EX-4.5






Exhibit 4.5




Dated September 27, 2007




COUNTRY STYLE COOKING RESTAURANT CHAIN CO., LTD.



SHAREHOLDERS’ AGREEMENT



PAUL, HASTINGS, JANOFSKY & WALKER

22nd Floor

Bank of China Tower

1 Garden Road

Hong Kong



 









 





TABLE OF CONTENTS




	 	 	 	 	 

	1. Definitions and Interpretation
	 	 	1	 
	 
	2. Financial Statements and Reports and Information and Inspection Rights
	 	 	7	 
	 
	3. Election of Directors; Management
	 	 	8	 
	 
	4. Right of Participation
	 	 	9	 
	 
	5. Right of First Refusal; Co-Sale Right
	 	 	11	 
	 
	6. Representations and Warranties; Covenants and Undertakings
	 	 	17	 
	 
	7. Demand Registration
	 	 	21	 
	 
	8. Piggyback Registration
	 	 	24	 
	 
	9. Expenses of Registration
	 	 	26	 
	 
	10. Termination of Registration Rights
	 	 	27	 
	 
	11. Registration Procedures and Obligations
	 	 	27	 
	 
	12. Information Furnished by Holder
	 	 	28	 
	 
	13. Indemnification
	 	 	28	 
	 
	14. Lock-Up or Market Standoff
	 	 	31	 
	 
	15. No-Action Letter or Opinion of Counsel in Lieu of Registration;
Conversion of Preferred Shares
	 	 	32	 
	 
	16. Reports Under the Exchange Act
	 	 	33	 
	 
	17. Transfer of Rights
	 	 	33	 
	 
	18. Legend; Stop Transfer Instructions
	 	 	34	 
	 
	19. Covenants
	 	 	34	 
	 
	20. Board Committees
	 	 	39	 
	 
	21. Miscellaneous
	 	 	40	 
	 
	22. Confidentiality and Announcements
	 	 	43	 






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EXECUTION COPY




COUNTRY STYLE COOKING RESTAURANT CHAIN CO., LTD.




SHAREHOLDERS’ AGREEMENT



     THIS SHAREHOLDERS’ AGREEMENT (the “Agreement”) is made as of September 27, 2007, by and
among:




	 	1.	 	Country Style Cooking Restaurant Chain Co., Ltd.

an exempted company incorporated under the laws of the Cayman Islands (the
“Company”);
	 
	 	2.	 	Growing Rich Limited
 a limited liability company
incorporated in Hong Kong
(“Growing Rich”);
	 
	 	3.	 	Chongqing Growing Rich Country Style Cooking Management
Co., Ltd.  a wholly
foreign-owned enterprise registered in Chongqing, PRC (the “WFOE”);
	 
	 	4.	 	Chongqing Country Style Cooking Restaurants Chain Co., Ltd.
 a domestic-funded enterprise established
under PRC laws with limited liability (the “Founder Co”);
	 
	 	5.	 	LI Hong  (PRC ID No. 510202196807080920);
	 
	 	6.	 	ZHANG Xingqiang  (PRC ID No. 110103196601100910) (together with LI Hong, the
“Founders”, and each a “Founder”);
	 
	 	7.	 	SIG China Investments One, Ltd., an exempted company incorporated in the Cayman
Islands (“SIG”); and
	 
	 	8.	 	Sequoia Capital China II, L.P., an exempted limited partnership registered in the
Cayman Islands (“Sequoia”).





     (the foregoing parties collectively, the “Parties”, and each a “Party”).



RECITALS



A. The Parties entered into a Subscription Agreement dated as of September 26, 2007 (the
“Subscription Agreement”), pursuant to which the Company issued and the Investors subscribed
24,000,000 Series A Shares of the Company.



B. In connection with the issuance and subscription of the Series A Shares of the Company, the
Parties desire to enter into this Agreement.





	 	 	THE PARTIES AGREE AS FOLLOWS:
	 
	1.	 	Definitions and Interpretation
	 
	1.1	 	Definitions. For purposes of this Agreement the following terms have the following meanings:
	 
	 	 	“Adherence Deed” means an adherence deed in the form attached hereto as EXHIBIT B.




 









 






	 	 	“Affiliate” means, in respect of a Person, any other Person that, directly or indirectly, through
one or more intermediaries, Controls, is Controlled by, or is under common Control with, such
Person, and in the case of an Investor shall include (a) any Person who holds Shares as a nominee
for such Investor, (b) any shareholder of such Investor, (c) any entity or individual which has a
direct and indirect interest in such Investor (including, if applicable, any general partner or
limited partner) or any fund manager thereof, (d) any Person that directly or indirectly Controls,
is Controlled by, under common Control with, or is managed by such Investor or its fund manager,
(e) the relatives of any individual referred to in (c) above, and (f) any trust Controlled by or
held for the benefit of such individuals.
	 
	 	 	“Agreement” has the meaning set forth in the preamble to this Agreement.
	 
	 	 	“Blue Sky” means the laws or statutes of any state of the United States of America or any other
jurisdiction regulating the sale of corporate securities within that state or jurisdiction.
	 
	 	 	“Board” means the Company’s board of Directors as constituted from time to time.
	 
	 	 	“Business Day” means any day, excluding Saturdays and Sundays, on which banks in Hong Kong,
Chongqing, PRC, and the State of New York, U.S.A. are generally open for business.
	 
	 	 	“Commission” means the United States Securities and Exchange Commission, as constituted from time
to time, or any successor agency charged with administering the Securities Act and/or the Exchange
Act.
	 
	 	 	“Compulsory Payment Amount” has the meaning set forth in the Memorandum of Association and Articles
of Association of the Company.
	 
	 	 	“Control” with respect to any third Person shall be deemed to exist in favor of any Person (a) when
such Person holds at least 20 per cent. of the outstanding voting securities of such third Person
and no other Persons owns a greater number of outstanding voting securities of such third Person or
(b) over other members of such Person’s immediate family. Immediate family members include, without
limitation, a Person’s spouse, parents, children, siblings, mother-in-law and father-in-law and
brothers and sisters-in-law. The terms “Controlling” and “Controlled” have meanings correlative to
the foregoing.
	 
	 	 	“Co-Sale Investors” means Investors exercising the Co-Sale Right, and Co-Sale Investor means any
one of them.
	 
	 	 	“Co-Sale Right” has the meaning set forth in Section 5.2 of this Agreement.
	 
	 	 	“Co-Sale Ratio” with respect to a Co-Sale Investor, means the ratio of (a) the number of Ordinary
Share Equivalents owned by such Co-Sale Investor on the date of the Transfer Notice to (b) the
total number of Ordinary Share Equivalents owned by the Transferring Shareholder and all the
Co-Sale Investors on the date of the Transfer Notice.
	 
	 	 	“Covenantors” means the Group Companies and the Founders, and “Covenantor” means any of them.




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	 	 	“Damages” has the meaning set forth in Section 13.1 of this Agreement.
	 
	 	 	“Directors” means the directors of the Company, and “Director” means any one of them.
	 
	 	 	“ESOP” means the stock incentive plan of the Company approved from time to time in accordance with
this Agreement and the Memorandum of Association and Articles of Association of the Company.
	 
	 	 	“Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission promulgated thereunder, all as from time to time in effect.
	 
	 	 	“Form F-3” means Form F-3 issued by the Commission or any substantially similar form then in
effect.
	 
	 	 	“Founders” has the meaning set forth in the Recitals, and “Founder” means any one of them.
	 
	 	 	“Group” or “Group Companies” means the Company, the WFOE, Growing Rich, Founder Co and their
respective Subsidiaries from time to time, and “Group Company” means any one of them.
	 
	 	 	“Holder” means any holder of outstanding Registrable Securities.
	 
	 	 	“IFRS” means International Financial Reporting Standards issued by the International Accounting
Standards Board, as in effect from time to time.
	 
	 	 	“Initiating Holders” means Holders who in the aggregate hold at least 50 per cent. of the
Registrable Securities.
	 
	 	 	“Investor Consent” means, at the time of its determination, the prior written consent of Investors
holding a majority of the Series A Shares in aggregate, as adjusted in accordance with their terms,
or securities resulting from the conversion or exchange of such Series A Shares which must include
the consent of the Investor Representatives.
	 
	 	 	“Investor Representatives” means SIG Representative and Sequoia Representative.
	 
	 	 	“Investors” means SIG and Sequoia, and “Investor” means any one of them.
	 
	 	 	“Issuance Notice” has the meaning set forth in Section 4.2 of this Agreement.
	 
	 	 	“New Securities” means any share capital of the Company (including reissued shares), whether
authorized or not, and any rights, options, or warrants to purchase share capital of the Company,
any notes, debentures, preferred stock or shares and securities of any type whatsoever that are
ultimately, or may become, convertible into capital stock of the Company issued (or, pursuant to
Article 16(c) of the Memorandum and Articles, deemed to be issued) by the Company. “New Securities”
does not include: (a) Ordinary Shares issued upon conversion of Preferred Shares; (b) securities
issued as a dividend or distribution on Preferred Shares or any event for which adjustment is made
pursuant to Article 16(g) or Article 16(h) of the




3









 






	 	 	Memorandum and Articles, (c) securities offered to the public pursuant to a registration statement
or registered prospectus in respect of a Qualified IPO, or (d) securities or share capital issued
to all Shareholders pro rata without consideration pursuant to a stock dividend, stock split, or
similar transaction.
	 
	 	 	“Ordinary Share Equivalents” means the number of issued and outstanding Ordinary Shares, and
Ordinary Shares into which issued and outstanding Preferred Shares and other securities are
convertible.
	 
	 	 	“Ordinary Shareholders” means the holders of Ordinary Shares.
	 
	 	 	“Ordinary Shares” means the ordinary shares of the Company.
	 
	 	 	“Person” means any individual, sole proprietorship, partnership, firm, joint venture, estate,
trust, unincorporated organization, association, corporation, institution, public benefit
corporation, entity or governmental authority or other entity of any kind or nature.
	 
	 	 	“PRC” means the People’s Republic of China, excluding (solely for purposes of this Agreement) the
Hong Kong Special Administrative Region, the Macau Special Administrative Region and the Islands of
Taiwan.
	 
	 	 	“Preferred Shares” means Series A Shares.
	 
	 	 	“Prohibited Transfer” has the meaning set forth in Section 5.6 of this Agreement.
	 
	 	 	“Pro Rata Ratio” with respect to any Investor, means the ratio of: (a) the total number of Ordinary
Share Equivalents held by that Investor to (b) the total number of Ordinary Share Equivalents held
by all Investors.
	 
	 	 	“Pro Rata Share” with respect to any Investor, means the ratio of: (a) the total number of Ordinary
Share Equivalents held by that Investor (assuming the conversion of all outstanding Preferred
Shares) immediately before the proposed allotment and issue of New Securities to (b) the total
number of Ordinary Share Equivalents held by all Shareholders of the Company (assuming the
conversion of all outstanding Preferred Shares to Common Shares and the exercise of all options
outstanding) immediately before the proposed allotment and issue of New Securities.
	 
	 	 	“Qualified IPO” means the closing of the Company’s first firm commitment, underwritten public
offering of Ordinary Shares or securities representing Ordinary Shares in connection with which
Ordinary Shares or such securities (or the shares of a company of which the Company is a wholly
owned subsidiary established for the purpose of listing (the “Listco”)) is listed and becomes
publicly traded on an internationally recognized securities exchange (including the Stock Exchange
of Hong Kong) or the NASDAQ National Market or the issue or transfer of shares in a company whose
shares are listed on an internationally recognized stock exchange (including the Stock Exchange of
Hong Kong) or on NASDAQ National Market for which shares approval for listing and trading has been
duly obtained and which shares are issued or transferred in consideration of the acquisition of the
Ordinary Shares of the Company or the shares of the Listco, provided, however, (i) that such
transaction or listing shall result in aggregate proceeds to the Company of at least US$60,000,000
(before deduction for underwriters’ commissions




4









 






	 	 	and expenses), (ii) that the market capitalization of the Company or the Listco immediately after
such transaction or listing shall be at least US$300,000,000, and (iii) that such transaction or
listing shall be acceptable to Shareholders holding a majority of the Series A Shares.
	 
	 	 	“Register”, “Registered”, and “Registration” means a registration of securities effected by
preparing and filing a registration statement on Form F-1, S-1, SB-2, F-3 or S-3 in compliance with the Securities Act, or on any comparable form in
connection with a registration in a jurisdiction other than the United States (a “Registration
Statement”), and the declaration or ordering of the effectiveness of that Registration Statement by
the Commission.
	 
	 	 	“Registrable Securities” means all Ordinary Shares not previously sold to the public but issued or
issuable to the Investors including: (a) Ordinary Shares issuable upon conversion or exercise of
any of the Preferred Shares; (b) Ordinary Shares issued pursuant to stock splits, stock dividends,
and similar distributions to the Investors; and (c) any securities of the Company granted
registration rights pursuant to Section 7 or 8 of this Agreement.
	 
	 	 	“Registration Expenses” means all expenses incurred by the Company in complying with Section 7 or 8
of this Agreement, including, without limitation, all federal and state Registration,
qualification, and filing fees, printing expenses, any fees, commissions, expenses and
disbursements of underwriters customarily paid by similarly situated companies in connection with
underwritten offerings of equity securities to the public, fees and disbursements of counsel for
the Company and one special counsel for all Holders (if different from counsel to the Company),
Blue Sky fees and expenses, and the expense of any special audits incident to or required by any
Registration, but excluding Selling Expenses.
	 
	 	 	“Registration Statement” has the meaning set forth in the definition of “Registration” above.
	 
	 	 	“Related Party” shall mean, with respect to any Person, (a) any Affiliate of such Person, (b) each
Person that serves as a director, officer, partner, executor, or trustee of such Person (or in any
other similar capacity), (c) any Person with respect to which such Person serves as a general
partner or trustee (or in any other similar capacity), (d) any Person that has direct or indirect
beneficial ownership of voting securities or other voting interests representing at least 10 per
cent. of the outstanding voting power or equity securities or other equity interests representing
at least 10 per cent. of the outstanding equity interests (a “Material Interest”) in such Person,
and (e) any Person in which such Person holds a Material Interest.
	 
	 	 	“Reserved Matters” has the meaning set forth in Section 19.1 of this Agreement.
	 
	 	 	“Right of First Refusal” has the meaning set forth in Section 5.1 of this Agreement.
	 
	 	 	“Right of Participation” has the meaning set forth in Section 4.1 of this Agreement.




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	 	 	“Rule [followed by a number]” means the Rule of the same number promulgated by the Commission under
the Securities Act.
	 
	 	 	“Sale of the Company” means (a) the sale, lease or other disposition (in one or a series of related
transactions) of all or substantially all of the Company’s assets to one Person or a group of
Persons acting in concert (other than the Company or any of its Controlled Affiliates), including a
sale (or multiple related sales) of one or more Subsidiaries (whether by way of merger,
consolidation, recapitalization, reclassification, reorganization or sale of all or substantially
all of the assets or securities) which constitute all or substantially all of the consolidated
assets or business of the Company, (b) the sale, exchange or transfer, in one or a series of
related transactions, of a majority of the outstanding capital stock of the Company to one Person
or a group of Persons acting in concert, under circumstances in which the holders of a majority in
voting power of the outstanding capital stock of the Company immediately prior to such transaction
beneficially own less than a majority in voting power of the outstanding capital stock of the
Company or the acquiring Person immediately following such transaction, or (c) a merger,
consolidation, amalgamation, recapitalization, reclassification, reorganization or similar business
combination transaction involving the Company under circumstances in which holders of a majority in
voting power of the capital stock of the Company immediately prior to such transaction beneficially
own less than a majority in voting power of the outstanding capital stock of the Company, or the
surviving or resulting corporation or acquirer, as the case may be, immediately following such
transaction.
	 
	 	 	“Securities Act” means the United States Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder, all as from time to time in effect.
	 
	 	 	“Selling Expenses” means all underwriting discounts and selling commissions applicable to the sale
of Registrable Securities pursuant to this Agreement.
	 
	 	 	“Senior Manager” means, with respect to any Group Company, the chief executive officer of such
company and any member of management reporting directly to the board of directors or chief
executive officer, managing director, chairman or legal representative of such company.
	 
	 	 	“Sequoia Representative” has the meaning set forth in Section 3.1(a) of this Agreement.
	 
	 	 	“Series A Shares” means Series A redeemable convertible preferred shares of the Company.
	 
	 	 	“Shares” means any Ordinary Shares or Preferred Shares.
	 
	 	 	“Shareholders” means the holders of Shares, and “Shareholder” means any one of them.
	 
	 	 	“SIG Representative” has the meaning set forth in Section 3.1(a) of this Agreement.
	 
	 	 	“Stock” has the meaning set forth in Section 5.1 of this Agreement.




6









 






	 	 	“Subsidiary” means, with respect to any Person that is not an individual, any corporation,
partnership, or other entity, Controlled by such Person.
	 
	 	 	“Transaction Documents” has the meaning set forth in the Subscription Agreement.
	 
	 	 	“Transfer Notice” has the meaning set forth in Section 5.1 of this Agreement.
	 
	 	 	“Transferring Shareholder” has the meaning set forth in Section 5.1 of this Agreement.
	 
	 	 	“Underwriter’s Representative” has the meaning set forth in Section 7.5(a) of this Agreement.
	 
	1.2	 	Interpretation. In this Agreement, unless otherwise specified:






	 	(a)	 	the headings and sub-headings are inserted for convenience only and shall not affect the
construction of this Agreement;
	 
	 	(b)	 	each reference to, and the definition of, any document shall be deemed to refer to such
document as it may be amended from time to time in accordance with its terms;
	 
	 	(c)	 	all time and dates in this Agreement shall be Hong Kong time and dates except where
otherwise stated;
	 
	 	(d)	 	each reference to a law or governmental approval shall be deemed to refer to such law or
governmental approval as the same may be amended from time to time;
	 
	 	(e)	 	any reference to a Person (including any Party) in any capacity includes a reference to
its permitted successors and assigns in such capacity and, in the case of any governmental
entity, any Person succeeding to any of its functions and capacities;
	 
	 	(f)	 	defined terms in the singular shall include the plural and vice versa, and the masculine,
feminine or neutral gender shall include all genders;
	 
	 	(g)	 	the words “include”, “includes” and “including” are deemed to be followed by the phrase
“without limitation”; and
	 
	 	(h)	 	references herein to Sections, Exhibits and Schedules are to sections and exhibits of and
schedules to this Agreement.






	2.	 	Financial Statements and Reports and Information and Inspection Rights.
	 
	2.1	 	Financial Statements and Reports to Shareholders. The Company covenants and agrees that,
commencing on the date of this Agreement and ending upon a Qualified IPO, the Company shall deliver
to each Investor, in English and in a form acceptable to such Investor:






	 	(a)	 	within 90 days after the end of each fiscal year of the Group, an audited consolidated
balance sheet of the Group as of the end of that year and audited consolidated statements of
income, shareholders’




7









 






	 	 	 	equity, and cash flow for that year, which year-end financial statements shall be
detailed and shall be prepared in accordance with IFRS, consistently applied and
accompanied by the opinion of a “big 4” firm of independent public accountants;
	 
	 	(b)	 	within 30 days after the end of each fiscal quarter of the Group, an unaudited
consolidated quarterly income statement, balance sheet and cash flow statement of the Group,
quarterly management review reports detailing certain operational performance indicators of
the Group and a comprehensive operating budget forecasting the Company’s revenues, expenses,
and cash position on a month-to-month basis for the upcoming fiscal year in a format
acceptable to a majority of the Investors;
	 
	 	(c)	 	within 30 days after the end of each calendar month that is not also the end of a fiscal
year or a fiscal quarter, unaudited management accounts of the Group;
	 
	 	(d)	 	at least 45 days prior to the end of each fiscal year of the Group, the annual
consolidated budget of the Group for the next fiscal year;
	 
	 	(e)	 	promptly following the end of each quarter, copy of an updated capitalization table;
	 
	 	(f)	 	copies of all documents or other information sent by any Group Company to any shareholder
of any Group Company; and
	 
	 	(g)	 	upon the written request of an Investor Representative, any other information as such
Investor Representative may reasonably request.






	2.2	 	Information and Inspection Rights.






	 	(a)	 	The Company covenants and agrees that, commencing on the date of this Agreement and ending
upon a Qualified IPO, for so long as any Investor holds any Preferred Shares and/or Ordinary
Shares issued upon the conversion of such Preferred Shares, such Investor shall have the right
to inspect the facilities, records and books of the Group Companies during normal business
hours, which shall include the right, without limitation, to discuss the business, operations
and financial condition of the Group Companies with their respective directors, officers,
employees, accountants, legal counsel or investment bankers.
	 
	 	(b)	 	The Company shall deliver to each Investor copies certified true and complete by the Chief
Executive Officer of (i) annual, quarterly and monthly financial statements, and other
information as determined by the Board, (ii) 30 days prior to the end of each fiscal year, a
comprehensive operating annual budget forecasting the Company’s revenue, expenses, and cash
position on a month-to-month basis for the upcoming fiscal year, and (iii) promptly following
the end of each quarter an up-to-date capitalization table.






	3.	 	Election of Directors; Management.




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	3.1	 	Board Composition. The number of persons comprising the Board shall be no more than five (5).
Each Covenantor agrees that, at each meeting of the shareholders of the Company called for the
purpose of electing the Board, it shall vote all of its shares of the Company entitled to vote, and
exercise any other rights or powers it has over the Company as follows:






	 	(a)	 	Investor Representatives. SIG shall be entitled to nominate, and to remove from office and
replace one (1) Director (the “SIG
Representative”), and Sequoia shall be entitled to nominate, and to remove from office
and replace one (1) Director (the “Sequoia Representative”, and collectively the
“Investor Representatives”). The Investor Representatives shall have the right to
appoint alternates or proxies to attend any meeting of the Board.
	 
	 	(b)	 	Ordinary Shareholders’ Representatives. The majority of the Ordinary Shareholders shall
collectively be entitled to nominate, and to remove from office and replace three (3)
Directors.






	3.2	 	Expenses. The Board shall meet at least quarterly, unless otherwise agreed by a vote of the
majority of Directors. The Company shall reimburse each Investor Representative for all reasonable
expenses incurred by such Investor Representative relating to Board activities, including but not
limited to reasonable travel expenses incurred to attend Board meetings, up to US$10,000 per annum
with respect to all Directors appointed by each Investor, provided that such expenses are incurred
within the territory of PRC.
	 
	3.3	 	Insurance; Indemnification.






	 	(a)	 	If the Board so requires, the Company shall:






	 	(i)	 	purchase and, at all times, maintain for the benefit of each Investor Representative
and his alternate, insurance against liability for negligence (including gross
negligence), default (including willful default), breach of duty and breach of trust for
an aggregate insured amount of not less than US$1,000,000; and
	 
	 	(ii)	 	deliver to each Investor Representative a copy of the policy documents in relation
to such insurance.






	 	(b)	 	The Company shall indemnify and hold harmless each Investor Representative and his
alternate, to the fullest extent permissible by law, from and against all liabilities,
damages, actions, suits, proceedings, claims, costs, charges and expenses suffered or incurred
by or brought or made against such Investor Representative or his alternate as a result of any
act, matter or thing done or omitted to be done by him in good faith in the course of acting
as a Director or alternate Director, as applicable, of the Company, by delivering to such
Investor Representative or his alternate, at the time of appointment as a Director or an
alternate Director, a deed of indemnity duly executed by the Company substantially in the form
attached hereto as EXHIBIT A.






	4.	 	Right of Participation.




9









 






	4.1	 	Right of Participation and Right of Oversubscription With Respect to New Securities. Subject to
the provisions of Sections 4.2 and 4.3, the Company grants to each Investor the right of
participation (the “Right of Participation”) to purchase its Pro Rata Share of New Securities which
the Company may, from time to time, propose to allot and issue and the right of oversubscription if
any other Investor elects not to purchase its Pro Rata Share of such New Securities (the
“Oversubscription Right”). The Company shall offer to the Investors for subscription their Pro Rata
Share of the New Securities on the same terms and at the same price at which the Company proposes
to allot and issue the New Securities. The New Securities which have not been accepted for
subscription by the Investors who fail to exercise their rights of participation or fail to
complete the purchase of their Pro Rata Shares shall first be offered to the Investors who have
exercised their Oversubscription Rights within the Issuance Notice Period pro rata to the number of
additional New Securities which such Investors have agreed to take up above their Pro Rata Shares
provided that no Investor shall be obliged to purchase more New Securities above its Pro Rata Share
than such additional New Securities it indicates its agreement to take up under this Section 4.1.
Thereafter the Company shall have the right to sell all remaining New Securities pursuant to
Section 4.3 of this Agreement.
	 
	4.2	 	Issuance Notice. In the event the Company proposes to issue New Securities, it shall give each
Investor a written notice (the “Issuance Notice”) of its intention, describing the type of New
Securities, the price, the terms upon which the Company proposes to issue the same, and an offer
for subscription the number of shares which that Investor is entitled to purchase pursuant to
Section 4.1 of this Agreement, and a statement that each Investor shall have 20 days from the date
of receipt of the Issuance Notice to accept the offer for subscription under the Issuance Notice
(the “Issuance Notice Period”). Within the Issuance Notice Period, each Investor may elect to
purchase its Pro Rata Share of the New Securities and to exercise its Oversubscription Right for
the price and upon the terms specified in the Issuance Notice by: (a) giving written notice to the
Company within the Issuance Notice Period, (b) forwarding payment for its Pro Rata Share of New
Securities to the Company if immediate payment is required by the terms of the Issuance Notice, and
(c) if the Oversubscription Right is exercised, the amount of additional New Securities it agrees
to purchase above its Pro Rata Share.
	 
	4.3	 	Sale of New Securities. In the event an Investor fails to exercise its right of participation
within the Issuance Notice Period and subject to the other Investors’ Oversubscription Rights, the
Company shall have 90 days thereafter to sell or enter into an agreement (pursuant to which the
sale of New Securities covered by the Issuance Notice shall be closed, if at all, within 60 days
after the date of that agreement) to allot and issue the New Securities in respect of which the
Investor’s rights were not exercised, at a price and upon general terms no more favorable to the
subscriber of the New Securities than specified in the Issuance Notice. In the event the Company
has not sold the New Securities within this 90-day period (or allotted and issued New Securities in
accordance with the foregoing within 60 days from the date of the agreement), the Company shall not
thereafter allot or issue any New Securities without first offering the New Securities to each
Investor in the manner provided above.




10









 






	5.	 	Right of First Refusal; Co-Sale Right.
	 
	5.1	 	Right of First Refusal.






	 	(a)	 	Subject to the provisions of this Section 5.1 and Sections 5.6 and 5.8 of this Agreement,
if any Shareholder holding one per cent. or more of the Shares, other than an Investor (the
“Transferring Shareholder”) proposes to sell or otherwise transfer any Shares or other voting
securities (or securities convertible into or exchangeable for voting securities) of the
Company now owned or subsequently acquired by the Transferring Shareholder (the “Stock”) or
any interest therein to any Person then the Investors shall have a right of first refusal (the
“Right of First Refusal”) to purchase the Stock proposed to be sold or otherwise transferred.
	 
	 	(b)	 	The Transferring Shareholder shall give a written notice (the “Transfer Notice”) to the
Investors describing fully the proposed transfer, including the number of shares proposed to
be transferred, the proposed transfer price, and the name and address of the proposed
transferee. The Transfer Notice shall be signed by the Transferring Shareholder, accompanied
by a written certification by such Transferring Shareholder that the proposed transferee is a
bona fide purchaser and that the Transfer Notice constitutes a binding commitment of the
Transferring Shareholder and the proposed transferee, with or without conditions, for the
transfer of that Stock subject to the Right of First Refusal.
	 
	 	(c)	 	Each Investor shall then have the right to purchase its Pro Rata Ratio of the Stock
subject to the Transfer Notice at a price per share equal to the proposed per share transfer
price, by delivery of a notice of exercise of its Right of First Refusal within 20 days after
the date the Transfer Notice is delivered to the Investors.
	 
	 	(d)	 	To the extent any Investor elects not to exercise its Right of First Refusal with respect
to its Pro Rata Ratio of the Stock subject to the Transfer Notice, the other Investors who
have exercised their Right of First Refusal (the “Electing Investors”) shall have the
additional right within 10 days after the expiration of the 30-day period specified above to
buy its pro rata share of the Stock subject to the Transfer Notice with respect to which the
Right of First Refusal has not been exercised (the “Unpurchased Stock”). For purposes of the
preceding sentence, each Electing Investor’s pro rata share of the Unpurchased Stock shall be
a fraction, the numerator of which shall be the number of Stock purchased by such Electing
Investor pursuant to clause (c) of this Section 5.1 and the denominator of which shall be the
total number of Stock purchased by all the Electing Investors pursuant to clause (c) of this
Section 5.1; provided that no Electing Investor shall be obligated to purchase more
Unpurchased Stock than it indicates its agreement to purchase under this clause (d).
	 
	 	(e)	 	If the purchase price for the Stock specified in a Transfer Notice is payable in
securities or property other than cash (or evidence of cash indebtedness), the Electing
Investors shall have the right to pay the purchase price in such securities or property (or in
cash equivalent to




11









 






	 	 	 	the fair market value of such securities or property), and the Transferring Shareholder
shall, before the dispatch of the Transfer Notice, appoint a third party valuer (the
“Valuer”) approved in advance by the Electing Investors to determine such fair market
value as at the latest practicable date prior to the Transfer Notice reasonably selected
by the Valuer. The determination of such fair market value by the Valuer shall, in the
absence of manifest error, be final and conclusive and shall be included in the Transfer
Notice together with a copy of the report from the Valuer stating the basis for
calculating such fair market value. The costs of appointing the Valuer shall be borne
equally by the Transferring Shareholder on the one hand, and the Electing Investors on
the other hand. The Valuer shall act as an expert and not as an arbitrator.






	5.2	 	Right of First Refusal With Respect to Preferred Shares.






	 	(a)	 	Investor Notice of Sale. No Investor (the “Selling Investor”) shall sell or transfer any
Preferred Shares (or securities resulting from the conversion or exchange thereof) held by it
(the “Investor Transfer Shares”) unless it first complies with this Section 5.2. The Selling
Investor shall promptly give written notice (the “Investor Transfer Notice”) to the other
Investors and the Founders, describing in reasonable detail the proposed sale or transfer
including, without limitation, the number of Investor Transfer Shares, the nature of such sale
or transfer, the consideration to be paid, and the name and the address of each prospective
purchaser or transferee.
	 
	 	(b)	 	Reply Notice. Each Investor or Founder who wishes to purchase Investor Transfer Shares (an
“Exercising Investor”) shall within 20 days from the date of receipt of the Investor Transfer
Notice provide the Selling Investor with a written notice (a “Reply Notice”) specifying the
maximum number of any Investor Transfer Shares which it irrevocably commits to purchase (the
“Exercise Amount”). A failure by an Investor or Founder to respond within such 20-day period
shall be deemed to constitute a decision by such Investor or Founder not to purchase any
Investor Transfer Shares. For the avoidance of doubt, each Exercising Investor may specify in
its Reply Notice an Exercise Amount higher or lower than its Proportionate Amount (as defined
in clause (d) of this Section 5.2). The Investor Transfer Shares shall be allocated among the
Exercising Investors (with rounding to avoid fractional shares) in proportion to their
respective Proportionate Amounts and on the same material terms and conditions as specified in
the Investor Transfer Notice PROVIDED THAT in no event shall an amount greater than an
Exercising Investor’s Exercise Amount be allocated to such Exercising Investor.
	 
	 	(c)	 	Excess Investor Transfer Shares. Any Investor Transfer Shares not allocated to Exercising
Investors pursuant to clause (b) of this Section 5.2 (“Excess Investor Transfer Shares”) shall
be allocated among the Exercising Investors whose Exercise Amounts have not yet been satisfied
pursuant to clause (b), in proportion to each Exercising Investor’s respective Excess
Proportionate Amount (with rounding to avoid fractional shares); provided that in no event
shall an Exercising Investor be required to purchase more Investor Transfer Shares




12









 






	 	 	 	pursuant to this clause (c) than the Exercise Amount specified by such Exercising
Investor in its Reply Notice. The procedures set out in this clause (c) shall be
repeated until the Exercise Amounts of all Exercising Investors have been satisfied or
until all the Investor Transfer Shares have been fully allocated to the Exercising
Investors, whichever occurs first.
	 
	 	(d)	 	Proportionate Amount. An Exercising Investor’s “Proportionate Amount” is equal to the
product obtainable by multiplying (x) the total number of Investor Transfer Shares, by (y) a
fraction, the numerator of which shall be the number of Ordinary Share Equivalents held by
such Exercising Investor (on an as converted basis) on the date of the Investor Transfer
Notice and the denominator of which shall be the aggregate number of all Ordinary Share
Equivalents held by all the Exercising Investors (on an as converted basis) on the date of the
Investor Transfer Notice.
	 
	 	(e)	 	Excess Proportionate Amount. An Exercising Investor’s “Excess Proportionate Amount” is
equal to the product obtainable by multiplying (x) the total number of Excess Investor
Transfer Shares, by (y) a fraction, the numerator of which shall be the number of Ordinary
Share Equivalents held by such Exercising Investor (on an as converted basis) on the date of
the Investor Transfer Notice and the denominator of which shall be the aggregate number of
Ordinary Share Equivalents held, on the date of the Investor Transfer Notice, by all the
Exercising Investors (on an as converted basis) whose Exercise Amount has not yet been
satisfied after employing the procedures set out herein.
	 
	 	(f)	 	In the event the Investors other than the Selling Investor fail to agree to purchase all
of the Investor Transfer Shares within the respective periods given above, the Selling
Investor shall not be obligated to sell any of the Investor Transfer Shares to the Exercising
Investors. The Selling Investor shall have 90 days from the date of delivery of the Investor
Transfer Notice to sell the Investor Transfer Shares at the price and upon terms and
conditions no more favorable to the transferee than specified in the original Investor
Transfer Notice. In the event that the Selling Investor has not sold the Investor Transfer
Shares within this 90-day period, the Selling Investor shall not thereafter sell any Shares
without first offering such shares to the other Investors in the manner provided in this
Section 2.2 above.






	5.3	 	Co-Sale Right. If the Transferring Shareholder is an Ordinary Shareholder, then each Investor
who does not exercise its Right of First Refusal pursuant to Section 5.1 above shall have the
right, exercisable upon written notice to the Transferring Shareholder within 20 days after the
date the Transfer Notice is delivered to the Investors, to participate in the sale of Stock on
substantially the same terms and conditions as the Transferring Shareholder to the extent of that
Investor’s Co-Sale Ratio with respect to its Stock (the “Co-Sale Right”), provided, however, such
Co-Sale Right shall not apply to any sale of Stock to an Investor pursuant to the exercise of the
Right of First Refusal of such Investor under Section 5.1, or the Right of First Refusal With
Respect to Preferred Shares of such Investor under Section 5.2. Each notice of an exercise of the
Co-Sale Right shall state the number of shares of Stock such




13









 






	 	 	Investor wishes to sell under its Co-Sale Right. Any Investor may elect to sell all or some of
the shares of Stock then held by such Investor up to that Investor’s Co-Sale Ratio with
respect to its Stock. To the extent the Investors exercise their Co-Sale Right in accordance
with the terms and conditions set forth in this Section 5.3, the Transferring Shareholder (i)
may only sell its shares of Stock if the proposed transferee completes the purchase of the
shares which the Investors seek to sell pursuant to the exercise of their Co-Sale Right, and
(ii) shall, at the request of any Investor, reduce the number of shares of its Stock to be
sold by the number of shares of Stock that such Investor wishes to sell under its Co-Sale
Right.






	 	(a)	 	Delivery of Certificates. The Investors shall effect their participation in the sale by
promptly delivering to the Transferring Shareholder for transfer to the prospective purchaser
one or more certificates, properly endorsed for transfer, which represent the type and number
of shares of Stock which the Investors elect to sell; provided that if an Investor elects to
sell Preferred Shares under its Co-Sale Right, it shall convert such Preferred Shares into
Ordinary Shares for transfer upon consummation of the sale. No Co-Sale Investor shall be
required to give any representations or warranties to the purchaser other than a
representation and warranty that such Stock is sold by such Co-Sale Investor as beneficial
owner free from encumbrances and liens other than those under this Agreement, the Memorandum
of Association and the Articles of Association of the Company.
	 
	 	(b)	 	Sales Proceeds. The stock certificate or certificates that the Investors deliver to the
Transferring Shareholder pursuant to Section 5.3(a) shall be transferred to the prospective
purchaser in consummation of the sale of the Stock pursuant to substantially the same terms
and conditions as specified in the Transfer Notice, and the Transferring Shareholder shall
upon receiving the same from the prospective purchaser concurrently remit to each Investor
that portion of the sale proceeds to which that Investor is entitled by reason of its
participation in the sale. To the extent that any prospective purchaser or purchasers
prohibits assignment or otherwise refuses to purchase shares or other securities from the
Investors, the Transferring Shareholder shall not sell to the prospective purchaser or
purchasers any Stock unless and until, simultaneously with the sale, the Transferring
Shareholder purchases those shares or other securities from the Investors.






	5.4	 	Sale by Transferring Shareholder. Subject to Section 5.7, if and to the extent that the
Investors do not exercise their Right of First Refusal or their Co-Sale Right in aggregate with
respect to the sale of all the Stock subject to the Transfer Notice within the relevant prescribed
period, the Transferring Shareholder may, not later than 90 days following delivery to the Company
and the Investors of the Transfer Notice, conclude a bona fide transfer of all of the Stock covered
by the Transfer Notice on terms and conditions not more favorable to the transferee or transferor
than those described in the Transfer Notice. Any proposed transfer on terms and conditions more
favorable than those described in the Transfer Notice, as well as any subsequent proposed transfer
of any Stock by the Transferring Shareholder, shall again be subject to the Right of First Refusal
and Co-Sale Right of the Investors and shall




14









 






	 	 	require compliance by the Transferring Shareholder with the procedures described in this
Section 5.
	 
	5.5	 	No Adverse Effect. The Investors’ exercise or non-exercise of the Right of First Refusal or the
Co-Sale Right shall not adversely affect their rights to participate in subsequent transfers of
Stock by the Transferring Shareholder subject to the provisions of this Section 5.
	 
	5.6	 	Prohibited Transfer. Subject to the terms of this Section 5.6 and Section 5.8, no Ordinary
Shareholder shall transfer any of the Stock it holds as at the date hereof, nor transfer or dispose
of or create any Encumbrance over any such Stock, without the prior written consent of Investors
representing a majority of the Preferred Shares, or securities resulting from the conversion or
exchange of such Preferred Shares and as adjusted for stock splits, stock dividends, reverse stock
splits and the like. In the event a Transferring Shareholder sells any Stock in contravention of
the Right of First Refusal or the Co-Sale Right of the Investors (a “Prohibited Transfer”), each
Investor, in addition to other remedies as may be available at law, in equity or hereunder, shall
have the put option provided in Section 5.7 below, and the Transferring Shareholder shall be bound
by the applicable provisions of that put option.
	 
	5.7	 	Remedies. In the event of a Prohibited Transfer, the Investors shall have the right to sell to
the Transferring Shareholder the type and number of shares of Stock equal to the number of shares
of stock the Investors would have been entitled to transfer to the purchaser had the Prohibited
Transfer been effected pursuant to and in compliance with the terms of this Agreement (the “Put
Option”). This sale shall be made on the following terms and conditions:






	 	(a)	 	the price per share at which the Stock is to be sold to the Transferring Shareholder shall
be equal to the price per share paid in the Prohibited Transfer;
	 
	 	(b)	 	the Transferring Shareholder shall reimburse the Investors for any and all fees and
expenses, including legal fees and expenses, incurred pursuant to the exercise or the
attempted exercise of the Investors’ rights under this Section 5;
	 
	 	(c)	 	within 60 days after the earlier of the dates on which the Investors (i) receive notice of
the Prohibited Transfer, or (ii) otherwise become aware of the Prohibited Transfer, the
Investors shall, if exercising the Put Option created by this Section 5.7, deliver to the
Transferring Shareholder the certificate or certificates representing the Stock to be sold,
each certificate to be properly endorsed for transfer;
	 
	 	(d)	 	the Transferring Shareholder shall, upon receipt of the certificate or certificates for
the Stock to be sold by the Investors, pursuant to this Section 5.7, pay the aggregate
purchase price therefor and the amount of reimbursable fees and expenses, as specified in
Section 5.7(b), in cash or by other means acceptable to the Investors; and
	 
	 	(e)	 	notwithstanding the foregoing, the Company agrees it will not effect any attempt by the
Transferring Shareholder to transfer Stock in violation of this Section 5 nor will it treat
any alleged transferee as the holder of the Stock purported to be transferred in violation of this




15









 






	 	 	 	Section 5, unless the Put Option is completed pursuant to this Section 5.7.






	5.8	 	Certain Permitted Transfers. The restrictions or requirements set forth in
Sections 5.1 through 5.7 with respect to transfers of Shares shall not, subject to
any applicable law, apply to:






	 	(a)	 	any transfer by any Shareholder who is a natural person:






	 	(i)	 	to a legal representative of such Shareholder, if such Shareholder becomes
incapacitated, or upon the death of such Shareholder;
	 
	 	(ii)	 	by will, the laws of intestacy or the laws of descent or survivorship; or
	 
	 	(iii)	 	any sale or transfer of Shares to the Company or an entity designated by the
Company pursuant to a repurchase right or right of first refusal of the Company in the
event of a termination of an employment or consulting relationship with a Group Company;
or
	 
	 	(iv)	 	pursuant to a court order upon the termination of a marital relationship of such
Shareholder; or






	 	(b)	 	any transfer by an Investor to its Affiliates.
	 
	 	 	 	(any permitted transferee thereunder, a “Permitted Transferee”)






	 	 	Provided, however, that in the case of any transfer described in any of
sub-paragraphs (a) and (b) above:






	 	(A)	 	each Permitted Transferee shall have executed and delivered to the Company and the other
Shareholders, as a condition precedent to any such transfer or acquisition of Shares, an
Adherence Deed in the form of EXHIBIT B, and shall have submitted to the Company and
the Investors such evidence as the Company and the Investors may reasonably request to
demonstrate that such transferee qualifies as a Permitted Transferee; and
	 
	 	(B)	 	each Permitted Transferee shall remain qualified as a Permitted Transferee of the
transferring Shareholder at all times following such transfer for as long as it continues to
hold any Shares, failing which it shall transfer the Shares held by it to another Permitted
Transferee reasonably satisfactory to the Company and the Investors.






	5.9	 	Drag-Along.






	 	(a)	 	At any time after the expiry of the 60th month from the date hereof, if the Company shall
not have undergone an IPO or Sale of the Company, and (i) the holders of a majority of the
Series A Shares, and (ii) the holders of a majority of the Ordinary Shares at a minimum price
equal to US$200,000,000, being five times of the Series A financing fully-diluted post-money
valuation of the Company (collectively, the




16









 






	 	 	 	“Initiating Sellers”) approve a Sale of the Company (in either case an “Approved Sale”),
at the request of the Initiating Sellers, each Shareholder shall approve, consent to and
raise no objections to the Approved Sale, and if the Approved Sale is structured as a
sale of the issued and outstanding capital stock of the Company (whether by merger,
recapitalization, consolidation or sale or Transfer of shares or otherwise), then each
Shareholder shall waive any dissenter’s rights, appraisal rights or similar rights in
connection with such Sale of the Company and each Shareholder shall agree to sell its
Shares on the terms and conditions approved by the Initiating Sellers. If the holders of
a majority of the Series A Shares approve a Sale of the Company pursuant to this
provision but the holders of a majority of the Ordinary Shares do not so approve, the
holders of the Series A Shares shall have the right to sell all their Series A Shares to
the holders of the Ordinary Shares pro rata at the price contemplated by any intending
third party purchaser of the Company in such proposed Sale of the Company. Each
Shareholder shall take all necessary and desirable actions in connection with the
consummation of the Approved Sale, including executing such agreements and instruments
and taking such other actions as may be reasonably necessary to provide the
representations, warranties, indemnities, covenants, conditions, escrow agreements and
other provisions and agreements, as the case may be, required for the consummation of
such Approved Sale. In the event that any Shareholder fails for any reason to take any
of the foregoing actions after reasonable notice thereof, such Shareholder hereby grants
an irrevocable power of attorney and proxy to the Initiating Sellers or an assignee or
designee of such Initiating Sellers to take all necessary actions and execute and
deliver all documents deemed by such Person to be reasonably necessary to effectuate the
terms of this Section 5.9. Subject to clause (c) of this Section 5.9, the restrictions
on Transfers of Shares set forth in Sections 5.1, 5.2, 5.3, 5.4 and 5.8 shall not apply
in connection with an Approved Sale, notwithstanding anything to the contrary in this
Agreement.
	 
	 	(b)	 	The Initiating Sellers shall deliver written notice to each other Shareholder setting
forth in reasonable detail the terms (including price, time and form of payment) of any
Approved Sale (the “Drag-Along Notice”). Within 15 days following receipt of the Drag-Along
Notice, each other Shareholder shall deliver to the Company written notice setting forth such
Shareholder’s agreement to the Approved Sale and undertaking to raise no objections against,
or impediments to, the Approved Sale (including, waiving all dissenter’s and similar rights)
and (ii) if the Approved Sale is structured as a sale of capital stock, to sell its Shares on
the terms and conditions set forth in the Drag Notice, including delivery of certificates
representing such Shareholder’s Shares (duly endorsed for transfer or accompanied by executed
stock powers or transfer instruments therefor).






	6.	 	Representations and Warranties; Covenants and Undertakings.
	 
	6.1	 	Restrictions on Transfer. Each Covenantor jointly and severally represents, warrants and
undertakes to each Investor that, other than as provided under the Transaction Documents, it will
not transfer, alienate or dispose of any share capital in any Group Company or otherwise create any
Encumbrance




17









 






	 	 	on any share capital of any Group Company without the written consent of each Investor.
	 
	6.2	 	Key Person Insurance. At the request of SIG, the Company shall purchase and maintain key person
insurance policies upon the life and against the disability of each Founder for such insured
amounts, on such terms and for the benefit of such Persons as SIG may require. Each Founder agrees
to cooperate fully in obtaining such insurance policies, including, without limitation, submitting
himself to any physical or medical examination which the insurer or underwriter in respect of such
policies may require, at such times and places as such insurer or underwriter may require.
	 
	6.3	 	Tax Covenants.






	 	(a)	 	For purposes of paragraphs (a) through (d) of this Section 6.3:






	 	(i)	 	“U.S. Investor” means (A) any Investor that is a United States person and (B) any
Investor that is an entity treated as a foreign partnership for U.S. federal income tax
purposes, one or more of the owners of which are United States persons; and
	 
	 	(ii)	 	“United States person” means any person described in Section 7701(a)(30) of the
Internal Revenue Code of 1986, as amended (the “Code”).






	 	(b)	 	Classification for U.S. Tax Purposes. The Company will not take any action inconsistent
with the treatment of the Company as a corporation for U.S. federal income tax purposes and
will not elect to be treated as an entity other than corporation for U.S. federal income tax
purposes.
	 
	 	(c)	 	Passive Foreign Investment Company.






	 	(i)	 	The Company will use, and will cause each direct and indirect subsidiary to use,
commercially reasonable efforts to avoid classification as a passive foreign investment
company (“PFIC”) within the meaning of Section 1297 of the United States Internal Revenue
Code of 1986, as amended, for the current year or any subsequent year.
	 
	 	(ii)	 	The Company agrees to make available to any U.S. Investor upon request, the books
and records of the Company and its direct and indirect subsidiaries, and to provide
information to such U.S. Investor pertinent to the Company’s or any subsidiary’s status
or potential status as a PFIC. Upon a determination by the Company, any U.S. Investor or
any taxing authority that the Company or any direct or indirect subsidiary has been or
is likely to become a PFIC, the Company will provide such U.S. Investor with all
information reasonably available to the Company or any of its subsidiaries to permit
such U.S. Investor to (i) accurately prepare all tax returns and comply with any
reporting requirements as a result of such determination and (ii) make any election
(including, without limitation, a “qualified electing fund” election under Section




18









 






	 	 	 	1295 of the Code), with respect to the Company or any of its direct or indirect
subsidiaries, and comply with any reporting or other requirements incident to such
election. If a determination is made by the Company, any U.S. Investor or any
taxing authority that the Company is a PFIC for a particular year, then for such
year and for each year thereafter, the Company will also provide each known
Investor with a completed “PFIC Annual Information Statement” as required by
Treasury Regulation Section 1.1295-1(g) and otherwise comply with applicable
Treasury Regulation requirements. The Company will promptly notify the U.S.
Investors of any assertion by the Internal Revenue Service that the Company or any
of its subsidiaries is or is likely to become a passive foreign investment
company.






	 	(d)	 	Controlled Foreign Corporation. The Company shall: (A) furnish to each U.S. Investor upon
its reasonable request, on a timely basis, and at the Company’s expense, all information
necessary to satisfy the U.S. income tax return filing requirements of such U.S. Investor (and
each “United States shareholder” of the Company as defined by Section 951(b) of the Code that
owns a direct or indirect interest in such U.S. Investor (a “U.S. Shareholder”)) arising from
its investment in the Company and relating to the Company’s classification as a “controlled
foreign corporation” (“CFC”) within the meaning of Section 957 of the Code; (B) use
commercially reasonable efforts to avoid generating for any taxable year in which the Company
is a CFC, amounts includible in the income of a U.S. Investor or U.S.
Shareholder pursuant to Section 951 of the Code (a “Section 951 Inclusion”); and (C) if
any U.S. Investor or U.S. Shareholder has a Section 951 Inclusion (determined solely by
reference to outstanding Preference Shares) for any taxable year (such U.S. Investor or
U.S. Shareholder, a “Taxable CFC Shareholder”), distribute cash pro rata with respect to
each outstanding Preference Share so that the aggregate amount distributed to each
Taxable CFC Shareholder equals 50 per cent. of the Section 951 Inclusion of such Taxable
CFC Shareholder for such taxable year; and (ii) If the Company ceases to be a CFC at any
time, the Company will provide prompt written notice to known U.S. Investors if at any
time thereafter the Company becomes aware that it or any subsidiary has become a CFC.
Upon written request of a U.S. Investor from time to time, subject to obtaining the
consent of its shareholders to release such information, the Company will promptly
provide in writing such information in its possession concerning its shareholders and,
to the Company’s actual knowledge, the direct and indirect interest holders in each
shareholder sufficient for such U.S. Investor to determine whether the Company is a CFC.






	6.4	 	Dealings with Government Officials. None of the Group Companies or any director, officer,
agent, employee, or any other Person associated with or acting for or on behalf of the foregoing,
will offer, pay, promise to pay, or authorize the payment of any money, or offer, give a promise to
give, or authorize the giving of anything of value, to any Government Official, to any political
party or official thereof or to any candidate for political office (or to any Person where the
Group Company, such director, officer, agent,




19









 






	 	 	employee or other Person knows or is aware of a high probability that all or a portion of such
money or thing of value would be offered, given or promised, directly or indirectly, to any
Government Official, political party, party official, or candidate for political office) for
the purposes of:






	 	(a)	 	influencing any act or decision of such Government Official, political party, party
official, or candidate in his or its official capacity;
	 
	 	(b)	 	inducing such Government Official, political party, party official or candidate to do or
omit to do any act in violation of the lawful duty of such Government Official, political
party, party official or candidate;
	 
	 	(c)	 	securing any improper advantage; or
	 
	 	(d)	 	inducing such Government Official, political party, party official, or candidate to use
his or its influence with any Governmental Authority to affect or influence any act or
decision of such Governmental Authority, in order to assist any Group Company in obtaining or
retaining business for or with, or directing business any Group Company.






	6.5	 	Compliance with the laws of the PRC. Each Founder and each Group Company shall at all times
comply with, and take all necessary steps to rectify any actual or potential conflicts or
inconsistencies respecting any Founder or Group Company with, all applicable laws of the PRC,
including all circulars, directives and notices issued by the PRC State Administration of Foreign
Exchange () the PRC
Ministry of Commerce
()
and other applicable departments, instrumentalities
and bureaux of the government of the PRC.
	 
	6.6	 	Waiver of Business Opportunities.






	 	(a)	 	Each Group Company acknowledges that the Investors are professional investment funds. The
Investors or their respective Affiliates may from time to time have information on or
knowledge of a business opportunity that a Group Company is financially able to undertake, is
from its nature in the line or lines of one or more Group Company’s existing or prospective
business and is a practical advantage to it, and is one in which a Group Company has an
interest or reasonable expectancy (“Business Opportunity”). Such Business Opportunity may or
may not be within the knowledge of an Investor Representative. Each Group Company irrevocably
agrees that no Investor Representative shall be under any duty to disclose any Business
Information to the Company or any other Group Company, or permit any Group Company to
participate in any Business Opportunity, or to otherwise take advantage of any Business
Opportunity, and hereby waives, to the extent permitted by law, any claim based on the
corporate opportunity doctrine or otherwise that could limit the Investors’ ability to benefit
from information related to an actual or potential Business Opportunity or that would require
the Investors or any Investor Representative to disclose any such information to any Group
Company or offer any Business Opportunity to any Group Company. Each Covenantor hereby
irrevocably agree that each Investor Representative shall be entitled to report all matters






20








 






	 	 	 	concerning the Group and its business (including but not limited to matters
discussed at meetings of the Board or information provided to an Investor Representative
in its capacity as such) to the Investor that appointed it.
	 
	 	(b)	 	The Investors and their respective Affiliates shall have the right to, and shall have no
duty hereunder to refrain from, investing in or financing or becoming a stockholder or
shareholder of other companies, corporations, business or enterprises that engage in the same
or similar activities or lines of business as any Group Company or that does business with any
potential or actual customer or supplier of any Group Company, or that employs or otherwise
engages any officer or employee of any Group Company. To the fullest extent permitted by law,
neither nor any Affiliate of the Investors nor any officer or director thereof shall be liable
to any Group Company or its other stockholders or shareholders for breach of any fiduciary
duty by reason of any such activities of the Investors or their respective Affiliates, or the
participation therein by the Investors or any of their Affiliates. In the event that the
Investors or any of their Affiliates acquires knowledge of a potential transaction or matter
which may be a Business Opportunity for any Group Company, no Investor shall have any duty to
communicate or present such Business Opportunity to the Group Company and shall not be liable
to the Group Company or its other stockholders or shareholders for breach of any fiduciary
duty as a Shareholder of the Company by reason of the fact that the Investors or any of their
Affiliates pursues or acquires such Business Opportunity for itself, directs such Business
Opportunity to another Person, or does not communicate information regarding such Business
Opportunity to any Group Company.






	7.	 	Demand Registration.
	 
	7.1	 	Request for Registration on Form Other Than Form F-3. Subject to the terms of this Agreement,
in the event that the Company receives from the Initiating Holders at any time following the
earlier to occur of (i) June 30, 2008, or (ii) six months after the closing of the Company’s
initial public offering of Ordinary Shares under a Registration Statement, a written request that
the Company effect any Registration with respect to all or a part of the Registrable Securities on
a form other than Form F-3 for an offering of the then outstanding Registrable Securities, the
Company shall (i) promptly give written notice of the proposed Registration to all other Holders,
and (ii) as soon as practicable, effect the Registration of the Registrable Securities specified in
the request, together with any Registrable Securities of any Holder in that request as are
specified in a written request given within 20 days after written notice from the Company. The
Company shall not be obligated to take any action to effect any Registration pursuant to this
Section 7.1 after the Company has effected three Registrations pursuant to this Section 7.1 and
each Registration has been declared effective. The substantive provisions of Section 7.5 shall be
applicable to the Registration initiated under this Section 7.1.
	 
	7.2	 	Request for Registration on Form F-3. If any Holder requests that the Company file a
Registration Statement on Form F-3 (or any successor form to




21









 






	 	 	Form F-3, or any comparable form for a Registration in a jurisdiction other than the United
States) for a public offering of shares of Registrable Securities, the anticipated aggregate
price to the public of which, net of Selling Expenses, would not be less than US$500,000, and
the Company is a registrant entitled to use Form F-3 or comparable form to Register the
Registrable Securities for an offering, the Company shall cause those Registrable Securities
to be Registered for the offering on that form and to cause those Registrable Securities to be
qualified in jurisdictions as the Holder or Holders may request. The substantive provisions of
Section 7.5 shall be applicable to each Registration initiated under this Section 7.2.
Registrations on Form F-3 shall not be deemed to be demand Registrations as described in
Section 7.1 above. Except as otherwise provided herein, there shall be no limit on the number
of times the Holders may request Registration of Registrable Securities under this Section
7.2.
	 
	7.3	 	Right of Deferral. Notwithstanding the foregoing, the Company shall not be obligated to file a
Registration Statement pursuant to this Section 7:






	 	(a)	 	in any particular jurisdiction in which the Company would be required to execute a general
consent to service of process in effecting that Registration, qualification, or compliance,
unless the Company is already subject to service in that jurisdiction and except as may be
required by the Securities Act or other applicable law in a jurisdiction other than the United
States in which the Registration is being effected;
	 
	 	(b)	 	within six months immediately following the effective date of any Registration Statement
pertaining to the securities of the Company (other than a registration of securities in a Rule
145 transaction or with respect to an employee benefit plan or a Registration from which the
Registrable Securities of Holders have been excluded, with respect to all or any portion of
the Registrable Securities the Holders requested be included in such Registration); or
	 
	 	(c)	 	if the Company furnishes to those Holders requesting Registration a certificate signed by
the President or Chief Executive Officer of the Company stating that in the good faith
judgment of the Board it would be materially detrimental to the Company and its shareholders
for a Registration Statement to be filed at such time, then the Company’s obligation to file a
Registration Statement shall be deferred for a period not to exceed 60 days from the receipt
of the request to file the Registration by that Holder provided that the Company shall not
exercise the right contained in this Section 7.3(c) more than once in any 12-month period and
provided further, that during such 60-day period the Company shall not file a Registration
Statement with respect to a public offering of securities of the Company.






	7.4	 	Registration of Other Securities in Demand Registration. Any Registration Statement filed
pursuant to the request of any Holder under this Section 7 may, subject to the provisions of
Section 7.5, include Ordinary Shares of the Company other than Registrable Securities.
	 
	7.5	 	Underwriting in Demand Registration.




22









 












	 	(a)	 	Notice of Underwriting. If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to this Section 7, and the Company shall include that
information in the written notice referred to in Section 7.1 or 7.2 of this Agreement. The right of
any Holder to Registration pursuant to this Section 7 shall be conditioned upon that Holder’s
agreement to participate in the underwriting and the inclusion of that Holder’s Registrable
Securities in the underwriting. In such event, the Company shall (together with all Holders
proposing to distribute their securities through the underwriting) enter into an underwriting
agreement with the representative (the “Underwriter’s Representative”) of the underwriter or
underwriters as set forth in Section 7.5(c).
	 
	 	(b)	 	Inclusion of Other Holders in Demand Registration. If the Company, officers or directors of the
Company holding Ordinary Shares other than Registrable Securities, or holders of securities other
than Registrable Securities, request inclusion of such Ordinary Shares or other securities in the
Registration, the Initiating Holders, to the extent they deem advisable and consistent with the
goals of that Registration, may, in their sole discretion, on behalf of all Holders, offer to any
or all of the Company, those officers or directors, and the holders of securities other than
Registrable Securities that such Ordinary Shares or other securities be included in the
underwriting and may condition that offer on the acceptance by those persons of the terms of this
Section 7. If, however, the number of shares so included exceeds the number of shares of
Registrable Securities included by all Holders, the Registration shall be treated as governed by
Section 8 of this Agreement rather than this Section 7, and it shall not count as a Registration
for purposes of this Section 7.
	 
	 	(c)	 	Selection of Underwriter in Demand Registration. The Company shall (together with all Holders
proposing to distribute their securities through the underwriting) enter into an underwriting
agreement with the Underwriter’s Representative of the underwriter or underwriters selected for the
underwriting by the Holders of a majority of the Registrable Securities being Registered by the
Initiating Holders and reasonably acceptable to the Company.
	 
	 	(d)	 	Marketing Limitation in Demand Registration. In the event the Underwriter’s Representative
advises the Initiating Holders in writing that market factors (including, without limitation, the
aggregate number of Ordinary Shares requested to be Registered, the general condition of the
market, and the status of the persons proposing to sell securities pursuant to the Registration)
require a limitation of the number of shares to be underwritten, then the number of shares of
Registrable Securities that may be included in the Registration and underwriting shall be allocated
among all selling Holders in proportion, as nearly as practicable, to the respective amounts of
Registrable Securities entitled to inclusion in that Registration held by those Holders at the time
of filing the Registration Statement. No Registrable Securities or other securities excluded from
the underwriting by reason of this Section 7.5(d) shall be included in that Registration Statement.




23









 






	 	(e)	 	Right of Withdrawal in Demand Registration. If any Holder of Registrable Securities, or a
holder of other securities entitled (upon request) to be included in that Registration,
disapproves of the terms of the underwriting, that person may elect to withdraw therefrom by
written notice to the Company, the Underwriter’s Representative, and the Initiating Holders
delivered at least seven days prior to the effective date of the Registration Statement. The
securities so withdrawn shall also be withdrawn from the Registration Statement.






	7.6	 	Other Securities Laws in Demand Registration. In the event of any Registration pursuant to this
Section 7, the Company shall Register and qualify the securities covered by the Registration
Statement under the securities laws of any other jurisdictions in the United States of America,
Europe, Hong Kong and Singapore as shall be appropriate for the distribution of the securities;
provided, however, that: (a) the Company shall not be required to do business or to file a general
consent to service of process in any such state or jurisdiction; and (b) notwithstanding anything
in this Agreement to the contrary, in the event any jurisdiction in which the securities shall be
qualified imposes a non-waivable requirement that expenses incurred in connection with the
qualification of the securities be borne by selling shareholders, the expenses shall be payable pro
rata by the selling shareholders.
	 
	7.7	 	Other Registration Rights. Each Covenantor hereby jointly represents and warrants to the
Investors that the Company has not granted any rights to any shareholder or other person with
respect to the Registration of securities of the Company. Without the prior written consent of
Holders of a majority of the Registrable Securities, the Company covenants and agrees that it shall
not hereafter grant any person any rights with respect to the Registration of securities of the
Company which are on a parity with or superior to the rights granted hereunder.
	 
	8.	 	Piggyback Registration.
	 
	8.1	 	Notice of Piggyback Registration and Inclusion of Registrable Securities.
Subject to the terms of this Agreement, if the Company decides to Register any of its Ordinary
Shares (either for its own account or the account of a security holder or holders exercising
their respective demand registration rights (other than Holders exercising their demand rights
pursuant to Section 7 of this Agreement)) (other than a registration relating solely to the
sale of securities to participants in a Company stock plan, a registration relating to a
corporate reorganization or other transaction under Rule 145 of the Securities Act, or a
registration in which the only securities being registered are Ordinary Shares issuable upon
conversion of debt securities that are also being registered), the Company shall: (a) at least
30 days prior to any such Registration, give each Holder written notice thereof (which shall
include a list of the jurisdictions in which the Company intends to attempt to qualify those
securities under the applicable Blue Sky or other securities laws); and (b) include in that
Registration (and any related qualification under Blue Sky laws or other compliance), and in
any underwriting involved therein, all the Registrable Securities specified in a written
request delivered to the Company by any Holder within 30 days after delivery of the written
notice from the Company. The Company shall have the right to terminate or withdraw any




24









 






	 	 	registration initiated by it under this Section 8 prior to the effectiveness of such
Registration whether or not any Holder has elected to include securities in such registration.
	 
	8.2	 	Underwriting in Piggyback Registration.






	 	(a)	 	Notice of Underwriting in Piggyback Registration. If the Registration of which the Company
gives notice is for a Registered public offering, involving an underwriting, the Company shall
so advise the Holders as a part of the written notice given pursuant to Section 8. In this
event, the right of any Holder to Registration shall be conditioned upon the underwriting and
the inclusion of that Holder’s Registrable Securities in the underwriting, to the extent
provided in this Section 8. All Holders proposing to distribute their securities through the
underwriting shall (together with the Company and the other holders distributing their
securities through the underwriting) enter into an underwriting agreement with the
Underwriter’s Representative for that offering. The Holders shall have no right to participate
in the selection of the underwriters for an offering pursuant to this Section 8.
	 
	 	(b)	 	Marketing Limitation in Piggyback Registration. In the event the Underwriter’s
Representative advises the Holders seeking Registration of Registrable Securities pursuant to
this Section 8 in writing that market factors (including, without limitation, the aggregate
number of Ordinary Shares requested to be Registered, the general condition of the market, and
the status of the persons proposing to sell securities pursuant to the Registration) require a
limitation of the number of shares to be underwritten, the Underwriter’s Representative
(subject to the allocation priority set forth in Section 8.2(c)) may:






	 	(i)	 	in the case of the Company’s initial Registered public offering, exclude some or all
Registrable Securities from the Registration and underwriting; and
	 
	 	(ii)	 	in the case of any Registered public offering subsequent to the initial public
offering, limit the number of shares of Registrable Securities to be included in the
Registration and underwriting, to not less than 50 per cent. of the securities requested
by such Holders to be included in the Registration.






	 	(c)	 	Allocation of Shares in Piggyback Registration. In the event that the Underwriter’s
Representative limits the number of shares to be included in a Registration pursuant to
Section 8.2(b), the number of shares to be included in the Registration shall be allocated
among all other Holders and other holders of securities (other than Registrable Securities)
requesting and legally entitled to include securities in that Registration, in the following
order of priority:






	 	(i)	 	first, to the Company, to the extent it is offering shares for its own account; and
	 
	 	(ii)	 	next, to Holders requesting inclusion of Registrable Securities in the offering, in
proportion, as nearly as practicable, to the respective amounts of securities (including
Registrable Securities) then held by such Holders respectively; and




25









 






	 	(iii)	 	next, to holders of other securities of the Company requesting inclusion of such
securities in the offering, in proportion, as nearly as practicable to the respective
amounts of securities then held by such other holders respectively.






	 	 	 	For any Registration subsequent to an initial public offering, the number of Registrable
Securities that may be included in the Registration and underwriting under Section
8.2(b)(ii) shall not be reduced to less than 50 per cent. of the aggregate securities
requested by Holders to be included in the Registration without the prior consent of at
least a majority of the Holders who have requested their Registrable Securities be
included in the Registration and underwriting. No Registrable Securities or other
securities excluded from the underwriting by reason of this Section 8.2(c) shall be
included in the Registration Statement.
	 
	 	(d)	 	Withdrawal in Piggyback Registration. If any Holder disapproves of the terms of any
underwriting, the Holder may elect to withdraw therefrom by written notice to the Company and
the Underwriter’s Representative delivered at least seven days prior to the effective date of
the Registration Statement. Any Registrable Securities or other securities excluded or
withdrawn from the underwriting shall be withdrawn from the Registration.
	 
	 	(e)	 	Not Demand Registration. Registration pursuant to this Section 8 shall not be deemed to be
a demand Registration as described in Section 7 above. There shall be no limit on the number
of times the Holders may request Registration of Registrable Securities pursuant to this
Section 8.






	9.	 	Expenses of Registration.




All Registration Expenses incurred in connection with Registrations pursuant to Sections 7.1, 7.2
and 8 shall be borne by the Company, and the Company shall bear the fees of a single counsel for
the selling Shareholders in the Registrations. All Registration Expenses incurred in connection
with any other Registration, qualification, or compliance, shall be apportioned among the Holders
and other holders, including the Company, of the securities so Registered on the basis of the
number of shares Registered. Notwithstanding the above, the Company shall not be required to pay
for any expenses of any Registration proceeding begun pursuant to Section 7 if the Registration
request is subsequently withdrawn at the request of the Holders of a majority of the Registrable
Securities to be Registered (which Holders shall bear those expenses), unless the Holders of a
majority of the Registrable Securities agree to forfeit their right to one corresponding
Registration pursuant to Section 7 provided, however, that if at the time of such withdrawal, the
Holders have learned of a material adverse change in the condition, business, or prospects of the
Company not known to the Holders at the time of their request for such Registration and have
withdrawn their request for Registration with reasonable promptness after learning of such material
adverse change, then the Holders shall not be required to pay any of such expenses and such
Registration shall not constitute the use of a demand Registration pursuant to Section 7.1. All
Selling Expenses shall be borne by the holders of the securities Registered pro rata on the basis
of the number of shares Registered.






26









 









	10.	 	Termination of Registration Rights.




The rights to cause the Company to Register securities granted under Sections 7 and 8 and to
receive notices pursuant to Section 8 of this Agreement, shall terminate, with respect to each
Holder on the date five years after a Qualified IPO or the Company’s initial public offering of
securities pursuant to a Registration Statement, or with respect to each Holder, if that Holder is
eligible to sell all of that Holder’s Registrable Securities either (i) under Rule 144 within any
three-month period without volume limitations, or (ii) under Rule 144(k), or (iii) with respect to
each Holder’s right with respect to Registration of Registrable Securities in any jurisdiction
other than the United States, if that Holder is eligible to sell all of its Registrable Securities
under a provision of that jurisdiction’s securities laws comparable to Rule 144 or 144(k).





	11.	 	Registration Procedures and Obligations.




Whenever required under this Agreement to effect the Registration of any Registrable Securities,
the Company shall as expeditiously as practicable:





	 	(a)	 	Prepare and file with the Commission (or comparable regulatory agency for a Registration
in a jurisdiction other than the United States) a Registration Statement with respect to those
Registrable Securities and use its best efforts to cause that Registration Statement to become
effective, and, upon the request of the Holders of a majority of the Registrable Securities
Registered thereunder, keep the Registration Statement effective for up to 180 days, or if
earlier, until the distribution contemplated by the Registration has been completed;
	 
	 	(b)	 	Prepare and file with the Commission (or comparable regulatory agency for a Registration
in a jurisdiction other than the United States), amendments and supplements to that
Registration Statement and the prospectus used in connection with the Registration Statement
as may be necessary to comply with the provisions of the Securities Act (or other applicable
law in a jurisdiction other than the United States) with respect to the disposition of all
securities covered by the Registration Statement;
	 
	 	(c)	 	Furnish to the Holders the number of copies of a prospectus, including a preliminary
prospectus, required by the Securities Act (or other applicable law in a jurisdiction other
than the United States), and any other documents as they may request in order to facilitate
the disposition of Registrable Securities owned by them;
	 
	 	(d)	 	Otherwise use its best efforts to comply with the Securities Act, the Exchange Act and any
other applicable rules and regulations of the Commission, and make available to the securities
holders, as soon as practicable, an earnings statement covering the period of at least 12
months after the effective date of such Registration Statement, which earnings statement shall
satisfy Section 11(a) of the Securities Act and any applicable regulations thereunder,
including Rule 158;
	 
	 	(e)	 	Use its best efforts to Register and qualify the securities covered by the Registration
Statement under the securities or Blue Sky laws of any other jurisdictions as shall be
requested by the Holders, provided that the Company shall not be required to qualify to do
business or file




27









 






	 	 	 	a general consent to service of process in any such states or jurisdictions, and
provided further that in the event any jurisdiction in which the securities shall be
qualified imposes a non-waivable requirement that expenses incurred in connection with
the qualification of the securities be borne by selling shareholders, those expenses
shall be payable pro rata by selling shareholders;
	 
	 	(f)	 	In the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the managing underwriter of
the offering. Each Holder participating in the underwriting shall also enter into and perform
its obligations under such an agreement;
	 
	 	(g)	 	Notify each Holder of Registrable Securities covered by the Registration Statement at any
time when a prospectus relating thereto is required to be delivered under the Securities Act
of the happening of any event as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;
	 
	 	(h)	 	Provide a transfer agent and registrar for all Registrable Securities Registered pursuant
to the Registration Statement and a CUSIP number for all those Registrable Securities, in each
case not later than the effective date of the Registration;
	 
	 	(i)	 	Furnish, at the request of any Holder requesting Registration of Registrable Securities
pursuant to this Agreement, on the date that Registrable Securities are delivered for sale in
connection with a Registration pursuant to this Agreement, (i) an opinion, dated the date of
the sale, of the counsel representing the Company for the purposes of the Registration, in
form and substance as is customarily given to underwriters in an underwritten public offering,
and (ii) a “comfort” letter dated the date of the sale, from the independent certified public
accountants of the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering and
satisfactory to a majority in interests of the Holders requesting Registration, addressed to
the underwriters, if any, and to Holders requesting Registration of Registrable Securities.
	 
	 	(j)	 	Take all action necessary to list the Registrable Securities on the primary exchange upon
which the Company’s securities are then traded.






	12.	 	Information Furnished by Holder.




It shall be a condition precedent of the Company’s obligations under this Agreement that each
Holder of Registrable Securities included in any Registration furnish to the Company information
regarding the Holder and the distribution proposed by the Holder as the Company may reasonably
request.





	13.	 	Indemnification.




28









 






	13.1	 	Company‘s Indemnification of Holders. To the extent permitted by law, the Company shall
indemnify each Holder, each of its officers, directors, and constituent partners, legal counsel for
the Holders, and each person controlling that Holder, with respect to which Registration,
qualification, or compliance of Registrable Securities has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls any underwriter against all
claims, losses, damages, liabilities, or actions in respect thereof (collectively, “Damages”) to
the extent the Damages arise out of or are based upon any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus or other document (including any related
Registration Statement) incident to any Registration, qualification, or compliance, or are based on
any omission (or alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or any violation by the Company of any
rule or regulation promulgated under the Securities Act, Exchange Act, applicable Blue Sky laws, or
other applicable laws in the jurisdiction other than the United States in which the Registration
occurred, applicable to the Company and relating to action or inaction required of the Company in
connection with any Registration, qualification, or compliance, and the Company shall reimburse
each Holder, each underwriter, and each person who controls any Holder or underwriter, for any
legal and any other expenses incurred in connection with investigating or defending any such claim,
loss, damage, liability, or action.
	 
	13.2	 	Holder‘s Indemnification of Company. To the extent permitted by law, each Holder shall, if
Registrable Securities held by that Holder are included in the securities as to which Registration,
qualification or, compliance is being effected pursuant to this Agreement, indemnify the Company,
each of its directors and officers, each legal counsel and independent accountant of the Company,
each underwriter, if any, of the Company’s securities covered by the Registration Statement, each
person who controls the Company or underwriter within the meaning of the Securities Act, and each
other Holder, each of its officers, directors, and constituent partners, and each person
controlling the other Holder, against all Damages arising out of or based upon any untrue statement
(or alleged untrue statement) of a material fact contained in any Registration Statement,
prospectus, offering circular, or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the statements therein
not misleading, or any violation by the Holder of any rule or regulation promulgated under the
Securities Act, Exchange Act, applicable Blue Sky laws, or other applicable laws in the
jurisdiction other than the United States in which the Registration occurred, applicable to the
Holder and relating to action or inaction required of the Holder in connection with any
Registration, qualification, or compliance, and shall reimburse the Company, those Holders,
directors, officers, partners, persons, law and accounting firms, underwriters or control persons
for any legal and any other expenses reasonably incurred in connection with investigating or
defending any claim, loss, damage, liability, or action, in each case to the extent, but only to
the extent, that the untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in that Registration Statement, prospectus, offering circular, or other document
in reliance upon and in conformity with written information furnished to the Company by that Holder
and stated to be specifically for use in connection with the offering of securities of the Company,
provided, however, that the indemnity contained in this Section




29









 






	13.2	 	shall not apply to amounts paid in settlement of any Damages if settlement is effected
without the consent of that Holder (which consent shall not be unreasonably withheld) and
provided, further, that each Holder’s liability under this Section 13.2 shall not exceed the
Holder’s proceeds (less underwriting discounts and selling commissions) from the offering of
securities made in connection with that Registration.
	 
	 	 	Any indemnification pursuant to this Section 13.2 shall be several, and not joint and several,
among the Holders whose Registrable Securities are included in the Registration.
	 
	13.3	 	Condition to Indemnity. The foregoing indemnity agreements of the Company and the Holders are
subject to the condition that, insofar as they relate to any violation made in a preliminary
prospectus but eliminated or remedied in the amended prospectus on file with the Commission at the
time the Registration Statement in question becomes effective or the amended prospectus filed with
the Commission pursuant to Rule 424(b) (the “Final Prospectus”), such indemnity agreement shall not
inure to the benefit of any person if a copy of the Final Prospectus was furnished to the
indemnified party and was not furnished to the person asserting the loss, liability, claim or
damage at or prior to the time such action is required by the Securities Act.
	 
	13.4	 	Indemnification Procedure. Promptly after receipt by an indemnified party under this Section
13 of notice of the commencement of any action, the indemnified party shall, if a claim is to be
made against an indemnifying party under this Section 13, notify the indemnifying party in writing,
of the commencement thereof and generally summarize the action. The indemnifying party shall have
the right to participate in and to assume the defense of that claim; provided, however, that the
indemnifying party shall be entitled to select counsel for the defense of the claim with the
approval of any parties entitled to indemnification, which approval shall not be unreasonably
withheld; provided further, however, that if either party reasonably determines that there may be a
conflict between the position of the Company and the Shareholders in conducting the defense of the
action, suit, or proceeding by reason of recognized claims for indemnity under this Section 13,
then counsel for that party shall be entitled to conduct the defense to the extent reasonably
determined by counsel to be necessary to protect the interests of
that party. The failure to notify an indemnifying party promptly of the commencement of any action, if
prejudicial to the ability of the indemnifying party to defend the action, shall relieve the
indemnifying party, to the extent so prejudiced, of any liability to the indemnified party
under this Section 13, but the omission to notify the indemnifying party shall not relieve the
party of any liability that the party may have to any indemnified party otherwise than under
this Section 13.
	 
	13.5	 	Contribution. If the indemnification provided for in this Section 13 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to any Damages, then
the indemnifying party, in lieu of indemnifying the indemnified party hereunder, shall contribute
to the amount paid or payable by the indemnified party as a result of those Damages in such
proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one
hand, and of the indemnified party, on the other hand, in connection with the statements or
omissions that resulted in Damages as well as any other relevant equitable considerations. The
relative fault of the




30









 






	 	 	indemnifying party and of the indemnified party shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the indemnifying or the
indemnified party and the parties’ relative intent, knowledge, access to information, and
opportunity to correct or prevent the statement or omission. No Holder will be required to
contribute any amount in excess of the net proceeds received from the sale of all such
Registrable Securities offered and sold by such Holder pursuant to such Registration
Statement; and no person or entity guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) will be entitled to contribution from any person or
entity who was not guilty of such fraudulent misrepresentation.
	 
	13.6	 	Conflicts. Notwithstanding the foregoing, to the extent that provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection with the
underwritten public offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control; provided however, that the provision in any such underwriting
agreement pertaining to indemnification and contribution will be (i) substantially similar to those
contained herein, or (ii) typical of such provisions found in underwriting agreements of companies
similarly situated to the Company.
	 
	13.7	 	Survival of Obligations. Subject to Section 13.6, the obligations of the Company and Holders
under this Section 13 shall survive the completion of any offering of Registrable Securities in a
Registration Statement under this Agreement or otherwise. No indemnifying party, in the defense of
any such claim or litigation, shall, except with the consent of each indemnified party, consent to
entry of any judgment or enter into any settlement which admits fault of behalf of the indemnified
party or which does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability with respect to such claim or
litigation.
	 
	14.	 	Lock-Up or Market Standoff.




Each Holder and Covenantor acknowledges that the Underwriter’s Representative (if any), in
connection with a registration relating to the Company’s initial public offering (other than a
registration on Form S-8 or a related or successor form relating solely to an employee benefit plan
or a registration on Form S-4 or a related or successor form relating solely to a transaction under
Rule 145), may request the Shareholders enter into a lockup or market standoff agreement in
customary form (subject to the following conditions) pursuant to which the Shareholders agree not
to sell or otherwise transfer or dispose of any Shares or other securities of the Company without
the prior written consent of the Underwriter’s Representative for up to 180 days following the
effective date of a Registration Statement of the Company filed under the Securities Act (or other
applicable law in a jurisdiction other than the United States in which a Registration occurred).
The obligations of each Holder under this Section 14 shall be conditioned upon the following:





	 	(a)	 	the lockup or market standoff agreement applies only to the first registration statement
of the Company which covers securities to be sold on its behalf to the public in an
underwritten offering, but not to




31









 






	 	 	 	Registrable Securities actually sold pursuant to such Registration Statement;
	 
	 	(b)	 	such Holder is satisfied that all Covenantors, directors or officers of any Group Company,
and holders of one per cent. or more of any class of securities of the Company are bound by
substantially identical restrictions, and that neither the Company nor the Underwriter’s
Representative will release any such Founders, directors or officers of any Group Company, and
holders of one per cent. or more of any class of securities from the lock-up without first
releasing the Holders; (c) the lockup or market standoff agreement provides that if any
securities of the Company are to be excluded or released in whole or part from such
restrictions, the Underwriter’s Representative shall so notify each Holder and each Holder
shall be excluded or released, in proportionate amounts to the extent of the exclusion or
release with respect to any other holder of the Company’s securities, including any director
or officer of any Group Company, or holder of one per cent. or more of any class of securities
of the Company subject to such restrictions; (d) the lockup or market standoff agreement by
its terms permits transfers of Registrable Securities by any Holder to any Affiliate of such
Holder during the restricted period, provided that such Affiliate executes a lock-up or market
standoff agreement substantively identical to that executed by the transferring Holder; and
(e) to the extent permitted by applicable law and regulation, the Underwriter’s Representative
and the Company permit the holders of Preferred Shares to sell their Shares in an amount
representing up to 20 per cent. of the Shares or other securities to be sold in such public
offering.




15. No-Action Letter or Opinion of Counsel in Lieu of Registration; Conversion of Preferred Shares.



Notwithstanding anything else in this Agreement, if: (a) the Company obtains from the Commission
(or comparable regulatory agency in lieu of Registration in a jurisdiction other than the United
States) a “no-action” letter in which the Commission or such comparable regulatory agency has
indicated that it will take no action if, without Registration under the Securities Act or
comparable law, any Holder disposes of Registrable Securities covered by any request for
Registration made under Section 7 of this Agreement in the specific manner in which the Holder
proposes to dispose of Registrable Securities included in that request (such as including, without
limitation, inclusion of the Registrable Securities in an underwriting initiated by either the
Company or the Holders) and that the Registrable Securities may be sold to the public without
Registration in accordance with an established procedure or Rule-based “safe harbor” without
unreasonable legal risk or uncertainty; or (b) in the opinion of counsel retained by the Company
concurred in by counsel for the Holder, which concurrence shall not be unreasonably withheld, no
Registration under the Securities Act (or other applicable law) is required in connection with the
disposition and that the Registrable Securities may be sold to the public without Registration,
then the Registrable Securities included in the request shall not be eligible for Registration
under this Agreement. Any Registrable Securities not so disposed of shall be eligible for
Registration in accordance with the terms of this Agreement with respect to other proposed
dispositions to which this Section 15 does not apply. The Registration rights of the Holders of
Registrable Securities set forth in this Agreement are conditioned upon the conversion of the
Registrable Securities with respect to






32









 







which Registration is sought into Ordinary Shares prior to the effective date of the Registration
Statement.





	16.	 	Reports Under the Exchange Act.




With a view to making available to Holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the Commission that may at any time permit a
Holder to sell securities of the Company to the public without Registration or pursuant to a
Registration on Form F-3, the Company agrees to:





	 	(a)	 	make and keep public information available, as those terms are understood and defined in
Rule 144, at all times after 90 days after the effective date of the first Registration
Statement filed by the Company for the offering of its securities to the public;
	 
	 	(b)	 	take all action, including the voluntary Registration of its Ordinary Shares under Section
12 of the Exchange Act, necessary to enable the Holders to utilize Form F-3 for the sale of
their Registrable Securities, such action to be taken as soon as practicable after the end of
the fiscal year in which the first Registration Statement filed by the Company for the
offering of its securities to the general public is declared effective;
	 
	 	(c)	 	file with the Commission in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act;
	 
	 	(d)	 	furnish to any Holder, so long as the Holder owns any Registrable Securities, promptly
upon request (i) a written statement by the Company that it has complied with the reporting
requirements of Rule 144 (at any time after 90 days after the effective date of the first
Registration Statement filed by the Company), the Securities Act, and the Exchange Act (at any
time after it has become subject to those reporting requirements), or that it qualifies as a
registrant whose securities may be resold pursuant to Form F-3 (at any time after it so
qualifies); (ii) a copy of the most recent annual or quarterly report of the Company and any
other reports and documents filed by the Company; and (iii) any other information as may be
requested in availing any Holder of any rule or regulation of the Commission which permits the
selling of any securities without Registration or pursuant to that form; and
	 
	 	(e)	 	for a Registration in a jurisdiction other than the United States, take actions similar to
those set forth in paragraphs (a), (b), (c) and (d) of this Section 16 with a view to making
available to Holders the benefits of the corresponding provision or provisions of that
jurisdiction’s securities laws.






	17.	 	Transfer of Rights.




The rights hereunder may be assigned by any Investor to a transferee or assignee of any Preferred
Shares or Registrable Securities, conditioned upon signing the Adherence Deed.






33









 









	18.	 	Legend; Stop Transfer Instructions.
	 
	18.1	 	Legend. Each certificate representing shares or securities now or hereafter owned by any
Shareholder or any transferee of such shares and securities and the members register of the Company
shall be endorsed with the following legend:






	 	 	 	“THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A SHAREHOLDERS’ AGREEMENT BY AND
BETWEEN THE HOLDER HEREOF, THE COMPANY AND CERTAIN OTHER SHAREHOLDERS OF THE COMPANY.
COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
COMPANY.”






	18.2	 	Stop Transfer Instructions. The Parties hereto agree that the Company may instruct its
transfer agent to impose transfer restrictions on the shares represented by certificates bearing
the legend referred to in Section 18.1 to enforce the provisions of this Agreement, and the Company
agrees promptly to do so. The legend shall be removed upon termination of this Agreement.
	 
	19.	 	Covenants.
	 
	19.1	 	Matters requiring Investor Consent. In addition to any other rights provided by law and the
provisions of the Articles of Association or Memorandum of Association of the Company, no Group
Company shall, and each Covenantor shall exercise all of their rights with respect to Ordinary
Shares held by them so as to cause the Group Companies to not effect or otherwise consummate any of
the following (the “Reserved Matters”) without first obtaining Investor Consent and the consent of
the SIG Representative and Sequoia Representative:






	 	(a)	 	Make any distribution of profits to the Shareholders by way of interim or final dividend,
capitalization of reserves or otherwise.
	 
	 	(b)	 	Settle or alter the terms of any bonus or profit sharing scheme or any employee share
option or share participation scheme.
	 
	 	(c)	 	Amend the accounting policies previously adopted, change the fiscal or financial year of
the Company, or adopt the annual accounts or budgets of any Group Company.
	 
	 	(d)	 	Appoint or change the auditors of any Group Company.
	 
	 	(e)	 	Appoint, amend, remove or settle the terms of appointment (including compensation) of any
Senior Manager (including, for the avoidance of doubt, any chief financial officer, chief
operating officer or chief technology officer) of any Group Company.
	 
	 	(f)	 	Acquire any investment or incur any commitment in excess of US$100,000 (or its equivalent
in other currencies) in respect of any single transaction, or in excess of US$500,000 (or its
equivalent in




34









 






	 	 	 	other currencies) in aggregate at any time in a series of related transactions in any
financial year of any Group Company in the ordinary course of its business, or acquire any
share capital or other securities of any body corporate.
	 
	 	(g)	 	Make any investment other than investments in prime commercial paper, money market funds,
certificates of deposit in any International bank having a net worth in excess of US$1,000,000 or
obligations issued or guaranteed by the United States of America or other sovereign government, in
each case having a maturity not in excess of two years.
	 
	 	(h)	 	Approve, or make adjustments or modifications to the terms of transactions involving the
interest of any director, shareholder or Related Party of any Group Company, including but not
limited to the making of any loans or advances, whether directly or indirectly, or the provision of
any guarantee, indemnity or security for or in connection with any indebtedness of liabilities of
any director or shareholder of any Group Company.
	 
	 	(i)	 	Increase, reduce or cancel the authorized or issued share capital of any Group Company or
issue, allot, purchase or redeem any shares or securities convertible into or carrying a right of
subscription in respect of shares or any share warrants or grant or issue any options rights or
warrants or which may require the issue of shares in the future or do any act which has the effect
of diluting or reducing the effective shareholding of the Investors in the Company or their
effective interest in any Group Company, except for (A) a redemption in accordance with the
Company’s Articles of Associations, (B) a repurchase or issuance of shares pursuant to an employee
share option plan approved by the Investors, (C) issuances of Ordinary Shares upon conversion of
Preferred Shares or other outstanding convertible securities approved by the Investors, and (D)
issuances of Ordinary Shares upon exercise of outstanding options or warrants approved by the
Investors.
	 
	 	(j)	 	Borrow any money or obtain any financial facilities except pursuant to trade facilities
obtained from banks or other financial institutions in excess of US$250,000 (or its equivalent in
other currencies) at any time in any financial year unless the transaction is already included in a
Board-approved budget or that it is trade credit incurred in the ordinary course of business.
	 
	 	(k)	 	Make any loan or advance to any person, including any employee or director, except advances and
similar expenditures in the ordinary course of business or under the terms of an employee stock or
option plan approved by the Board.
	 
	 	(l)	 	Make any loan or advance to, or own any stock or other securities of any subsidiary or other
corporation, partnership, or other entity unless it is wholly owned by the Company.
	 
	 	(m)	 	Create, allow to arise or issue any debenture constituting a pledge, lien or charge (whether by
way of fixed or floating change, mortgage encumbrance or other security) security interest,
guarantee, claim,




35









 






	 	 	 	restriction, equity or encumbrances of any nature whatsoever on any of the property,
undertaking, assets or rights of any Group Company, except for the purpose of securing
borrowings from banks or other financial institutions in the ordinary course of business not
exceeding US$100,000 (or its equivalent in other currencies) or in excess of US$500,000 (or
its equivalent in other currencies) at any time in any financial year.
	 
	 	(n)	 	Enter into or be a party to any transaction with any director, officer or employee of the
Company or any associate (as defined in Rule 12b-2 promulgated under the Exchange Act) of any such
person except transactions resulting in payments to or by the Company in an amount less than
US$50,000 per year, or transactions made in the ordinary course of business and pursuant to
reasonable requirements of the Company’s business and upon fair and reasonable terms that are
approved by a majority of the Board.
	 
	 	(o)	 	Sell, transfer, license, charge, encumber or otherwise dispose of any trademarks, patents or
other intellectual property owned by any Group Company, other than licensing in the ordinary course
of business.
	 
	 	(p)	 	Make any alteration or amendment to the Memorandum of Association or Articles of Association of
the Company, or the constitutional documents of any other Group Company.
	 
	 	(q)	 	Increase or reduce the maximum number of Directors on the Board.
	 
	 	(r)	 	Dispose of or dilute the Company’s direct or indirect interest in any other Group Company or
any of its other Subsidiaries.
	 
	 	(s)	 	Cease to conduct or carry on the business of any Group Company substantially as now conducted
or change any part of its business activities.
	 
	 	(t)	 	Sell or dispose of the goodwill or assets of any Group Company other than in the ordinary
course of business.
	 
	 	(u)	 	Pass any resolution for the winding up or dissolution of any Group Company or undertake any
merger, reconstruction or liquidation exercise concerning any Group Company or apply for the
appointment of a receiver, manager or judicial manager or like officer in respect of any Group
Company.
	 
	 	(v)	 	Approve any transfer of shares or interests in any Group Company.
	 
	 	(w)	 	Enter into any abnormal or unusual contract or contract outside the ordinary course of business
of the Company.
	 
	 	(x)	 	Settle, compromise or concede any litigation, legal proceedings, arbitration, mediation or any
other dispute resolution procedures involving any claim in excess of US$20,000 (or its equivalent
in other currencies) or any injunction, provided that the Company shall immediately notify each
Investor of any actual or threatened litigation, legal proceedings, arbitration, mediation or any
other dispute resolution procedures irrespective of its nature or size.




36









 






	 	(y)	 	Change the principal business of the Company (including entering into a new line of
business or exiting from the current line of business).
	 
	 	(z)	 	Liquidate, dissolve or wind-up the affairs of the Company, or effect any event that would
result in payment of a Compulsory Payment Amount.
	 
	 	(aa)	 	Purchase or redeem or pay any dividend on any share capital in priority to the Series A
Shares (other than shares repurchased from former employees or consultants in connection with
the cessation of their employment or services, at the lower of fair market value or cost).






	 	 	To the extent that any of the acts listed in this Article 18(a) through to (aa) is required
under the Statute to be passed by a Special Resolution, then such act shall be passed when a
Special Resolution is passed.
	 
	19.2	 	Protection of Reserved Matters. Each Covenantor jointly and severally undertakes to each
Investor that it shall exercise all its rights and powers in relation to the Group Companies so as
to procure that, subject to applicable law, no resolutions to approve, authorize and ratify any of
the Reserved Matters shall be considered or passed or effected at any meeting of Shareholders or
otherwise, without first obtaining Investor Consent.
	 
	19.3	 	Control of Directly Owned Subsidiaries. The Company will exercise or refrain from exercising
any voting rights or other powers of Control which it may have in or over any of its directly owned
subsidiaries (each a “Directly Owned Subsidiary”) so as to ensure that none of the actions set out
in Section 19.1 will be taken by any such Directly Owned Subsidiary without the same prior approval
as required under Section 19.1, insofar as it is not inconsistent with or contrary to the laws and
regulations of the jurisdiction in which such Directly Owned Subsidiary is organized. For this
purpose, references in Section 19.1 to the Company shall be construed as references to such
Directly Owned Subsidiary.
	 
	19.4	 	Control of Indirectly Owned Subsidiaries. The Company will cause each of its Directly Owned
Subsidiaries to exercise or refrain from exercising any voting rights or other powers of Control
(whether direct or indirect) which it may have in or over any company which is a subsidiary of any
Directly Owned Subsidiary (each an “Indirectly Owned Subsidiary”) so as to ensure that none of the
actions set out in Section 19.1 will be taken by such Indirectly Owned Subsidiary without the same
prior approval as required under Section 19.1, insofar as it is not inconsistent with or contrary
to the laws and regulations of the jurisdiction in which such Indirectly Owned Subsidiary is
organized. For this purpose, references in Section 19.1 to the Company shall be construed as
references to such Indirectly Owned Subsidiary.
	 
	19.5	 	Obtaining a Qualified IPO or an Approved Sale. The Covenantors undertake to the Investors,
jointly and severally, to use their best endeavors to cause within 36 months from the date hereof:






	 	(a)	 	a Qualified IPO; or
	 
	 	(b)	 	an Approved Sale.




37









 












	19.6	 	Investors’ Right to Participate in Underwritten Public Offering. If Shares or other securities
of the Company are offered in an underwritten public offering (whether or not a Qualified IPO) for
the account of any Founder, any Shareholder or any holder of other securities of the Company, each
holder of Preferred Shares shall have the right to include a pro-rata number of its Shares (based
on the number of shares (on an as-if-converted basis) then held by such holder of Preferred Shares
and other Shareholders selling in the offering) in the offering on terms and conditions no less
favorable to the holders of Preferred Shares than to any other Person selling Shares or other
securities in the offering. Each Investor shall also have the right to purchase up to five (5) per
cent. of the securities offered in the public offering, subject to prior consent of the
underwriters in the public offering (whether or not a Qualified IPO) is obtained.
	 
	19.7	 	Non-Competition.






	 	(a)	 	Each Founder undertakes to each of the Investors that as long as he remains employed by a
Group Company, he will not place himself in a position of conflict of duties or interest with
any Group Company.
Each Founder also undertakes to each of the Investors that for a period of 12 months
after he ceases to be employed by a Group Company, he will not, without the prior
written consent of the Investors:






	 	(i)	 	in the territory of PRC, the Hong Kong SAR, the Macau SAR and Taiwan either on his
own account or through any of his Affiliates, or in conjunction with or on behalf of any
other Person, carry on or be engaged, concerned or interested directly or indirectly
whether as Shareholder, director, employee, partner, agent or otherwise carry on any
business in direct competition with the Business;
	 
	 	(ii)	 	in the territory of PRC, the Hong Kong SAR, the Macau SAR and Taiwan either on his
own account or through any of his Affiliates, or in conjunction with or on behalf of any
other Person, disclose any know-how, lists of customers or suppliers, trade secrets,
technical processes or other confidential information, made known to him in his capacity
as Founder;
	 
	 	(iii)	 	either on his own account or through any of his Affiliates or in conjunction with
or on behalf of any other Person solicit or entice away or attempt to solicit or entice
away from any Group Company, the custom of any person, firm, company or organization who
is or shall at any time within 12 months prior to such cessation have been a customer,
client, representative, agent or correspondent of such Group Company or in the habit of
dealing with such Group Company;
	 
	 	(iv)	 	either on his own account or through any of his Affiliates or in conjunction with
or on behalf of any other Person, employ, solicit or entice away or attempt to employ,
solicit or entice away from any Group Company any person who is or shall have been at
the date of or within 12 months prior to such




38









 






	 	 	 	cessation an officer, manager, consultant or employee of any such Group Company
whether or not such person would commit a breach of contract by reason of leaving
such employment; and
	 
	 	(v)	 	neither he nor any of his Affiliates will at any time hereafter, in relation to any
trade, business or company use any business or trade name or any permutation,
combination, derivation or part thereof now or hereafter used by any Group Company in
its name or in the name of any of its products, services or their derivative terms, or
the Chinese or English equivalent or any similar word in such a way as to be capable of
or likely to be confused with the name of any Group Company or the product or services
or any other products or services of any Group Company, and shall use all reasonable
endeavors to procure that no such name shall be used by any of his Affiliates or
otherwise by any Person with which he is connected.






	 	(b)	 	Each and every obligation under clause (a) of this Section 19.7 shall be treated as a
separate obligation and shall be severally enforceable as such and in the event of any
obligation or obligations being or becoming unenforceable in whole or in part, such part or
parts which are unenforceable shall be deleted from such Section and any such deletion shall
not affect the enforceability of the remainder parts of such Section.
	 
	 	(c)	 	The Parties agree that having regard to all the circumstances, the restrictive covenants
contained in clause (a) of this Section 19.7 are reasonable and necessary for the protection
of the Group and the Shareholders, and further agree that having regard to those circumstances
the said covenants and are not excessive or unduly onerous upon the Founder. However, it is
recognized that restrictions of the nature in question may fail for technical reasons
currently unforeseen and accordingly it is hereby agreed and declared that if any of such
restrictions shall be adjudged to be void as going beyond what is reasonable in all the
circumstances for the protection of the Group or the Shareholders, but would be valid if part
of the wording thereof were deleted or the periods thereof reduced or the range of activities
or area dealt with thereby reduced in scope, the said restriction shall apply with such
modification as may be necessary to make it valid and effective.






	19.8	 	Appointment of Certain Officers. The Investors may nominate the Chief Executive Officer, Chief
Financial Officer, Chief Operating Officer, Chief Technology Officer, and other key management
personnel and key technical personnel of the Group, and the Board or the boards of directors of
other members of the Group, as the case may be, shall appoint such nominees accordingly
	 
	20.	 	Board Committees
	 
	20.1	 	Establishment of Compensation Committee and ESOP. The Board shall forthwith establish a
Compensation Committee consisting of both Investor Representatives and the Chief Executive Officer
of the Company, provided




39









 






	 	 	that the Compensation Committee be always made up of a majority of two (2) Investor
Representatives The Compensation Committee shall propose the terms of the ESOP and all grants
of awards thereunder to the Board, for approval and adoption by the Board and the
Shareholders, shall have the power and authority to administer the ESOP and to grant options
thereunder in accordance with such approval by the Board and the Shareholders, and shall have
such other powers and authorities as the Board shall delegate to it.
	 
	20.2	 	Establishment of Audit Committee. The Board shall forthwith establish an Audit Committee
consisting of both Investor Representatives and Directors of the Company, provided that the Audit
Committee be always made up of a majority of two (2) Investor Representatives.
	 
	21.	 	Miscellaneous.
	 
	21.1	 	Governing Law. Sections 7 through 16 of this Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, excluding those laws that direct the
application of the laws of another jurisdiction. All other provisions of this Agreement shall be
governed by, and construed in accordance with, the laws of the Hong Kong Special Administrative
Region, excluding those laws that direct the application of the laws of another jurisdiction.
	 
	21.2	 	Dispute Resolution.






	 	(a)	 	Any dispute, controversy or claim arising out of or relating to this Agreement, or the
interpretation, breach, termination or validity hereof, shall be resolved through
consultation. Such consultation shall begin immediately after one party hereto has delivered
to the other party hereto a written request for such consultation. If within 30 days following
the date on which such notice is given the dispute cannot be resolved, the dispute shall be
submitted to arbitration upon the request of either party with notice to the other.
	 
	 	(b)	 	The arbitration shall be conducted in Hong Kong under the auspices of the Hong Kong
International Arbitration Centre (the
“Centre”). There shall be one arbitrator. The arbitrator shall be jointly appointed by the
disputing parties or, failing which the Secretary-General of the Centre shall appoint
the arbitrator.
	 
	 	(c)	 	The arbitration proceedings shall be conducted in English. The arbitration tribunal shall
apply the UNCITRAL Arbitration Rules as administered by the Centre at the time of the
arbitration.
	 
	 	(d)	 	The arbitrator shall decide any dispute submitted by the parties to the arbitration
strictly in accordance with the substantive laws of Hong Kong and shall not apply any other
substantive law.
	 
	 	(e)	 	Each party shall cooperate with the other in making full disclosure of and providing
complete access to all information and documents requested by the other in connection with
such arbitration proceedings, subject only to any confidentiality obligations binding on such
party.




40









 






	 	(f)	 	In the course of arbitration, the Parties shall continue to implement the terms of this
Agreement except (as between the disputing parties) for the matters under arbitration.
	 
	 	(g)	 	The award of the arbitration tribunal shall be final and binding upon the disputing
parties, and the prevailing party may apply to a court of competent jurisdiction for
enforcement of such award.
	 
	 	(h)	 	Either party shall be entitled to seek preliminary injunctive relief from any court of
competent jurisdiction pending the constitution of the arbitral tribunal.






	21.3	 	Counterparts and Facsimile Execution. 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. Any counterpart or other signature delivered by facsimile shall be
deemed for all purposes as being a good and valid execution and delivery of this Agreement by that
party.
	 
	21.4	 	Headings. The headings of the Sections of this Agreement are for convenience and shall not by
themselves determine the interpretation of this Agreement.
	 
	21.5	 	Notices. Except as may be otherwise provided herein, all notices, requests, waivers and other
communications made pursuant to this Agreement shall be in writing and shall be conclusively deemed
to have been duly given (a) when hand delivered to the other party; (b) when printed confirmation
sheet verifying successful transmission of the facsimile is generated by the sender’s machine, when
sent by facsimile at the number set forth below (or hereafter amended by subsequent notice to the
parties hereto); (c) five Business Days after deposit in the mail as certified mail, receipt
requested, postage prepaid and addressed to the other party as set forth below; or (d) three
Business Days after deposit with an overnight delivery service, postage prepaid, addressed to the
parties as set forth below, provided that the sending party receives a confirmation of delivery
from the delivery service provider.





	 	 	 

	To:

	 	Any of the Covenantors
	 
	 	 
	 

	 	c/o Country Style Cooking Restaurant Chain Co., Ltd.
	 
	 	 
	 

	 	Room 727, Hilton Hotel
	 

	 	No. 139 Zhongshan Third Road
	 

	 	Yuzhong District
	 

	 	Chongqing
	 

	 	China
	 

	 	
	 
	 	 
	 

	 	Attention: Mr. Zhang Xingqiang and Ms. Li Hong
	 
	 	 
	 

	 	Facsimile: +86(23) 63800606
	 

	 	Telephone: +86(23) 89038688 or +86(23) 89031188
	 

	 	Email: csc.727@163.com / csc_li@163.com







41











 





	 	 	 	 	 	 	 

	 

	 	To:
	 	SIG	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	101 California Street, Suite 3250
	 	 
	 

	 	 	 	San Francisco	 	 
	 

	 	 	 	CA 94111, USA	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Attention: Mr. Michael L. Spolan	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Facsimile: +1(610) 6173896	 	 
	 

	 	 	 	Telephone: +1(415) 4036510	 	 
	 

	 	 	 	Email: michael.spolan@sig.com	 	 
	 
	 	 	 	 	 	 
	 

	 	To:
	 	Sequoia	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	2408, Air China Plaza	 	 
	 

	 	 	 	36 Xiaoyun Road	 	 
	 

	 	 	 	Chaoyang District	 	 
	 

	 	 	 	Beijing 100027, China	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Attention: Mr. Steven Ji	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Facsimile: + 86(10) 84475669	 	 
	 

	 	 	 	Telephone: +86(10) 84475668	 	 
	 

	 	 	 	Email: sji@sequoiacap.com	 	 







	 	 	Each person making a communication hereunder by facsimile shall promptly confirm
by telephone to the person to whom such communication was addressed each
communication made by it by facsimile pursuant hereto but the absence of such
confirmation shall not affect the validity of any such communication. A party may
change or supplement the addresses given above, or designate additional addresses,
for purposes of this Section 21.5 by giving the other parties written notice of
the new address in the manner set forth above.
	 
	21.6	 	Amendment of Agreement. This Agreement may be amended at any time by a written
instrument signed by the Company, holders of a majority of the Ordinary Shares and
holders of a majority of the Preferred Shares or securities resulting from the conversion
or exchange of such Preferred Shares. No waivers of or exceptions to any term, condition
or provision of this Agreement, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such term, condition or provision.
	 
	21.7	 	Severability. In case any provision of this Agreement shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.
	 
	21.8	 	Entire Agreement; Successors and Assigns. Except as specifically referenced in this
Agreement, this Agreement, together with all Exhibits to this Agreement, constitute the
entire contract among the Parties with respect to the subject matter of this Agreement.
Any prior or contemporaneous agreement, discussion, understanding, or correspondence
among the parties (including any prior representations or warranties given by the
Parties)




42









 






	 	 	regarding the subject matter of this Agreement is superseded by this Agreement.
Subject to the exceptions specifically set forth in this Agreement, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon the
respective executors, administrators, heirs, successors, and assigns of the
Parties to this Agreement.
	 
	21.9	 	Conflict with Charter Documents. In the event of any conflict or inconsistency
between the provisions of this Agreement and the provisions of the Company’s Articles or
Memorandum of Association or other constitutional documents, the terms of this Agreement
shall prevail as among the Parties other than the Company, who hereby agree and undertake
that they shall whenever necessary exercise all voting and other rights and powers
available to them so as to effect the intent of this Agreement to the greatest extent
possible under the circumstances and promptly amend the conflicting constitutional
documents to conform to this Agreement to the greatest extent possible.
	 
	21.10	 	Assignability. Subject to Section 17, the rights and obligation under this
Agreement shall not be assignable by any party without the prior written consent of all
the other Parties.
	 
	21.11	 	Termination. The provisions of this Agreement, save for Sections 1, 2, 7, 8,
9, 10, 11, 12, 13, 14, 15, 16, 21 and 22 and other provisions that by their
express terms survive termination, shall cease to have effect immediately upon a
Qualified IPO and no parties shall have any rights or obligations under these
provisions (save as excepted above) save for any obligations arising in connection
prior to the Qualified IPO.
	 
	21.12	 	Exercise of Investor’s Rights. Any rights of any Investor under this Agreement may,
without prejudice to such Investor to exercise any such rights, be exercised by any fund
manager of such Investor or their respective nominees (“Fund Manager”, which in the case
of SIG includes Susquehanna Asia Investment, LLP, and in the case of Sequoia includes
Sequoia Capital China Management I, L.P.), unless such Investor has given notice to the
other Parties that any such rights cannot be exercised by such Fund Manager.
	 
	21.13	 	Several Liability of Holders of Preferred Shares. Each holder of Preferred Shares
shall be severally (and not jointly and severally or jointly with any other Person)
liable for its own obligations under this Agreement.
	 
	22.	 	Confidentiality and Announcements.
	 
	22.1	 	Disclosure of Terms. Except with the prior written approval of the Investors, no
Party other than the Investors may make any announcement concerning or otherwise disclose
or divulge any information concerning any Investor’s involvement with or interest in any
Group Company including (without limitation) the subject matter and the terms and
conditions set forth in the Transaction Documents, and negotiations relating thereto,
which shall be confidential information (collectively, “Confidential Information”).




43









 






	22.2	 	Confidentiality Period. Each Party (other than the Investors) shall at all times
after the date of this Agreement keep confidential, and not directly or indirectly
reveal, disclose or use for any purpose, any Confidential Information, howsoever received
or obtained.
	 
	22.3	 	Permitted Disclosures. The prohibitions set out in Sections 22.1 and 22.2 do not
apply to:






	 	(a)	 	information which was in the public domain or otherwise known to a Party (the
“Disclosing Party”) before it was provided to the Disclosing Party by another
Party, or entered the public domain otherwise than as a result of (a) a breach by
the Disclosing Party of this Section 22, or (b) a breach of a confidentiality
obligation by the another person, where such breach was known to the Disclosing
Party;
	 
	 	(b)	 	disclosure of Confidential Information which is legally compelled by any law,
the order of any court, the requirements of a stock exchange or to obtain tax or
other clearances or consents from any relevant authority that is applicable to the
Disclosing Party, and provided that the Disclosing Party shall promptly provide
the other Parties with written notice of that fact, in accordance with Section
21.5, so that such other Parties may seek a protective order, confidential
treatment or other appropriate remedy. In such event, the Disclosing Party shall
furnish only that portion of the Confidential Information which is legally
required and shall exercise reasonable efforts to obtain reliable assurance that
confidential treatment will be accorded such Confidential Information to the
extent requested by the other Parties hereto;
	 
	 	(c)	 	information disclosed by any Investor (or its fund manager) for the purposes
of fund reporting or inter-fund reporting or to its fund manager, other funds
managed by its fund manager and their respective affiliates, advisers,
consultants, auditors, directors, officers, employees, stockholders, investors or
insurers;
	 
	 	(d)	 	information disclosed by any Investor to a bona fide potential purchaser of or
investor in any class of shares in the capital stock of the Company; or
	 
	 	(e)	 	information disclosed by any Investor Representative to the Investor that
appointed him, or its Affiliates.






	22.4	 	Covenantors’ Obligations. The Covenantors shall cause the observance of this Section
22 by each Group Company, shall allow access to Confidential Information only to
directors, officers and employees of the Group Companies whose duties require them to
possess such Confidential Information, and shall take all reasonable steps to minimize
the risk of disclosure of Confidential Information.
	 
	22.5	 	Other Information. The provisions of this Section 22 shall be in addition to, and
not in substitution for, the provisions of any separate nondisclosure agreement executed
by any of the Parties hereto with respect to the transactions contemplated hereby.




44









 











[Remainder of this page intentionally left blank]







45









 







     IN WITNESS WHEREOF, the parties to this Agreement have executed this Shareholders’
Agreement as of the date first written above.



	 	 	 	 	 

	GROUP COMPANIES	 	 
	 
	 	 	 	 
	COUNTRY STYLE COOKING
RESTAURANT CHAIN CO., LTD.
	 	 
	 
	 	 	 	 
	By:

	 	/s/ Zhang Xingqiang
 

	 	 
	Name:
	 	Zhang Xingqiang 	 	 
	Title:
	 	Authorized Signatory 	 	 
	 
	 	 	 	 
	GROWING RICH LIMITED
	 	 
	 
	 	 	 	 
	By:

	 	/s/ Zhang Xingqiang	 	 
	 

	 	 	 	 
	Name:
	 	Zhang Xingqiang 	 	 
	Title:
	 	Authorized Signatory 	 	 
	 
	 	 	 	 
	CHONGQING GROWING RICH
COUNTRY STYLE COOKING
MANAGEMENT CO., LTD.
	 	 
	 
	 	 	 	 
	By:

	 	/s/ Zhang Xingqiang	 	 
	 

	 	 	 	 
	Name:
	 	Zhang Xingqiang 	 	 
	Title:
	 	Authorized Signatory 	 	 
	 
	 	 	 	 
	CHONGQING COUNTRY STYLE
COOKING RESTAURANTS CHAIN
CO., LTD.
	 	 
	 
	 	 	 	 
	By:

	 	/s/ Zhang Xingqiang	 	 
	 

	 	 	 	 
	Name:
	 	Zhang Xingqiang 	 	 
	Title:
	 	Authorized Signatory 	 	 






[SHAREHOLDERS’ AGREEMENT SIGNATURE PAGE]





 









 








FOUNDERS




	 	 	 

	/s/ Li Hong

	 	/s/ Zhang Xingqiang
	 

	 	 
	LI Hong 

	 	ZHANG Xingqiang







[SHAREHOLDERS’ AGREEMENT SIGNATURE PAGE]




 









 








INVESTORS
– SIG




SIG CHINA INVESTMENTS ONE, LTD.




	 	 	 	 	 

	 
	 	 	 	 
	By:
	 	/s/ Michael L. Spolan	 	 
	Name:

	 	 

Michael L. Spolan
	 	 
	Title:

	 	Vice President
Subquehanna Asia
Investment LLLP, authorized agent for

SIG China Investments One, Ltd.
	 	 






[SHAREHOLDERS’ AGREEMENT SIGNATURE PAGE]





 









 








INVESTORS
– SEQUOIA




SEQUOIA
CAPITAL CHINA II, LP




	 	 	 	 	 

	A Cayman Islands exempted limited partnership	 	 
	 
	 	 	 	 
	By:

	 	Sequoia Capital China Management II, LP	 	 
	 
	 	 	 	 
	 

	 	A Cayman Islands exempted limited partnership

Its General Partner	 	 
	 
	 	 	 	 
	By:

	 	SC China Holding Limited	 	 
	 
	 	 	 	 
	 

	 	A Cayman Islands limited liability company Its General Partner	 	 
	 
	 	 	 	 
	/s/ Jimmy Wong	 	 
	 	 	 
	Name:

	 	Jimmy Wong	 	 
	Title:

	 	Authorized Signatory	 	 






[SHAREHOLDERS’ AGREEMENT SIGNATURE PAGE]





 














 








EXHIBIT A




INDEMNIFICATION AGREEMENT



This Indemnification Agreement (“Agreement”) is entered into as of the [...] day of [...] by and among
Country Style Cooking Restaurant Chain Co., Ltd., a business company incorporated under the laws of
the Cayman Islands (the “Company”),    
              
             
             
              
    and           
                               (together, the “Indemnitee”).




RECITALS



A. The Company and Indemnitee recognize the continued difficulty in obtaining liability
insurance for its directors, officers, employees, agents and fiduciaries, the significant
increases in the cost of such insurance and the general reductions in the coverage of
such insurance.



B. The Company and Indemnitee further recognize the substantial increase in corporate
litigation in general, subjecting directors, officers, employees, agents and fiduciaries
to expensive litigation risks at the same time as the availability and coverage of
liability insurance has been severely limited.



C. Indemnitee does not regard the current protection available as adequate under the
present circumstances, and Indemnitee and other directors, officers, employees, agents
and fiduciaries of the Company may not be willing to continue to serve in such capacities
without additional protection.



D. The Company desires to attract and retain the services of highly qualified
individuals, such as Indemnitee, to serve the Company and, in part, in order to induce
Indemnitee to continue to provide services to the Company, wishes to provide for the
indemnification and advancing of expenses to Indemnitee to the maximum extent permitted
by law.



E. In view of the considerations set forth above, the Company desires that Indemnitee be
indemnified by the Company as set forth herein.




     NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:




	1.	 	Indemnification.






	 	(a)	 	Indemnification of Expenses. The Company shall indemnify to the
fullest extent permitted by law if Indemnitee was or is or becomes a party to or
witness or other participant in, or are threatened to be made a party to or
witness or other participant in, any threatened, pending or completed action,
suit, proceeding or alternative dispute resolution mechanism, or any hearing,
inquiry or investigation that Indemnitee in good faith believe might lead to the
institution of any such action, suit, proceeding or alternative dispute resolution
mechanism, whether civil, criminal, administrative, investigative or other
(hereinafter a “Claim”) by reason of (or arising in part out of) any event or
occurrence related to the fact that Indemnitee is or was a director, officer,
employee, agent or fiduciary of the Company, or any subsidiary of the Company, or
is or was serving at the request of the Company as a director, officer, employee,
agent or fiduciary of




 









 






	 	 	 	another corporation, partnership, joint venture, trust or other
enterprise, or by reason of any action or inaction on the part of
Indemnitee while serving in such capacity (hereinafter an “Indemnifiable
Event”) against any and all expenses (including attorneys’ fees and all
other costs, expenses and obligations incurred in connection with
investigating, defending, being a witness in or participating in
(including on appeal), or preparing to defend, be a witness in or
participate in, any such action, suit, proceeding, alternative dispute
resolution mechanism, hearing, inquiry or investigation), judgments,
fines, penalties and amounts paid in settlement (if such settlement is
approved in advance by the Company, which approval shall not be
unreasonably withheld) of such Claim and any federal, state, local or
foreign taxes imposed on Indemnitee as a result of the actual or deemed
receipt of any payments under this Agreement (collectively, hereinafter
“Expenses”), including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses. Such payment of
Expenses shall be made by the Company as soon as practicable but in any
event no later than twenty days after written demand by Indemnitee
therefor is presented to the Company.






	 	(b)	 	Reviewing Party. Notwithstanding the foregoing, (i) the obligations
of the Company under Section 1(a) shall be subject to the condition that the
Reviewing Party (as described in Section 10(e) hereof) shall not have determined
(in a written opinion, in any case in which the Independent Legal Counsel
referred to in Section 1(c) hereof is involved) that Indemnitee would not be
permitted to be indemnified under applicable law, and (ii) the obligation of the
Company to make an advance payment of Expenses to Indemnitee pursuant to Section
2(a) (an “Expense Advance”) shall be subject to the condition that, if, when and
to the extent that the Reviewing Party determines that Indemnitee would not be
permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have been exhausted
or lapsed). The Indemnitee’s obligation to reimburse the Company for any Expense
Advance shall be unsecured and no interest shall be charged thereon. If there has
not been a Change in Control (as defined in Section 10(c) hereof), the Reviewing
Party shall be selected by the Board of Directors, and if there has been such a
Change in Control (other than a Change in Control which has been approved by a
majority of the Company’s Board of Directors who were directors immediately prior
to such Change in Control), the Reviewing Party shall be the Independent Legal
Counsel referred to in Section 1(c) hereof. If there has been no determination by
the Reviewing Party or if the Reviewing Party
determines that Indemnitee substantively would not be permitted to be indemnified
in whole or in




51









 






	 	 	 	part under applicable law, Indemnitee shall have the right to commence
litigation seeking an initial determination by the court or challenging
any such determination by the Reviewing Party or any aspect thereof,
including the legal or factual bases therefor, and the Company hereby
consents to service of process and to appear in any such proceeding. Any
determination by the Reviewing Party otherwise shall be conclusive and
binding on the Company and Indemnitee.
	 
	 	(c)	 	Change in Control. The Company agrees that if there is a Change in
Control of the Company (other than a Change in Control which has been approved by
a majority of the Company’s Board of Directors who were directors immediately
prior to such Change in Control) then, with respect to all matters thereafter
arising concerning the rights of Indemnitee to payments of Expenses and Expense
Advances under this Agreement or any other agreement or under the Company’s
Memorandum and Articles of Association as now or hereafter in effect, Independent
Legal Counsel (as defined in Section 10(d) hereof) shall be selected by
Indemnitee and approved by the Company (which approval shall not be unreasonably
withheld). Such counsel, among other things, shall render its written opinion to
the Company and Indemnitee as to whether and to what extent Indemnitee would be
permitted to be indemnified under applicable law and the Company agrees to abide
by such opinion. The Company agrees to pay the reasonable fees of the Independent
Legal Counsel referred to above and to fully indemnify such counsel against any
and all expenses (including attorneys’ fees), claims, liabilities and damages
arising out of or relating to this Agreement or its engagement pursuant hereto.
	 
	 	(d)	 	Mandatory Payment of Expenses. Notwithstanding any other provision of
this Agreement other than Section 9 hereof, to the extent that Indemnitee has
been successful on the merits or otherwise, including, without limitation, the
dismissal of an action without prejudice, in defense of any action, suit,
proceeding, inquiry or investigation referred to in Section (1)(a) hereof or in
the defense of any claim, issue or matter therein, Indemnitee shall be
indemnified against all Expenses incurred by Indemnitee in connection therewith.






	 	2.	 	Expenses; Indemnification Procedure.
	 
	 	(a)	 	Advancement of Expenses. The Company shall advance all Expenses
incurred by Indemnitee. The advances to be made hereunder shall be paid by the
Company to Indemnitee as soon as practicable but in any event no later than
twenty days after written demand by Indemnitee therefor to the Company.
	 
	 	(b)	 	Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition
precedent to Indemnitee’s right to be indemnified under this Agreement, give the
Company notice in writing as soon as practicable of any Claim made against
Indemnitee for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the Chief Executive Officer
of the Company at the address shown on the signature page of this Agreement (or
such other address as the Company shall
designate in writing to Indemnitee). In addition, Indemnitee shall give the
Company such




52









 






	 	 	 	information and cooperation as it may reasonably require and as shall be
within Indemnitee’s power.
	 
	 	(c)	 	No Presumptions; Burden of Proof. For purposes of this Agreement, the
termination of any Claim by judgment, order, settlement (whether with or without
court approval) or conviction, or upon a plea of nolo contendere, or its
equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law. In addition,
neither the failure of the Reviewing Party to have made a determination as to
whether Indemnitee has met any particular standard of conduct or had any
particular belief, nor an actual determination by the Reviewing Party that
Indemnitee has not met such standard of conduct or did not have such belief,
prior to the commencement of legal proceedings by Indemnitee to secure a judicial
determination that Indemnitee should be indemnified under applicable law, shall
be a defense to Indemnitee’s claim or create a presumption that Indemnitee has
not met any particular standard of conduct or did not have any particular belief.
In connection with any determination by the Reviewing Party or otherwise as to
whether Indemnitee is entitled to be indemnified hereunder, the burden of proof
shall be on the Company to establish that Indemnitee is not so entitled.
	 
	 	(d)	 	Notice to Insurers. If, at the time of the receipt by the Company of
a notice of a Claim pursuant to Section 2(b) hereof, the Company has liability
insurance in effect which may cover such Claim, the Company shall give prompt
notice of the commencement of such Claim to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of Indemnitee, all amounts payable as a result of such action, suit, proceeding,
inquiry or investigation in accordance with the terms of such policies.
	 
	 	(e)	 	Selection of Counsel. In the event the Company shall be obligated
hereunder to pay the Expenses of any Claim, the Company shall be entitled to
assume the defense of such Claim with counsel approved by Indemnitee, which
approval shall not be unreasonably withheld, upon the delivery to Indemnitee of
written notice of its election so to do. After delivery of such notice, approval
of such counsel by Indemnitee and the retention of such counsel by the Company,
the Company will not be liable to Indemnitee under this Agreement for any fees of
counsel subsequently incurred by Indemnitee with respect to the same Claim;
provided that, (i) Indemnitee shall have the right to employ Indemnitee’s counsel
in any such Claim at Indemnitee’s expense and (ii) if (A) the employment of
counsel by Indemnitee has been previously authorized by the Company, (B)
Indemnitee shall have reasonably concluded that there is a conflict of interest
between the Company and Indemnitee in the conduct of any such defense, or (C) the
Company shall not continue to retain such counsel to defend such Claim, then the
fees and expenses of Indemnitee’s counsel shall be at the expense of the Company.
The Company shall have the right to conduct such defense as it sees fit in its
sole discretion,




53









 






	 	 	 	including the right to settle any claim against Indemnitee without the
consent of the Indemnitee.
	 
	 	3.	 	Additional Indemnification Rights; Non-exclusivity.
	 
	 	(a)	 	Scope. The Company hereby agrees to indemnify Indemnitee to the
fullest extent permitted by law, notwithstanding that such indemnification is not
specifically authorized by the other provisions of this Agreement, the Company’s
Memorandum and Articles of Association. In the event of any change after the date
of this Agreement in any applicable law, statute or rule which expands the right
of a Cayman Islands corporation to indemnify a member of its Board of Directors or
an officer, employee, agent or fiduciary, it is the intent of the parties hereto
that Indemnitee shall enjoy by this Agreement the greater benefits afforded by
such change. In the event of any change in any applicable law, statute or rule
which narrows the right of a Cayman Islands corporation to indemnify a member of
its Board of Directors or an officer, employee, agent or fiduciary, such change,
to the extent not otherwise required by such law, statute or rule to be applied to
this Agreement, shall have no effect on this Agreement or the parties’ rights and
obligations hereunder except as set forth in Section 8(a) hereof.
	 
	 	(b)	 	Non-exclusivity. The indemnification provided by this Agreement shall
be in addition to any rights to which Indemnitee may be entitled under the
Company’s Memorandum of Association, its Articles of Association, any agreement,
any vote of stockholders or disinterested directors, the laws of the Hong Kong
Special Administrative Region, or otherwise. The indemnification provided under
this Agreement shall continue as to Indemnitee for any action Indemnitee took or
did not take while serving in an indemnified capacity even though Indemnitee may
have ceased to serve in such capacity.




4. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any Claim made against Indemnitee to the
extent Indemnitee has otherwise actually received payment (under any insurance policy,
Memorandum and Articles of Association or otherwise) of the amounts otherwise
indemnifiable hereunder.



5. Partial Indemnification. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of Expenses incurred in
connection with any Claim, but not, however, for all of the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion of such Expenses to which
Indemnitee is entitled.



6. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that in
certain instances, Federal law or applicable public policy may prohibit the Company from
indemnifying its directors, officers, employees, agents or fiduciaries under this
Agreement or otherwise. Indemnitee understands and acknowledges that if the Company is
subject to the informational requirements of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), the Company may be required to undertake with the
Securities and Exchange Commission to submit the question of indemnification to a court
in certain circumstances for a determination of the Company’s right under public policy
to indemnify Indemnitee.





54









 







7. Liability Insurance. The Company shall, from time to time, make the good faith
determination whether or not it is practicable for the Company to obtain and maintain a
policy or policies of insurance with reputable insurance companies providing the officers
and directors of the Company with coverage for losses from wrongful acts, or to ensure
the Company’s performance of its indemnification obligations under this Agreement. Among
other considerations, the Company will weigh the costs of obtaining such insurance
coverage against the protection afforded by such coverage. In all policies of directors’
and officers’ liability insurance, Indemnitee shall be named as an insured in such a
manner as to provide Indemnitee the same rights and benefits as are accorded to the most
favorably insured of the Company’s directors, if Indemnitee is a director; or of the
Company’s officers, if Indemnitee is not a director of the Company but is an officer; or
of the Company’s key employees, if Indemnitee is not an officer or director but is a key
employee.



8. Exceptions. Any other provision herein to the contrary notwithstanding, the
Company shall not be obligated pursuant to the terms of this Agreement:





	 	(a)	 	Excluded Action or Omissions. To indemnify Indemnitee for Expenses resulting
from acts, omissions or transactions for which Indemnitee is prohibited from
receiving indemnification under this Agreement or applicable law;
	 
	 	(b)	 	Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemnitee
with respect to Claims initiated or brought voluntarily by Indemnitee and not by
way of defense, except (i) with respect to actions or proceedings brought to
establish or enforce a right to indemnification under this Agreement or any other
agreement or insurance policy or under the Company’s Memorandum and Articles of
Association now or hereafter in effect relating to Claims for Indemnifiable
Events, or (ii) in specific cases if the Board of Directors has approved the
initiation or bringing of such Claim;
	 
	 	(c)	 	Lack of Good Faith. To indemnify Indemnitee for any expenses incurred
by Indemnitee with respect to any proceeding instituted by Indemnitee to enforce
or interpret this Agreement, if a court of competent jurisdiction determines that
each of the material assertions made by Indemnitee in such proceeding was not made
in good faith or was frivolous; or
	 
	 	(d)	 	Claims Under Section 16(b). To indemnify Indemnitee for expenses and
the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Exchange Act, or any similar
successor statute if the Company is subject to the informational requirements of
the Exchange Act.




9. Period of Limitations. No legal action shall be brought and no cause of action
shall be asserted by or in the right of the Company against Indemnitee, Indemnitee’s
estate, spouse, heirs, executors or personal or legal representatives after the
expiration of two years from the date of accrual of such cause of action, and any claim
or cause of action of the Company shall be extinguished and deemed released unless
asserted by the timely filing of a legal action within such two-year
period; provided, however, that if any shorter period of limitations is otherwise
applicable to any such cause of action, such shorter period shall govern.





55









 









	10.	 	Construction of Certain Phrases.






	 	(a)	 	For purposes of this Agreement, references to the “Company” shall include, in
addition to the resulting corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority to indemnify
its directors, officers, employees, agents or fiduciaries, so that if Indemnitee
is or was a director, officer, employee, agent or fiduciary of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of this Agreement
with respect to the resulting or surviving corporation as Indemnitee would have
with respect to such constituent corporation if its separate existence had
continued.
	 
	 	(b)	 	For purposes of this Agreement, references to “other enterprises” shall
include employee benefit plans; references to “fines” shall include any excise
taxes assessed on Indemnitee with respect to an employee benefit plan; and
references to “serving at the request of the Company” shall include any service as
a director, officer, employee, agent or fiduciary of the Company which imposes
duties on, or involves services by, such director, officer, employee, agent or
fiduciary with respect to an employee benefit plan, its participants or its
beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in the interest of the participants and beneficiaries of
an employee benefit plan, Indemnitee shall be deemed to have acted in a manner
“not opposed to the best interests of the Company” as referred to in this
Agreement.
	 
	 	(c)	 	For purposes of this Agreement a “Change in Control” shall be deemed to have
occurred if, on or after the date of this Agreement, (i) any “person” (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company acting in such capacity or a corporation owned directly or indirectly
by the stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, becomes the “beneficial owner” (as defined in
Rule 13d3 under the Exchange Act), directly or indirectly, of securities of the
Company representing more than 50 per cent. of the total voting power represented
by the Company’s then outstanding Voting Securities, (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute the
Board of Directors of the Company and any new director whose election by the Board
of Directors or nomination for election by the Company’s stockholders was approved
by a vote of at least two thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof, or (iii) the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation other than a
merger or consolidation which would result in the Voting Securities of the Company
outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being




56









 






	 	 	 	converted into Voting Securities of the surviving entity) at least 80 per
cent. of the total voting power represented by the Voting Securities of
the Company or such surviving entity outstanding immediately after such
merger or consolidation, or the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one transaction or a series of related
transactions) all or substantially all of the Company’s assets.
	 
	 	(d)	 	For purposes of this Agreement, “Independent Legal Counsel” shall mean an
attorney or firm of attorneys, selected in accordance with the provisions of
Section 1(c) hereof, who shall not have otherwise performed services for the
Company or Indemnitee within the last three years (other than with respect to
matters concerning the rights of Indemnitee under this Agreement, or of other
indemnitees under similar indemnity agreements).
	 
	 	(e)	 	For purposes of this Agreement, a “Reviewing Party” shall mean any appropriate
person or body consisting of a member or members of the Company’s Board of
Directors or any other person or body appointed by the Board of Directors who is
not a party to the particular Claim for which Indemnitee are seeking
indemnification, or Independent Legal Counsel.
	 
	 	(f)	 	For purposes of this Agreement, “Voting Securities” shall mean any securities
of the Company that vote generally in the election of directors.




11. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall constitute an original.



12. Binding Effect; Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business and/or assets of
the Company, spouses, heirs, and personal and legal representatives. The Company shall
require and cause any successor (whether direct or indirect by purchase, merger,
consolidation or otherwise) to all, substantially all, or a substantial part, of the
business and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to perform if
no such succession had taken place. This Agreement shall continue in effect with respect
to Claims relating to Indemnifiable Events regardless of whether Indemnitee continues to
serve as a director, officer, employee, agent or fiduciary of the Company or of any other
enterprise at the Company’s request.



13. Attorneys’ Fees. In the event that any action is instituted by Indemnitee
under this Agreement or under any liability insurance policies maintained by the Company
to enforce or interpret any of the terms hereof or thereof, Indemnitee shall be entitled
to be paid all Expenses incurred by Indemnitee with respect to such action, regardless of
whether Indemnitee is ultimately successful in such action, and shall be entitled to the
advancement of Expenses with respect to such action, unless, as a part of such action, a
court of competent jurisdiction over such action determines that each of the material
assertions made by Indemnitee as a basis for




57









 







such action was not made in good faith or was frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement to enforce or interpret
any of the terms of this Agreement, Indemnitee shall be entitled to be paid all Expenses
incurred by Indemnitee in defense of such action (including costs and expenses incurred
with respect to Indemnitee’s counterclaims and cross-claims made in such action), and
shall be entitled to the advancement of Expenses with respect to such action, unless, as
a part of such action, a court having jurisdiction over such action determines that each
of Indemnitee’s material defenses to such action was made in bad faith or was frivolous.



14. Notice. All notices and other communications required or permitted hereunder
shall be in writing, shall be effective when given, and shall in any event be deemed to
be given (a) five days after deposit with the U.S. Postal Service or other applicable
postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if
delivered by hand, (c) one business day after the business day of deposit with Federal
Express or similar overnight courier, freight prepaid, or (d) one day after the business
day of delivery by facsimile transmission, if delivered by facsimile transmission, with
copy by first class mail, postage prepaid, and shall be addressed if to Indemnitee, at
the Indemnitee’s address as set forth beneath Indemnitee’s signature to this Agreement
and if to the Company at the address of its principal corporate offices (attention:
Secretary) or at such other address as such party may designate by ten days’ advance
written notice to the other party hereto.



15. Consent to Jurisdiction. The Company and Indemnitee each hereby irrevocably
consent to the jurisdiction of the courts of the Hong Kong Special Administrative Region
for all purposes in connection with any action or proceeding which arises out of or
relates to this Agreement and agree that any action instituted under this Agreement may
be commenced, prosecuted and continued in the courts of the Hong Kong Special
Administrative Region which shall be a proper forum for adjudicating such a claim.



16. Severability. The provisions of this Agreement shall be severable in the
event that any of the provisions hereof (including any provision within a single section,
paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void
or otherwise unenforceable, and the remaining provisions shall remain enforceable to the
fullest extent permitted by law. Furthermore, to the fullest extent possible, the
provisions of this Agreement (including, without limitations, each portion of this
Agreement containing any provision held to be invalid, void or otherwise unenforceable,
that is not itself invalid, void or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or unenforceable.



17. Choice of Law. This Agreement shall be governed by and its provisions
construed and enforced in accordance with the laws of the Hong Kong Special
Administrative Region.



18. Subrogation. In the event of payment under this Agreement, the Company shall
be subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee who shall execute all documents required and shall do all acts that may be
necessary to secure such rights and to enable the Company effectively to bring suit to
enforce such rights.



19. Amendment and Termination. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless it is in writing signed by both
the parties hereto. No waiver of any of the provisions of this Agreement shall be







58









 







deemed or shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.



20. Integration and Entire Agreement. This Agreement sets forth the entire
understanding between the parties hereto and supersedes and merges all previous written
and oral negotiations, commitments, understandings and agreements relating to the subject
matter hereof between the parties hereto.



21. No Construction as Employment Agreement. Nothing contained in this Agreement
shall be construed as giving Indemnitee any right to be retained in the employ of the
Company or any of its subsidiaries.







59









 







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




	 	 	 	 	 

	COUNTRY STYLE
COOKING RESTAURANT CHAIN CO., LTD.	 	
	 
	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	AGREED TO AND ACCEPTED BY	 	 
	 
	 	 	 	 
	THE INDEMNITEE:	 	 
	 
	 	 	 	 
	 	 	 
	Name:

	 	 

	 	 
	 

	 	 	 	 
	Address:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	 
	Name:

	 	 

	 	 
	 

	 	 	 	 
	Address:
	 	 	 	 
	 

	 	 	 	 





60









 






EXHIBIT B



ADHERENCE DEED



THIS ADHERENCE DEED is made the      day of



by [...], a company incorporated in [...] with registered number [...] whose registered office
is at [...] (“New Shareholder”)




RECITALS



A. On [...], 2007, the shareholders of COUNTRY STYLE COOKING RESTAURANT CHAIN CO., LTD.
(the “Company”) entered into a shareholders’ agreement (the “Shareholders’ Agreement”),
to which the substantial form of this Adherence Deed forms EXHIBIT B.



B. The New Shareholder is the intended transferee of [...] [Ordinary Shares]/[Series A
Shares] of par value [...] each (“Transferred Shares”) in the capital of the Company from
[...] (“Transferor”) and in accordance with Section [5.8]/[17] of the Shareholders’
Agreement is executing this Deed.




THIS DEED WITNESSES as follows:



1. Interpretation. Capitalized terms not otherwise defined in this Deed shall have the
meanings given to then in the Shareholders’ Agreement.



2. Covenant; Enforceability. The New Shareholder hereby ratifies and accedes to the terms
of, agrees to be bound by, and assumes all rights and obligations under the terms and
conditions of, the Shareholders’ Agreement, as if the New Shareholder had been an
original party to the Shareholders’ Agreement in the same capacity as the Transferor;
provided, however, that the New Shareholder shall not have the benefit of
any rights of the Transferor under the Shareholders’ Agreement which are expressed to be
non-transferable by the terms thereof. The existing Shareholders shall be entitled to
enforce the Shareholders’ Agreement against the New Shareholder.



3. Governing Law. This Adherence Deed shall be governed by and construed in all respects
in accordance with the laws of Hong Kong law.



IN WITNESS WHEREOF this Adherence Deed has been executed as a deed by the New Shareholder
on the date set forth above.




	 	 	 	 	 	 	 

	[NEW SHAREHOLDER]

	 	 	)	 	 	 
	in the presence of:

	 	 	)