Exhibit
10.8


 


Execution Copy




 





 


SERIES
C PREFERRED SHARE PURCHASE AGREEMENT


 


 


by and among


 


 


SERIES
C INVESTORS


 


 


and


 


 


CHINACACHE
INTERNATIONAL HOLDINGS LTD.


 


 


and


 


 


THE
OTHER PARTIES NAMED HEREIN


 


 


December 11,
2009




 





 

















 


SERIES C PREFERRED SHARE PURCHASE AGREEMENT


 


This SERIES C
PREFERRED SHARE PURCHASE AGREEMENT (this “Agreement”)
is entered into on December 11, 2009 by and among the following parties:


 


A.                                   ChinaCache International
Holdings Ltd. (the “Company”), a Cayman
Islands exempted company whose registered address is at the offices of Offshore
Incorporations (Cayman) Limited, Scotia Centre, 4th Floor, P.O. Box 2804,
George Town, Grand Cayman, Cayman Islands;


 


B.                                     Song Wang  (PRC Identity Card No.            )
and Xiao-Hong Kou  (PRC Identity Card No.             )
(each a “Key Party” and together,
the “Key Parties”);


 


C.                                     ChinaCache Network
Technology (Beijing) Limited   (the “PRC
Subsidiary”), a wholly-foreign owned enterprise established under
the laws of the PRC whose registered address is at No. 8A, Langqiuyuan,
Tayuan, Haidian District, Beijing 100083, People’s Republic of China;


 


D.                                    Beijing Blue I.T.
Technologies Co., Ltd.  (“Beijing Blue I.T.”),  a  limited
liability company established under the laws of the PRC   whose registered address is at No. 8 A,
Langqiuyuan, Tayuan, Haidian District, Beijing 100083, PRC;


 


E.                                      Beijing Jingtian Technology
Co., Ltd.  (“Beijing Jingtian”), a  limited liability company established under
the laws of the PRC  whose
registered address is at 2nd Floor, No. 2 Building Chuangyin
Hotel,  No. 8 A, Langqiuyuan,
Tayuan, Haidian District, Beijing, PRC;


 


F.                                      Shanghai Jnet Telcom Co., Ltd.
 (“Shanghai Jnet”), a  limited
liability company established under the laws of the PRC  whose registered address is at Suite 221,
No. 728 Guanghua Road, Minhang District, Shanghai, PRC;


 


G.                                     Consolidated Capital
Holdings Ltd. (“CCH”), a British Virgin
Islands exempted company whose registered address is at Omar Hodge Building,
Wickhams Cay I, P.O. Box 362, Road Town, Tortola, British Virgin Islands;


 


H.                                    Harvest Century
International Ltd. (“HCI”), a company organized in the
British Virgin Island whose registered address is at [3rd Floor, Omar Hodge Building, Wickhams Cay I, P.O. Box
362, Road Town, Tortola, British Virgin Islands]; and


 


I.                                         The Series C Investors
set forth on Schedule A and the Lenders set
forth on Schedule A.


 


1

















 


RECITALS:


 


A.                                   WHEREAS, the Company is an exempted company
duly incorporated and validly existing under the laws of the Cayman Islands,
whose registered address is at the offices of Offshore Incorporations (Cayman)
Limited, Scotia Centre, 4th Floor, P.O. Box 2804, George Town, Grand
Cayman, Cayman Islands;


 


B.                                     WHEREAS, the PRC Subsidiary is a wholly
foreign-owned enterprise established on August 25, 2005 under the laws of
the PRC, whose registered address is at No. 8A, Langqiuyuan, Tayuan,
Haidian District, Beijing 100083, PRC; the Company owns 100% of the equity
interest in the PRC Subsidiary;


 


C.                                     WHEREAS, Beijing Blue I.T. is a limited
liability company established on June 25, 1998 under the laws of the PRC,
whose registered address is at No. 8A, Langqiuyuan, Tayuan, Haidian
District, Beijing 100083, PRC; Song Wang and Xiao-Hong Kou in aggregate own
100% of the equity interests of Beijing Blue I.T.;


 


D.                                    WHEREAS, Beijing Jingtian is a limited
liability company established on September 1, 2005 under the laws of the
PRC, whose registered address is at 2nd Floor, No. 2 Building Chuangyin
Hotel,  No. 8 A, Langqiuyuan,
Tayuan, Haidian District, Beijing, PRC; Xinxin Zheng and Huiling Ying in
aggregate own 100% of the equity interests of Beijing Jingtian;


 


E.                                      WHEREAS, Shanghai Jnet is a limited
liability company established on January 22, 2007 under the laws of the
PRC, whose registered address is at Suite 221, No. 728 Guanghua Road,
Minhang District, Shanghai, PRC; Yong Sha and Huiling Ying in aggregate own
100% of the equity interests of Shanghai Jnet;


 


F.                                      WHEREAS, subject to the terms and conditions
set forth in this Agreement, the Company desires to issue and sell to the Series C
Investors, and the Series C Investors desires to purchase from the
Company, 20,512,821 Series C-1 Preferred Shares for an aggregate purchase
price of US$ 8 million.


 


G.                                     WHEREAS, on July 29, 2008 and September 25,
2008, the Lenders provided loans in the aggregate principal amount of
US$3,605,000 (the “Bridge Loans”)
to the Company.  For the purposes of the
Bridge Loans, (1) the Company and the Lenders (except for Intel Capital
Corporation) entered into a Note Purchase Agreement on July 29, 2008 in
connection with the Bridge Loans of US$3,208,000, and (2) the Company and
Intel Capital Corporation entered into a Deed of Adherence (collectively with
the Note Purchase Agreement, the “Note Purchase Agreement”)
on September 25, 2008 in connection with an additional Bridge Loan of
US$397,000.  The Company issued a
promissory note (the “Note”) to each
of the Lenders, evidencing the respective amounts of the Bridge Loans provided
by such Lender.


 


To secure the Company’s obligations under the Note
Purchase Agreement and the Notes, (1) on July 29, 2008 CCH entered
into a Deed of Charge over Shares with the Lenders (except for Intel Capital
Corporation), pursuant to which CCH charged 5,763,180 Ordinary Shares it holds
in the Company to the Lenders (except for Intel Capital Corporation), and (2) on
September 25, 2008 CCH entered into a Deed of Adherence (collectively with
the Deed of Charge Over Shares, the “Deeds”) with
Intel Capital Corporation, pursuant to which Intel Capital Corporation agreed
to 


 


2

















 


accede to the Deed of Charge and CCH charged additional
713,211 Ordinary Shares it holds in the Company to Intel Capital Corporation
(collectively the “Share Charge”).
The Company, CCH and the Lenders entered into a Supplementary Agreement dated September 25,
2008 to amend the Note Purchase Agreement, the Notes and the Deeds.


 


On April 29, 2009, the Company, CCH and the
Lenders entered into a Supplemental Deed to extend the expiry date of the Notes
to December 29, 2009.


 


The Note Purchase
Agreement, the Notes, the Deeds, the Supplementary Agreement and the
Supplemental Deed are collectively referred to as the “Bridge Loan
Documents”.  Pursuant to the
Bridge Loan Documents, the Bridge Loans are convertible into a total of
11,831,308 Series C-2 Preferred Shares of the Company upon the Closing (as
defined below) at a conversion price of US$0.3047 per share (the “Loan Conversion”).


 


H.                 WHEREAS, subject to the terms and conditions
set forth in this Agreement, HCI will sell to the Company, and the Company will
repurchase from HCI, an aggregate of 12,436,707 Ordinary Shares (the “HCI Repurchased Shares”) at a price of US$ 0.2412 per share
(the “Company Repurchase”).  After the Company Repurchase, the Company
will (1) cancel the HCI Repurchased Shares and (2) allot and issue to
the Series C Investors, and the Series C Investors will subscribe
from the Company, an equal number of Series C-3 Preferred Shares at
US$0.2412 per share upon the Closing.


 


I.                      WHEREAS, on April 20, 2007, an Option
Agreement (the “Option Agreement”) was entered
into by and among the Company, CCH, the Key Parties, and the then-current
holders of Series B Preferred Shares (the “Series B
Investors”), pursuant to which upon the date that the Company
delivers the audited consolidated financial statements for the fiscal year
ending on December 31, 2007, if the gross revenues (less tax) reflected in
such financial statements reaches certain milestone (the “Revenue
Milestone”), the Series B Investors shall grant to the Key
Parties the options (the “Options”) to
purchase an aggregate of 3,400,000 Ordinary Shares (the “Option
Shares”) held by the Series B Investors.  In July 2009, the same parties entered
into a Supplementary Agreement (the “Option Supplementary
Agreement”), which provides, among other things, that: (1) the
the Series B Investors acknowledge that the Company has achieved the
Revenue Milestone; (b) the total number of Option Shares issuable to the
Key Parties upon their full exercise of the Options shall be reduced from
3,400,000 to 2,400,000, and as a result, the Company shall repurchase from the Series B
Investors a total of 1,000,000 Series B Preferred Shares (the “Repurchase for Option”).


 


AGREEMENT


 


NOW, THEREFORE, in consideration of the mutual
promises, covenants and conditions hereinafter set forth, the parties hereto
agree as follows:


 


1.                                       DEFINITIONS.


 


1.1                                 Certain Defined Terms.  As
used in this Agreement, the following terms shall have the following respective
meanings:


 


“Action”
shall mean any action, suit, proceeding, claim, arbitration or investigation.


 


3

















 


“Acceleration
Event” shall have the meaning ascribed to it in Section 7.22.


 


“Affiliate”
shall mean, 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 (a) in the case of a
natural Person, shall include, without limitation, such Person’s spouse,
parents, children, siblings, mother-in-law and father-in-law and brothers and
sisters-in-law, (b) in the case of a Series C Investor, shall include
any Person who holds Shares as a nominee for such Series C Investor, and (c) in
respect of a Series C Investor, shall also include (i) any
shareholder of such Series C Investor, (ii) any entity or individual
which has a direct or indirect interest in such Series C Investor
(including, if applicable, any general partner or limited partner) or any fund
manager thereof; (iii) any Person that directly or indirectly Controls, is
Controlled by, under common Control with, or is managed by Series C
Investor or its fund manager, (iv) the relatives of any individual
referred to in (ii) above, and (v) any trust Controlled by or held
for the benefit of such individuals.  For
the avoidance of doubt, no Series C Investor is or shall be deemed to be
an Affiliate of any Group Company.


 


“Agreed M&A”
shall mean the Third Amended and Restated Memorandum and Articles of
Association of the Company in the form attached as Exhibit A
hereto.


 


“Agreement”
is defined in the introductory paragraph of this Agreement.


 


“Amended and Restated Investors’ Rights Agreement” shall
mean the Second Amended and Restated Investors’ Rights Agreement among the
Investors (as defined therein), China OperVestors Inc., the Company, the PRC
Subsidiary, Beijing Blue I.T., Beijing Jingtian, Shanghai Jnet, CCH, HCI and
the Key Parties to be entered into as of the Closing in substantially the form
attached hereto as Exhibit B.


 


“Beijing Blue
I.T.” is defined in the introductory paragraph D of this Agreement.


 


“Beijing Jingtian”
is defined in the introductory paragraph E of this Agreement.


 


“Board”
shall mean the board of directors of the Company.


 


“Bonus Option Agreement”
shall mean the Option Agreement dated April 20, 2007 by and among the
Company, the Key Parties, and the Series B Investors defined therein, as
amended by the Supplementary Agreement dated July 31, 2009.


 


“Bridge Loans”
shall have the meaning ascribed to it in Recital G.


 


“Bridge Loan
Documents” shall have the meaning ascribed to it in Recital G.


 


“Business Day”
or “business day”  shall mean any day that is not a Saturday,
Sunday, legal holiday or a day on which banks are required to be closed in
Singapore, Hong Kong or the PRC.


 


“Business Plan” shall
mean the Company’s annual budget and business plan as adopted by the Company’s
Board of Directors.


 


“CCH”
is defined in introductory paragraph G of this Agreement.


 


4

















 


“Closing”
shall have the meaning ascribed to it in Section 2.3.


 


“Company”
is defined in introductory paragraph A of this Agreement.


 


“Company
Repurchase” shall have the meaning ascribed to it in Recital H.


 


“Control”
with respect to any third party, shall have the meaning ascribed to it in Rule 405
under Securities Act, and shall be deemed to exist for any party (a) when
such party holds at least twenty percent (20%) of the outstanding voting
securities of such third party and no other party owns a greater number of
outstanding voting securities of such third party or (b) over other
members of such party’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.


 


“Conversion
Shares” shall mean Ordinary Shares issuable upon conversion of the Series C
Preferred Shares purchased under this Agreement.


 


“Deeds”
shall have the meaning ascribed to it in Recital G


 


“Disclosing Party”
shall have the meaning ascribed to it in Section 8.4.


 


“Disclosure
Schedules” shall have the meaning ascribed to it in Section 3.


 


“Employee Share Option Plan”
shall mean the employee share option plans or stock incentive plans of the
Company adopted before the Closing and to be adopted as soon as practicable
after the Closing, and such other arrangements, contracts, or plans as approved
by the Board and the Investors in accordance with the Amended and Restated
Investors’ Rights Agreement.


 


“Environmental
Claim” shall mean any claim, action, cause of action, investigation,
or notice (written or oral) by any person or entity alleging potential liability
arising out of, based on, or resulting from: (i) the presence, or release
into the environment, of any Material of Environmental Concern at any location;
or (ii) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law.


 


“Environmental
Laws” shall mean all laws and regulations of any jurisdiction where
a Group Company is or has engaged in business activities relating to pollution
or protection of human health or the environment, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern.


 


“Financial
Statements” shall have the meaning ascribed to it in Section 3.7.


 


“Governmental
Authorizations” shall have the meaning ascribed to it in Section 3.14.


 


5

















 


“Group Companies”
shall mean the Company, the PRC Subsidiary, Beijing Blue I.T., Beijing
Jingtian, Shanghai Jnet and each Person (except individuals) Controlled by the Company,
and a “Group Company” shall mean
each or any of the Group Companies.


 


“Group Company
Inbound Technology Licenses” shall have the meaning ascribed to it
in Section 3.11(e).


 


“Group Company
Outbound Technology Licenses” shall have the meaning ascribed to it
in Section 3.11(d).


 


“Group Company
Technology” shall have the meaning ascribed to it in Section 3.11(a).


 


“Group Company
Technology Agreements” shall have the meaning ascribed to it in Section 3.11(f).


 


“HCI” is defined
in introductory paragraph H of this Agreement.


 


“HCI Repurchased Shares”
shall have the meaning ascribed to it in Recital H.


 


“IAS”
shall mean the applicable International Accounting Standards published by the
International Accounting Standards Board from time to time.


 


“Ignition” means
each of Ignition Venture Partners III, L.P., a State of Delaware limited
partnership; and Ignition Managing Directors Fund III, LLC, a State of Delaware
limited liability company.


 


“Intel”
means Intel Capital Corporation, a corporation incorporated in the State of
Delaware of the United States of America.


 


“Intel
Non-Disclosure Agreement” shall have the meaning ascribed to it in Section 8.5.


 


“Investors”
shall mean the investors and subscribers of the Preferred Shares.


 


“Investor Group”
shall mean Investor Group Asia LP., a company registered in Guernsey.


 


“Investor
Investments” shall mean Investor
Investments Asia Limited, a company registered in Guernsey.


 


“IPR Assignment,
Non-Competition and Confidentiality Agreement” shall have the
meaning ascribed to it in Section 3.19.


 


“JAFCO”
means JAFCO Asia Technology Fund II, a Cayman Island exempted company.


 


“JAFCO Manager”
shall have the meaning ascribed to it in Section 9.17.


 


“JIAP”
shall have the meaning ascribed to it in Section 9.17.


 


6

















 


“Key Party”
and “Key Parties” are defined in
introductory paragraph B of this Agreement.


 


“Lenders” shall mean
Qiming Venture Partners, L.P., Qiming
Managing Directors Fund, L.P., Ignition Venture Partners
III, L.P., Ignition Managing Directors Fund III,
LLC, Starr International Cayman, Inc, SIG
China Investments One, Ltd, JAFCO Asia Technology Fund II, Investor
Investments Asia Limited, Investor Group Asia LP, and Intel Capital Corporation. “Lender” shall mean each or any of the Lenders.


 


“Loan Conversion”
shall have the meaning ascribed to it in Recital G.


 


“Materials of
Environmental Concern” shall mean chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum, and
petroleum products.


 


“Non-Disclosing
Parties” shall have the meaning ascribed to it in Section 8.4.


 


“Note Purchase
Agreement” shall have the meaning ascribed to it in Recital G.


 


“Note”
shall have the meaning ascribed to it in Recital G.


 


“Options”
shall have the meaning ascribed to it in Recital I.


 


“Option Agreement”
shall have the meaning ascribed to it in Recital I.


 


“Option Shares”
shall have the meaning ascribed to it in Recital I.


 


“Option
Supplementary Agreement” shall have the meaning ascribed to it in
Recital I.


 


“Ordinary Shares”
shall mean the Company’s ordinary shares, par value US$0.0001 per share.


 


“Person”
means any corporation, company, partnership, limited liability company, other
business organization or entity and any individual.


 


“PRC”
shall mean the People’s Republic of China, for the purpose of this Agreement
excluding the Hong Kong Special Administrative Region, the Macau Special
Administrative Region and the Islands of Taiwan.


 


“PRC Subsidiary”
is defined in introductory paragraph C of this Agreement.


 


“PRC Companies”
shall mean the
PRC Subsidiary, Beijing Blue I.T., Beijing Jingtian and Shanghai Jnet, and a “PRC Company” shall mean each or any of them.


 


“Preferred Shares”
shall mean the Company’s preferred shares of any class or series, including Series A
Preferred Shares, Series B Preferred Shares and Series C Preferred
Shares.


 


7

















 


“Proprietary
Rights” shall mean any and all worldwide, international, PRC, or
foreign patents, all patent rights and all applications therefor and all
reissues, re-examinations, continuations, continuations-in-part, divisions, and
patent term extensions thereof, inventions (whether patentable or not),
discoveries, improvements, concepts, innovations, industrial models, registered
and unregistered copyrights, copyright registrations and applications, author’s
rights, works of authorship (including artwork of any kind and software of all
types in whatever medium, inclusive of computer programs, source code, object
code and executable code, and related documentation), URLs, web sites, web pages and
any part thereof, technical information, know-how, trade secrets, drawings,
designs, design protocols, specifications for parts and devices, quality
assurance and control procedures, design tools, manuals, research data
concerning historic and current research and development efforts, including the
results of successful and unsuccessful designs, databases and proprietary data,
proprietary processes, proprietary rights, technology, engineering,
discoveries, formulae, algorithms, operational procedures, trade names, trade
dress, trademarks, domain names, service marks, mask works, and registrations
and applications therefor, the goodwill of the business symbolized or
represented by the foregoing, customer lists and other proprietary information
and common law rights.


 


“Purchase Price”
shall mean (i) with respect to the Series C-1 Preferred Shares, the
per share price of US$ 0.39, at which the Series C Investors have agreed
to subscribe and the Company has agreed to allot and issue the Series C-1
Preferred Shares; (ii) with respect to the Series C-2 Preferred
Shares, the per share price of US$0.3047, at which the Notes are converted into
Series C-2 Preferred Shares; and (iii) with respect to the Series C-3
Preferred Shares, the per share price of US$0.2412 at which the Company has
agreed to allot and issue and the Series C Investors have agreed to
subscribe the Series C-3 Preferred Shares.


 


“Purchased Shares”
shall mean (i) the Series C-1 Preferred Shares to be subscribed by
the Series C Investors pursuant to Section 2.1(a) hereof, (ii) the
Series C-2 Preferred Shares to be issued to the Lenders upon conversion of
their Notes pursuant to the Bridge Loan Documents and Section 2.1(b) hereof,
and (iii) the Series C-3 Preferred Shares to be subscribed by the Series C
Investors immediately after the Company Repurchase, at the Closing.


 


“Qiming”
means  each of Qiming Venture Partners, L.P.,
a Cayman Islands exempted limited partnership and Qiming Managing Directors
Fund, L.P., a Cayman Islands exempted limited partnership.


 


“Qualified IPO”
shall mean a public offering of Ordinary Shares of the Company (or securities
representing such Ordinary Shares) registered under the Securities Act and with
gross proceeds to the Company of at least US$50 million and an implied
pre-money valuation of US$300 million or more, or in a similar public offering
of Ordinary Shares in a jurisdiction and on an internationally recognized
securities exchange or inter-dealer quotation system outside of the United
States, including The Stock Exchange of Hong Kong Limited, provided such public
offering is equivalent to the aforementioned in terms of offering proceeds and
regulatory approval, and is approved by holders of at least fifty-one percent
(51%) of the then outstanding Preferred Shares.


 


“Repurchase for Option”
shall have the meaning ascribed to it in recital I.


 


8

















 


“Restructuring
Agreements” shall mean the agreements governed by PRC laws which
were entered into by and among the PRC Subsidiary and each of Beijing Blue
I.T., Beijing Jingtian, Shanghai Jnet and their respective shareholders, mainly
including the Exclusive Business Cooperation Agreements, Equity Interest Pledge
Agreements, Exclusive Option Agreements, Power of Attorney, and the relevant
capital contribution certificates.


 


“Revenue Milestone”
shall have the meaing ascribed to it in recital I.


 


“RMB”
shall mean the lawful currency of the PRC.


 


“Securities Act”
shall mean the U.S. Securities Act of 1933, as amended.


 


“Series A Purchase
Agreement” shall mean the Series A Preferred Shares Purchase
Agreement  dated September 16, 2005 by
and among the Company, the PRC Companies, the Key Parties, JAFCO Asia
Technology Fund II, Intel Capital (Cayman) Corporation (formerly known as Intel
Capital Corporation), Investor Investments, Investor Group, CCH.


 


“Series B Investors”
shall have the meaning ascribed to it in recital I.


 


“Series B Purchase
Agreement” shall mean the Series B Preferred Shares Purchase
Agreement dated April 11, 2007  by
and among the Company, the PRC Subsidiary, Beijing Blue I.T., the Key Parties,
Qiming, Ignition, JAFCO, Starr, SIG, Intel, Investor Investments, Investor
Group, CCH.


 


“Series A
Preferred Shares” shall mean the Company’s Series A Preferred
Shares, par value US$0.0001 per share.


 


“Series B
Preferred Shares” shall mean the Company’s Series B Preferred
Shares, par value US$0.0001 per share.


 


“Series C
Investors” shall mean Qiming
Venture Partners, L.P., Qiming Managing Directors Fund, L.P., Ignition
Venture Partners III, L.P., Ignition Managing
Directors Fund III, LLC, SIG
China Investments One, Ltd, Investor Investments Asia
Limited, Investor Group Asia LP, and Intel Capital Corporation. “Series C Investors”
shall mean each or any of the Series C Investors.


 


“Series C-1
Preferred Shares” shall mean the Company’s Series C-1 Preferred
Shares, par value US$0.0001 per share.


 


“Series C-2
Preferred Shares” shall mean the Company’s Series C-2 Preferred
Shares, par value US$0.0001 per share.


 


“Series C-3
Preferred Shares” shall mean the Company’s Series C-3 Preferred
Shares, par value US$0.0001 per share.


 


“Series C
Preferred Shares” shall mean collectively the Company’s Series C-1
Preferred Shares, Series C-2 Preferred Shares and Series C-3
Preferred Shares, par value US$0.0001 per share.


 


9














 


“Series C-1 and C-2
Pre-Money Valuation” shall have the meaning ascribed to it in Section 2.2.


 


“Shanghai Jnet”
is defined in the introductory paragraph F of this Agreement.


 


“Shares”
shall mean Series C Preferred Shares.


 


“Share Charge”
shall have the meaning ascribed to it in Recital G.


 


“SIG” shall mean
SIG China Investments One, Ltd.


 


“Starr”
shall mean Starr International Cayman, Inc., a company registered in
Cayman Islands.


 


“Subsidiary”
or “subsidiary”  shall mean, with respect to any subject
entity (the “subject entity”), (i) any company, partnership or other
Person (x) more than 50% of whose shares or other interests entitled to
vote in the election of directors or (y) more than a 50% interest in
the  profits or capital of such entity
are owned or controlled directly or indirectly by the subject entity or through
one or more Subsidiaries of the subject entity, (ii) any entity whose
assets, or portions thereof, are consolidated with the net earnings of the
subject entity and are recorded on the books of the subject entity for
financial reporting purposes in accordance with IAS or U.S. GAAP, or (iii) any
entity with respect to which the subject entity has the power to otherwise
direct the business and policies of that entity directly or indirectly through
another subsidiary.


 


“Terms”
shall have the meaning ascribed to it in Section 8.1.


 


“Trade Sale”
shall have the meaning ascribed to it in Section 7.2.


 


“Transaction
Agreements” shall mean this Agreement, the Second Amended and
Restated Investors’ Rights Agreement, and any other document, certificate, and
agreement delivered in connection with the transactions contemplated hereby and
thereby.


 


“2009 Accounts”
shall have the meaning ascribed to it in Section 2.2(b).


 


“2009 EBITDA”
shall have the meaning ascribed to it in Section 2.2(b).


 


“US$”
shall mean the lawful currency of the United States of America.


 


“U.S. GAAP”  shall mean the accounting principles
generally accepted in the United States.


 


“UNCITRAL Rules”  shall have the meaning ascribed to it in Section 9.15(b).


 


“Warrantors”
shall mean the Company, the PRC Subsidiary, Beijing Blue I.T., Beijing
Jingtian, Shanghai Jnet, HCI and the Key Parties, unless the text specifically
indicates otherwise.


 


1.2                               Warrantor Obligations. 
Where this Agreement or any Transaction Agreement places an obligation
on any Warrantor, each other Warrantor shall use its best efforts to cause the
obligated Warrantor to perform such obligation.


 


10

















 


1.3                               Exhibits and Schedules.  The
following annex, schedule and exhibits are a part of this Agreement and hereby
are deemed incorporated herein by reference:


 


	
  Schedule A

  	
   

  	
  Schedule of Series C Investors and
  Lenders

  
	
   

  	
   

  	
   

  
	
  Schedule B

  	
   

  	
  Disclosure Schedules

  
	
   

  	
   

  	
   

  
	
  Schedule C

  	
   

  	
  Notices for Series C Investors and
  Lenders

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Amended and Restated Memorandum of
  Articles of Association of the Company

  
	
   

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  Form of Amended and Restated
  Investors’ Rights Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit C

  	
   

  	
  Intellectual Property Rights Assignment,
  Non-Competition and Confidentiality Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  PRC Companies’ Articles of Association and
  Business Licenses

  



 


2.                                      AGREEMENT TO PURCHASE AND SELL SHARES AT THE
CLOSING.


 


2.1                               Agreement to Purchase and Sell.


 


(a)                                Issue and Sale of Series C-1 Preferred
Shares.  Subject to the terms and conditions hereof,
at the Closing, the Company shall issue and sell to the Series C
Investors, and the Series C Investors shall purchase from the Company at
the Purchase Price of US$ 8 million, an aggregate of 20,512,821 Series C-1
Preferred Shares, with the respective number of Series C-1 Preferred
Shares to be issued to each Series C Investor set forth opposite the name
of such Series C Investor in Column C of Schedule A.  On the date of the Closing, each Series C Investor shall pay the amount of the Purchase
Price set forth opposite the name of such Series C Investor in Column
B of Schedule A  for its respective
Series C-1 Preferred Shares by wire transfer
of immediately available funds to an account
designated in writing by the Company and delivered to the Series C
Investors at the Closing.


 


(b)                                Conversion of Notes into Series C-2
Preferred Shares.  Subject to the terms and
conditions of this Agreement and the Notes, at the Closing, the Lenders shall
convert all (but not part) of the outstanding principal of the Notes, together
with all outstanding and accrued interest thereon (if any), into an aggregate
of 11,831,308 Series C-2 Preferred Shares. 
The respective number of Series C-2 Preferred Shares to be issued
by the Company to each Lender upon conversion of its Note is as set forth
opposite the name of such Lender in Column E of Schedule A.    Upon the Closing, each Lender shall deliver to the Company the original Note held by it
for cancellation.


 


(c)                                 Company Repurchase and Issue and Sale of Series C-3
Preferred Shares.  The Series C Investors and
HCI agree that, subject to the terms and conditions of this Agreement, at the
Closing, (1) HCI shall sell and transfer to the Company, and the Company
shall repurchase from HCI, the HCI Repurchased Shares at an aggregate
consideration of US$3 million, and (2) immediately following the Company
Repurchase, the Company will cancel the repurchased HCI Repurchased Shares and
issue to the Series C Investors an equivalent number of Series C-3


 


11

















 


Preferred
Shares in consideration of payment by the Series C Investors of the
Purchase Price therefore..  The
respective number of Series C-3 Preferred Shares to be subscribed by each Series C
Investor following the Company Repurchase 
is as set forth opposite the name of such Series C Investor in Column
G of Schedule A.  On the date
of the Closing, each Series C
Investor shall pay the amount of the Purchase Price for the Series C-3 Preferred Shares as  set forth
opposite the name of each Series C Investor in Column F of Schedule
A  by wire transfer of immediately available
funds to an account designated in writing by the Company
and delivered to the Series C Investors at the
Closing.


 


2.2                               (a)  
Pre-money
Valuation.  The pre-money valuation of the Company based on
which the Series C-1 Preferred Shares are issued to the Series C
Investors and the Notes are converted into Series C-2 Preferred Shares is
US$112.21 million (the “Series C-1 and C-2
Pre-Money Valuation”), and the pre-money valuation of the Company
based on which the Company repurchases the HCI Repurchased Shares and the Series C
Investors subscribe for the Series C-3 Preferred Shares from the Company
is US$69.48 million, and the weighted average of the pre-money valuation of the
Company of the transactions under this Agreement shall be US$95 million.


 


(b)   Adjustment of Series C-1
and C-2 Pre-Money Valuation.  If
based on the audited and consolidated financial statements of the Company for
the fiscal year ending on December 31, 2009 prepared in accordance with
IAS and audited by one of the “big four” international accounting firms (the “2009 Accounts”), the 2009 EBITDA of the Company is less than
RMB 113.5 million, then (i) the Series C-1 and C-2 Pre-Money
Valuation shall be adjusted to the higher of (x) the figure calculated in
accordance with the following formula, and (y) US$95million, and (ii) the
Series C Conversion Price (as defined in the Agreed M&A) with respect to the Series C-1 Preferred Shares
and the Series C-2 Preferred Shares shall be adjusted accordingly in
accordance with the Agreed M&A.  If  based
on the 2009 Accounts, the 2009 EBITDA of the Company equals to or is more than
RMB 113.5 million, no adjustment to the Series C-1 and C-2 Pre-Money
Valuation and Series C Conversion Price needs to be made.  For purposes of this Section,
“2009 EBITDA” means the earnings before
interest, taxes, depreciation, and amortization for the fiscal year ending on December 31,
2009.


 


Series C-1 and
C-2 Pre-Money Valuation = (Actual EBITDA of 2009 / RMB 113.5 million) * US$112.21
million


 


2.3                               Closing.  The purchase and
sale of the Purchased Shares shall be completed and
held (the “Closing”)  at
the office of Beijing Blue I.T. in Beijing, China, within three (3) Business Days after the
conditions to closing as set forth in Sections 5 and 6 have been fulfilled to the satisfaction of
the Series C Investors, or waived by the Series C Investors, as the
case may be, or at such other time and place as the Company
and the Series C Investors may mutually agree upon.


 


2.4                               Deliveries. 
At the Closing, the Company shall deliver the following items to the Series C Investors, against: (i) payment by each Series C Investor of its respective portion of the Purchase Price in connection with the Series C-1 Preferred
Shares purchase by it; (ii) payment by each Series C Investor of its respective portion of the Purchase Price in connection with the Series C-3 Preferred
Shares purchased by it; and (iii) delivery by each Lender of a notice of
conversion with respect to its Note, together with the original Note
surrendered by it for cancellation:


 


12

















 


(a)                                 (i) a copy of the register
of members of the Company as at the date of the Closing reflecting each Series C Investor’s and each Lender’s ownership of the respective Purchased Shares, (ii) a copy of the register
of directors as at the date of the Closing, each certified by a director of the
Company to be a true and complete copy thereof, and (iii) a table showing
the capitalization of the Company on a fully-diluted basis immediately after
the Closing;


 


(b)                                 duly issued share certificates to
each Series C Investor and each Lenders representing the respective Shares purchased  by
such Series C
Investor or the
Lender;


 


(c)                                  a compliance certificate dated as
of the Closing signed by each Warrantor or a duly authorized representative of
each Warrantor, as applicable, certifying that all of the conditions set forth
in Section 5 (other than Section 5.4) have been fulfilled, and
attaching and certifying as true and complete a copy of the Company’s Agreed M&A as in effect as of the Closing;


 


(d)                                 a certificate of good standing
issued by the Registrar of Companies of the Cayman Islands dated no earlier than
ten (10) Business Days prior to the Closing certifying that the Company
has been duly incorporated, has paid all required fees and taxes, and is
validly existing and in good standing under the laws of the Cayman Islands;


 


(e)                                  a certificate of good standing
issued by the Registrar of Companies of the British Virgin Islands dated no
earlier than ten (10) Business Days prior to the Closing certifying that
CCH has been duly incorporated, has paid all required fees and taxes, and is
validly existing and in good standing under the laws of the British Virgin
Islands;


 


(f)                                   a legal opinion of the Company’s
Cayman Islands counsel in form and substance satisfactory to the Series C
Investors and the Lenders;


 


(g)                                  a legal opinion of the CCH’s
British Virgin Islands counsel in form and substance satisfactory to the Series C
Investors and the Lenders;


 


(h)                                 a legal opinion of the Company’s
PRC counsel in form and substance satisfactory to the Series C Investors and the
Lenders; and


 


(i)                                     Board, and if necessary, members resolutions
of the applicable Group Companies approving the transactions contemplated
herein.


 


2.5                               Several and Not Joint Obligations.  The respective rights and obligations
of the Series C Investors hereunder, including the rights and obligations set
forth in this Section 2 shall be several and not joint and several.


 


3.                                      REPRESENTATIONS AND WARRANTIES
REGARDING OF THE WARRANTORS.


 


Unless specifically indicated otherwise, the
Warrantors hereby jointly and severally represent and warrant to each Series C
Investor and each Lender that the statements in this Section 3, except as
set forth in the Disclosure Schedules (the “Disclosure
Schedules”) attached to this Agreement as Schedule B (the
contents of which shall also be deemed to be representations and warranties
hereunder), are all true, correct and complete as of the date hereof and the
date of the Closing.  For purposes of
this Section 3, any reference to a party’s “knowledge” means such


 


13

















 


party’s best knowledge after due and diligent
inquiries of officers, directors, and other employees of such party reasonably
believed to have knowledge of the matter in question.


 


3.1                               Organization, Good Standing and
Qualification.


 


(a)                                 The Company is duly organized, validly existing
and in good standing under, and by virtue of, the laws of the place of its
incorporation or establishment and has all requisite power and authority to own
its properties and assets and to carry on its business as now conducted and as
presently proposed to be conducted.  The
Company is qualified to do business and is in good standing in each
jurisdiction where failure to be so qualified would have a material adverse
effect on its financial condition, business, prospects or operations.


 


(b)                                 HCI is duly organized, validly existing and
in good standing under, and by virtue of, the laws of the place of its
incorporation or establishment and has all requisite power and authority to own
its properties and assets and to carry on its business as now conducted and as
presently proposed to be conducted.  HCI
is the sole and legal owner of the HCI Repurchased Shares as of the date of
this Agreement. The HCI Repurchased Shares are free from all claims, liens,
charges, pledges, mortgages, trust, and other encumbrances as of the date of
this Agreement.


 


(c)                                  Each of the PRC Companies is a company duly
organized and existing under the laws of the PRC, and has all powers and all
governmental licenses, permits, Governmental Authorizations, consents and approvals required to carry
on its business as now conducted.  Each
of the PRC Companies has paid all such governmental fees, taxes and stamp duty
required to be paid by it under applicable PRC and other laws prior to or upon
the Closing.  Copies of the business
license, articles of association, and other organizational documents of each of
the PRC Companies, as amended to date, have been delivered to the Series C
Investors and are true, correct and complete and are in full force and effect.


 


3.2                               Due Authorization.  All
corporate action on the part of each Group Company, their respective officers,
directors and shareholders necessary for the authorization, execution and
delivery of each Transaction Agreement, the authorization, issuance,
reservation for issuance and delivery of all of the Shares and the Conversion
Shares, and, as applicable, the performance of their respective obligations
under each Transaction Agreement and all other agreements, instruments and
documents executed and delivered in connection with the transactions
contemplated hereby, has been taken or will be taken prior to the Closing.  The Transaction Agreements are valid and
binding obligations of each Group Company, enforceable in accordance with their
respective terms, subject as to enforcement of remedies to applicable
bankruptcy, insolvency, moratorium, reorganization and similar laws affecting
creditors’ rights generally and to general equitable principles.  The Shares and the Conversion Shares are not
subject to any preemptive rights, rights of first refusal, or liens of any kind
except for rights imposed under the Agreed M&A and/or the Transaction
Agreements.


 


All corporate action on the part of HCI, its
respective officers, directors and shareholders necessary for the
authorization, execution and delivery of each Transaction Agreement, the transfer
of all of the HCI Repurchased Shares, and, as applicable, the performance of its
obligations under each Transaction Agreement and all other agreements,
instruments and documents executed and delivered in connection with the
transactions contemplated hereby, has been taken or will be taken prior to the
Closing.  The Transaction Agreements are
valid and 


 


14

















 


binding obligations
of HCI, enforceable in accordance with their respective terms, subject as to
enforcement of remedies to applicable bankruptcy, insolvency, moratorium,
reorganization and similar laws affecting creditors’ rights generally and to
general equitable principles.  The HCI
Repurchased Shares are not subject to any preemptive rights, rights of first
refusal, or liens of any kind except for rights imposed under the Agreed
M&A and/or the Transaction Agreements.


 


3.3                               Capitalization.  The
authorized share capital of the Company will consist of the following
immediately prior to the Closing:


 


(a)                                 Ordinary Shares.  A
total of 310,000,000 authorized
Ordinary Shares of which 96,912,599 shares are issued and outstanding.


 


(b)                                 Preferred Shares.  A
total of 197,900,000 authorized Preferred Shares, 73,100,000 of which are Series A
Preferred Shares, 79,800,000 of which are Series B Preferred Shares,
20,600,000 of which are Series C-1 Preferred Shares, 11,900,000 of which
are Series C-2 Preferred Shares, and 12,500,000 of which are Series C-3
Preferred Shares.  Immediately prior to
Closing, 73,076,921 Series A Preferred Shares are issued and outstanding
and 79,765,142 Series B Preferred Shares are issued and outstanding,
provided that 2,400,000 Ordinary Shares (upon conversion of Series B
Preferred Shares) currently held by the existing holders of Series B
Preferred Shares are reserved for issuance to the Key Parties in accordance
with the terms and conditions of the Option Agreement and the Option
Supplementary Agreement.


 


(c)                                  Options, Warrants, Available Shares.  The
Company has made available and free of any liens (i) up to 44,780,836 Series C
Preferred Shares for issuance and sale under this Agreement; (ii) 44,780,836
Ordinary Shares representing the Conversion Shares, (iii) 150,442,063
Ordinary Shares representing the Ordinary Shares issuable upon conversion of
the Series A Preferred Shares issued under the Series A Purchase
Agreement and the Series B Preferred Shares issued under the Series B
Purchase Agreement;  (iv) 22,600,000
Ordinary Shares reserved for issuance under the Employee Share Option Plan, (v) 2,400,000
Ordinary Shares reserved for issuance to Wang Song and Kou Xiao Hong under the
Supplementary Agreement to the Bonus Option Agreement, and (vi) 382,862
Ordinary shares reserved for issuance to SmartAsia Holdings Ltd. and 3,445,735
Ordinary shares reserved for issuance to Sundream Holdings Ltd.   Other than with respect to the Preferred
Shares, Warrants, and Employee Share Option Plan, there are no options,
warrants, conversion privileges or other rights or agreements outstanding or
under which the Company is or may become obligated to issue any securities of
any class or series except as set forth above. 
Apart from the exceptions noted in this Section 3.3, none of the
Company’s outstanding shares, and no shares issuable upon exercise, conversion,
or exchange of any outstanding options or other shares issuable by the Company,
are subject to any preemptive rights, rights of first refusal, or other rights
to purchase such shares (whether in favor of the Company or any other person),
pursuant to any agreement or commitment to which the Company is a party or of
which the Company is aware, except for the rights imposed under the Agreed
M&A and in the Transaction Agreements and the Bonus Option Agreement.


 


(d)                                 Outstanding Security Holders.  Section 3.3(d) of
the Disclosure Schedule sets forth a complete list of all outstanding
shareholders, option holders and other security holders of the Company as of
the date hereof.


 


15

















 


3.4                               Subsidiaries (General).  The
Company does not presently own or control, directly or indirectly, any interest in any other
corporation, partnership, trust, joint venture, association, or other Person,
except for (i) one hundred percent (100%) of the
equity interests in the PRC Subsidiary, (ii) one hundred percent (100%) of the equity interests
in Jnet Holdings Ltd., and (iii) the arrangements contemplated under the Restructuring Agreements with Beijing Blue
I.T., Shanghai Jnet, Beijing Jingtian and their respective shareholders.    The Company was formed
solely to acquire and hold an equity interest in the PRC Subsidiary and since its formation has not engaged in any business and has not
incurred any liability except in the ordinary course of acquiring, managing and
disposing of its equity interest in the PRC Subsidiary.  The PRC Subsidiary is free and clear of all
liens, claims, charges and encumbrances, and no person or entity other than the
Company has any right to participate in, or receive any payment based on any
amount relating to, the revenue, income, value or net worth of the PRC
Subsidiary or any component or portion thereof, or any increase or decrease on
any of the foregoing.


 


3.5                               PRC Companies. 
Except as disclosed in Section 3.5 of the Disclosure Schedule:


 


(a)                                 The registered capital of the PRC
Subsidiary is fully paid as required under its articles of association and one hundred percent (100%) of the equity interest of the PRC Subsidiary
is duly
vested in the Company as the sole investor in and
owner of the PRC Subsidiary in accordance with applicable PRC rules and
regulations.


 


(b)                                 One hundred percent (100%) of the
equity interests of Beijing Blue I.T. is duly vested in Song Wang and Xiao-Hong
Kou as its sole investors and owners in accordance
with applicable PRC rules and regulations.  One hundred percent (100%) of the
equity interests of Beijing Jingtian is duly vested in Xinxin Zheng and Huiling Ying as its sole investors and owners in accordance with
applicable PRC rules and regulations.  One hundred percent (100%) of the
equity interests of Shanghai Jnet is duly vested in Yong Sha and Huiling Ying as its sole investors and owners in
accordance with applicable PRC rules and regulations.


 


(c)                                  Except as provided under the Restructuring Agreements dated September 23,
2005 by and among the PRC Subsidiary, Beijing Blue I.T. and the Key Parties,
the Restructuring Agreements dated January 10, 2008 by and among the PRC
Subsidiary, Shanghai Jnet and its shareholders, and the Restructuring Agreements
dated July 31, 2009, by and among the PRC Subsidiary, Beijing Jingtian and
its shareholders, there are no outstanding
rights, or commitments made by each of the PRC Companies or any of its investors and owners, to issue, purchase or
sell any equity interest in each of the PRC Companies.


 


(d)                                 There are no bonds, debentures,
notes or other indebtedness of any of the PRC Companies having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which holders of equity interests of each of the PRC Companies
may vote.  There are no voting trusts,
shareholder agreements, proxies or other agreements or understandings in effect
with respect to the voting or transfer of any of the equity interests to which
of any of the PRC Companies is a party
or is otherwise bound.


 


(e)                                  The PRC Subsidiary does not
maintain any offices or branches or subsidiaries except for its office at No. 8A,
Langqiuyuan, Tayuan, Haidian District, Beijing 100083, People’s Republic of
China.


 


16

















 


(f)                                   Beijing Blue I.T. does not maintain any offices or branches or subsidiaries except for
its office at 6th Floor, Xing Ke Building, No. 10 Jiu Xianqiao Road,
Chaoyang District, Beijing 100016 People’s Republic of China.  Beijing Jingtian does not maintain any offices or branches or subsidiaries except for
its office at 2nd Floor, No. 2
Building Chuangyin Hotel,  No. 8 A,
Langqiuyuan, Tayuan, Haidian District, Beijing, PRC, and Shanghai Jnet does not maintain any offices or branches or subsidiaries except for
its office at Suite 221, No. 728 Guanghua Road, Minhang District, Shanghai,
PRC.


 


(g)                                  The incorporation documents  relating to each of the PRC
Companies are valid and have been duly approved or issued (as applicable) by
the appropriate PRC authorities and are valid and in full force.


 


(h)                                 All consents, approvals, Governmental Authorizations, permits or
licenses required under PRC laws for the due and proper establishment and
operation of each of the PRC Companies as currently operated, or contemplated
to be operated, have been duly obtained from the appropriate PRC authorities
and are in full force and effect and each of the Group
Companies is in full compliance with the “Notice Regarding Strengthening Administration
of Foreign Investment in Operation of Value-added Telecommunication Businesses”
promulgated by the PRC Ministry of Information Industry on July 13, 2006.


 


(i)                                     All filings and registrations with the PRC authorities required in
respect of each of the PRC Companies and its operations, including the
registrations with the Ministry of Commerce (“MOFCOM”), the State Administration
of Industry and Commerce, the State Administration for Foreign Exchange (“SAFE”), tax
bureau, customs authorities, product registration authorities and health
regulatory authorities, as applicable, have been duly completed in accordance
with the relevant rules and regulations, including all
required registrations conducted pursuant to Circular Hui Fa (2005) No. 75
promulgated by SAFE on October 21, 2005 and its implementing rules.


 


(j)                                    None of the PRC Companies has received any letter
or notice from any relevant authority notifying each of the PRC Companies of
the revocation of any Governmental Authorizations, permits or licenses issued
to it for non-compliance or the need for compliance or remedial actions in
respect of the activities carried out directly or indirectly by each of the PRC
Companies.


 


(k)                                 With respect to any land use right, building, property and investment
held or leased by each of the PRC Companies, it has exclusive, full and
unimpaired legal and beneficial ownership of its rights, leasehold interests,
property and investments free from any mortgages or security interests of any
nature, third party rights, conditions, orders or other restrictions and has
obtained all necessary approvals and effected all necessary registrations with
government authorities with respect thereto.


 


(l)                                     All requisite formalities in respect of the importation of machinery, equipment,
parts, tools and materials by each of the PRC Companies has been and will be
complied with in accordance with the relevant PRC laws and regulations.


 


(m)                             Each of the PRC Companies has been conducting and will conduct its
business activities within the permitted scope of business or is otherwise
operating its business in 


 


17

















 


full compliance with all relevant legal
requirements, including producing, processing and/or distributing products with
all requisite licenses, permits and approvals granted by competent PRC
authorities.


 


(n)                                 No Group Company has any reason to believe that any Governmental
Authorizations, licenses or permits requisite for the conduct of any part of
each of the PRC Companies’ business which are subject to periodic renewal will
not be granted or renewed by the relevant PRC authorities.  Section 3.5(n) of the Disclosure
Schedule lists all lines of business in which the each of the PRC Companies is
participating or engaged.


 


(o)                                 All applicable laws and regulations with respect to the opening and
operation of foreign exchange accounts and foreign exchange activities of each
of the PRC Companies have been fully complied with, and all requisite approvals
from the State Administration of Foreign Exchange in relation thereto have been
duly obtained.


 


(p)                                 With regard to employment and staff or labour management, each of the
PRC Companies has complied with all applicable PRC laws and regulations,
including laws and regulations pertaining to welfare funds, social benefits,
medical benefits, insurance, retirement benefits, pensions or the like.


 


(q)                                 There are no outstanding stock options with respect to each of the PRC
Companies.  The name of each director and
officer of each of the PRC Companies on the date hereof, and the position held
by each, are listed in Section 3.5(q) of the Disclosure Schedule.


 


(r)                                    Each of the PRC Companies has delivered to the Series C Investors true and complete copies of the
articles of association and business license of each of the PRC Companies as in
effect on the date hereof, attached hereto as Exhibit D.


 


(s)                                   There are no other companies, partnerships, joint ventures, associations
or other entities in which each of the PRC Companies owns, of record or
beneficially, any direct or indirect equity or other interest or any right
(contingent or otherwise) to acquire the same.


 


(t)                                    Except as set forth in Section 3.5(t) of
the Disclosure Schedule, each of the PRC
Companies owns free and clear from all encumbrances and
third party rights all properties and assets,
including Proprietary Rights, necessary for its operations as presently
conducted and as proposed to be conducted.


 


3.6                               Valid Issuance of Shares.


 


(a)                                 The Shares, when issued, sold and
delivered in accordance with the terms of this Agreement, will be duly
authorized and validly issued, fully paid, non-assessable, and free of any
liens.  The Conversion Shares have been
duly and validly made available for issuance and, upon issuance will be duly
and validly issued, fully paid, non-assessable and free of any liens.


 


(b)                                 All presently outstanding
Ordinary Shares of the Company are duly and validly issued, fully paid and
non-assessable and free of any liens, and such Ordinary Shares, and all
outstanding shares, options and other securities of the Company, have been
issued in full compliance with the requirements of all applicable securities
laws and regulations, including the 


 


18

















 


Securities
Act, and all other antifraud and other provisions of applicable securities laws
and regulations.


 


3.7                               Financial Statements. 
Section 3.7
of the Disclosure
Schedule attaches (1) unaudited
consolidated balance sheets, cash flow statements and income statements of the
Group Companies as of December 31, 2008, (2) unaudited consolidated balance sheets,
cash flow statements and income statements of the Group Companies as of September 30, 2009, and (3) unaudited consolidated balance sheets, cash flow statements and income
statements of each of the Group Companies as of September 30, 2009 (all such financial statements being collectively
referred to herein as the “Financial
Statements”).  Such Financial
Statements (a) accord with the books and records of the respective Group
Company, (b) are true, correct and complete and present fairly the
financial condition and state of affairs of the respective Group Company at the
date or dates therein indicated and the results of operations for the period or
periods therein specified, and (c) have been prepared in accordance with
IAS applied on a consistent basis, except, as to the unaudited financial
statements, for the omission of notes thereto and normal year-end audit
adjustments.


 


Specifically, but not by way of limitation, the
respective balance sheets included in the Financial Statements disclose all of
the respective Group Company’s debts, liabilities and obligations of any
nature, whether due or to become due, as of their respective dates (including
absolute, accrued, and contingent liabilities) to the extent such debts,
liabilities and obligations are required to be disclosed in accordance with the
IAS, and each Group Company has good and marketable unencumbered title to all
assets set forth on the balance sheets of the respective Financial Statements,
except for such assets as have been spent, sold or transferred in the ordinary
course of business since their respective dates.


 


3.8                               Liabilities.  Except as
described in Section 3.8 of the Disclosure Schedule, no Group Company has
any indebtedness for borrowed money that it has directly or indirectly created,
incurred, assumed, or guaranteed, or with respect to which the Group Company
has otherwise become directly or indirectly liable, except as reflected on the
Financial Statements and none of the Group Companies is unable to pay its debts
as and when such debts fall due or is subject to any insolvency proceedings or
has had a receiver, liquidator or administrator appointed over its assets.


 


3.9                               Title to Properties and Assets. 
Each Group Company has good and marketable title to all respective
properties and assets reflected on the Financial Statements, in each case such
property and assets are subject to no mortgage, pledge, lien, encumbrance,
security interest or charge of any kind. 
With respect to the property and assets it leases, each Group Company is
in compliance with such leases and holds valid leasehold interests in such
assets free of any liens, encumbrances, security interests or claims of any
party other than the lessors of such property and assets.


 


3.10                        Activities Since September 30, 2009. 
Except as disclosed in Section 3.10 of the Disclosure Schedule,
none of the following events has occurred with respect to any Group Company
since September 30, 2009 and prior to the Closing:


 


(a)                                 any declaration or payment of any dividend,
or authorization or payment of any distribution upon or with respect to any
class or series of its capital shares or any other equity interest;


 


19














 


(b)                                 any incurrence of indebtedness for money
borrowed or any other liabilities;


 


(c)                                  any sale, exchange, assignment, or other
disposition of any assets or rights (including any Proprietary Rights or other
intangible assets) or creation of any encumbrance on any of its assets or
rights;


 


(d)                                 any agreements or transactions with any of
its officers, directors or employees or any entity controlled by any of such
individuals or with its shareholders or persons related to such shareholders,
or any agreement on transaction with any other party;


 


(e)                                  any damage, destruction or loss, whether or
not covered by insurance, affecting its assets, properties, financial
condition, operating results, prospects or business as presently conducted and
as presently proposed to be conducted;


 


(f)                                   any waiver of a valuable right or of a debt
owed to it;


 


(g)                                  any satisfaction or discharge of any lien,
claim or encumbrance or payment of any obligation;


 


(h)                                 any resignation or termination of any of its
directors or key officers; or


 


(i)                                     any other event or condition of any
character which would affect its assets, properties, financial condition,
operating results or business.


 


3.11                        Intellectual Property; Status of Proprietary
Rights.


 


(a)                                 Each Group Company (i) owns free and clear of all claims, security interests, liens and
other encumbrances, or (ii) has the valid right or license to use, all
products, materials, software, tools, software
tools, computer programs, specifications, source code, object code,
improvements, discoveries, user interfaces, software, mask works, Internet
domain names, enterprise or business names, logos, data, information and
inventions, and all documentation and media constituting, describing or
relating to the foregoing that is required or used in its business as currently
conducted or as proposed to be conducted together with all Proprietary Rights
in or to all of the foregoing (collectively, the
“Group Company
Technology”).  Section 3.11(a) of the Disclosure Schedule contains a true, complete
and accurate list of all Proprietary Rights to be transferred to each Group
Company and necessary for the conduct of the Group Company’s business as
currently being conducted or proposed to be conducted, all of the Proprietary
Rights set out in the Section 3.11(a) of
the Disclosure Schedule.


 


(b)                                 The possession, development, production,
manufacturing, use, offering, marketing, licensing, distribution, sale and
other exploitation by each Group Company of any
and all Group Company Technology as now conducted does not (A) infringe,
violate, misappropriate or otherwise interfere or conflict with any patent and
trademark rights or (B) infringe, violate, misappropriate or otherwise
interfere or conflict with any other rights, title or interest of any third
party.


 


(c)                                  No Group Company
has received any notice or claim (whether written, oral or otherwise) that (1) contests
or challenges in any manner whatsoever the Group Company’s ownership or other
rights in any Group Company Technology, (2) contests or challenges in any 


 


20

















 


manner
whatsoever the validity or enforceability of any of the Proprietary Rights of
the Group Company in the Group Company Technology, or (3) claims or
otherwise asserts that the Group Company, the Group Company Technology or the
conduct of the Group Company’s business as currently conducted infringes,
violates, misappropriates or otherwise interferes or conflicts with any right,
title or interest of any third party.


 


(d)                                 There are no outstanding options, material
licenses or agreements granting third parties the rights to own or use any Group Company Technology owned by the Group Company (“Group Company Outbound Technology
Licenses”).


 


(e)                                  The material licenses or
other agreements giving a Group Company the right to use certain Group Company
Technology are listed in Section 3.11(e) of the Disclosure
Schedule  (“Group Company  Inbound Technology
Licenses”).


 


(f)                                   True and complete copies of
all Group Company Outbound Technology Licenses and Group Company Inbound Technology
Licenses (other than licenses of generally commercially available “off the shelf” software used by the Company) (collectively,
the “Group Company Technology Agreements”) have been provided to the Series C Investors.


 


(g)                                  All Group Company Technology
Agreements are valid, binding and in full force and effect with respect to each
Group Company, and to the best information, knowledge and belief of the Group
Company, each other party thereto.  To
the best information, knowledge and belief of each Group Company, all parties
to the Group Company Technology Agreements have performed in all material
respects their obligations thereunder, and neither any Group Company nor any
other party thereto is in material default thereunder, nor to the best knowledge
of the Warrantors, has there occurred any material event or circumstance that
with notice or lapse of time or both would constitute a default or event of
default on the part of the Group Company or any other party thereto or give to
any other party thereto the right to terminate or modify any Group Company
Technology Agreement.


 


(h)                                 No Group Company has
received notice that any party to any Group Company Technology Agreement
intends to cancel or terminate any Group Company Technology Agreement.


 


(i)                                     No Group Company is or will be as a result
of the execution or delivery of this Agreement and the other Transaction
Agreements to which it is a party, the consummation of the transactions
contemplated hereby and thereby or the performance of obligations hereunder or
thereunder, or as a result of conducting its business as currently
contemplated, in breach of any license or other agreement relating to Group
Company Technology.


 


(j)                                    No Group Company is aware that any third party is
infringing or is likely to infringe any Group Company Technology.


 


(k)                                 To the best knowledge of the Warrantors
after due inquiry, none of a Group Company’s employees, contractors or
consultants is obligated under any contract or agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would
interfere with the use of his or her best efforts to promote the interests of
the Group Company or that would conflict
with the Group Company’s business.


 


21

















 


(l)                                     Each of the Group Company’s registered
patents, copyrights, domain names, trademarks and service marks are in full
force and effect, are not subject to any taxes, and each Group Company is current on all the maintenance
fees with respect thereto.


 


(m)                             To the best knowledge of the Warrantors
after due inquiry, no current or former employee, contractor or consultant of a
Group Company has developed any Group
Company Technology that is subject to any agreement under which such employee,
contractor or consultant has assigned or otherwise granted to any third party
any rights in or to such Group Company Technology.


 


(n)                                 Except with respect to generally
commercially available “off the shelf” software used by a Group Company, no royalties, fees or other
payments are payable by a Group Company
to any third party by reason of the ownership, possession, sale, marketing, use
or other exploitation of any Group Company Technology to the extent necessary
for the conduct of the Group Company’s
business as it is now conducted or as proposed to be conducted and none (or no
additional amounts) will be payable as a result of the consummation of the
transactions contemplated by this Agreement.


 


(o)                                 Each Group Company maintains and diligently enforces commercially
reasonable procedures to protect all confidential information relating to the
Group Company Technology.  No Group
Company has deposited any source code or other Group Company Technology in any
escrow account or otherwise delivered such source code or other Group Company
Technology to any escrow agent.


 


(p)                                 No government funding, facilities of any university, college or other
educational institution or public research center or funding from third parties
was used in the development of any Group Company Technology.


 


(q)                                 None of the software or firmware embedded or included in or on any
hardware or other products sold by a Group
Company or any other software or firmware that a Group Company now or in the future intends to sell or license
either as a separate product or bundled with any other product or service, is
required to be (a) disclosed or distributed in source code form, (b) licensed
for the purpose of making derivative works, or (c) redistributable at no
charge as the result of the use or incorporation of any Public Software in any
Group Company Technology, the use of any Public Software (as defined below) in
connection with the development of any Group Company Technology or for any
other reason.


 


For the purpose of
this Section 3.11, the term “Public
Software” means any software that contains, or is derived (in whole
or in part) from any software that is distributed as free software, open source
software (e.g., Linux) or similar licensing or distribution models.


 


3.12                        Contracts.


 


(a)                                 Material Contracts and Obligations.  All
agreements, contracts, leases, licenses, instruments, commitments (oral or
written), indebtedness, liabilities and other obligations to which any Group
Company is a party or by which it is bound that (i) are material to the
conduct and operations of its business and properties; (ii) involve any of
the officers, consultants, directors, employees or shareholders of any Group
Company; or (iii) obligate any Group Company to share, 


 


22

















 


license or develop
any product or technology are listed in Section 3.12 of the Disclosure
Schedule and have been provided to each Series C Investor and its
counsel.  For purposes of this Section 3.12
“material” shall mean any
agreement, contract, indebtedness, liability, arrangement or other obligation
either (i) having an aggregate value, cost, liability or amount of US$200,000
or more, or (ii) not terminable upon no more than thirty (30) days notice
without penalty or obligation.


 


(b)                                 Validity and Status.  All
the material contracts listed on Section 3.12 of the Disclosure Schedule
are legally valid and binding, in full force and effect, and enforceable in
accordance with their respective terms against the parties thereto.  There is no existing default or breach by any
party thereto and no Group Company has received any notice or claim or
allegation of default or breach thereof from any party thereto, and the various
transfers of assets, shares, equity interests, capital, personnel, contracts
and Proprietary Rights.


 


3.13                        Litigation.  There is
no Action pending or currently threatened against any Group Company, any Group
Company’s activities, properties or assets or against any officer, director or
employee of any Group Company in connection with such officer’s, director’s or
employee’s relationship with, or actions taken on behalf of, any Group
Company.  There is no factual or legal
basis for any such Action that might result, individually or in the aggregate,
in any material adverse change in the business, properties, assets, financial
condition, affairs or prospects of any Group Company.  No Group Company is a party to or subject to
the provisions of any order, writ, injunction, judgment or decree of any court
or government agency or instrumentality and there is no Action by any Group
Company currently pending or which it intends to initiate.


 


3.14                        Governmental Consents.  All
consents, approvals, orders, authorizations or registrations, qualifications,
designations, declarations or filings with any governmental authority (“Governmental Authorizations”) on the part
of each Group Company required in connection with the consummation of the
transactions contemplated herein have been obtained and are currently effective
and in consummating such transactions, the Group Companies are in full
compliance with the “Provisions for Foreign Investors to Merge and Acquire
Domestic Enterprises” promulgated by MOFCOM et.al. on August 8, 2006.  The offer, sale and issuance of the Shares
and the Conversion Shares, in conformity with the terms of this Agreement, are
exempt from the registration and prospectus delivery requirements of the
Securities Act and all other applicable securities laws and regulations.


 


3.15                        Compliance with Other Instruments.  No
Group Company is in, nor will the conduct of business of any Group Company as
proposed to be conducted result in, any violation, breach or default of any
constitutional document of any Group Company (which include, as applicable,
articles of incorporation, memoranda and/or articles of association, by-laws,
joint venture contracts and the like), or in any material respect of any term
or provision of any mortgage, indenture, contract, agreement or instrument to
which any Group Company is a party or by which it may be bound, or of any
provision of any judgment, decree, order, statute, rule or regulation
applicable to or binding upon any Group Company.  The execution, delivery and performance of
and compliance with the Transaction Agreements and the consummation of the
transactions contemplated hereby will not result in any such violation, breach
or default, or be in conflict with or constitute, with or without the passage
of time or the giving of notice or both, either a default under any such
constitutional documents, any such contract, agreement or instrument or a
violation of any statutes, laws, regulations or orders, or an event which
results in the creation of any lien, charge or encumbrance upon any asset of
any Group Company.


 


23

















 


3.16                        Registration Rights.  Except
as provided in the Amended and Restated Investors’ Rights Agreement, no Group
Company has granted or agreed to grant any Person or entity any registration
rights with respect to any of the securities of any Group Company.


 


3.17                        Tax Matters.  The provisions
for taxes in the respective Financial Statements are sufficient for the payment
of all accrued and unpaid applicable taxes of each Group Company, whether or
not assessed or disputed as of the date of each such balance sheet.  There have been no extraordinary examinations
or audits of any tax returns or reports by any applicable governmental agency,
and none are threatened or pending.  Each
Group Company has duly filed all tax returns required to have been completed
and filed by it and paid all taxes shown to be due on such returns in a timely
manner.  There are in effect no waivers
of applicable statutes of limitations with respect to taxes for any year.


 


3.18                        Obligations of Management. 
Each employee of each Group Company is identified in Section 3.18 of the Disclosure Schedule and except for the part-time employees specified in Disclosure
Schedule 3.18, each such employee is currently
devoting one hundred percent (100%) of his or her working time to the conduct
of the business of a Group Company.  To
the best knowledge of the Warrantors after due inquiry, no Warrantor is aware
that any such employee is planning to work less than full time at a Group
Company in the future.  To the best
knowledge of the Warrantors after due inquiry and except as disclosed in Section 3.18 of the Disclosure Schedule, no such
employee is currently working for a competitive enterprise, whether or not such
person is or will be compensated by such enterprise.


 


3.19                        Invention Assignment and
Confidentiality Agreement.  Each key
employee, officer, consultant and contractor of each Group Company has entered
into an Intellectual Property Rights Assignment, Non-Competition and
Confidentiality Agreement (the “IPR
Assignment, Non-Competition and Confidentiality Agreement”)
substantially in the form attached hereto as Exhibit C, containing
at a minimum, to the extent permitted under the applicable law, one (1) year
post termination non-competition and non-solicitation covenants, with the
relevant Group Company in a form approved by the Series C Investors.


 


3.20                        Environmental Compliance.


 


(a)                                 Each Group Company is in full
compliance with all Environmental Laws, which compliance includes the
possession by each Group Company of all permits and other Government
Authorizations required under applicable Environmental Laws and compliance with
the terms and conditions thereof.  No
Group Company has received any communication (written or oral), whether from a
governmental authority, citizens group, employee, or otherwise, that alleges
that it is not in such full compliance and to the best knowledge of each
Warrantor, there are no circumstances that may prevent or interfere with such
full compliance in the future.


 


(b)                                 There is no Environmental Claim
pending or threatened against any Group Company or any person or entity whose
liability for an Environmental Claim a Group Company has retained or assumed
either contractually or by operation of law. 
There are no past or present actions, activities or circumstances,
including the release, emission, discharge, or disposal of any Material of
Environmental Concern, that could form the basis of any Environmental Claim
against any Group Company or any person or entity whose liability for any
Environmental Claim a Group Company has retained or assumed either contractually
or by operation of law.


 


24

















 


3.21                        Interested Party Transactions. 
Except as disclosed in Section 3.21 of the Disclosure Schedule, no officer
or director of a Group Company or any Affiliate of any such person has any
agreement, understanding, or proposed transaction with, or is indebted to, any
Group Company, nor is any Group Company indebted (or committed to make loans or
extend or guarantee credit) to any of them. 
Except as disclosed in Section 3.21 of the Disclosure Schedule, no officer
or director of a Group Company has any direct or indirect ownership interest in
any firm or corporation with which a Group Company is affiliated or with which
a Group Company has a business relationship, or any firm or corporation that
competes with a Group Company, except that any of the foregoing persons may
have record ownership interest in the Company or own shares in publicly traded
companies that may compete with a Group Company.  No Affiliate of any officer or director of a
Group Company is directly or indirectly interested in any material contract
with a Group Company.  No officer or
director of a Group Company or any Affiliate of any such person has had, either
directly or indirectly, any interest in: (a) any person or entity which
purchases from or sells, licenses or furnishes to a Group Company any goods,
property, intellectual or other property rights or services; or (b) any
contract or agreement to which a Group Company is a party or by which it may be
bound or affected.


 


3.22                        Share Restriction Agreements. 
Each person who, pursuant to any benefit, bonus or incentive plan of the
Company, holds any currently outstanding Ordinary Shares or other securities of
the Company or any option, warrant or right to acquire such shares or other
securities, has entered into or is otherwise bound by, an agreement granting
the Company (a) the right to repurchase any unvested shares for the
original purchase price, or to cancel the unvested option, warrant or right, in
the event the holder’s employment or services with the Company terminate for
any reason, subject to release of such repurchase or cancellation right on
terms and conditions specified by the Board, and (b) a right of first
refusal with respect to all such shares. 
The Company has furnished to the Series C Investors true and complete copies of the forms of
all such share restriction agreements.


 


3.23                        Minute Books.  The minute books of each Group Company made
available to the Series C Investors contain a complete summary of all
meetings and actions taken by directors and shareholders or owners of each
Group Company since their respective time of formation, and reflect all
transactions referred to in such meetings and actions accurately in all
material respects.


 


3.24                        Disclosure. 
No representation or warranty by any Warrantor in this Agreement or in
any written statement or certificate furnished or to be furnished to the Series C Investors pursuant to any Transaction Agreement
contains or will contain any untrue statement of fact or omits or will omit to
state any fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which they are made, not
misleading in any way.  Each of the
Warrantors has fully provided the Series C Investors with all the information that the Series C Investors have requested for deciding whether to
purchase the Shares and all information that could reasonably be expected to
enable the Series C
Investors to make such decision.


 


3.25                     Labor Agreement and Actions;
Employee Compensation.  Except as
disclosed in Section 3.25 of the Disclosure Schedule, no Group Company is bound by
or subject to (and none of its assets or properties is bound by or subject to)
any written or oral, express or implied, contract, commitment or arrangement
with any labor union, and no labor union has requested or has sought to
represent any of the employees, representatives or agents of a Group
Company.  There is no strike or other
labor dispute involving a Group Company pending or threatened (nor has there
been 


 


25

















 


since
the incorporation of each Group Company), which could have a material adverse
effect on any Group Company, nor is any Group Company aware of any labor
organization activity involving its employees. 
To the best knowledge of the Warrantors after due inquiry, none of the
officers or key employees, or any group of key employees, intends to terminate
his, her or their employment with a Group Company.  Each Group Company has complied in all
respects with all applicable national, provincial, local or municipal equal
employment opportunity and other laws related to employment.  No Group Company is a party to or bound by
any currently effective employment contract that provides for compensation
exceeding three (3) months’ average remuneration of that employee upon
termination, deferred compensation agreement, severance agreement, bonus plan,
incentive plan, profit sharing plan, retirement agreement, or other employee
compensation agreement.


 


3.26                        Exempt Offering. 
Based in part on the representations and warranties of the Series C
Investors set forth in Section 4 below, the offer, sale and issuance of
the Series C Preferred Shares under this Agreement are exempt from the
registration requirements of the Act and from the registration or qualification
requirements of any other applicable securities laws of any governmental authority,
and the issuance of Ordinary Shares upon conversion of the Series C
Preferred Shares in accordance with the Agreed
M&A, will be exempt from such registration or qualification
requirements.


 


3.27                        Bank and Brokerage Accounts; Investment Assets.  Section 3.27 of the
Disclosure Schedule sets forth (a) a true and complete list of the names
and locations of all banks, trust companies, securities brokers and other
financial institutions at which any Group Company has an account or safe
deposit box or maintains a banking, custodial, trading or other similar
relationship; (b) a true and complete list and description of each such
account, box and relationship, indicating in each case the account number and
the names of the respective officers, employees, agents or other similar
representatives of the Group Company having signatory power with respect
thereto; and (c) a list of each Investment Asset (defined as all
debentures, notes and other evidences of indebtedness, stocks, securities
(including rights to purchase and securities convertible into or exchangeable
for other securities), interests in joint ventures and general and limited
partnerships, mortgage loans and other investment or portfolio assets) held
through or in each such account, box and relationship, including the name of
the record and beneficial owner thereof, the location of the certificates, if
any, the maturity date, if any, and any stock or bond powers or other authority
for transfer granted with respect thereto.


 


3.28                        Certain Business Practices. Neither the Company nor any Group Company
nor any officer, director, agent or employee purporting to act on behalf of the
Company or any Group Company has at any time, directly or indirectly, (i) made,
provided or paid any unlawful contributions, gifts, entertainment or other
unlawful expenses to any candidate for political office, or failed to disclose
fully any such contributions in violation of applicable law and regulations, (ii) made
any payment to any local, state, federal or foreign governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or allowed by applicable law and regulations
(including, without limitation, the United States Foreign Corrupt Practices Act
of 1977, as amended), (iii) made any payment to any agent, employee,
officer or director of any entity to which the Company or any Group Company
does business for the purpose of influencing such agent, employee, officer or
director to do business with the Company or such Group Company, (iv) engaged
in any transactions, maintained any bank account or used any corporate funds,
except for transactions, bank accounts and funds which have been and are 


 


26

















 


reflected in
the normally maintained books and records of the Company and/or such Group
Company or which are engaged, maintained or used during the ordinary course of
business of the Company and/or such Group Company in compliance with the
applicable laws and regulations, (v) violated any provision of the United
States Foreign Corrupt Practices Act of 1977, as amended, or (vi) made any
payment in the nature of criminal bribery or any other unlawful payment.


 


3.29                        Actions Against Officers and Directors. 
To the best
knowledge of the Warrantors, none of the directors or key officers of the
Company or any Group Company or any officer, director, agent or employee
purporting to act on behalf of the Company or any Group Company has been (i) subject
to voluntary or involuntary petition under federal bankruptcy law  or any state insolvency law or the
appointment of a receiver, fiscal agent or similar officer by a court for his
or her business or property, or any partnership in which he or she was a
general partner or any corporation or business association of which he or she
was an executive officer; (ii) convicted in a criminal proceeding or named
as a subject of a pending criminal proceeding (excluding traffic violations and
other minor offenses); (iii) subject to any order (not subsequently
reversed, suspended, or vacated) of any court of competent jurisdiction permanently
or temporarily enjoining him from engaging, or otherwise imposing limits or
conditions on his engagement in any securities, investment advisory, banking,
insurance, or other type of business or acting as an officer or director of a
public company; or (iv) found by a court of competent jurisdiction in a
civil action or by the United States Securities and Exchange Commission or the
Commodity Futures Trading Commission to have violated any federal or state
securities, commodities, or unfair trade practices law, which such judgment or
finding has not been subsequently reversed, suspended, or vacated.


 


3.30                        Compliance with Export and Trade
Laws.  Each of the Group Companies is in full compliance
with all applicable United States and foreign government laws and regulations
concerning the exportation of any products, technology, technical data and
services, including those administered by, without limitation, the United
States Department of Commerce, the United States Department of State, and the
United States Department of the Treasury. 
Each of the Group Companies is also in full compliance with United
States and international economic and trade sanctions, including those
administered by the Office of Foreign Assets Control (“OFAC”) within the United States Department
of the Treasury.  Each of the Group
Companies is also in full compliance with the antiboycott regulations
administered by the United States Department of Commerce, the United States
Foreign Corrupt Practices Act, and all laws and regulations administered by the
Bureau of Customs and Border Protection in the United States Department of
Homeland Security.


 


4.                                      REPRESENTATIONS AND WARRANTIES OF
SERIES C INVESTORS.


 


Each Series C Investor and each Lender hereby
severally with respect only to itself and no other person, but not jointly,
represents and warrants to the Group Companies, CCH, HCI and the Key Parties as
follows as of the date hereof and as of the Closing:


 


4.1                               Authorization.  It has
full power and authority to enter into this Agreement and the other Transaction
Agreements, and each of the Transaction Agreements, when executed and delivered
by a Series C Investor or a Lender, will constitute a valid and legally
binding obligation of that Series C Investor or that Lender, as the case
may be, subject as to enforcement of remedies, 


 


27

















 


to applicable
bankruptcy, insolvency, moratorium, reorganization and similar laws affecting
creditors’ rights generally and to general equitable principles.


 


4.2                               Investigation; Economic Risk.  It
is able to fend for itself in the transactions contemplated by this Agreement
and has the ability to bear the economic risks of its investment in the Shares.


 


4.3                            Purchase for Own Account.  It
is, or will be acquiring, its respective Shares and the Conversion Shares for
its own account, not as a nominee or agent, and not with a view to or in
connection with the sale or distribution of any part thereof.  By executing this Agreement, each Series C
Investor and each Lender further represents that it does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or
grant participation to such person or any third person, with respect to any
Shares or Conversion Shares, other than, with respect to any Series C
Investor and any Lender that is an investment fund, agreements or arrangements
governing the acquisition, management and disposition of fund assets or
interests in general fund assets with participants in the fund.


 


5.                                      CONDITIONS TO SERIES C INVESTORS’
OBLIGATIONS AT THE CLOSING.


 


The obligations of the Series C Investors to subscribe
for the Series C-1 Preferred Shares and the Series C-3 Preferred
Shares and the obligations of each Lender to convert the Notes into the Serires
C-2 Preferred Shares at the Closing is, unless otherwise waived in writing by such
Series C Investor or such Lender, subject to the fulfillment to the
satisfaction of such Series C Investor and/or such Lender (with respect
only to itself) on or prior to the Closing of the following conditions:


 


5.1                               Representations and Warranties Correct.  The
representations and warranties made by the Warrantors in Section 3 hereof
shall be true and correct and complete in all material respects with respect to
the subjects covered therein when made, and shall be true, correct and complete
in all material respects as of the date of the Closing with the same force and
effect as if they had been made on and as of such date except in either case for those representations and
warranties (i) that already contain any materiality qualification,
which representations and warranties, to the extent already so qualified, shall
instead be true and correct in all respects as so qualified as of such dates
and (ii) that address matters
only as of a particular date, which representations will have been true and
correct in all material respects (subject to clause (i)) as of such particular
date.


 


5.2                               Performance of Obligations. 
Each Warrantor shall have performed and complied with all agreements,
obligations and conditions contained in this Agreement that are required or
contemplated to be performed or complied with by it on or before the Closing.


 


5.3                               Company’s Charter Documents.  The
Company’s Agreed M&A shall
have been duly amended by all necessary action of the Board and shareholders to
read as set forth in the Agreed M&A attached as Exhibit A and
such amendment shall have been duly filed with and accepted by  the Registrar of Companies of the Cayman
Islands at the Closing.


 


5.4                               Due Diligence.  The Series C
Investors and the Lenders shall have completed their due diligence
investigation of the Warrantors and any corrective items identified by a Series C
Investor or a Lender shall have been corrected and the results of the due
diligence investigation in 


 


28

















 


legal,
financial, managerial and technological aspects shall be satisfactory to each Series C
Investor and each Lender.  Without
limiting the foregoing, the Series C Investors and the Lenders shall have
received from the Company all documents and other materials requested by the Series C
Investors and the Lenders for the purpose of examining and determining the
rights in and to any technology, products and Proprietary Rights now used,
proposed to be used in, or necessary to, the business as now conducted and
proposed to be conducted by the Group Companies, and the status of its
ownership rights in and to all such technology, products and Proprietary Rights
shall be satisfactory to the Series C Investors and the Lenders in their
sole discretion.


 


5.5                               Consents and Waivers. 
Each Warrantor shall have obtained any and all consents and waivers
necessary or appropriate for consummation of the transactions contemplated by
this Agreement including all necessary PRC government approvals to permit the
investment in the PRC Subsidiary using the proceeds from the issuance of the relevant
Shares.


 


5.6                               Laws.  The offer
and sale of the Shares and the Conversion Shares to the Series C Investors
and/or the Lenders, as the case may be, and the Company Repurchase pursuant to
this Agreement shall be exempt from the registration and prospectus delivery
requirements of the Securities Act and shall not violate or breach or result in
a violation or breach of any other applicable laws or regulations.


 


5.7                               No Litigation; No Material Change.  No
Action shall have been threatened or instituted against any Warrantor or any Series C
Investor seeking to enjoin, challenge the validity of, or assert any liability
against any of them on account of, any transactions contemplated by this
Agreement or the other Transaction Agreements. 
There shall have been no material adverse change to the business
operation or prospects of the Group Companies.


 


5.8                               Amended and Restated Investors’ Rights
Agreement.  Counterparts of the Amended and
Restated Investors’ Rights Agreement shall have been duly executed and
delivered by all parties thereto.


 


5.9                               Closing Deliveries.  The
Warrantors shall have tendered delivery of all of the various items they are
required to deliver to the Series C Investors at the Closing under Section 2.4.


 


5.10                        Proceedings and Documents.  All
corporate and other proceedings in connection with the transactions
contemplated hereby and all documents and instruments incident to such
transactions shall be reasonably satisfactory in substance and form to the Series C
Investors, and the Series C Investors shall have received all such
counterpart originals or certified or other copies of such documents as they
may reasonably request.


 


5.11                        Board. 
The Board shall be composed of eight (8) directors. Paul Choo shall have been appointed as the designee of
Investor Group and Investor Investments.


 


5.12                        Minimum Investment. 
The Series C
Investors collectively shall invest a minimum of US$8 million for purchase of the Series C-1
Preferred Shares.


 


5.13                        Surrender of Share Certificate by HCI.  HCI
shall have surrendered to the Company the certificate representing all of the
HCI Repurchased Shares for cancellation.


 


29














 


5.14                        Simultaneous Closing.   (1) The issuance of the Series C-1
Preferred Shares to the Series C Investors, (2) the conversion of the
Notes into Series C-2 Preferred Shares, and (3) the Company
Repurchase and the issuance of the Series C-3 Preferred Shares to the Series C
Investors, shall occur simultaneously upon the Closing.


 


6.                                      CONDITIONS TO COMPANY’S
OBLIGATIONS AT THE CLOSING.


 


The obligations of the Company to issue or sell the
relevant Shares to each Series C Investor or each Lender and the obligations
of HCI to transfer the HCI Repurchased Shares to the Company at the Closing,
unless otherwise waived in writing by the Company and HCI, is subject to the
fulfillment to the Company’s and HCI’s satisfaction on or prior to the Closing
of the following conditions:


 


6.1                               Representations and Warranties Correct.  The
representations and warranties made by the relevant Series C Investor and
the relevant Lender in Section 4 hereof shall be true and correct and
complete in all material respects with respect to the subjects covered therein
when made, and shall be true and correct and complete as of the date of the
Closing with the same force and effect as if they had been made on and as of
such date, subject to changes contemplated by this Agreement.


 


6.2                               Performance of Obligations.  The
relevant Series C Investors and the relevant Lender shall have performed
and complied with all agreements, obligations and conditions contained in this
Agreement that are required or contemplated to be performed or complied with by
it on or before the Closing.


 


6.3                               Laws.  The issue
and sale of the Shares to the relevant Series C Investor or the relevant
Lender pursuant to this Agreement shall be exempt from the registration and
prospectus delivery requirements of the Securities Act and shall not violate or
breach or result in a violation or breach of any other applicable law or
regulation.


 


6.4                               No Litigation.  No Action
shall have been threatened or instituted against the relevant Series C Investor
or the relevant Lender seeking to enjoin, challenge the validity of, or assert
any liability against any of them on account of, any transactions contemplated
by this Agreement or the other Transaction Agreements.


 


6.5                               Delivery of Notes. 
With respect to each Lender, a notice of conversion of the applicable
Note shall have been delivered to the Company, and the original Note held by
such Lender shall have been surrendered to the Company for cancellation in
exchange of the relevant Series C-2 Preferred Shares.


 


7.                                      COVENANTS OF THE WARRANTORS.


 


The Warrantors each hereby jointly and severally
covenant to each Series C Investor and each Lender as follows:


 


7.1                               Use of Proceeds.  Except for the payment of
reasonable expenses incurred in connection with the Transaction Agreements and
the transactions contemplated hereby, including the amounts due to the Series C Investors under Section 9.8,  the Company shall
use the entire proceeds from the sale of the Series C-1 Preferred Shares and Series C-2 Preferred
Shares
for (i) 


 


30

















 


research
and development of new technologies and products; (ii) network
development, including new node deployment in the PRC and overseas and build-up
of stronger processing capabilities; (iii) business expansion to the PRC
and overseas market; (iv) management build-up, including the recruitment
of capable senior manager and establishment of employee training; (v) business
expansion and (vi) working capital. 
The Company shall take all necessary steps to enable the Company to invest
such proceeds in the PRC Subsidiary, including increasing its registered
capital.


 


7.2                               Liquidity Events. 
Within thirty-six (36) months from the date of this Agreement, each Warrantor shall take all necessary actions to , (i) list the Ordinary Shares of the
Company (or securities representing the Ordinary Shares of the Company) on the
Nasdaq National Market or The Stock Exchange of Hong Kong Limited or any other
internationally recognized stock exchange or inter-dealer quotation systems
acceptable to the Investors in a Qualified IPO; or (ii) procure a bona
fide third party offer for the sale of all or more than fifty percent (50%) of
the equity or assets of the Company, whether through a single transaction or a series
of transactions, for at least the greater of (i) an amount that represents an implied valuation
of the Company that generates a minimum internal rate of return of thirty-five
percent (35%) per annum to each holder of Preferred Shares, and (ii) an
amount which represents an implied valuation of the Company of at least US$300
million (the “Trade Sale”).  In the event such internal rate of return is
calculated for a period of time that is less than a full year, such rate shall
be calculated ratably based on a 360-day year.


 


7.3                               Financial Control Policies; Bank
Accounts.  The bank account(s) of the Company shall require only the signatory of the Chief Executive Officer or
the Chief Financial Officer of the Company. 
No change to the identity of the authorized signatory representing the
Company can be made without the approval of the Board and the Series C Investors holding no less than a majority of the Series C
Preferred Shares outstanding as of the Closing.


 


7.4                               Additional Covenants. 
Except as required by this Agreement, the Amended and Restated Investors’
Rights Agreement, no resolution of the directors, owners, members, joint
venture parties, or shareholders of any Group Company shall be passed nor shall
any contract or commitment be entered into prior to the Closing without the
written consent of each of the Series C Investors, except that the Group Companies may
carry on their respective businesses in the same manner as heretofore and may
pass resolutions and enter into contracts and commitments in the ordinary
course of business and consistent with past practice.


 


7.5                               Notice of Certain Events. 
If at any time before the Closing, any
Warrantor comes to know of any material fact or event which:


 


(a)                                 is in any way inconsistent with any of the representations and
warranties in this Agreement;


 


(b)                                 suggests that any fact warranted hereunder may not be as warranted or
may be misleading; or


 


(c)                                  might affect the willingness of a prudent investor to purchase the
Shares on the terms contained in the Transaction Agreements or the amount of
the consideration a prudent 


 


31

















 


investor would be prepared to pay for the Shares,
then the Warrantors shall immediately notify the Series C Investors in writing, describing the fact or event in reasonable detail.


 


7.6                               Key Parties’ Commitments to the
Company.  Each Key Party hereby agrees to devote one
hundred percent (100%) of his or her working time to the business and
operations of the Group Companies.


 


7.7                               Employee Equity; Vesting.  Except as set forth in Section 7.7 of the Disclosure Schedule, after the
Closing, the Company (but not any other Group Company) may issue shares and
grant options to employees, advisors, officers, and directors of, and
consultants to, the Company and its subsidiaries, but only pursuant to Employee
Share Option Plan, and provided that the total number of shares issued or
issuable under any such Employee Share Option Plan shall not exceed 22,600,000 Ordinary Shares (proportionally adjusted to
reflect any share dividends, share splits, or similar transactions).  Except as unanimously approved by the Board,
shares or share options to be issued under the Employee Share Option Plan shall  be either (i) 100% vested on the applicable
grant date, or (ii) subject to  a minimum four (4) year vesting schedule calling for vesting no faster than the
following, counting from the applicable grant date with respect to the issued options:
fifty percent (50%) at the end of twenty-four (24) months, twenty-five percent
(25%) each at the end of  thirty-six (36)
months and forty-eight (48) months.


 


Except as otherwise approved by a majority of the
Board (including the vote of a Series A Directors and Series B
Directors and Series C Director (as defined in Section 8.1 of the
Amended and Restated Investors’ Rights Agreement), the Company shall cause all
future officers, directors, and employees of, and consultants to, the Company
and its Subsidiaries who purchase, or receive options to purchase, shares of
the Company’s Ordinary Shares, to execute and deliver agreements in forms
approved by the Board providing for a right of repurchase in favor of the
Company on unvested shares at cost upon resignation or termination with cause,
a prohibition on the transfer of all shares prior to a Qualified IPO (unless
otherwise permitted under such Employee Share Option Plan) and a lockup or
market standoff commitment after the Qualified IPO in respect of vested shares
subject to the requirements that the underwriters or sponsors may have at such
time.


 


7.8                               Availability of Ordinary Shares.  The Company hereby covenants that
at all times there shall be made available, free of any liens, for issuance and
delivery upon conversion of the Series C Preferred Shares such number of Ordinary Shares or
other shares of share capital of the Company as are from time to time issuable
upon conversion of the Series C Preferred Shares.


 


7.9                               Use of “Qiming” Name or Logo. 
Without the prior written consent of Qiming, and whether or not Qiming
then holds any Shares, none of the Warrantors shall use, publish or reproduce
the name “Qiming” or any similar name, trademark or logo in any of their
marketing, advertising or promotion materials or otherwise for any marketing,
advertising or promotional purposes.


 


7.10                        Use of “Ignition” Name or Logo. 
Without the prior written consent of Ignition, and whether or not
Ignition  then holds any Shares, none of
the Warrantors shall use, publish or reproduce the name “Ignition” or any
similar name, trademark or logo in any of their marketing, advertising or
promotion materials or otherwise for any marketing, advertising or promotional
purposes.


 


32

















 


7.11                        Use of “JAFCO” Name or Logo.  Without
the prior written consent of JAFCO, and whether or not JAFCO is then a shareholder of the Company, none of the Warrantors shall use,
publish or reproduce the name “JAFCO” or any similar name, trademark or logo in any of
their marketing, advertising or promotion materials or otherwise for any
marketing, advertising or promotional purposes.


 


7.12                        Use of “Starr” Name or Logo. 
Without the prior written consent of Starr, and whether or not Starr is
then a shareholder of the Company, none of the Warrantors shall use, publish or
reproduce the name “Starr” or any similar
name, trademark or logo in any of their marketing, advertising or promotion
materials or otherwise for any marketing, advertising or promotional purposes.


 


7.13                        Use of “Intel” Name or Logo. 
Without the prior written consent of Intel, and whether or not Intel is
then a shareholder of the Company, none of the Warrantors shall use, publish or
reproduce the name “Intel” or any similar name, trademark or logo in any
of their marketing, advertising or promotion materials or otherwise for any
marketing, advertising or promotional purposes.


 


7.14                        Use of “IGC” Name or Logo. 
Without the prior written consent of IGC Asia, and whether or not IGC
Asia then holds any Shares, none of the Warrantors shall use, publish or
reproduce the names “Investor Growth”, “Investor Group Asia”, “Investments Asia”, “Investor
AB” or any similar name, trademark or logo in any of their marketing,
advertising or promotion materials or otherwise for any marketing, advertising
or promotional purposes.


 


7.15                        Tax Indemnity. 
The Warrantors hereby jointly and severally undertake to indemnify each of the Series C Investors in an amount equal to the amount of any
diminution in the value of the Shares or the Conversion Shares, and to
indemnify each of the Series C Investors against any and all losses, liabilities,
damages, suits, obligations, judgments or settlements or any kind (including
all reasonable legal costs, costs of recovery and other expenses incurred by each of the Series C Investors) resulting from any claim of taxation
(including those resulting from cancellation or reclamation of tax benefits of
any kind relating to the Group Companies) arising from an event that occurred
or is deemed to have occurred prior to the Closing.


 


7.16                        Operations of Beijing Blue I.T. 
Beijing Blue I.T. shall, to the extent permitted by applicable law,
operate its business at the direction of its board of directors and its
shareholders (who have assigned their voting rights to the PRC
Subsidiary).  The PRC Subsidiary shall
take all reasonably necessary steps to ensure that Beijing Blue I.T. will and
the Key Parties shall each cause Beijing Blue I.T. to, have funds available to
cover its operating expenses and to timely repay its debts as they become due.


 


7.17                        Intellectual Property Rights and
Confidentiality Agreement.  Within two
(2) months of the Closing, the Company shall cause each of the non-Key
Party employees, directors, and consultants of any Group Company to enter into
an IPR Assignment, Non-Competition and Confidentiality Agreement with an
appropriate Group Company, if he or she has not already done so.


 


33

















 


7.18                        Registration of IP Rights. 
A status report shall be sent to each of the Series C Investors regarding the registration of the
intellectual property rights upon the earlier of the completion of such matter,
or the expiration of the timeframe stated therein.


 


7.19                        Release of Obligations under the Bridge Loan
Documents.


 


(a)                                 Upon completion of the Loan Conversion, all outstanding Bridge
Loans  and all
interest accrued thereon (if any) under
the Notes shall be deemed to have been used to satisfy the Purchase Price
for subscription
of the Series C-2 Preferred Shares and shall be reduced to zero.  The
Lenders agree that after the Loan Conversion, the Company shall have no
obligations under the Bridge Loan Documents with respect to the Bridge Loans.


 


(b)                                The Lenders agree that upon completion of
the Loan Conversion, the Obligations defined in the Deeds shall be fully
discharged and the Lenders shall, at the cost of CCH, take all actions necessary
to procure the Charged Shares (as defined in the Deeds) to be released from the
Charge (as defined in the Deeds) and any other security under the Deeds.


 


(c)                                  The Company agrees (i) that the notice
of conversion provided under Section 2.4 constitutes sufficient notice
required under the Bridge Loan Documents to convert the Notes, regardless of
any specific requirements stated in the Bridge Loan Documents; and (ii) to
waive any other requirements to be satisfied by the Lenders in order to convert
the Notes.


 


7.20                        Further Undertaking from the Warrantors.  Each
of the Warrantors undertakes to each of the Series C Investors and the
Lenders that it shall not and shall procure that no Group Company nor any
officer, director, agent or employee purporting to act on behalf of a member of
the Group Company shall at any time, directly or indirectly:


 


(a)                               make, provide or pay any unlawful
contributions, gifts, entertainment or other unlawful expenses to any candidate
for political office, or fail to disclose fully any such contributions in
violation of any applicable law;


 


(b)                               make any payment to any local, state,
federal or any other type of governmental officer or official, or other person
charged with similar public or quasi-public duties, other than payments required
or allowed by applicable law (including, without limitation, the United States
Foreign Corrupt Practices Act of 1977, as amended);


 


(c)                                make any payment to any agent, employee,
officer or director of any entity to which any Group Company does business for
the purpose of influencing such agent, employee, officer or director to do
business with any Group Company;


 


(d)                               engage in any transactions, maintain any
bank account or use any corporate funds, except for transactions, bank accounts
and funds which have been and are reflected in the normally maintained books
and records of any Group Company or which are engaged, maintained or used
during the ordinary course of business of the Company and/or such Group Company
in compliance with the applicable laws and regulations;


 


(e)                                violate any provision of the United States
Foreign Corrupt Practices Act of 1977, as amended; or


 


34

















 


(f)                                 make any payment in the nature of criminal
bribery or any other unlawful payment.


 


As a further
and separate undertaking, each of the Warrantors undertakes to notify each of
the Series C Investors and the Lenders immediately of any breach of the
above.


 


7.21                                 Abide by the Agreed M&A.                                             Each of the Warrantors hereby agrees to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary under the applicable law to abide by the terms of the Company’s
Memorandum and Articles of Association, as may be amended from time to time in
accordance with the provisions of this Agreement.   Each of
the Warrantors further agrees to execute and deliver, or cause to be executed
and delivered, such other documents, certificates, agreements and other
writings and to take, or cause to be taken, such other actions as reasonably
deemed necessary in order to consummate or implement expeditiously the
provisions of the Company’s Memorandum and Articles of Association, as may be
amended from time to time in accordance with the provisions of this Agreement.


 


7.22                                Repurchase for Option.                   The parties acknowledge and agree that (1) the
Company will complete the Repurchase for Option before the Closing; (2) 2,400,000
Ordinary Shares (convertible from the outstanding Series B Preferred
Shares) currently held by the existing holders of Series B Preferred
Shares are reserved for issuance to the Key Parties in accordance with the
terms and conditions of the Option Agreement and the Option Supplementary
Agreement.


 


8.                                      CONFIDENTIALITY AND NON-DISCLOSURE.


 


8.1                               Disclosure of Terms. 
Each party hereto acknowledges that the terms and conditions
(collectively, the “Terms”) of
this Agreement, the other Transaction Agreements, and all exhibits,
restatements and amendments hereto and thereto, including their existence,
shall be considered confidential information and shall not be disclosed by it
to any third party except in accordance with the provisions set forth
below.  Save for Intel which shall be
separately bound by the Corporate
Non- Disclosure Agreement as referred to below in Section 8.5, each Series C Investor and each Lender agrees with the Company that such Series C Investor or Lender will keep confidential and will not disclose or
divulge, any information which the Series C Investor or Lender obtains from the Company, pursuant to financial
statements, reports, presentations, correspondence, and any other materials
provided by the Company to, or communications between the Company and Series C Investor or the Lender, or pursuant to information rights granted under
the Amended and Restated Investors’ Rights Agreement or any other related
documents, unless the information is known, or until the information becomes
known, to the public through no fault of such Series C Investor or such Lender, or unless the Company gives its written consent
to such Series C Investor’s
or such
Lender’s release
of the information.


 


8.2                               Press Releases. 
Within sixty (60) days of the Closing, the Company may issue a press
release related to the Closing, disclosing that the Series C Investors and the Lenders have invested in the Company provided that (a) the
release does not disclose any of the Terms, (b) the press release does not
disclose the amount or other specific terms of the investment, and (c) the
final form of the press release is approved in advance in writing by each Series C Investor and each Lender mentioned therein. 
Series C
Investors’ and Lenders’ names and the fact that the Series C Investors and the Lenders are shareholders in the Company can be included in
a reusable press 


 


35

















 


release
boilerplate statement, so long as each Series C Investor or each Lender has given the Company its initial approval of such
boilerplate statement and the boilerplate statement is reproduced in exactly
the form in which it was approved.  No
other announcement regarding any Series C Investor or any Lender in a press release, conference, advertisement,
announcement, professional or trade publication, mass marketing materials or
otherwise to the general public may be made without such Series C Investor’s or such Lender’s prior written consent, which consent may be
withheld at such Series C
Investor’s or such
Lender’s sole
discretion.


 


8.3                               Permitted Disclosures. 
Notwithstanding anything in the foregoing to the contrary,


 


(a)                                 the Company may disclose any of
the Terms to its current or bona fide prospective investors, directors,
officers, employees, shareholders, investment bankers, lenders, accountants,
auditors, insurers, business or financial advisors, and attorneys, in each case
only where such persons or entities are under appropriate nondisclosure
obligations imposed by professional ethics, law or otherwise;


 


(b)                                 each Series C Investor and each Lender  (and its fund manager) may, without disclosing the identities of the other
Series C
Investors or other
Lenders
or the Terms of their respective investments in the Company without their
consent, disclose such Series C Investor’s or such Lender’s investment in the Company to third parties or to
the public at its sole discretion and in relation thereto may use the Company’s logo
and trademark and may include links to the Company’s website (without requiring
the Company’s further consent).  If it does so, the other parties shall have the
right to disclose to third parties any such information disclosed in a press
release or other public announcement by such Series C Investor or such Lender.


 


(c)                                  each Series C Investor and each Lender shall have the right to disclose:


 


(i)                                     any information to such Series C Investor’s or such Lender’s Affiliate or fund manager, such Series C
Investor’s or such Lender’s and/or its fund manager’s and/or its Affiliate’s legal
counsel, fund manager,
auditor, insurer, accountant, consultant or to an officer, director, general
partner, limited partner, fund manager, shareholder, investment counsel or
advisor, or employee of such Series C Investor or such Lender, fund manager or Affiliate and any of their investors or
respective Affiliates,  provided, however, that any counsel, auditor, insurer,
accountant, consultant, officer, director, general partner, limited partner,
fund manager, shareholder, investment counsel or advisor, or employee shall be
advised of the confidential nature of the information or are under appropriate
non-disclosure obligation imposed by professional ethics, law or otherwise;


 


(ii)                                  any information for fund and
inter-fund reporting purposes;


 


(iii)                               any information as required by
law, government authorities, exchanges and/or regulatory bodies, including by
the Securities and Futures Commission of the Hong Kong Special Administrative
Region, the China Securities and Regulatory Commission of the PRC or the
Securities and Exchange Commission of the United States (or equivalent for
other venues); and/or


 


(iv)                              any information to bona fide
prospective purchasers/investors of any share, security or other interests in
the Company,


 


36

















 


(v)                                 any information contained in
press releases or public announcements of the Company pursuant to Section 8.2
above.


 


(d)                                 the confidentiality obligations
set out in this Section 8 do not apply to:


 


(i)                                     information which was in the
public domain or otherwise known to the relevant party before it was furnished
to it by another party hereto or, after it was furnished to that party, entered
the public domain otherwise than as a result of (i) a breach by that party
of this Section 8 or (ii) a breach of a confidentiality obligation by
the discloser, where the breach was known to that party;


 


(ii)                                  information the disclosure of
which is necessary in order to comply with any applicable 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; or


 


(iii)                               the disclosure of information by any director of
the Company to its appointer or any of its Affiliates or otherwise in
accordance with the foregoing provisions of this Section 8.3.


 


8.4                               Legally Compelled Disclosure. 
In the event that any party is requested or becomes legally compelled
(including without limitation pursuant to securities laws and regulations) to
disclose the existence of this Agreement or any Terms in contravention of the
provisions of this Section 8, such party (the “Disclosing Party”) shall if and to extent that it can lawfully do so provide the other parties (the “Non-Disclosing Parties”) with prompt
written notice of that fact so that the appropriate party may seek (with the
cooperation and reasonable efforts of the other parties) a protective order,
confidential treatment or other appropriate remedy.  In such event, the Disclosing Party shall
furnish only that portion of the information that is legally required and shall
exercise reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded such information to the extent reasonably requested
by any Non-Disclosing Party.


 


8.5                               The provisions of this Section 8
shall be in addition to, and not in substitution for, the provisions of the
separate nondisclosure agreements executed by the Company with Intel and/or its affiliates with respect
to the transactions contemplated herein. 
Additional disclosures and exchange of confidential information between
the Company and Intel (including any exchanges of information with any board
observer designated by Intel) shall be governed exclusively by the terms of the
Corporate Non-Disclosure Agreement No. 9323388 dated August 31, 2005,
executed by the Company and Intel Corporation (the “Intel Non-Disclosure Agreement”).


 


9.                                      MISCELLANEOUS.


 


9.1                               Governing Law. 
This Agreement shall be governed in all respects by the laws of the Hong
Kong Special Administrative Region without regard to conflicts of law
principles.


 


9.2                               Survival. 
The representations, warranties, covenants and agreements made herein
shall survive any due diligence investigation made by any party hereto and
shall survive the Closing.


 


37

















 


9.3                               Successors and Assigns. 
Except as otherwise expressly provided herein, the provisions hereof
shall inure to the benefit of, and be binding upon, the successors, permitted
assigns, heirs, executors and administrators of the parties hereto whose rights
or obligations hereunder are affected by such amendments.  This Agreement and the rights and obligations
herein may be assigned by any Series C Investor to any affiliate of such Series C Investor. 
No Warrantor may assign its rights or delegate its obligations under
this Agreement without the written consent of each Series C Investor.


 


9.4                               Entire Agreement. 
This Agreement, the Amended and Restated Investors’ Rights Agreement and
the schedules and exhibits hereto and thereto, which are hereby expressly
incorporated herein by this reference, constitute the entire understanding and
agreement between the parties with regard to the subjects hereof and thereof; provided,
however, that nothing in this Agreement or related agreements shall be
deemed to terminate or supersede the provisions of any confidentiality and
nondisclosure agreements executed by the parties hereto prior to the date of
this Agreement, all of which agreements shall continue in full force and effect
until terminated in accordance with their respective terms.


 


9.5                               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 sent by facsimile at the
number set forth below, upon a successful transmission report being generated
by the sender’s machine; or (c) three (3) Business Days after deposit
with an internationally-recognized overnight delivery service, postage prepaid,
addressed to the parties as set forth below with next-business-day delivery
guaranteed, provided that the sending party receives a confirmation of delivery
from the delivery service provider.


 


	
  To the Company:

  	
   

  	
  To Beijing Blue I.T.:

  
	
   

  	
   

  	
   

  
	
  c/o Beijing Blue I.T. Technologies Co., Ltd.

  6th
  Floor, Xing Ke Building

  No. 10
  Jiu Xianqiao Road

  Chaoyang
  District, Beijing 100016, PRC

  Attn: Board of Directors

  Fax Number: +8610 6437 4251

  	
   

  	
  6th Floor, Xing Ke Building

  No. 10 Jiu Xianqiao Road

  Chaoyang District, Beijing 100016, PRC

  Attn: Song Wang

  Fax Number: +86 10 6437-5315

  
	
   

  	
   

  	
   

  
	
  To the PRC Subsidiary:

  	
   

  	
  To each Key Party:

  
	
   

  	
   

  	
   

  
	
  c/o Beijing Blue I.T. Technologies
  Co., Ltd.

  6th Floor, Xing Ke Building

  No. 10 Jiu Xianqiao Road

  Chaoyang District, Beijing 100016, PRC

  Attn: Board of Directors

  Fax Number: +8610 6437 4251

  	
   

  	
  c/o Beijing Blue I.T. Technologies
  Co., Ltd.

  6th Floor, Xing Ke Building

  No. 10 Jiu Xianqiao Road

  Chaoyang District, Beijing 100016, PRC
  Attn:

  Attn: Song Wang

  Fax Number: +86 10 6437-5315

  
	
   

  	
   

  	
   

  
	
  To Beijing Jingtian:

  	
   

  	
  To Shanghai Jnet:

  
	
   

  	
   

  	
   

  
	
  6th Floor, Xing Ke Building

  No. 10 Jiu Xianqiao Road

   

  	
   

  	
  Room 527, 1033 Kang Ding Road, Jing
  An

  District, Shanghai

   

  



 


38

















 


	
  Chaoyang District, Beijing 100016, PRC

  Attn: Song Wang

  Fax Number: +86 10 6437-5315

  	
   

  	
  Attn: Yong Sha

  Fax Number: +8621 5228 9716

  
	
   

  	
   

  	
   

  
	
  To the Series C Investors or the
  Lenders:

   

  The addresses and fax numbers set forth
  opposite each Series C Investor or each Lender on Schedule C

  	
   

  	
   

  



 


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 9.5 by giving the other party
written notice of the new address in the manner set forth above.


 


9.6                               Amendments and Waivers. 
This Agreement may be amended only with the prior written consent of the
Company and all the Series C Investors and the Lenders.  Notwithstanding the foregoing, this Section 9.6
may not be amended without the prior written consent of each party hereto.


 


9.7                               Delays or Omissions.  No
delay or omission to exercise any right, power or remedy accruing to any party
upon any breach or default of any other party hereto under this Agreement,
shall impair any such right, power or remedy of the aggrieved party nor shall
it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of any similar breach or default thereafter occurring;
nor shall any waiver of any other breach or default theretofore or thereafter
occurring.  Any waiver, permit, consent
or approval of any kind or character on the part of any party of any breach or
default under this Agreement or any waiver on the part of any party of any
provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing.  All remedies, either under this Agreement, or
by law or otherwise afforded to the parties shall be cumulative and not
alternative.


 


9.8                               Professional Fees.  The
Company shall pay the Series C Investors’ and the Lenders’ fees and
expenses, including legal, accounting and out-of-pocket costs incurred by the Series C
Investors in connection with the transactions contemplated hereby, within five (5) Business
Days after its receipt of written invoices for such fees and expenses, provided
that such fees and expenses shall not exceed US$20,000.  In the event the Closing does not occur due
to a reason attributable to the Company, the Company shall promptly reimburse
to the Series C Investors all legal and other professional costs and
expenses incurred by or on behalf of the Series C Investors in connection
with the transactions contemplated by this Agreement.  In the event of any action at law, suit in
equity or arbitration proceeding in relation to this Agreement or any Shares or Conversion Shares, the
prevailing party shall be entitled to an award of reasonable attorney’s fees
and out-of pocket expenses from the losing party.


 


9.9                               Finder’s Fees. 
Except as set forth in Section 9.9 of the Disclosure Schedule by the Company, each party (a) represents
and warrants to the other party hereto that it has not retained any finder or
broker in connection with the transactions contemplated by this Agreement, and
(b)


 


39














 


hereby
agrees to indemnify and to hold harmless the other party hereto from and
against any liability for any commission or compensation in the nature of a
finder’s fee of any broker or other person or firm (and the costs and expenses
of defending against such liability or asserted liability) for which the
indemnifying party or any of its employees or representatives are responsible.


 


9.10                        Interpretation; Titles and
Subtitles.  This Agreement shall be
construed according to its fair language. 
The rule of construction to the effect that ambiguities are to be
resolved against the drafting party shall not be employed in interpreting this
Agreement.  The titles of the sections
and subsections of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.


 


9.11                        Counterparts. 
This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument.


 


9.12                        Severability. 
Should any provision of this Agreement be determined to be illegal or
unenforceable, such determination shall not affect the remaining provisions of
this Agreement.


 


9.13                        Exculpation among Series C Investors and Lenders.  Each
Series C Investor and each Lender acknowledges that it is not relying upon any
person or entity other than the Company and its officers and directors in
making its investment or decision to invest in the Company.  Each Series C Investor and each Lender hereby waives any claim against, and covenants not
to sue, any other Series C
Investor, Lender or the respective controlling
persons, officers, directors, members, partners, agents or employees of any
Series C Investor or Lender on account of any action heretofore or hereafter
taken or omitted to be taken in connection with this Agreement or any
transaction contemplated hereby.


 


9.14                        Pronouns. 
All pronouns and any variations thereof are deemed to refer to the
masculine, feminine, neuter, singular or plural, as the identity of the Person
or Persons may require.


 


9.15                        Dispute Resolution.


 


(a)                                 Negotiation Between Parties;
Mediations.  The parties agree to negotiate
in good faith to resolve any dispute between them regarding this
Agreement.  If the negotiations do not
resolve the dispute to the reasonable satisfaction of the relevant parties, then each party to the dispute that is a company shall nominate one authorized
officer as its representative.  The relevant parties or their representatives, as the case may
be, shall, within thirty (30) days of a written request by either party to call
such a meeting, meet in person and alone (except for one assistant for each
party) and shall attempt in good faith to resolve the dispute.  If the disputes cannot be resolved by such
senior managers in such meeting, the parties agree that they shall, if
requested in writing by either party, meet within thirty (30) days after such
written notification for one (1) day with an impartial mediator and consider
dispute resolution alternatives other than formal arbitration.  If an alternative method of dispute resolution
is not agreed upon within thirty (30) days after the one (1) day mediation,
either party to the dispute may begin formal arbitration proceedings to be conducted in accordance
with subsection (b) below.  This procedure
shall be a prerequisite before taking any additional action hereunder.


 


40

















 


(b)                                 Arbitration. 
In the event the parties are unable to settle a dispute between them
regarding this Agreement in accordance with subsection (a) above, such dispute shall be referred to
and finally settled by arbitration at the Hong Kong International Arbitration
Centre in accordance with the UNCITRAL Arbitration Rules (“UNCITRAL Rules”) in effect, which rules are
deemed to be incorporated by reference into this subsection (b), subject to the
following: (i) the arbitration tribunal shall consist of three arbitrators to
be appointed according to the UNCITRAL Rules; and (ii) the language of the
arbitration shall be English. 
Notwithstanding anything in this Agreement or in the UNCITRAL Rules or
otherwise, the arbitration tribunal shall not have the power to award
injunctive relief or any other equitable remedy of any kind against any Series C Investor or any Lender unless such award both (x)
is expressly appealable to and subject to de novo review by the courts of Hong
Kong, and (y) would not, if upheld, have the effect of impairing, restricting,
or imposing any conditions on the right or ability of such Series C Investor, such Lender or its Affiliates to conduct
its respective business operations or to make or dispose of any other
investments.  The prevailing party shall
be entitled to reasonable attorney’s fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.


 


9.16                        Exclusivity. 
Each Warrantor hereby agrees that, unless otherwise agreed to by the
Series C Investors, prior to December 29, 2009, neither the Warrantor nor any
of its representative or agent shall directly or indirectly initiate, respond
to, or participate in any discussions regarding, or accept any proposal for,
any equity or debt financing or sale of any of the Group Companies or their
Subsidiaries, unless with the prior written consent of each of the Series C Investors. 
If the Closing does not occur prior to December 29, 2009, this
exclusivity requirement will automatically expire and no longer bind the
Warrantors, their agents or representatives.


 


9.17                        JAFCO Rights. 
Any rights of JAFCO under this Agreement may, without prejudice to the
rights of JAFCO to exercise any such rights, be exercised by JAFCO Investment
(Asia Pacific) Ltd. (“JIAP”) or
any other fund manager of JAFCO or their nominees (“JAFCO Manager”), unless JAFCO has (a) given notice to the
other parties that any such rights cannot be exercised by JIAP or a JAFCO
Manager; and (b) not given notice to the other parties that such notice which
is given under this Section 9.17 has been revoked.


 


[Signature Page Follows]


 


41















 


Schedule A


 


Schedule of Series C
Investors and Lenders


 


	
  A

  	
   

  	
  B

  	
   

  	
  C

  	
   

  	
  D

  	
   

  	
  E

  	
   

  	
  F

  	
   

  	
  G

  	
   

  	
  H

  	
   

  	
  I

  	
   

  
	
  Series C Investors

  and/or Lenders

  	
   

  	
  Purchase Price

  for Series C-1

  Preferred Shares

  (US$)

  	
   

  	
  No. of Series C-1

  Preferred

  Shares

  Purchased

  	
   

  	
  Amount of

  Bridge Loan

  Cancelled

  (US$)

  	
   

  	
  No. of Series

  C-2 Preferred

  Shares

  Converted from

  Notes

  	
   

  	
  Purchase Price

  paid for Series

  C-3 Preferred

  Shares

  (US$)

  	
   

  	
  Total No. of

  Series C-3

  Preferred Shares

  Purchased

  	
   

  	
  Total Purchase

  Price for Series

  C Preferred

  Shares (US$)

  	
   

  	
  Total No. of

  Series C

  Preferred

  Shares

  Obtained

  	
   

  
	
  Qiming Venture Partners, L.P.

  	
   

  	
  1,441,600

  	
   

  	
  3,696,410

  	
   

  	
  727,000

  	
   

  	
  2,385,953

  	
   

  	
  540,600

  	
   

  	
  2,241,095

  	
   

  	
  2,709,200

  	
   

  	
  8,323,458

  	
   

  
	
  Qiming Managing Directors Fund, L.P.

  	
   

  	
  21,600

  	
   

  	
  55,385

  	
   

  	
  11,000

  	
   

  	
  36,102

  	
   

  	
  8,100

  	
   

  	
  33,579

  	
   

  	
  40,700

  	
   

  	
  125,066

  	
   

  
	
  Ignition Venture Partners III, L.P.

  	
   

  	
  528,800

  	
   

  	
  1,355,897

  	
   

  	
  267,000

  	
   

  	
  876,271

  	
   

  	
  198,300

  	
   

  	
  822,066

  	
   

  	
  994,100

  	
   

  	
  3,054,234

  	
   

  
	
  Ignition Managing Directors Fund III, LLC

  	
   

  	
  16,000

  	
   

  	
  41,026

  	
   

  	
  8,000

  	
   

  	
  26,255

  	
   

  	
  6,000

  	
   

  	
  24,873

  	
   

  	
  30,000

  	
   

  	
  92,154

  	
   

  
	
  Starr International Cayman, Inc.(1)

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  723,000

  	
   

  	
  2,372,825

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  723,000

  	
   

  	
  2,372,825

  	
   

  
	
  SIG China Investments One, Ltd

  	
   

  	
  1,312,000

  	
   

  	
  3,364,103

  	
   

  	
  217,000

  	
   

  	
  712,176

  	
   

  	
  492,000

  	
   

  	
  2,039,620

  	
   

  	
  2,021,000

  	
   

  	
  6,115,899

  	
   

  
	
  JAFCO Asia Technology Fund II

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  433,000

  	
   

  	
  1,421,071

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  433,000

  	
   

  	
  1,421,071

  	
   

  
	
  Intel Capital Corporation

  	
   

  	
  363,800

  	
   

  	
  932,821

  	
   

  	
  397,000

  	
   

  	
  1,302,920

  	
   

  	
  136,200

  	
   

  	
  564,626

  	
   

  	
  897,000

  	
   

  	
  2,800,367

  	
   

  
	
  Investor Investments Asia Limited

  	
   

  	
  3,021,000

  	
   

  	
  7,746,153

  	
   

  	
  575,000

  	
   

  	
  1,887,102

  	
   

  	
  1,133,100

  	
   

  	
  4,697,344

  	
   

  	
  4,729,100

  	
   

  	
  14,330,599

  	
   

  
	
  Investor Group Asia LP

  	
   

  	
  1,295,200

  	
   

  	
  3,321,026

  	
   

  	
  247,000

  	
   

  	
  810,633

  	
   

  	
  485,700

  	
   

  	
  2,013,504

  	
   

  	
  2,027,900

  	
   

  	
  6,145,163

  	
   

  
	
  TOTALS

  	
   

  	
  8,000,000

  	
   

  	
  20,512,821

  	
   

  	
  3,605,000

  	
   

  	
  11,831,308

  	
   

  	
  3,000,000

  	
   

  	
  12,436,707

  	
   

  	
  14,605,000

  	
   

  	
  44,780,836

  	
   

  



 






1.             Starr and JAFCO are Lenders but not
a Series C Investor


 














 


Schedule B


 


Disclosure Schedules


 

















 


Schedule C


 


Series C Investors and Lenders and
Addresses for Notices


 


	
  Name of Series C Investor or Bridge

  Loan Lender

  	
   

  	
  Address for Notices

  
	
   

  	
   

  	
   

  
	
  QIMING VENTURE PARTNERS, L.P.

  	
   

  	
  11400 SE Sixth Street

  Suite 100

  Bellevue, Washington 98004

  Attention: John Zagula

  Phone: (425) 709-0772

  Fax: (425) 709-0798

  
	
   

  	
   

  	
   

  
	
  QIMING MANAGING DIRECTORS FUND, L.P.

  	
   

  	
  11400 SE Sixth Street

  Suite 100

  Bellevue, Washington 98004

  Attention: John Zagula

  Phone: (425) 709-0772

  Fax: (425) 709-0798

  
	
   

  	
   

  	
   

  
	
  IGNITION VENTURE PARTNERS III, L.P.

  	
   

  	
  11400 SE Sixth Street

  Suite 100

  Bellevue, Washington 98004

  Attention: John Zagula

  Phone: (425) 709-0772

  Fax: (425) 709-079

  
	
   

  	
   

  	
   

  
	
  IGNITION MANAGING DIRECTORS FUND III, LLC

  	
   

  	
  11400 SE Sixth Street

  Suite 100

  Bellevue, Washington 98004

  Attention: John Zagula

  Phone: (425) 709-0772

  Fax: (425) 709-079

  
	
   

  	
   

  	
   

  
	
  STARR INTERNATIONAL
  CAYMAN, INC.

  	
   

  	
  c/o C.V. Starr Investment Advisors (Asia)
  Limited

  Suite 4006, Central Plaza, 18 Harbour
  Road, Wanchai,

  Hong Kong

  Attention: Mr Cesar Zalamea / Ms Elaine
  Zong

  With an e-mail copy in PDF format to :

  elaine.zong@cvstarr.com

  Fax: (852) 2905-1555

  



 

















 


	
  SIG CHINA INVESTMENTS
  ONE, LTD

  	
   

  	
  Suite 5711, Plaza 66

  1266 Nanjing Road West

  Shanghai, China 200040

  Fax: +86 21 6113 0128

  Attention: Peter Tan

  All email correspondence to: Peter.Tan@sig.com

   

  With a copy to:

  Michael L. Spolan

  Susquehanna Asia Investment, LLP

  101 California Street, Suite 3250

  San Francisco, CA 94

  
	
   

  	
   

  	
   

  
	
  JAFCO ASIA TECHNOLOGY
  FUND II

  	
   

  	
  c/o JAFCO Investment (Asia Pacific) Ltd

  6 Battery Road

  #42-01 Singapore 049909

  Attention: The President

  Fax: +65 6221 3690

   

  With a copy to:

  JAFCO Investment (Hong Kong) Ltd.

  Beijing Representative Office

  Room 801

  Beijing Fortune Building

  No.5 Dong San Huan Bei Lu

  Chao Yang District, Beijing 100004, China

  Attention: Chief Representative

  Fax: 8610 6590 9729

  
	
   

  	
   

  	
   

  
	
  INTEL CAPITAL CORPORATION

  	
   

  	
  c/o Intel Semiconductor Ltd

  32/F Two Pacific Place

  88 Queensway Central

  Hong Kong

  Fax: +852 2240-3775

  Attention: APAC Portfolio Manager

   

  With an e-mail copy in PDF format to

  apacportfolio@intel.com

  



 

















 


	
  INVESTOR INVESTMENTS ASIA
  LIMITED

  	
   

  	
  Canada Court, Upland Road

  St Peter Port

  Guernsey, GY1 3BQ

  Fax: +44 1481 744 555

  Attention: Ms. Lisa Barnett

   

  With an e-mail copy in PDF format to:

  paul.choo@investorab.com,

  investorab@rbc.com,

  robert.deheus@investorab.com, and

  AMOALL@investorab.com

  
	
   

  	
   

  	
   

  
	
  INVESTOR GROUP ASIA LP

  	
   

  	
  By Investor Group Asia G.P. Ltd, its
  General Partner

  Canada Court, Upland Road

  St Peter Port

  Guernsey, GY1 3BQ

  Fax: +44 1481 7444 555

  Attention: Ms. Lisa Barnett

   

  With an e-mail copy in PDF format to:

  paul.choo@investorab.com,

  investorab@rbc.com,

  robert.deheus@investorab.com, and

  AMOALL@investorab.com

  



 

















 


Exhibit A


 


Amended and Restated

Memorandum and Articles of Association of the Company


 

















 


Exhibit B


 


Amended and Restated Investors’ Rights Agreement


 

















 


Exhibit C


 


Intellectual Property Rights Assignment, 

Non-Competition and Confidentiality Agreement


 

















 


Exhibit D


 


PRC Companies’ Article of Association and Business License


 

















 


IN WITNESS WHEREOF, the parties hereto have
executed this Agreement on the day and year herein above first written.


 


	
  CHINACACHE INTERNATIONAL 

  	
   

  	
  SEALED with the OFFICIAL SEAL of 

  
	
  HOLDINGS LTD.

  	
   

  	
  CHINACACHE NETWORK

  
	
   

  	
   

  	
  TECHNOLOGY (BEIJING)
  LIMITED

  
	
   

  	
   

  	
  

  
	
   

  	
   

  	
   

  
	
  By

  	
    /s/ Xiao-Hong Kou

  	
   

  	
   

  
	
  Print Name: Xiao-Hong Kou

  	
   

  	
   

  
	
  Title:Director

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
    /s/ Song Wang

  
	
   

  	
   

  	
  Print Name: Song Wang

  
	
   

  	
   

  	
  Title: Legal Representative

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SEALED with the OFFICIAL SEAL of  

  	
   

  	
   

  
	
  BEIJING BLUE I.T.
  TECHNOLOGIES

  	
   

  	
   

  
	
  CO., LTD. 

  	
   

  	
   

  
	
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
    /s/ Xiao-Hong Kou

  	
   

  	
   

  
	
  Print Name: Xiao-Hong Kou

  	
   

  	
   

  
	
  Title: Legal Representative

  	
   

  	
   

  



 


Signature
page to Series C Preferred Share Purchase Agreement


in
respect of ChinaCache International Holdings Ltd.


 

















 


IN WITNESS WHEREOF, the parties hereto have
executed this Agreement on the day and year herein above first written.


 


	
  SEALED with the OFFICIAL SEAL of

  	
   

  	
  SEALED with the OFFICIAL SEAL of

  
	
  BEIJING JINGTIAN
  TECHNOLOGY CO.,

  	
   

  	
  SHANGHAI JNET TELCOM CO., LTD.

  
	
  LTD. 

  	
   

  	
  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
    /s/ Xinxin Zheng

  	
   

  	
  By

  	
    /s/ Yong Sha

  
	
  Print Name: Xinxin Zheng

  	
   

  	
  Print Name: Yong Sha

  
	
  Title: Legal Representative

  	
   

  	
  Title: Legal Representative

  
					



 


Signature
page to Series C Preferred Share Purchase Agreement

in respect of ChinaCache International Holdings Ltd.


 














 


IN WITNESS WHEREOF, the parties hereto have
executed this Agreement on the day and year herein above first written.


 


	
  SIGNED AND DELIVERED BY:  

  	
   

  	
  SIGNED AND DELIVERED BY:  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
    /s/ Song Wang

  	
   

  	
    /s/ Xiao-Hong Kou  

  
	
  Song Wang  as an individual

  	
   

  	
  Xiao-Hong Kou  as
  an individual

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CONSOLIDATED CAPITAL HOLDINGS, LTD.

  	
   

  	
  HARVEST CENTURY INTERNATIONAL LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
    /s/ Xiao-Hong Kou

  	
   

  	
  By

  	
    /s/ Xiao-Hong Kou

  
	
  Print Name: Xiao-Hong Kou

  	
   

  	
  Print Name: Xiao-Hong Kou

  
	
  Title: Director

  	
   

  	
  Title: Director

  
					



 


Signature
page to Series C Preferred Share Purchase Agreement

in respect of ChinaCache International Holdings Ltd.


 

















 


IN WITNESS WHEREOF, the parties hereto have
executed this Agreement on the day and year herein above first written.


 


	
  QIMING VENTURE PARTNERS, L.P., a

  	
   

  	
  QIMING MANAGING DIRECTORS FUND,

  
	
  Cayman Islands exempted limited
  partnership

  	
   

  	
  L.P., a Cayman Islands exempted limited

  
	
   

  	
   

  	
  partnership

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  QIMING GP, L.P., a Cayman Island

  	
   

  	
   

  	
  By:

  	
  QIMING CORPORATE GP, LTD., a

  
	
   

  	
   

  	
  exempted limited partnership

  	
   

  	
   

  	
   

  	
  Cayman Island corporation

  
	
   

  	
  Its:

  	
  General Partner

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  QIMING CORPORATE GP,

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Managing Director

  
	
   

  	
   

  	
   

  	
  LTD., a Cayman Island

  	
   

  	
   

  	
   

  	
  Its:

  	
  Managing Director

  
	
   

  	
   

  	
   

  	
  corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Managing Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Managing Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IGNITION VENTURE PARTNERS
  III,

  	
   

  	
  IGNITION MANAGING DIRECTORS

  
	
  L.P., a Delaware limited partnership

  	
   

  	
  FUND III, LLC, a Delaware limited liability

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  company

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  IGNITION GP III, LLC, a Delaware

  	
   

  	
  By:

  	
  /s/ Managing Director

  
	
   

  	
   

  	
  limited liability company

  	
   

  	
  Its:

  	
  Managing Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Managing Director

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Managing Director

  	
   

  	
   

  
													



 


Signature
page to Series C Preferred Share Purchase Agreement


in
respect of ChinaCache International Holdings Ltd.


 

















 


IN WITNESS WHEREOF, the parties hereto have
executed this Agreement on the day and year herein above first written.


 


 


	
  SIG CHINA INVESTMENTS
  ONE, LTD

  	
   

  	
  STARR INTERNATIONAL
  CAYMAN,

  
	
   

  	
   

  	
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
    /s/ Michael L. Spolan

  	
   

  	
  By

  	
    /s/Stuart Osborne

  
	
  Print Name:
  Michael L. Spolan

  	
   

  	
  Print Name: Stuart Osborne

  
	
  Title:

  	
  SIG Asia Investment LLLP

  	
   

  	
  Title: Director

  
	
   

  	
  authorized agent for 

  	
   

  	
   

  
	
   

  	
  SIG China Investments One, Ltd.

  	
   

  	
   

  
						



 


Signature page to Series C Preferred Share Purchase Agreement


in respect of ChinaCache International Holdings Ltd.


 

















 


IN WITNESS WHEREOF, the parties hereto have
executed this Agreement on the day and year herein above first written.


 


	
  JAFCO ASIA TECHNOLOGY
  FUND II

  	
   

  	
  INTEL CAPITAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By 

  	
    /s/ Hiroshi Yamada

  	
   

  	
  By 

  	
    /s/ Michael J Scown

  
	
  Print Name: Hiroshi Yamada

  	
   

  	
  Print Name: Michael J Scown

  
	
  Title: Attorney

  	
   

  	
  Title: Authorised Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  INVESTOR INVESTMENTS ASIA
  

  	
   

  	
  INVESTOR GROUP ASIA LP

  
	
  LIMITED

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By 

  	
    /s/ Lisa Barnett

  	
   

  	
  By 

  	
    /s/ Lisa Barnett

  
	
  Print Name: Lisa Barnett

  	
   

  	
  Print Name: Lisa Barnett

  
	
  Title: “A” Director

  	
   

  	
  Title: “A” Director

  
	
   

  	
   

  	
   

  
	
  INVESTOR INVESTMENTS ASIA
  

  	
   

  	
  INVESTOR GROUP ASIA LP

  
	
  LIMITED

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By 

  	
    /s/
  Robert de Heus

  	
   

  	
  By 

  	
    /s/
  Robert de Heus

  
	
  Print Name: Robert de Heus  

  	
   

  	
  Print Name: Robert de Heus

  
	
  Title: “B” Director

  	
   

  	
  Title: “B” Director

  



 


Signature page to Series C Preferred Share Purchase Agreement


in respect of ChinaCache International Holdings Ltd.