Document:

Exhibit 4.52

 

LEJU HOLDINGS LIMITED

 

2013 SHARE INCENTIVE PLAN

 

ARTICLE 1

 

PURPOSE

 

The purpose of the Leju Holdings Limited 2013 Share Incentive Plan (the “Plan”) is to promote the success and enhance the value of Leju Holdings Limited, a company formed under the laws of the Cayman Islands (the “Company”), by linking the personal interests of the members of the Board, Employees, and Consultants to those of the Company’s shareholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to the Company’s shareholders.  The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees, and Consultants upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent.

 

ARTICLE 2

 

DEFINITIONS AND CONSTRUCTION

 

Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise.  The singular pronoun shall include the plural where the context so indicates.

 

2.1       “Applicable Laws” means the legal requirements relating to the Plan and the Awards under applicable provisions of the corporate, securities, tax and other laws, rules, regulations and government orders, and the rules of any applicable stock exchange or national market system, of any jurisdiction applicable to Awards granted to residents therein.

 

2.2       “Assumption Date” means the date when the Company assumed the China Online Housing Technology Corporation 2013 Share Incentive Plan with the Board approval.

 

2.3       “Award” means an Option, Restricted Share or Restricted Share Unit award granted to a Participant pursuant to the Plan.

 

 

2.4       “Award Agreement” means any written agreement, contract, or other instrument or document evidencing an Award, including through electronic medium.

 

2.5       “Board” means the Board of Directors of the Company.

 

2.6       “Cause” with respect to a Participant means (unless otherwise expressly provided in the applicable Award Agreement, or another applicable contract with the Participant that defines such term for purposes of determining the effect that a “for cause” termination has on the Participant’s Awards) a termination of employment or service based upon a finding by the Service Recipient, acting in good faith and based on its reasonable belief at the time, that the Participant:

 

(a)                                 has been negligent in the discharge of his or her duties to the Service Recipient, has refused to perform stated or assigned duties or is incompetent in or (other than by reason of a disability or analogous condition) incapable of performing those duties;

 

(b)                                 has been dishonest or committed or engaged in an act of theft, embezzlement or fraud, a breach of confidentiality, an unauthorized disclosure or use of inside information, customer lists, trade secrets or other confidential information;

 

(c)                                  has breached a fiduciary duty, or willfully and materially violated any other duty, law, rule, regulation or policy of the Service Recipient; or has been convicted of, or plead guilty or nolo contendere to, a felony or misdemeanor (other than minor traffic violations or similar offenses);

 

(d)                                 has materially breached any of the provisions of any agreement with the Service Recipient;

 

(e)                                  has engaged in unfair competition with, or otherwise acted intentionally in a manner injurious to the reputation, business or assets of, the Service Recipient; or

 

(f)                                   has improperly induced a vendor or customer to break or terminate any contract with the Service Recipient or induced a principal for whom the Service Recipient acts as agent to terminate such agency relationship.

 

A termination for Cause shall be deemed to occur (subject to reinstatement upon a contrary final determination by the Committee) on the date on which the Service Recipient first delivers written notice to the Participant of a finding of termination for Cause.

 

2.7       “Code” means the Internal Revenue Code of 1986 of the United States, as amended.

 

2.8       “COHT Plan” means the China Online Housing Technology Corporation 2013 Share Incentive Plan, adopted by China Online Housing Technology Corporation, an indirect wholly owned subsidiary of the Company, on December 1, 2013. The COHT Plan was assumed by the Company and replaced by the Plan and ceased to be effective as of the Assumption Date.

 

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2.9       “Committee” means the Board or a committee of the Board described in Article 10.

 

2.10      “Consultant” means any consultant or adviser if: (a) the consultant or adviser renders bona fide services to a Service Recipient; (b) the services rendered by the consultant or adviser are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities; and (c) the consultant or adviser is a natural person who has contracted directly with the Service Recipient to render such services.

 

2.11      “Corporate Transaction”, unless otherwise defined in an Award Agreement, means any of the following transactions, provided, however, that the Committee shall determine under (d) and (e) whether multiple transactions are related, and its determination shall be final, binding and conclusive:

 

(a)                                 an amalgamation, arrangement or consolidation or scheme of arrangement (i) in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the jurisdiction in which the Company is incorporated or (ii) following which the holders of the voting securities of the Company do not continue to hold more than 50% of the combined voting power of the voting securities of the surviving entity;

 

(b)                                 the sale, transfer or other disposition of all or substantially all of the assets of the Company;

 

(c)                                  the complete liquidation or dissolution of the Company;

 

(d)                                 any reverse takeover or series of related transactions culminating in a reverse takeover (including, but not limited to, a tender offer followed by a reverse takeover) in which the Company is the surviving entity but (A) the Company’s equity securities outstanding immediately prior to such takeover are converted or exchanged by virtue of the takeover into other property, whether in the form of securities, cash or otherwise, or (B) in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such takeover or the initial transaction culminating in such takeover, but excluding any such transaction or series of related transactions that the Committee determines shall not be a Corporate Transaction; or

 

(e)                                  acquisition in a single or series of related transactions by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities but excluding any such transaction or series of related transactions that the Committee determines shall not be a Corporate Transaction.

 

2.12 “Disability”, unless otherwise defined in an Award Agreement, means that the Participant qualifies to receive long-term disability payments under the Service Recipient’s long-term disability insurance program, as it may be amended from time to time, to which the Participant provides services regardless of whether the Participant is covered by such policy.  If the Service Recipient to which the Participant provides service does not have a long-term disability plan in place, “Disability” means that a Participant is unable to carry out the responsibilities and functions of the position held by the Participant by reason of any medically determinable physical or mental impairment for a period of not less than ninety (90) consecutive days.  A Participant will not be considered to have incurred a Disability unless he or she furnishes proof of such impairment sufficient to satisfy the Committee in its discretion.

 

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2.13 “Effective Date” shall have the meaning set forth in Section 11.1.

 

2.14 “Employee” means any person, including an officer or a member of the Board of the Company or any Parent or Subsidiary of the Company, who is in the employment of a Service Recipient, subject to the control and direction of the Service Recipient as to both the work to be performed and the manner and method of performance.  The payment of a director’s fee by a Service Recipient shall not be sufficient to constitute “employment” by the Service Recipient.

 

2.15 “Exchange Act” means the Securities Exchange Act of 1934 of the United States, as amended.

 

2.16 “Fair Market Value” means, as of any date, the value of Shares determined as follows:

 

(a)                                 If the Shares are listed on one or more established stock exchanges or national market systems, including without limitation, The New York Stock Exchange and The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such shares (or the closing bid, if no sales were reported) as quoted on the principal exchange or system on which the Shares are listed (as determined by the Committee) on the date of determination (or, if no closing sales price or closing bid was reported on that date, as applicable, on the last trading date such closing sales price or closing bid was reported), as reported in The Wall Street Journal or such other source as the Committee deems reliable;

 

(b)                                 If the Shares are regularly quoted on an automated quotation system (including the OTC Bulletin Board) or by a recognized securities dealer, its Fair Market Value shall be the closing sales price for such shares as quoted on such system or by such securities dealer on the date of determination, but if selling prices are not reported, the Fair Market Value of a Share shall be the mean between the high bid and low asked prices for the Shares on the date of determination (or, if no such prices were reported on that date, on the last date such prices were reported), as reported in The Wall Street Journal or such other source as the Committee deems reliable; or

 

(c)                                  In the absence of an established market for the Shares of the type described in (a) and (b), above, the Fair Market Value thereof shall be determined by the Committee in good faith and in its discretion by reference to (i) the placing price of the latest private placement of the Shares and the development of the Company’s business operations and the general economic and market conditions since such latest private placement, (ii) other third party transactions involving the Shares and the development of the Company’s business operation and the general economic and market conditions since such sale, (iii) an independent valuation of the Shares, or (iv) such other methodologies or information as the Committee determines to be indicative of Fair Market Value and relevant.

 

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2.17 “Incentive Share Option” means an Option that is intended to meet the requirements of Section 422 of the Code or any successor provision thereto.

 

2.18 “Independent Director” means (i) before the Shares or other securities representing the Shares are listed on a stock exchange, a member of the Board who is a Non-Employee Director; and (ii) after the Shares or other securities representing the Shares are listed on a stock exchange, a member of the Board who meets the independence standards under the applicable corporate governance rules of the stock exchange.

 

2.19 “Non-Employee Director” means a member of the Board who qualifies as a “Non-Employee Director” as defined in Rule 16b-3(b)(3) of the Exchange Act, or any successor definition adopted by the Board.

 

2.20 “Non-Qualified Share Option” means an Option that is not intended to be an Incentive Share Option.

 

2.21 “Option” means a right granted to a Participant pursuant to Article 5 of the Plan to purchase a specified number of Shares at a specified price during specified time periods.  An Option may be either an Incentive Share Option or a Non-Qualified Share Option.

 

2.22 “Participant” means a person who, as a member of the Board, Consultant or Employee, has been granted an Award pursuant to the Plan.

 

2.23 “Parent” means a parent corporation under Section 424(e) of the Code.

 

2.24 “Plan” means this Leju Holdings Limited 2013 Share Incentive Plan, as it may be amended from time to time.

 

2.25 “Related Entity” means any business, corporation, partnership, limited liability company or other entity in which the Company, a Parent or Subsidiary of the Company holds a substantial ownership interest, directly or indirectly, but which is not a Subsidiary and which the Board designates as a Related Entity for purposes of the Plan.

 

2.26 “Restricted Share” means a Share awarded to a Participant pursuant to Article 6 that is subject to certain restrictions and may be subject to risk of forfeiture.

 

2.27 “Restricted Share Unit” means the right granted to a Participant pursuant to Article 7 to receive a Share at a future date.

 

2.28 “Securities Act” means the Securities Act of 1933 of the United States, as amended.

 

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2.29 “Service Recipient” means the Company, any Parent or Subsidiary of the Company and any Related Entity to which a Participant provides services as an Employee, a Consultant or a Director.

 

2.30 “Share” means any class of ordinary shares of the Company, and such other securities of the Company that may be substituted for Shares pursuant to Article 9.

 

2.31 “Subsidiary” means any corporation or other entity of which a majority of the outstanding voting shares or voting power is beneficially owned directly or indirectly by the Company.

 

2.32 “Trading Date” means the closing of the first sale to the general public of the Shares pursuant to a registration statement filed with and declared effective by the U.S. Securities and Exchange Commission under the Securities Act.

 

ARTICLE 3

 

SHARES SUBJECT TO THE PLAN

 

3.1       Number of Shares.

 

(a)                                 Subject to the provisions of Article 9 and Section 3.1(b), the maximum aggregate number of Shares which may be issued pursuant to all Awards (including Incentive Share Options) (the “Award Pool”) shall initially be 10,434,783 Shares, and the Award Pool shall be increased automatically by that number of Shares, which shall be equal to 5% of the then total issued and outstanding Shares on an as-converted fully diluted basis, on each of the third, sixth and ninth anniversary of the Effective Date.

 

(b)                                 To the extent that an Award terminates, expires, or lapses for any reason, any Shares subject to the Award shall again be available for the grant of an Award pursuant to the Plan.  To the extent permitted by Applicable Laws, Shares issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form or combination by the Company or any Parent or Subsidiary of the Company shall not be counted against Shares available for grant pursuant to the Plan.  Shares delivered by the Participant or withheld by the Company upon the exercise of any Award under the Plan, in payment of the exercise price thereof or tax withholding thereon, may again be optioned, granted or awarded hereunder, subject to the limitations of Section 3.1(a).  If any Restricted Shares are forfeited by the Participant or repurchased by the Company, such Shares may again be optioned, granted or awarded hereunder, subject to the limitations of Section 3.1(a).  Notwithstanding the provisions of this Section 3.1(b), no Shares may again be optioned, granted or awarded if such action would cause an Incentive Share Option to fail to qualify as an Incentive Share Option under Section 422 of the Code.

 

3.2                         Shares Distributed.  Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares, treasury shares (subject to Applicable Laws) or Shares purchased on the open market.  Additionally, in the discretion of the Committee, American Depository Shares in an amount equal to the number of Shares which otherwise would be distributed pursuant to an Award may be distributed in lieu of Shares in settlement of any Award.  If the number of Shares represented by an American Depository Share is other than on a one-to-one basis, the limitations of Section 3.1 shall be adjusted to reflect the distribution of American Depository Shares in lieu of Shares.

 

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ARTICLE 4

 

ELIGIBILITY AND PARTICIPATION

 

4.1                         Eligibility. Persons eligible to participate in this Plan include Employees, Consultants, and all members of the Board, as determined by the Committee.

 

4.2                         Participation.  Subject to the provisions of the Plan, the Committee may, from time to time, select from among all eligible individuals, those to whom Awards shall be granted and shall determine the nature and amount of each Award.  No individual shall have any right to be granted an Award pursuant to this Plan.

 

4.3                         Jurisdictions.  In order to assure the viability of Awards granted to Participants employed in various jurisdictions, the Committee may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, or custom applicable in the jurisdiction in which the Participant resides or is employed.  Moreover, the Committee may approve such supplements to, or amendments, restatements, or alternative versions of, the Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan as in effect for any other purpose; provided, however, that no such supplements, amendments, restatements, or alternative versions shall increase the share limitations contained in Section 3.1 of the Plan.  Notwithstanding the foregoing, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate any Applicable Laws.

 

ARTICLE 5

 

OPTIONS

 

5.1       General.  The Committee is authorized to grant Options to Participants on the following terms and conditions:

 

(a)                                 Exercise Price.  The exercise price per Share subject to an Option shall be determined by the Committee and set forth in the Award Agreement which may be a fixed or variable price related to the Fair Market Value of the Shares.  The exercise price per Share subject to an Option may be amended or adjusted in the absolute discretion of the Committee, the determination of which shall be final, binding and conclusive.  For the avoidance of doubt, to the extent not prohibited by Applicable Laws or any exchange rule, a downward adjustment of the exercise prices of Options mentioned in the preceding sentence shall be effective without the approval of the Company’s shareholders or the approval of the affected Participants.

 

(b)                                 Time and Conditions of Exercise.  The Committee shall determine the time or times at which an Option may be exercised in whole or in part, including exercise prior to vesting; provided that the term of any Option granted under the Plan shall not exceed ten years, except as provided in Section 12.1.  The Committee shall also determine any conditions, if any, that must be satisfied before all or part of an Option may be exercised.

 

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(c)                                  Payment.  The Committee shall determine the methods by which the exercise price of an Option may be paid, the form of payment, including, without limitation (i) cash or check denominated in U.S. Dollars, (ii) to the extent permissible under the Applicable Laws, cash or check in Chinese Renminbi, (iii) cash or check denominated in any other local currency as approved by the Committee, (iv) Shares held for such period of time as may be required by the Committee in order to avoid adverse financial accounting consequences and having a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof, (v) after the Trading Date the delivery of a notice that the Participant has placed a market sell order with a broker with respect to Shares then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price; provided that payment of such proceeds is then made to the Company upon settlement of such sale, (vi) other property acceptable to the Committee with a Fair Market Value equal to the exercise price, or (vii) any combination of the foregoing.  Notwithstanding any other provision of the Plan to the contrary, no Participant who is a member of the Board or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to pay the exercise price of an Option in any method which would violate Section 13(k) of the Exchange Act.

 

(d)                                 Evidence of Grant.  All Options shall be evidenced by an Award Agreement between the Company and the Participant.  The Award Agreement shall include such additional provisions as may be specified by the Committee.

 

(e)                                  Effects of Termination of Employment or Service on Options.  Termination of employment or service shall have the following effects on Options granted to the Participants:

 

(i)                                     Dismissal for Cause. Unless otherwise provided in the Award Agreement, if a Participant’s employment by or service to the Service Recipient is terminated by the Service Recipient for Cause, the Participant’s Options will terminate upon such termination, whether or not the Option is then vested and/or exercisable;

 

(ii)                                  Death or Disability. Unless otherwise provided in the Award Agreement, if a Participant’s employment by or service to the Service Recipient terminates as a result of the Participant’s death or Disability:

 

(a)                                 the Participant (or his or her legal representative or beneficiary, in the case of the Participant’s Disability or death, respectively), will have until the date that is 12 months after the Participant’s termination of Employment to exercise the Participant’s Options (or portion thereof) to the extent that such Options were vested and exercisable on the date of the Participant’s termination of Employment on account of death or Disability;

 

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(b)                                 the Options, to the extent not vested and exercisable on the date of the Participant’s termination of Employment or service, shall terminate upon the Participant’s termination of Employment or service on account of death or Disability; and

 

(c)                                  the Options, to the extent exercisable for the 12-month period following the Participant’s termination of Employment or service and not exercised during such period, shall terminate at the close of business on the last day of the 12-month period.

 

(iii)                               Other Terminations of Employment or Service. Unless otherwise provided in the Award Agreement, if a Participant’s employment by or service to the Service Recipient terminates for any reason other than a termination by the Service Recipient for Cause or because of the Participant’s death or Disability:

 

(a)                                 the Participant will have until the date that is 90 days after the Participant’s termination of Employment or service to exercise his or her Options (or portion thereof) to the extent that such Options were vested and exercisable on the date of the Participant’s termination of Employment or service;

 

(b)                                 the Options, to the extent not vested and exercisable on the date of the Participant’s termination of Employment or service, shall terminate upon the Participant’s termination of Employment or service; and

 

(c)                                  the Options, to the extent exercisable for the 90-day period following the Participant’s termination of Employment or service and not exercised during such period, shall terminate at the close of business on the last day of the 90-day period.

 

5.2       Incentive Share Options.  Incentive Share Options may be granted to Employees of the Company, a Parent or Subsidiary of the Company.  Incentive Share Options may not be granted to Employees of a Related Entity or to Independent Directors or Consultants.  The terms of any Incentive Share Options granted pursuant to the Plan, in addition to the requirements of Section 5.1, must comply with the following additional provisions of this Section 5.2:

 

(a)                                 Individual Dollar Limitation.  The aggregate Fair Market Value (determined as of the time the Option is granted) of all Shares with respect to which Incentive Share Options are first exercisable by a Participant in any calendar year may not exceed $100,000 or such other limitation as imposed by Section 422(d) of the Code, or any successor provision.  To the extent that Incentive Share Options are first exercisable by a Participant in excess of such limitation, the excess shall be considered Non-Qualified Share Options.

 

(b)                                 Exercise Price.  The exercise price of an Incentive Share Option shall be equal to the Fair Market Value on the date of grant.  However, the exercise price of any Incentive Share Option granted to any individual who, at the date of grant, owns Shares possessing more than ten percent of the total combined voting power of all classes of shares of the Company may not be less than 110% of Fair Market Value on the date of grant and such Option may not be exercisable for more than five years from the date of grant.

 

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(c)                                  Transfer Restriction.  The Participant shall give the Company prompt notice of any disposition of Shares acquired by exercise of an Incentive Share Option within (i) two years from the date of grant of such Incentive Share Option or (ii) one year after the transfer of such Shares to the Participant.

 

(d)                                 Expiration of Incentive Share Options.  No Award of an Incentive Share Option may be made pursuant to this Plan after the tenth anniversary of the Effective Date.

 

(e)                                  Right to Exercise.  During a Participant’s lifetime, an Incentive Share Option may be exercised only by the Participant.

 

ARTICLE 6

 

RESTRICTED SHARES

 

6.1       Grant of Restricted Shares.  The Committee, at any time and from time to time, may grant Restricted Shares to Participants as the Committee, in its sole discretion, shall determine.  The Committee, in its sole discretion, shall determine the number of Restricted Shares to be granted to each Participant.

 

6.2       Restricted Shares Award Agreement.  Each Award of Restricted Shares shall be evidenced by an Award Agreement that shall specify the period of restriction, the number of Restricted Shares granted, and such other terms and conditions as the Committee, in its sole discretion, shall determine.  Unless the Committee determines otherwise, Restricted Shares shall be held by the Company as escrow agent until the restrictions on such Restricted Shares have lapsed.

 

6.3       Issuance and Restrictions.  Restricted Shares shall be subject to such restrictions on transferability and other restrictions as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Shares or the right to receive dividends on the Restricted Share).  These restrictions may lapse separately or in combination at such times, pursuant to such circumstances, in such installments, or otherwise, as the Committee determines at the time of the grant of the Award or thereafter.

 

6.4       Forfeiture/Repurchase.  Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon termination of employment or service during the applicable restriction period, Restricted Shares that are at that time subject to restrictions shall be forfeited or repurchased in accordance with the Award Agreement; provided, however, the Committee may (a) provide in any Restricted Share Award Agreement that restrictions or forfeiture and repurchase conditions relating to Restricted Shares will be waived in whole or in part in the event of terminations resulting from specified causes, and (b) in other cases waive in whole or in part restrictions or forfeiture and repurchase conditions relating to Restricted Shares.

 

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6.5       Certificates for Restricted Shares.  Restricted Shares granted pursuant to the Plan may be evidenced in such manner as the Committee shall determine.  If certificates representing Restricted Shares are registered in the name of the Participant, certificates must bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Shares, and the Company may, at its discretion, retain physical possession of the certificate until such time as all applicable restrictions lapse.

 

6.6       Removal of Restrictions.  Except as otherwise provided in this Article 6, Restricted Shares granted under the Plan shall be released from escrow as soon as practicable after the last day of the period of restriction.  The Committee, in its discretion, may accelerate the time at which any restrictions shall lapse or be removed.  After the restrictions have lapsed, the Participant shall be entitled to have any legend or legends under Section 6.5 removed from his or her Share certificate, and the Shares shall be freely transferable by the Participant, subject to applicable legal restrictions.  The Committee (in its discretion) may establish procedures regarding the release of Shares from escrow and the removal of legends, as necessary or appropriate to minimize administrative burdens on the Company.

 

ARTICLE 7

 

RESTRICTED SHARE UNITS

 

7.1       Grant of Restricted Share Units.  The Committee, at any time and from time to time, may grant Restricted Share Units to Participants as the Committee, in its sole discretion, shall determine.  The Committee, in its sole discretion, shall determine the number of Restricted Share Units to be granted to each Participant.

 

7.2       Restricted Share Units Award Agreement.  Each Award of Restricted Share Units shall be evidenced by an Award Agreement that shall specify any vesting conditions, the number of Restricted Share Units granted, and such other terms and conditions as the Committee, in its sole discretion, shall determine.

 

7.3       Performance Objectives and Other Terms.  The Committee, in its discretion, may set performance objectives or other vesting criteria which, depending on the extent to which they are met, will determine the number or value of Restricted Share Units that will be paid out to the Participants.

 

7.4       Form and Timing of Payment of Restricted Share Units.  At the time of grant, the Committee shall specify the date or dates on which the Restricted Share Units shall become fully vested and nonforfeitable.  Upon vesting, the Committee, in its sole discretion, may pay Restricted Share Units in the form of cash, in Shares or in a combination thereof.

 

7.5       Forfeiture/Repurchase.  Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon termination of employment or service during the applicable restriction period, Restricted Share Units that are at that time unvested shall be forfeited or repurchased in accordance with the Award Agreement; provided, however, the Committee may (a) provide in any Restricted Share Unit Award Agreement that restrictions or forfeiture and repurchase conditions relating to Restricted Share Units will be waived in whole or in part in the event of terminations resulting from specified causes, and (b) in other cases waive in whole or in part restrictions or forfeiture and repurchase conditions relating to Restricted Share Units.

 

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ARTICLE 8

 

PROVISIONS APPLICABLE TO AWARDS

 

8.1       Award Agreement.  Awards under the Plan shall be evidenced by Award Agreements that set forth the terms, conditions and limitations for each Award which may include the term of an Award, the provisions applicable in the event the Participant’s employment or service terminates, and the Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an Award.

 

8.2       No Transferability; Limited Exception to Transfer Restrictions.

 

8.2.1                     Limits on Transfer. Unless otherwise expressly provided in (or pursuant to) this Section 8.2, by applicable law and by the Award Agreement, as the same may be amended:

 

(a)                                 all Awards are non-transferable and will not be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge;

 

(b)                                 Awards will be exercised only by the Participant; and

 

(c)                                  amounts payable or shares issuable pursuant to an Award will be delivered only to (or for the account of), and, in the case of Shares, registered in the name of, the Participant.

 

In addition, the shares shall be subject to the restrictions set forth in the applicable Award Agreement.

 

8.2.2                     Further Exceptions to Limits on Transfer. The exercise and transfer restrictions in Section 8.2.1 will not apply to:

 

(a)                                 transfers to the Company or a Subsidiary;

 

(b)                                 transfers by gift to “immediate family” as that term is defined in SEC Rule 16a-1(e) promulgated under the Exchange Act;

 

(c)                                  the designation of a beneficiary to receive benefits if the Participant dies or, if the Participant has died, transfers to or exercises by the Participant’s beneficiary, or, in the absence of a validly designated beneficiary, transfers by will or the laws of descent and distribution; or

 

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(d)                                 if the Participant has suffered a disability, permitted transfers or exercises on behalf of the Participant by the Participant’s duly authorized legal representative; or

 

(e)                                  subject to the prior approval of the Committee or an executive officer or director of the Company authorized by the Committee, transfer to one or more natural persons who are the Participant’s family members or entities owned and controlled by the Participant and/or the Participant’s family members, including but not limited to trusts or other entities whose beneficiaries or beneficial owners are the Participant and/or the Participant’s family members, or to such other persons or entities as may be expressly approved by the Committee, pursuant to such conditions and procedures as the Committee or may establish. Any permitted transfer shall be subject to the condition that the Committee receives evidence satisfactory to it that the transfer is being made for estate and/or tax planning purposes and on a basis consistent with the Company’s lawful issue of securities.

 

Notwithstanding anything else in this Section 8.2.2 to the contrary, but subject to compliance with all applicable laws, Incentive Share Options, Restricted Shares and Restricted Share Units will be subject to any and all transfer restrictions under the Code applicable to such Awards or necessary to maintain the intended tax consequences of such Awards.  Notwithstanding clause (b) above but subject to compliance with all applicable laws, any contemplated transfer by gift to “immediate family” as referenced in clause (b) above is subject to the condition precedent that the transfer be approved by the Administrator in order for it to be effective.

 

8.3       Beneficiaries.  Notwithstanding Section 8.2, a Participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s death.  A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to the Participant, except to the extent the Plan and Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Committee.  If the Participant is married and resides in a community property state, a designation of a person other than the Participant’s spouse as his or her beneficiary with respect to more than 50% of the Participant’s interest in the Award shall not be effective without the prior written consent of the Participant’s spouse.  If no beneficiary has been designated or survives the Participant, payment shall be made to the person entitled thereto pursuant to the Participant’s will or the laws of descent and distribution.  Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation is filed with the Committee.

 

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8.4       Share Certificates.  Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing the Shares pursuant to the exercise of any Award, unless and until the Committee has determined, with advice of counsel, that the issuance and delivery of such certificates is in compliance with all Applicable Laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the Shares are listed or traded.  All Share certificates delivered pursuant to the Plan are subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with all Applicable Laws, and the rules of any national securities exchange or automated quotation system on which the Shares are listed, quoted, or traded.  The Committee may place legends on any Share certificate to reference restrictions applicable to the Shares.  In addition to the terms and conditions provided herein, the Committee may require that a Participant make such reasonable covenants, agreements, and representations as the Committee, in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements. The Committee shall have the right to require any Participant to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation, as may be imposed in the discretion of the Committee.

 

8.5       Paperless Administration.  Subject to Applicable Laws, the Committee may make Awards, provide applicable disclosure and procedures for exercise of Awards by an internet website or interactive voice response system for the paperless administration of Awards.

 

8.6       Foreign Currency.  A Participant may be required to provide evidence that any currency used to pay the exercise price of any Award were acquired and taken out of the jurisdiction in which the Participant resides in accordance with Applicable Laws, including foreign exchange control laws and regulations.  In the event the exercise price for an Award is paid in Chinese Renminbi or other foreign currency, as permitted by the Committee, the amount payable will be determined by conversion from U.S. dollars at the official rate promulgated by the People’s Bank of China for Chinese Renminbi, or for jurisdictions other than the People’s Republic of China, the exchange rate as selected by the Committee on the date of exercise.

 

ARTICLE 9

 

CHANGES IN CAPITAL STRUCTURE

 

9.1       Adjustments.  In the event of any dividend, share split, combination or exchange of Shares, amalgamation, arrangement or consolidation, spin-off, recapitalization or other distribution (other than normal cash dividends) of Company assets to its shareholders, or any other change affecting the shares of Shares or the share price of a Share, the Committee shall make such proportionate adjustments, if any, as the Committee in its discretion may deem appropriate to reflect such change with respect to (a) the aggregate number and type of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3.1); (b) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); and (c) the grant or exercise price per share for any outstanding Awards under the Plan.

 

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9.2       Corporate Transactions.  Except as may otherwise be provided in any Award Agreement or any other written agreement entered into by and between the Company and a Participant, if the Committee anticipates the occurrence, or upon the occurrence, of a Corporate Transaction, the Committee may, in its sole discretion, provide for (i) any and all Awards outstanding hereunder to terminate at a specific time in the future and shall give each Participant the right to exercise the vested portion of such Awards during a period of time as the Committee shall determine, or (ii) the purchase of any Award for an amount of cash equal to the amount that could have been attained upon the exercise of such Award (and, for the avoidance of doubt, if as of such date the Committee determines in good faith that no amount would have been attained upon the exercise of such Award, then such Award may be terminated by the Company without payment), or (iii) the replacement of such Award with other rights or property selected by the Committee in its sole discretion or the assumption of or substitution of such Award by the successor or surviving corporation, or a Parent or Subsidiary thereof, with appropriate adjustments as to the number and kind of Shares and prices, or (iv) payment of Award in cash based on the value of Shares on the date of the Corporate Transaction plus reasonable interest on the Award through the date when such Award would otherwise be vested or have been paid in accordance with its original terms, if necessary to comply with Section 409A of the Code.

 

9.3       Outstanding Awards — Other Changes.  In the event of any other change in the capitalization of the Company or corporate change other than those specifically referred to in this Article 9, the Committee may, in its absolute discretion, make such adjustments in the number and class of shares subject to Awards outstanding on the date on which such change occurs and in the per share grant or exercise price of each Award as the Committee may consider appropriate to prevent dilution or enlargement of rights.

 

9.4       No Other Rights.  Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of Shares of any class, the payment of any dividend, any increase or decrease in the number of shares of any class or any dissolution, liquidation, merger, or consolidation of the Company or any other corporation.  Except as expressly provided in the Plan or pursuant to action of the Committee under the Plan, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of shares subject to an Award or the grant or exercise price of any Award.

 

ARTICLE 10

 

ADMINISTRATION

 

10.1                                   Committee.  The Plan shall be administered by the Board or a committee of one or more members of the Board to whom the Board shall delegate the authority to grant or amend Awards to Participants other than any of the Committee members. Any grant or amendment of Awards to any Committee member shall then require an affirmative vote of a majority of the Board members who are not on the Committee.

 

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10.2                                   Action by the Committee.  A majority of the Committee shall constitute a quorum. The acts of a majority of the members of the Committee present at any meeting at which a quorum is present, and acts approved in writing by a majority of the Committee in lieu of a meeting, shall be deemed the acts of the Committee.  Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Subsidiary, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.

 

10.3                                   Authority of the Committee.  Subject to any specific designation in the Plan, the Committee has the exclusive power, authority and discretion to:

 

(a)                     designate Participants to receive Awards;

 

(b)                     determine the type or types of Awards to be granted to each Participant;

 

(c)                      determine the number of Awards to be granted and the number of Shares to which an Award will relate;

 

(d)                     determine the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, or purchase price, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Committee in its sole discretion determines;

 

(e)                      determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in, cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;

 

(f)                       prescribe the form of each Award Agreement, which need not be identical for each Participant;

 

(g)                      decide all other matters that must be determined in connection with an Award;

 

(h)                     establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan;

 

(i)                         interpret the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; and

 

(j)                        make all other decisions and determinations that may be required pursuant to the Plan or as the Committee deems necessary or advisable to administer the Plan.

 

10.4                                   Decisions Binding.  The Committee’s interpretation of the Plan, any Awards granted pursuant to the Plan, any Award Agreement and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties.

 

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ARTICLE 11

 

EFFECTIVE AND EXPIRATION DATE

 

11.1 Effective Date.  The Plan is effective as of December 1, 2013, the date when the COHT Plan was adopted (the “Effective Date”).

 

11.2 Expiration Date.  The Plan will expire on, and no Award may be granted pursuant to the Plan after, the tenth anniversary of the Effective Date.  Any Awards that are outstanding on the tenth anniversary of the Effective Date shall remain in force according to the terms of the Plan and the applicable Award Agreement.

 

ARTICLE 12

 

AMENDMENT, MODIFICATION, AND TERMINATION

 

12.1 Amendment, Modification, and Termination.  With the approval of the Board, at any time and from time to time, the Committee may terminate, amend or modify the Plan; provided, however, that (a) to the extent necessary and desirable to comply with Applicable Laws or stock exchange rules, the Company shall obtain shareholder approval of any Plan amendment in such a manner and to such a degree as required, unless the Company decides to follow home country practice, and (b) unless the Company decides to follow home country practice, shareholder approval is required for any amendment to the Plan that (i) increases the number of Shares available under the Plan (other than any adjustment as provided by Article 9), or (ii) permits the Committee to extend the term of the Plan or the exercise period for an Option beyond ten years from the date of grant.

 

12.2 Awards Previously Granted.  Except with respect to amendments made pursuant to Section 12.1, no termination, amendment, or modification of the Plan shall adversely affect in any material way any Award previously granted pursuant to the Plan without the prior written consent of the Participant.

 

ARTICLE 13

 

GENERAL PROVISIONS

 

13.1 No Rights to Awards.  No Participant, employee, or other person shall have any claim to be granted any Award pursuant to the Plan, and neither the Company nor the Committee is obligated to treat Participants, employees, and other persons uniformly.

 

13.2 No Shareholders Rights.  No Award gives the Participant any of the rights of a Shareholder of the Company unless and until Shares are in fact issued to such person in connection with such Award.

 

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13.3 Taxes.  No Shares shall be delivered under the Plan to any Participant until such Participant has made arrangements acceptable to the Committee for the satisfaction of any income and employment tax withholding obligations under Applicable Laws.  The Company or any Subsidiary shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy all applicable taxes (including the Participant’s payroll tax obligations) required or permitted by Applicable Laws to be withheld with respect to any taxable event concerning a Participant arising as a result of this Plan.  The Committee may in its discretion and in satisfaction of the foregoing requirement allow a Participant to elect to have the Company withhold Shares otherwise issuable under an Award (or allow the return of Shares) having a Fair Market Value equal to the sums required to be withheld.  Notwithstanding any other provision of the Plan, the number of Shares which may be withheld with respect to the issuance, vesting, exercise or payment of any Award (or which may be repurchased from the Participant of such Award after such Shares were acquired by the Participant from the Company) in order to satisfy any income and payroll tax liabilities applicable to the Participant with respect to the issuance, vesting, exercise or payment of the Award shall, unless specifically approved by the Committee, be limited to the number of Shares which have a Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for the applicable income and payroll tax purposes that are applicable to such supplemental taxable income.

 

13.4 No Right to Employment or Services.  Nothing in the Plan or any Award Agreement shall interfere with or limit in any way the right of the Service Recipient to terminate any Participant’s employment or services at any time, nor confer upon any Participant any right to continue in the employment or services of any Service Recipient.

 

13.5 Unfunded Status of Awards.  The Plan is intended to be an “unfunded” plan for incentive compensation.  With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights that are greater than those of a general creditor of the Company or any Subsidiary.

 

13.6 Indemnification.  To the extent allowable pursuant to Applicable Laws, each member of the Committee or of the Board shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf.  The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company’s Memorandum of Association and Articles of Association, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

 

13.7 Relationship to other Benefits.  No payment pursuant to the Plan shall be taken into account in determining any benefits pursuant to any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.

 

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13.8 Expenses.  The expenses of administering the Plan shall be borne by the Company and its Subsidiaries.

 

13.9 Titles and Headings.  The titles and headings of the Sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.

 

13.10                                               Fractional Shares.  No fractional Shares shall be issued and the Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding up or down as appropriate.

 

13.11                                               Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan, the Plan, and any Award granted or awarded to any Participant who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule.  To the extent permitted by the Applicable Laws, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

 

13.12                                               Government and Other Regulations.  The obligation of the Company to make payment of awards in Shares or otherwise shall be subject to all Applicable Laws, and to such approvals by government agencies as may be required.  The Company shall be under no obligation to register any of the Shares paid pursuant to the Plan under the Securities Act or any other similar law in any applicable jurisdiction.  If the Shares paid pursuant to the Plan may in certain circumstances be exempt from registration pursuant to the Securities Act or other Applicable Laws, the Company may restrict the transfer of such Shares in such manner as it deems advisable to ensure the availability of any such exemption.

 

13.13                                               Governing Law.  The Plan and all Award Agreements shall be construed in accordance with and governed by the laws of the Cayman Islands.

 

13.14                                               Section 409A.  To the extent that the Committee determines that any Award granted under the Plan is or may become subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code.  To the extent applicable, the Plan and the Award Agreements shall be interpreted in accordance with Section 409A of the Code and the U.S. Department of Treasury regulations and other interpretative guidance issued thereunder, including without limitation any such regulation or other guidance that may be issued after the Effective Date.  Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date the Committee determines that any Award may be subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the Effective Date), the Committee may adopt such amendments to the Plan and the applicable Award agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Committee determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and related U.S. Department of Treasury guidance.

 

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13.15                                               Appendices.  The Committee may approve such supplements, amendments or appendices to the Plan as it may consider necessary or appropriate for purposes of compliance with Applicable Laws or otherwise and such supplements, amendments or appendices shall be considered a part of the Plan; provided, however, that no such supplements shall increase the share limitation contained in Section 3.1 of the Plan without the approval of the Board.

 

20Exhibit 4.4

 

FINAL VERSION

 

INVESTOR’S RIGHTS AGREEMENT

 

dated as of May 16, 2013

 

by and among

 

AUTONAVI HOLDINGS LIMITED,

 

the FOUNDERS named herein,

 

the FOUNDER ENTITIES named herein,

 

and

 

ALI ET INVESTMENT HOLDING LIMITED

 

 

TABLE OF CONTENTS

 

	
1.
    	
DEFINITIONS   AND INTERPRETATION
    	
1
    
	
 
    	
 
    	
 
    
	
2.
    	
BOARD   REPRESENTATION
    	
5
    
	
 
    	
 
    	
 
    
	
3.
    	
REGISTRATION   RIGHTS
    	
7
    
	
 
    	
 
    	
 
    
	
4.
    	
CHANGE   OF CONTROL
    	
20
    
	
 
    	
 
    	
 
    
	
5.
    	
PRE-EMPTIVE   RIGHT
    	
21
    
	
 
    	
 
    	
 
    
	
6.
    	
OPTIONAL   REDEMPTION RIGHT
    	
23
    
	
 
    	
 
    	
 
    
	
7.
    	
PROTECTIVE   PROVISIONS
    	
24
    
	
 
    	
 
    	
 
    
	
8.
    	
RIGHT   OF FIRST REFUSAL
    	
25
    
	
 
    	
 
    	
 
    
	
9.
    	
ASSIGNMENT   AND AMENDMENT
    	
26
    
	
 
    	
 
    	
 
    
	
10.
    	
GENERAL   PROVISIONS
    	
26
    

 

 

INVESTOR’S RIGHTS AGREEMENT

 

THIS INVESTOR’S RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of May 16, 2013 by and among AutoNavi Holdings Limited, a Cayman Islands exempted limited liability company (the “Company”), each of the entities listed on Exhibit A hereto (collectively, the “Founder Entities” and each, a “Founder Entity”), each of the individuals listed on Exhibit B hereto (collectively, the “Founders” and each, a “Founder”), and Ali ET Investment Holding Limited, an exempted limited liability company organized under the laws of the Cayman Islands (the “Purchaser”). The Purchaser and the Founder Entities together are collectively referred to herein as the “Shareholders” and each individually as a “Shareholder.”

 

RECITALS

 

A.                                    The Purchaser has agreed to purchase from the Company, and the Company has agreed to sell to the Purchaser certain Series A Shares and certain Ordinary Shares, on the terms and conditions set forth in the Investment Agreement; and

 

B.                                    The Investment Agreement provides that the execution and delivery of this Agreement by the parties shall be a condition precedent to the consummation of the transactions contemplated under the Investment Agreement.

 

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

1.                                      DEFINITIONS AND INTERPRETATION.

 

1.1.                            In this Agreement, including the Exhibits hereto, certain definitions relating solely to the registration rights of the Purchaser are set forth in Section 3.2 of this Agreement. Unless defined therein or otherwise defined:

 

“Agreement” has the meaning set forth in the Preamble;

 

“Audit Committee” has the meaning set forth in Section 2.1(c);

 

“Blue Sky” or “Blue Sky laws” mean the laws or statutes of any state of the United States of America or any other jurisdiction regulating the sale of corporate securities within that state or jurisdiction;

 

“Board” means the Board of Directors of the Company;

 

“Capital Share” means each and every share, interest, right to purchase, warrant, option, participation or other equivalent of or interest in (however designated) a share issued by the Company;

 

“Certificate of Designations” means that certain Certificate of the Designations, Preferences and Relative Participating, Optional and Other Special Rights and Qualifications, Limitations or Restrictions of Series A Convertible Preferred Shares, par value US$0.0001, of AutoNavi Holdings Limited, adopted by Board resolution on May 9, 2013, as amended from time to time;

 

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“Change of Control” has the meaning set forth in Section 4.1;

 

“Change of Control Effective Date” has the meaning set forth in Section 6.1;

 

“Claim” means any demand, action, claim, suit, litigation, arbitration, prosecution, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding, at law or in equity), hearing, examination or investigation;

 

“Company” has the meaning set forth in the Preamble;

 

“Compensation Committee” has the meaning set forth in Section 2.1(d);

 

“Competitor” has the meaning set forth in Exhibit C attached hereto;

 

“Competitor Change of Control” has the meaning set forth in Section 4.2;

 

“Demand Registration Effectiveness Deadline” means the date that is one hundred and twenty (120) calendar days after the date on which the Company gives the Request Notice;

 

“Effective Date” means the date on which an applicable registration statement has become effective in accordance with the Securities Act;

 

“Effectiveness Deadline” means the Demand Registration Effectiveness Deadline and the Form F-3 Registration Effectiveness Deadline, as applicable;

 

“Effectiveness Failure” has the meaning set forth in Section 3.13;

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and any successor statute;

 

“Excluded Portions” has the meaning set forth in Section 2.1(c);

 

“Exempt Securities” has the meaning set forth in Section 5.1;

 

“Exercise Notice” has the meaning set forth in Section 8.1;

 

“Form F-3 Registration Effectiveness Deadline” means the date that is one hundred and twenty (120) calendar days after the date on which the Company gives written notice pursuant to Section 3.5(a) of this Agreement;

 

“Founder” or “Founders” has the meaning set forth in the Preamble;

 

“Founder Entity” or “Founder Entities” has the meaning set forth in the Preamble;

 

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“Indemnified Liabilities” has the meaning set forth in Section 10.4;

 

“Indemnitees” has the meaning set forth in Section 10.4;

 

“Initiating Holders” has the meaning set forth in Section 3.3(b);

 

“Investment Agreement” means that certain Investment Agreement dated as of May 10, 2013 by and between the Company and the Purchaser, and any amendment or successor agreement thereto;

 

“Issue Notice” has the meaning set forth in Section 5.1;

 

“Junior Shares” means the Ordinary Shares, and any other class or series of Capital Share now existing or hereafter authorized other than the Series A Shares.;

 

“Maintenance Failure” has the meaning set forth in Section 3.13;

 

“Memorandum and Articles” means the Amended and Restated Memorandum and Articles of Association of the Company currently in effect, including any Certificate of Designations with respect thereto;

 

“New Security” or “New Securities” has the meaning set forth in Section 5.1;

 

“Nominating and Corporate Governance Committee” has the meaning set forth in Section 2.1(e);

 

“Notice” has the meaning set forth in Section 2.1(c);

 

“Optional Redemption Right” has the meaning set forth in Section 6.1;

 

“Ordinary Shares” mean the ordinary shares, par value US$0.0001 per share, of the Company;

 

“Person” means any individual, partnership, corporation, association, joint stock company, trust, joint venture, limited liability company or governmental authority;

 

“PRC” means the People’s Republic of China, excluding the Special Administrative Regions of Hong Kong and Macau, and the islands of Taiwan, for the purpose of this Agreement only;

 

“Proposal Notice” has the meaning set forth in Section 8.1;

 

“Prospective Largest Shareholder” has the meaning set forth in Section 5.2(a);

 

“Purchaser” has the meaning set forth in the Preamble;

 

“Purchaser Director” or “Purchaser Directors” have the meanings set forth in Section 2.1(a);

 

3

 

“Registrable Securities” has the meaning set forth in Section 3.2(b);

 

“Registration Delay Payments” has the meaning set forth in Section 3.13;

 

“Request Notice” has the meaning set forth in Section 3.3(a);

 

“SEC” or “Commission” means the U.S. Securities and Exchange Commission;

 

“Securities Act” means the U.S. Securities Act of 1933, as amended, including any successor statutes;

 

“Series A Shares” mean the Series A Convertible Preferred Shares, par value US$0.0001 per share, of the Company, having the powers, preferences, and rights, as specified in the Certificate of Designations;

 

“Shareholder” or “Shareholders” has the meaning set forth in the Preamble;

 

“Shares” mean any securities of the Company the holders of which are entitled to vote for members of the Board, including, without limitation, all shares of Ordinary Shares and Series A Shares, by whatever name called, now owned or subsequently acquired by a Shareholder, however acquired, whether through share splits, share dividends, reclassifications, recapitalizations, similar events or otherwise;

 

“Specified Transaction” has the meaning set forth in Section 8.2;

 

“Transaction Documents” mean this Agreement, the Investment Agreement, the Certificate of Designations, and each of the other agreements entered into by the parties hereto or their respective affiliates in connection with the transactions contemplated by the Investment Agreement.

 

“Transfer” has the meaning set forth in Section 4.3; and

 

“Violation” has the meaning set forth in Section 3.9(a).

 

1.2.                            For the purposes of this Agreement, to the extent applicable, reference to registration of securities under the Securities Act and the Exchange Act shall also be deemed to mean the equivalent registration in a jurisdiction other than the United States, it being understood and agreed that in each such case all references in this Agreement to the Securities Act, the Exchange Act and rules, forms of registration statements and registration of securities thereunder, U.S. law, and the SEC, shall be deemed to refer, to the equivalent statutes, rules, forms of registration statements, registration of securities and laws of and equivalent government authority in the applicable non-U.S. jurisdiction.

 

1.3.                            Other Defined Terms. All capitalized terms used in this Agreement but not defined herein shall have the same meanings as set forth in the Certificate of Designations.

 

4

 

2.                                      BOARD REPRESENTATION.

 

2.1.                            Board Composition.

 

(a)                                 Board Representation. For so long as the Purchaser beneficially owns a number of Series A Shares and/or Ordinary Shares issued upon conversion of Series A Shares equal to at least seventy-five percent (75%) of the Series A Shares issued at the Closing (in each case, as appropriately adjusted for share splits, reverse share splits, share dividends, share consolidations, recapitalizations and the like), the Company shall procure that, and each Shareholder and each Founder agrees to vote, or cause to be voted, all Shares owned by such Shareholder, or over which such Shareholder and such Founder has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that, at annual or extraordinary general meetings of shareholders, pursuant to written consent of the shareholders, or by actions by the Board , the Purchaser shall have the exclusive right to appoint and elect two (2) directors of the Board (the “Purchaser Directors,” and each, a “Purchaser Director”). The initial Purchaser Directors shall be Joseph C. Tsai and Yongming Wu.

 

For so long as the Purchaser beneficially owns a number of Series A Shares and/or Ordinary Shares issued upon conversion of Series A Shares equal to at least fifty percent (50%) of the Series A Shares issued at the Closing, but less than seventy-five percent (75%) of the Series A Shares issued at the Closing (in each case, as appropriately adjusted for share splits, reverse share splits, share dividends, share consolidations, recapitalizations and the like), the Company shall procure that, and each Shareholder and each Founder agrees to vote, or cause to be voted, all Shares owned by such Shareholder, or over which such Shareholder and such Founder has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that, at annual or extraordinary general meetings of shareholders, pursuant to written consent of the shareholders, or by actions by the Board, the Purchaser shall have the exclusive right to appoint and elect one (1) Purchaser Director to the Board.

 

(b)                                 [Reserved].

 

(c)                                  Audit Committee Observer. For so long as the Purchaser is entitled to designate at least one (1) Purchaser Director, the Company shall procure, in whatever manner as shall be necessary to ensure, that a Purchaser Director selected by the Purchaser is appointed to be a non-voting observer on the Audit Committee of the Board (the “Audit Committee”) and such non-voting observer shall be entitled to receive identical written notice (the “Notice”) as voting Audit Committee members of, and to attend, all Audit Committee meetings, and to receive all materials provided to voting members of the Audit Committee in connection therewith; provided, however, that the voting members of the Audit Committee may, by unanimous vote and acting in good faith for reasons determined to be necessary to ensure good corporate governance, exclude such non-voting observer from attending certain portions or all (the “Excluded Portions”) of a particular Audit Committee meeting or receiving materials provided to the voting members of the Audit Committee relating to the Excluded Portions of such meeting, regardless of whether such meeting is relating to the Purchaser or its Affiliates; provided further that, together with the Notice, the Purchaser shall receive a written confirmation that the basis for exclusion of the Excluded Portions is for good corporate governance reason. For the avoidance of doubt, Purchaser’s non-voting observer shall still be entitled to receive Notice of any meeting of the Audit Committee with Excluded Portions (even if such observer is to be excluded from the entire meeting), but any provisions of the Notice specifically referring to Excluded Portions may be redacted.

 

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(d)                                 Compensation Committee Observer. For so long as the Purchaser is entitled to designate at least one (1) Purchaser Director, the Company shall procure, in whatever manner as shall be necessary to ensure, that a Purchaser Director selected by the Purchaser is appointed to be a non-voting observer on the Compensation Committee of the Board (the “Compensation Committee”), and such non-voting observer shall be entitled to receive the Notice as voting Compensation Committee members of, and to attend, all Compensation Committee meetings, and to receive all materials provided to members of the Compensation Committee in connection therewith; provided, however, that the voting members of the Compensation Committee may, by unanimous vote and acting in good faith for reasons determined to be necessary to ensure good corporate governance, exclude such non-voting observer from attending the Excluded Portions of a particular Compensation Committee meeting or receiving materials provided to the voting members of the Compensation Committee relating to the Excluded Portions of such meeting, regardless of whether such meeting is relating to the Purchaser or its Affiliates; provided further that, together with the Notice, the Purchaser shall receive a written confirmation that the basis for exclusion of the Excluded Portions is for good corporate governance reasons. For the avoidance of doubt, Purchaser’s non-voting observer shall still be entitled to receive Notice of any meeting of the Compensation Committee with Excluded Portions (even if such observer is to be excluded from the entire meeting), but any provisions of the Notice specifically referring to Excluded Portions may be redacted.

 

(e)                                  Nominating and Corporate Governance Committee Observer. For so long as the Purchaser is entitled to designate at least one (1) Purchaser Director, the Company shall procure, in whatever manner as shall be necessary to ensure, that a Purchaser Director selected by the Purchaser is appointed to be a non-voting observer on the Nominating and Corporate Governance Committee of the Board (the “Nominating and Corporate Governance Committee”), and such non-voting observer shall be entitled to receive the Notice as voting Nominating and Corporate Governance Committee members of, and to attend, all Compensation Committee meetings, and to receive all materials provided to voting members of the Compensation Committee in connection therewith; provided, however, that the voting members of the Nominating and Corporate Governance Committee may, by unanimous vote and acting in good faith for reasons determined to be necessary to ensure good corporate governance, exclude such non-voting observer from attending the Excluded Portions of a particular Nominating and Corporate Governance Committee meeting or receiving materials provided to the voting members of the Nominating and Corporate Governance Committee relating to the Excluded Portions of such meeting, regardless of whether such meeting is relating to the Purchaser or its Affiliates; provided further that, together with the Notice, the Purchaser shall receive a written confirmation that the basis for exclusion of the Excluded Portions is for good corporate governance reasons. For the avoidance of doubt, Purchaser’s non-voting observer shall still be entitled to receive Notice of any meeting of the Nominating and Corporate Governance Committee with Excluded Portions (even if such observer is to be excluded from the entire meeting), but any provisions of the Notice specifically referring to Excluded Portions may be redacted.

 

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2.2.                            Removal of Board Members. The Company shall procure that, and each Shareholder and each Founder agrees to vote, or cause to be voted, all Shares owned by such Shareholder, or over which such Shareholder and such Founder has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that (i) no director elected pursuant to Section 2.1 may be removed from office, unless (A) such removal is directed or approved by the Purchaser in writing, or (B) the Purchaser is no longer so entitled to designate or approve such director; and (ii) any vacancies created by the resignation, removal or death of a director elected pursuant to Section 2.1 shall be filled pursuant to the provisions of Section 2.1. All Shareholders and Founders agree to execute any written consents required to perform the obligations of this Section 2, and the Company agrees, at the request of the Purchaser, to call an extraordinary general meeting of shareholders for the purpose of electing directors, if such written consent or meeting of the shareholders is required under applicable laws, stock exchange rules, or the Memorandum and Articles. No party, nor any Affiliate of any such party, shall have any liability as a result of voting for any designee to the Board in accordance with the provisions of this Agreement.

 

2.3.                            Size of the Board. For so long as the Purchaser is entitled to designate at least one (1) Purchaser Director, except with the express prior written consent of the Purchaser, the Company shall procure that, and each Shareholder and each Founder agrees to vote, or cause to be voted, all Shares owned by such Shareholder, or over which such Shareholder and such Founder has voting control, from time to time and at all times, in whatever manner shall be necessary to ensure that, the size of the Board shall be no fewer than five (5) members and no more than nine (9) members.

 

2.4.                            Board Protection. The Company shall use commercially reasonable efforts to maintain at its own cost directors and officers (D&O) liability insurance with a carrier and in an amount satisfactory to the Board. In the event the Company merges with another entity and is not the surviving corporation, or transfers all of its assets, the Company shall use commercially reasonable efforts to procure that proper provisions shall be made so that successors of the Company assume the Company’s obligations with respect to indemnification of its current and former directors.

 

3.                                      REGISTRATION RIGHTS.

 

3.1.                            Applicability of Rights. The holders of Registrable Securities (as defined below) shall be entitled to the following rights with respect to any potential public offering of the Company’s Ordinary Shares in the United States and shall be entitled to reasonably analogous or equivalent rights with respect to any other offering of the Company’s securities in any other jurisdiction in which the Company undertakes to publicly offer or list such securities for trading on a recognized securities exchange.

 

3.2.                            Definition. For the purposes of this Section 3:

 

(a)                                 Registration. The terms “register,” “registered,” and “registration” refer to a registration effected by preparing and filing a registration statement which is set in a form which complies with, and becomes effective in accordance with, the Securities Act.

 

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(b)                                 Registrable Securities. The term “Registrable Securities” shall mean: (1) any Ordinary Shares of the Company issued or issuable pursuant to conversion of any shares of Series A Shares issued (x) under the Investment Agreement, and (y) pursuant to the Pre-emptive Rights as set forth in this Agreement, (2) any Ordinary Shares of the Company issued (or issuable upon the conversion or exercise of any warrant, right or other security which is issued) as a dividend or other distribution with respect to, or in exchange for or in replacement of, any shares described in clause (1) of this subsection (b), and (3) any other Ordinary Shares of the Company owned or hereafter acquired by the Purchaser. Notwithstanding the foregoing, “Registrable Securities” shall exclude any Registrable Securities sold by a person in a transaction in which rights under this Section 3 are not assigned in accordance with Section 9.1 of this Agreement, and any Registrable Securities which are sold in a registered public offering under the Securities Act or analogous statute of another jurisdiction, or sold pursuant to Rule 144 promulgated under the Securities Act or analogous rule of another jurisdiction.

 

(c)                                  Registrable Securities then outstanding. The number of shares of “Registrable Securities then outstanding” shall mean the number of Ordinary Shares of the Company that (i) are Registrable Securities, and (ii) are then issued and outstanding, or issuable upon conversion of Series A Shares then issued and outstanding.

 

(d)                                 Holder. The term “Holder” shall mean any person owning or having the rights to acquire Registrable Securities or any permitted assignee of record of such Registrable Securities to whom rights under this Section 3 have been duly assigned in accordance with Section 9.1 of this Agreement.

 

(e)                                  Form F-3. The term “Form F-3” shall mean such respective form under the Securities Act as is in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC, which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

 

(f)                                   Registration Expenses. The term “Registration Expenses” shall mean all expenses incurred by the Company in complying with Sections 3.3, 3.4 and 3.5 hereof, including all registration and filing fees, printing expenses, fees, and disbursements of counsel for the Company, reasonable fees and expenses of one (1) counsel for the selling Holders, Blue Sky compliance fees and expenses, and the expense of any special audits incidental to or required by any such registration (but excluding the compensation of regular employees of the Company, which shall be paid in any event by the Company).

 

(g)                                  Selling Expenses. The term “Selling Expenses” shall mean all underwriting discounts, selling commissions, ADS issuance fees payable to the depositary bank, fees payable to its service of process agent and share transfer taxes applicable to the sale of Registrable Securities pursuant to Sections 3.3, 3.4 and 3.5 hereof.

 

3.3.                            Demand Registration.

 

(a)                                 Request by Holders. If the Company shall, at any time, receive a written request from the Holders of at least 15% of the Registrable Securities then-outstanding that the Company file a registration statement under the Securities Act covering the registration of such Holders’ Registrable Securities pursuant to this Section 3.3 with an anticipated gross proceeds from the offering of such Registrable Securities in excess of US$10,000,000, then the Company shall, within ten (10) Business Days of the receipt of such written request, give written notice of such request (“Request Notice”) to all Holders, and use its best efforts to effect, as soon as practicable, and in any event, shall effect, no later than the Demand Registration Effectiveness Deadline, the registration under the Securities Act of all Registrable Securities that the Holders request to be registered and included in such registration by written notice given by such Holders to the Company within twenty (20) days after receipt of the Request Notice, subject only to the limitations of this Section 3.3; provided that the Company shall not be obligated to effect any such registration if the Company has, within the six (6) month period preceding the date of such request, already effected a registration under the Securities Act pursuant to this Section 3.3 or Section 3.5 hereof, or in which the Holders had an opportunity to participate pursuant to the provisions of Section 3.4, other than a registration from which the Registrable Securities of the Holders have been excluded (with respect to all or any portion of the Registrable Securities the Holders requested be included in such registration) pursuant to the provisions of Section 3.4(a).

 

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(b)                                 Underwriting. If the Holders initiating the registration request under this Section 3.3 (the “Initiating Holders”) intend to distribute the Registrable Securities covered by their request by means of an underwriting, then they shall so advise the Company as a part of their request made pursuant to this Section 3.3, and the Company shall include such information in the Request Notice. In such event, the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such Holder) to the extent provided herein. The Company and Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in a customary form with the managing underwriter or underwriters selected for such underwriting by the Company and reasonably acceptable to the Holders of a majority of the Registrable Securities being registered.

 

(c)                                  Cutbacks. Notwithstanding any other provision of this Section 3.3, if the underwriter(s) advise(s) the Company in writing that marketing factors require a limitation of the number of securities to be underwritten, then the Company shall so advise, in writing, all Holders of Registrable Securities which would otherwise be registered and underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be reduced as required by the underwriter(s) and allocated among the Holders of Registrable Securities on a pro rata basis according to the number of Registrable Securities then outstanding held by each Holder requesting registration (including the Initiating Holders); provided, however, that the number of shares of Registrable Securities to be included in such underwriting and registration shall not be reduced unless all other securities are first entirely excluded from the underwriting and registration including, without limitation, all shares that are not Registrable Securities and are held by any other person, including, without limitation, any person who is an employee, officer or director of the Company or any Subsidiary of the Company. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter(s), delivered at least ten (10) Business Days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration.

 

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(d)                                 Maximum Number of Demand Registrations. The Company shall not be obligated to effect more than two (2) such demand registrations pursuant to this Section 3.3. A registration shall not be counted as “effected” for purposes of this Section 3.3 until such time as the applicable registration statement has become effective, unless the Initiating Holders withdraw their request for such registration, elect not to pay the applicable registration expenses therefor, and forfeit their rights with respect to one (1) demand registration pursuant to Section 3.6, in which case such withdrawn registration statement shall be counted as “effected” for purposes of this Section 3.3.

 

(e)                                  Deferral. Notwithstanding the foregoing, if the Company shall furnish to Holders requesting registration pursuant to this Section 3.3, a certificate signed by the chief executive officer of the Company stating that in the good faith judgment of the Board, it would be materially detrimental to the Company and its shareholders for such registration statement to be filed at such time, then the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders; provided, however, that the Company may not utilize this right more than once in any twelve (12) month period; provided further, that the Company shall not register any other of its shares during such ninety (90) day period. A demand right shall not be deemed to have been exercised until such deferred registration shall have been effected.

 

(f)                                   Other Securities Laws in Demand Registration. In the event of any registration pursuant to this Section 3.3, the Company shall register and qualify the securities covered by the registration statement under the securities laws of any other jurisdictions outside of the United States or in Hong Kong or elsewhere as shall be appropriate for the distribution of the securities; provided, however, that (a) the Company shall not be required to do business or to file a general consent to service of process in any such state or jurisdiction, and (b) notwithstanding anything in this Agreement to the contrary, in the event any jurisdiction in which the securities shall be qualified imposes a non-waivable requirement that expenses incurred in connection with the qualification of the securities be borne by selling shareholders, the expenses shall be payable pro rata by the selling shareholders.

 

3.4.                            Piggyback Registrations.

 

(a)                                 Procedure. The Company shall notify all Holders of Registrable Securities in writing at least thirty (30) days prior to filing any registration statement under the Securities Act for purposes of effecting a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities of the Company, but excluding registration statements relating to any registration under Section 3.3 or Section 3.5 of this Agreement or to any employee benefit plan or a corporate reorganization or other Rule 145 transaction, an offer and sale of debt securities, or a registration on any registration form that does not permit secondary sales), and shall, subject to Section 3.4(d), use best efforts to afford each such Holder an opportunity to include in such registration statement all or any part of the Registrable Securities then held by such Holder. Each Holder desiring to include in any such registration statement all or any part of the Registrable Securities held by it shall within twenty (20) days after receipt of the above-described notice from the Company, so notify the Company in writing, and in such notice shall inform the Company of the number of Registrable Securities such Holder wishes to include in such registration statement. If a Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein.

 

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(b)                                 Right to Withdraw. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 3.4 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration. The expenses of such registration shall be borne by the Company, in accordance with Section 3.6 hereof.

 

(c)                                  Underwriting. If a registration statement under which the Company gives notice under this Section 3.4 is for an underwritten offering, then the Company shall so advise the Holders of Registrable Securities. In such event, the right of any such Holder’s Registrable Securities to be included in a registration pursuant to this Section 3.4 shall be conditioned upon such Holder’s participation in such underwriting on the terms agreed upon between the Company and the underwriters selected by the Company, and upon the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting.

 

(d)                                 Cutbacks. Notwithstanding any other provision of this Agreement, if the managing underwriter(s) determine(s) in good faith that marketing factors require a limitation of the number of shares to be underwritten, then the managing underwriter(s) may exclude shares from the registration and the underwriting, and the number of shares that may be included in the registration and the underwriting shall be allocated, first, to the Company and second, to each of the Holders requesting inclusion of their Registrable Securities in such registration statement, the Founders and holders of other securities of the Company on a pro rata basis based on the total number of shares then held by each such person; provided, however, that the number of shares of the Purchaser’s Registrable Securities to be included in such underwriting and registration shall not be reduced unless all other Holders’ Registrable Securities are first entirely excluded from the underwriting and registration. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter(s), delivered at least ten (10) Business Days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration.

 

(e)                                  Not Demand Registration. Registration pursuant to this Section 3.4 shall not be deemed to be a demand registration as described in Section 3.3 above. There shall be no limit on the number of times the Holders may request registration of Registrable Securities under this Section 3.4.

 

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3.5.                            Form F-3 Registration. In case the Company shall receive from any Holder or Holders of Series A Shares (and/or Ordinary Shares issued or issuable upon conversion of the Series A Shares) a written request or requests that the Company effect a registration on Form F-3 (or an equivalent registration in a jurisdiction outside of the United States) and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, then the Company will:

 

(a)                                 Notice. Promptly give written notice of the proposed registration and the Holder’s or Holders’ request therefor, and any related qualification or compliance, to all other Holders of Registrable Securities; and

 

(b)                                 Registration. Use best efforts to effect, as soon as practicable, and in any event, shall effect, no later than the Form F-3 Registration Effectiveness Deadline, such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holders or Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within twenty (20) days after the Company provides the notice contemplated by Section 3.5(a); provided, however, that the Company shall not be obligated to effect any such registration, qualification, or compliance pursuant to this Section 3.5:

 

(1)                                 if Form F-3 is not available for such offering by the Holders;

 

(2)                                 if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less than US$2,000,000;

 

(3)                                 if the Company shall furnish to the Holders a certificate signed by the chief executive officer of the Company stating that in the good faith judgment of the Board, it would be materially detrimental to the Company and its shareholders for such Form F-3 Registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form F-3 registration statement no more than once during any twelve (12) month period for a period of not more than ninety (90) days after receipt of the request of the Holder or Holders under this Section 3.5; provided that the Company shall not register any of its other shares during such ninety (90) day period.

 

(4)                                 if the Company has, within the six (6) month period preceding the date of such request, already effected a registration under the Securities Act other than a registration from which the Registrable Securities of Holders have been excluded (with respect to all or any portion of the Registrable Securities the Holders requested be included in such registration) pursuant to the provisions of Sections 3.3(c) and 3.4(d);

 

(5)                                 if the Company has been requested to effect a registration on Form F-3 pursuant to this Section 3.5 more than twice in any twelve (12) month period; or

 

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(6)                                 in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification, or compliance.

 

(c)                                  Not Demand Registration. Form F-3 registrations shall not be deemed to be demand registrations as described in Section 3.3 above. Except as otherwise provided herein, there shall be no limit on the number of times the Holders may request registration of Registrable Securities under this Section 3.5; provided that the Company shall not be required to file more than two (2) Form F-3 registration statements in any twelve (12) month period.

 

(d)                                 Underwriting. If the Holders of Registrable Securities requesting registration under this Section 3.5 intend to distribute the Registrable Securities covered by their request by means of an underwriting, the provisions of Sections 3.3(b) and 3.3(c) shall apply to such registration.

 

3.6.                            Expenses. All Registration Expenses incurred in connection with any registration pursuant to Sections 3.3, 3.4 or 3.5 (but excluding Selling Expenses) shall be borne by the Company. Each Holder participating in a registration pursuant to Sections 3.3, 3.4 or 3.5 shall bear such Holder’s proportionate share (based on the total number of shares sold in such registration other than for the account of the Company) of all Selling Expenses or other amounts payable to underwriter(s) or brokers, in connection with such offering by the Holders. Notwithstanding the foregoing, the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 3.3 or 3.5 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all participating Holders shall bear such expenses), unless the Holders of a majority of the Registrable Securities then outstanding agree that such registration constitutes the use by the Holders of one (1) demand registration pursuant to Section 3.3 or one (1) Form F-3 registration pursuant to Section 3.5, as the case may be (in which case such registration shall also constitute the use by all Holders of Registrable Securities of one (1) such demand registration or one (1) such F-3 registration, as the case may be); provided further, however, that if at the time of such withdrawal, the Holders have learned of a material adverse change in the condition, business, or prospects of the Company not known to the Holders at the time of their request for such registration and have withdrawn their request for registration with reasonable promptness after learning of such material adverse change, then the Holders shall not be required to pay any of such expenses and such registration shall not constitute the use of a demand registration pursuant to Section 3.3 or an F-3 registration pursuant to Section 3.5, as the case may be.

 

3.7.                            Obligations of the Company. Whenever required to effect the registration of any Registrable Securities under this Agreement, the Company shall, as expeditiously as reasonably possible:

 

(a)                                 Registration Statement. Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to ninety (90) days or, in the case of Registrable Securities registered under Form F-3 in accordance with Rule 415 under the Securities Act or a successor rule, until the distribution contemplated in the registration statement has been completed, if earlier; provided, however, that (i) such ninety (90) day period shall be extended for a period of time equal to the period any Holder refrains from selling any securities included in such registration at the request of the underwriter(s), and (ii) in the case of any registration of Registrable Securities on Form F-3 which are intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC rules, such ninety (90) day period shall be extended for up to an additional ninety (90) days, if necessary, to keep the registration statement effective until all such Registrable Securities are sold.

 

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(b)                                 Amendments and Supplements. Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for up to one hundred twenty (120) days, or until the distribution described in such registration statement is completed, if earlier.

 

(c)                                  Prospectuses. Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of the Registrable Securities owned by them that are included in such registration.

 

(d)                                 Blue Sky. To the extent applicable, use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act.

 

(e)                                  Underwriting. In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement in the usual and customary form, with the managing underwriter(s) of such offering. Each Holder and other security holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.

 

(f)                                   Exchange. Use commercially reasonable efforts to list the Registrable Securities covered by such registration statement with any securities exchange on which the Ordinary Shares are then listed.

 

(g)                                  Depositary. Maintain a depositary bank for all such Registrable Securities for so long as the Company remains a public company.

 

(h)                                 Notification. Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of (i) the issuance of any stop order by the SEC in respect of such registration statement, or (ii) the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and at the request of any Holder, prepare and furnish to the Holders a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, such obligation to continue for one hundred and twenty (120) days or until the distribution described in such registration statement is completed, if earlier.

 

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(i)                                     Opinion and Comfort Letter. Use its best efforts to cause to be furnished, at the request of any Holder requesting registration of Registrable Securities, on the date that such Registrable Securities are delivered to the underwriter(s) for sale, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering and reasonably satisfactory to a majority in interest of the Holders requesting registration, addressed to the underwriters, if any, and (ii) letters dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering and reasonably satisfactory to a majority in interest of the Holders requesting registration, addressed to the underwriters, if any.

 

(j)                                    Inclusion of Holders’ Comments. In connection with the preparation and filing of each registration statement registering Registrable Securities under the Securities Act, and before filing any such registration statement or any other document in connection therewith, give reasonable consideration to the inclusion in such documents of any comments reasonably and timely made by any Holder or its legal counsel; participate in and make documents available for the reasonable and customary due diligence review of underwriters during normal business hours, on reasonable advance notice and without undue burden or hardship on the Company; provided that (i) any party receiving confidential materials shall execute a confidentiality agreement on customary terms if reasonably requested by the Company, and (ii) the Company may restrict access to competitively sensitive or legally privileged documents or information.

 

(k)                                 Cooperation. Otherwise use commercially reasonable efforts to comply with the Securities Act, the Exchange Act, and any other applicable rules and regulations of the SEC and reasonably cooperate with the Holders in the disposition of their Registrable Securities in accordance with the terms of this Agreement. Such cooperation shall include the endorsement and transfer of any certificates representing Registrable Shares (or a book-entry transfer to similar effect) transferred in accordance with this Agreement.

 

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3.8.                            Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to Sections 3.3, 3.4 or 3.5 that the selling Holders shall furnish to the Company such information regarding themselves, the Registrable Securities held by them, and the intended method of disposition of such securities as the Company may reasonably request, including without limitation such information as shall be required to timely effect the registration of their Registrable Securities. The Company shall have no obligation with respect to any registration requested pursuant to Section 3.3 or Section 3.5 of this Agreement if, as a result of the application of the preceding sentence, the anticipated aggregate offering price of the Registrable Securities to be included in the registration does not equal or exceed the anticipated aggregate offering price required to originally trigger the Company’s obligation to initiate such registration as specified in Section 3.3(a) or Section 3.5(b)(2), whichever is applicable.

 

3.9.                            Indemnification. In the event any Registrable Securities are included in a registration statement under Sections 3.3, 3.4, or 3.5:

 

(a)                                 By the Company. To the extent permitted by law, the Company shall indemnify and hold harmless (including, without limitation, the advancement of expenses, expenses related to the investigation of any Claim, and reasonable fees, expenses and disbursements of attorneys and other professionals, incurred prior to any assumption of the defense of such Claim by the Company) each Holder and its Affiliates, and each of their partners, officers, directors, legal counsel, any underwriter (as defined in the Securities Act) and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act and the officers, directors, employees, agents and employees of each such controlling person, against any losses, Claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act, or other U.S. federal or state law, insofar as such losses, Claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions, or violations (collectively, a “Violation”):

 

(i)                                     any untrue statement or alleged untrue statement of a material fact contained or incorporated by reference in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, or contained in any “issuer free writing prospectus” (as such term is defined in Rule 433 under the Securities Act) prepared by the Company or authorized by it in writing for use by such Holder or any amendment or supplement thereto;

 

(ii)                                  the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or

 

(iii)                               any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any Blue Sky laws, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any Blue Sky laws in connection with the offering covered by such registration statement.

 

Upon the occurrence of a Violation, the Company shall reimburse each such Holder, its partner, officer, director, legal counsel, underwriter, or controlling person for any legal or other expenses reasonably incurred by them, as incurred, in connection with investigating or defending any such loss, Claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 3.9(a) shall not apply to amounts paid in settlement of any such loss, Claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, Claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder, or any partner, officer, director, legal counsel, underwriter, or controlling person of such Holder.

 

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(b)                                 By Selling Holders. To the extent permitted by law, each selling Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration qualifications or compliance is being effected, indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter, any legal counsel of the Company, and any other Holder selling securities under such registration statement or any of such other Holder’s partners, directors, officers, legal counsel or any person who controls such Holder within the meaning of the Securities Act or the Exchange Act, against any losses, Claims, damages or liabilities (joint or several) to which the Company or any such director, officer, legal counsel, controlling person, underwriter or other such Holder, partner or director, officer or controlling person of such other Holder may become subject under the Securities Act, the Exchange Act or other United States federal or state law, insofar as such losses, Claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter or other Holder, partner, officer, director or controlling person of such other Holder in connection with investigating or defending any such loss, Claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 3.9(b) shall not apply to amounts paid in settlement of any such loss, Claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided, further, that in no event shall any indemnity under this Section 3.9(b) exceed the net proceeds received by such Holder in the registered offering out of which the applicable Violation arises, except in the case of willful fraud by such Holder.

 

(c)                                  Notice. Promptly after receipt by an indemnified party under this Section 3.9 of notice of the commencement of any action (including any governmental action), such indemnified party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 3.9, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the reasonable fees and expenses to be paid by the indemnifying party, if (i) the indemnifying party has agreed in writing to pay such reasonable fees and expenses, (ii) the indemnifying party failed to promptly assume the defense of such proceeding and to employ counsel (in accordance with this Section 3.9(c)) reasonably satisfactory to such indemnified party in any such proceeding, or (iii) representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential conflict of interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of liability to the indemnified party under this Section 3.9 to the extent the indemnifying party is prejudiced as a result thereof, but the omission to so deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party other than under this Section 3.9.

 

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(d)                                 Contribution. In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any indemnified party makes a Claim for indemnification pursuant to this Section 3.9 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 3.9 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any indemnified party in circumstances for which indemnification is provided under this Section 3.9; then, and in each such case, the indemnified party and the indemnifying party will contribute to the aggregate losses, Claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that a Holder (together with its related persons) is responsible for the portion represented by the percentage that the public offering price of its Registrable Securities offered by and sold under the registration statement bears to the public offering price of all securities offered by and sold under such registration statement, and the Company and other selling Holders are responsible for the remaining portion. The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case: (A) no Holder will be required to contribute any amount in excess of the net proceeds to such Holder from the sale of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, except in the case of willful fraud by such Holder; and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation. Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the provisions in this Section 3.9, the provisions in the underwriting agreement shall control.

 

(e)                                  Survival; Consents to Judgments and Settlements. The obligations of the Company and Holders under this Section 3.9 shall survive the completion of any offering of Registrable Securities in a registration statement, regardless of the expiration of any statutes of limitation or extensions of such statutes. No indemnifying party, in the defense of any such Claim or litigation, shall, except with the prior written consent of each indemnified party, consent to entry of any judgment or enter into any settlement of any such pending proceeding, which (i) does not include, as an unconditional term thereof, the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such Claim, proceeding, or litigation, and/or (ii) expressly includes or will result in any limitation or restriction upon any Holder’s exercise of all rights, privileges, and preferences applicable to it as a holder of Series A Shares (and/or Ordinary Shares issued or issuable pursuant to conversion of Series A Shares) and its rights under the Transaction Documents.

 

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3.10.                     No Registration Rights to Third Parties. Without the prior written consent of the Purchaser, the Company covenants and agrees that it shall not grant, or cause or permit to be created, for the benefit of any person or entity any registration rights of any kind (whether similar to the demand, “piggyback” or Form F-3 registration rights described in this Section 3 or otherwise) relating to any securities of the Company which are senior to, or on a parity with, those granted to the Holders of Registrable Securities. The Purchaser shall have priority with respect to future registration rights granted by the Company in accordance with this Section 3.10 (including priority for inclusion with respect to underwriter cutbacks).

 

3.11.                     Rule 144 Reporting. With a view to making available to the Holders the benefits of certain rules and regulations of the SEC which may at any time permit the sale of the Registrable Securities to the public without registration or pursuant to a registration on Form F-3, after such time as a public market exists for the Ordinary Shares, the Company agrees to:

 

(a)                                 Make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times after ninety (90) days after the effective date of the first registration under the Securities Act filed by the Company for an offering of its securities to the general public so long as the Company remains subject to the periodic reporting requirements under Sections 13 or 15(d) of the Exchange Act;

 

(b)                                 File with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); and

 

(c)                                  So long as a Holder owns any Registrable Securities, to furnish to such Holder forthwith upon request (i) a written statement by the Company as to its compliance with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, or its qualification as a registrant whose securities may be resold pursuant to Form F-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company, and (iii) such other reports and documents of the Company as a Holder may reasonably request in availing itself of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to Form F-3.

 

3.12.                     Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 3.

 

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3.13.       Termination of the Holder’s Registration Rights.  The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Sections 3.3, 3.4 or 3.5 shall terminate when all of such Holder’s Registrable Securities can be sold without restriction or during a three (3) month period without registration under SEC Rule 144.

 

4.                                      CHANGE OF CONTROL.

 

4.1. Definition.  “Change of Control” shall mean the occurrence of any of the following events (through one or a series of transactions):

 

(a)                                 any Person becoming the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act, except that the Person will be deemed to have “beneficial ownership” of all shares that the Person has the direct or indirect right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of fifty percent (50%) or more of the total voting power of the Ordinary Shares and/or other shares having the power to vote in the election of directors of the Company or any successor thereof, whether such ownership is acquired through merger, consolidation, amalgamation, tender or exchange offer, open market purchases, privately negotiated purchases, or otherwise;

 

(b)                                 any Person directly or indirectly acquiring (in one or more transactions) all or substantially all of the assets of the Group (or any successor thereof);

 

(c)                                  the merger, consolidation, or amalgamation of any Person with or into the Company (or any successor thereof) as a result of which the holders of the voting shares of the Company (or any successor thereof) immediately prior to such transaction own, directly or indirectly, less than a majority of the voting shares of the Company (or such successor) or the applicable surviving entity or any direct or indirect parent company thereof immediately after such transaction; and

 

(d)                                 a replacement at one time or over any period of three years or less of more than one-half of the members of the Board which is not approved by a majority of those individuals who are members of the Board on the date of the Closing, including the affirmative consent of the Purchaser Directors (or by those individuals who are serving as members of the Board on any date whose nomination to the Board was approved by a majority of the members of the Board who are members on the date of the Closing, including the affirmative consent of the Purchaser Directors).

 

4.2.                            Company Restriction.  For a period of one (1) year after the Closing and so long as the Purchaser beneficially owns a number of Series A Shares and/or Ordinary Shares issued upon conversion of Series A Shares equal to at least seventy-five percent (75%) of the Series A Shares issued at the Closing (in each case, as appropriately adjusted for share splits, reverse share splits, share dividends, share consolidations, recapitalizations and the like) during such one (1) year period, the Company shall not effectuate, or by any action or omission, directly or indirectly, cause, permit, or facilitate, a Change of Control with or involving a Competitor (a “Competitor Change of Control”) without the express prior written consent of the Purchaser in its sole discretion. Any attempted Competitor Change of Control in contravention of this Section 4 shall be null and void ab initio.

 

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4.3.                            Shareholder Restriction.  For a period of one (1) year after the Closing and so long as the Purchaser beneficially owns a number of Series A Shares and/or Ordinary Shares issued upon conversion of Series A Shares equal to at least seventy-five percent (75%) of the Series A Shares issued at the Closing (in each case, as appropriately adjusted for share splits, reverse share splits, share dividends, share consolidations, recapitalizations and the like), during such one (1) year period, without the express prior written consent of the Purchaser in its sole discretion, each Founder and Founder Entity shall not, and each Founder shall cause and procure any shareholder of any entity whose name is set forth next to such Founder in Exhibit D (to the extent within such Founder’s control to do so) not to, (i) directly or indirectly, sell, assign, transfer, pledge, hypothecate, mortgage, encumber or otherwise dispose, through one or a series of transactions, any equity interest held, directly or indirectly, by such shareholder in such entity to any Person, (ii) directly or indirectly, sell, assign, transfer, pledge, hypothecate, mortgage, encumber or otherwise dispose, through one or a series of transactions, any equity interest in any Group Company held or controlled by him to any Person (any such action in clause (i) or (ii) collectively, a “Transfer”), or (iii) take any action to, or by omission, permit or facilitate any such Transfer, if any such Transfer(s) and related actions are reasonably likely to result in, whether individually or in conjunction with Transfers by and other actions of, other shareholders of the Company, a Competitor Change of Control of the Company, provided, however, that this Section 4.3 shall not apply to genuine open market sale (including block trade) where the identity of the purchaser of the equity securities is not known to, and cannot reasonably be determined by, such Founder or such entity or its agent effecting such sale.

 

5.                                      PRE-EMPTIVE RIGHT.

 

5.1.                            For so long as the Purchaser beneficially owns any Series A Shares, at any time the Company proposes to issue any shares of capital stock or transfer any shares of capital stock that have been repurchased from the open market and held under the Company’s brokerage account or otherwise held under the Company’s name, including the Ordinary Shares, or any securities convertible into or exercisable or exchangeable into shares of capital stock or other equity interests in the Company (the “New Securities”) other than: (i) pursuant to any present or future employee, director or consultant benefit plan or program of the Company that has been duly approved by the shareholders of the Company and the issuance of any Ordinary Shares issuable upon exercise of such equity awards under any such plan, (ii) the issuance of Ordinary Shares upon conversion of the Series A Shares or as a dividend or distribution on the Series A Shares, or (iii) the issuance of Ordinary Shares upon a stock split, stock dividend or any subdivision of the Ordinary Shares (subject to customary adjustment under the terms of the Series A Shares) (all New Securities identified in the foregoing clauses (i), (ii) and (iii), collectively, the “Exempt Securities”), the Company shall notify Purchaser in writing of such proposal (an “Issue Notice”). The Issue Notice shall specify the number and type of New Securities to be offered by the Company and the material terms of the proposed offer (including the proposed price (or range of prices) per New Security to be paid by the proposed third party purchaser(s) and other conditions), as well as which of the following pre-emptive rights are available to the Purchaser.

 

5.2.                            The Purchaser shall have the right to purchase, or to purchase through an Affiliate, a number of New Securities so as to enable the Purchaser to beneficially hold, after the issue of the New Securities which are the subject to the Issue Notice, either (in its sole discretion):

 

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(a)                                 in the case of New Securities (including, for this purpose, Exempt Securities) that would result, after the issuance thereof, in an investor and its Affiliates (other than an underwriter that is placing on behalf of the Company the New Securities in a bona fide capital markets transaction) (collectively, the “Prospective Largest Shareholder”) beneficially owning more than the Purchaser (and its Affiliates) in the aggregate, one share more than the number of shares in the Company proposed to be beneficially owned by such Prospective Largest Shareholder, unless at least two-thirds (2/3) of the members of the Board acting in good faith resolve in writing that the implementation of this Section 5.2(a) is not in the best interests of the Company and its shareholders as a whole; provided that the right under this clause (a) may only be exercised if the Purchaser beneficially owns a number of Series A Shares and/or Ordinary Shares issued upon conversion of the Series A Shares equal to at least fifty percent (50%) of the Series A Shares issued at the Closing (in each case, as appropriately adjusted for stock splits, reverse stock splits, stock dividends, stock consolidation, recapitalization and the like); or

 

(b)                                 a pro rata portion of the New Securities equal to the percentage of the issued share capital of the Company (on an as-converted, fully-diluted basis) then beneficially owned by the Purchaser (together with its Affiliates) prior to the issuance of the New Securities (for the avoidance of the doubt, the preemptive right as set forth in this Section 5.2(b) shall be exercisable by the Purchaser for so long as it beneficially owns any Series A Shares),

 

in each case upon the same terms and conditions set forth in the Issue Notice, by giving written notice to the Company of the exercise of this right within fifteen (15) Business Days of Purchaser’s receipt of the Issue Notice. If such notice is not given by the Purchaser within such fifteen (15) Business Days thereof, the Purchaser shall be deemed to have elected not to exercise its rights under this Section 5.2 with respect to the issuance described in that specific Issue Notice (it being understood that if the Purchaser is not permitted to exercise its rights under Section 5.2(a) because the Board takes action to prohibit such exercise in the manner provided by Section 5.2(a), the Purchaser shall be entitled to exercise its rights under Section 5.2(b) for an additional ten (10) Business Days after receiving written notice of the Board’s action).

 

5.3.                            If the Purchaser (or its Affiliate) exercises its rights provided in this Section 5, the closing of the purchase of the New Securities with respect to which such right has been exercised shall take place within twenty (20) Business Days after the giving of notice of such exercise, which period of time shall be extended for a maximum of sixty (60) Business Days in order to comply with applicable laws and regulations (including receipt of any applicable regulatory or shareholder approvals). The Company and the Purchaser (or its Affiliate) exercising its rights under Section 5 will use commercially reasonable efforts to secure any regulatory or shareholder approvals or other consents, and to comply with any law or regulation necessary in connection with the offer, sale and purchase of, such New Securities.

 

5.4.                            In the event that Purchaser fails to exercise its right provided in this Section 5 within such fifteen (15) Business Day period, or in the event that the Purchaser fails to consummate its transaction within such twenty (20) Business Day period after its giving of notice of exercise or the sixty (60) Business Day extension thereof, the Company shall thereafter be entitled to issue and sell within ninety (90) Business Days the New Securities not elected to be purchased pursuant to this Section 5 by the Purchaser at a price no less than that offered to the Purchaser, and otherwise upon terms and conditions no more favorable to the third-party purchasers of such securities than were specified in the Issue Notice. In the event the Company has not issued and sold the New Securities within such ninety (90) Business Day period, the Company shall not thereafter offer, issue or sell such New Securities without first offering such securities to the Purchaser in the manner provided in this Section 5.

 

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5.5.                            In the case of the offering of New Securities for a consideration in whole or in part other than cash, including securities acquired in exchange therefor (other than securities by their terms so exchangeable), the consideration other than cash shall be deemed to be the fair value thereof as determined in good faith by the Board; provided, however, that such fair value as determined by the Board shall not exceed the aggregate market price of the securities being offered as of the date the Board authorizes the offering of such securities.

 

6.                                      OPTIONAL REDEMPTION RIGHT.

 

6.1.                            General. At any time prior to the first (1st) anniversary of the Closing, in the event of a Change of Control, each Holder of outstanding Series A Shares shall have the option, during the period beginning on the effective date of the Change of Control (the “Change of Control Effective Date”) and ending on the date that is twenty (20) Business Days after the Change of Control Effective Date, to require the Company to purchase, out of funds legally available therefor, any or all of its Series A Shares at a purchase price per share, payable in cash, equal to 120% of the then current Liquidation Preference Amount (the “Optional Redemption Right”).

 

6.2.                            Initial Change of Control Notice. On or before the twentieth (20th) Business Day prior to the date on which the Company anticipates consummating the Change of Control, a written notice shall be sent by or on behalf of the Company, in accordance with Section 10.4 to the Holders as they appear in the records of the Company. Such notice shall contain:

 

(a)                                 the date on which the Change of Control is anticipated to be effected (or, if applicable, the date on which a Schedule TO or other schedule, form or report disclosing a Change of Control was filed);

 

(b)                                 the date, which shall be twenty (20) Business Days after the anticipated Change of Control Effective Date, by which the Optional Redemption Right must be exercised; and

 

(c)                                  a summary of the material terms of such Change of Control.

 

6.3.                            Final Change of Control Notice. On the Change of Control Effective Date, a final written notice shall be sent by or on behalf of the Company, in accordance with 10.4to the Holders as they appear in the records of the Company. Such notice shall contain:

 

(a)                                 the date, which shall be no less than twenty (20) Business Days after the Change of Control Effective Date, by which the Optional Redemption Right must be exercised;

 

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(b)                                 the amount of cash payable per share of Series A Shares and the purchase date for such shares, which shall be no less than ten (10) and no greater than twenty (20) Business Days from the date by which the Optional Redemption Right must be exercised; and

 

(c)                                  the instructions a Holder must follow to exercise its Optional Redemption Right in connection with such Change of Control.

 

6.4.                            Optional Redemption Procedure. To exercise the Optional Redemption Right, a Holder must, no later than 5:00 p.m., Beijing time, on the date by which such right must be exercised, deliver written notice to the Company indicating that it is exercising its Optional Redemption Right and the details of the account to which the purchase price for the redemption shall be wired. Upon exercise of the Optional Redemption Right by a Holder, the Company shall, within five (5) Business Days, deliver or cause to be delivered to the Holder by wire transfer the purchase price payable upon the purchase by the Company of such Holder’s Series A Shares. Upon receipt of the wire initiation confirmation from the Company pursuant to the foregoing, the Holder shall surrender to the Company the certificates representing the redeemed Series A Shares and a duly executed instrument of transfer transferring the redeemed Series A Shares to the Company.

 

6.5.                            Unsold Shares Remain Outstanding. If a Holder does not elect to exercise the Optional Redemption Right pursuant to this Section 6 with respect to all of its Series A Shares, the Series A Shares held by it and not surrendered for settlement will remain outstanding until otherwise subsequently converted, redeemed, reclassified or canceled.

 

6.6.                            Partial Exercise of Optional Redemption Right. In the event that the Optional Redemption Right is exercised with respect to Series A Shares representing less than all the Series A Shares held by a Holder, upon exercising such Optional Redemption Right the Company shall execute and deliver to such Holder, at the expense of the Company, a certificate evidencing the Series A Shares held by the Holder as to which the Optional Redemption Right was not exercised, together with an updated, certified register of members evidencing the same.

 

6.7.                            Definition of Holder.  Solely for the purposes of this Section 6, “Holder” shall have the meaning ascribed to it in the Certificate of Designations.

 

7.                                      PROTECTIVE PROVISIONS.

 

7.1.                            For so long as the Purchaser beneficially owns a number of Series A Shares and/or Ordinary Shares issued upon conversion of Series A Shares equal to at least fifty percent (50%) of the Series A Shares issued at the Closing (in each case, as appropriately adjusted for stock splits, reverse stock splits, stock dividends, stock consolidations, recapitalizations and the like), in addition to any other vote or consent of the Company’s shareholders required by law or by the Memorandum and Articles, the Company shall not, and shall cause each of its controlled Subsidiaries and Beijing Golden Tom Information Technology Co., Ltd. not to, as applicable, without the affirmative vote or written consent of the Purchaser who is the record holder of the Series A Shares at such time (which consent, except as expressly provided below, may be given or withheld, or made subject to such conditions as are determined by the Purchaser, in its sole discretion):

 

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(a)                                 amend, alter or repeal the Memorandum and Articles or any provision thereof, including the Certificate of Designations or any other instrument establishing or designating the Series A Shares, or otherwise amend the terms of the Series A Shares;

 

(b)                                 authorize, designate or issue any other security convertible into or exercisable for any equity security having rights, privileges or preferences senior to or on parity with the Series A Shares;

 

(c)                                  declare or pay any dividend on, or make any distributions relating to, any Junior Shares (including pursuant to clause (d) of this Section 7.1) or redeem, purchase or acquire for value any (x) Junior Shares, or (y) any options, warrants or other rights to acquire such Junior Shares, other than purchases, redemptions or other acquisitions of such Junior Shares in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or consultants and other than as permitted under Section 5(e) of the Investment Agreement;

 

(d)                                 distribute (by way of dividend, share distribution, exchange, redemption, recapitalization or similar transaction) securities of any entity holding a significant portion of the assets and business of any member of the Group, including by way of spin-off, split-off or other distribution transaction;

 

(e)                                  enter into, or permit any Subsidiary to enter into, any agreement, or any modification or amendment to an existing agreement, which, in the absence of a default under such agreement, would by its terms prevent the Company from fully performing its obligations with respect to the Series A Shares;

 

(f)                                   incur any material indebtedness, except as permitted under the terms of any credit facility then in place, renewing existing credit facilities in similar terms, or as provided in the Group’s annual business plan;or

 

(g)                                  agree or undertake to do any of the foregoing.

 

8.                                      RIGHT OF FIRST REFUSAL.

 

8.1.                            General.  For so long as the Purchaser beneficially owns a number of Series A Shares and/or Ordinary Shares issued upon conversion of the Series A Shares equal to at least seventy-five percent (75%) of the Series A Shares issued at the Closing (in each case, as appropriately adjusted for stock splits, reverse stock splits, stock dividends, stock consolidation, recapitalization and the like), in the event that any Material Group Company receives a proposal, or that the Board authorizes the Company to initiate or pursue a proposal (or the Company otherwise undertakes in writing to pursue the same), which could reasonably be expected to lead to a Specified Transaction (as defined below), the Company shall, within two (2) Business Days, provide the Purchaser with a written notice of the proposal and a summary of the material terms (including the name of counterparty and any controlling Person thereof) of the proposal (the “Proposal Notice”). The Purchaser shall have a right of first refusal, exercisable by written notice to the Company (the “Exercise Notice”) within twenty (20) Business Days of receiving the Proposal Notice, to use its reasonable best efforts to consummate the Specified Transaction as soon as practicable after delivery of the Exercise Notice at substantially the same terms, prices and conditions as set forth in the Proposal Notice. If the Purchaser does not elect to exercise its right of first refusal within such twenty (20) Business Day period, or if the Purchaser fails to consummate the transaction using its reasonable best efforts after delivery of the Exercise Notice, the Company may proceed with the Specified Transaction upon terms and conditions no more favorable to the counter parties in the Specified Transaction than those specified in the Proposal Notice, subject to necessary Board and shareholder approval.

 

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8.2.                            Definition.  For purposes of this Section 8, “Specified Transaction” means a transaction or a series of transactions that (i) sell, transfer, lease, or license material technology of, or otherwise dispose of, any Material Group Company, or substantially all of the assets, including without limitation, intellectual property assets of any Material Group Company, to one or more Persons that are not a Group Company; (ii) merge, amalgamate, or consolidate any Material Group Company with any other Person or entity; (iii) effect a statutory exchange of securities of the Company with another Person or entity; or (iv) effect a Change of Control.

 

9.                                      ASSIGNMENT AND AMENDMENT.

 

9.1.                            Assignment of Registration Rights.  Notwithstanding anything herein to the contrary, the registration rights of any Holder under Section 3 may be assigned to any person acquiring Registrable Securities, in part or in whole; provided that, in each case such assignee is not a Competitor and the Registrable Securities being transferred include shares representing at least two percent (2%) of the then-current capitalization of the Company on an as-converted, fully diluted basis or represent all of the Registrable Securities held by each of the transferring Holders; provided, however, that in any case no party may be assigned any of the foregoing rights unless the Company is given written notice by the assigning party stating the name and address of the assignee and identifying the securities of the Company as to which the rights in question are being assigned; and provided further, that any such assignee shall receive such assigned rights subject to all the terms and conditions of this Agreement and such assignee agrees in writing to be bound by all the terms and conditions of this Agreement.

 

9.2.                            Amendment of Rights.  This Agreement may be amended, modified or supplemented only by a written instrument duly executed by all the parties hereto. The observance of any provision in this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only by the written consent of (i) as to the Company, only by the Company; (ii) as to the Purchaser or its assigns, by the Purchaser and its assigns; (iii) as to each Founder Entity, by such Founder Entity and its assigns; and (iv) as to each Founder, by such Founder. Any amendment or waiver effected in accordance with this Section 9.2 shall be binding upon the Company, the Purchaser, the Founder Entities, the Founders, and their respective assigns.

 

10.                               GENERAL PROVISIONS.

 

10.1.                     Publicity.  Subject to specific disclosures required by applicable securities laws (which disclosures shall be made in accordance with Section 5(d) of the Investment Agreement), without the prior written consent of the Purchaser, each of the Group Companies and each Shareholder (other than the Purchaser) shall not, and each foregoing Person shall cause any of its Affiliates to not, (i) use in advertising, publicity, announcements, or otherwise, the name of the Purchaser or any Affiliate of the Purchaser, either alone or in combination of, including, without limitation, “Ali (),” “Alibaba (),” “Alipay (),” “Taobao (),” “Tao (),” “Tmall (),” “eTao (),” “Juhuasuan (),” “Aliyun / Alibaba Cloud ( ),” “Yahoo China (),” or any company name, trade name, trademark, service mark, domain name, device, design, symbol or any abbreviation, contraction or simulation thereof owned or used by the Purchaser or any of its Affiliates, or (ii) represent, directly or indirectly, that any product or services provided by any Group Company has been approved or endorsed by the Purchaser or any of its Affiliates. The rights and obligations of each Group Company and each Shareholder under this Section 10.1 shall survive the termination of this Agreement.

 

26

 

10.2.                     Compliance.  The Company, each Shareholder (other than the Purchaser), and each Founder shall, and shall cause each Group Company to, comply with all applicable statutes, rules, regulations, ordinances, codes, orders, decrees, policies, protocols, and judicial, administrative or ministerial judgments, interpretation, notices or other requirements imposed by all relevant Governmental Entities (as defined in the Investment Agreement) in respect of the operation of its and their business as currently conducted and contemplated to be conducted, except where the failure to be in compliance could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect (as defined in the Investment Agreement), including maintenance and compliance of all Permits (as defined in the Investment Agreement) required in connection with such businesses and shall use commercially reasonable efforts to ensure that its employees and agents comply with all Permits, except where the failure to obtain, maintain or comply with such Permits, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect

 

10.3.                     Termination.  Unless expressly provided otherwise in the relevant Section, in addition to the other termination provisions in this Agreement, this Agreement shall terminate, and have no further force and effect, when the Company shall consummate a transaction or series of transactions deemed to be a liquidation, dissolution or winding up of the Company pursuant to the Company’s Memorandum and Articles, as such Memorandum and Articles may be amended from time to time, or if the Purchaser or its affiliates no longer hold any Series A shares and/or Ordinary Shares issued upon conversion of the Series A Shares.

 

10.4.                     Notices.  Except as may be otherwise provided herein, any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); (iii) one (1) Business Day after deposit with an internationally recognized overnight courier service; or (iv) when sent by confirmed electronic mail if sent during normal business hours of the recipient, or if not, then on the next Business Day, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

 

27

 

	
If to the Company:
    
	
 
    
	
 
    	
AutoNavi Holdings Limited
    
	
 
    	
Address:
    	
 
    	
16/F, Section A, Focus Square
    
	
 
    	
 
    	
 
    	
No. 6, Futong East Avenue, Wangjing
    
	
 
    	
 
    	
 
    	
Chaoyang District, Beijing 100102
    
	
 
    	
 
    	
 
    	
People’s Republic of China
    
	
 
    	
Telephone: 
    	
 
    	
86 10 8410-7000
    
	
 
    	
Email: 
    	
 
    	
Catherine.zhang@autonavi.com
    
	
 
    	
Facsimile: 
    	
 
    	
86 10 8410-7777
    
	
 
    	
Attention: 
    	
 
    	
Ms. Catherine Qin Zhang
    
	
 
    	
 
    	
 
    	
 
    
	
with a copy (for   informational purposes only) to:
    
	
 
    	
 
    	
 
    
	
 
    	
Skadden, Arps, Slate, Meagher & Flom
    
	
 
    	
Address: 
    	
 
    	
42/F, Edinburgh Tower, The Landmark
    
	
 
    	
 
    	
 
    	
15 Queen’s Road Central
    
	
 
    	
 
    	
 
    	
Hong Kong
    
	
 
    	
Telephone: 
    	
 
    	
(852) 3740-4700
    
	
 
    	
Email: 
    	
 
    	
Julie.gao@skadden.com
    
	
 
    	
Attention: 
    	
 
    	
Z. Julie Gao, Esq.
    
	
 
    	
 
    	
 
    
	
If to the Purchaser:
    
	
 
    	
 
    	
 
    
	
 
    	
Ali ET Investment Holding Limited
    
	
 
    	
Address: 
    	
 
    	
26/F, Tower One, Times Square
    
	
 
    	
 
    	
 
    	
1 Matheson Street, Causeway Bay
    
	
 
    	
 
    	
 
    	
Hong Kong
    
	
 
    	
Telephone: 
    	
 
    	
(852) 2215 5100
    
	
 
    	
Email: 
    	
 
    	
joe@hk.alibaba-inc.com / tim.steinert@hk.alibaba-inc.com
    
	
 
    	
Facsimile: 
    	
 
    	
(852) 2215 5200
    
	
 
    	
Attention: 
    	
 
    	
Mr. Joseph Tsai / Mr. Tim Steinert
    
	
 
    	
 
    	
 
    
	
with a copy (for   informational purposes only) to:
    
	
 
    	
 
    	
 
    
	
 
    	
Sheppard Mullin Richter & Hampton LLP
    
	
 
    	
Address: 
    	
 
    	
26th Floor, Wheelock Square
    
	
 
    	
 
    	
 
    	
1717 Nanjing Road West
    
	
 
    	
 
    	
 
    	
Jing An District
    
	
 
    	
 
    	
 
    	
Shanghai 200040, China
    
	
 
    	
Telephone: 
    	
 
    	
+8621 2321 6000
    
	
 
    	
Email: 
    	
 
    	
dwilliams@sheppardmullin.com /
    
	
 
    	
 
    	
 
    	
jmercer@sheppardmullin.com
    
	
 
    	
Facsimile: 
    	
 
    	
+8621 2321 6001
    
	
 
    	
Attention: 
    	
 
    	
Don Williams, Esq. / Jamie Mercer, Esq.
    

 

28

 

A party may change or supplement the addresses given above, or designate additional addresses, for purposes of this Section 10.4 by giving the other party written notice of the new address in the manner set forth above.

 

10.5.                     Entire Agreement.  This Agreement and the other Transaction Documents, together with all the exhibits hereto and thereto, constitute and contain the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes any and all prior negotiations, correspondence, agreements, understandings, duties or obligations between the parties respecting the subject matter hereof.

 

10.6.                     Governing Law; Dispute Resolution.  This Agreement shall be governed in all respects by the laws of the State of New York, without regard to principles of conflict of laws thereunder. The dispute resolution mechanism as set forth in Section 9(d) of the Investment Agreement shall be incorporated by reference herein as if written in their entirety herein.

 

10.7.                     Severability.  If any provision of this Agreement is found to be invalid or unenforceable, then such provision shall be construed, to the extent feasible, so as to render the provision enforceable and to provide for the consummation of the transactions contemplated hereby on substantially the same terms as originally set forth herein, and if no feasible interpretation would save such provision, it shall be severed from the remainder of this Agreement, which shall remain in full force and effect unless the severed provision is essential to the rights or benefits intended by the parties. In such event, the parties shall use commercially reasonable efforts to negotiate, in good faith, a substitute, valid and enforceable provision or agreement, which most nearly effects the parties’ intent in entering into this Agreement.

 

10.8.                     Third Parties.  Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their permitted successors and assigns, any rights or remedies under or by reason of this Agreement.

 

10.9.                     Successors and Assigns.  Subject to the provisions of Section 9.1, the provisions of this Agreement shall inure to the benefit of, and shall be binding upon, the successors and permitted assigns of the parties hereto. Except as otherwise provided herein, neither this Agreement nor any of the rights, interests, or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties; provided, however, that the Purchaser may assign any of its rights, interests, or obligations hereunder to an Affiliate of the Purchaser without the prior written consent of the other parties in its sole discretion.

 

29

 

10.10.              Interpretation; Captions.  When a reference is made in this Agreement to an Article, Section or Exhibit, such reference shall be to an Article or Section of, or an Exhibit to, this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,” “includes,” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein,” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word “or” shall not be exclusive. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Except as specifically stated herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. Except as otherwise specified herein, references to a Person are also to its permitted successors and assigns. Each of the parties has participated in the drafting and negotiation of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement must be construed as if it is drafted by all the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of authorship of any of the provisions of this Agreement.

 

10.11.              Counterparts.  This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. A facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature.

 

10.12.              Adjustments for Share Splits, Etc.  Wherever in this Agreement there is a reference to a specific number of shares of Series A Shares or Ordinary Shares of the Company, then, upon the occurrence of any subdivision, combination or share dividend of the Series A Shares or Ordinary Shares, the specific number of shares so referenced in this Agreement shall automatically be proportionally adjusted to reflect the effect on the outstanding shares of such class or series of shares by such subdivision, combination or share dividend.

 

10.13.              Aggregation of Shares.  All Series A Shares or Ordinary Shares held or acquired by the Purchaser and/or its Affiliates shall be aggregated together for the purpose of determining the availability of any Purchaser rights under this Agreement.

 

10.14.              Investor’s Rights Agreement to Control.  If, and to the extent that, there are inconsistencies between the provisions of this Agreement and those of the Memorandum and Articles, the terms of this Agreement shall control to the extent permissible under any applicable law. The parties agree to take all actions necessary or advisable, as promptly as practicable after the discovery of such inconsistency, to amend the Memorandum and Articles so as to eliminate such inconsistency to the extent permissible under any applicable law.

 

10.15.              Specific Performance.  The parties hereto acknowledge and agree irreparable harm may occur for which money damages would not be an adequate remedy in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties to this Agreement shall be entitled to injunction to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement.

 

— REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK —

 

30

 

IN WITNESS WHEREOF, the parties have caused their respective duly authorized representatives to execute this Agreement as of the date and year first above written.

 

 

	
COMPANY: 
    	
AUTONAVI HOLDINGS LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Congwu Cheng
    
	
 
    	
Name: 
    	
Congwu Cheng
    
	
 
    	
Title: 
    	
Chief Executive Officer
    

 

Signature Page to Investor’s Rights Agreement

 

 

IN WITNESS WHEREOF, the parties have caused their respective duly authorized representatives to execute this Agreement as of the date and year first above written.

 

 

	
FOUNDER ENTITY: 
    	
DOUBLE88 CAPITAL LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Congwu Cheng
    
	
 
    	
Name: Congwu Cheng
    
	
 
    	
Title: Director
    
	
 
    	
 
    
	
FOUNDER ENTITY: 
    	
PROGRESS ASIA HOLDINGS LIMITED
    
	
 
    	
 
    
	
 
    	
By: 
    	
 
    
	
 
    	
Name: Derong Jiang
    
	
 
    	
Title: Director
    

 

Signature Page to Investor’s Rights Agreement

 

 

IN WITNESS WHEREOF, the parties have caused their respective duly authorized representatives to execute this Agreement as of the date and year first above written.

 

 

	
FOUNDER ENTITY: 
    	
DOUBLE88 CAPITAL LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
 
    
	
 
    	
Name: Congwu Cheng
    
	
 
    	
Title: Director
    
	
 
    	
 
    
	
FOUNDER ENTITY: 
    	
PROGRESS ASIA HOLDINGS LIMITED
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Derong Jiang
    
	
 
    	
Name: Derong Jiang
    
	
 
    	
Title: Director
    

 

Signature Page to Investor’s Rights Agreement

 

 

IN WITNESS WHEREOF, the parties have caused their respective duly authorized representatives to execute this Agreement as of the date and year first above written.

 

 

	
FOUNDERS: 
    	
CHENG CONGWU
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Cheng Congwu
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JIANG DERONG
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TANG XIYONG
    
	
 
    	
 
    
	
 
    	
 
    

 

Signature Page to Investor’s Rights Agreement

 

 

IN WITNESS WHEREOF, the parties have caused their respective duly authorized representatives to execute this Agreement as of the date and year first above written.

 

 

	
FOUNDERS: 
    	
CHENG CONGWU
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JIANG DERONG
    
	
 
    	
 
    
	
 
    	
/s/ Jiang Derong
    
	
 
    	
 
    
	
 
    	
TANG XIYONG
    
	
 
    	
 
    
	
 
    	
 
    

 

Signature Page to Investor’s Rights Agreement

 

 

IN WITNESS WHEREOF, the parties have caused their respective duly authorized representatives to execute this Agreement as of the date and year first above written.

 

 

	
FOUNDERS: 
    	
CHENG CONGWU
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JIANG DERONG
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TANG XIYONG
    
	
 
    	
 
    
	
 
    	
/s/ Tang Xiyong
    

 

Signature Page to Investor’s Rights Agreement

 

 

IN WITNESS WHEREOF, the parties have caused their respective duly authorized representatives to execute this Agreement as of the date and year first above written.

 

 

	
PURCHASER: 
    	
ALI ET INVESTMENT HOLDING LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Joseph C. Tsai
    
	
 
    	
Name: Joseph C. Tsai
    
	
 
    	
Title: Authorized Signatory
    

 

Signature Page to Investor’s Rights Agreement

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