Document:

Exhibit 10.2

 

EXECUTION VERSION

 

STANDSTILL AGREEMENT

 

This STANDSTILL AGREEMENT is made and entered into as of April 22, 2016 (the “Agreement”) by and among Guidance Software, Inc., a Delaware corporation (the “Company”), and Michael J. McConnell (the “Investor”).  The Company and the Investor are referred to herein as the “Parties.”

 

WHEREAS, the Investorbeneficially owns the number of shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) listed on Exhibit A hereto;

 

WHEREAS, on March 30, 2016, the Company filed a definitive proxy statement with the Securities and Exchange Commission (the “SEC”) nominating and recommending for election six director candidates (the “Company Proxy Statement”) for election to the Company’s Board of Directors (the “Board”) at the Company’s 2016 annual meeting of stockholders (including any adjournment thereof, the “2016 Annual Meeting”); and

 

WHEREAS, on March 30, 2016, Shawn H. McCreight, John P. Colbert, Jonathan R. Mather, Michael J. McConnell and Roberto Medrano filed a definitive proxy statement with the SEC nominating and recommending for election five director candidates (the “McCreight Proxy Statement”) for election to the Board at the 2016 Annual Meeting.

 

WHEREAS, the Company and the Investor have reached an agreement with respect to certain matters related to the 2016 Annual Meeting, including the Company Proxy Statement and the McCreight Proxy Statement and certain other matters, as provided in this Agreement.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

 

Section 1.        Standstill.

 

(a)        The Investor agrees that, from the date of this Agreement until the expiration of the Standstill Period, neither it nor any of its Affiliates or Associates will, and it will cause each of its Affiliates and Associates not to, directly or indirectly, in any manner, acting alone or in concert with others:

 

(i)         submit any shareholder proposal (pursuant to Rule 14a-8 promulgated by the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise) or any notice of nomination or other business for consideration, or nominate any candidate for election to the Board (including by way of Rule 14a-11 of Regulation 14A), other than as expressly permitted by this Agreement;

 

(ii)        engage in, directly or indirectly, any “solicitation” (as defined in Rule 14a-1 of Regulation 14A) of proxies (or written consents) or otherwise become a “participant in a solicitation” (as such term is defined in Instruction 3 of Schedule 14A of

 

 

Regulation 14A under the Exchange Act) in opposition to the recommendation or proposal of the Board, or recommend or request or induce or attempt to induce any other person to take any such actions, or seek to advise, encourage or influence any other person with respect to the voting of the Common Stock (including any withholding from voting) or grant a proxy with respect to the voting of the Common Stock or other voting securities to any person other than to the Board or persons appointed as proxies by the Board;

 

(iii)       seek to call, or to request the call of, a special meeting of the Company’s stockholders, or make a request for a list of the Company’s stockholders or for any books and records of the Company;

 

(iv)       form, join in or in any other way participate in a “partnership, limited partnership, syndicate or other group” within the meaning of Section 13(d)(3) of the Exchange Act with respect to the Common Stock or deposit any shares of Common Stock in a voting trust or similar arrangement or subject any shares of Common Stock to any voting agreement or pooling arrangement, other to the extent such a group may be deemed to result with the Company or any of its Affiliates of Associates as a result of this Agreement;

 

(v)        vote for any nominee or nominees for election to the Board, other than those nominated or supported by the Board;

 

(vi)       seek to place a representative or other Affiliate, Associate or nominee on the Board or seek the removal of any member of the Board or a change in the size or composition of the Board;

 

(vii)      other than at the direction of the Board, seek, propose, or make any statement, in each case publicly, with respect to, or solicit, negotiate with, or provide any information to any person, in each case publicly, with respect to, a merger, consolidation, acquisition of control or other business combination, tender or exchange offer, purchase, sale or transfer of assets or securities, dissolution, liquidation, reorganization, change in structure or composition of the Board, change in the executive officers of the Company, change in capital structure, recapitalization, dividend, share repurchase or similar transaction involving the Company, its subsidiaries or its business, whether or not any such transaction involves a change of control of the Company;

 

(viii)     acquire, announce an intention to acquire, offer or propose to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, beneficial ownership of any (A) interests in any of the Company’s indebtedness or (B) Common Stock of the Company representing in the aggregate (amongst the Investor and its Affiliates and Associates) in excess of 1.0% of the Company’s outstanding Common Stock; provided, however, nothing herein shall prevent the Investor from confidentially seeking a waiver to acquire in excess of 1.0% of the Company’s outstanding Common Stock;

 

(ix)       commence, encourage or support any derivative action in the name of the Company or any class action or other litigation against the Company with respect to any facts or events occurring or arising prior to the date hereof or relating to any potential strategic transactions pursued by the Company;

 

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(x)        disclose publicly, or privately in a manner that could reasonably be expected to become public, any intention, plan or arrangement inconsistent with the foregoing;

 

(xi)       take any action challenging the validity or enforceability of any provisions of this Section 1; or

 

(xii)      enter into any agreement, arrangement or understanding concerning any of the foregoing (other than this Agreement) or encourage or solicit any person to undertake any of the foregoing activities.

 

Notwithstanding anything to the contrary in this Agreement, including this Section 1, nothing in this Agreement shall be deemed to prohibit the Investor from (A) voting for or against (1) any acquisition of any material assets or businesses of the Company or any of its subsidiaries, (2) any tender offer or exchange offer, merger, acquisition or other business combination involving the Company or any of its subsidiaries, or (3) any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company or any of its subsidiaries, (B) communicating privately with the Board or the Chief Executive Officer of the Company regarding any matter, (C) making any public statement or announcement with respect to a transaction as described in clause (A) of this paragraph proposed by the Company that requires a vote of the stockholders and that is publicly announced by the Company after the date of this Agreement, or (D) voting for or against any matter requiring shareholder approval other than with respect to the election of directors nominated by the Board.

 

(b)        As used in this Agreement:

 

(i)         the terms “Affiliate” and “Associate” shall have the respective meanings set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act;

 

(ii)        the terms “beneficial owner” and “beneficial ownership” shall have the same meanings as set forth in Rule 13d-3 promulgated by the SEC under the Exchange Act;

 

(iii)       the terms “person” or “persons” shall mean any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature; and

 

(iv)       the term “Standstill Period” shall mean the period commencing on the date of this Agreement, and ending on the commencement of the director nomination window for the 2018 Annual Meeting.

 

Section 2.        Representations and Warranties of the Company.  The Company represents and warrants to the Investor that (a) the Company has the corporate power and authority to execute the Agreement and to bind it thereto, (b) this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding obligation and agreement of the Company, and is enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles and (c) the execution, delivery and performance of this Agreement by the Company does not and will not

 

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violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to it, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, or any material agreement, contract, commitment, understanding or arrangement to which the Company is a party or by which it is bound.

 

Section 3.        Representations and Warranties of the Investor.  The Investor represents and warrants to the Company that (a) as of the date hereof, the Investor beneficially owns only the number of shares of Common Stock as described opposite its name on Exhibit A and Exhibit A includes all Affiliates of the Investor that own any securities of the Company beneficially or of record, (b) this Agreement has been duly and validly authorized, executed and delivered by the Investor, and constitutes a valid and binding obligation and agreement of the Investor, enforceable against the Investor in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles, (c) the Investor has the authority to execute the Agreement on behalf of itself and the applicable Investor associated with that signatory’s name, and to bind the Investor to the terms hereof and (d) the execution, delivery and performance of this Agreement by the Investor does not and will not violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to it, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which such member is a party or by which it is bound.

 

Section 4.        Specific Performance.  The Investor, on the one hand, and the Company, on the other hand, acknowledges and agrees that irreparable injury to the other Party hereto may occur in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached and that such injury would not be adequately compensable in monetary damages.  It is accordingly agreed that the Investor, on the one hand, and the Company, on the other hand (the “Moving Party”), shall each be entitled to specific enforcement of, and injunctive or other equitable relief to prevent any violation of, the terms hereof, and the other party hereto will not take action, directly or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any other remedy or relief is available.

 

Section 5.        Notice.  Any notices, consents, determinations, 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); or (iii) one (1) business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

 

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To the Company:

 

	
Guidance   Software, Inc.
    
	
1055 E. Colorado   Blvd.
    
	
Pasadena, CA
    
	
Fax:
    	
(626) 316-5922
    
	
Attn:
    	
Alfredo Gomez, General Counsel
    
	
 
    
	
with a copy to   (which shall not constitute notice):
    
	
 
    
	
Latham &   Watkins LLP
    
	
350 South Grand   Avenue
    
	
Los Angeles, CA 90017
    
	
E-mail:   julian.kleindorfer@lw.com
    
	
Attention: Julian   Kleindorfer
    

 

To the Investor:

 

	
c/o   Morrison & Foerster
    
	
425   Market Street
    
	
San   Francisco, CA 94105
    
	
Fax:   (415)268-7522
    
	
Attn:   Murray Indick, Esq.
    

 

 

Section 6.        Governing Law.  This Agreement shall be governed by, and construed in accordance with, the Law of the State of Delaware, without regard to conflict of law principles thereof.

 

Section 7.        Exclusive Jurisdiction.  Each Party to this Agreement (i) irrevocably and unconditionally submits to the personal jurisdiction of the state courts of the State of Delaware and the federal courts of the United States of America located in the State of Delaware, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) agrees that any actions or proceedings arising in connection with this Agreement or the transactions contemplated by this Agreement shall be brought, tried and determined only in the state and federal courts for or in the State of Delaware, (iv) waives any claim of improper venue or any claim that those courts are an inconvenient forum and (v) agrees that it will not bring any action relating to this Agreement or the transactions contemplated hereunder in any court other than as specified in clause (iii) of this Section 7.

 

Section 8.        Waiver of Jury Trial.  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT

 

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OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED AND UNDERSTANDS THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.

 

Section 9.        Receipt of Adequate Information; No Reliance; Representation by Counsel.  Each Party acknowledges that it has received adequate information to enter into this Agreement, that is has not relied on any promise, representation or warranty, express or implied not contained in this Agreement and that it has been represented by counsel in connection with this Agreement.  Accordingly, any rule of law or any legal decision that would provide any party with a defense to the enforcement of the terms of this Agreement against such party shall have no application and is expressly waived.  The provisions of the Agreement shall be interpreted in a reasonable manner to effect the intent of the Parties.

 

Section 10.      Severability.  If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree shall remain in full force and effect to the extent not held invalid or unenforceable.  The Parties further agree to replace such invalid or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the purposes of such invalid or unenforceable provision.

 

Section 11.      Entire Agreement.  This Agreement constitutes the entire agreement among the parties relating to the matters contemplated hereby and supersede any other agreements, whether written or oral, that may have been made or entered into by or among any of the parties hereto or any of their respective Affiliates relating to the matters contemplated hereby.  No representations, warranties, covenants, understandings, agreements, oral or otherwise, relating to the matters contemplated by this Agreement exist between the parties except as expressly set forth in this Agreement.

 

Section 12.      Amendment.  This Agreement may be modified, amended or otherwise changed only in a writing signed by all of the Parties.

 

Section 13.      Successors and Assigns; No Third Party Beneficiaries.  This Agreement shall bind the successors and permitted assigns of the Parties, and inure to the benefit of any successor or permitted assign of any of the parties; provided, however, that no party may assign this Agreement without the prior written consent of the other Parties.  No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations, or liabilities hereunder upon any person other than the Parties hereto and their respective successors and assigns.

 

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Section 14.      Counterparts.  This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective when each Party hereto shall have received a counterpart hereof signed by the other Parties hereto.  Counterparts delivered by electronic transmission shall be deemed to be originally signed counterparts.

 

(Signature page follows)

 

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IN WITNESS WHEREOF, the Parties hereto have duly executed and delivered this Agreement as of the date first above written.

 

	
 
    	
GUIDANCE   SOFTWARE, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Patrick Dennis
    
	
 
    	
Name:   Patrick Dennis
    
	
 
    	
Title:   CEO
    

 

 

INVESTOR:

 

 

	
 
    	
MICHAEL   J. MCCONNELL
    
	
 
    	
 
    
	
 
    	
/s/   Michael J. McConnell
    

 

 

EXHIBIT A

 

	
Investor
    	
 
    	
Shares of Common Stock
   Beneficially Owned
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Michael   J. McConnell
    	
 
    	
45,000Exhibit 4.7

 

TECHNICAL CONSULTING AND SERVICES AGREEMENT

 

This Technical Consulting and Services Agreement (this “Agreement”) is entered into in Shanghai, the People’s Republic of China (“PRC”) as of __________ by and between the following parties:

 

(1)                                 Party A: ______________________________
 Address: ______________________________; and

 

(2)                                 Party B: ______________________________
 Address: ______________________________

 

WHEREAS

 

(1)                                 Party A is a wholly foreign owned enterprise duly incorporated and validly existing under the PRC laws, having the relevant resources to provide Party B with the technical consulting and services.

 

(2)                                 Party B is a limited liability company duly incorporated and validly existing under the PRC laws.

 

(3)                                 Party B intends to entrust Party A, and Party A agrees to accept Party B’s entrustment, to provide exclusive technical consulting and related services to Party B by utilizing Party A’s strengths in human resources, technology and information during the term of this Agreement. Party B agrees to only accept such technical consulting and services provided by Party A.

 

NOW, THEREFORE, Upon mutual consultation, the Parties hereby agree as follows:

 

1.                                Exclusive Consulting and Service; Sole and Exclusive Rights and Interests

 

1.1                         During the term of this Agreement, Party A agrees to provide Party B with relevant technical consulting and services (see details in Exhibit 1 attached hereto) as Party B’s exclusive consulting and services provider subject to the terms and conditions hereof.

 

1.2                         During the term of this Agreement, Party B agrees to hereby irrevocably appoint and designate Party A as its exclusive technical consulting and services provider and agrees to accept the technical consulting and services provided by Party A. Party B further agrees that during the term hereof, it will not accept from any third party, directly or indirectly, any other technical consulting and services the same as or similar to those provided hereunder, nor will Party B enter into any similar service agreement with any third party, unless otherwise agreed by Party A in writing in advance.

 

 

1.3                               Party A shall enjoy sole and exclusive rights and interests in any and all rights, ownership, interests and intellectual property rights arising from the performance of this Agreement, including but not limited to copyrights, patent rights, technical know-how, trade secrets, etc., whether developed by Party A or Party B based on Party A’s intellectual property rights. Unless otherwise expressly provided herein, Party B shall have no rights to each of the foregoing.

 

1.4                               Party A has the right to designate and appoint, at its sole discretion, any of its Affiliates to provide any service set forth herein without obtaining any form of consents or confirmations from Party B. The “Affiliates” referred to in this paragraph shall include, without limitation, __________________________________________________________.

 

2.                                Calculation and Payment of the Consulting and Service Fee

 

2.1                               The Parties agree that the consulting and service fees (hereinafter referred to as the “Service Fees”) hereunder shall be determined based upon the services rendered by Party A as entrusted, and Party A may, at its sole reasonable discretion, decide the amount and payment method of the Service Fees payable by Party B. The calculation and payment method of the Service Fees are set out in Exhibit 2 attached hereto.

 

2.2                               If at any time throughout the existence of this Agreement, Party A decides, at its own reasonable judgment, to adjust the calculation and payment method of the Service Fees for any reason whatsoever, it has the right to notify Party B of such adjustment with a five (5) days’ prior written notice without any need to obtain Party B’s consent.

 

3.                                Representations and Warranties

 

3.1                               Party A hereby represents and warrants that:

 

(1)                                 it is a wholly foreign-owned enterprise duly incorporated and validly existing under the laws of the PRC;

 

(2)                                 it executes and performs this Agreement within the scope of its corporate power and business; it has obtained necessary corporate action and appropriate authorization and necessary consent and approvals from third parties and government agency, and its execution and performance of this Agreement will not constitute a breach of any restrictions by laws or contracts by which it is bound or affected; and

 

(3)                                 This Agreement, once executed, constitutes its lawful, effective and binding obligation, which may be enforced pursuant to the terms hereof.

 

3.2                               Party B hereby represents and warrants that:

 

(1)                                 it is a limited liability company duly incorporated and validly existing under the laws of the PRC;

 

 

(2)                                 it executes and performs this Agreement within the scope of its corporate power and business; it has obtained necessary corporate action and appropriate authorization and necessary consent and approvals from third parties and government agency, and its execution and performance of this Agreement will not constitute a breach of any restrictions by laws or contracts by which it is bound or affected; and

 

(3)                                 This Agreement, once executed, constitutes its lawful, effective and binding obligation, which may be enforced pursuant to the terms hereof.

 

4.                                Confidentiality

 

4.1                               Both Parties acknowledge and confirm that any oral or written materials exchanged by and between the Parties in connection with this Agreement are confidential (the “Confidential Information”). Both Parties shall keep secret of all Confidential Information and not disclose, offer or transfer any such documents to any third party without prior written consent from the other Party, except for such information: (a) as are known or will be known by the public (except by disclosure of the receiving party without authorization); (b) as are required to be disclosed in accordance with applicable laws or stock exchange rules or regulations; or (c) as are required to be disclosed by any Party to its legal counsel or financial consultant for the purpose of the transaction of this Agreement, provided that such legal counsel or financial consultant shall also be subject to the confidentiality obligation similar to that stated hereof. Any disclosure by employees or agencies employed by any Party shall be deemed the disclosure of such Party and such Party shall assume the liabilities for its breach of contract pursuant to this Agreement.

 

4.2                               Party B further agrees to try its best to take various reasonable measures to keep secret of Party A’s Confidential Information that it may be aware of or have access to due to its acceptance of Party A’s exclusive technical consulting and services. Upon termination of this Agreement, Party B shall, upon Party A’s request, either return to Party A or destroy by itself all the documents, materials or software containing the Confidential Information and shall delete any such Confidential Information from all the relevant memory devices and cease to use such Confidential Information.

 

4.3                               Both Parties agree that this Article 4 shall survive even if this Agreement is amended, cancelled, terminated or held impractical.

 

5.                                Party A’s Financial Support

 

To ensure that the cash flow requirements with regard to the business operations of Party B are met and/or to set off loss accrued during such operations, Party A agrees that it shall, to the extent permitted under PRC law, either by itself or through its designated party, provide financial support to Party B, including without limitation, in the form of entrusted bank loans.

 

 

6.                                Compensation Liability for Breach of Contract

 

6.1                               If either party (“Defaulting Party”) breaches any provision of this Agreement, which causes damage to the other Party (“Non-defaulting Party”), the Non-defaulting Party may notify the Defaulting Party in writing and request it to immediately rectify and correct such breach of contract; if the Defaulting Party fails to take any action satisfactory to the Non-defaulting Party to rectify and correct such breach within fifteen (15) working days upon the issuance of the written notice by the Non-defaulting Party, the Non-defaulting Party may promptly take actions provided in this Agreement or take other remedies in accordance with laws.

 

6.2                               Party B further agrees to indemnify and hold Party A harmless from any losses, damage, obligations and expenses incurred or arising from the contents of the technical consulting and services that Party B requires Party A to provide, or resulting from any litigations, claims or other requests filed against Party A.

 

6.3                               Both Parties agree that this Article 6 shall survive even if this Agreement is amended, cancelled, terminated or held impractical.

 

7.                                Effectiveness and Term

 

7.1                               This Agreement shall be executed and take effect as of the date first written above. The term of this Agreement is ten (10) years unless early termination occurs in accordance with relevant provisions herein.

 

7.2                               This Agreement may be automatically extended for another ten (10) years upon its expiry, and may be extended for unlimited number of times thereafter, unless Party A notifies Party B in writing of its disagreement with the extension. Party B may not veto the extension of the term of this Agreement.

 

8.                                Termination

 

8.1                               Termination. This Agreement shall remain valid, unless Party A disapproves the extension of the term hereof pursuant to Article 7.2 above or this Agreement is early terminated pursuant to Article 8.2 below.

 

8.2                               Early Termination.

 

(1)                                 During the term hereof, in no event shall Party B terminate this Agreement earlier, unless Party A commits gross negligence, fraud or other illegal action, or goes bankrupt. Notwithstanding the foregoing, Party A shall have the right to terminate this Agreement at any time by issuing a thirty (30) days’ prior written notice to Party B.

 

(2)                                 During the term hereof, if Party B breaches this Agreement, Party A may terminate this Agreement by serving a written notice to Party B if Party B fails to correct its breach within fifteen (15) days upon its receipt of the written notice from Party A specifying the breach.

 

 

(3)                                 If during the term provided in Article 7.1 and 7.2 above, the operating term of either Party (including any extension thereof) expires or is otherwise terminated, this Agreement shall terminate upon the termination of such Party, unless such Party has transferred its rights and obligations hereunder according to Article 11 hereof.

 

8.3                               Survival. After the termination of this Agreement, the respective rights and obligations of the Parties under Articles 4, 6 and 14 shall nonetheless remain valid.

 

9.                                Force Majeure

 

9.1                               An “Force Majeure Event” shall mean any event beyond the reasonable anticipation and control of a Party so affected, which are unavoidable even if the affected Party takes a reasonable care, including but not limited to governmental acts, Act of God, fires, explosion, storms, floods, earthquakes, tides, lightning or wars. However, any shortage of credits, funds or financing shall not be deemed as the events beyond reasonable control of the affected Party. The affected Party shall forthwith inform the other Party of the details concerning the exemption of liabilities and the steps that need to be taken to complete discharging such liabilities.

 

9.2                               In the event that the performance of this Agreement is delayed or interrupted due to the said Force Majeure Event, the affected Party shall be excused from any liability hereunder to the extent of the delayed or interrupted performance, provided, however, that the affected Party shall take appropriate measures to minimize or eliminate the adverse impacts therefrom and strive to resume the performance of this Agreement so delayed or interrupted. The Parties agree to use their best efforts to continue the performance of this Agreement once the said Force Majeure Event disappears.

 

10.                         Notices

 

Notices or other communications required to be given by any Party pursuant to this Agreement shall be written in Chinese or English and delivered personally or sent by registered mail, postage prepaid mail, express delivery or facsimile transmission to the addresses of the other Parties set forth below, or to other designated addresses notified by such other Parties to such Party from time to time, or the addresses of other persons designated by such Party. A notice is deemed to be duly served: (a) if delivered personally, upon the delivery; (b) if sent by mail, on the tenth (10th) day after the date when the air registered mail with postage prepaid has been sent out (as is shown on the postmark), or the fourth (4th) day after delivered to the courier service agency; and (c) if sent by facsimile transmission, upon the receipt time as is shown on the transmission confirmation of relevant documents.

 

 

If to Party A: _______________________________

Attn: ____________
 Address: ________________________________
 Phone:          (___) ____________
 Fax:                       (___) ____________

 

If to Party B: _______________________________
 Address: ________________________________
 Phone:          (___) __________
 Fax:                       (___) __________

 

11.                         Assignment

 

11.1                        Party B shall not assign its rights and obligations under this Agreement to any third party without prior written consent from Party A.

 

11.2                        Party B hereby agrees that Party A may assign its rights and obligations under this Agreement as Party A may decide at its sole discretion, and such assignment shall only be subject to a written notice sent to Party B, without subject to its consent. When and as requested by Party A, Party B shall execute with the assignee a supplementary agreement or an agreement substantially the same as this Agreement.

 

12.                         Entire Agreement and Severability

 

12.1                        The Parties confirm that this Agreement shall, upon its effectiveness, constitute the entire agreement and common understanding of the Parties with respect to the contents herein and fully supersede all prior verbal and/or written agreements and understandings between the Parties with respect to the contents herein.

 

12.2                        If any one or more provisions of this Agreement is identified or judged by a court of competent jurisdiction or arbitration authority as void, invalid or unenforceable in any respect according to any laws or regulations, the validity, legality and enforceability of the other provisions hereof shall not be affected or impaired in any way. The Parties shall cease performing such void, invalid or unenforceable provisions and revise those void, invalid or unenforceable provisions only to the extent closest to the original intention thereof to recover its validity or enforceability for such specific facts and circumstances.

 

13.                         Amendment and Supplement to Agreement

 

Any amendment and supplement to this Agreement shall be made in writing by the Parties. Any agreements on such amendment and supplement duly executed by both Parties shall be deemed as a part of this Agreement and shall have the same legal effect as this Agreement.

 

14.                         Governing Law and Dispute Resolution

 

14.1                        The formation, validity, interpretation, performance and termination of this Agreement and the amendment hereto as well as the resolution of any disputes arising hereunder shall be governed by the PRC laws.

 

 

14.2                        Any disputes arising from the interpretation and performance of this Agreement shall first be resolved through friendly consultation among the Parties. In case no settlement can be reached through consultation within thirty (30) days after the request for consultation is made by any Party with a written notice, any Party can submit such disputes to Shanghai International Economic and Trade Arbitration Commission for arbitration in accordance with its then effective rules. The arbitration shall take place in Shanghai. The arbitration proceedings shall be conducted in Chinese. The arbitration award shall be final and binding upon both Parties.

 

14.3                        If any dispute arises from the interpretation and performance of this Agreement or any dispute is under arbitration, the Parties shall continue to perform their respective rights and obligations hereunder other than those in dispute.

 

15.                         Miscellaneous

 

15.1                        The headings contained in this Agreement are for the convenience of reference only and shall not be used to interpret, explain or otherwise affect the meaning of the provisions of this Agreement.

 

15.2                        The Parties agree to promptly execute such documents, or take such further actions, as are reasonably necessary or beneficial for performing the provisions or achieving the purposes hereof.

 

15.3                        Any Party’s failure to exercise the rights under this Agreement in time shall not be deemed as its waiver of such rights and would not affect its future exercise of such rights.

 

15.4                        Any obligations that are incurred or become due arising from this Agreement by the expiry or early termination of this Agreement shall survive the expiry or termination of this Agreement.

 

15.5                        The exhibits attached hereto shall constitute a component of this Agreement and shall be equally binding as this Agreement.

 

15.6                        This Agreement is written in Chinese and executed with two (2) originals with the same legal effect.

 

IN WITNESS WHEREOF, this Agreement has been duly executed by the Parties or their respective authorized representatives on the date first above written.

 

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[This page is execution page]

 

	
Party   A:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Signature:
    	
 
    	
 
    
	
Authorized representative:
    	
 
    	
 
    
	
(stamp)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Party   B:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Signature:
    	
 
    	
 
    
	
Authorized representative:
    	
 
    	
 
    
	
(stamp)
    	
 
    
								

 

 

 

 

 

 

Exhibit 1: List of Technical Consulting and Services

 

Subject to the terms and conditions of this Agreement, the Parties hereby agree and confirm that Party A will provide the following technical consulting and services to Party B:

 

(1)                                 webpage design and content creation for all of the existing and future websites of Party B (including without limitation www.ctrip.com);

 

(2)                                 research and development of the relevant technology required in connection with Party B’s business operations, including development, design and production of database software for information storage, customer interface software and other related technologies as well as granting license of such technology to Party B;

 

(3)                                 technology application and implementation for Party B’s business operations, including without limitation master design, installation, commissioning and trial operation of technical systems;

 

(4)                                 routine maintenance, monitor, commissioning and trouble shooting for Party B’s computer network equipment necessary for its business operations, including prompt input of user information to database, or prompt update of database and regular update of customer interface, as well as other related technical services;

 

(5)                                 consulting services for procurement of equipment, software and hardware systems necessary for business operations by Party B, including without limitation consulting and advising on selection, installation and commissioning of tool software, application software and technical platform, as well as the selection, type and function of complementary hardware facilities and equipment;

 

(6)                                 pre-work and on-work training and technical support and assistance for Party B’s employees, including without limitation providing appropriate raining for Party B and its employees on customer services or technologies, sharing knowledge and experience in installation and operation of systems and equipment, assisting to resolve any problem in connection with system and equipment installation and operation, consulting and advising on operation of any other web edition platform and software, and assisting to collect and compile information and contents;

 

(7)                                 technical consulting and response to enquiries raised by Party B relating to network equipment, technical products and software;

 

(8)                                 a certain level of staff support at Party B’s request, including without limitation temporarily sending and seconding relevant staff; and

 

(9)                                 any other services required by Party B for business operations.

 

 

Exhibit 2:                                        Calculation and Payment of Services Fee

 

Subject to the terms and conditions of this Agreement, the Parties hereby agree and confirm that the amount of the Service Fees shall be calculated and paid in the following way:

 

1.              The Service Fees hereunder shall be calculated on the basis of Party B’s revenue and its relevant operating cost, selling cost, management cost and such other costs, and may be charged:

 

(1)                                 at a percentage of Party B’s revenue;

 

(2)                                 at a fixed amount for the service items completed for Party B;

 

(3)                                 at a fixed amount of loyalty fee for specific software and patents; and/or

 

(4)         in such other manner as decided by Party A from time to time based on the nature of the service.

 

2.              Party A shall send to Party B a written confirmation about the Service Fees, and the amount of the Service Fees shall be determined after taking into account:

 

(1)                           difficulty of the technology and complexity of the services provided by Party A;

 

(2)                           time required by Party A’s employees to provide the services; and

 

(3)         contents and commercial value of the services, software or consulting provided by Party A; and/or

 

(4)         the benchmark price of the similar services on the market.

 

3.              Party A shall calculate the Service Fees and issue the corresponding invoices to Party B on a fixed period of time basis (monthly, quarterly and such other period as determined by Party A). Party B shall pay the Service Fees to the bank account designated by Party A.

 

4.              The Service Fees payable by Party B to Party A shall be subject to the payment notice sent by Party A to Party B.

 

 

Schedule A

 

The following schedule sets forth all other similar agreements the registrant entered into with each of its affiliated Chinese entities. Other than the information set forth below, there is no material difference between such other agreements and this exhibit.

 

	
VIE
    	
 
    	
Executing Parties
    	
 
    	
Execution Date
    
	
Shanghai Ctrip Commerce Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Network Technology (Shanghai)   Co., Ltd.
   Party B: Shanghai Ctrip Commerce Co., Ltd.
    	
 
    	
December 14, 2015
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Shanghai Huacheng Southwest International Travel   Agency Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Network Technology (Shanghai)   Co., Ltd.
   Party B: Shanghai Huacheng Southwest International Travel Agency   Co., Ltd.
    	
 
    	
December 14, 2015
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Beijing Ctrip International Travel Agency   Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Information Technology   (Shanghai) Co., Ltd.
   Party B: Beijing Ctrip International Travel Agency Co., Ltd.
    	
 
    	
December 14, 2015
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Shanghai Ctrip International Travel Agency   Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Information Technology   (Shanghai) Co., Ltd.
   Party B: Shanghai Ctrip International Travel Agency Co., Ltd.
    	
 
    	
February 26, 2016
    
	
 
    	
Party A: Wancheng (Shanghai) Travel Agency   Co., Ltd.
   Party B: Shanghai Ctrip International Travel Agency Co., Ltd.
    	
 
    	
February 26, 2016
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Shenzhen Ctrip International Travel Agency   Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Information Technology   (Shanghai) Co., Ltd.
   Party B: Shenzhen Ctrip International Travel Agency Co., Ltd.
    	
 
    	
December 14, 2015
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guangzhou Ctrip International Travel Agency   Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Information Technology   (Shanghai) Co., Ltd.
   Party B: Guangzhou Ctrip International Travel Agency Co., Ltd.
    	
 
    	
December 14, 2015
    

 

 

	
VIE
    	
 
    	
Executing Parties
    	
 
    	
Execution Date
    
	
Chengdu Ctrip Travel Agency Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Network Technology (Shanghai)   Co., Ltd.
   Party B: Chengdu Ctrip Travel Agency Co., Ltd.
    	
 
    	
December 14, 2015
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Chengdu Ctrip International Travel Agency   Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Information Technology   (Shanghai) Co., Ltd.
   Party B: Chengdu Ctrip International Travel Agency Co., Ltd.
    	
 
    	
December 14, 2015
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Hangzhou Ctrip Travel Agency Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Information Technology   (Shanghai) Co., Ltd.
   Party B: Hangzhou Ctrip Travel Agency Co., Ltd.
    	
 
    	
December 14, 2015
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Wuhan Ctrip International Travel Agency   Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Information Technology   (Shanghai) Co., Ltd.
   Party B: Wuhan Ctrip International Travel Agency Co., Ltd.
    	
 
    	
December 14, 2015
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Sanya Ctrip International Travel Agency   Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Information Technology   (Shanghai) Co., Ltd.
   Party B: Sanya Ctrip International Travel Agency Co., Ltd.
    	
 
    	
December 14, 2015
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Nantong Tongcheng Information Technology   Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Network Technology (Shanghai)   Co., Ltd.
   Party B: Nantong Tongcheng Information Technology Co., Ltd.
    	
 
    	
December 14, 2015
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Shanghai Souzhen Information Technology   Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Network Technology (Shanghai)   Co., Ltd.
   Party B: Shanghai Souzhen Information Technology Co., Ltd.
    	
 
    	
December 14, 2015
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Lijiang Ctrip Travel Agency Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Information Technology   (Shanghai) Co., Ltd.
   Party B: Lijiang Ctrip Travel Agency Co., Ltd.
    	
 
    	
December 14, 2015
    

 

 

	
VIE
    	
 
    	
Executing Parties
    	
 
    	
Execution Date
    
	
Shanghai Ctrip Intelligent Tourism Commerce   Consulting Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Information Technology   (Shanghai) Co., Ltd.
   Party B: Shanghai Ctrip Intelligent Tourism Commerce Consulting   Co., Ltd.
    	
 
    	
December 14, 2015
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ctrip Insurance Agency Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Network Technology (Shanghai)   Co., Ltd.
   Party B: Ctrip Insurance Agency Co., Ltd.
    	
 
    	
December 14, 2015
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Chongqing Ctrip Travel Agency Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Information Technology   (Shanghai) Co., Ltd.
   Party B: Chongqing Ctrip Travel Agency Co., Ltd.
    	
 
    	
December 14, 2015
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Nanjing Ctrip International Travel Agency   Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Information Technology   (Shanghai) Co., Ltd.
   Party B: Nanjing Ctrip International Travel Agency Co., Ltd.
    	
 
    	
December 14, 2015
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Shanghai Kehui Investment Consulting Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Network Technology (Shanghai)   Co., Ltd.
   Party B: Shanghai Kehui Investment Consulting Co., Ltd.
    	
 
    	
December 14, 2015
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Chengdu Tufeng International Travel Agency   Co., Ltd.
    	
 
    	
Party A: Chengdu Ctrip Travel Tufeng Technology   Co., Ltd.
   Party B: Chengdu Tufeng International Travel Agency Co., Ltd.
    	
 
    	
December 30, 2013
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Shanghai Jitu Information Technology Co., Ltd.
    	
 
    	
Party A: Ctrip Travel Network Technology (Shanghai)   Co., Ltd.
   Party B: Shanghai Jitu Information Technology Co., Ltd.
    	
 
    	
December 14, 2015

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