Document:

exhibit10-3.htm

Exhibit 10.3

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT ("Agreement") is made as of this 31st day of July, 2011, by and between
BUNDLED BUILDER SOLUTIONS, INC., a Delaware corporation (the "Company"), in favor of TCA GLOBAL CREDIT MASTER
FUND, LP, a Cayman Islands limited partnership (the "Secured Party").

 

RECITALS

 

WHEREAS, pursuant to a Securities Purchase Agreement dated of even date herewith between Dynamic Ventures Corp. ("Dynamic"), an Affiliate of the Company, and the Secured Party (the "Purchase Agreement"), Dynamic has agreed to issue to the Secured Party and the Secured Party has agreed to purchase from Dynamic certain senior secured redeemable debentures (the
"Debentures"), as more specifically set forth in the Purchase Agreement; and

 

WHEREAS, as an Affiliate of Dynamic, the Company will benefit from Secured Party's purchase of the Debentures; and

 

WHEREAS, as part of the transactions contemplated by the Purchase Agreement, the Company has executed and delivered to Secured Party a Guaranty of even date herewith (the "Guaranty"), pursuant to which the Company has agreed to guaranty payment and performance of the "Liabilities" (as such term is defined in the Guaranty),
as more specifically set forth in the Guaranty; and

 

WHEREAS, in order to induce the Secured Party to purchase the Debentures, the Company has agreed to execute and deliver to the Secured Party this Agreement for the benefit of the Secured Party and to grant to it a continuing, first priority security interest in certain property of the Company to secure the prompt payment, performance and discharge in full of the Company's obligations under the Guaranty and all of Dynamic's obligations under the Debentures, the Purchase Agreement and the other Transaction Documents;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties each intending to be legally bound, hereby do agree as follows:

 

1.  Recitals. The recitations set forth in the preamble of this Agreement are true and correct and incorporated herein by this reference.

 

2.  Construction and Definition of Terms.  In this Agreement, unless the express context
otherwise requires: (i) the words "herein," "hereof' and "hereunder" and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement; (ii) references to the words "Section" or "Subsection" refer to the respective Sections and Subsections of this Agreement, and references to "Exhibit" or "Schedule" refer to the respective Exhibits and Schedules attached hereto; (iii) wherever the word "include," "includes" or "including" is used in this Agreement, it will be deemed to be followed by the words "without limitation." All capitalized terms used in this Agreement that are defined in the Purchase Agreement or otherwise defined in Articles 8 or 9 of the Code shall have the meanings assigned to them in the Purchase Agreement or the Code, respectively and as applicable, unless the context of this Agreement requires otherwise. In addition to the
capitalized tenns defined in the Code and the Purchase Agreement, unless the context otherwise requires, when used herein, the following capitalized terms shall have the following meanings (provided that if a capitalized term used herein is defined in the Purchase Agreement and separately defined in this Agreement, the meaning of such term as defined in this Agreement shall control for purposes of this Agreement):

 

 

  

Exhibit 10.3 - Page - 1

  

 

(a)     "Agreement" means this Security Agreement and all amendments, modifications and supplements hereto.

 

(b)    "Bankruptcy Code" means the United States Bankruptcy Code, as amended from time to time, or any other similar laws, codes, rules or regulations relating to bankruptcy, insolvency or the protection of creditors.

 

(c)           "Business Premises" shall mean the Company's offices located at 8776 E. Shea

 

Blvd., Suite B3A-615, Scottsdale, AZ 85260.

 

 

(d)           "Closing" shall mean the date on which this Agreement is fully executed by both parties.

 

 

 

 

(e)     "Code" shall mean the Uniform Commercial Code as in effect from time to time in the State of Florida, provided that terms used herein which are defined in the Code as in effect in the State of Florida on the date hereof shall continue to have the same meaning notwithstanding any replacement or amendment of such statute, except as the Secured Party may otherwise agree.

 

(f)   "Collateral" shall mean any and all property of the Company, of any kind or description, tangible or intangible, real, personal or mixed, wheresoever located and whether now existing or hereafter arising or acquired, including the following: (i) all property of, or for the account of, the Company now or hereafter coming into the possession, control or custody of, or in transit to, Secured Party or any agent or bailee for Secured Party or
any parent, affiliate or subsidiary of Secured Party or any participant with Secured Party in the Obligations (whether for safekeeping, deposit, collection, custody, pledge, transmission or otherwise), including all cash, earnings, dividends, interest, or other rights in connection therewith and the products and proceeds therefrom, including the proceeds of insurance thereon; (ii) the additional property of the Company,  whether now existing or hereafter arising or acquired, and wherever now or hereafter located, together with all additions and accessions thereto, substitutions, betterments and replacements therefor, products and Proceeds therefrom, and all of the Company's books and records and recorded data relating thereto (regardless of the medium of recording or storage), together with all of the Company's right, title and interest in and to all computer software required
to utilize, create, maintain and process any such records or data on electronic media, including all: (A) Accounts, and all goods whose sale, lease or other disposition by the Company has given rise to Accounts and have been returned to, or repossessed or stopped in transit by, the Company, or rejected or refused by an Account debtor; (B) As-extracted Collateral; (C) Chattel Paper (whether tangible or electronic); (D) Commodity Accounts; (E) Commodity Contracts; (F) Deposit Accounts, including all cash and other property from time to time deposited therein and the monies and property in the possession or under the control of the Secured Party or any affiliate, representative, agent, designee or correspondent of the Secured Party; (G) Documents; (H) Equipment;  (I) Farm Products; (J) Fixtures; (K) General Intangibles (including all Payment Intangibles); (L) Goods, and all
accessions thereto and goods with which the Goods are commingled;  (M) Health-Care  Insurance  Receivables;  (N) Instruments;  (0) Inventory, including raw materials, work-in-process and finished goods; (P) Investment Property; (Q) Letter-of-Credit  Rights; (R) Promissory Notes; (S) Software; (T) all Supporting Obligations; (U) all commercial tort claims hereafter arising; (V) all other tangible and intangible personal prope1iy of the Company (whether or not subject to the Code), including, all bank and other accounts and all cash and all investments therein,  all proceeds,  products,  offspring,  accessions,  rents,  profits,  income,  benefits, substitutions and replacements of and to any of the property of the Company described  within
the definition of Collateral (including, any proceeds of insurance thereon and all causes of action, claims and warranties now or hereafter held by the Company in respect of any of the items listed within the definition of Collateral), and all books, correspondence, files and other Records, including, all tapes, desks, cards, Software, data and computer programs in the possession or under the control of the Company or any other Person from time to time acting for the Company, in each case, to the extent of the Company's rights therein, that at any time evidence or contain information relating to any of the property described or listed within the definition of Collateral or which are otherwise necessary or helpful in the collection  or realization thereof; (W) real estate property owned by the Company and the interest of the Company in fixtures related to such real property;
and (X) Proceeds, including all Cash Proceeds  and Noncash Proceeds, and products of any or all of the foregoing, in each case howsoever the Company's interest therein may arise or appear (whether by ownership, security interest, claim or otherwise).

 

 

  

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(g)           "Event of Default" shall mean any of the events described in Section 4 hereof.

 

(h)    "Obligations" shall mean any and all obligations of Dynamic or the Company to Secured Party, whether arising, existing or incurred under this Agreement, the Purchase Agreement, the Guaranty, or any other Transaction  Documents,  or any other agreement  involving  the Company, Dynamic, the Secured Party or any other party related thereto, or any of them, in each case, whether now or hereafter existing or incurred, voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly
owed with others, and whether or not from time to time decreased or extinguished and later decreased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from the Secured Party as a preference, fraudulent transfer or otherwise as such obligations may be amended, supplemented, converted, extended or modified from time to time.

 

3.           Security.

 

(a)     Grant of Security Interest.  As security for the full payment and performance of all of the Obligations, whether or not any instrument or agreement relating to any Obligation specifically refers to this Agreement or the security interest created hereunder, the Company hereby assigns, pledges and grants to Secured Party an unconditional,
continuing, first-priority security interest in all of the Collateral.  Secured Party's security interest shall continually exist until all Obligations have been satisfied and/or paid in full.

 

(b)     Representations,
Warranties, Covenants and
Agreement
of the Company. With respect to all of the Collateral, Company covenants, warrants and represents, for the
benefit of the Secured Party, as follows:

 

(i)   The Company has the requisite corporate power and authority to enter into this Agreement and otherwise to carry out its obligations hereunder. The execution, delivery and performance by the Company of this Agreement and the filings contemplated herein have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company. This Agreement constitutes a legal, valid and binding obligation of the Company enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditor's rights generally.

 

 

  

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(ii)  The Company represents and warrants that it has no place of business or offices where its respective books of account and records are kept or places where Collateral is stored or located, except for the Business Premises.

 

(iii)  Subject only to restrictions upon the Collateral disclosed by Dynamic to the Secured Party in the disclosure schedules to the Purchase Agreement, the Company is the sole owner of the Collateral (except for non-exclusive licenses granted by the Company in the Ordinary Course of Business), free and clear of any and all Encumbrances.  The Company is fully authorized to grant the security interests in and to pledge the Collateral to Secured Party. There is not on file in any agency, land records or other office of any Governmental  Authority, an effective financing  statement,  security agreement, license or transfer or any notice of any of the foregoing (other
than those that have been filed in favor of the Secured Patty pursuant to this Agreement) covering or affecting any of the Collateral. So long as this Agreement shall be in effect, the Company shall not execute and shall not permit to be on file in any such agency, land records or other office any such financing statement or other document or instrument (except to the extent filed or recorded in favor of the Secured Party pursuant to the terms of this Agreement).

 

(iv)  No part of the Collateral has been judged invalid or unenforceable. No Claim, Proceeding or other notice or other similar item has been received by the Company that any Collateral or the Company's use of any Collateral violates the rights of any Person. There has been no adverse decision or claim to the Company's ownership rights in or exclusive rights to use the Collateral in any jurisdiction or to the Company's right to keep and maintain such Collateral in full force and effect, and there is no Claim or Proceeding of any nature involving said rights pending or, to the best knowledge of the Company, threatened, before any Governmental Authority.

 

(v)  The Company shall at all times maintain its books of account and records relating to the Collateral and maintain the Collateral at the Business Premises, and the Company shall not relocate such books of account and records or Collateral, except and unless: (A) Secured Party first approves of such relocation, which approval may be withheld in Secured Party's sole and absolute discretion; and (B) evidence that appropriate financing statements and other necessary documents have been filed and recorded and other steps have been taken to create in favor of the Secured Patty valid, perfected and continuing liens in the Collateral.

 

(vi)  Upon making the filings described in the immediately following sentence, this Agreement creates, in favor of the Secured Party, a valid, perfected, first-priority security interest in the Collateral. Except for the filing of financing statements on Form-1 under the Code with the State of Delaware, no authorization or approval of, or filing with, or notice to any Govemmental Authority is required either: (A) for the grant by the Company of, or the effectiveness of, the security interest granted hereby or for the execution, delivery and performance of this Agreement by the Company; or (B) for the perfection of or exercise by the Secured Party of its rights and remedies hereunder.

 

(vii) Simultaneous with the execution of this Agreement, the Company hereby authorizes the Secured Party to file one or more UCC financing statements with respect to the security interests on the Collateral granted hereby, with the State of Delaware and in such other jurisdictions as may be requested or desired by the Secured Party.

 

(viii) The execution,  delivery  and performance  of this Agreement,  and the granting of the security interests contemplated hereby, will not: (A) constitute a violation of or conflict with the Certificate of Incorporation, Bylaws or any other organizational or governing documents of the Company; (B) constitute a violation of, or a default or breach under (either immediately, upon notice, upon lapse of time, or both), or conflicts with, or gives to any other Person any rights of termination, amendment, acceleration  or cancellation of, any provision of any Contract or agreement  to which Company is a party or by which any of the Collateral may be bound;
(C) constitute a violation of, or a default or breach under (either immediately, upon notice, upon lapse of time, or both), or conflicts with any Judgment of any Governmental Authority; (D) constitute a violation of, or conflict with, any Law; or (E) result in the loss or adverse modification  of, or the imposition  of any fine, penalty or other Encumbrance with respect to, any Permit granted or issued to, or otherwise held by or for the use of, the Company or any of the Collateral. No Consent (including from stockholders or creditors of the Company) is required for the Company to enter into and perform its obligations hereunder.

 

 

  

Exhibit 10.3 - Page - 4

  

 

(ix)  The Company shall at all times maintain the liens and security interests provided for hereunder as valid and perfected first-priority liens and security interests in the Collateral in favor of the Secured Party until this Agreement and the security interests hereunder shall terminate pursuant to Section 9(o) below. The Company shall at all times safeguard and protect all Collateral for the account of the Secured Party. At the request of the Secured Party, the Company will sign and deliver to the Secured Party at any time, or from time to time, one or more financing statements pursuant to the Code (or any other applicable statute) in form reasonably satisfactory to the Secured Party and will pay
the cost of filing the same in all public offices wherever filing is, or is deemed by the Secured Party to be, necessary or desirable to effect the rights and obligations provided for herein. Without limiting the generality of the foregoing, the Company shall pay all fees, taxes and other amounts necessary to maintain the Collateral and the security interests granted hereunder, and the Company shall obtain and furnish to the Secured Party from time to time, upon demand, such releases and/or subordinations of claims and liens which may be required to maintain the priority of the security interests hereunder.

 

(x)  The Company will not transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the Collateral without the prior written consent of the Secured Party, which consent may be withheld in the Secured Party's sole and absolute discretion, except for transfers, sales or licenses made in the Ordinary Course of Business.

 

(xi)  The Company shall keep, maintain and preserve all of the Collateral in good condition, repair and order, ordinary wear and tear excepted, and the Company will use, operate and maintain the Collateral in compliance with all Laws, and in compliance with all applicable insurance requirements and regulations.

 

(xii) The Company shall, within five (5) days of obtaining knowledge thereof, advise the Secured Party promptly, in sufficient detail, of any substantial or material change in the Collateral, and of the occurrence of any event which would have a Material Adverse Effect on the value of the Collateral or on the Secured Party's security interest therein.

 

(xiii) The Company shall promptly execute and deliver to the Secured Party such further deeds, mortgages, assignments, security agreements, financing statements or other instruments, documents, certificates and assurances and take such further action as the Secured Party may from time to time request and may in its sole discretion deem necessary to perfect, protect or enforce its security interest in the Collateral, including, placing legends on Collateral or on books and records pertaining to Collateral stating that Secured Party has a security interest therein.

 

 

(xiv) The Company will take all steps reasonably necessary to diligently pursue and seek to preserve, enforce and collect any rights, claims, causes of action and accounts receivable in respect of the Collateral.

 

 

  

Exhibit 10.3 - Page - 5

  

 

(xv)  The Company shall promptly notify the Secured Party in sufficient detail upon becoming aware of any litigation, attachment, garnishment, execution or other legal process levied against any Collateral or of any litigation, attachment, garnishment,  execution or other legal process which Company knows or has reason to believe is pending or threatened against it or the Collateral, and of any other information received by the Company that may materially affect the value of the Collateral, the security interests granted hereunder or the rights and remedies of the Secured Party hereunder.

 

(xvi) All information heretofore, herein or hereafter supplied to the Secured Party by or on behalf of the Company with respect to the Collateral is accurate and complete in all material respects as of the date furnished.

 

(xvii)  Company  will  promptly  pay  when  due  all  taxes  and  all transportation, storage, warehousing and all other charges and fees affecting or arising out of or relating to the Collateral and shall defend the Collateral, at Company's expense, against all claims of any Persons claiming any interest in the Collateral adverse to Company or Secured Party.

 

(xviii)   At all reasonable times, Secured Party and its agents and designees may enter the Business Premises and any other premises of the Company and inspect the Collateral and all books and records of the Company (in whatever form), and the Company shall pay the reasonable costs of such inspections.

 

(xix) The Company shall maintain comprehensive casualty  insurance on the Collateral against such risks, in such amounts, with such loss deductible  amounts  and with such companies as may be reasonably satisfactory to the Secured Party, and each such policy shall contain a clause or endorsement satisfactory to Secured Party naming Secured Party as loss payee and a clause or endorsement satisfactory to Secured Party that such policy may not be canceled or altered and Secured Party may not be removed as loss payee without at least thirty (30) days prior written notice to Secured Party. In all events, the amounts of such insurance coverages shall conform to pdent business practices and
shall be in such minimum amounts that Company will not be deemed a co-insurer under applicable insurance laws, policies or practices. The Company hereby assigns to Secured Party and grants to Secured Party a security interest in any and all proceeds of such policies and authorizes and empowers Secured Party to adjust or compromise any loss under such policies and to collect and receive all such proceeds. The Company hereby authorizes and directs each insurance company to pay all such proceeds directly and solely to Secured Party and not to the Company and Secured Party jointly. The Company authorizes and empowers Secured Party to execute and endorse in Company's name all proofs of loss, drafts, checks and any other documents or instruments necessary to accomplish such collection, and any persons making payments to Secured Party under the terms of this subsection are hereby relieved
absolutely from any obligation or responsibility to see to the application of any sums so paid. After deduction from any such proceeds of all costs and expenses (including attorney's fees) incurred by Secured Party in the collection and handling of such proceeds, the net proceeds shall be applied as follows: if no Event of Default shall have occurred and be continuing, such net proceeds may be applied, at Company's option, either toward replacing or restoring the Collateral, in a manner and on terms satisfactory to Secured Party, or as a credit against such of the Obligations, whether matured or unmatured, as Secured Party shall determine in Secured Party's sole discretion.  In the event that Company may and does elect to replace or restore any of the Collateral as aforesaid, then such net proceeds shall be deposited in a segregated account opened in the name and for the
benefit of Secured Party, and such net proceeds shall be disbursed therefrom by Secured Party in such manner and at such times as Secured Party deems appropriate to complete and insure such replacement or restoration; provided, however, that if an Event of Default shall occur at any time before or after replacement or restoration has commenced, then thereupon Secured Party shall have the option to apply all remaining net proceeds either toward replacing or restoring the Collateral, in a manner and on terms satisfactory to Secured Party, or as a credit against such of the Obligations, whether matured or unmatured, as Secured Party shall determine in Secured Patty's sole discretion.  If an Event of Default shall have occurred prior to such deposit of the net proceeds, then Secured Party may, in its sole discretion, apply such net proceeds either toward replacing or restoring the
Collateral, in a manner and on terms satisfactory to Secured Party, or as a credit against such of the Obligations, whether matured or unmatured, as Secured Party shall determine in Secured Party's sole discretion.

 

 

  

Exhibit 10.3 - Page - 6

  

 

(xx) The Company shall cooperate with Secured Pa1ty to obtain and keep in effect one or more control agreements in Deposit Accounts, Electronic Chattel Paper, Investment Property and Letter-of-Credit Rights Collateral.  In addition, the Company, at the Company's expense, shall promptly: (A) execute all notices of security interest for each relevant type of Software and other General Intangibles in forms suitable for filing with any United States or foreign office handling the registration or filing of patents, trademarks, copyrights and other intellectual property and any successor office or agency thereto; and _(B) take all commercially reasonable steps in any Proceeding before any such office or any
similar office or agency in any other country or any political subdivision thereof, to diligently prosecute or maintain, as applicable, each application and registration of any Software, General Intangibles or any other intellectual property rights and assets that are part of the Collateral, including filing of renewals, affidavits of use, affidavits of incontestability  and opposition,  interference  and cancellation proceedings.

 

(xxi) Company shall not file any amendments, correction statements or termination statements concerning the Collateral without the prior written consent of Secured Party.

(c)     Collateral Collections.  After an Event of Default shall have occurred, Secured Party shall have the right at any and all times to enforce the Company's rights against all Persons obligated on any of the Collateral, including the right to: (i) notify and/or require the Company to notify any or all Persons obligated on any of the Collateral to make payments directly to Secured Party or in care of a post office_ lock box under the. sole control of Secured Party established at Company's expense, and to take any or all action with respect to Collateral as Secured Party shall determine in its sole discretion, including, the right to demand, collect, sue for and receive any
money or property at any time due, payable or receivable on account thereof, compromise and settle with any Person liable thereon, and extend the time of payment or otherwise change the terms thereof, without incurring any liability or responsibility to the Company whatsoever; and/or (ii) require the Company to segregate and hold in trust for Secured Party and, on the day of Company's receipt thereof, transmit to Secured Party in the exact form received by the Company (except for such assignments and endorsements as may be required by Secured Party), all cash, checks, drafts, money orders and other items of payment constituting any portion of the Collateral or proceeds of the Collateral. Secured Party's collection and enforcement of Collateral against Persons obligated thereon shall be deemed to be commercially reasonable if Secured Party exercises the care and follows the procedures
that Secured Party generally applies to the collection of obligations owed to Secured Party.

 

(d)     Care of Collateral. Company shall have all risk of loss of the Collateral. Secured Party shall have no liability or duty, either before or after the occurrence of an Event of Default, on account of loss of or damage to, to collect or enforce any of its rights against, the Collateral, to collect any income accruing on the Collateral, or to preserve
rights against Persons with prior interests in the Collateral.  If Secured Party actually receives any notices requiring action with respect to Collateral in Secured Party's possession, Secured Party shall take reasonable steps to forward such notices to the Company. The Company is responsible for responding to notices concerning the Collateral, voting the Collateral, and exercising rights and options, calls and conversions of the Collateral. Secured Party's sole responsibility is to take such action as is reasonably requested by Company in writing, however, Secured Party is not responsible to take any action that, in Secured Party's sole judgment, would affect the value of the Collateral as security for the Obligations adversely. While Secured Party is not required to take certain actions, if action is needed, in Secured Party's sole discretion, to preserve and maintain the
Collateral, Company authorizes Secured Party to take such actions, but Secured. Party is not obligated to do so.

 

 

  

Exhibit 10.3 - Page - 7

  

4.       Events of Default.  The occurrence of any one or more of the following events shall constitute an
"Event of Default" hereunder:

 

(a)     Failure to Pay. The failure of Company to pay any sum due under or as part of the Obligations as and when -clue and payable (whether by acceleration, declaration, extension or otherwise).

 

(b)     Covenants and Agreements.  The failure of Company to perform, observe or comply with any and all of the covenants, promises and agreements of the Company in this Agreement, the Guaranty, the Purchase Agreement or any other Transaction Documents, which such failure is not cured by the Company within ten (10) days after receipt of written notice thereof from Secured Party.

 

(c)     Information, Representations and Warranties. If any representation or warranty made herein, in the Guaranty, the Purchase Agreement or any other Transaction Documents, or if any information contained in any financial statement, application, schedule, report or any other document given by the Company in connection with the Obligations, with the Collateral, or with any Transaction Document, is not in all respects true, accurate and complete, or if the Company omitted to state any material
fact or any fact necessary to make such information not misleading.

 

(d)    Default on Other Obligations.  The occurrence of any default under any other borrowing or Obligation of the Company, if the result of such default would: (i) permit the acceleration of the maturity of any note, loan or other Contract between Company and any Person other than Secured Party; or (ii) materially and adversely affect, as determined by
Secured Party in good faith, but in its sole discretion, any of the Collateral, the value thereof or Secured Party's rights and remedies to realize upon such Collateral as set forth herein.

 

(e)           Dynamic  Default. The occurrence of any default or Event of Default by Dynamic under the Debentures, the Purchase Agreement or any other Transaction Documents.

 

(f)     Insolvency.  Company shall be or become insolvent or unable to pay its debts as they become due, or admits in writing to such insolvency or to such inability to pay its debts as they become due.

 

(g)     Involuntary Bankruptcy.  There shall be filed against Company an involuntary petition or other pleading seeking the entry of a decree or order for relief under the Bankruptcy Code or any similar foreign, federal or state insolvency or similar  laws ordering: (i) the liquidation  of the Company; or (ii) a reorganization  of Company or the business and affairs of Company;  or (iii) the appointment of a receiver, liquidator, assignee, custodian, trustee, or similar official for Company of the property of Company, and the failure to have such petition or other pleading
denied or dismissed within thirty (30) calendar days from the date of filing.

 

 

  

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(h)    Voluntary Bankruptcy. The commencement by the Company of a voluntary case under the Bankruptcy Code or any foreign, federal or state insolvency or similar laws or the consent by the Company to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, or similar official for Company of any of the property of the Company or the making by the Company of an assignment for the benefit of creditors, or the failure by the Company generally to pay its debts as
the debts become due.

 

(i)     Judgments. Awards.  The entry of any final and non-appealable Judgment or other determination or adjudication against the Company and a determination by Secured Party, in good faith but in its sole discretion, that any such Judgment or other determination or adjudication could have a Material Adverse Effect on the prospect for Secured Party to fully and punctually realize the full benefits conferred on Secured Party by this Agreement.

 

(j)     Injunction.  The injunction or restraint of the Company in any manner from conducting its business in whole or in part and a determination by Secured Party, in good faith but in its sole discretion, that the same could have a Material Adverse Effect on the prospect for Secured Party to fully and punctually realize the full benefits conferred on Secured Party by this Agreement.

 

(k)    Attachment by Other Parties.  Any Assets of the Company shall be attached, levied upon, seized or repossessed, or come into the possession of a trustee, receiver or other custodian and a determination by Secured Party, in good faith but in its sole discretion, that the same could have a Material Adverse Effect on the prospect for Secured Party to fully and punctually realize the full benefits conferred on Secured Party by this Agreement.

 

5.           Rights and Remedies.

 

(a)           Rights and Remedies of Secured Party.  Upon and after the occurrence of an Event of Default, Secured Party may, without notice or demand, exercise in any jurisdiction in which enforcement hereof is sought, the .following rights and remedies, in addition to the rights and remedies available to Secured - Party under the Purchase Agreement and any other Transaction Documents, the rights and remedies of a secured party under the Code, and all
other rights and remedies available to Secured Party under applicable law or in equity, all such rights and remedies being cumulative and enforceable alternatively, successively or concurrently:

 

(i)   Take absolute control of the Collateral, including transferring  into the Secured Party's name or into the name of its nominee or nominees (to the extent the Secured Party has not theretofore done so) and thereafter receive, for the benefit of the Secured Party, all payments made thereon, give all consents, waivers and ratifications in respect thereof and otherwise act with respect thereto as though it were the outright owner thereof;

 

(ii)  Require the Company to, and the Company hereby agrees that it will at its expense and upon request of the Secured Party forthwith, assemble all or part of the Collateral as directed by the Secured Party and make it available to the Secured Party at a place or places to be designated by the Secured Party that is convenient to Secured Party, and the Secured Party may enter into and occupy the Business Premises or any other premises owned or leased by the Company where the Collateral or any part thereof is located or assembled in order to effectuate the Secured Party's rights and remedies hereunder or under law, including removing such Collateral therefrom, without any obligation or liability to the
Company in respect of such occupation, the Company HEREBY WAIVING ANY AND ALL RIGHTS TO PRIOR NOTICE AND TO JUDICIAL HEARING WITH RESPECT TO REPOSSESSION OF COLLATERAL AND THE COMPANY HEREBY GRANTING TO SECURED PARTY AND ITS AGENTS AND REPRESENTATIVES FULL AUTHORITY TO ENTER SUCH PREMISES;

 

 

  

Exhibit 10.3 - Page - 9

  

 

(iii)  Without notice, except as specified below, and without any obligation to prepare or process the Collateral for sale: (A) sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Secured Party's offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Secured Party may deem commercially reasonable; and/or (B) lease, license or dispose of the Collateral or any part thereof upon such terms as the Secured Party may deem commercially reasonable. The Company agrees that, to the extent notice of sale or any other disposition of the Collateral shall be required by law, at least ten (10)
days' notice to the Company of the time and place of any public sale or the time after which any private sale or other disposition of the Collateral is to be made shall constitute reasonable notification. The Secured Party shall not be obligated to make any sale or other disposition of any Collateral regardless of notice of sale having been given. The Secured Party may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor and such sale may, without further notice, be made at the time and place to which it was so adjourned. The Company hereby waives any claims and actions against the Secured Party arising by reason of the fact that the price at which any of the Collateral may have been sold at a private sale was less than the price which might have been obtained at a public sale or was less than the aggregate amount of the Obligations,
even if the Secured Party accepts the first offer received and does not offer such Collateral to more than one offeree, and waives all rights that the  Company may have to require that all or any part of such Collateral be marshaled upon any sale (public or private) thereof.  The Company hereby acknowledges that: (X) any such sale of the Collateral by the Secured Party shall be made without warranty; (Y) the Secured Party may specifically disclaim any warranties of title, possession, quiet enjoyment or the like; and (Z) such actions set forth in clauses (X) and (Y) above shall not adversely affect the commercial reasonableness of any such sale of Collateral. In addition to the foregoing: (1) upon written notice to the Company from the Secured Party after and during the continuance of an Event of Default, the Company shall cease any use of any intellectual property or
any _  trademark, patent or copyright similar thereto for any purpose described in such notice; (2) the Secured Party may, at any time and from time to time after and during the continuance of an Event of Default, license, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any of the Company's intellectual property, throughout the universe for such te1m or terms, on such conditions, and in such manner, as the Secured Party shall in its sole discretion determine; and (3) the Secured Party may, at any time, pursuant to the authority granted under this Agreement (such authority being effective upon the occurrence and during the continuance of an Event of Default), execute and deliver on behalf of the Company, one or more instruments of assignment of any intellectual property (or any application  or registration thereof), in form
suitable for filing, recording or registration  in any country.

 

(iv)  Operate, manage and control the Collateral (including use of the Collateral and any other property or assets of Company in order to continue or complete performance of Company's obligations under any contracts of Company), or permit the Collateral or any portion thereof to remain idle or store the same, and collect all rents and revenues therefrom the Collateral.

 

  

Exhibit 10.3 - Page - 10

  

 

(v)           Enforce the Company's rights against any Persons obligated  upon any of

 

 

(vi)  The Company hereby acknowledges that if the Secured Party complies with any applicable foreign, state, provincial or federal law requirements in connection with a disposition of the Collateral, such compliance will not adversely affect the commercial reasonableness of any sale or other disposition of the Collateral.

 

(vii) The Secured Party shall not be required to marshal any present or future collateral security (including, this Agreement and the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order, and all of the Secured Party's rights hereunder and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights, however existing or arising. To the extent that the Company lawfully may, the Company hereby agrees that it will not invoke any law relating to the marshaling of collateral which might cause delay in or impede the enforcement of
the Secured Party's rights under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, the Company hereby irrevocably waives the benefits of all such laws.

 

(b)     Power of Attorney.  Effective upon the occurrence of an Event of Default, Company hereby designates and appoints Secured Party and its designees as attorney-in-fact of and for the Company, irrevocably and with full power of substitution, with authority to endorse the Company 's name on any notes, acceptances, checks, drafts, money orders, instruments or other evidences of payment or proceeds of the Collateral that may come into Secured Party's possession; to execute proofs of claim and loss; to adjust and compromise any _claims under insurance
policies; and to perform all other acts necessary and advisable, in Secured Party's sole discretion, to carry out and enforce this Agreement and the rights and remedies conferred upon the Secured Party by this Agreement, the Purchase Agreement or any other Transaction Documents.  All acts of said attorney or designee are hereby ratified and approved by the Company and said attorney or designee shall not be liable for any acts of commission or omission, nor for any error of judgment or mistake of fact or law. This power of attorney is coupled with an interest and is irrevocable so long as any of the Obligations remain unpaid or unperformed or there exists any commitment by Secured Party which could give rise to any Obligations.

 

(c)     Costs and Expenses.  The Company agrees to pay to the Secured Party, upon demand, the amount of any and all costs and expenses, including the reasonable fees, costs, expenses and disbursements of counsel for the Secured Party and of any expe1is and agents, which the Secured Party
may  incur  in  connection  with:  (i) the  preparation,  negotiation,  execution,  delivery,  recordation, administration,  amendment,  waiver or other modification  or termination of this Agreement;  (ii) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any Collateral; (iii) the exercise or enforcement of any of the rights of the Secured Party hereunder; or (iv) the failure by the Company to perform or observe any of the provisions hereof.  Included in the foregoing shall be the amount of all expenses paid or incurred by Secured Party in consulting with counsel concerning any of its rights hereunder, under the Purchase Agreement or under applicable law, as well as such portion of
Secured Party's overhead as Secured Party shall allocate to collection and enforcement of the Obligations in Secured Party's sole but reasonable discretion.  All such costs and expenses shall bear interest from the date of outlay until paid, at the highest rate set forth in the Debenture, or if none is so stated, the highest rate allowed by law. The provisions of this Subsection shall survive the termination of this Agreement and Secured Party's security interest hereunder and the payment of all Obligations.

 

  

Exhibit 10.3 - Page - 11

  

 

 

6.     Security Interest Absolute. All rights of the Secured Party and all Obligations of the Company hereunder, shall be absolute and unconditional, irrespective of: (i) any lack of validity or enforceability of this Agreement, the Purchase Agreement, and any other Transaction Documents or any agreement entered into in connection with the foregoing, or any portion hereof or thereof; (ii) any change in the time, manner or place of payment or performance of, or in any other term of, all or any of
the Obligations, or any other amendment or waiver of or any consent to any departure from the terms and provisions of the Purchase Agreement, any other Transaction Documents, or any other agreement entered into in connection with the foregoing; (iii)  any exchange, release or non-perfection  of any of the Collateral, or any release or amendment or waiver of or consent to departure from any other collateral for, or any guaranty, or any other security, for all or any of the Obligations; (iv) any action by the Secured Party to obtain, adjust, settle and cancel in its sole discretion any insurance claims or matters made or arising in connection with the Collateral; or (v) any other circumstance which might otherwise constitute any legal or equitable defense available to the Company, or a discharge of all or any part of the security interests granted hereby. Until the
Obligations shall have been paid and performed in full, the rights of the Secured Party shall continue even if the Obligations are barred for any reason, including, the running of the statute of limitations or bankruptcy. In the event that at any time any transfer of any Collateral or any payment received by the Secured Party hereunder shall be deemed by final order of a comt of competent jurisdiction to have been a voidable preference or fraudulent conveyance under the Bankruptcy Code or any other similar insolvency or bankruptcy laws of any jurisdiction, or shall be deemed to be otherwise due to any party other than the Secured Party, then, in any such event, the Company's obligations hereunder shall survive cancellation of this Agreement, and shall not be discharged or satisfied by any prior payment thereof and/or cancellation of this Agreement,  but shall remain a valid
and binding obligation enforceable in accordance with the terms and provisions hereof. The Company waives all right to require the Secured Party to proceed against any other Person or to apply any Collateral which the Secured Party may hold at any time, or to pursue any other remedy. The Company waives any defense arising by reason of the application of the statute of limitations to any obligation secured hereby.

 

7.     Indemnity.  The Company agrees to defend, protect, indemnify and hold the Secured Party forever harmless from and against any and all Claims of any nature or kind (including reasonable legal fees, costs, expenses, and disbursements of counsel) to the extent that they arise out of, or otherwise result from, this Agreement (including, enforcement of this Agreement).  This indemnity shall survive termination of this Agreement.

 

8.     Continuing Obligation of Company.  The obligations, covenants, agreements and duties of the Company under this Agreement shall in no way be affected or impaired by: (i) the modification or amendment (whether material or otherwise) of any of the obligations of Dynamic; (ii) the voluntary or involuntary  bankruptcy,  assignment  for the  benefit  of  creditors,  reorganization,  or other similar
proceedings affecting Dynamic; (iii) the release of Dynamic or any waiver granted to Dynamic by Secured Party from the performance  or observance of any of the agreements,  covenants, terms or conditions contained in any Transaction Documents, by the operation of law or otherwise, including, but not limited to, the release or waiver of Dynamic's obligation to pay any sums due to the Secured Party, including interest or attorney's fees.

 

The Company further agrees that Secured Patty may take other guaranties or collateral or security to further secure the Debentures, and consents that any of the terms, covenants and conditions contained in any of the Transaction  Documents may be, without the Company's consent, renewed, altered, extended, changed or modified by Secured Party or may be released by Secured Party, without in any manner affecting this Agreement or releasing the Company herefrom, and without further consent of or notice to the Company, and the Company shall continue to be liable and bound hereunder to pay and perform pursuant hereto, notwithstanding  any such release or the taking of such  other
guaranties, collateral or security.  This Agreement is additional and supplemental to any and all other guarantees, security agreements or collateral heretofore and hereafter executed by the Company, Dynamic or any other Person for the benefit of Secured Party, whether relating to the indebtedness evidenced by the Debentures or not, and shall not supersede or be superseded by any other document or guaranty executed by Dynamic or any other Person for any purpose.  The Company hereby agrees that Dynamic, the Company and any additional parties who may become liable for repayment of the Debentures, may hereafter be released from their liability hereunder and thereunder; and Secured Party may take, or delay in taking or refuse to take, any and all action with reference to the Debentures or any other Transaction Documents (regardless of whether same might vary the risk or
alter the rights, remedies or recourses of the Company), including specifically  the settlement  or compromise  of any amount  allegedly due thereunder, all without notice to, consideration to or the consent of the Company, and without in any way releasing, diminishing or affecting in any way the absolute nature of the Company's obligations and liabilities hereunder.

 

 

  

Exhibit 10.3 - Page - 12

  

 

No delay on the part of the Secured Party in exercising any rights hereunder or failure to exercise the same shall operate as a waiver of such rights. The Company hereby waives any and all legal requirements, statutory or otherwise, that Secured Party shall institute any action or proceeding at law or in equity or exhaust its rights, remedies and recourses against Dynamic, any collateral or anyone else with respect to the Debentures or any other Transaction Documents, as a condition precedent to bringing an action against the Company upon this Agreement or as a condition precedent to Secured Party's rights to exercise its remedies against the Collateral. The Company agrees that Secured Party may simultaneously
maintain an action upon this Agreement and an action or proceeding upon the Debentures or any other Transaction Documents.  All remedies afforded by reason of this Agreement are separate and cumulative remedies and may be exercised serially, simultaneously and in any order, and the exercise of any of such remedies shall not be deemed an exclusion of the other remedies and shall in no way limit or prejudice any other contractual, legal, equitable or statutory remedies which Secured Party may have in and to the Collateral.  Until the Obligations, and all extensions, renewals and modifications thereof, are paid in full, and until each and all of the terms, covenants and conditions of this Agreement are fully performed, the Company shall not be released by any act or thing which might, but for this provision of this Agreement, be deemed a legal or equitable discharge of
a surety, or by reason of any waiver, extension, modification, forbearance or delay of Secured Party or any obligation or agreement between Dynamic, the Company or any other Person or their respective successors or assigns, and the then holder of the Debentures, relating to the payment of any sums evidenced or secured thereby or to any of the other terms, covenants and conditions contained therein, and the Company hereby expressly waives and surrenders any defense to liability hereunder based upon any of the foregoing acts, things, agreements or waivers, or any of them. The Company also waives any defense arising by virtue of any disability, insolvency, bankruptcy, lack of authority or power or dissolution of Dynamic, usury or any other defense, even though rendering the Debentures void, unenforceable or otherwise uncollectible, it being agreed that the Company shall remain liable
hereunder, regardless of any claim which the Company might otherwise have against Secured Party by virtue of Secured Party's invocation of any right, remedy or recourse given to it hereunder, under the Debentures or any other Transaction Documents.  In addition, the Company waives and renounces any right of subrogation, reimbursement or indemnity whatsoever, and any right of recourse to security for the Obligations of Dynamic to Secured Party, unless and until all of said Obligations have been paid in full to Secured Party.  In addition, the Company hereby subordinates all obligations now or hereafter owed by Dynamic to the Company ("Subordinated Debt") to any and all obligations of Dynamic to Secured Party now or hereafter existing while this
Agreement is in effect, and hereby agrees that the Company will not request or accept payment of or any security for any part of the Subordinated Debt, and any proceeds of the Subordinated Debt paid to the Company, through error or otherwise, shall immediately be forwarded to Secured Party by the Company, properly endorsed to the order of Secured Party, to apply to the Obligations.

 

 

  

Exhibit 10.3 - Page - 13

  

 

9.           Miscellaneous.

 

 

(a) Performance for Company.  The Company agrees and hereby authorizes that Secured Party may, in Secured Party's  sole discretion, but Secured Party shall not be obligated to, whether or not an Event of Default shall have occurred, advance funds on behalf of the Company, without prior notice to the Company, in order to insure the Company's compliance with any covenant, warranty,· representation or agreement of the Company made in or pursuant to this Agreement,  the Purchase Agreement, or any other Transaction
Documents, to continue or complete, or cause to be continued or completed, performance of the Company's obligations  under any Contracts of the Company,  or to preserve or protect any right or interest of Secured Party in the Collateral or under or pursuant to this Agreement, the Purchase Agreement or any other Transaction Documents, including, the payment of any insurance premiums or tmces and the satisfaction or discharge of any Claim, Obligation, Judgment or any other Encumbrance upon the Collateral or other property or Assets of Company; provided, however, that the making of any such advance by Secured Party shall not constitute a waiver by Secured Party of any Event of Default with respect to which such advance is made, nor relieve the Company of any such Event of Default. The Company shall pay to Secured Party upon demand all such advances made by Secured Party
with interest thereon at the highest rate set forth in the Debenture, or if none is so stated, the highest rate allowed by law. All such advances shall be deemed to be included in the Obligations and secured by the security interest granted Secured Party hereunder; provided, however, that the provisions of this Subsection  shall survive the termination  of this Agreement  and Secured  Party's  security  interest hereunder and the payment of all other Obligations.  Notwithstanding anything contained in this Section 8(a) to the contrary, the Secured Party agrees that it shall not directly pay any of the fees or costs allowed to be paid by the Secured Party under this Section 8(a) unless the Secured Party first makes written demand to the Company for payment of same, and if the Company fails to pay such fees or costs
within ten (10) days from the date the Secured Party notifies the Company that such fees or costs are due, then the Secured Party may (but shall have no obligation to do so) pay such fees and costs in accordance with this Section 8(a).

 

(b)     Applications ·of  Payments  and
 Collateral.   Except  as  may  be  otherwise specifically  provided in this Agreement or the Purchase Agreement,  all Collateral  and proceeds of Collateral coming into Secured Party's possession and all payments made by any Person to Secured Party with respect to any Collateral may be applied by Secured Party (after payment of any amounts payable to the Secured Party pursuant to Section 5(c) hereof) to any of the Obligations,  whether matured or unmatured, as Secured Party shall determine in its sole, but reasonable discretion.  Any surplus held by the Secured Party and remaining after the indefeasible payment in full in cash of all of the
Obligations shall be paid over to whomsoever shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct.  Secured Party may defer the application of Noncash Proceeds of Collateral, to the Obligations until Cash Proceeds are actually received by Secured Party. In the event that the proceeds of any such sale, collection or realization are insufficient to pay all amounts to which the Secured Party is legally entitled, the Company shall be liable for the deficiency, together with interest thereon at the highest rate specified in the Debenture for interest on overdue principal thereof or such other rate as shall be fixed by applicable law, together with the costs of collection and the reasonable fees, costs, expenses and other client charges of any attorneys employed by the Secured Party to collect such deficiency.

 

 

  

Exhibit 10.3 - Page - 14

  

 

(c)     Waivers by Company. The Company .hereby waives, to the extent the same may be waived under applicable law: (i) notice of acceptance of this Agreement; (ii) all claims and rights of the Company against Secured Party on account of actions taken or not taken by Secured Party in the exercise of Secured Party's  rights or remedies hereunder, under
the Purchase Agreement,  and other Transaction Documents or under applicable law; (iii) all claims of the Company for failure of Secured Party to comply with any requirement of applicable law relating to enforcement of Secured Party's rights or remedies hereunder, under the Purchase Agreement, under any other Transaction Documents or under applicable law; (iv) all rights of redemption of the Company with respect to the Collateral; (v) in the event Secured Party seeks to repossess any or all of the Collateral by judicial proceedings, any bond(s) or demand(s) for possession which otherwise may be necessary or required; (vi) presentment, demand for payment, protest and notice of non-payment and all exemptions applicable to any of the Collateral or the Company; any and all other notices or demands which by applicable law must be given to or made upon the Company by Secured Party;
(viii) settlement, compromise or release of the obligations of any Person primarily or secondarily liable upon any of the Obligations; (ix) all rights of 'the Company to demand that Secured Party release account debtors or other Persons liable on any of the Collateral from further obligation to Secured Party; and (x) substitution,  impairment,  exchange  or release of any Collateral for any of the Obligations. The Company agrees that Secured Party may exercise any or all of its rights and/or remedies hereunder, under the Purchase Agreement, the other Transaction Documents and under applicable law without resorting to and without regard to any Collateral or sources of liability with respect to any of the Obligations. Upon termination of this Agreement and Secured Party's security interest hereunder and payment of all Obligations, within ten (10) business
days following the Company's request to Secured Party, Secured Party shall release control of any security interest in the Collateral perfected by control and Secured Party shall send Company a statement terminating any financing statement filed against the Collateral.

 

(d)     Waivers.  No failure or any delay on the part of either party in exercising any right, power or remedy hereunder, under this Agreement, the Purchase Agreement, and other Transaction Documents or under applicable law, shall operate as a waiver thereof.

 

(e)     Secured Party's Setoff. Secured Party shall have the right, in addition to all other rights and remedies available to it, following an Event of Default, to set off against any Obligations due Secured Party, any debt owing to the Company by Secured Party.

 

(f)     Modifications, Waivers and Consents.   No modifications  or waiver of any provisions of this Agreement, the Purchase Agreement, or any other Transaction  Documents, and no consent by Secured Party to any departure by the Company therefrom, shall in any event be effective unless the same shall be in writing, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given, and any single or partial
written waiver by Secured Party of any term, provision or right of Secured Party hereunder shall only be applicable to the specific instance to which it relates and shall not be deemed to be a continuing or future waiver of any other right, power or remedy.  No notice to or demand upon the Company in any case shall entitle Company to any other or further notice or demand in the same, similar or other circumstances.

 

(g)     Notices.  All notices of request, demand and other communications hereunder shall be addressed to the parties as follows:

 

 

  

Exhibit 10.3 - Page - 15

  

 

If to the Company:               Bundled Builder Solutions, Inc.

8776 E. Shea Blvd., Suite B3A-615

            

 

With a copy to:                     Luke C. Zouvas, Esq.

Zouvas Law Group, P.C.

2368 Second Avenue, 11th Floor

San Diego, CA 92101

Telephone: 619.688.1715

Fax: 619.688.1716

Email: lzouvas@zouvaslaw.com

 

	
If to the Secured Party :

	
TCA Global Credit Master Fund, LP

	
  

	
1404 Rodman Street

Hollywood, FL 33020

Attn: Mr. Robert Press

Telephone: (786) 323-1650

Facsimile: (786) 323-1651

E-Mail: bpress@trafcap.com

 

With a copy to:                                    David Kahan, P.A.

3125 W. Commercial Blvd., Suite 100

Ft, Lauderdale, FL 33309

Attn: David Kahan, Esq. Telephone: (954) 548-3930

Facsimile: (954) 548-3910

E-Mail: david@dkpalaw.com

 

unless the address is changed by the party by like notice given to the other parties.  Notice shall be in writing and shall be deemed delivered: (i) if mailed by certified mail, return receipt requested, postage :prepaid and properly addressed to the address below, then three (3) business days after deposit of same in a regularly maintained U.S. Mail receptacle; or (ii) if mailed by Federal Express, UPS or other nationally recognized overnight courier service, next business morning delivery, then one (1) business day after deposit of same in a regularly maintained receptacle of such overnight courier; or (iii) if hand delivered, then upon hand delivery thereof to the address indicated on or prior to
5:00p.m., EST, on a business day. Any notice hand delivered after 5:00p.m., EST, shall be deemed delivered on the following business day. Notwithstanding the foregoing, notice, consents, waivers or other communications referred to in this Debenture may be sent by facsimile, e-mail, or other method of delivery, but shall be deemed to have been delivered only when the sending party has confirmed (by reply e-mail or some other form of written confirmation) that the notice has been received by the other party.

 

(h)    Applicable Law and Consent to Jurisdiction.  This Agreement shall be construed in accordance with the laws of the State of Florida, without regard to the principles of conflicts of laws, except to the extent that the validity and perfection or the perfection and the effect of perfection or non­ perfection of the security interest created hereby, or remedies hereunder, in respect of any particular Collateral are governed under the Code by the law of a jurisdiction other than the State of Florida, in which case such issues shall be governed by the laws of the jurisdiction governing such issues under the Code. The parties further agree that any action between them shall be
heard in Broward County, Florida and expressly consent to the jurisdiction and venue of the State Court sitting in Broward County, Florida and the United States District Court for the Southern District of Florida for the adjudication of any civil action asserted pursuant to this Agreement, provided, however, that nothing herein shall prevent from bringing suit or taking legal action in any other jurisdiction. By its execution hereof, the Company hereby irrevocably waives any objection and any right of immunity on the ground of venue, the convenience of the forum or the jurisdiction of such courts or from the execution of judgments resulting therefrom. The Company hereby irrevocably accepts and submits to the jurisdiction of the aforesaid courts in any such suit, action or proceeding.

 

 

  

Exhibit 10.3 - Page - 16

  

 

(i)  Survival: Successors and Assigns.  All covenants, agreements, representations and warranties made herein shall survive the execution and delivery hereof, shall survive Closing and shall continue in full force and effect until all Obligations have been paid in full, there exists no commitment by Secured Party which could give rise to any Obligations and all
appropriate termination statements have been filed terminating the security interest granted Secured Party hereunder.  Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party. In the event that Secured Party assigns this Agreement and/or its security interest in the Collateral, Secured Party shall give written notice to the Company of any such assignment and such assignment shall be binding upon and recognized by the Company.  All covenants, agreements, representations and warranties by or on behalf of the Company which are contained in this Agreement shall inure to the benefit of Secured Party, its successors and assigns. The Company may not assign this Agreement or delegate any of its rights or obligations hereunder, without the prior written consent of Secured Party,
which consent may be withheld in Secured Party's sole and absolute discretion.

 

(j)     Severability.  If any term, provision or condition, or any part thereof, of this Agreement shall for any reason be found or held invalid or unenforceable by any court or governmental authority of competent jurisdiction, such invalidity or unenforceability shall not affect the remainder of such tem1, provision or condition nor any other term, provision or condition, and this Agreement shall survive and be construed as if such invalid or unenforceable term, provision or condition had not been contained therein.

 

(k)           Merger and Integration.  This Agreement and the attached Schedules (if any),   together with the Purchase Agreement and the other Transaction Documents, contain the entire agreement of the parties hereto with respect to the matters covered and the transactions contemplated hereby and thereby, and no other agreement, statement or promise made by any party hereto or thereto, or by any employee, officer, agent or attorney of any party hereto, which is not contained herein or therein shall be valid or binding.

 

(1)     WAIVER OF JURY TRIAL. THE COMPANY HEREBY: (a) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY; AND (b) WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE COMPANY AND SECURED PARTY MAY BE PARTIES, ARISING OUT OF, IN CONNECTION WITH OR IN ANY WAY PERTAINING TO THIS AGREEMENT, THE PURCHASE AGREEMENT AND/OR  ANY  TRANSACTIONS,  OCCURRENCES, COMMUNICATIONS, OR UNDERSTANDINGS (OR THE LACK OF ANY OF THE FOREGOING) RELATING IN ANY WAY TO DEBTOR-CREDITOR RELATIONSHIP BETWEEN THE PARTIES.  IT IS UNDERSTOOD AND AGREED  THAT
THIS WAIVER CONSTITUTES A WAIVER  OF TRIAL  BY JURY OF ALL CLAIMS  AGAINST  ALL  PARTIES  TO  SUCH  ACTIONS  OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES 'WHO ARE NOT PARTIES TO THIS SECURITY AGREEMENT.

 

 

  

Exhibit 10.3 - Page - 17

  

 

THIS WAIVER OF JURY TRIAL IS SEPARATELY GIVEN, KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE COMPANY AND THE COMPANY HEREBY AGREES THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT.  SECURED PARTY IS HEREBY AUTHORIZED TO SUBMIT THIS AGREEMENT TO ANY COURT HAVNG JURISDICTION OVER THE SUBJECT MATTER AND THE COMPANY AND SECURED PARTY, SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF SUCH WAIVER OF RIGHT TO TRIAL BY JURY.  THE COMPANY REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS - WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED
OF ITS OWN FREE WILL, AND/OR THAT IT'HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

 

(m)    Execution.  This Agreement may be executed in one or more counterparts, all of which taken together shall be deemed and considered one and the same Agreement, and same shall become effective when counterparts have been signed by each party and each party has delivered its signed counterpart  to the other party.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf' format file or other similar format file, such signature shall be deemed an original for all purposes and shall
create a valid and binding obligation of the party executing same with the same force and effect as if such facsimile or ".pdf' signature page was an original thereof.

 

(n)    Headings.  The headings and sub-headings contained  in the titling of this Agreement are intended to be used for convenience only and shall not be used or deemed to limit or diminish any of the provisions hereof.

 

(o)    Termination.   This Agreement and  the  security  interests  hereunder  shall terminate on the date on which all Obligations  have been paid or discharged  in full. Upon such termination, the Secured Party, at the request and at the expense of the Company, will join in executing any termination statement with respect to any financing statement executed and filed pursuant to this Agreement.

 

(p)     Gender and Use of Singular and Plural. All pronouns shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the party or parties or their personal representatives, successors and assigns may require.

 

(q)    Further Assurances. The parties hereto will execute and deliver such further instruments and do such further acts and things as may be reasonably required to carry out the intent and purposes of this Agreement.

 

(r)     Time is of the Essence. The parties hereby agree that time is of the essence with
respect to performance of each of the pat1ies ' obligations under this Agreement.  The parties agree that in the event that any date on which performance is to occur falls on a Saturday, Sunday or state or national holiday, then the time for such performance shall be extended until the next business day thereafter occurring.

 

  

Exhibit 10.3 - Page - 18

  

 

(s)     Joint Preparation.  The preparation of this Agreement has been a joint effort of the parties and the resulting documents shall not, solely as a matter of judicial construction, be construed more severely against one of the parties than the other.

 

 

(t)     Increase in Obligations. [( is the intent of the parties to secure payment of the Obligations, as the amount of such Obligations may increase from time to time in accordance with the terms and provisions of the Purchase Agreement, and all of the Obligations, as so increased from time to time, shall be and are secured hereby. Upon the execution hereof, the
Company shall pay any and all documenta1y stamp taxes and/or other charges required to be paid in connection with the execution and enforcement of the Purchase Agreement and this Agreement, and if, as and to the extent the Obligations are increased from time to time in accordance with the terms and provisions of the Debenture, then the Company shall immediately pay any additional documentary stamp taxes or other charges in connection therewith.

 

[Signatures on the following page]

 

 

 

  

Exhibit 10.3 - Page - 19

  

 

1N WITNESS WHEREOF, the parties hereto. have duly executed this Amendment as of the day and year first above written.

 

COMPANY:

By: /s/ Paul Kalkbrenner                                                                

Name: Paul Kalkbrenner                                                                

Title: CEO                                                      

 

SECURED PARTY:

 

TCA GLOBAL CREDIT MASTER  FUND,

LP

 

By: TCA Global Credit Fund GP, Ltd., its general partner

 

By: /s/ Robert Press                                                      

Name: Robert Press                                                      

Title: Director                                       

 

 

                         

  

Exhibit 10.3 - Page - 20September 30, 2011 Exhibit 10.1

Exhibit
10.1

CONFIDENTIAL
TREATMENT

 

execution
version

 

ZOOM
TECHNOLOGIES, INC.

 

COMMON
STOCK PURCHASE AGREEMENT

 

October
18, 2011

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

TABLE
OF CONTENTS

 

Page

	
      1.
	
      Definitions.
	
      1

	 
      	 
      	 
      
	
      2.
	
      Purchase and Sale of the Purchase
      Shares
	
      6

	 
      	
      2.1
	
      Purchase and Sale
	
      6

	 
      	
      2.2
	
      Closing
	
      7

	 
      	
      2.3
	
      Deliveries
	
      7

	 
      	 
      	 
      
	
      3.
	
      Representations and Warranties of the
      Company
	
      7

	 
      	
      3.1
	
      Organization; Good Standing;
      Qualification
	
      7

	 
      	
      3.2
	
      Capitalization
	
      7

	 
      	
      3.3
	
      No Subsidiaries or Equity
      Interests
	
      8

	 
      	
      3.4
	
      Authorization;
      Non-Contravention
	
      8

	 
      	
      3.5
	
      SEC Filings; Financial Statements; Internal
      Controls
	
      9

	 
      	
      3.6
	
      Governmental Consents
	
      11

	 
      	
      3.7
	
      Brokers or Finders
	
      11

	 
      	
      3.8
	
      Nasdaq
	
      12

	 
      	
      3.9
	
      Valid Issuance of the Purchase
      Shares
	
      12

	 
      	
      3.10
	
      Offering
	
      12

	 
      	
      3.11
	
      No Material Adverse Effect
	
      12

	 
      	
      3.12
	
      Intellectual Property
	
      12

	 
      	
      3.13
	
      Compliance; Permits
	
      13

	 
      	
      3.14
	
      Litigation
	
      13

	 
      	
      3.15
	
      Ownership of Assets
	
      14

	 
      	
      3.16
	
      Transactions with Affiliates and
      Employees
	
      14

	 
      	
      3.17
	
      OFAC
	
      14

	 
      	
      3.18
	
      Sarbanes-Oxley Act of 2002
	
      14

	 
      	
      3.19
	
      Environmental Matters
	
      15

	 
      	
      3.20
	
      Foreign Corrupt Practices
    Act
	
      16

	 
      	
      3.21
	
      Full Disclosure
	
      16

	 
      	 
      	 
      	 
      
	
      4.
	
      Representations and Warranties of the
      Purchaser
	
      16

	 
      	
      4.1
	
      Organization; Authorization
	
      16

	 
      	
      4.2
	
      Purchase Entirely for Own
      Account
	
      16

	 
      	
      4.3
	
      Receipt of Information
	
      17

	 
      	
      4.4
	
      Accredited Investor
	
      17

	 
      	
      4.5
	
      Investment Experience
	
      17

	 
      	
      4.6
	
      Rule 144
	
      17

	 
      	
      4.7
	
      Reliance on Purchaser's
      Representations
	
      17

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

i

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

TABLE
OF CONTENTS

 

Page

 

	 
      	
      4.8
	
      General Solicitation
	
      17

	 
      	
      4.9
	
      Legends
	
      18

	 
      	 
      	 
      	 
      
	
      5.
	
      Covenants
	
      18

	 
      	
      5.1
	
      Board Nominee
	
      18

	 
      	
      5.2
	
      Further Assurances
	
      19

	 
      	
      5.3
	
      Nasdaq Listing
	
      19

	 
      	
      5.4
	
      Conduct of Business by the
      Company
	
      19

	 
      	
      5.5
	
      Exclusivity
	
      20

	 
      	 
      	 
      	 
      
	
      6.
	
      Conditions Precedent to
    Closing
	
      20

	 
      	
      6.1
	
      Conditions to the Obligation of the Purchaser to
      Consummate the Closing
	
      20

	 
      	
      6.2
	
      Conditions to the Obligation of the Company to
      Consummate the Closing
	
      21

	 
      	 
      	 
      	 
      
	
      7.
	
      Miscellaneous Provisions
	
      22

	 
      	
      7.1
	
      Rights Cumulative
	
      22

	 
      	
      7.2
	
      Notices
	
      22

	 
      	
      7.3
	
      Captions
	
      23

	 
      	
      7.4
	
      Severability
	
      23

	 
      	
      7.5
	
      Governing Law; Arbitration; Injunctive
      Relief
	
      23

	 
      	
      7.6
	
      Amendment
	
      24

	 
      	
      7.7
	
      Expenses
	
      24

	 
      	
      7.8
	
      Assignment
	
      24

	 
      	
      7.9
	
      Survival
	
      24

	 
      	
      7.10
	
      Entire Agreement
	
      25

	 
      	
      7.11
	
      Counterparts; Reproductions
	
      25

	 
      	
      7.12
	
      Termination
	
      25

	 
      	
      7.13
	
      WAIVER OF JURY TRIAL
	
      25

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

ii

 

 

CONFIDENTIAL
TREATMENT REQUEST

Schedule
I

 

Schedule
I                      
-           Key
Stockholders

Exhibits

 

Exhibit
A                      
-           Confidential
Purchase Questionnaire

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

iii

 

 

CONFIDENTIAL
TREATMENT REQUEST

COMMON
STOCK PURCHASE AGREEMENT

 

This
COMMON STOCK PURCHASE AGREEMENT (the "Agreement") is made as of
October 18, 2011 by and among Zoom Technologies, Inc., a Delaware corporation
(the "Company"), Spreadtrum
Communications, Inc., a Cayman Islands company (the "Purchaser") and each of the
key stockholders listed on Schedule I hereto (each, a "Key Stockholder" and
collectively, the "Key
Stockholders").

 

WHEREAS,
the parties desire that the Purchaser makes an equity investment in the Company
pursuant to the terms and conditions of this Agreement; and

 

WHEREAS,
the Company and the Purchaser are executing and delivering this Agreement (i) in
reliance upon the exemption from securities registration afforded by the rules
and regulations as promulgated by the SEC (as defined below) under
Section 4(2) of the Securities Act (as defined below).

 

NOW
THEREFORE, in consideration of the mutual agreements, representations,
warranties and covenants herein contained, as well as other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged and
accepted, and intending to be legally bound hereby, the parties hereto agree as
follows:

 

1.           Definitions.

 

1.1           As
used in this Agreement, the following terms shall have the following respective
meanings:

 

(a)           "Affiliate" shall mean, with
respect to any given Person, a Person that Controls, is Controlled by, or is
under common Control with the given Person.

 

(b)           "Control" shall mean, when used
with respect to any Person, the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.

 

(c)           "Common Stock" shall mean the
common stock of the Company, par value US$0.01 per share.

 

(d)           "Company Intellectual Property"
shall mean all of the Intellectual Property owned by the Company or any of its
Subsidiaries.

 

(e)           "Company Intellectual Property
Agreements" shall mean the contracts in effect as of the date of this
Agreement: (i) under which the Company or any of its Subsidiaries is granted a
right to any third party's Intellectual Property that is material to the
operation of the Company's business as a whole, other than licenses and related
services agreements for commercially available technology or Intellectual
Property, or (ii) under which the Company or any of its Subsidiaries has
licensed to third parties rights under any material Company Intellectual
Property, other than customer, developer and reseller licenses and other
agreements entered into in the ordinary course of business or in connection with
the sale or licensing of Company products or services.

 

 

1

 

CONFIDENTIAL
TREATMENT REQUEST

 

(f)           "Company Options" shall mean
options to purchase Common Stock under any of the Company Stock Options
Plans.

 

(g)           "Company Products" means all of
the Company's (i) GSM/GPRS/EDGE products, including but not limited to,
handsets, data card, tablet PC and other wireless terminals, (ii) TD-SCDMA
related smart phone products, including but not limited to, TD-SCDMA smart
phones and multi-mode smart phones that include TD-SCDMA, and (iii) TD-SCDMA
feature phone products ("TD-SCDMA Feature Phone
Products"), but excluding solely products, including handsets, tablet PC
and other wireless terminals, that are manufactured by the Company or its
Affiliates through the Company's Electronic Manufacturing Services for or on
behalf of third parties.

 

(h)           "Company Stock Option Plan"
shall mean each stock option plan, stock award plan, stock appreciation right
plan, phantom stock plan, stock option, other equity or equity-based
compensation plan, equity or other equity based award to any employee, whether
payable in cash, shares or otherwise, (to the extent not issued pursuant to any
of the foregoing plans) or other plan or contract of any nature with any
employee pursuant to which any stock, option, warrant or other right to purchase
or acquire capital stock of the Company or right to payment based on the value
of Company capital stock has been granted or otherwise issued.

 

(i)           "Competitive Products" means
any and all third party baseband integrated circuit chipset products, including
GSM/GPRS/EDGE and TD-SCDMA products.

 

(j)           [***]

 

(k)           "Environment" means soil, land
surface or subsurface strata, surface waters (including navigable waters, ocean
waters, streams, ponds, drainage basins, and wetlands), groundwaters, drinking
water supply, stream sediments, ambient air (including indoor air), plant and
animal life, and any other environmental medium or natural
resource.

 

(l)           "Environmental Claim" means any
and all administrative, regulatory or judicial actions, suits, orders, demands,
directives, claims, liens, investigations, proceedings or written or oral
notices of noncompliance or violation by or from any Person alleging liability
of whatever kind of nature (including liability or responsibility for the costs
of enforcement proceedings, investigations, cleanup, governmental response,
removal or remediation, natural resources damages, property damages, personal
injuries, medical monitoring, penalties, contribution, indemnification and
injunctive relief) arising out of, based on or resulting from (i) the
presence or Release of, or exposure to, any Hazardous Materials at any location
or (ii) the failure to comply with any Environmental Law.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

2

 

CONFIDENTIAL
TREATMENT REQUEST

 

(m)           "Environmental Law" means any
Legal Requirement that requires or relates to:

 

(i)      advising
appropriate authorities, employees, and the public of intended or actual
releases of pollutants or hazardous substances or materials, violations of
discharge limits, or other prohibitions and of the commencements of activities,
such as resource extraction or construction, that could have significant impact
on the Environment;

 

(ii)      preventing
or reducing to acceptable levels the release of pollutants or hazardous
substances or materials into the Environment;

 

(iii)          
       reducing
the quantities, preventing the release, or minimizing the hazardous
characteristics of wastes that are generated;

 

(iv)          
       assuring
that products are designed, formulated, packaged, and used so that they do not
present unreasonable risks to human health or the Environment when used or
disposed of;

 

(v)         
        
protecting resources, species, or ecological amenities;

 

(vi)          
       reducing
to acceptable levels the risks inherent in the transportation of hazardous
substances, pollutants, oil, or other potentially harmful
substances;

 

(vii)          
       cleaning
up pollutants that have been released, preventing the threat of release, or
paying the costs of such clean up or prevention; or

 

(viii)          
       making
responsible parties pay private parties, or groups of them, for damages done to
their health or the Environment, or permitting self-appointed representatives of
the public interest to recover for injuries done to public assets.

 

(n)           "Exchange Act" shall mean the
U.S. Securities Exchange Act of 1934, as amended.

 

(o)           "Exclusivity Term" means the
term commencing on the Closing and ending three (3) years
thereafter.

 

(p)           "GAAP" shall mean United States
generally accepted accounting principles.

 

(q)           "Governmental Entity" shall
mean any national, provincial, state, municipal, local government, any
instrumentality, subdivision, court, administrative agency or commission or
other governmental authority or instrumentality, or any quasi-governmental or
private body exercising any regulatory, taxing, importing or other governmental
or quasi-governmental authority.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

3

 

CONFIDENTIAL
TREATMENT REQUEST

 

(r)           "Hazardous Materials" means any
waste or other substance that is listed, defined, designated, or classified as,
or otherwise determined to be, hazardous, radioactive, or toxic or a pollutant
or a contaminant under or pursuant to any Environmental Law, including any
admixture or solution thereof, and specifically including petroleum and all
derivatives thereof or synthetic substitutes therefor and asbestos or
asbestos-containing materials.

 

(s)           "Intellectual Property" shall
mean the rights associated with or arising under any of the following anywhere
in the world: (i) patents and applications therefor; (ii) copyrights,
copyrights registrations and applications therefor, and all other rights
corresponding rights in works of authorship, however denominated;
(iii) rights in industrial designs and any registrations and applications
therefor; (iv) trademark rights and corresponding rights in trade names,
logos and service marks, trademark or service mark, and registrations and
applications therefor; (v) trade secrets rights and corresponding rights in
confidential business and technical information and know-how ("Trade
Secrets"); and (vi) any similar or equivalent rights to any of the
foregoing anywhere in the world (as applicable).

 

(t)           "Knowledge" shall mean, with
respect to a party hereto, with respect to any matter in question, that any of
the Chief Executive Officer, Chief Financial Officer or Vice Presidents of such
party, has actual knowledge (and not constructive or imputed knowledge) of such
matter.

 

(u)           "Legal Requirements" shall mean
any national, provincial, state, municipal, local or other law, statute,
constitution, principle of common law, resolution, ordinance, code, order,
edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted,
promulgated, implemented or otherwise put into effect by or under the authority
of any Governmental Entity.

 

(v)           "Lien" shall mean any pledge,
claim, lien, charge, encumbrance, option and security interest of any kind or
nature whatsoever.

 

(w)           "Material Adverse Effect" shall
mean any change, event, violation, inaccuracy, circumstance or effect that has a
material adverse effect on the business, properties, prospects, assets, results
of operations or condition (financial or otherwise) of the Company or its
Subsidiaries; provided, however, that in no
event shall any of the following, alone or in combination, be deemed to
constitute a Material Adverse Effect: (i) changes in generally accepted
accounting principles in the United States or changes in the regulatory
accounting requirements applicable to any industry in which the Company and its
Subsidiaries operate, (ii) changes in the financial and securities markets or
general economic and political conditions in the United States or the People's
Republic of China, (iii) changes (including changes of applicable law) or
conditions generally affecting the industry in which the Company and its
Subsidiaries operate and not specifically relating to or having a materially
disproportionate effect on the Company and its Subsidiaries, taken as a whole,
(iv) acts of war, sabotage or terrorism or natural disasters involving the
United States of America or the People's Republic of China, (v) the announcement
or consummation of the transactions contemplated by this Agreement, (vi) any
failure by the Company and its Subsidiaries to meet any internal or published
budgets, projections, forecasts or predictions of financial performance for any
period and any changes in the trading price or trading volume of Shares
(provided that the underlying causes of such failure or changes shall not be
excluded) or (vii) any action taken (or omitted to be taken) at the request of
the Purchaser.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

4

 

CONFIDENTIAL
TREATMENT REQUEST

 

(x)           "Nasdaq" shall mean the Nasdaq
Capital Market.

 

(y)           "Permits" shall mean all
permits, licenses, variances, exemptions, orders and approvals from Governmental
Entities.

 

(z)           "Permitted Liens" shall mean
(i) statutory liens for Taxes that are not yet due and payable,
(ii) statutory liens to secure obligations to landlords, lessors or renters
under leases or rental agreements, (iii) deposits or pledges made in
connection with, or to secure payment of, workers' compensation, unemployment
insurance or similar programs mandated by applicable Law, (iv) statutory
liens in favor of carriers, warehousemen, mechanics and materialmen, to secure
claims for labor, materials or supplies and other like liens, (v) liens in the
ordinary course of business, and (vi) liens in favor of customs and revenue
authorities arising as a matter of an applicable Legal Requirement to secure
payments of customs duties in connection with the importation of
goods.

 

(aa)           "Person" shall mean any
individual, corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any limited liability company or joint stock
company), firm or other enterprise, association, organization, entity or
Governmental Entity.

 

(bb)           "Release" means any actual or
threatened release, spill, emission, leaking, dumping, injection, pouring,
deposit, disposal, discharge, dispersal, leaching or migration into or through
the environment (including ambient air, surface water, groundwater, land surface
or subsurface strata) or within any building, structure, facility or
fixture.

 

(cc)           "SEC" shall mean the U.S.
Securities and Exchange Commission.

 

(dd)           "Securities Act" shall mean the
Securities Act of 1933, as amended.

 

(ee)           "Spreadtrum Products" means
baseband and radio frequency integrated circuit chipset products, including
GSM/GPRS/EDGE and TD-SCDMA products, developed, owned, licensed, marketed or
distributed by the Purchaser.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

5

 

CONFIDENTIAL
TREATMENT REQUEST

 

(ff)           "Subsidiaries" shall mean, when
used with respect to any party, any corporation or other organization, whether
incorporated or unincorporated, at least a majority of the securities or other
interests of which having by their terms ordinary voting power to elect a
majority of the board of directors or others performing similar functions with
respect to such corporation or other organization is directly or indirectly
owned or controlled by such party or by any one or more of its Subsidiaries, or
by such party and one or more of its Subsidiaries.

 

1.2           The
following capitalized terms shall have the respective meanings ascribed thereto
in the respective sections of this Agreement set forth opposite each of the
capitalized terms below:

	
      
      Term

	 	
      
      Section
      where Defined

	
      Accredited
      Investor
	 	
      4.4

	
      Agreement
	 	
      Preamble

	
      Balance
      Sheet Date
	 	
      3.5(b)

	
      Board
	 	
      3.5(c)

	
      Closing
	 	
      2.2

	
      Company
	 	
      Preamble

	
      Company
      Balance Sheet
	 	
      3.5(b)

	
      Company
      Financials
	 	
      3.5(b)

	
      Company
      Permits
	 	
      3.13(b)

	
      Company
      SEC Reports
	 	
      3.5(a)(i)

	
      correspondence
	 	
      7.2(a)

	
      Disclosure
      Schedule
	 	
      3

	
      Inventory
	 	
      3.5(a)(iv)

	
      Irreparable
      Breach
	 	
      7.5(c)

	
      Key
      Stockholder or Key Stockholders
	 	
      Preamble

	
      OFAC
	 	
      3.17

	
      Preferred
      Stock
	 	
      3.2(a)

	
      Purchase
      Shares
	 	
      2.1

	
      Purchaser
	 	
      Preamble

	
      Purchaser
      Nominee
	 	
      5.1

	
      SOX
	 	
      3.18

	
      Trade
      Secrets
	 	
      1.1(s)

 

2.           Purchase and Sale of the
Purchase Shares. 

 

2.1           Purchase and
Sale. 
At the Closing, the Company hereby agrees to sell to the Purchaser, and the
Purchaser hereby agrees to purchase, for a purchase price of US$1.73 per share,
1,676,300 shares of Common Stock (the "Purchase Shares") for an
aggregate purchase price of US$2,900,000.00.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

6

 

CONFIDENTIAL
TREATMENT REQUEST

 

2.2           Closing.  As
soon as practicable following satisfaction or waiver (to the extent permitted
hereunder) of all the conditions precedent set forth in Section 6.1 and
Section 6.2 below (other than those conditions that by their terms are to
be satisfied at the Closing, but subject to the satisfaction or waiver (to the
extent permitted hereunder) of such conditions), at the closing (the "Closing"), the Company shall
issue and sell the Purchase Shares to the Purchaser.  The Closing
shall take place remotely through the exchange of signature pages and documents
electronically or by facsimile.

 

2.3           Deliveries.  At
the Closing, the Purchaser shall pay to the Company the aggregate purchase price
for the Purchase Shares.  Such payments shall be made by wire transfer
of U.S. Dollars to a bank account of the Company in accordance with the
Company's wire instructions.  The Company shall, at the Closing, issue
and deliver to the Purchaser a stock certificate representing the Purchased
Shares, registered in the name of the Purchaser.

 

3.           Representations and
Warranties of the Company. 
Except as set forth in the Disclosure Schedule delivered in connection with this
Agreement (the "Disclosure Schedule"), which
qualifies the following representations and warranties in their entirety, the
Company hereby represents and warrants to the Purchaser as follows:

 

3.1           Organization; Good Standing;
Qualification.  The
Company and each of its Subsidiaries is a corporation or other organization duly
organized, validly existing and in good standing (when such concept is
applicable) under the laws of the jurisdiction of its incorporation or
organization, has the requisite power and authority to own, lease and operate
its properties and to carry on its business as now being
conducted.  The Company is duly qualified and in good standing to do
business in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification necessary, other
than in such jurisdictions where the failure to be so qualified and in good
standing, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on the Company.

 

3.2           Capitalization.

 

(a)           Capital Stock.  The
authorized capital stock of the Company consists of 35,000,000  shares of Common Stock
and 1,000,000 shares
of preferred stock, par value $0.01 per share ("Preferred
Stock").  At the close of business on October 17, 2011:
(i) 18,412,925 shares of Common Stock were issued and outstanding and
(ii) zero shares of Preferred Stock were issued and
outstanding.  Except as set forth in Schedule 3.2 (a) of the
Disclosure Schedule, all of the outstanding shares of capital stock of Company
are duly authorized and validly issued, fully paid and nonassessable and not
subject to any preemptive rights.

 

(b)           Stock Options.  As
of the close of business on October 17, 2011: (i) 1,876,350 shares of
Common Stock are subject to issuance pursuant to Company Options;
(ii) 753,000 shares of Common Stock are reserved for future issuance under
the Company Stock Option Plans, and (iii) 747,000 shares of Common Stock to be
reserved for future issuance upon approval to increase the plan by shareholders
at the next annual meeting of shareholders to be held in December
2011.  All shares of Common Stock subject to issuance under the
Company Stock Option Plans, upon issuance on the terms and conditions specified
in the instruments pursuant to which they are issuable, would be duly authorized
and validly issued, fully paid and nonassessable.  Except for
outstanding Company Options, there are no outstanding or authorized stock
appreciation, phantom stock, profit participation or other similar rights with
respect to Company.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

7

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

(c)           Other
Securities.  Except as set forth in Schedule 3.2(c) of the
Disclosure Schedule, there are no securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which the
Company or any of its Subsidiaries is a party or by which any of them is bound
obligating the Company or any of its Subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other voting securities of the Company or any of its Subsidiaries, or obligating
the Company or any of its Subsidiaries to issue, grant, extend or enter into any
such security, option, warrant, call, right, commitment, agreement, arrangement
or undertaking. Except as disclosed in Schedule 3.2(c) and as contemplated by
this Agreement, none of the Company's capital stock is subject to preemptive
rights or any other similar rights.  All outstanding shares of Common
Stock, all outstanding Company Options and all outstanding shares of capital
stock of each Subsidiary of the Company have been issued and granted in
compliance in all material respects with all applicable securities laws and
other material Legal Requirements.

 

3.3           No Subsidiaries or Equity
Interests. Except
as set forth in Schedule 3.3 of the Disclosure Schedule and except as set forth
in the Company SEC Reports, the Company does not own, directly or indirectly,
any capital stock, membership interest, partnership interest, joint venture
interest or other equity interest in any Person.

 

3.4           Authorization;
Non-Contravention.

 

(a)           Authorization.  All
corporate action on the part of the Company necessary for the authorization,
execution and delivery of this Agreement, the performance of all obligations of
the Company hereunder and thereunder, and the authorization, issuance, sale and
delivery of the Purchase Shares has been taken prior to the date hereof, and
this Agreement, when validly executed by the Purchaser, constitutes a valid and
legally binding obligation of the Company, enforceable in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
enforcement of creditors' rights generally and (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies.

 

(b)           Non-Contravention.  The
execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance of the Purchase Shares) will not
(i) result in a violation of the Company's or any Subsidiary's Certificate of
Incorporation, Bylaws (each as amended to date) or other organizational or
charter documents, (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any Subsidiary is a party, or (iii) subject to the consents set forth in Section
3.6, result in a violation of any Legal Requirement applicable to the Company or
by which any property or asset of the Company or any Subsidiary is bound or
affected, except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which would not reasonably be expected
to result in a Material Adverse Effect on the Company.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

8

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

3.5           SEC Filings; Financial
Statements; Internal Controls. 

 

(a)           SEC Filings.

 

(i)      As
of the date hereof, the Company has filed all required registration statements,
prospectuses, reports, schedules, forms, statements and other documents
(including exhibits and all other information incorporated by reference)
required to be filed by it with the SEC, for the twelve months preceding the
date hereof (or such shorter period as the Company was required by law or
regulation to file such material) All such registration statements,
prospectuses, reports, schedules, forms, statements and other documents in the
form filed with the SEC have been made available to the Purchaser or are
publicly available in the Interactive Data Electronic Applications database of
the SEC.  All such required registration statements, prospectuses,
reports, schedules, forms, statements and other documents, as amended, are
referred to herein as the "Company SEC
Reports."  As of their respective dates (or if subsequently
amended or supplemented, on the date of such amendment or supplement), the
Company SEC Reports (i) were prepared in accordance and complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations of the SEC thereunder applicable to
such Company SEC Reports, and (ii) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.  None of the
Company's Subsidiaries is required to file any forms, reports or other documents
with the SEC.

 

(ii)      Except
as set forth on Schedule 3.5(a)(ii) or disclosed in the Company SEC Reports,
neither the Company nor any of its Subsidiaries has any material liabilities or
obligations of any nature (whether accrued, absolute, contingent or
otherwise).

 

(iii)          
       Subject
to the applicable reserve for bad debts (which were determined in accordance
with GAAP consistent with the Company's past practices) on the most recent
audited balance sheet included in the Company SEC Reports, all accounts
receivable of the Company reflected on such balance sheet were valid receivables
as of such date subject to no setoffs or counterclaims.  All accounts
receivable of the Company have arisen from bona fide transactions in the
ordinary course of business.  Since the date of the most recent
audited balance sheet included in the Company SEC Reports, there have not been
any write-offs as uncollectible of any customer accounts receivable of the
Company and the Subsidiaries, except for write-offs in the ordinary course of
business of the Company and the Subsidiaries and consistent with past practice
and no write-offs were related to transactions with a related party of the
Company.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

9

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

(iv)          
       All
items in the inventories of the Company (the "Inventory") reflected on the
most recent balance sheet included in the Company SEC Reports or existing at the
date hereof are of a quality and quantity saleable or usable in the ordinary
course of business consistent with past practices of the Company, subject to the
reserves or provisions reflected in the Inventory valuation in such balance
sheet. Such Inventory reflects reserves or provisions which were determined in
accordance with GAAP consistent with the Company's past practices and procedures
for items which are below standard quality, represent excess quantities or have
become obsolete or unsaleable or unusable (except at prices less than cost) in
the ordinary course of business. No material reserves or provisions for
Inventory since the date of the most recent audited balance sheet included in
the Company SEC Reports have been, or are required to be,
recorded.  .

 

(v)      Neither
the Company nor any of its Subsidiaries is a party to, or has any commitment to
become a party to, any joint venture, off balance sheet partnership or any
similar contract (including any contract or arrangement relating to any
transaction or relationship between or among the Company and any of its
Subsidiaries, on the one hand, and any unconsolidated Affiliate, including any
structured finance, special purpose or limited purpose entity or person, on the
other hand, or any "off balance sheet arrangements" (as defined in
Item 303(a) of Regulation S-K)), where the result, purpose or intended
effect of such contract is to avoid disclosure of any material transaction
involving, or material liabilities of, the Company or any of its Subsidiaries in
the Company's or such Subsidiary's published financial statements or other
Company SEC Reports.

 

(b)           Financial
Statements.  Except as set forth in Schedule 3.5(b), each of
the consolidated financial statements (including, in each case, any related
notes thereto) contained in the Company SEC Reports (the
"Company
Financials"): (i) complied in all material respects with the
published rules and regulations of the SEC with respect thereto as in effect at
the time of filing; (ii) was prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto), except that unaudited financial statements may not contain
all footnotes required by GAAP; and (iii) fairly presented in all material
respects the consolidated financial position of the Company and its consolidated
Subsidiaries as at the respective dates thereof and the consolidated results of
the Company's operations and cash flows for the periods indicated, subject, in
the case of unaudited statements, to normal, immaterial, year-end audit
adjustments. The balance sheet of the Company as of June 30, 2011 ("Balance
Sheet Date") contained in the Company SEC Reports is hereinafter referred
to as the "Company Balance
Sheet."  Except as disclosed in the Company Financials, since
the date of the Company Balance Sheet and through the date hereof, neither the
Company nor any of its Subsidiaries has any liabilities required under GAAP to
be set forth on a consolidated balance sheet except for (A) liabilities set
forth, recognized or disclosed on the Company Balance Sheet,
(B) liabilities incurred since the date of the Company Balance Sheet in the
ordinary course of business, and (C) liabilities incurred pursuant to this
Agreement, and no liability incurred pursuant to clauses (A), (B) or (C),
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect on the Company or its Subsidiaries.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

10

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

(c)           Internal
Controls.  The Company has established and maintains, adheres
to and enforces a system of internal accounting controls which are effective in
providing reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements in accordance with GAAP, including
policies and procedures that (i) require the maintenance of records that in
reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of the Company and its Subsidiaries,
(ii) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with GAAP,
and that receipts and expenditures of the Company and its Subsidiaries are being
made only in accordance with appropriate authorizations of management and the
board of directors of the Company (the "Board"), and
(iii) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the assets of the Company and
its Subsidiaries.  Neither the Company nor, to the Knowledge of the
Company, the Company's independent auditors, has identified or been made aware
of (A) any significant deficiency or material weakness, in each case which
has not been subsequently remediated, in the system of internal accounting
controls utilized by the Company and its Subsidiaries, taken as a whole, or
(B) any fraud that involves the Company's management or other employees who
have a role in the preparation of financial statements or the internal
accounting controls utilized by the Company.

 

3.6           Governmental
Consents.  No
consent, approval, order or authorization of, or registration, declaration or
filing with any Governmental Entity is required to be obtained or made by the
Company in connection with the execution and delivery of this Agreement and the
transactions contemplated hereby, except for: (i) such consents, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under applicable U.S. federal and state securities; (ii) such filings,
registrations and qualifications as may be required by Nasdaq in connection with
the issuance of the Purchase Shares; and (iii) such other consents,
authorizations, filings, approvals and registrations which if not obtained or
made (A) could not reasonably be expected have a Material Adverse Effect on
the Company, or (B) would not prevent consummation of the transactions
contemplated hereunder or otherwise substantially impair the parties hereto from
performing their respective obligations hereunder.

 

3.7           Brokers or
Finders. 
The Company has not incurred, and shall not incur, directly or indirectly, any
liability for any brokerage or finders' fees or agents commissions or any
similar charges in connection with this Agreement or any transaction
contemplated hereby.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

11

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

3.8           Nasdaq. 
The Common Stock is listed on Nasdaq, there are no proceedings to revoke or
suspend such listing and the Company has not received any notice from Nasdaq,
nor does the Company have Knowledge of any reason that the Company does not meet
the listing or maintenance requirements for continuing listing on such
exchange.

 

3.9           Valid Issuance of the
Purchase Shares. 
The Purchase Shares, when issued, sold and delivered in accordance with the
terms of this Agreement and upon payment of the purchase price therefor, will be
duly authorized and validly issued, fully paid and nonassessable, and free and
clear of all Liens (other than restrictions on transfer imposed by U.S. law
(both state and federal).

 

3.10           Offering. 
Provided that the representations and warranties made by the Purchaser herein
are complete, true and accurate, then the offer, issuance and sale of the
Purchase Shares pursuant hereto will be exempt from the registration
requirements of Section 5 of the Securities Act, and will have been
registered or qualified (or are exempt from registration and qualification)
under the registration, permit or qualification requirements of all applicable
U.S. state securities laws.  Neither the Company nor any agent on its
behalf has solicited any offers to sell or has offered to sell all or any part
of the Purchase Shares to any person or persons so as to bring the sale of such
securities within the registration and/or qualification provisions of the
Securities Act or any applicable U.S. state securities laws.

 

3.11           No Material Adverse
Effect.  Since
the Balance Sheet Date, no event or circumstance has occurred that, individually
or in the aggregate, has had or could reasonably be expected to have a Material
Adverse Effect on the Company.

 

3.12           Intellectual
Property.

 

(a)           The
Company Intellectual Property is owned by the Company or its Subsidiaries free
and clear of Liens, other than (i) Permitted Liens, (ii) encumbrances,
restriction or other obligations arising under any of the Company Intellectual
Property Agreements,  or (iii) Liens that would not have a Material
Adverse Effect on the Company.  The Company owns, or is validly
licensed or otherwise has the right to use, all Intellectual Property which is
material to the conduct of all business and operations conducted by the Company
or its Subsidiaries, taken as a whole.

 

(b)           The
Company and each of its Subsidiaries has taken reasonable steps consistent with
applicable industry practice to protect and preserve the confidentiality of
material confidential information that they wish to, or are obligated by third
parties to, protect as Trade Secrets, and, to the Knowledge of the Company,
there is no misappropriation from the Company of such Trade Secrets by any
Person, except where such misappropriation would not have a Material Adverse
Effect on the Company.

 

(c)           To
the Knowledge of the Company, none of the Company or any of its Subsidiaries or
any of its or their current products or services (or products and services
proposed to be sold or provided) is infringing upon or otherwise violating the
Intellectual Property of any third party, except where such infringement would
not have a Material Adverse Effect on the Company.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

12

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

(d)           As
of the date of this Agreement, the Company has not received notice of any suit,
claim, action, investigation or proceeding made, conducted or brought by a third
party that has been served upon or, to the Knowledge of the Company, filed or
threatened with respect to any alleged infringement or other violation in any
material respect by the Company or any of its Subsidiaries or any of its or
their current products or services or other operation of the Company's or its
Subsidiaries' business of the Intellectual Property of such third
party.  As of the date of this Agreement, to the Knowledge of the
Company, there is no pending or threatened claim challenging the validity or
enforceability of, or contesting the Company's or any of its Subsidiaries'
rights with respect to, any of the material Company Intellectual
Property.

 

(e)           The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in (i) the Company or its
Subsidiaries granting to any third party any rights or licenses to any Company
Intellectual Property, (ii) any right of termination or cancellation under any
Company Intellectual Property Agreement, or (iii) the imposition of any Lien on
any Company Intellectual Property, except where any of the foregoing (in clauses
(i) through (iii)) would not have a Company Material Adverse
Effect.

 

3.13           Compliance;
Permits.

 

(a)           Compliance.  Neither
the Company nor any of its Subsidiaries is in conflict with, or in default or in
violation of any Legal Requirement applicable to the Company or any of its
Subsidiaries or by which the Company or any of its Subsidiaries or any of their
respective businesses or properties is bound or affected, except for conflicts,
violations and defaults that would not have a Material Adverse Effect on the
Company.  As of the date hereof, no investigation or review by any
Governmental Entity is pending or has been threatened in a writing delivered to
the Company or any of its Subsidiaries, against the Company or any of its
Subsidiaries.  There is no judgment, injunction, order or decree
binding upon the Company or any of its Subsidiaries which has or could
reasonably be expected to be material to the Company.

 

(b)           Permits.  The
Company and its Subsidiaries hold, to the extent legally required, all Permits
that are required for the operation of the business of the Company, as currently
conducted, the failure to hold which could reasonably be expected to be material
to the Company (collectively, "Company Permits").  As of
the date hereof, no suspension or cancellation of any of the Company Permits is
pending or, to the Knowledge of Company, threatened.  The Company and
its Subsidiaries are in compliance in all material respects with the terms of
the Company Permits.

 

3.14           Litigation. 
As of the date hereof, there are no claims, suits, actions, notices of
violations, arbitrations, audits, proceedings or investigations threatened
against or affecting the Company, any director or officer of the Company (in
their capacities as such) or any of the Company's properties, before or by any
court, governmental department, commission, agency, instrumentality or
authority.  There is no judgment, order or decree imposed upon any
director or officer of the Company (in their capacities as such) that would
prevent, enjoin, alter or materially delay any of the transactions contemplated
by this Agreement or that would reasonably be expected to have a Material
Adverse Effect on the Company.   Neither the Company, nor any
director or officer thereof (in his or her capacity as such), is or has been the
subject of any claim, action, suit, notice of violation, arbitration, audit,
proceeding or investigation involving a claim or violation of or liability under
federal or state securities laws or a claim of breach of fiduciary
duty.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

13

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

3.15           Ownership of
Assets.  Other
than Permitted Liens and other than with respect to any Company Intellectual
Property, to the Knowledge of the Company, there are no Liens over or affecting
the whole or any part of the material assets of the Company.

 

3.16           Transactions with Affiliates
and Employees. 
Except as disclosed in the Company SEC Reports, none of the officers, directors,
stockholders or employees of the Company is presently a party, directly or
indirectly, to any transaction with the Company (other than for services as
employees, officers and directors), including any contract or agreement
providing for the furnishing of services to or by, providing for the rental of
real or personal property to or from, or otherwise requiring payments to or from
any officer, director or such employee or entity to which any officer, director
or such employee has a substantial interest or is an officer, director, trustee
or partner, in each case in excess of $120,000 other than for: (i) payment of
salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including
stock option agreements under and stock option plan of the Company.

 

3.17           OFAC. 
Neither the Company, nor any director or officer of the Company, nor any agent,
employee, affiliate or Person acting on behalf of the Company is currently
identified on the specially designated nationals or other blocked person list or
otherwise currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department
("OFAC"), and the Company has
not, directly or indirectly, used any funds, or loaned, contributed or otherwise
made available such funds to any Subsidiary, joint venture partner or other
Person in connection with any sales or operations in Cuba, Iran, Syria, Sudan,
Myanmar or any other country sanctioned by OFAC or for the purpose of financing
the activities of any Person currently subject to, or otherwise in violation of,
any U.S. sanctions administered by OFAC.

 

3.18           Sarbanes-Oxley Act of
2002.  Except
as set forth in Schedule 3.18 of the Disclosure Schedule, the Company is in
material compliance with all provisions of the SOX applicable to it as of the
date hereof and as of the Closing.  There has been no material change in
the Company's accounting policies except as described in the notes to the
Company Financials.  No executive officer of the Company has failed to
make the certifications required of him or her under Section 302 or 906 of
the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations
promulgated thereunder ("SOX") with respect to any
Company SEC Report, except as disclosed in certifications filed with the Company
SEC Reports, and such certification was true and accurate and materially
complied with the SOX and the rules and regulations promulgated thereunder.
 Neither the Company, nor to the Knowledge of the Company, any of its
executive officers has received or otherwise had or obtained knowledge of any
complaint, allegation, assertion or claim, whether written or oral, regarding
the accounting or auditing practices, procedures, methodologies or methods of
the Company or their respective internal accounting controls, including any
complaint, allegation, assertion or claim that the Company has engaged in
questionable accounting or auditing practices, except for (a) any complaint,
allegation, assertion or claim as has been resolved without any resulting change
to the Company's accounting or auditing practices, procedures methodologies or
methods of the Company or its internal accounting controls and (b) questions
regarding such matters raised and resolved in the ordinary course in connection
with the preparation and review of the Company's financial statements and
periodic reports.  To the Knowledge of the Company, no attorney
representing the Company, whether or not employed by the Company, has reported
evidence of a material violation of securities laws, breach of fiduciary duty or
similar violation by the Company or any of its officers, directors, employees or
agents to the Board or any committee thereof or to any director or officer of
the Company.  To the Knowledge of the Company, no employee of the Company
has provided or is providing information to any law enforcement agency regarding
the commission or possible commission of any crime or the violation or possible
violation of any applicable law, in each case, regarding the
Company.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

14

 

 

CONFIDENTIAL
TREATMENT REQUEST

 
3.19           Environmental
Matters. 
Except for those matters disclosed in the Company SEC Reports: (i) each of
the Company and its Subsidiaries is, and has been, in compliance in all material
respects with all Environmental Laws, and, except for matters on which the
Company or its Subsidiaries have obtained full and final resolution, neither the
Company nor any of its Subsidiaries has received any (A) written
communication that alleges that the Company or any of its Subsidiaries is in
material violation of, or has any material liability under, any Environmental
Law or (B) written request for information pursuant to any Environmental
Law; (ii)(A) each of the Company and its Subsidiaries has obtained and is in
compliance in all material respects with all permits, licenses and governmental
authorizations pursuant to Environmental Law necessary for its operations as
currently conducted and (B) all such permits, licenses and governmental
authorizations are valid and in good standing; (iii) there are no material
Environmental Claims pending or, to the Knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries, and neither the
Company nor any of its Subsidiaries is subject to any material outstanding
judgment, order or decree pursuant to or under Environmental Laws; (iv) to
the Knowledge of the Company there have been no Releases of any Hazardous
Material that could reasonably be expected to form the basis of any material
Environmental Claim against or affecting the Company or any of its Subsidiaries
or against any Person whose liabilities for such Environmental Claims the
Company or any of its Subsidiaries has, or may have, retained or assumed, either
contractually or by operation of law; (v) neither the Company nor any of
its Subsidiaries has retained or assumed, either contractually or by operation
of law, any liabilities or obligations that could reasonably be expected to form
the basis of any material Environmental Claim against or affecting the Company
or any of its Subsidiaries; (vi) there are no facts, circumstances or conditions
that could reasonably be expected to form the basis for any material
Environmental Claim against or affecting the Company or any of its Subsidiaries;
and (vii) the Company has provided the Purchaser with complete and accurate
copies of all environmental reports, studies and audits of the Company and
operations in the Company's possession.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

15

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

3.20           Foreign Corrupt Practices
Act. 
Neither the Company nor any director, employee, officer or director of the
Company has, in the course of its actions for, or on behalf of, the Company (a)
used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expenses relating to political activity; (b) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (c) violated or is in violation of any provision
of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder; or (d) made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.

 

3.21           Full
Disclosure. 
The Company has provided the Purchaser with all information requested by the
Purchaser in connection with its decision to purchase the Purchaser Shares,
including all information the Company believes is reasonably necessary to make
such investment decision.  To the Company's Knowledge, neither this
Agreement nor any certificate, document, schedule or agreement delivered
pursuant to this Agreement contains any untrue statement of a material fact nor,
to the Company's Knowledge, omits to state a material fact necessary in order to
make the statements contained herein or therein not misleading.

 

4.           Representations and
Warranties of the Purchaser. 
The Purchaser represents and warrants to the Company as follows:

 

4.1           Organization;
Authorization. 
The Purchaser is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with full right,
corporate or partnership power and authority to enter into and to consummate the
transactions contemplated by this Agreement and otherwise to carry out its
obligations hereunder. All corporate action on the part of the Purchaser
necessary for the authorization, execution and delivery of this Agreement, the
performance of all obligations of the Purchaser hereunder and thereunder has
been taken prior to the date hereof, and this Agreement, when validly executed
by the Company, constitutes a valid and legally binding obligation of the
Purchaser, enforceable in accordance with its terms, except (i) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting the enforcement of creditors' rights generally
and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.

 

4.2           Purchase Entirely for Own
Account. 
The Purchase Shares to be purchased by the Purchaser will be acquired for
investment for the Purchaser's own account, and not as a nominee or agent, and
not with a view to the resale or distribution of any part thereof, and the
Purchaser has no present intention of selling, granting any participation in, or
otherwise distributing the same.  The Purchaser is not a party to any
contract, understanding, agreement or arrangement with any person to sell,
transfer or otherwise dispose of any of the Purchase Shares purchased by
it.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

16

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

4.3           Receipt of
Information. 
The Purchaser has had an opportunity to ask questions and receive answers from
the Company regarding the terms and conditions of the issuance and sale of the
Purchase Shares and the business, properties, prospects and financial condition
of the Company and obtain additional information (to the extent the Company
possessed such information or could acquire such information without
unreasonable effort or expense) necessary to verify the accuracy of any
information furnished to it or to which it had access.  The foregoing,
however, does not limit or modify the representations and warranties of the
Company in Section 3 of this Agreement or the right of the Purchaser to
rely thereon.

 

4.4           Accredited
Investor. 
Unless otherwise expressly indicated to the Company, (a) the Purchaser is
an "accredited investor" as such term is defined in Rule 501 of Regulation
D promulgated under the Securities Act (an "Accredited Investor"), or
(b) if the Purchaser was formed for the specific purpose of acquiring the
Purchaser Shares, then each shareholder or member of the Purchaser is an
Accredited Investor.

 

4.5           Investment
Experience. 
The Purchaser is experienced in evaluating and investing in securities of
companies and acknowledges that it is able to fend for itself, can bear the
economic risk of its investment, and has such knowledge and experience in
financial and business matters that is capable of evaluating the merits and
risks of the investment in the Purchase Shares.

 

4.6           Rule 144. 
The Purchaser understands that the Purchase Shares may not be sold, transferred
or otherwise disposed of without registration under the Securities Act or an
exemption therefrom, and that in the absence of an effective registration
statement covering the Purchase Shares or on an available exemption from
registration under the Securities Act, the Purchase Shares must be held
indefinitely.  In particular, the Purchaser is aware that the Purchase
Shares may not be sold pursuant to Rule 144 promulgated under the Securities Act
unless all of the conditions of that rule are met.  Among the
conditions for use of Rule 144 is the availability of current information to the
public about the Company.

 

4.7           Reliance on Purchaser's
Representations. 
The Purchaser understands that the Purchase Shares being offered and sold to it
will not be registered under the Securities Act or any other applicable
securities laws on the ground that such issuance will be exempt from the
registration requirements of U.S. federal, state and other applicable securities
laws, and that the Company is relying upon the truth and accuracy of, and the
Purchaser's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth herein in order to
determine the availability of such exemptions and the eligibility of the
Purchaser to acquire the Purchase Shares.

 

4.8           General
Solicitation.  The
Purchaser is not, to its knowledge, purchasing the Securities as a result of any
advertisement, article, notice or other communication regarding the Securities
published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or, to such Purchaser's
knowledge, any other general solicitation or general advertisement.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

17

 

CONFIDENTIAL
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4.9           Legends. 
Each certificate representing any of the Purchase Shares shall be endorsed with
the applicable legend set forth below and any other legends required by
applicable law, and the Purchaser covenants that, except to the extent such
restrictions are waived in writing by the Company, it shall not transfer the
shares represented by any such certificate without complying with the
restrictions on transfer described in this Agreement and the legends endorsed on
such certificate:

 

THE
SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE
OFFERED, SOLD OR TRANSFERRED UNLESS (I) THERE IS AN EFFECTIVE REGISTRATION
STATEMENT COVERING SUCH OFFER, SALE OR TRANSFER OR (II) THERE IS AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAWS FOR SUCH OFFER, SALE OR TRANSFER IS AVAILABLE.
HEDGING TRANSACTIONS INVOLVING THE SHARES REPRESENTED HEREBY MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.  THIS
CERTIFICATE MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A
CONDITION PRECEDENT TO THE SALE, PLEDGE, HYPOTHECATION OR ANY OTHER TRANSFER OF
ANY INTEREST IN ANY OF THE SHARES REPRESENTED BY THIS CERTIFICATE.

 

 

5.           Covenants.

 

5.1           Board
Nominee.  As
of the Closing Date, the Board shall have an authorized size of six (6)
directors, and Mr. Leo Li shall have been appointed to the Board as a nominee of
the Purchaser (such member of the Board appointed pursuant to this Section 5.1,
a "Purchaser
Nominee").

 

(a)           Subject
to the terms and conditions herein, the Purchaser shall, following the Closing,
continue to have the right to nominate a Purchaser Nominee to the
Board.  At each annual or special meeting of the stockholders of the
Company after the date hereof at which directors are to be elected, the Company
shall nominate the Purchaser Nominee to serve as a director until the next
annual general meeting, and each of the Key Stockholders shall, and shall cause
any of its Affiliates to which capital stock in the Company may be subsequently
transferred, to vote all of the capital stock of the Company now owned and which
may hereafter be acquired by the such Key Stockholder  or its
Affiliates and any other securities, if any, which such Key Stockholder or its
Affiliates is currently entitled to vote, or after the date hereof, becomes
entitled to vote, in favor of the election of such Purchaser Nominee to the
Board.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

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(b)           Notwithstanding
anything in this Agreement to the contrary, in the event that, anytime after the
date hereof, the Purchaser and its Affiliates beneficially own, in the
aggregate, less than fifty percent (50%) of the Purchase Shares, then the
Purchaser shall not be entitled under this Section 5.1 to nominate any member of
the Board (it being understood that, subject to the provisions of the Agreement
(i) nothing in this Section 5.1(b) shall prevent the Purchaser from exercising
its voting rights with respect to the election of directors generally as a
stockholder of the Company and (ii) nothing in this Section 5.1(b) shall prevent
any former Purchaser Nominee from serving on the Board henceforth if such former
Purchaser Nominee is otherwise elected in accordance with the Company's then
current certificate of incorporation and bylaws).

 

(c)           Notwithstanding
anything contained herein to the contrary: (i) the appointment of the Purchaser
Nominee shall be subject to compliance with the rules, regulations and
requirements of Nasdaq and applicable law (including, without limitation, the
Securities Act and the Exchange Act)  applicable to service on the
Board of Directors and (ii) the Purchaser Nominee shall comply in all respects
with the Company's corporate governance guidelines applicable to directors
generally in effect from time to time.

 

5.2           Further
Assurances. 
Each party agrees to act in good faith and use commercially reasonable efforts
to cooperate fully with the other parties and to execute such further
instruments, documents and agreements and to give such further written
assurances, as may be reasonably requested by the other parties to better
evidence and reflect the transactions described herein and contemplated hereby,
and to carry into effect the intents and purposes of this
Agreement.

 

5.3           Nasdaq
Listing. The
Company agrees to take all reasonable action necessary to maintain its Common
Stock listing on Nasdaq and to notify Nasdaq with respect to the Purchase
Shares.

 

5.4           Conduct of Business by the
Company. 
During the period from the date hereof and continuing until the earlier of the
termination of this Agreement pursuant to its terms or the Closing, the Company
and each of its Subsidiaries shall, except as otherwise expressly contemplated
by this Agreement, the Disclosure Schedule or as required to consummate the
transaction contemplated hereunder or as required by applicable laws or
regulations, or to the extent that the Purchaser shall otherwise consent in
writing, (i) carry on its business in the usual, regular and ordinary
course, in substantially the same manner as heretofore conducted and consistent
with the Company's plan's  for managing its business and other
operations and in material compliance with all applicable laws and regulations,
(ii) pay its debts and Taxes when due, pay or perform other material
obligations when due, (iii) not sell, assign or transfer any material Company
Intellectual Property other than in the ordinary course of business, (iv) not
declare or pay any dividends, and (v) use commercially reasonable efforts
consistent with past practices and policies and its existing restructuring plans
to (x) preserve substantially intact its present business organization,
(y) use commercially reasonable efforts to keep available the services of
its present executive officers and employees, and (z) use commercially
reasonable efforts to preserve its relationships with customers, suppliers,
licensors, licensees, and others with which it has significant business
dealings.  In addition, the Company shall promptly notify in writing
the Purchaser of any event that it believes could reasonably be expected to lead
to a Material Adverse Effect on the Company.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

19

 

 

CONFIDENTIAL
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5.5           Exclusivity.

 

During
the Exclusivity Term, Company and its Affiliates (i) shall design and develop
all Company Products to integrate and operate solely with the Spreadtrum
Products (s ("Exclusive Products"), and shall not design or develop any Company
Products to integrate or operate with any Competitive Products. 
Notwithstanding the foregoing, solely during [***], Company and its Affiliates
shall have the right to develop and design Company Products, other than [***],
provided : i) there are no [***]; and ii) Company and its Affiliates commence
[***] (which were designed and developed during [***]) no later than the
expiration of [***], provided that, for those Company Products integrating or
operating with any Competitive Products that have been designed and developed
prior to the expiration of [***], Company and its Affiliates shall have the
right to [***] such Company Products but shall not make [***] on such Company
Products after the expiration of [***].

 

6.           Conditions Precedent to
Closing. 

 

6.1           Conditions to the Obligation
of the Purchaser to Consummate the Closing. 
The obligation of the Purchaser to consummate the Closing and to purchase and
pay for the Purchase Shares being purchased by it pursuant to this Agreement is
subject to the satisfaction of the following conditions precedent:

 

(a)           Representations and Warranties;
Covenants.

 

(i)      Each
of the representations and warranties of the Company in Section 3 shall be true
and correct in all material respects (except for those representations and
warranties that are qualified by materiality or Material Adverse Effect, which
shall be true and correct to such extent) as of the date of this Agreement and
as of the date of the Closing as though made at that time (except for
representations and warranties that speak as of a specific date, which shall be
true and correct as of such specified date).

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

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CONFIDENTIAL
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(ii)      The
Company shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by this Agreement prior
to the date of Closing.

 

(b)           Qualifications.  All
authorizations, approvals or permits, if any, of any Governmental Entity that
are required in connection with the lawful issuance, sale and purchase of the
Purchase Shares, and the purchase and the procurement of foreign exchange for
payment of the Purchase Price, pursuant to this Agreement shall have been duly
obtained and effective as of the Closing.

 

(c)           Board
Composition.  Effective as of the Closing, the Board shall
include (but not be limited to) the following individuals (unless any such
individual is unable or unwilling to serve on the Board):  Lei Gu,
Anthony Chan, Augustine Lo, Chang Shan, Cheng Wang and Leo Li.

 

(d)           Nasdaq
Listing.  Nasdaq shall have been notified with respect to the
Purchase Shares.

 

6.2           Conditions to the Obligation
of the Company to Consummate the Closing. 
The obligation of the Company to consummate the Closing and to issue and sell
the Purchase Shares to the Purchaser at the Closing is subject to the
satisfaction of the following conditions precedent:

 

(a)           Representations and Warranties;
Covenants.

 

(i)      Each
of the representations and warranties of the Purchaser in Section 4 shall be
true and correct as of the date of this Agreement and as of the date of the
Closing as though made at that time.

 

(ii)      The
Purchaser shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by this Agreement prior
to the date of Closing.

 

(b)           Qualifications.  All
authorizations, approvals or permits, if any, of any Governmental Entity that
are required in connection with the lawful issuance and sale of the Purchase
Shares pursuant to this Agreement shall be duly obtained and effective as of the
Closing. The Purchaser shall have delivered the Purchaser Questionnaire in the
form of Exhibit B attached hereto.

 

(c)           Payment.  The
Purchaser shall have paid the purchase price to the Company as set forth in the
Section 2.3(a).

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

21

 

 

CONFIDENTIAL
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7.           Miscellaneous
Provisions. 

 

7.1           Rights
Cumulative. 
Each and all of the various rights, powers and remedies of the parties shall be
considered to be cumulative with and in addition to any other rights, powers and
remedies which such parties may have at law or in equity in the event of the
breach of any of the terms of this Agreement.  The exercise of any
right, power or remedy shall neither constitute the exclusive election thereof
nor the waiver of any other right, power or remedy available to such
party.

 

7.2           Notices. 

 

(a)           Any
notices, reports or other correspondence (hereinafter collectively referred to
as "correspondence") required or
permitted to be given hereunder shall be sent by international courier,
facsimile, electronic mail or delivered by hand to the party to whom such
correspondence is required or permitted to be given hereunder.  Where
a notice is sent by overnight courier, service of the notice shall be deemed to
be effected by properly addressing, and sending such notice through an
internationally recognized express courier service, delivery fees pre-paid, and
to have been effected three (3) business days following the day the same is sent
as aforesaid.  Where a notice is delivered by facsimile, electronic
mail, by hand or by messenger, service of the notice shall be deemed to be
effected upon delivery; provided that facsimile or electronic mail alone does
not constitute an effective notice.

 

(b)           All
correspondence to the Company shall be addressed as follows:

Zoom
Technologies, Inc.

Sanlitun
SOHO, Building A, 11th
Floor

No. 8
Workers Stadium North Road

Chaoyang
District, Beijing 100027, China

 

with a
copy to:

Ellenoff
Grossman & Schole, LLP

150 East
42nd
Street,

New York,
NY, 10017

Facsimile:
1-212-370-7889

Attention:
David Selengut and Barry Grossman

 

(c)           All
correspondence to the Purchaser shall be addressed as follows:

 

Spreadtrum
Communications, Inc.

Spreadtrum
Center, Building No. 1

Lane
2288, Zuchongzhi Road

Zhangjiang,
Shanghai 201203

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

22

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

People's
Republic of China

Attention:
Dr. Leo Li and Ms. Shannon Gao

Facsimile:
+8621-5080-2996

E-mail:
leo.li@spreadtrum.com, shannon.gao@spreadtrum.com

 

With a
copy to:

 

Wilson
Sonsini Goodrich & Rosati

650 Page
Mill Road

Palo
Alto, California  94304

Facsimile: (650)
493-6811

Attention: Carmen
Chang, Eva Wang and Scott Anthony

 

(d)           Any
entity may change the address to which correspondence to it is to be addressed
by notification as provided for herein.

 

7.3           Captions. 
The captions and paragraph headings of this Agreement are solely for the
convenience of reference and shall not affect its interpretation.

 

7.4           Severability. 
Should any part or provision of this Agreement be held unenforceable or in
conflict with the applicable laws or regulations of any jurisdiction, the
invalid or unenforceable part or provisions shall be replaced with a provision
which accomplishes, to the extent possible, the original business purpose of
such part or provision in a valid and enforceable manner, and the remainder of
this Agreement shall remain binding upon the parties hereto.

 

7.5           Governing Law; Arbitration;
Injunctive Relief. 

 

(a)           This
Agreement shall be governed by and construed in accordance with the internal and
substantive laws of the State of New York and without regard to any conflicts of
laws concepts which would apply the substantive law of some other
jurisdiction.

 

(b)           Other
than as set forth in Section 7.5(c), each of the parties hereto irrevocably
(i) agrees that any dispute or controversy arising out of, relating to, or
concerning any interpretation, construction, performance or breach of this
Agreement, may be settled by arbitration to be held in City of New York, State
of New York, in accordance with the rules then in effect of the American
Arbitration Association, (ii) waives, to the fullest extent it may
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such arbitration, and (iii) submits to the
non-exclusive jurisdiction of the State of California in any such arbitration or
to the jurisdiction of state of federal courts in the state of California in any
of the legal actions or claims.  If submitted to arbitration in any
jurisdiction, the decision of the arbitrator shall be final, conclusive and
binding on the parties to the arbitration.  Judgment may be entered on
the arbitrator's decision in any court having jurisdiction.  The
parties to the arbitration shall each pay an equal share of the costs and
expenses of such arbitration, and each party shall separately pay for its
respective counsel fees and expenses; provided, however, that the
prevailing party in any such arbitration shall be entitled to recover from the
non-prevailing party its reasonable costs and attorney fees.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

23

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

(c)           Each
of the parties hereto acknowledges and agrees that damages will not be an
adequate remedy for any material breach or violation of this Agreement if such
material breach or violation would cause immediate and irreparable harm (an "Irreparable
Breach").  Accordingly, in the event of a threatened or ongoing
Irreparable Breach, each party hereto shall be entitled to seek, in any court of
law of competent jurisdiction, equitable relief of a kind appropriate in light
of the nature of the ongoing or threatened Irreparable Breach, which relief may
include, without limitation, specific performance or injunctive relief; provided, however, that if the
party bringing such action is unsuccessful in obtaining the relief sought, the
moving party shall pay the non-moving party's reasonable costs, including
attorney's fees, incurred in connection with defending such
action.  Such remedies shall not be the parties' exclusive remedies,
but shall be in addition to all other remedies provided in this
Agreement.

 

7.6           Amendment. 
This Agreement may not be amended, modified or terminated, and no rights or
provisions may be waived, except with the written consent of the Company and the
Purchaser.

 

7.7           Expenses. 
Each party will bear its own costs and expenses in connection with the drafting
and negotiation of this Agreement.

 

7.8           Assignment.  Except
as otherwise indicated herein, no party may assign either this Agreement or any
of its rights, interests, or obligations hereunder without the prior written
approval of the other parties.  Any purported assignment in violation
of this Section 7.8 shall be void.  Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and permitted
assigns.  Notwithstanding the preceding, the Purchaser may assign its
rights herein to any wholly-owned subsidiary without the consent of the Company
provided that any such assignment shall not relieve the Purchaser of any
liability hereunder.

 

7.9           Survival. 
The respective representations and warranties given by the parties hereto shall
terminate upon the earlier of (i) the third anniversary of the Closing, and
(ii) the date on which this Agreement is terminated in accordance with
Section 7.12 of this Agreement.  Notwithstanding any applicable
statute of limitations, any claim with respect to the failure of a
representation or warranty to be true and correct (other than as a result of
fraud or willful misconduct) that is not asserted within such timeframes may not
be pursued and is hereby irrevocably waived after such
time.  Notwithstanding the preceding, the representations and
warranties given by the Company shall terminate immediately with respect to the
Purchaser if it has sold all the Purchased Shares it purchased hereunder and
with respect to any Purchased Shares that have been sold by the
Purchaser.  Each party hereby agrees that, before bringing any claim
with respect to the failure of a representation or warranty to be true and
correct, it shall give the other party or parties reasonable notice of such
failure and reasonable time to cure such failure.

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

24

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

7.10           Entire
Agreement. 
This Agreement constitutes the entire agreement between the parties hereto
respecting the subject matter hereof and supersedes all prior agreements,
negotiations, understandings, representations and statements respecting the
subject matter hereof, whether written or oral.  No modification,
alteration, waiver or change in any of the terms of this Agreement shall be
valid or binding upon the parties hereto unless made in writing and in
accordance with the provisions of Section 7.6 hereof.

 

7.11           Counterparts;
Reproductions. 
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one
instrument.  A facsimile, portable document file (PDF) or other
reproduction of this Agreement may be executed by one or more parties and
delivered by such party by facsimile, electronic mail or any similar electronic
transmission pursuant to which the signature of or on behalf of such party can
be seen.  Such execution and delivery shall be considered valid,
binding and effective for all purposes.

 

7.12           Termination.

 

(a)           This
Agreement may be terminated and the transactions contemplated hereby abandoned
as follows:

 

(i)      at
any time by mutual consent of the Company and the Purchaser; or

 

(ii)      by
either the Company or the Purchaser if the Closing has not occurred within 90
days of the date hereof; provided, however, that the right to terminate this
Agreement under this Section 7.12(a)(ii) shall not be available to any party
whose action or failure to act has been a principal cause of or resulted in the
failure of the Closing to occur on or before such date and such action or
failure or failure to act constitutes a material breach of this
Agreement.

 

(b)           If
terminated, this Agreement shall become void and there shall be no liability or
obligation on the part of any party hereto or their respective officers,
directors or affiliates; provided, however, that (1) each party shall
remain liable for any breach of this Agreement prior to its termination (subject
to the limitations set forth herein, including, without limitation,
Section 7.9), and (2) the provisions of this Section 7
(other than Section 7.2) shall remain in full force and effect and survive any
termination.

 

7.13           WAIVER OF JURY
TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN
ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY.

 

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

25

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

(Remainder of Page Intentionally
Blank)

 

 

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

 

26

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

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

 

	 	COMPANY	 
	 	 	 	 
	 	
      ZOOM
      TECHNOLOGIES, INC.
	 
	 	 	 	 
	 
	
      By:
      
	/s/ Lei
      (Leo) Gu	 
	 	 	 	 
	 	
      Name:  Lei
      (Leo) Gu
	 
	 	
      Title:  Chief
      Executive Officer
	 

 

 

 

 

Signature
Page To Common Stock Purchase Agreement

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

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

 

	 	
      PURCHASER
	 
	 	 	 	 
	 	
      
      SPREADTRUM
      COMMUNICATIONS, INC.

	 
	 	 	 	 
	 
	
      By:
      
	/s/
      Leo Li	 
	 	 	 	 
	 	
      
      Name:  Leo
      Li

	 
	 	
      
      Title:   Chief
      Executive Officer

	 

 

 

 

 

Signature
Page To Common Stock Purchase Agreement

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

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

 

 

 

          
                      
                      
          

	 	
      KEY
      STOCKHOLDER
	 
	 	 	 	 
	 	
      
      LEO
      (LEI) GU

	 
	 	 	 	 
	 
	/s/
      Leo (Lei) Gu    	 
	 	 	 	 

 

 

 

 

Signature
Page To Common Stock Purchase Agreement

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

 

 

 

 

CONFIDENTIAL
TREATMENT REQUEST

 

Schedule
I

 

Lei (Leo)
Gu

 

FOIA confidential treatment
requested: [***] indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to such
omitted portions.

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