Document:

Exhibit 4.5

 

EXECUTION COPY

 

AMENDED AND RESTATED SHAREHOLDERS’ AGREEMENT

 

DATED: August 4, 2011

 

(1).          58.COM INC.

(2).          CHINA CLASSIFIED NETWORK CORPORATION

(3).          CHINA CLASSIFIED INFORMATION CORPORATION LIMITED

(4).          BEIJING CHENGSHI WANGLIN INFORMATION TECHNOLOGY CO., LTD.

(5).          BEIJING 58 INFORMATION TECHNOLOGY CO., LTD.

(6).          SB ASIA INVESTMENT FUND II L.P.

(7).          DCM V, L.P. and DCM AFFILIATES FUND V, L.P.

(8).          WP X ASIA ONLINE INVESTMENT HOLDINGS LIMITED

(9).          NIHAO CHINA CORPORATION

(10).        FOUNDERS NAMED IN SCHEDULE 1

(11).        ORDINARY SHAREHOLDERS NAMED IN SCHEDULE 1

(12).        DONG YANG

(13).        RECRUIT CO., LTD.

 

 

AMENDED AND RESTATED SHAREHOLDERS’ AGREEMENT

 

relating to

 

58.COM INC.

 

 

 

AMENDED AND RESTATED SHAREHOLDERS’ AGREEMENT

 

DATED:                                               August 4, 2011

 

AMONG:

 

(1)                                 58.COM INC., a company incorporated in the Cayman Islands, with its registered office located at the offices of Codan Trust Company (Cayman) Limited, Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands (the “Company”);

 

(2)                                 CHINA CLASSIFIED NETWORK CORPORATION, a company incorporated in the British Virgin Islands, with its registered office located at the offices of P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (the “BVI Co”);

 

(3)                                 CHINA CLASSIFIED INFORMATION CORPORATION LIMITED (中国分类信息集团有限公司), a limited liability company incorporated under the laws of Hong Kong, with its registered office located at flat 2, 19/F, Henan Building, 90-92 Jaffe Road, Wanchai, Hong Kong (the “HK Co”);

 

(4)                                 BEIJING CHENGSHI WANGLIN INFORMATION TECHNOLOGY CO., LTD. (北京城市网邻信息技术有限公司), a wholly foreign owned enterprise incorporated in the PRC with its registered office located at Building 6 Yi 108 Beiyuan Road, Chaoyang District, Beijing, PRC, 100101 (the “WFOE”);

 

(5)                                 BEIJING 58 INFORMATION TECHNOLOGY CO., LTD. (北京五八信息技术有限公司), a limited liability company incorporated in the PRC with its registered office located at No. 2 Pingfang Yi 108 Beiyuan Road, Chaoyang District, Beijing, PRC, 100101 (the “Domestic Company”, collectively with the WFOE, the “PRC Companies”);

 

(6)                                 SB ASIA INVESTMENT FUND II L.P., a partnership formed in Cayman Islands with its registered office located at M&C Corporate Services Limited, PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands (“SAIF”);

 

(7)                                 DCM V, L.P. and DCM AFFILIATES FUND V, L.P., a partnership formed in Cayman Islands with its registered office located at Campbell Corporate Services Limited, PO Box 268 GT, 4th Floor Scotiabank Building, George Town, Cayman Islands, KY1-1104 (collectively, “DCM”);

 

(8)                                 WP X ASIA ONLINE INVESTMENT HOLDINGS LIMITED, a company incorporated under the laws of the British Virgin Islands with its registered office located at 2/F Palm Grove House, PO Box 3340, Road Town, Tortola, British Virgin Islands (“WP”);

 

(9)                                 NIHAO CHINA CORPORATION, a company incorporated under the laws of the

 

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British Virgin Islands with registration number 1528249 and its registered office located at Trinity Chambers, P.O. Box 4301, Road Town, Tortola, British Virgin Islands (“Yao SPV”);

 

(10)                          the Person listed in Part A of Schedule 1 (the “Founders” and each a “Founder”);

 

(11)                          the Ordinary Shareholders (as defined below), including without limitation the Person listed in Part B of Schedule 1;

 

(12)                          Dong Yang, a citizen of Hong Kong with address at SAIF Advisors, Suites 2115-2118 Two Pacific Place, 88 Queensway, Hong Kong (“Dong Yang”); and

 

(13)                          Recruit Co., Ltd., a limited liability company incorporated under the laws of Japan with its registered office at 8-4-17, Ginza, Chuo-ku, Tokyo, 104-8001, Japan (“Recruit”).

 

WHEREAS:

 

(A)                               SAIF, DCM, certain Founders, certain Ordinary Shareholders, Dong Yang, WP, and Recruit were directly and indirectly the legal and beneficial holders of all of the issued share capital of BVI Co immediately prior to the share exchange pursuant to that certain Share Exchange Agreement, dated July 6, 2011, among the Company and other parties thereto (the “Share Exchange Agreement”).

 

(B)                               BVI Co, HK Co, WFOE, Domestic Company, SAIF, DCM, WP, certain Founders and Dong Yang were parties to that certain Amended and Restated Shareholders Agreement dated December 9, 2010 (the “BVI Shareholders’ Agreement”), immediately prior to the share exchange pursuant to the Share Exchange Agreement,.

 

(C)                               Recruit executed that certain Deed of Adherence dated March 24, 2011 to be bound by the terms of the BVI Shareholders’ Agreement.

 

(D)                               In connection with the share exchange pursuant to the Share Exchange Agreement, on July 6, 2011, certain parties hereto entered into a Shareholders’ Agreement (the “First Cayman Shareholders’ Agreement”) for the purposes of regulating the rights and obligations among them as well as the business and management of the Group Companies and terminate and supersede the BVI Shareholders’ Agreement from the date thereof.

 

(E)                                The Founders, the Company, the BVI Co, the HK Co, the PRC Companies and WP (the “Investor”) are parties to the Series B-1 Preference Share Subscription Agreement dated July 23, 2011 (the “Series B-1 Subscription Agreement”) pursuant to which the Company desires to issue and allot to the Investor, and the Investor desires to subscribe for up to 15,242,995 Series B-1 convertible and redeemable preference shares of par value of US$0.00001 each in the capital of the Company in aggregate (each a “Series B-1 Preference Share”).

 

(F)                                 It is a condition precedent to the subscription by the Investor for the Series B-1 Preference Shares that the parties hereto shall execute this Agreement and terminate

 

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and supersede the First Cayman Shareholders’ Agreement, and this Agreement is executed by the parties hereto in consideration of the Investor agreeing to subscribe for the Series B-1 Preference Shares pursuant to the Series B-1 Subscription Agreement and for other good and valuable consideration (the sufficiency of which the parties hereto hereby acknowledge).

 

NOW IT IS HEREBY AGREED as follows:

 

1.                                      INTERPRETATION

 

1.1                               In this Agreement, the following expressions shall, except where the context otherwise requires, have the following meanings:

 

“Acceptance Notice” has the meaning ascribed to it in Section 11.3;

 

“Agreement” means this Amended and Restated Shareholders’ Agreement;

 

“Associate” means:

 

(i)                                     as to any body corporate, any other body corporate, unincorporated entity or person directly or indirectly Controlling, directly or indirectly Controlled by or under direct or indirect common Control with, such body corporate; and

 

(ii)                                  as to any individual, his spouse, child, brother, sister, parent, trustee of any trust in which such individual or any of his immediate family members is a beneficiary or a discretionary object, or any entity or company Controlled by any of the aforesaid persons;

 

“Board” or “Board of Directors” means the board of directors of the Company;

 

“Business” means internet information service conducted by the Company, its consolidated Subsidiaries and the PRC Companies and other business approved by the Board, including the approval of the Series A Director, the Series A-1 Director and the Series B Director;

 

“Business Day” means any day, other than a Saturday, Sunday or a public holiday, on which commercial banks are open for normal business in California, New York, Hong Kong and Beijing;

 

“BVI” means the British Virgin Islands;

 

“BVI Co” has the meaning ascribed to it in the preamble;

 

“BVI Shareholders’ Agreement” has the meaning ascribed to it in the recitals;

 

“Code” means the U.S. Internal Revenue Code of 1986, as amended;

 

“Company Right of First Refusal” has the meaning ascribed to it in Section 12.1;

 

“Control”, “Controls”, “Controlled” or any correlative term means the possession,

 

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directly or indirectly, of the power to direct or cause the direction of the management of a Person, whether through the ownership of voting securities, by contract, credit arrangement or proxy, as trustee, executor, agent or otherwise.  For the purpose of this definition, a Person shall be deemed to Control another Person if such first Person, directly or indirectly, owns or holds more than 50% of the voting equity interests in such other Person;

 

“Co-Sale Eligible Shares” has the meaning ascribed to it in Section 13.1;

 

“DCM” has the meaning ascribed to it in the preamble;

 

“DCM Group” means DCM and any affiliated venture capital fund, a partner or member of such partnership or affiliated entity or a retired partner or member of such partnership or affiliated entity who retires after the date hereof, or to the estate of any such partner, member, retired partner or retired member or the transfer by gift, will or intestate succession of any partner or member to his or her spouse or to the siblings, lineal descendants or ancestors of such partner or member or his or her spouse;

 

“Deed of Adherence” means a deed of adherence, substantially in the form attached hereto as Schedule 4;

 

“Director” means any director of the Company appointed by the Shareholder(s) from time to time;

 

“Disclosing Party” has the meaning ascribed to it in Section 5.3;

 

“Dispose” means to make or to effect any sale, assignment, exchange, lease, license, Encumbrance, transfer, or to grant any option, right of first refusal or other right or interest whatsoever or to enter into agreement for any of the same and the expression “Disposal” shall be construed accordingly;

 

“Domestic Company” has the meaning ascribed to it in the preamble;

 

“Dong Yang” has the meaning ascribed to it in the preamble;

 

“Drag Along Notice” has the meaning ascribed to it in Section 14.1;

 

“Drag Along Requestor” has the meaning ascribed to it in Section 14.1;

 

“Drag Along Right” has the meaning ascribed to it in Section 14.1;

 

“Drag Along Transaction” has the meaning ascribed to it in Section 14.1;

 

“Encumbrance” means any mortgage, charge, pledge, lien (otherwise than arising by statute or operation of law), hypothecation, equities, adverse claims, or other encumbrance, priority or security interest, over or in any property, assets or rights of whatsoever nature or interest or any agreement for any of the same and the expression “Encumber” shall be construed accordingly;

 

“ESOP” means any stock option plan or equity incentive plan adopted by any Group

 

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Company from time to time in relation to the grant or issue of shares, stock options or any other securities to its employees, officers, directors, consultants and/or other eligible persons;

 

“ESOP Share” means any Ordinary Share granted pursuant to the ESOP;

 

“Expiration Notice” has the meaning ascribed to it in Section 12.4(b);

 

“First Cayman Shareholders’ Agreement” has the meaning ascribed to it the recitals.

 

“Form S-3” and “Form F-3” has the meaning ascribed to it in Section 2(e) of Schedule 2;

 

“Founder” and “Founders” have the meanings ascribed to them in the preamble;

 

“Group Companies” means the Company, the BVI Co, the HK Co, the PRC Companies and their respective Subsidiaries from time to time and “Group Company” means any one of them;

 

“HK Co” has the meaning ascribed to it in the preamble;

 

“Holder” has the meaning ascribed to it in Section 2(d) of Schedule 2;

 

“Hong Kong” means the Hong Kong Special Administrative Region of the PRC;

 

“IFRS” means the International Financial Reporting Standards prepared by the International Accounting Standards Board, as amended from time to time.

 

“Information” has the meaning ascribed to it in Section 3.18.

 

“Initiating Holders” has the meaning ascribed to it in Section 3(b) of Schedule 2;

 

“Intellectual Property” means, collectively, the Owned Intellectual Property and the Licensed Intellectual Property.

 

“Investment Documents” means this Agreement together with the Amended and Restated Memorandum and Articles of Association, the Series B-1 Subscription Agreement, the Restructuring Documents and any other agreements the execution of which is contemplated hereunder or thereunder;

 

“Investor” has the meaning ascribed to it in the recitals;

 

“IPO” means a firm commitment underwritten public offering of Ordinary Shares of the Company or of the listing vehicle (or securities representing such Ordinary Shares) registered under the Securities Act or its equivalent in another jurisdiction if the IPO does not occur in the U.S., including the Qualified IPO;

 

“Licensed Intellectual Property” means any and all license rights granted to any Group Company in any third party intellectual property or other proprietary or 

 

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personal rights, including any and all of the following that are licensed to any Group Company anywhere in the world: trademarks, trade names, service marks and trade dress, and all goodwill associated with trademarks, trade names, corporate names, business names, brand names, service marks and trade dress; patents; concepts; prototypes; drawings; designs; logos; trade dress; distinguishing guises; certification marks; official marks; mask works; utility models; domain names and other identifiers for internet protocol addresses and networks, fictional characters, and other indicators of source or business identifiers, and all goodwill associated therewith; copyrights and copyrightable works; databases; graphics; schematics; marketing, sales and user data and strategies and customer lists; technology; trade secrets, including confidential know-how, inventions, invention disclosures, inventor’s notes, improvements, discoveries, formulae, specifications and processes; computer software programs of any kind  (in both source and object code form); application programming interfaces; protocols; and any renewal, extension, reissue, continuation or division rights, applications and/or registrations for any of the foregoing;

 

“Liquidation Event” means (A) any liquidation, winding up or dissolution of the Company; (B) a sale, lease, transfer, exclusive license or other Disposal, in a single transaction or series of related transactions, by the Group Companies of all or substantially all of the assets and/or Intellectual Property of the Group Companies, taken as a whole; (C) a merger, consolidation, amalgamation or acquisition of the Company by a third party, or any other corporate reorganization or scheme of arrangement, including a sale or acquisition of shares/equity of the Company in which the Shareholders of the Company immediately before such transaction own less than fifty percent (50%) of the voting power of the Company, the surviving entity or the entity Controlling the surviving entity immediately after such transaction (excluding any transaction effected solely for tax purposes or to change the Company’s domicile); or (D) the creation, termination of, or making any material amendments to, any of the Restructuring Documents without the written consent of the Majority A Shareholders, the Majority A-1 Shareholders and the Majority B Shareholders;

 

“Majority A Shareholders” shall mean holders of more than fifty percent (50%) of the then outstanding Series A Preference Shares;

 

“Majority A-1 Shareholders” shall mean holders of more than fifty percent (50%) of the then outstanding Series A-1 Preference Shares;

 

“Majority B Shareholders” shall mean holders of more than fifty percent (50%) of the aggregate number of Ordinary Shares into which the then outstanding Series B Preference Shares and Series B-1 Preference Shares are convertible;

 

“Majority Ordinary Shareholders” shall mean holders of more than fifty percent (50%) of the then outstanding Ordinary Shares;

 

“Memorandum and Articles of Association” shall mean the Second Amended and Restated Memorandum of Association and the Second Amended and Restated Articles of Association of the Company, as amended from time to time;

 

“New Securities” has the meaning ascribed to it in Section 11.1;

 

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“Non-Disclosing Parties” has the meaning ascribed to it in Section 5.3;

 

“Observer” and “Observers” has the meaning ascribed to it in Section 3.15;

 

“Offered Price” has the meaning ascribed to it in Section 12.3;

 

“Offered Securities” has the meaning ascribed to it in Section 12.1;

 

“Ordinary Shares” mean ordinary shares of par value of US$0.00001 each in the capital of the Company;

 

“Ordinary Share Directors” have the meaning ascribed to it in Section 3.4;

 

“Ordinary Shareholder” means a holder of any Ordinary Share;

 

“Owned Intellectual Property” means any and all of the following that are owned (including joint ownership) or held by any Group Company anywhere in the world:  trademarks, trade names, service marks and trade dress, and all goodwill associated with trademarks, trade names, corporate names, business names, brand names, service marks and trade dress; patents; concepts; prototypes; drawings; designs; logos; trade dress; distinguishing guises; certification marks; official marks; mask works; utility models; domain names and other identifiers for internet protocol addresses and networks, fictional characters, and other indicators of source or business identifiers, and all goodwill associated therewith; copyrights and copyrightable works; databases; graphics; schematics; marketing, sales and user data and strategies and customer lists; technology; trade secrets, including confidential know-how, inventions, invention disclosures, inventor’s notes, improvements, discoveries, formulae, specifications and processes; computer software programs of any kind  (in both source and object code form); application programming interfaces; protocols; and any renewal, extension, reissue, continuation or division rights, applications and/or registrations for any of the foregoing;

 

“Permitted Transferee” means, with respect to any individual Founder, any spouse, children or other immediately family members of such individual Founder;

 

“Person” means any natural person, firm, partnership, association, corporation, company, trust, public body or government or other entity.

 

“PRC” means the People’s Republic of China;

 

“PRC Companies” has the meaning ascribed to it in the preamble and “PRC Company” means any one of them;

 

“Preference Right of First Refusal” has the meaning ascribed to it in Section 12.2;

 

“Preference Shares” means any of the Series A Preference Shares and/or the Series A-1 Preference Shares and/or the Series B Preference Shares and/or the Series B-1 Preference Shares.

 

“Preference Shareholders” means any of the Series A Shareholders and/or the Series 

 

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A-1 Shareholders and/or the Series B Shareholders and/or the Series B-1 Shareholders.

 

“Pro Rata Portion” has the meaning ascribed to it in Section 11.3;

 

“Proposed Transfer” has the meaning ascribed to it in Section 12.1;

 

“Proposed Transferee” has the meaning ascribed to it in Section 12.1;

 

“Purchase Right Period” has the meaning ascribed to it in Section 12.4;

 

“Qualified IPO” means an IPO in the United States of America pursuant to an effective registration under the Securities Act or on a reputable stock exchange in Tokyo, London, Hong Kong, Singapore or such reputable stock exchange as may be determined by the Company, with market valuation of the Company immediately prior to such offering of more than US$1,000,000,000;

 

“Recruit” has the meaning ascribed to it in the preamble;

 

“Registrable Securities” has the meaning ascribed to it in Section 2(b) of Schedule 2;

 

“Registrable Securities then outstanding” has the meaning ascribed to it in Section 2(c) of Schedule 2;

 

“Request Notice” has the meaning ascribed to it in Section 3(a) of Schedule 2;

 

“Restructuring Documents” has the meaning ascribed to it in the Series B-1 Subscription Agreement;

 

“Right of Co-Sale” has the meaning ascribed to it in Section 13.1;

 

“Rule 144” shall mean Rule 144 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission;

 

“SAIF Group” means SAIF, and any affiliated venture capital fund, a partner or member of such partnership or affiliated entity or a retired partner or member of such partnership or affiliated entity who retires after the date hereof, or to the estate of any such partner, member, retired partner or retired member or the transfer by gift, will or intestate succession of any partner or member to his or her spouse or to the siblings, lineal descendants or ancestors of such partner or member or his or her spouse;

 

“SEC” or “Commission” means the Securities and Exchange Commission of the United States of America or any other federal agency for the time being administering the Securities Act;

 

“Securities” means any shares, stocks, debentures, funds, bonds, notes or any rights, warrants, options or interests in respect of any of the foregoing or any other derivatives or instruments having similar economic effect;

 

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“Securities Act” means the Securities Act of 1933 of the United States of America, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time;

 

“Selling Shareholder” has the meaning ascribed to it in Section 12.1;

 

“Series A Director” has the meaning ascribed to it in Section 3.3;

 

“Series A Preference Shares” means series A preference shares of par value of US$0.00001 each in the capital of the Company;

 

“Series A Shareholder” means a holder of any Series A Preference Share;

 

“Series A-1 Director” has the meaning ascribed to it in Section 3.2;

 

“Series A-1 Preference Shares” means series A-1 preference shares of par value of US$0.00001 each in the capital of the Company;

 

“Series A-1 Shareholder” means a holder of any Series A-1 Preference Share;

 

“Series B Director” has the meaning ascribed to it in Section 3.5;

 

“Series B Preference Shares” means series B convertible and redeemable preference shares of par value of US$0.00001 each in the capital of the Company;

 

“Series B Shareholder” means a holder of any Series B Preference Share;

 

“Series B-1 Preference Shares” has the meaning ascribed to it in the recitals;

 

“Series B-1 Shareholder” means a holder of any Series B-1 Preference Share;

 

“Series B-1 Subscription Agreement” has the meaning ascribed to it in the recitals;

 

“Share Restriction Agreement” means the share restriction agreement dated March 15, 2010 entered into among, inter alios, BVI Co and Jinbo Yao;

 

“Shares” means any of the Ordinary Shares and the Preference Shares;

 

“Shareholders” means any or all of those persons and entities at any time holding any Shares of the Company and “Shareholder” means any one of them;

 

“Share Exchange Agreement” has the meaning ascribed to it in the recitals;

 

“Subsidiary” or “subsidiary” means, as of the relevant date of determination, with respect to any Person (the “subject entity”), (i) any Person (x) more than 50% of whose shares or other interests entitled to vote in the election of directors or (y) more than a fifty percent (50%) interest in the profits or capital of such Person are owned or Controlled directly or indirectly by the subject entity or through one (1) or more Subsidiaries of the subject entity, (ii) any Person whose assets, or portions thereof, are 

 

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consolidated with the net earnings of the subject entity and are recorded on the books of the subject entity for financial reporting purposes in accordance with IFRS or US GAAP, or (iii) any Person with respect to which the subject entity has the power to otherwise direct the business and policies of that entity directly or indirectly through another Subsidiary.  For the avoidance of doubt, the Subsidiaries of the Company shall include the PRC Companies and their Subsidiaries from time to time;

 

“Subsidiary Boards” means the boards of directors from time to time of the PRC Companies and any of other Subsidiaries of the Company, and a “Subsidiary Board” means any of them;

 

“Transaction” has the meaning ascribed to it in Section 4.1A(c);

 

“Transaction Agreements” means this Agreement together with the Amended and Restated Memorandum and Articles of Association and the Share Exchange Agreement;

 

“Transfer Notice” has the meaning ascribed to it in Section 12.3;

 

“US$” means United States dollars, the lawful currency of the United States of America;

 

“US GAAP” means the generally accepted accounting principles in the United States of America in effect from time to time;

 

“WFOE” has the meaning ascribed to it in the preamble;

 

“WP” has the meaning ascribed to it in the preamble;

 

“WP Group” means WP and any affiliated venture capital fund, a partner or member of such partnership or affiliated entity or a retired partner or member of such partnership or affiliated entity who retires after the date hereof, or to the estate of any such partner, member, retired partner or retired member or the transfer by gift, will or intestate succession of any partner or member to his or her spouse or to the siblings, lineal descendants or ancestors of such partner or member or his or her spouse; and

 

“Yao SPV” has the meaning ascribed to it in the preamble.

 

1.2                                                       In this Agreement, except as otherwise expressly provided:

 

(a)                                 references to recitals, Sections, Schedules and Exhibits are to the clauses and sub-clauses of, and the recitals, schedules and exhibits to, this Agreement;

 

(b)                                 references to any statutory provision or any rule or regulation (whether or not having the force of law) shall be construed as references to the same as amended, varied, modified, consolidated or re-enacted from time to time and to any subordinate legislation made under such statutory provision;

 

(c)                                  references to parties are to parties of this Agreement;

 

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(d)                                 words importing the singular include the plural and vice versa, words importing one gender include every gender, and references to persons include bodies corporate and unincorporated; and

 

(e)                                  headings are for ease of reference only and shall not affect the interpretation of this Agreement.

 

1.3                               The recitals, the Schedules and the Exhibits form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement and any reference to this Agreement shall include the Recitals, the Schedules and the Exhibits.

 

1.4                               The expressions “Ordinary Shareholders”, “Series A Shareholders”, “Series A-1 Shareholders”, “Series B Shareholders”, “Series B-1 Shareholders” or any party hereto shall, where the context permits, include their respective successors, assigns and personal representative (where applicable).

 

2.                                      BUSINESS OF THE GROUP

 

2.1                               The Group Companies shall not conduct any business or activity other than the Business and otherwise in accordance with business plans approved by the Board (including the Series A Director, the Series A-1 Director and the Series B Director) from time to time.

 

2.2                               The parties shall use their best endeavours to cause and procure the Group Companies to implement any business plan prepared by or for any of the Group Companies and approved by the Board (including the Series A Director, the Series A-1 Director and the Series B Director) on or prior to or after the date hereof.

 

3.                                      BOARD CONSTITUTION AND BOARD AND SHAREHOLDERS’ MEETING AND BOARD COMMITTEE; OBSERVER RIGHT

 

3.1.                            The maximum number of persons comprising each of the Board and the Subsidiary Boards shall initially be five (5), which number of members shall not be changed unless otherwise approved by the Majority A Shareholders, the Majority A-1 Shareholders, the Majority B Shareholders and the Majority Ordinary Shareholders.

 

3.2.                            The Majority A-1 Shareholders shall be entitled to elect one (1) Director of the Board of the Company (the “Series A-1 Director”); upon request of the Majority A-1 Shareholders, the Group Companies and the Founders shall cause one (1) representative nominated by such holders to be elected to any of the Subsidiary Board.  The Majority A-1 Shareholders shall also be entitled to appoint a member to any committee of the Board, including without limitation the audit committee and the compensation committee.

 

3.3.                            The Majority A Shareholders shall be entitled to elect one (1) Director of the Board of the Company (the “Series A Director”); upon request of the Majority A Shareholders, the Group Companies and the Founders shall cause one (1) representative nominated by such holders to be elected to any of the Subsidiary Board.  The Majority A Shareholders shall also be entitled to appoint a member to any committee of the Board, 

 

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including without limitation the audit committee and the compensation committee.

 

3.4.                            The Majority Ordinary Shareholders shall be entitled to elect two (2) Directors of the Board of the Company (the “Ordinary Share Directors”), one of which shall be the chief executive officer of the Company.

 

3.5.                            The Majority B Shareholders shall be entitled to elect one (1) Director of the Board of the Company (the “Series B Director”); upon request of the Majority B Shareholders, the Group Companies and the Founders shall cause one (1) representative nominated by such holders to be elected to any of the Subsidiary Board.  The Majority B Shareholders shall also be entitled to appoint a member to any committee of the Board, including without limitation the audit committee and the compensation committee.

 

3.6.                            Each Shareholder agrees to elect the persons nominated by the other parties to the Board of the Company in accordance with this Agreement.  A Director can only be removed from the Board of the Company by the Shareholder(s) which appointed him/her, unless such Director resigns voluntarily or the term of his/her service expires, in which case the Shareholder(s) entitled to appoint such Director shall be entitled to nominate a replacement to be appointed by the Board of the Company to fill the vacancy thus created.

 

3.7.                            Each of the Board and the Subsidiary Boards shall convene at least one (1) meeting each quarter in each fiscal year, unless otherwise agreed by all Directors.

 

3.8.                            In relation to meetings of the Board and the Subsidiary Boards, each director of such board shall be given not less than ten (10) Business Days’ written notice of meetings, but any meeting held without such notice having been given to all directors shall be valid if all the directors entitled to vote at the meeting who do not attend waive notice of the meeting in writing; and for this purpose, the presence of a director at a meeting shall be deemed to constitute a waiver on his part in respect of such meeting.  Except for the business as outlined in the notice to directors, no other business shall be transacted thereat.

 

3.9.                            Four (4) Directors, including the Series A-1 Director, the Series A Director, the Series B Director and an Ordinary Share Director, in attendance in person, telephone, video conference or other medium of simultaneous voice communication shall constitute a quorum.  More than a majority of all members of any committee of the Board (which must include at least the Series A Director, the Series A-1 Director and the Series B Director (provided that the committee consists of such directors)) present in person or by proxy shall constitute a quorum which shall be necessary for the conduct of business at any meeting of such committee.  A meeting of any committee of the Board will be adjourned to the same time and place seven (7) Business Days later if a quorum is not present at that committee’s meeting.  If at such adjourned meeting a quorum is still not present within forty-five (45) minutes from the time appointed for the meeting, the members of such committee present shall constitute a quorum.  Subject to Section 4.2, any resolution of the Board (or any Subsidiary Board) must be approved by a majority of the directors of the Board (or any Subsidiary Board) present at a meeting at which there is a quorum in order to be valid.  A resolution signed by all members of the Board (or any Subsidiary Board) entitled to receive notice of a meeting of the Board (or Subsidiary Board) shall be as valid and effectual 

 

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for all purposes as a resolution of such directors duly passed at a meeting of the Board (or Subsidiary Board) duly convened, held and constituted.

 

3.10.                     At the request of the Series A-1 Director or the Series A Director or the Series B Director, the Company shall obtain within ninety (90) days of the date upon receipt of the notice of the Series A-1 Director or the Series A Director or the Series B Director a commercially reasonable directors and officers liability insurance policy from financially sound and reputable insurers, the amount of which shall be approved by the Board.

 

3.11.                     A meeting of the Shareholders is duly constituted if, at the commencement of and throughout the meeting, there are present in person or by proxy the Majority Ordinary Shareholders, the Majority A Shareholders, the Majority A-1 Shareholders and the Majority B Shareholders.

 

3.12.                     A meeting of Shareholders will be adjourned to the same time and place seven (7) Business Days later if a quorum is not present at that Shareholders’ meeting.  Subject to Section 4, if at such adjourned meeting a quorum is still not present within forty-five (45) minutes from the time appointed for the meeting, the Shareholders present shall constitute a quorum.  Except for the business as outlined in the notice to Shareholders, no other business shall be transacted thereat.

 

3.13.                     Each Preference Share shall carry such number of votes equal to the number of votes of Ordinary Shares then issuable upon the conversion of such Preference Share.  The Preference Shareholders and the Ordinary Shareholders shall vote together and not as a separate class unless otherwise required herein or in the Memorandum and Articles of Association of the Company or by applicable laws.

 

3.14.                     Any shareholders’ meeting of any Group Company and any meeting of the Board (or any committee of the Board) or a Subsidiary Board may be held, and any shareholder or director or member as the case may be, may participate in such meeting in attendance in person, or by means of telephone, video conference or other medium of simultaneous voice communication, and such participation shall be deemed to constitute presence in person at the meeting.

 

3.15.                     Each of the Majority A-1 Shareholders, the Majority A Shareholders, the Majority B Shareholders and Recruit shall have the right, from time to time, to designate one (1) representative (collectively, the “Observers” and each an “Observer”) to attend all meetings of the Board, the Subsidiary Board and all committees thereof (whether in person, by telephone or other means), in a nonvoting observer capacity.    The Observers shall be entitled to receive copies of all notices, minutes, consents, and other materials that any Group Company provides to its directors at the same time and in the same manner as provided to such directors.  An Observer shall have full rights of audience and may speak at all meetings of the Board, the Subsidiary Board and all committees thereof but shall not be entitled to vote or be counted towards the quorum at any such meetings.

 

3.16.                     The Observers may be excluded from all or any portion of a meeting where their presence could reasonably result in (i) the disclosure of trade secrets to a competitor, or (ii) the loss of attorney client privilege.  At the request of the Company, all 

 

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Observers shall enter into a confidentiality agreement with the Company prior to exercising their observation rights.

 

3.17.                     The Company shall reimburse the directors of any Group Company and the Observers for all reasonable out-of-pocket expenses incurred in connection with attending any meetings of the Board, the Subsidiary Board and all committees thereof.

 

4.                                      MATTERS REQUIRING CONSENT OF PREFERENCE SHAREHOLDERS

 

4.1A.                   In addition to any other vote or consent required elsewhere in this Agreement, the Memorandum and Articles of Association or by any applicable statute, each of the Group Companies shall not, and the Founders shall procure that each of the Group Companies does not, directly or indirectly, carry out any of the following actions, and no affirmative board or shareholders’ resolutions shall be adopted to approve or carry out the same, except with the prior written consent of each of (i) the Majority A Shareholders and (ii) the Majority A-1 Shareholders and (iii) the Majority B Shareholders, and for the avoidance of doubt, at the time when a meeting of shareholders proceeds to discuss or vote for any of the following matters, at least (i) the Majority A Shareholders and (ii) the Majority A-1 Shareholders and (iii) the Majority B Shareholders must be present in person or by proxy for the purpose of constituting a necessary quorum:

 

(a)                                 the issuance of any Securities of any class in the Group Company having rights superior or on a parity to any of the Preference Shares (other than issuance of Securities at a pre-money valuation of the Company of more than US$500,000,000);

 

(b)                                 any redemptions or repurchases of Ordinary Shares or Preference Shares or any Securities of any class in the Group Company except for purchases at cost upon termination of service or the exercise by the Company of any contractual rights of first refusal over such shares or pursuant to the Transaction Agreements or the Investment Documents;

 

(c)                                  any merger, sale, acquisition, consolidation or reorganisation of any Group Company with or into one or more corporations or any other entity(ies) (other than a merger or consolidation involving only the Company and its wholly owned Subsidiary) or any other transaction or series of related transactions (such merger, sale, acquisition, consolidation, reorganisation and transactions to be collectively referred to as “Transaction”); or any formation of a Subsidiary or an Associate;

 

(d)                                 any merger, spin-off, sale, Disposal of, or creation of any Encumbrance over all or substantially all of the assets or goodwill or any assets or goodwill of any Group Company (including without limitation the Company’s interest in any of its Subsidiaries or the Intellectual Property or business in connection with any of its products as may be developed from time to time);

 

(e)                                  any increase or decrease in the number of authorized shares of Preference Shares or Ordinary Shares or any Securities of any class in the Group Company (subject to Section 4.1B (j) below);

 

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(f)                                   any adverse change to the rights, preferences and privileges of any Preference Shares, including any action to reclassify any outstanding shares into shares having preferences or priority as to dividends or assets senior to or on a parity with any Preference Share; and

 

(g)                                  any amendment, modification or change to or of the Memorandum and Articles of Association and constitutional or charter documents of any other Group Company (subject to Section 4.1B (j) below).

 

4.1B.                   In addition to any other vote or consent required elsewhere in this Agreement, the Memorandum and Articles of Association or by any applicable statute, each of the Group Companies shall not, and the Founders shall procure that each of the Group Companies does not, directly or indirectly, carry out any of the following actions, and no affirmative board or shareholders’ resolutions shall be adopted to approve or carry out the same, except that any two (2) of the following three (3) classes of holders give a prior written consent: (i) the Majority A Shareholders, (ii) the Majority A-1 Shareholders and (iii) the Majority B Shareholders; and for the avoidance of doubt at the time when a meeting of shareholders proceeds to discuss or vote for any of the following matters, at least any two (2) of the following three (3) classes of holders must be present in person or by proxy for the purpose of constituting a necessary quorum: (i) the Majority A Shareholders, (ii) the Majority A-1 Shareholders and (iii) the Majority B Shareholders:

 

(a)                                 the declaration or payment of any dividend or other distribution on any Securities of any class in the Group Company;

 

(b)                                 any change in the maximum number of directors of the Board or the Subsidiary Board;

 

(c)                                  any borrowing or other incurrence of indebtedness (including the assumption of contingent liability under any guarantee, surety or indemnity but excluding any trade debts owed or trade credits granted) by any Group Company (in one transaction or a series of related transactions) (individually or in the aggregate within any twelve (12) months period) which is in excess of US$1,000,000, unless such is incurred pursuant to the then current business plan or budget, approved by the Board pursuant to Section 4.2;

 

(d)                                 any exclusive, irrevocable licensing of all or substantially all of any Group Company’s Intellectual Property to a third party;

 

(e)                                  any transaction or agreement with any of the Founders, any Group Company’s officers, employees (other than for employment matters) or directors, or shareholders holding more than three percent (3%) of Company’s equity on a fully diluted basis, their Associates or other related parties, and any amendment or termination thereof;

 

(f)                                   any issuance of Securities by any Group Company; provided that any issuance of Securities of any class in the Company shall be subject to prior written consent of the holder(s) of a majority of the then issued and outstanding 

 

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Securities in that class;

 

(g)                                  consummation of a Qualified IPO or an IPO or negotiations of a new round of equity or debt financing;

 

(h)                                 the liquidation, dissolution or winding-up or Liquidation Event of any Group Company;

 

(i)                                     the creation, termination of, or any material amendment to, the Restructuring Documents; and

 

(j)                                    any amendment, modification or change to or of the Memorandum and Articles of Association and constitutional or charter documents of any other Group Company solely for the purpose of issuing Securities of the Company at a pre-money valuation of the Company of more than US$500,000,000 (including any amendment to the Memorandum to increase the authorized share capital of the Company solely for the purpose of such issuance).

 

4.2.                            In addition to any other vote or consent required elsewhere in this Agreement, the Memorandum and Articles of Association or by any applicable statute, each of the Group Companies shall not, and the Founders shall procure that each of the Group Companies does not directly or indirectly carry out any of the following actions, except with the prior approval of the Board of Directors, including the affirmative consent or vote of each of (i) the Series A-1 Director and (ii) the Series A Director and (iii) the Series B Director:

 

(a)                                 any loan or advance to any Person, or acquisition of any shares or other Securities of any subsidiary, corporation, partnership, or entity unless it is wholly owned by the Company;

 

(b)                                 any loan or advance to any Person, including, any employee or director, except for the advances and similar expenditures in the ordinary course of Business of any Group Company or under the terms of an employee stock or option plan unanimously approved by the Board of Directors;

 

(c)                                  any guarantee of indebtedness or creation of Encumbrance, except for trade accounts of the Company or any Group Company arising in the ordinary course of the Business;

 

(d)                                 appointment, removal, or change the compensation or other material terms of employment (including the increase of ten percent (10%) or more in the total compensation in any 12-month period) of the ten (10) most highly compensated employees, including without limitation the Chief Executive Officer, Chief Financial Officer, Chief Operation Officer and Chief Technology Officer of any Group Company;

 

(e)                                  the adoption of, or any amendment to, or implementation of any ESOP or any other employee equity incentive plans of any Group Company;

 

(f)                                   any material alteration or change in the Business of any Group Company, 

 

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entry into a new line of business, or exiting any Group Company’s existing line of business, in each case in a manner that is not contemplated in the most recent business plan approved by the Board pursuant to this Section 4.2;

 

(g)                                  any items of capital expenditure in excess of US$200,000 (individually or in the aggregate within any twelve (12) months period), unless such expenditure is incurred pursuant to the then current business plan or budget, approved by the Board pursuant to this Section 4.2;

 

(h)                                 the approval or any amendments to annual business plan or budget; and

 

(i)                                     the appointment or change of auditors or any material change in the accounting methods or policies.

 

4A.                             INCREASE IN AUTHORIZED SHARE CAPITAL

 

Each Shareholder agrees to vote all of its Shares from time to time and at all times, in whatever manner shall be necessary to authorize an increase in the authorized share capital of the Company so that there will be sufficient Ordinary Shares available for conversion of all of the then-outstanding Preference Shares at any time that an adjustment to the relevant conversion price with respect to the Preference Shares is made under the Memorandum and Articles of Association.

 

5.                                      CONFIDENTIALITY

 

5.1.                            The terms and conditions of this Agreement (including its existence) shall be confidential information and shall not be disclosed by any party hereto or any of their Associates to any person not being a party hereto except as permitted under this Section 5.

 

5.2.                            Notwithstanding Section 5.1, any party hereto may disclose the terms of this Agreement to its investors, employees, investment bankers, lenders, accountants, attorneys, business partners, directors, shareholders and senior management and bona fide prospective investors, in each case only where such persons or entities are under appropriate non-disclosure obligations.  For the avoidance of doubt, other than disclosures to the foregoing permitted persons, none of the parties may disclose the investment amounts in relation to the Preference Shares held by the Preference Shareholders, the amount of valuation of the Company, the rights and privileges of the Preference Shareholders under this Agreement and the Series B-1 Subscription Agreement and the share capital structure of the Company to any person except with the prior written consent of the Preference Shareholders (such consent not to be unreasonably withheld).

 

5.3.                            In the event that any party becomes legally compelled (including without limitation, pursuant to securities laws and regulations) to make disclosure not permitted under Section 5.1 and 5.2, such party (the “Disclosing Party”) shall provide the other parties (the “Non-Disclosing Parties”) with prompt written notice of that fact so that the appropriate party may seek (with the co-operation and reasonable efforts of the other parties) a protective order, confidential treatment or other appropriate remedies.  In such event, the Disclosing Party shall furnish only that portion of the information 

 

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which is legally required and shall exercise reasonable efforts to obtain reliable assurance that confidential treatment will be accorded to such information to the extent reasonably requested by any Non-Disclosing Party.

 

5.4.                            Sections 5.1, 5.2 and 5.3 shall cease to have effect and cease to be binding on the parties hereto after the expiry of two (2) years from the date hereof.

 

5.5.                            Each of the Group Companies and the Founders acknowledges and agrees that the Preference Shareholders will not maintain an exclusive relationship with the Company and nothing contained herein shall prevent any Preference Shareholders, any of its Associates or members from (a) entering into any business, entering into any agreement with a third party, or investing in, evaluating or engaging in investment discussions with any other company (whether or not competitive with any of the Group Companies), provided that such Preference Shareholder, any of its Associates or members does not, except as permitted in accordance with this Section 5, disclose any proprietary or confidential information of any Group Company in connection with such activities, or (b) making any disclosures required by law, rule, regulation or court or other governmental order.

 

6.                                      MANAGEMENT

 

6.1.                            The parties hereto confirm that the Business and affairs of the Group Companies shall be overseen by the Board in the best interests of the Company and its Subsidiaries taken as a whole.  In furtherance of the foregoing, the parties hereto agree that, after the date hereof, neither they, nor any of their Associates will enter into any contract, agreement, arrangement or other transaction with the Company or any of its Subsidiaries unless the terms and provisions of such contract, agreement or other arrangement or the terms on which such transaction is conducted, as the case may be, are fair to the Company or such Subsidiary and are not less favourable than those obtainable in an arm’s length relationship.

 

6.2.                            Save as otherwise agreed between the parties, the Group Companies shall, and the Ordinary Shareholders and the Group Companies shall procure the directors of such Group Companies to, exercise their powers and control in relation to the Group Companies so as to ensure that each of the Group Companies shall:

 

(a)                                       carry on and conduct businesses and affairs in a proper and efficient manner and for the benefit of the Company and in accordance with the terms of this Agreement and the Investment Documents;

 

(b)                                       keep proper books of account and therein make true and complete entries of all its dealings and transactions of and in relation to its business in accordance with US GAAP; and

 

(c)                                        conduct its business in accordance with all applicable legal requirements, including the obtaining of all necessary licences, consents and approvals.

 

6.3.                            The Group Companies and the Founders agree that to the extent that any holder of Ordinary Shares, Series A Preference Shares, Series A-1 Preference Shares or other Securities of any Group Company in any financing transaction (including without 

 

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limitation equity or debt financing transaction and whether consummated prior to the date hereof) enjoys any right, option, preference or privilege that is superior or more favorable or in addition to those granted to the Series B Shareholders or Series B-1 Shareholders under this Agreement, any other Transaction Agreements or any other Investment Documents, the Company shall, and the Group Companies and the Founders shall procure the Company to, also immediately grant each Series B Shareholder and each Series B-1 Shareholder such right, option, preference or privilege.

 

7.                                      DIVIDENDS

 

7.1.                            The parties acknowledge and agree that the Preference Shareholders shall be entitled to receive the preferential dividends as provided in the Company’s Memorandum and Articles of Association.

 

8.                                      USE OF A SHAREHOLDER’S NAME OR LOGO

 

8.1.                            Except with the prior written authorization of DCM, none of the Company or the Group Companies shall be entitled to use, publish or reproduce the name, trademark or logo of “DCM”, or any similar name, trademark and/or logo in any of their marketing, advertising or promotion materials or otherwise for any marketing, advertising or promotional purposes.

 

8.2.                            Except with the prior written authorization of SAIF, none of the Company or the Group Companies shall be entitled to use, publish or reproduce the name, trademark or logo of “SAIF”, or any similar name, trademark and/or logo in any of their marketing, advertising or promotion materials or otherwise for any marketing, advertising or promotional purposes.

 

8.3.                            Except with the prior written authorization of WP, none of the Company or the Group Companies shall be entitled to use, publish or reproduce the name, trademark or logo of “Warburg Pincus”, or any similar name, trademark and/or logo in any of their marketing, advertising or promotion materials or otherwise for any marketing, advertising or promotional purposes.

 

9.                                      EMPLOYEE SHARES

 

9.1.                            The Board shall have the power to grant share options to the employees, directors, consultants and officers of any Group Company to acquire Ordinary Shares pursuant to a bona fide employment-related ESOP adopted by the Board of the Company pursuant to Section 4.2.  In connection with the share exchange pursuant to the Share Exchange Agreement, the Company has assumed all options and restricted shares granted under the BVI Co’s ESOP and adopted an ESOP with substantially the same terms and conditions as BVI Co’s ESOP.  As of June 30, 2011, the Company has authorized a total of 16,729,892 Ordinary Shares under the ESOP, out of which 6,760,696 Ordinary Shares are reserved and unissued. The number of Ordinary Shares reserved under the ESOP shall not be increased without prior written approval by the Board, including the affirmative consent or vote of the Series A-1 Director and the Series A Director and the Series B Director.

 

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9.2.                            Unless approved by the Board (including affirmative votes of the Series A-1 Director and the Series A Director and the Series B Director), all employees, directors, consultants and officers of any Group Company who shall purchase, or receive options to purchase, shares of the Company under the ESOP shall be required to execute share purchase or option agreements providing for (i) vesting of shares over not less than a four-year period with the first twenty five percent (25%) of such shares vesting following twelve (12) months of continued employment or services, and the remaining shares vesting in equal monthly instalments over the following thirty-six (36) months; and (ii) a one-hundred eighty (180)-day lockup period in connection with the Company’s IPO.  The Company shall retain a “right of first refusal” on Disposal of any Securities by employees until the Company’s Qualified IPO and the right to repurchase vested options at cost.

 

9.3.                            The WFOE or the Domestic Company or any Group Company shall enter into an employment contract with each key employee of the Group Companies, which includes among other things, upon cessation of employment, such employee shall execute a release of claims, resign from the Board or Subsidiary Board (if applicable) and agree to vote Shares held by him/her as directed by the holders of a majority of the then outstanding shares of Ordinary Shares.

 

10.                               INFORMATION RIGHTS

 

10.1.                     The Company shall, deliver to each Preference Shareholder, the following documents and information of each Group Company:

 

(a)                                 audited annual consolidated financial statements within ninety (90) days after the end of each fiscal year;

 

(b)                                 unaudited quarterly consolidated financial statements signed by the Chief Executive Officer of the Company within forty-five (45) days of the end of each fiscal quarter;

 

(c)                                  unaudited monthly consolidated financial statements and capitalization reports (including the type and amount of the Securities held by each Preference Shareholder) signed by the Chief Executive Officer of the Company within thirty (30) days of the end of each month;

 

(d)                                 notice of all actions, suits, claims, proceedings, investigations, inquiries or event that may be likely to have a material adverse effect on any Group Company or any of its Associates, and title and enjoyment of their respective businesses, premises, assets or properties; and

 

(e)                                  upon the written request by a Preference Shareholder, such other information as the Preference Shareholder shall request.

 

All the financial statements referred to in this Section 10.1 shall be prepared and/or audited by an accounting firm of national standing acceptable to the Board (including the Series A-1 Director and the Series A Director and the Series B Director) in accordance with US GAAP on a consolidated basis (including the Company, the BVI 

 

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Co, the HK Co and the PRC Companies) and shall include a balance sheet, profit and loss accounts and statement of cash flows and, only in respect of audited statements, all directors’ notes thereto (if any).

 

10.2.                     Each Preference Shareholder shall have the following rights, at its own expense, during normal business hours: (i) the right to inspect the books and records (including without limitation financial records) of all Group Companies and to make extracts and copies therefrom; (ii) the right to inspect the plant, equipment, stock in trade and facilities of any Group Companies; (iii) the right to discuss the business, operations and management and other matters of any Group Companies with their respective directors, officers, employees, accountants, auditors, financial advisors, legal counsel and investment bankers, provided that in no event shall such exercise of the inspection rights materially impair the normal business operations of the Group Companies; and (iv) to compel an audit of any Group Company by a “Big 4” accounting firm at the cost of such Preference Shareholder which has requested for such audit.

 

10.3.                     All information delivered to or received by any Preference Shareholder in accordance with this Section 10 shall be confidential information and shall not be disclosed by any Preference Shareholder to any person not being a party hereto except as permitted under Section 5 of this Agreement.

 

10.4.                     The information rights and inspection rights of the Preference Shareholders set forth in this Section 10 shall terminate upon the closing of a Qualified IPO.

 

11.                               RIGHT OF PARTICIPATION

 

11.1.                     Each Preference Shareholder shall have a right of participation to purchase and subscribe for any New Securities which the Company proposes to issue in order to maintain such Preference Shareholder’s proportionate beneficial ownership interest in the Company (on an as-if-converted basis).  “New Securities” shall mean any Securities of the Company other than:

 

(a)                                 the sale of Ordinary Shares reserved for employees, directors, consultants and officers pursuant to an ESOP, the number of which may be increased subject to the approval of the Board (including the affirmative consent or vote of the Series A-1 Director and the Series A Director and the Series B Director);

 

(b)                                 Ordinary Shares issued or issuable in connection with any share split, share dividend, combination, recapitalization or other similar transaction of the Company for which proportional adjustments are made;

 

(c)                                  Ordinary Shares issued or issuable upon conversion of Preference Shares;

 

(d)                                 Securities issued pursuant to the terms of the Share Exchange Agreement, or Series B-1 Preference Shares issued pursuant to the terms of the Series B-1 Subscription Agreement;

 

(e)                                  Securities issued in connection with a bona fide business acquisition by the Company, the terms of which shall have been approved by the Board (including the affirmative consent or vote of the Series A-1 Director and the 

 

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Series A Director and the Series B Director);

 

(f)                                   Securities issued or issuable pursuant to strategic transactions, entered into for primarily non-equity financing purposes approved by the Board (including the affirmative consent or vote of the Series A-1 Director and the Series A Director and the Series B Director); and

 

(g)                                  Securities issued or issuable pursuant to equipment lease financings or bank credit arrangements approved by the Board (including the affirmative consent or vote of the Series A-1 Director and the Series A Director and the Series B Director).

 

11.2.                     If the Company wishes to make any issue of New Securities, it shall prior to such issue give each Preference Shareholder a written notice of the proposed issue.  The notice shall set forth the terms and conditions of the proposed issue (including the number of New Securities to be offered and the price, if any, for which the Company proposes to offer such New Securities), and that the Preference Shareholder can elect to purchase and shall constitute an offer to issue the relevant portion of the New Securities to the Preference Shareholder on such terms and conditions.

 

11.3.                     Each Preference Shareholder may accept such offer by delivering a written notice of acceptance (an “Acceptance Notice”) to the Company within ten (10) Business Days after receipt of the notice of the Company of the proposed issue.  Any Preference Shareholder exercising its right of participation shall be entitled to purchase all but not part of such Preference Shareholder’s pro rata portion of such New Securities (its “Pro Rata Portion”) which is the ratio of (a) the number of Ordinary Shares (calculated on an as-converted basis) held by such Preference Shareholder, to (b) the total number of Ordinary Shares (calculated on an as-converted basis) held by all Preference Shareholders immediately prior to the issuance of New Securities giving rise to such right of participation.  If any Preference Shareholder fails to purchase or does not accept its Pro Rata Portion, the other Preference Shareholder(s) shall have the right to purchase the balance of the New Securities not so purchased.  The Company shall promptly (but no later than three (3) Business Days after such ten (10) Business Days period), in writing, inform each Preference Shareholder that has elected to fully exercise its right of participation of any other Preference Shareholder’s failure to do likewise (the “Second Notice”).  The right of over-subscription may be exercised by a Preference Shareholder by notifying the Company (within five (5) Business Days after the date of the Second Notice) of its desire to purchase more than its Pro Rata Portion.  Oversubscription will be allocated based on the Pro Rata Portion of the holders of Preference Shares electing to exercise this oversubscription right.

 

11.4.                     If any Preference Shareholder who elects to exercise its right of participation does not complete the subscription of such New Securities within five (5) Business Days after the expiration of such five (5) Business Day period mentioned in Section 11.3, the Company may complete the issue of New Securities on the terms and conditions specified in the Company’s notice within ninety (90) days following the expiration of such five (5) Business Day period mentioned in Section 11.3.

 

11.5.                     If the Company does not complete the issue of the New Securities within such ninety 

 

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(90) day period described in Section 11.4 above, the right of participation provided in this Section 11 in respect of such New Securities shall be deemed to be revived and the New Securities shall not be offered to any person unless first re-offered to each Preference Shareholder in accordance with this Section 11.

 

11.6.                     The rights of a Preference Shareholder under this Section 11 shall terminate upon:

 

(a)                                 that point of time when such Preference Shareholder no longer owns any Preference Share; or

 

(b)                                 the consummation of a Qualified IPO.

 

12A.                      TRANSFER RESTRICTIONS

 

12A.1               Each of Jinbo Yao and Yao SPV agrees from the date hereof to the closing of a Qualified IPO, not to Dispose, directly or indirectly, any Securities of the Company or of any Group Company except in compliance with Sections 12A, 12, 13 and 14 and all applicable laws and with the consent of the Majority A Shareholders, the Majority A-1 Shareholders and the Majority B Shareholders.  Each Ordinary Shareholder shall cause its Associates to abide by Sections 12A, 12, 13 and 14 and procure that restrictions set forth in Sections 12A, 12, 13 and 14 shall not be avoided by the direct or indirect Disposal or issuance or redemption of any Securities (or other interest) in such Ordinary Shareholder or of any other Person having Control over such Ordinary Shareholder.

 

12A.2             Notwithstanding anything to the contrary contained herein, without the prior written approval of the Majority A Shareholders, the Majority A-1 Shareholders and the Majority B Shareholders:

 

(a)                                 None of the Group Companies or the Founders shall, nor shall any of them cause or permit any other Person to, directly or indirectly, Dispose through one or a series of transactions any equity interest held or Controlled by him/it in any Company’s direct or indirect Subsidiaries or Associates (for the avoidance of doubt, excluding the Company but including without limitation the PRC Companies and their respective Subsidiaries) to any Person.  Any Disposal in violation of this Section 12A.2 shall be void and the Group Companies shall procure that none of the Company’s direct or indirect Subsidiaries or Associates (for the avoidance of doubt, excluding the Company but including without limitation the PRC Companies and their respective Subsidiaries) will effect such Disposal nor will it treat any alleged transferee as the holder of such equity interest without the prior written approval of the Majority A Shareholders, the Majority A-1 Shareholders and the Majority B Shareholders.

 

(b)                                 None of the Company’s direct or indirect Subsidiaries or Associates (for the avoidance of doubt, excluding the Company but including without limitation the PRC Companies and their respective Subsidiaries) shall, nor shall the Group Companies or the Founders cause or permit any such company to, issue to any Person any equity securities of such company, or any options or warrants for, or any other Securities exchangeable for or convertible into, such equity securities of such company.

 

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12.                               RIGHT OF FIRST REFUSAL

 

12.1.                    Subject to Section 12A and the Share Restriction Agreement, before any Shares may be sold or otherwise transferred or Disposed (the “Proposed Transfer”) by any Ordinary Shareholder excluding Dong Yang (the “Selling Shareholder”) to any proposed purchaser or other transferee (the “Proposed Transferee”), the Company shall have a right of first refusal (the “Company Right of First Refusal”) to purchase such Shares (the “Offered Securities”) in accordance with the terms of this Section 12.  For the avoidance of doubt, any change in the equity interest of an Ordinary Shareholder that is an entity, including without limitation as a result of (i) the issuance or redemption by such Ordinary Shareholder of any portion of its outstanding shares or equity, or (ii) a Disposal of such Ordinary Shareholder’s equity by its equity holder, shall constitute a “Proposed Transfer” for purposes of this Agreement and such equity interest to be transferred or issued by such holder shall be treated as “Offered Securities” for all purposes under this Agreement.  Any Proposed Transfer shall be made in compliance with this Agreement and the Share Restriction Agreement.

 

12.2.                     To the extent that the Company elects not to purchase all of the Offered Securities pursuant to Section 12.1, each Selling Shareholder hereby unconditionally and irrevocably grants to each Preference Shareholder a right of first refusal (the “Preference Right of First Refusal”) to purchase any Offered Securities not purchased by the Company pursuant to Section 12.1.

 

12.3.                     Before the transfer of any Offered Securities, the Selling Shareholder shall deliver to the Company and the Preference Shareholders a written notice (the “Transfer Notice”) stating:

 

(a)                                 the Selling Shareholder’s intention to sell or otherwise transfer or Dispose of such Offered Securities; and

 

(b)                                 the number of Offered Securities to be transferred to each Proposed Transferee.

 

The Transfer Notice shall constitute an irrevocable offer by the Selling Shareholder to sell the Offered Securities at the price for which the Selling Shareholder proposes to transfer the Offered Securities (the “Offered Price”) to the Company and the Preference Shareholders.

 

12.4.                                                                     (a)                                 The Company shall have the right, upon notice to the Selling Shareholder at any time within ten (10) Business Days after receipt of the Transfer Notice (the “Purchase Right Period”), to purchase all but not part of the Offered Securities at the Offered Price and upon the same terms (or terms as similar as reasonably practicable) upon which the Selling Shareholder is proposing or is to Dispose of such Offered Securities, and the Selling Shareholder shall, upon receipt of the notice of purchase from the Company, sell the Offered Securities to the Company pursuant to such terms.

 

(b)                                 Subject to the Company Right of First Refusal as provided in Section 12.4(a), concurrently with the Company, the Preference Shareholders shall have the 

 

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Preference Right of First Refusal to purchase the Offered Securities; provided that each Preference Shareholder so electing gives written notice of the exercise of such right to the Selling Shareholder within the Purchase Right Period.  Upon the earlier to occur of (a) the termination of the Purchase Right Period, or (b) the time when the Selling Shareholder has received written confirmation from the Company regarding its exercise of its Company Right of First Refusal, the Company shall be deemed to have made its election with respect to the Offered Securities, and the Offered Securities for which the Preference Shareholders may exercise their Preference Rights of First Refusal shall be correspondingly reduced to the extent the Company elects to purchase all but not part of the Offered Securities.  To the extent that the Company elects not to purchase any of the Offered Securities, each Preference Shareholder who has given written notice of its exercise of such right within the Purchase Right Period shall have the right to purchase all but not part of its Pro Rata Share of the Offered Securities not purchased by the Company (the “Remaining Securities”).  For the purposes of this Section 12.4, each Preference Shareholder’s “Pro Rata Share” shall be equal to the product of the number of Remaining Securities multiplied by a fraction, the numerator of which shall be the number of Ordinary Shares issuable upon conversion of all Securities (excluding any outstanding warrants) (calculated on an as-converted basis) held by such Preference Shareholder on the date of the Transfer Notice and the denominator of which shall be the number of Ordinary Shares issuable upon conversion of all Securities (excluding any outstanding warrants) (calculated on an as-converted basis) held by all the Preference Shareholders on the date of the Transfer Notice.

 

(c)                                  In the event that any Preference Shareholder elects not to purchase its full Pro Rata Share of the Remaining Securities available to it pursuant to its rights under Section 12.4(b) above within the Purchase Right Period, the Selling Shareholder shall grant the Preference Shareholders who have elected to purchase its full Pro Rata Share of the Remaining Securities (the “Fully Participating Preference Shareholders”) the right to purchase that number of Remaining Securities equal to the product of the balance of the Remaining Securities multiplied by a fraction, the numerator of which shall be the number of Ordinary Shares issuable upon conversion of all Securities (excluding any outstanding warrants) (calculated on an as-converted basis) held by such Fully Participating Preference Shareholder and the denominator of which shall be the number of Ordinary Shares issuable upon conversion of all Securities (excluding any outstanding warrants) (calculated on an as-converted basis) held by all the Fully Participating Preference Shareholders.  The Selling Shareholder and the Fully Participating Preference Shareholders shall, within five (5) Business Days after the end of the Purchase Right Period (the “Extension Period”), make such adjustments to the number of Offered Securities that the Fully Participating Preference Shareholders elect to purchase so that the balance of the Remaining Securities may be allocated to the Fully Participating Preference Shareholders exercising such oversubscription right in accordance with this Section 12.4(c).

 

(d)                                 Within five (5) Business Days after expiration of the Extension Period, the Selling Shareholder will provide notice to the Company or each Preference 

 

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Shareholder specifying the number of Offered Securities that was elected to be purchased by the Company or the Preference Shareholders exercising the Company Rights of First Refusal or the Preference Right of First Refusal (“Expiration Notice”).

 

12.5.                     If and to the extent any of the Offered Securities proposed in the Transfer Notice to be transferred are not purchased by the Company or the Preference Shareholders after the expiration of the Extension Period, then after the issue of the Expiration Notice and subject to the co-sale rights set forth in Section 13, the Selling Shareholder may sell or otherwise transfer or Dispose to the Proposed Transferee(s) such Offered Securities which have not been purchased by the Company or the Preference Shareholders at the Offered Price or at a higher price, which price, in the aggregate, shall be no more favourable than that has been offered to the Company and the Preference Shareholders, and on terms and conditions that are no more favourable than those set forth by the Selling Shareholder in the Transfer Notice.

 

12.6.                     In the event that the Proposed Transferee(s) pay for the Offered Price in consideration other than in cash, the value of such consideration shall be appraised by a qualified asset appraisal firm approved by the Board of Directors (including the affirmative consent of the Series A Director and the Series A-1 Director and the Series B Director).

 

12.7.                     The rights of a Preference Shareholder under this Section 12 shall terminate upon the earlier of:

 

(a)                                 that point of time when such Preference Shareholder no longer owns any Preference Share of the Company; or

 

(b)                                 the consummation of a Qualified IPO.

 

12.8.                     The Preference Shareholders agree not to sell or transfer any Preference Share to the Competitors of the Company.  For purposes of this Section 12.8, “Competitor” means any company engaging in any business in the PRC that is similar to the Business and directly competing with the Company as internet information service provider in the PRC.  For the avoidance of doubt, each party hereto acknowledges and agrees that WP shall be entitled to transfer Series B-1 Preference Shares to Yao SPV without any restriction and without obtaining any prior consent from any party hereto.

 

13.                               CO-SALE RIGHTS

 

13.1.                     In the event that any Offered Securities are not purchased by the Preference Shareholders pursuant to Section 12 above and thereafter are to be sold to a Proposed Transferee (the “Co-Sale Eligible Shares”), each Preference Shareholder who has not exercised its Preference Right of First Refusal (the “Co-Sale Preference Shareholder”) may elect to exercise its right (a “Right of Co-Sale”) and participate on a pro-rata basis in the Proposed Transfer on the same terms and conditions specified in the Transfer Notice, provided that the Preference Shareholder may convert Securities, the subject of such sale, to Ordinary Shares (if required) prior to the completion of a sale pursuant to this Section 13.  Each Co-Sale Preference 

 

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Shareholder shall exercise its Right of Co-Sale by delivering to the Selling Shareholder, within five (5) Business Days after receipt of the Expiration Notice (the “Co-Sale Period”), written notice of its intention to participate, specifying the number of the relevant Shares such Co-Sale Preference Shareholder desires to sell to the Proposed Transferee.  At the closing of the transaction, such Co-Sale Preference Shareholder shall deliver one or more certificates representing the number of Shares which it elects to sell hereunder together with instrument of transfer and other documents necessary for transfer of such Shares to the Proposed Transferee, and the Selling Shareholder shall procure that the Proposed Transferee shall pay to such Co-Sale Preference Shareholder a pro rata amount of the purchase price entitled to be received by such Co-Sale Preference Shareholder.  To facilitate the exercise of Right of Co-Sale by a Co-Sale Preference Shareholder, the Company undertakes to such Co-Sale Preference Shareholder that it shall effect and register the conversion of Preference Shares into Ordinary Shares (if required), and provide relevant share certificates therefor to the Co-Sale Preference Shareholder as soon as practicable upon any request for conversion.

 

13.2.                     Each Co-Sale Preference Shareholder shall have the right to co-sell such number of Ordinary Shares (or such number of other Shares representing such number of Ordinary Shares, calculated on an-as converted basis) equal to the product of the number of Co-Sale Eligible Shares multiplied by a fraction, the numerator of which is the number of Ordinary Shares issuable upon conversion of all Securities (excluding any outstanding warrants) (calculated on an as-converted basis) owned by such Co-Sale Preference Shareholder, and the denominator of which is the number of Ordinary Shares issuable upon conversion of all Securities (excluding any outstanding warrants) (calculated on an as-converted basis) held by the Selling Shareholder and all Co-Sale Preference Shareholders.  In the event that the Proposed Transferee desires to purchase a number of Shares less than the amount of the Co-Sale Eligible Shares, the amount that the Proposed Transferee desires to purchase shall be substituted for Co-Sale Eligible Shares in the above equation for the purpose of determining each Co-Sale Preference Shareholder’s co-sale rights.

 

13.3.                     If the Proposed Transferee refuses to purchase Shares from any Co-Sale Preference Shareholder exercising its Right of Co-Sale under this Section 13, the Selling Shareholder shall not sell to the Proposed Transferee any Shares unless and until, simultaneously with such sale or transfer, such Selling Shareholder shall purchase such Shares from such Co-Sale Preference Shareholder on the same terms and conditions specified in the Transfer Notice.

 

13.4.                     The exercise or non-exercise of the right to participate under this Section 13 with respect to a particular sale or Disposal by any Selling Shareholder shall not adversely affect the Preference Shareholder’s right to participate in subsequent sales or Disposals by any Selling Shareholder pursuant to this Section 13.

 

13.5.                     Any sale, assignment or other transfer or Disposal of Offered Securities by any Selling Shareholder contrary to the provisions of this Agreement or the Share Restriction Agreement or other Transaction Agreements or Investment Documents shall be null and void, and the transferee shall not be recognized by the Company as the holder or owner of the Offered Securities sold, assigned, or transferred for any purpose (including, without limitation, voting or dividend rights) and the register of 

 

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members of the Company shall not be updated accordingly, unless and until such Selling Shareholder has satisfied the requirements of this Agreement, the Share Restriction Agreement, other Transaction Agreements and the Investment Documents with respect to such sale or Disposal.

 

13.6.                     To the extent the Company and the Preference Shareholders do not elect to purchase the Offered Securities pursuant to Section 12, the Selling Shareholder together with each Co-Sale Preference Shareholder who has exercised its Right of Co-Sale may, not later than twenty (20) Business Days following the expiration of the Co-Sale Period, conclude a transfer of the Offered Securities which shall have not been elected to be purchased by the Company and the Preference Shareholders pursuant to Section 12, which in each case shall be on terms and conditions not more favorable to the Proposed Transferee(s) than those described in the Transfer Notice.  Any Proposed Transfer on terms and conditions which are more favorable than those described in the Transfer Notice, as well as any subsequent Proposed Transfer of any Shares by the Selling Shareholder, shall again be subject to the Company Right of First Refusal, the Preference Right of First Refusal and the Right of Co-Sale and shall require compliance by the Selling Shareholder with the procedures described in Sections 12 and 13 of this Agreement.

 

13.7.                     The Preference Right of First Refusal set forth in Section 12 and the Right of Co-Sale set forth in Sections 13.1 to 13.6 shall not apply to transfers of Shares to any Permitted Transferee; provided that in each case the Selling Shareholder shall remain to be bound by this Agreement and the Permitted Transferee shall have executed and delivered a Deed of Adherence as provided in Section 26 agreeing to be bound by this Agreement and that the Selling Shareholder shall procure that the Permitted Transferee shall not transfer its Shares except to the Selling Shareholder or other Permitted Transferee(s) of such Selling Shareholder and that any such Transfer shall comply with all applicable laws.

 

13.8.                     The rights of a Preference Shareholder under Sections 13.1 to 13.6 shall terminate upon the earlier of:

 

(a)                                 that point of time when such Preference Shareholder no longer owns any Preference Share of the Company; or

 

(b)                                 the consummation of a Qualified IPO.

 

13.9.                     Each certificate representing the Ordinary Shares shall bear legends in the following form (in addition to any legend required under any other applicable securities laws):

 

THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A SHARE RESTRICTION AGREEMENT AND AN AMENDED AND RESTATED SHAREHOLDERS’ AGREEMENT BY AND AMONG THE HOLDER HEREOF, THE COMPANY AND CERTAIN OTHER SHAREHOLDERS OF THE COMPANY, AND THE SECOND AMENDED AND RESTATED MEMORANDUM AND ARTICLES OF ASSOCIATION OF THE COMPANY.  COPIES OF SUCH AGREEMENTS AND THE SECOND AMENDED AND RESTATED MEMORANDUM AND ARTICLES OF ASSOCIATION OF THE COMPANY ARE 

 

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ON FILE WITH THE PRINCIPAL OFFICE OF THE COMPANY.

 

13.10.              The parties hereto agree that any purchaser of Shares (unless already a party to this Agreement) from a Selling Shareholder shall be required to sign the Deed of Adherence as provided in Section 26 confirming its agreement to be bound by this Agreement as a condition of his becoming a Shareholder.

 

14.                               DRAG ALONG RIGHT

 

14.1.                     In the event that the Majority Ordinary Shareholders, the Majority A Shareholders, the Majority A-1 Shareholders and the Majority B Shareholders (collectively “Drag Along Requestors”), each voting as a separate class, vote in favor of, otherwise consent in writing to, and/or otherwise agree in writing a proposed sale or series of related transactions of the Company or any Group Company to a third Person, or a group of related Persons, whether structured as a merger, reorganization, asset sale, stock sale or otherwise, with proceeds to the Company or such Group Company or shareholder(s) of the Company or of such Group Company of at least US$1,000,000,000 (the “Drag Along Transaction”), which has been approved by the Board of Directors (including affirmative votes of the Series A-1 Director, the Series A Director and the Series B Director), the Drag-Along Requestors shall have the right (the “Drag Along Right”) to require all other Shareholders by giving a notice (the “Drag Along Notice”) to all such parties, subject to and upon such terms and conditions as the Drag-Along Requestors may reasonably require:

 

(i)                                     to vote all voting Shares held by them in the same manner as the Drag-Along Requestors;

 

(ii)                                  to refrain from exercising any dissenters’ rights or rights of appraisal under applicable law at any time with respect to such Drag-Along Transaction;

 

(iii)                               to execute and deliver all related documentation and take such other action in support of the Drag-Along Transaction as shall reasonably be requested by the Company or the Drag-Along Requestors; and

 

(iv)                              in the event that the Drag-Along Transaction is to be effected by the sale of Shares held by Drag-Along Requestors without the need for shareholder approval, to sell all Shares of the Company beneficially held by such other Shareholders (or in the event that the Drag-Along Requestors are selling fewer than all of their Shares held in the Company, Shares in the same proportion as the Drag-Along requestors are selling) to the person to whom the Drag-Along Requestors propose to sell its Shares, for the same per-share consideration (on an as-converted basis) and on the same terms and conditions as the Drag-Along Requestors; provided, however, that such terms and conditions, including with respect to price paid or received per share, may differ as between Ordinary Shares and the Preference Shares and different series of Preference Shares, if any, (including without limitation, in order to reflect the liquidation preferences and participation rights of the Preference Shares as set forth in this Agreement and the Memorandum and Articles of Association).

 

14.2.                     Sections 14.1 shall terminate upon the consummation of a Qualified IPO.

 

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15.                               REDEMPTION

 

15.1.                     Notwithstanding any provisions to the contrary in this Agreement, the parties acknowledge and agree that the Preference Shares may be redeemed in accordance with terms and conditions of the Memorandum and Articles of Association.

 

16.                              LIQUIDATION

 

16.1.                     If a Liquidation Event occurs, the parties acknowledge and agree that distributions to the Shareholders of the Company shall be made in accordance with the Company’s Memorandum and Articles of Association.

 

17.                               REGISTRATION RIGHTS

 

17.1.                     The Preference Shareholders shall be entitled to the registration rights set out in Schedule 2.  Such registration rights shall terminate upon the earlier of (a) the fifth anniversary of the closing of a Qualified IPO, or (b) such time at which all Registrable Securities (as defined in Schedule 2) held by the Preference Shareholders (and any Associate of the Preference Shareholder with whom the Preference Shareholder must aggregate its sales under Rule 144 of the Securities Act) proposed to be sold may be sold under Rule 144 of the Securities Act in any ninety (90)-day period without registration in compliance with Rule 144 of the Securities Act.

 

18.                               CONTROL OF SUBSIDIARIES

 

18.1.                     The Company shall at any time institute and shall keep in place arrangements reasonably satisfactory to the Board of Directors of the Company (including the Series A Director and the Series A-1 Director and the Series B Director) such that the Company (i) shall control the operations of all Subsidiaries of the Company, including without limitation, other Group Companies, whether now in existence or formed in the future, and (ii) shall be permitted to consolidate properly the financial results for such entity in consolidated financial statements for the Company prepared under US GAAP or such other international accounting principles as may be approved by the Board of Directors of the Company (including the Series A Director and the Series A-1 Director and the Series B Director).  The composition of each Subsidiary Board shall be reasonably acceptable to the Board of Directors of the Company (including the Series A Director and the Series A-1 Director and the Series B Director).  The Company shall, and shall cause any of its Subsidiaries to comply with the United States Foreign Corrupt Practices Act, as amended.  The Company shall take all necessary actions to maintain all Subsidiaries of the Company, including without limitation, other Group Companies, whether now in existence or formed in the future, as is necessary to conduct the business of the Group Companies as conducted or as proposed to be conducted.  The Company shall use its reasonable best efforts to cause each Subsidiary of the Company, including without limitation, other Group Companies, whether now in existence or formed in the future, to comply in all material respects with all applicable laws, rules and regulations and to obtain and maintain all necessary permits, licenses and certificates to operate its respective business in compliance with all applicable laws.

 

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18.2.                     All material aspects of such formation, maintenance and compliance of any direct or indirect Subsidiary or entity Controlled by the Company, including, without limitation, the Group Companies, whether now in existence or formed in the future, shall be subject to the review and approval by the Board of Directors of the Company (including the Series A Director and the Series A-1 Director and the Series B Director) and the Company shall promptly provide the Preference Shareholders with copies of all material related documents and correspondence.  The Company shall cause all Subsidiaries of the Company, including without limitation, others Group Companies, whether now in existence or formed in the future, to have a board of directors as its governing and managing body and each member thereof shall serve at the pleasure of the Company and shall be reasonably acceptable to the Board of Directors (including  the Series A Director and the Series A-1 Director and the Series B Director).  The Group Companies and the Founders shall procure that, subject to other provisions of this Agreement, if any action involving any Group Company has been approved and adopted by the Board, such Group Company shall take such approved action.

 

18.3.                     Each of the Founders hereby jointly and severally undertakes:

 

(a)                                 to, and, to procure the other registered shareholders of the Domestic Company or other Group Companies incorporated in PRC (together with the Founders, collectively “Domestic Shareholders” and each, a “Domestic Shareholder”) to, comply with all the terms of the following agreements (to which such Domestic Shareholder is a party) or documents (collectively “Domestic Documents” and each, a “Domestic Document”): (i) each of the Restructuring Documents; (ii) the articles of association of the Domestic Company or such Group Company; and (iii) any amendment and/or restatement of any of the above documents or any other documents among one or more of the Domestic Shareholders, the Company, the WFOE, the Domestic Company and/or any other Group Companies pursuant to which the Company acquires direct or indirect Control over the equity, asset, business or operation of a Group Company;

 

(b)                                 to procure each of the Domestic Shareholders to make payment into such bank account as designated by the Company, within 14 days of the receipt, any and all consideration received by the Domestic Shareholder for the sale or transfer of his or its equity interest in the Domestic Company or any Group Company incorporated in PRC, pursuant to the exclusive option agreement of the Restructuring Documents or such other acquisition agreement(s) to be entered into as provided in the Domestic Documents, less all tax withheld, paid or payable in respect of such consideration.

 

18.4.                     Each of DCM and WP shall have the right to require the Founders to transfer the same percentage of equity interests of the Domestic Company or any Group Company incorporated in PRC as DCM or WP (as the case may be) holds in the Company (on an as converted basis) to a Person or Persons designated by DCM or WP (as the case may be) without any consideration.  The Founders shall use their best efforts to cause other Domestic Shareholders to give consent to such equity transfer to the extent such consent is necessary for the equity transfer.  In the event of such equity transfer, the Company shall procure that the Restructuring Documents be amended to 

 

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the satisfaction of each of the Majority A Shareholders, the Majority A-1 Shareholders and the Majority B Shareholders.

 

19.                               U.S. TAX MATTERS

 

19.1.                     The Group Companies and the Founders jointly and severally undertake to Preference Shareholders that they will cause the Company to take such actions, including making an election to be treated as a corporation or refraining from making an election to be treated as a partnership, as may be required to ensure that at all times the Company is treated as corporation for United States federal income tax purposes.

 

19.2.                     The Company shall, and each of the Group Companies and the Founders undertakes to the Preference Shareholders to cause the Company to, make due inquiry with its tax advisors on at least an annual basis regarding whether Preference Shareholders’ interest in the Company is subject to the reporting requirements of either or both of Sections 6038 and 6038B of the Code (and the Company shall duly inform the Preference Shareholders of the results of such determination), and in the event that the Company’s tax advisors or the Preference Shareholders’ tax advisors determine that the Preference Shareholders’ interest in the Company is subject to any such reporting requirements, the Company agrees, upon a request from such Preference Shareholder, to provide such information to such Preference Shareholders may be necessary to fulfill such Preference Shareholder’s obligations thereunder.

 

19.3.                     The Group Companies and the Founders hereby acknowledge that the Company will not be at any time during the calendar year in which the Second Closing (as defined in the Series B-1 Subscription Agreement) occurs a “passive foreign investment company” (a “PFIC”) within the meaning of Section 1297 of the Code.  The Group Companies and the Founders shall use its best efforts to avoid the Company being a PFIC.  The Group Companies and the Founders shall make due inquiry with its tax advisors on at least an annual basis regarding its status as a PFIC, and if the Company is informed by its tax advisors that it has become a PFIC, or that there is a likelihood of the Company being classified as a PFIC for any taxable year, the Group Companies and the Founders shall promptly notify the Preference Shareholders of such status or risk, as the case may be.  In connection with a “Qualified Electing Fund” election made by a Preference Shareholder pursuant to Section 1295 of the United States Internal Revenue Code or a “Protective Statement” filed by a Preference Shareholder pursuant to Treasury Regulation Section 1.1295-3, as amended (or any successor thereto), the Company shall provide annual financial information to the Preference Shareholder in the form provided in the attached PFIC Exhibit (attached hereto as Schedule 3) as soon as reasonably practicable following the end of each taxable year of such Preference Shareholder (but in no event later than 90 days following the end of each such taxable year), and shall provide such Preference Shareholder with access to such other Company information as may be required for purposes of filing U.S. federal income tax returns in connection with such Qualified Electing Fund election or Protective Statement.  In the event that a Preference Shareholder who has made a “Qualified Electing Fund” election must include in its gross income for a particular taxable year its pro rata share of the Company’s earnings and profits pursuant to Section 1293 of the Code, the Company agrees, to the extent permitted by law, to make a dividend distribution to such Preference Shareholder (no 

 

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later than 90 days following the end of such Preference Shareholder’s taxable year or, if later, 90 days after the Company is informed by such Preference Shareholder that such Preference Shareholder has been required to recognize such an income inclusion) in an amount equal to 50% of the amount so included by such Preference Shareholder.

 

19.4.                     The Group Companies and the Founders hereby acknowledge that the Company shall not, without the written consent of a Preference Shareholder, issue or transfer Securities in the Company to such Preference Shareholder if following such issuance or transfer the Company, in the determination of counsel or accountants for such Preference Shareholder, would be a controlled foreign corporation (a “CFC”) as defined in Section 957 of the Code with respect to the Securities held by such Preference Shareholder.  No later than two (2) months following the end of each Company taxable year, the Company shall provide the following information to each Preference Shareholder:  (i) the Company’s capitalization table as of the end of the last day of such taxable year and (ii) a report regarding the Company’s status as a CFC.  In addition, the Company shall provide each Preference Shareholder with access to such other Company information as may be required by such Preference Shareholder to determine the Company’s status as a CFC, to determine whether such Preference Shareholder is required to report its pro rata portion of the Company’s “Subpart F income” (as defined in Section 952 of the Code) on its United States federal income tax return, or to allow such Preference Shareholder to otherwise comply with applicable United States federal income tax laws.  The Company shall make due inquiry with its tax advisors on at least an annual basis regarding its status as a CFC and regarding whether any portion of the Company’s income is Subpart F income.  In the event that Company is determined by the Company’s tax advisors or by counsel or accountants for any Preference Shareholder to be a CFC with respect to the Securities held by such Preference Shareholder, the Company agrees to use commercially reasonable efforts to avoid generating Subpart F income.  In the event that the Company is determined by counsel or accountants for any Preference Shareholder to be a CFC with respect to the Securities held by such Preference Shareholder, the Company agrees, to the extent permitted by law, to annually make dividend distributions to such Preference Shareholder in an amount equal to 50% of any income deemed distributed to such Preference Shareholder pursuant to Section 951(a) of the Code.

 

20.                               RESTRICTIVE COVENANTS

 

20.1                        Each of the Founders and the Group Companies hereof acknowledge that the Preference Shareholders agree to invest in the Company and become a Preference Shareholders on the basis of continued and exclusive services of and full devotion and commitment by the Founders to the Group Companies, and agree that the Preference Shareholders should have reasonable assurance of such basis of investment.  Each of the Group Companies and the Founders (with the exclusion of Jiang Yuan who is not a full-time employee of the Company) hereof jointly and severally undertakes to the Preference Shareholders that neither he nor any of his Associates, his nominees, trustees or the like will directly or indirectly:

 

(a)                       during the Relevant Period and for a period of two (2) years after the Relevant Period (collectively “Restriction Period”), participate, assist, advise, consult, 

 

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be concerned with, engaged or interested in, any business or entity in any manner, directly or indirectly, alone or in concert with others, which is in competition with the business carried on by any Group Company at any time during the Restriction Period;

 

(b)                       during the Restriction Period, solicit in any manner any person who is or has been during the Restriction Period a customer or client of any Group Company for the purpose of offering to such person any goods or services similar to or competing with any of the businesses conducted by any Group Company at any time during the Restriction Period;

 

(c)                        during the Restriction Period, solicit or entice away, or endeavour to solicit or entice away, any employee or officer of any Group Company;

 

(d)                       at any time disclose to any person, or use for any purpose (except for the ordinary business of the Group Companies), any information concerning the business, accounts, finance, transactions or Intellectual Property rights of any Group Company or any trade secrets or confidential information of or relating to any of the Group Companies.

 

(e)                        at any time to sell, transfer, pledge, mortgage, charge or otherwise Encumber or Dispose of any of their Shares or interest in the Company, nor shall they grant an option over their Shares or enter into any agreement in respect of the votes attached to the Shares before the completion of a Qualified IPO, unless prior written agreement has been obtained from the Majority A Shareholders, the Majority A-1 Shareholders and the Majority B Shareholders.

 

20.2                        Each undertaking in paragraphs (a), (b), (c), (d) and (e) of Section 20.1 shall be treated as independent of the other undertakings so that, if any of them is held to be invalid or unenforceable for any reason, the remaining undertakings shall be valid to the extent that they are not affected.

 

20.3                        Each of the Founders and the Group Companies hereby expressly acknowledges and declares that he has duly considered the undertakings set out in Section 20.1 and considers that they are reasonable in the circumstances, and warrants and undertakes to the Preference Shareholders that he shall not challenge or query the validity and enforceability of these undertakings.

 

20.4                        For the purposes of this Section 20, “Relevant Period” means, in relation to a Founder and/or his Associates, nominees, trustees or the like, the period during which he or his Associates, nominees, trustees or the like is a shareholder, director, employee and/or has any direct or indirect interest (legal or beneficial) in the capital of any of the Group Companies.

 

20.5                        No transfer, sale, pledge, mortgage, charge, Disposal of or Encumbrance of any Share or interest in the Company or Group Companies by any Ordinary Shareholder or any Domestic Shareholder shall take place except in accordance with this Agreement and the Share Restriction Agreement.

 

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21.                               TERMINATION

 

20.1.                     If this Agreement is terminated or rescinded for whatsoever reason, all further rights and obligations of the parties hereto shall cease to have effect upon such termination or rescission except that the termination or rescission will not affect the then accrued rights and obligations of the parties.

 

22.                               SEVERABILITY

 

22.1.                     If at any time any one or more provisions hereof is or becomes invalid, illegal, unenforceable or incapable of performance in any respect, the validity, legality, enforceability or performance of the remaining provisions hereof shall not thereby in any way be affected or impaired, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

 

23.                               ENTIRE AGREEMENT

 

23.1.                     Except as otherwise specified in this Agreement, this Agreement constitutes the entire agreement and understanding between the parties in connection with the subject matter of this Agreement and supersedes all previous term sheets, proposals, representations, warranties, agreements (including without limitation the BVI Shareholders’ Agreement and the First Cayman Shareholders’ Agreement) or undertakings relating thereto whether oral, written or otherwise and replaces all other agreements between and among any of the parties with respect to the subject matter hereof.   No party hereto has relied or is entitled to rely on any such term sheets, proposals, representations, warranties, agreements or undertakings.

 

24.                               NATURE OF THIS AGREEMENT

 

24.1.                     In the event of any conflict between the provisions of this Agreement and the terms of the Memorandum and Articles of Association of the Company, the provisions of this Agreement shall prevail as between the Shareholders of the Company only and, if any of the parties hereto shall so require, the Memorandum and Articles of Association of the Company shall be revised so as to reflect the provisions of this Agreement.

 

25.                               TIME

 

25.1.                     Time shall be of the essence of this Agreement.

 

25.2.                     No time or indulgence given by any party to the other shall be deemed or in any way be construed as a waiver of any of its rights and remedies hereunder.

 

26.                               ASSIGNMENT AND COUNTERPARTS

 

26.1.                     This Agreement shall be binding on and endure for the benefits of the parties hereto, and their respective successors and permitted assigns.

 

26.2.                     Subject to Section 26.3 and in the circumstances where no Preference Share has been transferred, DCM may assign and transfer any of its rights, benefits and obligations of and in this Agreement to any member(s) of DCM Group; SAIF may assign and 

 

35

 

transfer any of its rights, benefits and obligations of and in this Agreement to any member(s) of SAIF Group; and WP may assign and transfer any of its rights, benefits and obligations of and in this Agreement to any member(s) of WP Group; provided that (i) each of DCM, SAIF and WP (as the case may be) shall notify the Company of its proposed transfer and assignment in advance, and (ii) each transferee or assignee shall be required to be bound by this Agreement.

 

26.3.                     Notwithstanding anything to the contrary contained in Section 26.2 and subject to other provisions of this Agreement, this Agreement and the rights and obligations herein may be assigned and transferred by any Preference Shareholder to any Person who holds or acquires any Preference Shares from such holder; provided that (i) such Preference Shareholder shall notify the Company of its proposed transfer and assignment in advance, and (ii) each transferee or assignee (unless already a party to this Agreement) shall be required to sign the Deed of Adherence as provided in this Section 26 confirming its agreement to be bound by this Agreement in relation to the Preference  Shares thus purchased, as a condition of becoming a Preference Shareholder of the Company.

 

26.4.                     Save as aforesaid, and save as provided herein, no party hereto may assign or transfer any of his or its rights or obligations under this Agreement without the prior written consent of the other parties hereto.

 

26.5.                     Each permitted transferee or assignee of the Shares shall continue to be subject to the terms hereof, and, as a condition to the Company’s recognizing such transfer, the transferor shall procure that the permitted transferee or assignee (unless already a party to this Agreement) shall agree in writing to be subject to each of the terms of this Agreement by executing and delivering the Deed of Adherence.  The Company shall not permit the transfer of the Shares on its books, update its register of members or issue a new certificate representing any such Shares unless and until such transferee has complied with the terms of this Section 26.5.

 

26.6.                     In the event that after the date of this Agreement, the Company issues any Shares, the Company shall not issue such Shares to such person (unless already a party to this Agreement) unless such person executes and delivers the Deed of Adherence, becomes a party to this Agreement, and shall thereby be bound by, and such issuance shall be subject to, all applicable terms and provisions of this Agreement.

 

26.7.                     This Agreement may be executed in any number of counterparts and by the parties on separate counterparts, each of which, when so executed and delivered, shall be an original but all the counterparts shall together constitute one and the same instrument.

 

27.                               ASSIGNMENT AND ASSUMPTION OF SHARE RESTRICTION AGREEMENT; PROCEEDS OF SUBSCRIPTION

 

27.1              In connection with the share exchange pursuant to the Share Exchange Agreement, BVI Co has assigned its rights and obligations under the Share Restriction Agreement to the Company and the Company has agreed to assume any and all rights and obligations of BVI Co under the Share Restriction Agreement.  Parties to the Share Restriction Agreement hereby consent to the assignment by BVI Co of any and all of its rights and obligations under the Share Restriction Agreement to the Company.

 

36

 

27.2              The parties acknowledge and agree that the proceeds of the subscription for the Series B-1 Preference Shares under the Series B-1 Subscription Agreement shall be used, in accordance with the directions of the Company’s Board of Directors, as it shall be constituted in accordance herein, for customer acquisition, product development, internal management improvement, brand building, working capital and other Business activities.  The aforesaid proceeds shall not by any means be used in the payment of any debt of the Company or its Subsidiaries held by any Shareholders without the prior consent of the Majority B Shareholders.

 

28.                               NOTICES AND OTHER COMMUNICATION

 

28.1.                    Any notice or other communication to be given under this Agreement shall be in writing and may be delivered by hand or given by facsimile or sent by an established courier service to the address or fax number from time to time designated, the initial  address and fax number so designated by each party being set out in Part A, Part B, Part C and Part D of Schedule 1.  Any such notice or communication shall be sent to the party to whom it is addressed and must contain sufficient reference and/or particulars to render it readily identifiable with the subject-matter of this Agreement.  If so delivered by hand or given by facsimile such notice or communication shall be deemed received on the date of despatch and if so sent by an established courier service shall be deemed received three (3) Business Days after the date of despatch.

 

28.2.                     Each person making a communication hereunder by facsimile shall promptly confirm by telephone to the person to whom such communication was addressed, but the absence of such confirmation shall not affect the validity of any such communication.

 

29.                               GOVERNING LAW AND JURISDICTION

 

29.1.                     This Agreement shall be governed by and construed in accordance with the laws of Hong Kong.

 

29.2.                     Any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules as at present in force and as may be amended by the rest of this Section. The appointing authority shall be the Hong Kong International Arbitration Centre (“HKIAC”). The place of arbitration shall be in Hong Kong at the HKIAC.  Any such arbitration shall be administered by the HKIAC in accordance with the HKIAC Procedures for the Administration of International Arbitration adopted with effect from 31st March 2005, even if the said Procedures have been superseded.  The parties hereby expressly agree that if and when the HKIAC Secretariat invites them pursuant to Article 1.3 of the HKIAC’s Administered Arbitration Rules to agree to the application of those rules, the parties will decline such invitation and will allow the arbitration to proceed under the UNCITRAL Arbitration Rules. The arbitral award shall be final and binding upon the parties.

 

29.3.                     There shall be one (1) arbitrator appointed by the parties in dispute or, failing such agreement within ten (10) Business Days after any party in dispute has given to the other party(ies) in dispute a written request to concur in the appointment of an 

 

37

 

arbitrator, a single arbitrator to be appointed, on the request of any party, by the Chairman for the time being of the HKIAC (as the appointing authority).

 

29.4.                     The language to be used in the arbitral proceedings shall be English. The prevailing party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

 

30.                               AMENDMENTS AND WAIVERS

 

30.1.                     Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the holders of a majority of the outstanding Ordinary Shares (excluding Ordinary Shares issued upon conversion of Preference Shares) who at such time are providing services to any Group Company as an employee or consultant, the Majority A Shareholders, the Majority A-1 Shareholders and the Majority B Shareholders.  Any amendment or waiver effected in  accordance with this Section 30.1 shall be binding upon the Company, the Founders, other Ordinary Shareholders and each holder of any Registrable Securities then outstanding, each future holder of all such Registrable Securities, and other parties hereto and their respective permitted transferees, assignees and successors in interest.  The Company shall give prompt written notice of any amendment or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, termination or waiver.  Any amendment, termination or waiver effected in accordance with this Section 30.1 shall be binding on all parties hereto, even if they do not execute such consent.  No waivers of or exceptions to any term, condition or provision of this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.

 

31.                               MISCELLANEOUS

 

31.1.                     The single or partial exercise of any right, power or remedy provided by law or under this Agreement shall not preclude any other or further exercise of it or the exercise of any other right, power or remedy.

 

31.2.                     The rights, powers and remedies provided in this Agreement are cumulative and not exclusive of any rights, powers and remedies provided by law.

 

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

 

31.4.                     For the purpose of this Agreement, unless otherwise explicitly provided, the written consent or written approvals of the Series B Shareholders shall mean the written consent or written approvals of the holders of at least a majority of the aggregate number of Ordinary Shares into which the then outstanding Series B Preference Shares and Series B-1 Preference Shares are convertible.

 

38

 

32.                               WAIVER ON SERIES B-1 PREFERENCE SHARES ISSUANCE

 

32.1                        Each of the Shareholders hereby waives any right of first offer, pre-emptive right, or other rights to purchase any portion of the Series B-1 Preference Shares issued by the Company pursuant to the Series B-1 Subscription Agreement, any anti-dilution rights with respect any adjustment to the conversion price of any Series A Preference Shares, Series A-1 Preference Shares or Series B Preference Shares and any other right that such Shareholder may have with respect to the allotment, issuance and sale of Series B-1 Preference Shares pursuant to the Series B-1 Subscription Agreement under any agreement (including without limitation, the BVI Shareholders’ Agreement or the First Cayman Shareholders’ Agreement or any share subscription agreement entered into, inter alios, the Company or the BVI Co (as the case may be) and any party hereto) or the constitutional documents of the Company (including without limitation the Memorandum and Articles of Association), and hereby approves the allotment, issuance and sale of Series B-1 Preference Shares pursuant to the Series B-1 Subscription Agreement.

 

- EXECUTION PAGE FOLLOWS -

 

39

 

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

 

 

FOUNDERS:

 

 

	
NINHAO CHINA CORPORATION
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Jinbo   Yao
    	
 
    
	
Name:
    	
Jinbo YAO
    	
 
    
	
Title:
    	
Director
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Jinbo Yao
    	
 
    
	
Jinbo YAO
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Jianbo Su
    	
 
    
	
Jianbo SU
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Baoshan Wang
    	
 
    
	
Baoshan WANG
    	
 
    

 

[SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS’ AGREEMENT]

 

 

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

 

 

	
ORDINARY SHAREHOLDERS:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Dong   Yang
    	
 
    
	
Dong YANG
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Cui   Jinfeng
    	
 
    
	
CUI Jinfeng
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Jin Yusong
    	
 
    
	
JIN Yusong
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Chen   Xiaohua
    	
 
    
	
CHEN Xiaohua
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Geng Chunsheng
    	
 
    
	
GENG Chunsheng
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Xu Guipeng
    	
 
    
	
XU Guipeng
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Gao Bo
    	
 
    
	
GAO Bo
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Zhuang Jiandong
    	
 
    
	
ZHUANG Jiandong
    	
 
    

 

[SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS’ AGREEMENT]

 

 

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

 

 

GROUP COMPANIES:

 

COMPANY:

 

	
58.COM INC.
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Jinbo   Yao
    	
 
    
	
Name:
    	
Jinbo Yao
    	
 
    
	
Title:
    	
Director
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
BVI CO:
    	
 
    
	
 
    	
 
    
	
CHINA CLASSIFIED NETWORK CORPORATION
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Jinbo   Yao
    	
 
    
	
Name:
    	
Jinbo Yao
    	
 
    
	
Title:
    	
Director
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
HK CO:
    	
 
    
	
 
    	
 
    
	
CHINA CLASSIFIED INFORMATION
    	
 
    
	
CORPORATION LIMITED
    	
 
    
	
(中国分类信息集团有限公司)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Jinbo   Yao
    	
 
    
	
Name:
    	
Jinbo Yao
    	
 
    
	
Title:
    	
Director
    	
 
    

 

[SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS’ AGREEMENT]

 

 

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

 

 

GROUP COMPANIES: (Cont’d.)

 

WFOE:

 

	
BEIJING CHENGSHI WANGLIN
    	
 
    
	
INFORMATION TECHNOLOGY   CO., LTD.
    	
 
    
	
(北京城市网邻信息技术有限公司)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Jinbo   Yao
    	
 
    
	
Name:
    	
Jinbo Yao
    	
 
    
	
Title:
    	
Director
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
DOMESTIC COMPANY:
    	
 
    
	
 
    	
 
    
	
BEIJING 58 INFORMATION
    	
 
    
	
TECHNOLOGY CO., LTD.
    	
 
    
	
(北京五八信息技术有限公司)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Jinbo   Yao
    	
 
    
	
Name:
    	
Jinbo Yao
    	
 
    
	
Title:
    	
Director
    	
 
    

 

[SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS’ AGREEMENT]

 

 

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

 

 

PREFERENCE SHAREHOLDERS:

 

 

	
SB ASIA INVESTMENT FUND II L.P.
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Andrew   Y. Yan
    	
 
    
	
Name:
    	
Andrew Y.   Yan
    	
 
    
	
Title:
    	
Managing   Partner
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
DCM V, L.P.
    	
 
    
	
 
    	
 
    
	
DCM AFFILIATES FUND V, L.P.
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
DCM   Investment Management V, L.P.
    	
 
    
	
 
    	
its General   Partner
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
DCM   International V, Ltd.
    	
 
    
	
 
    	
its General   Partner
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Matthew   C. Bonner
    	
 
    
	
Name:
    	
Matthew C.   Bonner
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
WP X ASIA ONLINE INVESTMENT HOLDINGS LIMITED
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Timothy   J. Curt
    	
 
    
	
Name:
    	
Timothy J.   Curt
    	
 
    
	
Title:
    	
Director
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
RECRUIT CO., LTD.
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Takashi   Kuzuhara
    	
 
    
	
Name:
    	
Takashi   Kuzuhara
    	
 
    
	
Title:
    	
Company President
    	
 
    

 

[SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS’ AGREEMENT]

 

 

SCHEDULE 1

 

ADDRESS AND FAX NUMBERS FOR NOTIFICATION

 

Part A

Founders

 

1.              Jinbo YAO

Citizenship:         PRC

Address:                         Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

Attn:                                             Jinbo Yao

Fax No. :                       +8610-64459926

 

2.              Jianbo SU

Citizenship:        PRC

Address:                         Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

Attn:                                             Jinbo Yao

Fax No. :                      +8610-64459926

 

3.              Baoshan WANG

Citizenship:        PRC

Address:                         Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

Attn:                                             Jinbo Yao

Fax No. :                      +8610-64459926

 

4.              NIHAO CHINA CORPORATION

Address:                         Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

Attn:                                             Jinbo Yao

Fax No.:                          +8610-64459926

 

 

Part B

Ordinary Shareholders

 

1.              Dong Yang

Citizenship:        Hong Kong

Address:                         c/o SAIF Advisors, Suites 2115-2118 Two Pacific Place, 88 Queensway, Hong Kong

Attn:                                             Dong Yang

Fax No.:                         852-2234-9116

 

2.              Cui Jinfeng

Citizenship:        PRC

Address:                         Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

Attn:                                             Cui Jinfeng

Fax No.:                         +8610-57960999

 

3.              Jin Yusong

Citizenship:        PRC

Address:                         Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

Attn:                                             Jin Yusong

Fax No.:                         +8610-57960999

 

4.              Chen Xiaohua

Citizenship:        PRC

Address:                         Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

Attn:                                             Chen Xiaohua

Fax No.:                         +8610-57960999

 

5.              Geng Chunsheng

Citizenship:        PRC

Address:                         4/F, Chuangfu Building, No.18, Danleng Street, Haidian District, Beijing, PRC

Attn:                                             Geng Chunsheng

Fax No.:                         +8610-64459295

 

 

6.              Xu Guipeng

Citizenship:        PRC

Address:                         Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

Attn:                                             Xu Guipeng

Fax No.:                         +8610-57960999

 

7.              Gao Bo

Citizenship:        PRC

Address:                         Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

Attn:                                             Gao Bo

Fax No.:                         +8610-57960999

 

8.              Zhuang Jiandong

Citizenship:        PRC

Address:                         Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

Attn:                                             Zhuang Jiandong

Fax No.:                         +8610-57960999

 

 

Part C

Group Companies

 

1.                                      58.COM INC.

Address:                                               Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

Attn:                                                                    Jinbo Yao

Fax No. :                                              +8610-64459926

 

2.                                      CHINA CLASSIFIED NETWORK CORPORATION

Address:                                               Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

Attn:                                                                    Jinbo Yao

Fax No. :                                              +8610-64459926

 

3.                                      CHINA CLASSIFIED INFORMATION CORPORATION LIMITED (中国分类信息集团有限公司)

Address:                                               Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

Attn:                                                                    Jinbo Yao

Fax No. :                                              +8610-64459926

 

4.                                      BEIJING CHENGSHI WANGLIN INFORMATION TECHNOLOGY CO., LTD. (北京城市网邻信息技术有限公司)

Address:                                               Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

Attn:                                                                    Jinbo Yao

Fax No.:                                                 +8610-64459926

 

5.                                      BEIJING 58 INFORMATION TECHNOLOGY CO., LTD. (北京五八信息技术有限公司)

Address:                                               Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

Attn:                                                                    Jinbo Yao

Fax No. :                                              +8610-64459926

 

 

Part D

Preference Shareholders

 

1.                                      SB ASIA INVESTMENT FUND II L.P.

 

Address:                                                 c/o M&A Corporation Services Limited, PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands; c/o SAIF Advisors, Suites 2115-2118 Two Pacific Place, 88 Queensway, Hong Kong

Attn:                                                                    Andrew Y. Yan

Fax No.:                                                 852-2234-9116

 

2.                                      DCM V, L.P. and DCM Affiliates Fund V, L.P.

 

Address:                                                 2420 Sand Hill Road, Suite 200, Menlo Park, CA 94025, U.S.

Attn:                                                                    Matthew C. Bonner

Fax No.:                                                 (001) 650-854-9159

 

3.                                      WP X Asia Online Investment Holdings Limited

 

Address:                                                 c/o Warburg Pincus Asia LLC

Suite 6703 Two International Finance Centre

8 Finance Street

Hong Kong

Attn:                                                                    Julian Cheng

Fax No.:                                                 (852) 2521 3869

 

4.                                      NIHAO CHINA CORPORATION

 

Address:                                                Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

Attn:                                                                   Jinbo Yao

Fax No.:                                                 +8610-64459926

 

5.                                      RECRUIT

 

Address:                                                1-9-2, Marunouchi, Chiyoda-ku, Tokyo

Post Code: 100-6640

Japan

Attn:                                                                   Mr. Hiroaki Ogata

 

 

Fax No.:                                                 +813-6834-8876

 

 

SCHEDULE 2

 

REGISTRATION RIGHTS

 

1.                                      Applicability of Rights.  The Preference Shareholders shall be entitled to the following rights with respect to any potential public offering of the Preference Shares or the Ordinary Shares in the United States and shall be entitled to reasonably analogous or equivalent rights with respect to any other offering of Securities of the Company in any other jurisdiction pursuant to which the Company undertakes to publicly offer or list such Securities for trading on a recognized securities exchange.

 

2.                                      Definitions.  For purposes of this Schedule 2:

 

(a)                                 Registration.  The terms “register,” “registered,” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement.

 

(b)                                 Registrable Securities.  The term “Registrable Securities” means:  (1) any Ordinary Shares of the Company issued or to be issued pursuant to conversion of any Preference Shares issued (A) under the Series B-1 Subscription Agreement or under any previous subscription agreements in relation to the issuance of the Series A Preference Shares, Series A-1 Preference Shares or Series B Preference Shares, (B) under the Share Exchange Agreement, and (C) pursuant to the right of participation as provided in Section 11 of the Agreement; (2) any Ordinary Shares of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, any Preference Shares described in clause (1) of this subsection (b); and (3) any other Ordinary Shares of the Company owned or hereafter acquired by a Preference Shareholder.  Notwithstanding the foregoing, “Registrable Securities” shall exclude any Registrable Securities sold by a person in a transaction in which rights under this Schedule 2 are not assigned in accordance with this Agreement or any Registrable Securities sold in a public offering, whether sold pursuant to Rule 144 promulgated under the Securities Act, or in a registered offering, or otherwise.

 

(c)                                  Registrable Securities Then Outstanding.  The number of shares of “Registrable Securities then outstanding” shall mean the number of Ordinary Shares of the Company that are Registrable Securities and are then issued and outstanding.

 

(d)                                 Holder.  For purposes of this Schedule 2, the term “Holder” means any person owning of record Registrable Securities that have not been sold to the public or pursuant to Rule 144 promulgated under the Securities Act or any permitted assignee of record of such Registrable Securities to whom rights under this Schedule 2 have been duly assigned in accordance with this Agreement.

 

 

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

 

(f)                                   SEC.  The term “SEC” or “Commission” means the U.S. Securities and Exchange Commission.

 

3.                                      Demand Registration.

 

(a)                                 Request by Holders.  If the Company shall at any time after the earlier of (i) three (3) years following the Second Closing (as defined in the Series B-1 Subscription Agreement), or (ii) six (6) months following the consummation of the Company’s IPO, receive a written request from the Holders of at least twenty percent (20%) of the Registrable Securities then outstanding that the Company file a registration statement under the Securities Act covering the registration of Registrable Securities pursuant to this Section 3, then the Company shall, within ten (10) Business Days of the receipt of such written request, give written notice of such request (“Request Notice”) to all Holders, and use all reasonable efforts to effect, as soon as practicable, the registration under the Securities Act of all Registrable Securities that Holders (including other Holders who so) request to be registered and included in such registration by written notice given by such Holders to the Company within twenty (20) Business Days after receipt of the Request Notice, subject only to the limitations of this Section 3; provided that the Company shall not be obligated to effect any such registration if the Company has, within the six (6) month period preceding the date of such request, already effected a registration under the Securities Act pursuant to this Section 3 or Section 5, or in which the Holders had an opportunity to participate pursuant to the provisions of Section 4, other than a registration from which the Registrable Securities of Holders have been excluded (with respect to all or any portion of the Registrable Securities the Holders requested be included in such registration) pursuant to the provisions of Section 4(b).

 

(b)                                 Underwriting.  If the Holders initiating the registration request under this Section 3 (“Initiating Holders”) intend to distribute the Registrable Securities covered by their request by means of an underwriting, then they shall so advise the Company as a part of their request made pursuant to this Section 3 and the Company shall include such information in the written notice referred to in subsection 3(a).  In such event, the right of any Holder to include his Registrable Securities in such registration shall be conditional upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by seventy-five percent (75%) in interest of the Initiating Holders and such Holder) to the extent provided herein.  All Holders proposing to distribute their Registrable Securities 

 

 

through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting by the Holders of seventy-five percent (75%) of the Registrable Securities being registered and reasonably acceptable to the Company (subject to Section 10 of this Schedule 2, including a market stand-off agreement of up to 180 days if required by such underwriter or underwriters).  Notwithstanding any other provision of this Section 3, if the underwriter(s) advise(s) the Company in writing that marketing factors require a limitation of the number of securities to be underwritten then the Company shall so advise all Holders of Registrable Securities which would otherwise be registered and underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be reduced as required by the underwriter(s) and allocated among the Holders of Registrable Securities on a pro rata basis according to the number of Registrable Securities then outstanding held by each Holder requesting registration (including the Initiating Holders); provided, however, that the number of shares of Registrable Securities to be included in such underwriting and registration shall not be reduced unless all other Securities are first entirely excluded from the underwriting and registration.  If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter(s), delivered at least ten (10) Business Days prior to the effective date of the registration statement.  Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration.  If the underwriter has not limited the number of Registrable Securities to be underwritten, the Company may include its securities for its own account in such registration if the underwriter so agrees and if the number of Registrable Securities which would otherwise have been included in such registration and underwriting will not thereby be limited.

 

(c)                                  Maximum Number of Demand Registrations.  The Company shall be obligated to effect one (1) such registration for each of SAIF, DCM and WP pursuant to this Section 3; provided that at the time any of them initiates such registration, it shall hold at least twenty percent (20%) of Registrable Securities then outstanding.

 

(d)                                 Deferral.  Notwithstanding the foregoing, the Company shall not be required to effect a registration pursuant to this Section 3:

 

(i)                                     during the period starting with the date sixty (60) Business Days prior to the Company’s good faith estimate of the date of the filing of, and ending on a date one hundred eighty (180) Business Days following the effective date of, a Company-initiated registration subject to Section 4 below, provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective;

 

 

(ii)                                  if the Initiating Holders propose to dispose of Registrable Securities that may be registered on Form S-3 pursuant to Section 5 hereof; or

 

(iii)                               if the Company shall furnish to Holders requesting the filing of a registration statement pursuant to this Section 3, a certificate signed by the President or Chief Executive Officer of the Company stating that in the good faith judgment of the Board, it would be materially detrimental to the Company and its shareholders for such registration statement to be filed, then the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders; provided, however, that the Company may not utilize this right more than once in any twelve (12) month period; provided further, that the Company shall not register any other of its Securities during such twelve (12) month period.  A demand right shall not be deemed to have been exercised until such deferred registration shall have been effected.

 

(e)                                  Expenses.  All expenses incurred in connection with any registration pursuant to this Section 3, including without limitation all U.S. federal, “blue sky” and all foreign registration, filing and qualification fees, printer’s and accounting fees, and fees and disbursements of counsel for the Company including reasonable expenses of one legal counsel for the Holders (but excluding underwriters’ discounts and commissions relating to shares sold by the Holders), shall be borne by the Company.  Each Holder participating in a registration pursuant to this Section 3 shall bear such Holder’s proportionate share (based on the total number of shares sold in such registration other than for the account of the Company) of all discounts, commissions or other amounts payable to underwriter(s) or brokers, in connection with such offering by the Holders.

 

4.                                      Piggyback Registrations.  The Company shall notify all Holders of Registrable Securities in writing at least twenty (20) days prior to filing any registration statement under the Securities Act for purposes of effecting a public offering of Securities of the Company (including, but not limited to, registration statements relating to secondary offerings of Securities of the Company, but excluding registration statements relating to any registration under Section 3 or Section 5 of this Schedule 2 or to any employee benefit plan or a corporate reorganization) and will afford each such Holder an opportunity to include in such registration statement all or any part of the Registrable Securities then held by such Holder.  Each Holder desiring to include in any such registration statement all or any part of the Registrable Securities held by such Holder shall within eighteen (18) days after receipt of the above-described notice from the Company, so notify the Company in writing, and in such notice shall inform the Company of the number of Registrable Securities such Holder wishes to include in such registration statement.  If a Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the 

 

 

Company with respect to offerings of its Securities, all upon the terms and conditions set forth herein.

 

(a)                                 Right to Terminate Registration.  The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 4 prior to the effectiveness of such registration whether or not any Holder has elected to include Securities in such registration.  The expenses of such withdrawn registration shall be borne by the Company in accordance with Section 4(c) hereof.

 

(b)                                 Underwriting.  If a registration statement under which the Company gives notice under this Section 4 is for an underwritten offering, then the Company shall so advise the Holders of Registrable Securities.  In such event, the right of any such Holder’s Registrable Securities to be included in a registration pursuant to this Section 4 shall be conditional upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein.  All Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting (subject to Section 10 of this Schedule 2, including a market stand-off agreement of up to 180 days if required by such underwriter or underwriters).  Notwithstanding any other provision of this Agreement, if the managing underwriter(s) determine(s) in good faith that marketing factors require a limitation of the number of shares to be underwritten, then the managing underwriter(s) may exclude shares (including up to one hundred percent (100%) of the Registrable Securities for an IPO and up to seventy percent (70%) of the Registrable Securities thereafter) from the registration and the underwriting, and the number of shares that may be included in the registration and the underwriting shall be allocated, first to the Company, second, to each of the Holders requesting inclusion of their Registrable Securities in such registration statement on a pro rata basis based on the total number of Registrable Securities then held by each such Holder; and third, to holders of other Securities of the Company provided, however, that the right of the underwriter(s) to exclude shares (including Registrable Securities) from the registration and underwriting as described above shall be restricted so that (i) the number of Registrable Securities included in any such registration after an IPO is not reduced below thirty percent (30%) of the aggregate number of Registrable Securities for which inclusion has been requested; and (ii) all shares that are not Registrable Securities and are held by any other person, including, without limitation, the Founders and any other person who is an employee, officer, consultant or director of the Company (or any Subsidiary of the Company) shall first be excluded from such registration and underwriting before any Registrable Securities are so excluded.  If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter(s), delivered at least ten (10) days prior to the effective date of the registration statement.  Any Registrable Securities excluded or withdrawn from such underwriting shall 

 

 

be excluded and withdrawn from the registration.  For any Holder that is a partnership, the Holder and the partners and retired partners of such Holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons, and for any Holder that is a corporation, the Holder and all corporations that are Associates of such Holder, shall be deemed to be a single “Holder” and any pro rata reduction with respect to such “Holder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “Holder”, as defined in this sentence.

 

(c)                                  Expenses.  All expenses incurred in connection with a registration pursuant to this Section 4 (excluding underwriters’ and brokers’ discounts and commissions relating to shares sold by the Holders), including, without limitation all U.S. federal, “blue sky” and all foreign registration, filing and qualification fees, printers’ and accounting fees, and fees and disbursements of counsel for the Company and reasonable expenses of one legal counsel for the Holders, shall be borne by the Company.

 

(d)                                 Not Demand Registration.  Registration pursuant to this Section 4 shall not be deemed to be a demand registration as described in Section 3 above.  Except as otherwise provided herein, there shall be no limit on the number of times the Holders may request registration of Registrable Securities under this Section 4.

 

5.                                      Form S-3 or Form F-3 Registration.  In case the Company shall receive from any Holder or Holders of at least twenty percent (20%) of all Registrable Securities then outstanding a written request or requests that the Company effect a registration on Form S-3 or Form F-3 and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, then the Company will:

 

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

 

(b)                                 Registration.  As soon as practicable, effect such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holders or Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within fourteen (14) Business Days after the Company provides the notice contemplated by Section 5(a); provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section 5:

 

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

 

 

(2)                                 if the Company shall furnish to the Holders a certificate signed by the President or Chief Executive Officer of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be materially detrimental to the Company and its shareholders for such Form S-3 or Form F-3 registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 or Form F-3 registration statement no more than once during any twelve month period for a period of not more than ninety (90) days after receipt of the request of the Holder or Holders under this Section 5; provided that the Company shall not register any of its other Securities during such ninety (90) day period; or

 

(3)                                 if the Company has, within the twelve (12) month period preceding the date of such request, already effected two (2) registrations under the Securities Act other than a registration from which the Registrable Securities of Holders have been excluded (with respect to all or any portion of the Registrable Securities the Holders requested be included in such registration) pursuant to the provisions of Section 3(b) or Section 4(b).

 

(c)                                  Expenses.  The Company shall pay all expenses incurred in connection with each registration requested pursuant to this Section 5 (excluding underwriters’ or brokers’ discounts and commissions relating to shares sold by the Holders), including without limitation all U.S. federal, “blue sky” and all foreign registration, filing and qualification fees, printers’ and accounting fees, and fees and disbursements of counsel for the Company and reasonable expenses of one legal counsel for the Holders.

 

(d)                                 Not Demand Registration.  Form S-3 or Form F-3 registrations shall not be deemed to be demand registrations as described in Section 3 above.  Except as otherwise provided herein, there shall be no limit on the number of times the Holders may request registration of Registrable Securities under this Section 5.

 

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

 

(a)                                 Registration Statement.  Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use all reasonable efforts to cause such registration statement to become effective, provided, however, that the Company shall not be required to keep any such registration statement effective for more than sixty (60) days.

 

(b)                                 Amendments and Supplements.  Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement.

 

 

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

 

(d)                                 Blue Sky.  Use all reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions.

 

(e)                                  Underwriting.  In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement in usual and customary form, with the managing underwriter(s) of such offering.  Subject to Section 10 of this Schedule 2, each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.

 

(f)                                   Notification.  Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of (i) the issuance of any stop order by the SEC in respect of such registration statement, or (ii) the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.

 

(g)                                  Opinion and Comfort Letter.  Furnish, at the request of any Holder requesting registration of Registrable Securities, on the date that such Registrable Securities are delivered to the underwriter(s) for sale, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering and reasonably satisfactory to seventy-five percent (75%) in interest of the Holders requesting registration, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities and (ii) a “comfort” letter dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering and reasonably satisfactory to seventy-five percent (75%) in interest of the Holders requesting registration, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities.

 

 

(h)                                 Notwithstanding any of the foregoing provisions, the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 3 or Section 5 if the registration request is subsequently withdrawn at the request of the Holders of seventy-five percent (75%) of the Registrable Securities to be registered (in which case the participating Holders requesting for the withdrawal shall bear such expenses), unless, in the case of a registration requested under Section 3, all of the Holders of the Registrable Securities agree to forfeit their right to one demand registration pursuant to Section 3; provided further, however, that if at the time of such withdrawal, the Holders have learnt of a material adverse change in the condition, business, or prospects of the Company not known to the Holders at the time of their request for such registration and have withdrawn their request for registration with reasonable promptness after learning of such material adverse change, then the Holders shall not be required to pay any of such expenses and such registration shall not constitute the use of a demand registration pursuant to Section 3.

 

7.                                      Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Schedule 2 with respect to the Registrable Securities of the selling Holders that such selling Holders shall furnish to the Company such information regarding themselves, the Registrable Securities held by them and the intended method of disposition of such securities as shall be required to timely effect the registration of their Registrable Securities.  In this connection, each selling Holder shall be required to, severally but not jointly, represent and warrant to the Company that all such information which is given in writing expressly for inclusion in such registration is true and accurate in all material respects.

 

8.                                      No Registration Rights to Third Parties.  Without the prior consent of the Majority A Shareholders, the Majority A-1 Shareholders and the Majority B Shareholders, the Company covenants and agrees that it shall not grant, or cause or permit to be created, for the benefit of any person or entity any registration rights of any kind (whether similar to the demand, “piggyback” or Form S-3 or Form F-3 registration rights described in this Schedule 2, or otherwise) relating to any Securities of the Company, other than rights that are subordinate in right to the Series A Shareholders, the Series A-1 Shareholders, the Series B Shareholders and the Series B-1 Shareholders.

 

9.                                      Assignment.  The registration rights under this Schedule 2 may be transferred or assigned to any transferee of Preference Shares representing five percent (5%) or more of the issued share capital of the Company.

 

10.                               Market Stand-Off Agreement.  Each Ordinary Shareholder and each Holder hereby agrees that, upon request by the Company or the underwriters managing the Company’s IPO, it will not (other than those permitted to be included in the registration and other Disposal to Associates permitted by applicable law or to other Associates who agree to be similarly bound), without the prior written consent of the managing underwriter, during the period commencing on the date 

 

 

of the final prospectus relating to the Company’s IPO and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (l80) days) (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Ordinary Shares or any securities convertible into or exercisable or exchangeable for Ordinary Shares (whether such shares or any such securities are then owned by the Holder or are thereafter acquired), or (ii) enter into any swap or  other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Ordinary Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Ordinary Shares or such other securities, in cash or otherwise.  The foregoing provisions of this Section 10 shall apply only to the Company’s IPO of equity securities, shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, and shall only be applicable to the Holders if all officers and directors and greater than one percent (1%) Shareholders of the Company enter into similar agreements with same terms and conditions as described in this Section 10, and if the Company or any underwriter releases any officer, director or holder of one percent (1%) or more of the Company’s outstanding share capital from his or her sale restrictions so undertaken, then each Holder shall be notified prior to such release and shall itself be simultaneously released to the same proportional extent.  Each Shareholder of the Company shall take all steps consistent with the requirements of any applicable law to minimize lockup restrictions of the Preference Shares (or the Ordinary Shares issued upon the conversion of the Preference Shares).  The underwriters in connection with the Company’s IPO are intended third party beneficiaries of this Section 10 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.  In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Registrable Securities of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period.  The Company shall require all future acquirers of the Company’s Securities holding at least one percent (1%) of the then outstanding share capital of the Company to execute prior to a Qualified IPO a market stand-off agreement containing substantially similar provisions as those contained in this Section 10.

 

11.                               Re-sale Rights.  The Company shall at its own cost use its best efforts to assist each Holder in the sale or disposition of, and to enable the Holder to sell under Rule 144 promulgated under the Securities Act the maximum number of, its Registrable Securities, including without limitation (a) the prompt delivery of applicable instruction letters to the Company’s transfer agent to remove legends from the Holder’s share certificates, (b) causing the prompt delivery of appropriate legal opinions from the Company’s counsel in forms reasonably satisfactory to the Holder’s counsel, (c) if the Company has depository receipts listed or traded on any exchange or inter-dealer quotation system, (i) the prompt delivery of instruction letters to the Company’s share registrar and depository agent to convert the Holder’s securities into depository receipts or similar instruments to be deposited in the Holder’s brokerage account(s), and (ii) the prompt payment of all costs and fees related to such depositary facility, including conversion fees and maintenance fees for Registrable Securities held by the 

 

 

Holders.  The Company acknowledges that time is of the essence with respect to its obligations under this Section 11 hereof, and that any delay will cause the Holders irreparable harm and constitutes a material breach of its obligations under this Agreement.

 

 

SCHEDULE 3

 

PFIC EXHIBIT

 

(1)                                                                                 This questionnaire applies to the taxable year of [·] (“Company”) beginning on January 1, [        ], and ending on December 31, [        ].

 

(2)                                                                                 PLEASE CHECK HERE IF 75% OR MORE OF THE COMPANY’S GROSS INCOME CONSTITUTES PASSIVE INCOME.

 

Passive income:  For purposes of this test, passive income includes:

 

·                  Dividends, interests, royalties, rents and annuities, excluding, however, rents and royalties which are received from an unrelated party in connection with the active conduct of a trade or business.

·                  Net gains from the sale or exchange of property—

·                 which gives rise to dividends, interest, rents or annuities (excluding, however, property used in the conduct of a banking, finance or similar business, or in the conduct of an insurance business);

·                 which is an interest in a trust, partnership, or REMIC; or

·                 which does not give rise to income.

·                  Net gains from transactions in commodities.

·                  Net foreign currency gains.

·                  Any income equivalent to interest.

 

Look-through rule: if the Company owns, directly or indirectly, 25% of the stock by value of another corporation, the Company must take into account its proportionate share of the income received by such other corporation.

 

(3)                                                                                 PLEASE CHECK HERE IF THE AVERAGE FAIR MARKET VALUE DURING THE TAXABLE YEAR OF PASSIVE ASSETS HELD BY THE COMPANY EQUALS 50% OR MORE OF THE AVERAGE FAIR MARKET VALUE OF ALL OF THE COMPANY’S ASSETS.

 

Note: This test is applied on a gross basis; no liabilities are taken into account.

 

Passive Assets:  For purposes of this test, “passive assets” are those assets which generate (or are reasonably expected to generate) passive income (as defined above).  Assets which generate partly passive and partly non-passive income are considered passive assets to the extent of the relative proportion of passive income (compared to non-passive income) generated in a particular taxable year by such assets.  Please note the following:

 

·                  A trade or service receivable is non-passive if it results from sales or services provided in the ordinary course of business.

·                  Intangible assets that produce identifiable items of income, such as patents or licenses, are characterized in terms of the type of income produced.

·                  Goodwill and going concern value must be identified to a specific income producing activity and are characterized in accordance with the nature of that activity.

·                  Cash and other assets easily convertible into cash are passive assets, even when used as working capital.

·                  Stock and securities (including tax-exempt securities) are passive assets, unless held by a dealer as inventory.

 

Average value:  For purposes of this test, “average fair market value” equals 

 

 

the average quarterly fair market value of the assets for the relevant taxable year.

 

Look-through rule:  if the Company owns, directly or indirectly, 25% of the stock by value of another corporation, the Company must take into account its proportionate share of the passive assets of such other corporation.

 

(4)                                                                                 PLEASE CHECK HERE IF (A) MORE THAN 50% OF THE COMPANY’S STOCK (BY VOTING POWER OR BY VALUE) IS OWNED BY FIVE OR FEWER U.S. PERSONS OR ENTITIES AND (B) THE AVERAGE AGGREGATE ADJUSTED TAX BASES (AS DETERMINED UNDER U.S. TAX PRINCIPLES) DURING THE TAXABLE YEAR OF THE PASSIVE ASSETS HELD BY THE COMPANY EQUALS 50% OR MORE OF THE AVERAGE AGGREGATE ADJUSTED TAX BASES OF ALL OF THE COMPANY’S ASSETS.

 

Average value: For purposes of this test, “average aggregate adjusted tax bases” equals the average quarterly aggregate adjusted tax bases of the assets for the relevant taxable year.

 

Look-through rule: if the Company owns, directly or indirectly, 25% of the stock by value of another corporation, the Company must take into account its proportionate share of the passive assets of such other corporation.

 

(5)                                 [INVESTOR] HAS THE FOLLOWING PRO-RATA SHARE OF THE ORDINARY EARNINGS AND NET CAPITAL GAIN OF THE COMPANY AS DETERMINED UNDER U.S. INCOME TAX PRINCIPLES FOR THE TAXABLE YEAR OF THE COMPANY:

 

Ordinary Earnings:                                       (as determined under U.S. income tax principles)

 

Net Capital Gain:                                           (as determined under U.S income tax principles)

 

Pro Rata Share: For purposes of the foregoing, the shareholder’s pro rata share equals the amount that would have been distributed with respect to the shareholder’s stock if, on each day during the taxable year of the Company, the Company had distributed to each shareholder its pro rata share of that day’s ratable share (determined by allocating to each day of the year, an equal amount of the Company’s aggregate ordinary earnings and aggregate net capital gain for such year) of the Company’s ordinary earnings and net capital gain for such year.  Determination of a shareholder’s pro rata share will require reference to the Company’s charter, certificate of incorporation, articles of association or other comparable governing document.

 

(6)                                 The amount of cash and fair market value of other property distributed or deemed distributed by Company to [Investor] during the taxable year specified in paragraph 1. is as follows:

 

Cash:

 

Fair Market Value of Property:

 

 

(7)                                 Company will permit [Investor] to inspect and copy Company’s permanent books of account, records, and such other documents as may be maintained by Company that are necessary to establish that PFIC ordinary earnings and net capital gain, as provided in  Section 1293(e) of the U.S. Internal Revenue Code of 1986, as amended (or any successor provision thereto), are computed in accordance with U.S. income tax principles.

 

 

The foregoing representations are true and accurate as of the date hereof.  If in any respect such representations shall cease to be true and accurate, the undersigned shall give immediate notice of such fact to [Investor].

 

 

	
 
    	
 
    
	
 
    	
Name of Corporation
    
	
 
    	
By:
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
Date:
    

 

 

SCHEDULE 4

 

FORM OF DEED OF ADHERENCE

 

DEED OF ADHERENCE

 

THIS DEED is made the [          ] day of [          ] by [name of new shareholder], [a citizen of [          ] with [          ] passport no. [          ] and [his/her] residential address at [          ] / [a limited liability company incorporated under the laws of [          ] with its registered office at [          ]] (the “New Shareholder”).

 

WHEREAS

 

(A)                                           By a [transfer of OR subscription for] share dated [of even date herewith], [[name of transferor], [a citizen of [          ] with [          ] passport no. [          ] and [his/her] residential address at [          ] / [a limited liability company incorporated under the laws of [          ] with its registered office at [          ] (the “Transferor”) transferred to the New Shareholder] / [the New Shareholder subscribed for] [number] [Ordinary Shares OR Series A Preference Shares OR Series A-1 Preference Shares OR Series B Preference Shares OR Series B-1 Preference Shares], [par value US$0.00001 each] in the capital of 58.COM INC., a company limited by shares incorporated in the Cayman Islands, with its registered office at the offices of [Codan Trust Company (Cayman) Limited, Cricket Square, Hutchings Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands] (the “Company”) (together the [“Transferred Shares” OR “Subscribed Shares”]).

 

(B)                                           This Deed is entered into in compliance with the terms of an amended and restated shareholders’ agreement dated August 4, 2011 made by and among, inter alios, the Company, the Founders (as defined therein), and other parties thereto (as supplemented and amended from time to time) (the “Shareholders Agreement”).

 

NOW THEREFORE IT IS HEREBY AGREED as follows:

 

(1)                                 Words and expressions used in this Deed shall have the same meaning assigned to them in the Shareholders Agreement unless the context otherwise expressly requires.  The rules of interpretation contained in Section 1 of the Shareholders Agreement shall apply to the construction of this Deed with all necessary changes.

 

(2)                                 The New Shareholder hereby confirms that it has been supplied with a copy of the Shareholders Agreement.

 

(3)                                 The New Shareholder hereby agrees to assume and assumes the benefit of the rights [of the Transferor] under the Shareholders Agreement in respect of the [Transferred Shares OR Subscribed Shares] and hereby agrees to assume and assumes the burden of the [Transferor’s] obligations under the Shareholders Agreement to be performed after the date hereof in respect of the [Transferred Shares OR Subscribed Shares].

 

(4)                                 The New Shareholder hereby agrees to be bound by the Shareholders Agreement in all respects as if the New Shareholder were a party to the Shareholders Agreement as 

 

 

[the Founder / the Ordinary Shareholder / the Series A Shareholder / the Series A-1 Shareholder / the Series B Shareholder / the Series B-1 Shareholder] and to perform:

 

(a)                                 [all the obligations of the Transferor in that capacity thereunder; and]

 

(b)                                 all the obligations expressed to be imposed on such a party to the Shareholders Agreement;

 

[in both cases,] to be performed on or after the date hereof.

 

(5)                                 This Deed is made for the benefit of:

 

(a)                                 the parties to the Shareholders Agreement; and

 

(b)                                 any other Person who may after the date of the Shareholders Agreement (and whether or not prior to or after the date hereof) assume any rights or obligations under the Shareholders Agreement and be permitted to do so by the terms thereof;

 

and this Deed shall be irrevocable without the written consent of the Company acting on their behalf in each case only for so long as they hold any Share in the capital of the Company.

 

(6)                                 [For the avoidance of doubt, if applicable, nothing in this Deed shall release the Transferor from any liability in respect of any obligations under the Shareholders Agreement due to be performed prior to the date of this Deed.]

 

(7)                                 [None of Preference Shareholder:

 

(a)                                 makes any representation or warranty or assumes any responsibility with respect to the legality, validity, effectiveness, adequacy or enforceability of the Shareholders Agreement (or any agreement entered into pursuant thereto); or

 

(b)                                 makes any representation or warranty or assumes any responsibility with respect to the content of any information regarding the Company or any Group Company or otherwise relates to the acquisition of Shares in the Company; or

 

(c)                                  assumes any responsibility for the financial condition of the Company or any Group Company or any other party to the Shareholders Agreement or any other document or for the performance and observance by the Company or any other party to the Shareholders Agreement or any other document (save as expressly provided therein);

 

and any and all conditions and warranties, whether express or implied by law or otherwise, are excluded.]

 

(8)                                The New Shareholder’s address for notices, demands and all other communications under the Shareholders Agreement is as follows:

 

[name of New Shareholder]

 

Address:                                                 [          ]

 

 

Post Code:                                     [          ]

Attention:                                         [          ]

Fax Number:                        [          ]

 

(9)                                 This Deed shall be read as one with the Shareholders Agreement so that any reference in the Shareholders Agreement to “this Agreement” and similar expressions shall include this Deed.

 

(10)                          This Deed shall be governed by and construed in all respects in accordance with the laws of Hong Kong without regard to the principles of conflicts of law thereunder .

 

[EXECUTION PAGE TO FOLLOW]

 

 

IN WITNESS WHEREOF this Deed of Adherence is executed as a deed on the date and year first above written.Exhibit 4.6

 

EXECUTION COPY

 

FOUNDERS NAMED IN EXHIBIT A-1

 

58.COM INC.

 

CHINA CLASSIFIED NETWORK CORPORATION

 

CHINA CLASSIFIED INFORMATION CORPORATION LIMITED

 

BEIJING CHENGSHI WANGLIN INFORMATION TECHNOLOGY CO., LTD.

 

BEIJING 58 INFORMATION TECHNOLOGY CO., LTD.

 

AND

 

WP X ASIA ONLINE INVESTMENT HOLDINGS LIMITED

 

 

SERIES B-1 PREFERENCE SHARE
 SUBSCRIPTION AGREEMENT

 

 

Dated July 23, 2011

 

Orrick, Herrington & Sutcliffe LLP

43rd Floor, Gloucester Tower
 The Landmark
 15 Queen’s Road Central
 Hong Kong

 

 

58.COM INC.

 

SERIES B-1 PREFERENCE SHARE SUBSCRIPTION AGREEMENT

 

THIS SERIES B-1 PREFERENCE SHARE SUBSCRIPTION AGREEMENT (this “Agreement”) is made on July 23, 2011 by and among:

 

(1)                                 The Persons listed in EXHIBIT A-1 (the “Founders” and each a “Founder”);

 

(2)                                 58.COM INC., a company incorporated in the Cayman Islands, with its registered office located at the offices of Codan Trust Company (Cayman) Limited, Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands (the “Company”);

 

(3)                                 CHINA CLASSIFIED NETWORK CORPORATION, a company limited by shares incorporated in the British Virgin Islands, with its registered office at the offices of P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (the “BVI Subsidiary”);

 

(4)                                 CHINA CLASSIFIED INFORMATION CORPORATION LIMITED  (中国分类信息集团有限公司), a limited liability company incorporated under the laws of Hong Kong, with its registered office at flat 2, 19/F, Henan Building, 90-92 Jaffe Road, Wanchai, Hong Kong (the “HK Subsidiary”);

 

(5)                                 BEIJING CHENGSHI WANGLIN INFORMATION TECHNOLOGY CO., LTD. (北京城市网邻信息技术有限公司), a wholly foreign owned enterprise incorporated in the People’s Republic of China, with its registered office at Building 6 Yi 108 Beiyuan Road, Chaoyang District, Beijing, PRC, 100101, its legal representative being Jinbo YAO (姚劲波) (the “PRC Subsidiary”);

 

(6)                                 BEIJING 58 INFORMATION TECHNOLOGY CO., LTD. (北京五八信息技术有限公司), a limited liability company incorporated in the People’s Republic of China, with its registered office at No. 2 Pingfang Yi 108 Beiyuan Road, Chaoyang District, Beijing, its legal representative being Jinbo YAO (姚劲波) (the “Domestic Enterprise”); and

 

(7)                                 WP X ASIA ONLINE INVESTMENT HOLDINGS LIMITED, a company limited by shares incorporated in the British Virgin Islands, with its registered office at 2/F Palm Grove House, PO Box 3340, Road Town, Tortola, British Virgin Islands (the “Investor”).

 

The Founders, the Company, the BVI Subsidiary, the HK Subsidiary, the PRC Subsidiary, the Domestic Enterprise, and the Investor are hereinafter collectively referred to as the “Parties” and individually as a “Party”.

 

RECITALS

 

A.            Immediately prior to the First Closing (as defined below), the Company shall have an authorized capital consisting of (i) 4,912,433,396 ordinary shares, par value US$0.00001 per share (each an “Ordinary Share”), of  which 44,245,388 have been issued

 

 

and are fully paid up, (ii) 27,028,572 Series A convertible preference shares, par value US$0.00001 per share (each a “Series A Share”), all of which have been issued and are fully paid up, (iii) 19,047,620 Series A-1 convertible preference shares, par value US$0.00001 per share (each a  “Series A-1 Share”), all of which have been issued and are fully paid-up, (iv) 26,247,412 Series B convertible and redeemable preference shares, par value US$0.00001 per share (each a “Series B Share”), all of which has been issued, and (v) 15,243,000 Series B-1 convertible and redeemable preference shares, par value US$0.00001 per share (each a “Series B-1 Share”, together with the Series A Shares, Series A-1 Shares and Series B Shares, the “Preference Shares”), none of which has been issued;

 

B.            The Company desires to issue and allot to the Investor and the Investor desires to subscribe for up to 15,242,995 Series B-1 Shares on the terms and conditions set forth in this Agreement;

 

C.            The Company owns hundred percent (100%) equity interest in the BVI Subsidiary which owns hundred percent (100%) equity interest in the HK Subsidiary, which in turn owns hundred percent (100%) equity interest in the PRC Subsidiary (on a fully diluted basis), free and clear of any Encumbrance (as defined below); and

 

D.            The Domestic Enterprise and the Domestic Subsidiaries (as defined below) shall be engaged in the business of internet information services and such other business activities as set out in its business license in the PRC (as defined below), and exclusively engaging the PRC Subsidiary and the other Group Companies (as defined below) to provide technical support for their business (the “Domestic Principal Business”) and the PRC Subsidiary shall be engaged in the business of the research and development of technologies, and such other business activities as set out in its business license in the PRC (the “PRC Subsidiary Principal Business”).

 

AGREEMENT

 

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

 

1.             DEFINITIONS

 

1.1          Definitions.  Unless otherwise defined in this Agreement, capitalized terms used in this Agreement shall have the following meanings:

 

	
“Action”
    	
 
    	
has the meaning   set out in Section 10 of EXHIBIT D.
    
	
 
    	
 
    	
 
    
	
“Affiliate”
    	
 
    	
with respect to a   specified Person means (a) in the case of an individual, such Person’s   spouse and lineal descendants (whether natural or adopted), brother, sister,   parent, or any trust formed and maintained solely for the benefit of such   Person, such Person’s spouse, such lineal descendants, brother, sister and/or   parent, or trustee of any such trust, or any entity or company Controlled by   any of the aforesaid Persons, (b) in the case of any Person, a Person   that directly, or indirectly through one or more intermediaries, Controls or is Controlled by, or is under common Control with, the Person
    

 

2

 

	
 
    	
 
    	
specified, and   (c) in the case of the Investor being an investment fund (or a   Subsidiary of an investment fund), the term “Affiliate”   shall include any other investment fund (or a Subsidiary of any such   investment fund) managed by the same manager of the Investor (or, if the   Investor is a Subsidiary of an investment fund, the same manager of the   investment fund of which the Investor is a Subsidiary).
    
	
 
    	
 
    	
 
    
	
“Agreement”
    	
 
    	
has the meaning   set out in the Preamble.
    
	
 
    	
 
    	
 
    
	
“Applicable Laws”
   or “Applicable Law”
    	
 
    	
means, with   respect to any Person, relevant provisions of any constitution, treaty,   statute, law, regulation, ordinance, code, rule, judgment, rule of   common law, order, decree, award, injunction, government approval,   concession, grant, franchise, license, agreement, directive, requirement, or   other governmental restriction or any similar form of decision of, or   determination by, or interpretation and administration of any of the   foregoing by, any Governmental Authority, whether in effect as at the date   hereof or thereafter and in each case as amended or re-enacted, applicable to   such Person or any of its assets or undertakings.
    
	
 
    	
 
    	
 
    
	
“Arbitration Notice”
    	
 
    	
has the meaning   set out in Section 10.4(b).
    
	
 
    	
 
    	
 
    
	
“Associate”
    	
 
    	
means with respect   to any Person, (a) a corporation or organization (other than the Group   Companies) of which such Person is an officer or partner or is, directly or   indirectly, the beneficial owner of ten percent (10%) or more of any class of   equity securities, (b) any trust or other estate in which such Person   has a substantial beneficial interest or as to which such Person serves as   trustee or in a similar capacity, and (c) any relative or spouse of such   Person, or any relative of such spouse who has the same home as such Person.
    
	
 
    	
 
    	
 
    
	
“Board”
    	
 
    	
means the board of   directors of the Company.
    
	
 
    	
 
    	
 
    
	
“Business Day”
    	
 
    	
any day (excluding   Saturdays, Sundays and public holidays in Hong Kong, New York or the PRC) on   which banks generally are open for business in Hong Kong, New York and the   PRC.
    
	
 
    	
 
    	
 
    
	
“BVI Subsidiary”
    	
 
    	
has the meaning   set out in the Preamble.
    
	
 
    	
 
    	
 
    
	
“Centre”
    	
 
    	
has the meaning   set out in Section 10.4(c).
    
	
 
    	
 
    	
 
    
	
“Closing”
    	
 
    	
has the meaning   set out in Section 3.5.
    
	
 
    	
 
    	
 
    
	
“Closing Account”
    	
 
    	
has the meaning   set out in Section 20 of EXHIBIT G.
    
	
 
    	
 
    	
 
    
	
“Company”
    	
 
    	
has the meaning   set out in the Preamble.
    
	
 
    	
 
    	
 
    
	
“Confidential
   Information”
    	
 
    	
has the meaning   set out in Section 8.
    

 

3

 

	
“Confidentiality Agreement”
    	
 
    	
has the meaning   set out in Section 18 of EXHIBIT D.
    
	
 
    	
 
    	
 
    
	
“Constitutional
   Documents”
    	
 
    	
means, with   respect to any Person, the certificate of incorporation, memorandum of   association, articles of association, joint venture agreement, shareholders   agreement, or similar constitutive documents for such Person.
    
	
 
    	
 
    	
 
    
	
“Contract”
    	
 
    	
means any   agreement, arrangement, bond, commitment, franchise, indemnity, indenture,   instrument, lease, license, permit, or binding understanding, whether or not   in writing.
    
	
 
    	
 
    	
 
    
	
“Control”
    	
 
    	
(including the   correlative meanings of the terms “Controlling,”   “Controlled by” and “under common Control with”) means, with respect to any   Person, direct or indirect possession of the power to direct or cause the   direction of the management or policies (with respect to operational or   financial control or otherwise) of such Person, whether through the ownership   of securities, by contract or otherwise.
    
	
 
    	
 
    	
 
    
	
“Conversion Shares”
    	
 
    	
has the meaning   set out in Section 2.3.
    
	
 
    	
 
    	
 
    
	
“Covenantors”
    	
 
    	
means the Group   Companies and the Founders, and “Covenantor”   means any of the Covenantors.
    
	
 
    	
 
    	
 
    
	
“Disclosure
   Schedule”
    	
 
    	
has the meaning   set out in Section 4.1.
    
	
 
    	
 
    	
 
    
	
“Dispute”
    	
 
    	
has the meaning   set out in Section 10.4(a).
    
	
 
    	
 
    	
 
    
	
“Domestic
   Enterprise”
    	
 
    	
has the meaning   set out in the Preamble.
    
	
 
    	
 
    	
 
    
	
“Domestic Principal
   Business”
    	
 
    	
has the meaning   set out in the Recitals.
    
	
 
    	
 
    	
 
    
	
“Domestic
   Subsidiaries”
    	
 
    	
means direct or   indirect, current or future Subsidiaries of the Domestic Enterprise   (including without limitation the entities set forth in EXHIBIT N),   and the “Domestic Subsidiary” means any   of the Domestic Subsidiaries.
    
	
 
    	
 
    	
 
    
	
“Encumbrance”
    	
 
    	
means (a) any   mortgage, charge, pledge, lien, hypothecation, deed of trust, title   retention, security interest, or other third-party rights of any kind   securing or conferring any priority of payment in respect of any obligation   of any Person, any other restriction or limitation; (b) any easement or   covenant granting a right of use or occupancy to any Person; (c) any proxy,   power of attorney, voting trust agreement, interest, option, right of first   offer, right of pre-emptive negotiation, or refusal or transfer restriction   in favor of any Person; (d) any
    

 

4

 

	
 
    	
 
    	
adverse claim as   to title, possession, or use, and includes any agreement or arrange for any   of the same.
    
	
 
    	
 
    	
 
    
	
“ESOP”
    	
 
    	
has the meaning   set out in Section 9 of EXHIBIT F.
    
	
 
    	
 
    	
 
    
	
“Financial
   Statements”
    	
 
    	
has the meaning   set out in Section 6(a) of EXHIBIT D.
    
	
 
    	
 
    	
 
    
	
“First Closing”
    	
 
    	
has the meaning   set out in Section 3.1.
    
	
 
    	
 
    	
 
    
	
“Founder” and
   “Founders”
    	
 
    	
have the   respective meanings set out in the Preamble.
    
	
 
    	
 
    	
 
    
	
“Government Official”
    	
 
    	
has the meaning   set out in Section 11(c) of EXHIBIT D.
    
	
 
    	
 
    	
 
    
	
“Governmental
   Authority”
    	
 
    	
means any   government or political subdivision thereof, whether on a federal, central,   state, provincial, municipal or local level and whether executive,   legislative or judicial in nature, including any agency, authority, board,   bureau, commission, court, department or other instrumentality thereof.
    
	
 
    	
 
    	
 
    
	
“Group Company
   Contracts”
    	
 
    	
has the meaning   set out in Section 12 of EXHIBIT D.
    
	
 
    	
 
    	
 
    
	
“Group Companies”
    	
 
    	
means the Company,   the BVI Subsidiary, the HK Subsidiary, the PRC Subsidiary, the Domestic   Enterprise, the Domestic Subsidiaries and all other direct or indirect,   current or future Subsidiaries of the foregoing, and the “Group Company” means any of the Group Companies.
    
	
 
    	
 
    	
 
    
	
“HK Subsidiary”
    	
 
    	
has the meaning   set out in the Preamble.
    
	
 
    	
 
    	
 
    
	
“Hong Kong”
    	
 
    	
means the Hong   Kong Special Administrative Region of the PRC.
    
	
 
    	
 
    	
 
    
	
“Investor”
    	
 
    	
has the meaning   set out in the Preamble.
    
	
 
    	
 
    	
 
    
	
“Investor Director”
    	
 
    	
means any director   nominated to the Board by holder(s) of more than fifty percent (50%) of   the aggregate number of Ordinary Shares into which the then outstanding   Series B Shares and Series B-1 Shares are convertible.
    
	
 
    	
 
    	
 
    
	
“Key Employee”
    	
 
    	
has the meaning   set out in Section 11 of EXHIBIT G.
    
	
 
    	
 
    	
 
    
	
“knowledge”
    	
 
    	
means, with   respect to a Person’s “knowledge,” the actual knowledge of such Person or that   knowledge which should have been acquired by such Person after making such   due inquiry and exercising such due diligence as a prudent business Person   would have made or exercised in the management of his or her business   affairs, including due inquiry of those officers, directors, key employees   and
    

 

5

 

	
 
    	
 
    	
professional   advisers (including attorneys, accountants and consultants) of the Person and   its Affiliates.
    
	
 
    	
 
    	
 
    
	
“Losses”
    	
 
    	
means all direct   or indirect losses, liabilities, damages, deficiencies, diminution in value,   suits, debts, obligations, interest, penalties, expenses, judgments or   settlements of any nature or kind, including all costs and expenses related   thereto, including without limitation reasonable attorneys’ fees and   disbursements, court costs, amounts paid in settlement and expenses of   investigation, whether at law or in equity, whether known or unknown,   foreseen or unforeseen, of any kind or nature.
    
	
 
    	
 
    	
 
    
	
“Material Adverse
   Effect”
    	
 
    	
means a material   adverse effect on the condition (financial or otherwise), assets relating to,   or results or prospects of operation of or business (as presently conducted   and proposed to be conducted) of the Person(s) specified.
    
	
 
    	
 
    	
 
    
	
“Ordinary Shares”
    	
 
    	
has the meaning   set out in the Recitals.
    
	
 
    	
 
    	
 
    
	
“Ordinary
   Shareholders”
    	
 
    	
means holders of   the Ordinary Shares, and an “Ordinary Shareholder”   means any of the Ordinary Shareholders.
    
	
 
    	
 
    	
 
    
	
“Party” and
   “Parties”
    	
 
    	
have the   respective meanings set out in the Preamble.
    
	
 
    	
 
    	
 
    
	
“Person”
    	
 
    	
shall be construed   as broadly as possible and shall include an individual, a partnership   (including a limited liability partnership), a company, an association, a   joint stock company, a limited liability company, a trust, a joint venture   (including a sino-foreign equity joint venture or sino-foreign cooperative   join venture), an unincorporated organization and a Governmental Authority.
    
	
 
    	
 
    	
 
    
	
“PRC”
    	
 
    	
means the People’s   Republic of China, solely for purposes of this Agreement, excluding Hong   Kong, the Macau Special Administrative Region and Taiwan.
    
	
 
    	
 
    	
 
    
	
“PRC GAAP”
    	
 
    	
means the   generally accepted accounting principles in the PRC in effect from time to   time.
    
	
 
    	
 
    	
 
    
	
“PRC Subsidiary”
    	
 
    	
has the meaning   set out in the Preamble.
    
	
 
    	
 
    	
 
    
	
“PRC Subsidiary
   Principal Business”
    	
 
    	
has the meaning   set out in the Recitals.
    
	
 
    	
 
    	
 
    
	
“Preamble”
    	
 
    	
means the preamble   of this Agreement.
    
	
 
    	
 
    	
 
    
	
“Preference Shares”
    	
 
    	
has the meaning   set out in the Recitals.
    
	
 
    	
 
    	
 
    
	
“Proceeds”
    	
 
    	
has the meaning   set out in Section 2 of EXHIBIT F.
    

 

6

 

	
“Proprietary Assets”
    	
 
    	
means all patents,   patent applications, trademarks, service marks, trade names, domain names,   copyrights, copyright registrations and applications and all other rights   corresponding thereto, inventions, databases and all rights therein, all   computer software including all source code, object code, firmware,   development tools, files, records and data, including all media on which any   of the foregoing is stored, formulas, designs, trade secrets, confidential and   proprietary information, proprietary rights, know-how and processes of a   company, and all documentation related to any of the foregoing.
    
	
 
    	
 
    	
 
    
	
“Recitals”
    	
 
    	
means the recitals   of this Agreement.
    
	
 
    	
 
    	
 
    
	
“Registered
   Intellectual
   Property”
    	
 
    	
means all   Proprietary Assets of any Group Company, wherever located, that is the   subject of an application, certificate, filing, registration or other   document issued by, filed with or recorded by any Governmental Authority.
    
	
 
    	
 
    	
 
    
	
“Relevant Period”
    	
 
    	
has the meaning set out in Section 19 of EXHIBIT F.
    
	
 
    	
 
    	
 
    
	
“Restated Articles”
    	
 
    	
has the meaning set out in Section 14 of EXHIBIT F.
    
	
 
    	
 
    	
 
    
	
“Restricted Period”
    	
 
    	
has the meaning set out in Section 19 of EXHIBIT F.
    
	
 
    	
 
    	
 
    
	
“Restructuring
   Documents”
    	
 
    	
means Equity   Pledge Agreements entered into among the PRC Subsidiary, the Domestic   Enterprise, and each shareholder of the Domestic Enterprise dated   August 23, 2010, Exclusive Option Agreements entered into among the PRC   Subsidiary, the Domestic Enterprise, and each shareholder of the Domestic   Enterprise dated March 15, 2010 or August 23, 2010 (as the case may   be); Exclusive Business Cooperation Agreement between the PRC Subsidiary and   the Domestic Enterprise dated March 15, 2010; Power of Attorney from   each of shareholders of the Domestic Enterprise to the PRC Subsidiary dated   March 15, 2010 or August 23, 2010 (as the case may be); Undertaking   Letter from each shareholder of the Domestic Enterprise to the PRC Subsidiary   dated March 15, 2010 or August 23, 2010 (as the case may be) and   Termination Agreement entered into among Chengshi Wangxun (Beijing) Information Technology Co., Ltd. (城市网讯(北京)信息技术有限公司), the Domestic   Enterprise, certain Founders and Shangji Zaixian (Beijing) Network Technology   Co., Ltd. (商机在线(北京)网络技术有限公司) dated March 15, 2010, and any other similar   agreement entered or to be entered into between the Group Companies through which a Group Company Controls   (financially, operationally or otherwise) another Group Company and the financial results for such latter Group Company shall be consolidated into consolidated   financial statements for the Company.
    
	
 
    	
 
    	
 
    
	
“RMB”
    	
 
    	
means the lawful   currency of the PRC.
    
	
 
    	
 
    	
 
    
	
“SAFE”
    	
 
    	
has the meaning   set out in Section 21(c) of EXHIBIT D.
    

 

7

 

	
“SAFE Circular”
    	
 
    	
has the meaning   set out in Section 21 of EXHIBIT F.
    
	
 
    	
 
    	
 
    
	
“Second Closing”
    	
 
    	
has the meaning   set out in Section 3.3.
    
	
 
    	
 
    	
 
    
	
“Securities Act”
    	
 
    	
has the meaning   set out in Section 5(b) of EXHIBIT D.
    
	
 
    	
 
    	
 
    
	
“Series A
   Shareholders”
    	
 
    	
means holders of   the Series A Shares, and a “Series A   Shareholder” means any of the Series A Shareholders.
    
	
 
    	
 
    	
 
    
	
“Series A Shares”
    	
 
    	
has the meaning   set out in the Recitals.
    
	
 
    	
 
    	
 
    
	
“Series A-1
   Shareholders”
    	
 
    	
means holders of   the Series A-1 Shares, and a “Series A-1   Shareholder” means any of the Series A-1 Shareholders.
    
	
 
    	
 
    	
 
    
	
“Series A-1 Shares”
    	
 
    	
has the meaning   set out in the Recitals.
    
	
 
    	
 
    	
 
    
	
“Series B
   Shareholders”
    	
 
    	
means holders of   the Series B Shares, and a “Series B   Shareholder” means any of the Series B Shareholders.
    
	
 
    	
 
    	
 
    
	
“Series B Shares”
    	
 
    	
has the meaning   set out in the Recitals.
    
	
 
    	
 
    	
 
    
	
“Series B-1
   Shareholders”
    	
 
    	
means holders of   the Series B-1 Shares, and a “Series B-1   Shareholder” means any of the Series B-1 Shareholders.
    
	
 
    	
 
    	
 
    
	
“Series B-1 Shares”
    	
 
    	
has the meaning   set out in the Recitals.
    
	
 
    	
 
    	
 
    
	
“Shareholders
   Agreement”
    	
 
    	
has the meaning   set out in Section 14 of EXHIBIT F.
    
	
 
    	
 
    	
 
    
	
“Subscribed Shares”
    	
 
    	
has the meaning   set out in Section 2.3.
    
	
 
    	
 
    	
 
    
	
“Subscription Price”
    	
 
    	
has the meaning   set out in Section 2.2.
    
	
 
    	
 
    	
 
    
	
“Subsidiary”
    	
 
    	
means, with   respect to any given Person, any other Person that is not a natural person   and that is Controlled by such given Person.
    
	
 
    	
 
    	
 
    
	
“Termination Date”
    	
 
    	
has the meaning   set out in Section 9.1.
    
	
 
    	
 
    	
 
    
	
“Transaction
   Agreements”
    	
 
    	
has the meaning   set out in Section 4 of EXHIBIT D.
    
	
 
    	
 
    	
 
    
	
“US$”
    	
 
    	
means the lawful   currency of the United States of America.
    
	
 
    	
 
    	
 
    
	
“US GAAP”
    	
 
    	
means the   generally accepted accounting principles in the United States of America in   effect from time to time.
    
	
 
    	
 
    	
 
    
	
“Yao SPV”
    	
 
    	
means Nihao China   Corporation, a company limited by shares incorporated in the British Virgin   Islands.
    

 

8

 

1.2          Interpretation.  For all purposes of this Agreement, except as otherwise expressly provided:

 

(a)           the terms defined in this Section 1 shall have the meanings assigned to them in this Section 1 and include the plural as well as the singular;

 

(b)           all accounting terms not otherwise defined herein have the meanings assigned under US GAAP;

 

(c)           all references in this Agreement to designated “Sections” and other subdivisions are to the designated Sections and other subdivisions of the body of this Agreement;

 

(d)           pronouns of either gender or neuter shall include, as appropriate, the other pronoun forms;

 

(e)           the words “herein”, “hereof”, and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision;

 

(f)            all references in this Agreement to designated exhibits or schedules are to the exhibits or schedules attached to this Agreement unless explicitly stated otherwise;

 

(g)           “include”, “includes”, “including”, and other words of similar import are deemed to be followed by “without limitation” whether or not they are in fact followed by such words or words of like import;

 

(h)           the titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement;

 

(i)            any reference in this Agreement to any “Party” or any other Person shall be construed so as to include its successors in title, permitted assigns, permitted transferees and any Person deriving title under them;

 

(j)            any reference in this Agreement to any agreement or instrument is a reference to that agreement or instrument as amended or novated;

 

(k)           references to statutory provisions shall be construed as references to those provisions as respectively amended or re-enacted (whether before or after the date of this Agreement) from time to time and shall include any provision of which they are re-enactments (whether with or without modification) and any subordinate legislation made under such statutory provisions; and

 

(l)            this Agreement shall be construed according to its fair language. The rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in interpreting this Agreement.

 

1.3          Schedules and Exhibits.  The recitals, the schedules and the exhibits form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement and any reference to this Agreement shall include the recitals, the schedules and the exhibits.

 

9

 

2.             AGREEMENT TO PURCHASE AND ALLOT SHARES

 

2.1          Authorization. As of the First Closing, the Company will have authorized the issuance, pursuant to the terms and conditions of this Agreement, of 15,242,995 Series B-1 Shares having the rights, preferences, privileges and restrictions as set forth in the Restated Articles.

 

2.2          Agreement to Purchase and Sell. Subject to the terms and conditions hereof:

 

(a)           the Company hereby agrees to issue and allot to the Investor, and the Investor hereby agrees to purchase from the Company, on the date of the First Closing, 11,640,105 Series B-1 Shares, and

 

(b)           the Company hereby agrees to issue and allot to the Investor, and the Investor hereby agrees to purchase from the Company, on the date of the Second Closing, 3,602,890 Series B-1 Shares,

 

at a price equal to US$3.608 per Series B-1 Share, determined based on a pre-money valuation of the Company at US$445,000,000, amounting to an aggregate purchase price of US$55,000,000 (the “Subscription Price”).  The Subscription Price shall be paid by the Investor to the Company on the date of each Closing in the manner set forth in Section 3.

 

2.3          Conversion Shares.  The Series B-1 Shares to be subscribed pursuant to this Agreement will be collectively hereinafter referred to as the “Subscribed Shares” and the Ordinary Shares issuable upon conversion of the Subscribed Shares shall be collectively hereinafter referred to as the “Conversion Shares”.  Immediately after the Second Closing contemplated under this Agreement, the shareholding of the Ordinary Shareholders, Series A Shareholder, Series A-1 Shareholders, Series B Shareholders and the Investor (on a fully diluted and as converted basis) shall be as set forth in EXHIBIT B.

 

3.             CLOSINGS; DELIVERIES

 

3.1          First Closing. The purchase by the Investor of 11,640,105 Series B-1 Shares (the “First Closing”) shall take place remotely via the exchange of documents and signatures on the date that is five (5) Business Days after the satisfaction or waiver of all the conditions set forth in Section 6 hereto, or at such other time and date as may be mutually agreed upon by the Company and the Investor.

 

3.2          First Closing Deliveries.  At the First Closing:

 

(a)               The parties to the Transaction Agreements shall exchange duly executed signature pages to the Transaction Agreements remotely via facsimile, or by such other methods as mutually agreed by the parties thereto;

 

(b)               The Investor shall pay US$42,000,000 by wire transfer of immediately available funds to the Closing Account or by such other payment methods as may be mutually agreed upon by the Company and the Investor; and

 

10

 

(c)               The Company shall (i) deliver to the Investor, free and clear of any Encumbrance, a share certificate registered in its name or the name(s) of its nominee(s) as directed by the Investor, evidencing the number of Subscribed Shares subscribed by the Investor, (ii) enter the Investor in the register of members of the Company as a holder of the Subscribed Shares subscribed by it, free and clear of any Encumbrance, evidencing the Investor’s Subscribed Shares as having been issued and credited as fully paid, (iii) deliver to the Investor a certified true copy of the register of members of the Company reflecting the issuance of the Subscribed Shares subscribed by the Investor, and (iv) deliver to the Investor all other items required at the First Closing under Section 6.1.

 

3.3          Second Closing.  At the sole discretion by the Investor, the Investor shall have the right, but not obligation, to purchase 3,602,890 Series B-1 Shares from the Company (the “Second Closing”), unless otherwise agreed by the Investor and the Company in writing, at any time within two (2) months after the date of the First Closing pursuant to terms and conditions of this Agreement.  Once the Investor decides to proceed to the Second Closing, the Company shall be obliged to issue and allot all but not part of 3,602,890 Series B-1 Shares to the Investor at the Second Closing pursuant to this Agreement.   Unless otherwise agreed by the Investor and the Company in writing, if the Second Closing shall have not occurred within two (2) months after the date of the First Closing, the Investor shall have no further obligation to subscribe from the Company, and the Company shall have no further obligation to issue and allot to the Investor, any additional Series B-1 Shares pursuant to this Agreement.  The Parties hereto acknowledge and agree that the Investor shall not be liable for any Losses, liabilities, obligations, responsibilities or debts, of whatever nature, incurred from or arose out of or as a result of the failure to complete the Second Closing.

 

3.4          Second Closing Deliveries.  At the Second Closing:

 

(a)               The Investor shall pay US$13,000,000 by wire transfer of immediately available funds to the Closing Account or by such other payment methods as may be mutually agreed upon by the Company and the Investor; and

 

(b)               The Company shall (i) deliver to the Investor, free and clear of any Encumbrance, a share certificate registered in its name or the name(s) of its nominee(s) as directed by the Investor, evidencing the number of Subscribed Shares subscribed by the Investor, (ii) enter the Investor in the register of members of the Company as a holder of the Subscribed Shares subscribed by it, free and clear of any Encumbrance, evidencing the Investor’s Subscribed Shares as having been issued and credited as fully paid, and (iii) deliver to the Investor a certified true copy of the register of members of the Company reflecting the issuance of the Subscribed Shares subscribed by the Investor.

 

3.5          Closing.  For purposes of this Agreement, the term “Closing” shall mean any of the First Closing or the Second Closing.

 

4.             REPRESENTATIONS AND WARRANTIES

 

4.1          Representations and Warranties of Covenantors.  Unless otherwise provided in EXHIBIT D, the Covenantors, jointly and severally, hereby represent and warrant to the Investor, except as set forth in the Disclosure Schedule (the “Disclosure Schedule”) attached to this Agreement as EXHIBIT C (which Disclosure Schedule shall be deemed to modify the representations and warranties set forth in this Agreement), that the representations and warranties set forth in EXHIBIT D are true as of the date hereof and will be true as of the

 

11

 

date of each Closing (except for such representations and warranties that speak as of a particular date, in which case, such representations and warranties shall be true as of such date).

 

4.2          Representations and Warranties of Investor.  The Investor hereby represents and warrants to the Company that the representations and warranties with respect to itself set forth in EXHIBIT E are true as of the date hereof and will be true as of the date of the First Closing.

 

5.             COVENANTS

 

Unless otherwise provided in EXHIBIT F, each of the Covenantors jointly and severally covenants to the Investor as set forth in EXHIBIT F.

 

6.             CLOSING CONDITIONS

 

6.1          Conditions to Investor’s Obligations at First Closing.  The obligation of the Investor to purchase the relevant portion of the Subscribed Shares subscribed by it at the First Closing is subject to the fulfillment by the Covenantors on or prior to the First Closing, to the satisfaction of the Investor, or waiver by the Investor, of the conditions set forth in EXHIBIT G.

 

6.2          Conditions to Company’s Obligations at First Closing.  The obligation of the Company at the First Closing is subject to the fulfillment by the Investor, or waiver by the Company, of the conditions set forth in EXHIBIT H.

 

7.             INDEMNIFICATION

 

7.1          Indemnification.  The Covenantors shall, jointly and severally, indemnify, defend and hold harmless the Investor and its respective Affiliates, together with the employees, officers, directors, managing directors and partners of the foregoing, from and against any and all Losses, directly or indirectly, arising out of, relating to, connected with or incidental to any breach of any representation, warranty, covenant or agreement made by any of the Covenantors in this Agreement or in any Transaction Agreements (the “Indemnifiable Losses”).  The Investor shall not be liable for any Losses, liabilities, obligations, responsibilities or debts, whether contractual or otherwise, or any taxes or any other undertakings of any of the Group Companies incurred from or arose out of or as a result of events which happened before the First Closing.

 

7.2          Payment. At the absolute discretion of the Investor, all Indemnifiable Losses suffered by the Investor may be settled by (a) payment of cash in an amount equal to the Indemnifiable Losses, or (b) the transfer of such number of Ordinary Shares or Preference Shares (at the sole discretion of the Investor) equal to (i) the amount of Indemnifiable Losses suffered by the Investor divided by (ii) the fair market value of one Ordinary Share or Preference Share (as the case may be) as determined in good faith by the Board (with the consent of the Investor Director), or (c) the Company’s allotment and issuance of such number of Ordinary Shares or Preference Shares (at the sole discretion of the Investor) equal to (i) the amount of Indemnifiable Losses suffered by the Investor divided by (ii) the fair market value of one Ordinary Share or Preference Share (as the case may be) as determined in good faith by the Board (with the consent of the Investor Director), provided, that any such

 

12

 

allotment and issuance shall be grossed up and shall not have any dilutive effect on the Investor, or a combination of the above.

 

7.3          Limitation.  Notwithstanding any other provision to the contrary contained herein, the maximum liability of the Covenantors to the Investor under the Transaction Agreements shall not exceed US$55,000,000 in aggregate.

 

7.4          Survival.  The agreements in this Section 7 shall survive the execution and delivery or any termination of this Agreement.

 

7.5          Survival of Representations and Warranties. All actions for breach of, or indemnifications with respect to, any of the representations and warranties contained in this Agreement must be asserted within two (2) years after the date of the First Closing or, if there is the Second Closing, within two (2) years after the date of the Second Closing.

 

8.             CONFIDENTIALITY AND NON-DISCLOSURE

 

8.1          Confidentiality.  From the date hereof, each Party shall, and shall cause any Person who is Controlled by such Party to, keep confidential the terms, conditions, and existence of this Agreement and the Transaction Agreements and any related documentation, the identities of any of the Parties, and other information of a non-public nature received from any other Party or prepared by such Party exclusively in connection herewith or therewith (collectively, the “Confidential Information”) except as the Company and the Investor shall mutually agree otherwise; provided, that any Party hereto may disclose Confidential Information or permit the disclosure of Confidential Information (a) to the extent required by Applicable Law or the rules of any stock exchange; provided that such Party shall, where practicable and to the extent permitted by Applicable Law, provide the other Parties with prompt written notice of that fact and use all reasonable endeavors to seek (with the cooperation and reasonable endeavors of the other Parties) a protective order, confidential treatment or other appropriate remedy; and in such event, such Party shall furnish only that portion of the information which is legally required to be disclosed and shall exercise reasonable endeavors to keep such information confidential to the extent reasonably requested by any such other Parties, (b) to its officers, directors, employees, and professional advisors on a need-to-know basis for the performance of its obligations in connection herewith so long as such Party advises each Person to whom any Confidential Information is so disclosed as to the confidential nature thereof, (c) in the case of the Investor, its fund manager, other funds managed by its fund manager and their respective auditors, counsel, directors, officers, employees, shareholders, partners or investors for the purposes of fund reporting or inter-fund reporting so long as the Investor advises each Person to whom any Confidential Information is so disclosed as to the confidential nature thereof, and (d) to its current or bona fide prospective investors, investment bankers and any Person otherwise providing substantial debt or equity financing to such Party so long as the Party advises each Person to whom any Confidential Information is so disclosed as to the confidential nature thereof.  For the avoidance of doubt, Confidential Information does not include information that (i) was already in the possession of the receiving Party before such disclosure by the disclosing Party, (ii) is or becomes available to the public other than as a result of disclosure by the receiving Party in violation of this Section 8, or (iii) is or becomes available to the receiving Party from a third party not known by the receiving Party to be in breach of any legal or contractual obligation not to disclose such information to it.

 

13

 

8.2          Press Releases. The Parties shall not make any announcement regarding the consummation of the transaction contemplated by this Agreement, other Transaction Agreements and any related documentation in a press release, conference, advertisement, announcement, professional or trade publication, marketing materials or otherwise to the general public without the Company’s and the Investor’s prior written consent.

 

9.             TERMINATION

 

9.1          Termination of Agreement.  Subject to other provisions herein, this Agreement and the transactions contemplated by this Agreement shall terminate (a) at the election of the Company or the Investor on or after three (3) months after the date hereof (such elected date hereinafter referred to as the “Termination Date”), if the First Closing shall not have occurred on or before such date, provided that (i) the terminating Party is not in material default of any of its obligations hereunder, and (ii) the right to terminate this Agreement pursuant to this Section 9.1 shall not be available to any Party whose breach of any provision of this Agreement has been the cause of, or resulted, directly or indirectly, in, the failure of the First Closing to be consummated by such date; or (b) upon the mutual consent in writing of the Company and the Investor.

 

9.2          Effect of Termination.  If this Agreement is terminated pursuant to the provisions of Section 9.1 above, then this Agreement shall become void and have no further effect; provided, that no Party shall be relieved of any liability of any nature for a breach of this Agreement or for any misrepresentation hereunder, nor shall such termination be deemed to constitute a waiver of any available remedy (including specific performance if available) for any such breach or misrepresentation.

 

9.3          Survival.  Notwithstanding any provision to the contrary, the provisions of Section 7 (Indemnification), Section 8 (Confidentiality and Non-Disclosure), this Section 9 (Termination), Section 10.2 (Expenses), Section 10.3 (Governing Law) and Section 10.4 (Dispute Resolution) shall survive any expiration or termination of this Agreement.

 

10.          MISCELLANEOUS

 

10.1        Binding Effect; Assignment.  This Agreement shall be binding on and shall enure for the benefit of the successors, heirs, executors and administrators and permitted transferees and assignees of the Parties hereto but shall not be capable of being assigned by any Covenantor nor Yao SPV without the prior consent in writing of the Investor.  This Agreement and the rights and obligations herein may be assigned and transferred by the Investor to any Person without the written consent of the other Parties hereto.

 

10.2        Expenses.

 

(a)           The Company shall pay the Investor (or its transferees or assignees) for all costs and expenses incurred by the Investor (or its transferees or assignees) in connection with negotiation and preparation of this Agreement and any Transaction Agreements, the performance of and compliance with all agreements and conditions contained herein or therein, including the fees, expenses, taxes, duties and disbursements of any counsel and/or accountants that may be retained.

 

(b)           If the transactions contemplated by this Agreement and any other Transaction Agreements do not result in the First Closing, the Company will bear fifty

 

14

 

percent (50%) and the Investor (or its transferees or assignees) will bear fifty percent (50%) of such costs and expenses incurred by the Investor (or its transferees or assignees) since July 1, 2011.  The Parties agree that such aggregate costs and expenses to be reimbursed by the Company hereunder shall be limited to a maximum amount of US$300,000.

 

10.3        Governing Law.  This Agreement shall be governed by and construed in all respects in accordance with the laws of Hong Kong.

 

10.4        Dispute Resolution.

 

(a)           Any dispute, controversy or claim (each, a “Dispute”) arising out of or relating to this Agreement or the interpretation, breach, termination or validity hereof, shall be resolved at the first instance through consultation between the Parties to such Dispute.  Such consultation shall begin immediately after any Party has delivered written notice to any Party to the Dispute requesting such consultation.

 

(b)           If the Dispute is not resolved within fifteen (15) days following the date on which such notice is given, the Dispute shall be submitted to arbitration upon the request of any Party to the Dispute with notice to each other Party to the Dispute (the “Arbitration Notice”).

 

(c)           The arbitration shall be conducted in Hong Kong under the auspices of the Hong Kong International Arbitration Centre (the “Centre”).  There shall be three (3) arbitrators.  The Investor shall choose one (1) arbitrator, the Covenantors shall collectively choose one (1) arbitrator and the two (2) arbitrators shall jointly select the third arbitrator who shall serve as the chairman of the arbitral tribunal.  If any of the members of the arbitral tribunal have not been appointed within thirty (30) days after the Arbitration Notice is given, the relevant appointment shall be made by the Secretary General of the Centre.

 

(d)           The arbitration proceedings shall be conducted in English.  The arbitral tribunal shall apply the Arbitration Rules of the United Nations Commission on International Trade Law, as administered by the Centre at the time of the arbitration.  However, if such rules are in conflict with the provisions of this Section 10.4, including the provisions concerning the appointment of arbitrators, the provisions of this Section 10.4 shall prevail.

 

(e)           The arbitrators shall decide any Dispute submitted by the Parties strictly in accordance with the substantive law of Hong Kong; provided that when the published laws of Hong Kong do not cover a certain matter, international legal principles and practices shall apply.

 

(f)            Each Party to the arbitration shall cooperate with the other Parties to the arbitration in making full disclosure of and providing complete access to all information and documents requested by such other Party in connection with such arbitration proceedings, subject only to any confidentiality obligations binding on such Party.

 

(g)           The costs of arbitration shall be borne by the losing Party, unless otherwise determined by the arbitral tribunal.

 

(h)           When any Dispute occurs and when any Dispute is under arbitration, except for the matters in dispute, the Parties shall continue to fulfill their respective obligations and shall be entitled to exercise their rights under this Agreement.

 

15

 

(i)            The award of the arbitral tribunal shall be final and binding upon the Parties, and the prevailing Party may apply to a court of competent jurisdiction for enforcement of such award.

 

(j)            Any Party shall be entitled to seek preliminary injunctive relief from any court of competent jurisdiction pending the constitution of the arbitral tribunal.

 

(k)           During the course of the arbitral tribunal’s adjudication of the Dispute, this Agreement shall continue to be performed except with respect to the part in dispute and under adjudication.

 

10.5        Entire Agreement.  This Agreement, and the Transaction Agreements, and any transaction agreement the execution of which is contemplated hereunder and thereunder and the schedules and exhibits hereto and thereto constitute the entire understanding and agreement between the Parties with respect to the subject matter hereof and thereof and supersede all prior written or oral understandings or agreements with respect to the subject matter hereof and thereof.

 

10.6        Notices.  Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Agreement shall be in writing and shall be conclusively deemed to have been duly given (a) when hand delivered to the other Party, upon delivery; (b) when sent by facsimile at the number set forth on EXHIBIT L hereto, upon receipt of confirmation of error-free transmission; (c) when sent by electronic mail at the address set forth on EXHIBIT L hereto, on the same day that it was sent and it shall not be necessary for the receipt of the electronic mail to be acknowledged by the recipient; (d) three (3) Business Days after deposit in the mail as air mail or certified mail, postage prepaid and addressed to the other Parties as set forth on EXHIBIT L hereto; or (e) one (1) Business Day after deposit with an overnight delivery service, postage prepaid, addressed to the other Parties as set forth on EXHIBIT L hereto with next Business Day delivery guaranteed.  A Party may change or supplement the facsimile number, electronic mail address or mailing address given in EXHIBIT L, or designate an additional facsimile number, electronic mail address or mailing address, for purposes of this Section 10.6 by giving the other Parties written notice of the new facsimile number, electronic mail address or mailing address in the manner set forth above.

 

10.7        Amendments and Waivers.

 

(a)           Any provision of this Agreement may be amended only with the written consent of the Company and the Investor.

 

(b)           Any amendment or waiver effected in accordance with this Section 10.7 shall be binding upon the Parties hereto and their respective permitted transferees, assignees and successors in interest.

 

(c)           Notwithstanding anything to the contrary in this Section 10.7, no amendment to this Agreement shall be effective or enforceable against any Party (other than the Company and the Investor) unless a copy of the final executed version of the amendment shall be provided to such Party.

 

16

 

(d)           No waivers of or exceptions to any term, condition or provision of this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.

 

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

 

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

 

10.10      Adjustments for Share Splits, Etc.  Wherever in this Agreement there is a reference to a specific number of Series B-1 Shares, Series B Shares, Series A-1 Shares, Series A Shares or Ordinary Shares of the Company, then, upon the occurrence of any subdivision, combination or share dividend of the Series B-1 Shares, Series B Shares, Series A-1 Shares, Series A Shares or Ordinary Shares, the specific number of shares so referenced in this Agreement shall automatically be proportionally adjusted to reflect the effect on the outstanding shares of such class or series of shares by such subdivision, combination or share dividend.

 

10.11      Specific Performance etc.  The Parties unconditionally and irrevocably acknowledge, agree and declare that it is impossible to measure in money the damages that would be suffered by a Party by reason of the failure by any other Party to perform any of the obligations under any this Agreement or other Transaction Agreements.  Therefore, if any Party shall institute any action or proceeding to enforce the provisions hereof or thereof (including without limitation seeking protective orders, injunctive relief, specific performance and other remedies available at law or in equity), any Party against whom such action or proceeding is brought hereby waives any claim or defense therein that the other Parties have an adequate remedy at law.

 

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

 

17

 

[SIGNATURE PAGE TO FOLLOW]

 

18

 

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

 

	
FOUNDER:
    	
 
    
	
 
    	
 
    
	
EXECUTED   AS A DEED
    	
)
    
	
 
    	
)
    
	
SIGNED, SEALED and DELIVERED
    	
)
    
	
 
    	
)
    
	
by JINBO YAO (姚劲波)
    	
)  /s/ Jinbo Yao
    	
L.S.
    
	
 
    	
)
    
	
the holder of the   People’s Republic of China
    	
)
    
	
 
    	
)
    
	
in the presence   of:
    	
)
    
	
 
    	
)
    
	
Name of Witness:
    	
)
    
	
Address of   Witness:
    	
)
    

 

[SIGNATURE PAGE TO SERIES B-1 PREFERENCE SHARE SUBSCRIPTION AGREEMENT]

 

 

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

 

 

	
FOUNDER:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
EXECUTED   AS A DEED
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
SIGNED, SEALED and DELIVERED
    	
)
    	
 
    
	
 
    	
)
    	
L.S.
    
	
by JIANBO SU (苏剑波)
    	
)
    	
/s/ Jianbo Su
    	
 
    
	
 
    	
)
    	
 
    
	
the holder of the   People’s Republic of China
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
in the presence   of:
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
Name of Witness:
    	
)
    	
 
    
	
Address of   Witness:
    	
)
    	
 
    

 

[SIGNATURE PAGE TO SERIES B-1 PREFERENCE SHARE SUBSCRIPTION AGREEMENT]

 

 

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

 

 

	
FOUNDER:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
EXECUTED   AS A DEED
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
SIGNED, SEALED and DELIVERED
    	
)
    	
 
    
	
 
    	
)
    	
L.S.
    
	
by BAOSHAN WANG (王宝珊)
    	
)
    	
/s/ Baoshan Wang
    	
 
    
	
 
    	
)
    	
 
    
	
the holder of the   People’s Republic of China
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
in the presence   of:
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
Name of Witness:
    	
)
    	
 
    
	
Address of   Witness:
    	
)
    	
 
    

 

[SIGNATURE PAGE TO SERIES B-1 PREFERENCE SHARE SUBSCRIPTION AGREEMENT]

 

 

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

 

 

	
FOUNDER:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
EXECUTED   AS A DEED
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
SEALED with the COMMON   SEAL
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
of NIHAO CHINA CORPORATION
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
and SIGNED by JINBO YAO
    	
)
    	
/s/ Jinbo Yao
    
	
 
    	
)
    	
 
    
	
(Director)
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
in the presence   of:-
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
Name of witness:
    	
)
    	
 
    
	
Address of   witness:
    	
)
    	
 
    

 

[SIGNATURE PAGE TO SERIES B-1 PREFERENCE SHARE SUBSCRIPTION AGREEMENT]

 

 

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

 

 

	
COMPANY:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
EXECUTED   AS A DEED
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
SEALED with the COMMON   SEAL
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
of 58.COM INC.
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
and SIGNED by JINBO YAO
    	
)
    	
/s/ Jinbo Yao
    
	
 
    	
)
    	
 
    
	
(Director)
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
in the presence   of:-
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
Name of witness:
    	
)
    	
 
    
	
Address of   witness:
    	
)
    	
 
    

 

[SIGNATURE PAGE TO SERIES B-1 PREFERENCE SHARE SUBSCRIPTION AGREEMENT]

 

 

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

 

 

	
BVI   SUBSIDIARY:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
EXECUTED   AS A DEED
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
SEALED with the COMMON   SEAL
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
of CHINA CLASSIFIED NETWORK
    	
)
    	
 
    
	
CORPORATION
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
and SIGNED by JINBO YAO
    	
)
    	
/s/ Jinbo Yao
    
	
 
    	
)
    	
 
    
	
(Director)
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
in the presence   of:-
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
Name of witness:
    	
)
    	
 
    
	
Address of   witness:
    	
)
    	
 
    

 

[SIGNATURE PAGE TO SERIES B-1 PREFERENCE SHARE SUBSCRIPTION AGREEMENT]

 

 

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

 

 

	
HK   SUBSIDIARY:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
EXECUTED   AS A DEED
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
SEALED with the COMMON   SEAL
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
of CHINA CLASSIFIED INFORMATION
    	
)
    	
 
    
	
CORPORATION LIMITED
    	
)
    	
 
    
	
(中国分类信息集团有限公司)
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
and SIGNED by JINBO YAO
    	
)
    	
/s/ Jinbo Yao
    
	
 
    	
)
    	
 
    
	
(Director)
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
in the presence   of:-
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
Name of witness:
    	
)
    	
 
    
	
Address of   witness:
    	
)
    	
 
    

 

[SIGNATURE PAGE TO SERIES B-1 PREFERENCE SHARE SUBSCRIPTION AGREEMENT]

 

 

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

 

 

	
PRC SUBSIDIARY:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
EXECUTED AS A DEED
    	
 
    	
 
    
	
 
    	
)
    	
 
    
	
SIGNED SEALED and DELIVERED
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
by JINBO YAO
    	
)
    	
/s/ Jinbo Yao
    	
 
    	
L.S.
    
	
 
    	
)
    	
 
    
	
the lawful   attorney of
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
BEIJING   CHENGSHI WANGLIN
    	
)
    	
 
    
	
INFORMATION   TECHNOLOGY CO., LTD.
    	
)
    	
 
    
	
(北京城市网邻信息技术有限公司))
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
in the presence   of:-
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
Name of witness:
    	
)
    	
 
    
	
Address of   witness:
    	
)
    	
 
    

 

[SIGNATURE PAGE TO SERIES B-1 PREFERENCE SHARE SUBSCRIPTION AGREEMENT]

 

 

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

 

 

	
DOMESTIC ENTERPRISE:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
EXECUTED   AS A DEED
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
SIGNED SEALED and DELIVERED
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
by JINBO YAO
    	
)
    	
/s/ Jinbo Yao
    	
 
    	
L.S.
    
	
 
    	
)
    	
 
    
	
the lawful   attorney of
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
BEIJING 58 INFORMATION
    	
)
    	
 
    
	
TECHNOLOGY CO., LTD.
    	
)
    	
 
    
	
(北京五八信息技术有限公司)
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
in the presence   of:-
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
Name of witness:
    	
)
    	
 
    
	
Address of   witness:
    	
)
    	
 
    

 

[SIGNATURE PAGE TO SERIES B-1 PREFERENCE SHARE SUBSCRIPTION AGREEMENT]

 

 

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

 

	
INVESTOR:
    
	
 
    
	
WP X ASIA ONLINE INVESTMENT HOLDINGS LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Timothy J.   Curt
    	
 
    
	
Name:
    	
Timothy J. Curt
    	
 
    
	
Title:
    	
Director
    	
 
    

 

[SIGNATURE PAGE TO SERIES B-1 PREFERENCE SHARE SUBSCRIPTION AGREEMENT]

 

 

EXHIBIT A-1

 

LIST OF FOUNDERS

 

1.                                      Jinbo YAO (姚劲波)

Citizenship: PRC

Address: Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

 

2.                                      Jianbo SU (苏剑波)

Citizenship: PRC

Address: Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

 

3.                                      Baoshan WANG (王宝珊)

Citizenship: PRC

Address: Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

 

4.                                      Yao SPV (Nihao China Corporation)

Address: c/o Yi 108 Block E, North American International Business Center, Beiyuan Road, Chaoyang District, Beijing, PRC, 100101

 

 

EXHIBIT A-2

 

LIST OF INVESTOR

 

	
Closing
    	
 
    	
Investor
    	
 
    	
Number of
   Subscribed Shares
    	
 
    	
Subscription Price
    (US$)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
First Closing
    	
 
    	
WP X Asia Online   Investment Holdings Limited
    	
 
    	
11,640,105
    	
 
    	
US$
    	
42,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Second Closing
    	
 
    	
WP X Asia Online   Investment Holdings Limited
    	
 
    	
3,602,890
    	
 
    	
US$
    	
13,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
TOTAL:
    	
 
    	
15,242,995
    	
 
    	
US$
    	
55,000,000
    	
 
    

 

25

 

EXHIBIT B

 

SHAREHOLDING RATIO

 

	
 
    	
 
    	
 Shareholding Ratio
    	
 
    
	
Shareholders
    	
 
    	
(on an as-converted and fully

diluted basis)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ordinary Shareholders
    	
 
    	
31.93
    	
%
    	
 
    	
 
    
	
Nihao China Corporation
    	
 
    	
 
    	
 
    	
18.43
    	
%
    
	
Jianbo Su (苏剑波)
    	
 
    	
 
    	
 
    	
4.50
    	
%
    
	
Baoshan Wang (王宝珊)
    	
 
    	
 
    	
 
    	
1.50
    	
%
    
	
Dong Yang (羊东) 
    	
 
    	
 
    	
 
    	
1.97
    	
%
    
	
Cui Jinfeng  
    	
 
    	
 
    	
 
    	
0.55  
    	
%
    
	
Jin Yusong
    	
 
    	
 
    	
 
    	
0.28  
    	
%
    
	
Chen Xiaohua  
    	
 
    	
 
    	
 
    	
1.06  
    	
%
    
	
Geng Chunsheng
    	
 
    	
 
    	
 
    	
0.49  
    	
%
    
	
Xu Guipeng  
    	
 
    	
 
    	
 
    	
1.05  
    	
%
    
	
Gao Bo  
    	
 
    	
 
    	
 
    	
1.05  
    	
%
    
	
Zhuang Jiandong  
    	
 
    	
 
    	
 
    	
1.05
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ESOP
    (unissued   Ordinary Shares under the ESOP)
    	
 
    	
4.88
    	
%
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Series A Shareholders
    	
 
    	
19.50
    	
%
    	
 
    	
 
    
	
SB Asia Investment Fund II L.P.
    	
 
    	
 
    	
 
    	
19.50
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Series A-1 Shareholders
    	
 
    	
13.75
    	
%
    	
 
    	
 
    
	
DCM V, L.P.
    	
 
    	
 
    	
 
    	
13.42
    	
%
    
	
DCM Affiliates Fund V, L.P.
    	
 
    	
 
    	
 
    	
0.33
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Series B Shareholders
    	
 
    	
18.94
    	
%
    	
 
    	
 
    
	
WP X Asia Online Investment Holdings Limited
    	
 
    	
 
    	
 
    	
14.15
    	
%
    
	
DCM V, L.P.
    	
 
    	
 
    	
 
    	
1.97
    	
%
    
	
DCM Affiliates Fund V, L.P.
    	
 
    	
 
    	
 
    	
0.05
    	
%
    
	
Recruit Co., Ltd.
    	
 
    	
 
    	
 
    	
0.75
    	
%
    
	
Nihao China Corporation
    	
 
    	
 
    	
 
    	
2.02
    	
%
    
	
Investor
    	
 
    	
11.00
    	
%
    	
 
    	
 
    
	
WP X Asia Online Investment Holdings Limited
    	
 
    	
 
    	
 
    	
11.00
    	
%
    

 

 

EXHIBIT C

 

DISCLOSURE SCHEDULE

 

27

 

EXHIBIT D

 

REPRESENTATIONS AND WARRANTIES OF COVENANTORS

 

1.                                      Organization, Standing and Qualification. Each of Group Company and Yao SPV is duly organized, validly existing and in good standing (or equivalent status in the relevant jurisdiction) under, and by virtue of, the laws of the place of its incorporation or establishment (in respect of each of the Domestic Enterprise and the Domestic Subsidiaries, its registered capital has been contributed in full and in respect of the PRC Subsidiary its registered capital of US$48,500,000 has been contributed in full) and has all requisite power and authority to own its properties and assets and to carry on its business as now conducted and as proposed to be conducted, and to perform each of its obligations hereunder and under any Transaction Agreement to which it is a party.  Each of Group Company and Yao SPV is qualified or licensed to do business and is in good standing (or equivalent status in the relevant jurisdiction) in each jurisdiction where failure to be so qualified or licensed could have a Material Adverse Effect.  Each of Group Company and Yao SPV is not in receivership or liquidation; no steps have been taken to enter into liquidation; and no petition has been presented for winding up any Group Company or Yao SPV; and there are no grounds on which a petition or application could be based for the winding up or appointment of a receiver of any Group Company or Yao SPV.

 

2.                                      Capitalization.

 

(a)                                 Immediately prior to the First Closing, the authorized share capital of the Company consists of the following:

 

(i)                                     Ordinary Shares. A total of 4,912,433,396 authorized Ordinary Shares, of which 44,245,388 Ordinary Shares are issued and outstanding immediately prior to the First Closing.  The Company holds no treasury shares.  The Company has reserved 16,729,892 Ordinary Shares for issuance to officers, directors, employees of, and consultants to, any Group Company under the ESOP (and out of which only 6,760,696 Ordinary Shares are unissued) as of the First Closing and, if there is the Second Closing, as of the Second Closing.

 

(ii)                                  Preference Shares. A total of 87,566,604 authorized Preference Shares, of which 27,028,572 are designated as Series A Shares, all of which are issued and outstanding immediately prior to the First Closing, 19,047,620 are designated as Series A-1 Shares, all of which are issued and outstanding immediately prior to the First Closing, 26,247,412 are designed as Series B Shares, all of which are issued and outstanding immediately prior to the First Closing, and 15,243,000 are designated as Series B-1 Shares, none of which is issued and outstanding immediately prior to the First Closing.

 

(iii)                               Options, Warrants, Reserved Shares. The Company has reserved 87,566,604 Ordinary Shares for issuance upon the conversion of the Preference Series.  Except for (A) the conversion privileges of the Preference Shares, (B) the preemptive rights provided in the Shareholders Agreement, and (C) the transactions contemplated by the

 

 

Transaction Agreements, there are no subscriptions, options, warrants, conversion privileges, pre-emptive or other rights or Contracts with respect to the issuance or transfer of any shares of the Company.  Except as set forth in the preceding sentence, no shares (including the Subscribed Shares and the Conversion Shares) of the Company’s outstanding share capital, or shares issuable upon exercise or exchange of any outstanding options or other shares issuable by the Company, are subject to any preemptive rights, rights of first refusal or other rights to purchase such shares (whether in favor of the Company or any other Person).

 

(b)                                 BVI Subsidiary.   Immediately prior to the First Closing, the share capital of the BVI Subsidiary is US$60,000, consisting of (i) 167,676,396 ordinary shares, par value US$0.00025 per share, of which 44,245,388 is issued and outstanding, and (ii) 72,323,604 preference shares par value US$0.00025 per share, of which 27,028,572 are designated as series A preference shares, all of which are issued and outstanding, 19,047,620 are designated as series A-1 preference shares, all of which are issued and outstanding, and 26,247,412 are designed as series B preference shares, all of which is issued and outstanding and the Company owns hundred percent (100%) of the issued and outstanding ordinary shares and preference shares of the BVI Subsidiary (on a fully diluted basis) which is free and clear of any Encumbrance.  There are no subscriptions, options, warrants, conversion privileges, pre-emptive or other rights or Contracts with respect to the issuance or transfer of any shares of the BVI Subsidiary.  There are no shares of the BVI Subsidiary’s outstanding share capital, or shares issuable upon exercise or exchange of any outstanding options or other shares issuable by the BVI Subsidiary, that are subject to any preemptive rights, rights of first refusal or other rights to purchase such shares (whether in favor of the BVI Subsidiary or any other Person).

 

(c)                                  HK Subsidiary.  Immediately prior to the First Closing, the share capital of the HK Subsidiary is HK$10,000, consisting of 10,000 ordinary shares, par value HK$1 per share, of which 1 is issued and outstanding and the BVI Subsidiary  owns hundred percent (100%) of the issued and outstanding shares of the HK Subsidiary (on a fully diluted basis) which is free and clear of any Encumbrance.  There are no subscriptions, options, warrants, conversion privileges, pre-emptive or other rights or Contracts with respect to the issuance or transfer of any shares of the HK Subsidiary.  There are no shares of the HK Subsidiary’s outstanding share capital, or shares issuable upon exercise or exchange of any outstanding options or other shares issuable by the HK Subsidiary, that are subject to any preemptive rights, rights of first refusal or other rights to purchase such shares (whether in favor of the HK Subsidiary or any other Person).

 

(d)                                 PRC Subsidiary Registered Capital. Immediately prior to the First Closing, the registered capital of the PRC Subsidiary is US$53,500,000, of which US$48,500,000 has been contributed in full.  The contributed registered capital of the PRC Subsidiary has been duly verified by a certified accountant registered in the PRC, and the verification report was timely filed with the relevant PRC Governmental Authority.  The HK Subsidiary owns hundred

 

29

 

percent (100%) of the registered capital of the PRC Subsidiary (on a fully diluted basis), which is free and clear of any Encumbrance.  There are no subscriptions, options, warrants, conversion privileges, pre-emptive or other rights or Contracts with respect to the issuance of any equity interest or registered capital, or any securities convertible into or exchangeable for any equity interest or registered capital, of the PRC Subsidiary.

 

(e)                                  Domestic Enterprise Registered Capital. Immediately prior to the First Closing, the registered capital of the Domestic Enterprise is RMB1,000,000, all of which has been contributed in full.  The contributed registered capital of the Domestic Enterprise has been duly verified by a certified accountant registered in the PRC, and the verification report was timely filed with the relevant PRC Governmental Authority.  Each of Jinbo Yao, Jianbo Su, Baoshan Wang, Mingke He and Beijing Wanglintong Information Technology Co., Ltd.  (北京网邻通信息技术有限公司) owns thirty-four point seven nine percent (34.79%), nine point zero four percent (9.04%), three point zero one percent (3.01%), thirty-nine point eight two percent (39.82%) and thirteen point three four percent (13.34%) of the registered capital of the Domestic Enterprise respectively (on a fully diluted basis), which is free and clear of any Encumbrance other than the Encumbrance created under the Restructuring Documents.  Except for the transactions contemplated by the Transaction Agreements and Restructuring Documents, there are no subscriptions, options, warrants, conversion privileges, pre-emptive or other rights or Contracts with respect to the issuance of any equity interest or registered capital, or any securities convertible into or exchangeable for any equity interest or registered capital, of the Domestic Enterprise.  The particulars of the Domestic Enterprise are set forth in EXHIBIT M, which are true and correct.

 

(f)                                   Domestic Subsidiary Registered Capital.  Immediately prior to the First Closing, the registered capital of each Domestic Subsidiary is set forth in EXHIBIT N, all of which has been contributed in full and duly verified by a certified accountant registered in the PRC, and the verification report was timely filed with the relevant PRC Governmental Authority.  The Domestic Enterprise owns such percentage of the registered capital of each Domestic Subsidiary (on a fully diluted basis) as set forth in EXHIBIT N, which is free and clear of any Encumbrance.  Except for the transactions contemplated by the Transaction Agreements, there are no subscriptions, options, warrants, conversion privileges, pre-emptive or other rights or Contracts with respect to the issuance of any equity interest or registered capital, or any securities convertible into or exchangeable for any equity interest or registered capital, of any Domestic Subsidiary.  The particulars of each Domestic Subsidiary are set forth in EXHIBIT N, which are true and correct.

 

(g)                                  No Encumbrance.  Except for the transactions contemplated under the Transaction Agreements and except as set forth in Section 2(g) of the Disclosure Schedule, none of the Covenantors or any of their respective Affiliates is a party to any Contracts by which any of them is bound or obligated to transfer or assign or create any Encumbrance on any interest, economic or otherwise, in any equity interests of any Group Company to any Person.  Except for the Transaction Agreements and except as set forth in

 

30

 

Section 2(g) of the Disclosure Schedule, there is no other Contracts between or among any Founder, and/or any other shareholder of any Group Company with respect to the ownership or voting or Control of any Group Company.

 

3.                                      Subsidiaries; Group Structure. Except as specified in this Section 3 of EXHIBIT D and Yao SPV is wholly owned by Jinbo Yao, and subject to Section 3 of the Disclosure Schedule, no Covenantor has any Subsidiary or presently owns or Controls, directly or indirectly, any interest in any other Person.  The Group Companies do not maintain any offices or branches or Subsidiaries except for the offices set forth in Section 3 of the Disclosure Schedule.

 

4.                                      Due Authorization.  All corporate action on the part of the Group Companies, Yao SPV and, as applicable, their respective officers, directors and shareholders necessary for (a) the authorization, execution and delivery of, and the performance of all obligations of the Group Companies and Yao SPV under this Agreement, the Shareholders Agreement, the Restated Articles, the Restructuring Documents and any other agreements the execution of which is contemplated hereunder or thereunder (together the “Transaction Agreements”), and (b) the authorization, issuance, reservation for issuance and delivery of all of the Subscribed Shares being sold under this Agreement and of the Conversion Shares, has been taken or will be taken prior to the First Closing.  Each of the Covenantors has all requisite power and authority to execute and deliver this Agreement and other Transaction Agreements to which it is a party.  Each Transaction Agreement to which a Covenantor is a party is a valid and binding obligation of such Covenantor, enforceable against it in accordance with its terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, and (ii) the effect of rules of law governing the availability of equitable remedies.

 

5.                                      Valid Issuance.

 

(a)                                 The Subscribed Shares and the Conversion Shares, when issued, sold and delivered in accordance with the terms of this Agreement will be duly and validly authorised and issued, credited as fully paid, and nonassessable.

 

(b)                                 The issued and outstanding share capital of the Group Companies are duly and validly authorized and issued, fully paid and nonassessable (and in case of each of the Domestic Enterprise and the Domestic Subsidiaries, its registered capital has been contributed in full and in case of the PRC Subsidiary its registered capital of US$48,500,000 has been contributed in full).  All outstanding shares, options, warrants and other securities of the Company have been issued (and the issuance of Subscribed Shares or Conversion Shares shall be) in full compliance with the requirements of all Applicable Laws, including, to the extent applicable, the registration and prospectus delivery requirements of the United States Securities Act of 1933, as amended (the “Securities Act”), or in compliance with applicable exemptions therefrom, and all other provisions of applicable securities laws and regulations, including, without limitation, anti-fraud provisions, and the Company’s Constitutional Documents at the time of such issuance.

 

31

 

6.                                      Financial Statement.

 

(a)                                 Prior to the date of the First Closing, the Group Companies have delivered to the Investor their unaudited consolidated financial statements and management accounts (including balance sheet, profit and loss statement, and cash flow statement) as of December 31, 2010 (collectively, the “Financial Statements”).

 

(b)                                 The Financial Statements have been prepared in accordance with US GAAP.  Since December 31, 2010, none of the Group Companies has changed any of the accounting principles or practices used by it in the past.

 

(c)                                  The Financial Statements are accurate and complete in all material respects and present fairly the financial position of each Group Company as of the respective dates thereof and the results of operations of each Group Company for the periods covered thereby.  In particular, the Financial Statements reflect all debts, liabilities, and obligations of any nature whether due or to become due (including, without limitation, absolute liabilities, accrued liabilities, and contingent liabilities) of the Group Companies as at December 31, 2010, and contain all necessary reserves, provisions and accruals in accordance with US GAAP.  The Financial Statements present an accurate picture of the net assets, financing and results of operations of the Group Companies taken as a whole in accordance with US GAAP as at December 31, 2010.

 

(d)                                 All transactions conducted by the Group Companies have been duly recorded on their books and in their accounting records to the extent required by US GAAP and other applicable local accounting provisions and regulations.  As at December 31, 2010, the Group Companies have not incurred, assumed or guaranteed any liabilities or debts of any nature (whether due, fixed, contingent or otherwise) that were material to the business of any Group Company and were not reflected or expressly provisioned against in the Financial Statements.

 

(e)                                  Except as set forth in the Financial Statements and in the Disclosure Schedule, (i) none of the Group Companies have any liability or obligation, absolute or contingent (individually or in the aggregate), or any indebtedness for borrowed money that it has directly or indirectly created, incurred, assumed or guaranteed, (ii) no Group Company is a guarantor or indemnitor of any liability, obligation or indebtedness of any Person, (iii) none of the Founders is a guarantor or indemnitor of any liability, obligation or indebtedness of any Group Company, and (iv) none of the Covenantors has pledged or created any Encumbrance over any of its interest in the securities of any Group Company.

 

7.                                      Title to Properties and Assets. Each Group Company has good and marketable title to its properties and assets, and none of its properties and assets is subject to any Encumbrance.  With respect to the properties and assets it leases, each Group Company is in compliance with each lease to which it is a party and such Group Company holds valid leasehold interests in such properties and assets.

 

8.                                      Status of Proprietary Assets.

 

(a)                                 Each Group Company (i) has independently developed and owns free and clear of any Encumbrance, or (ii) has a valid right or license to use, all

 

32

 

Proprietary Assets, including Registered Intellectual Property, necessary and appropriate for its business as now conducted and as proposed to be conducted and without any conflict with or infringement of the rights of others.  Section 8 of the Disclosure Schedule contains a complete list of Proprietary Assets, including all Registered Intellectual Property, of each Group Company.  Each of the Group Companies has taken all steps it reasonably considers necessary (including registrations with, or applications to register with, the appropriate Governmental Authority) to perfect or protect its actual and alleged Proprietary Assets and such Proprietary Assets are valid and enforceable.

 

(b)                                 There are no outstanding options, licenses, Contracts or rights of any kind granted by any Group Company or any other Person relating to any Group Company’s Proprietary Assets, nor is any Group Company bound by or a party to any options, licenses, Contracts or rights of any kind with respect to the Proprietary Assets of any other Person, except, in either case, for standard end-user agreements with respect to commercially readily available intellectual property such as “off the shelf” computer software.

 

(c)                                  No Covenantor has received any communications alleging that it has violated or, by conducting its business as proposed, could violate any Proprietary Assets of any other Person, nor, to the best knowledge of the Covenantors is there any reasonable basis therefor.  To the best knowledge of the Covenantors, no other Person is infringing any Proprietary Assets of any Group Company.

 

(d)                                 None of the Founders nor, to the best knowledge of the Covenantors, any of the current or former officers, employees or consultants of any Group Company (at the time of their employment or engagement by a Group Company) has been or is obligated under any Contract, or subject to any judgment, decree or order of any court or administrative agency, that could interfere with the use of his, her or its best endeavors to promote the interests of such Group Company or that could conflict with the business of such Group Company as proposed to be conducted or that could prevent such Founders, officers, employees or consultants from assigning to such Group Company inventions conceived or reduced to practice in connection with services rendered to such Group Company.  Neither the execution, delivery nor performance of the Transaction Agreements, nor the carrying on of the business of any Group Company by its employees, nor the conduct of the business of any Group Company as proposed, will, to the best knowledge of the Covenantors, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any Contract under which any of such Founders, officers, employees or consultants is now obligated.  No government funding, facilities of any educational institution or research center, or funding from third parties has been used in the development of any Proprietary Assets of any Group Company.

 

9.                                     Material Contracts and Obligations.

 

(a)                                 All Contracts, indebtedness, liabilities and other obligations to which a Group Company is a party or by which it is bound, that (i) are material to the conduct and operations of such Group Company’s business and properties (including

 

33

 

without limitation the Restructuring Documents), (ii) involve any of the Founders, officers, consultants, directors, employees, shareholders or Affiliates of such Group Company; or (iii) obligate such Group Company to share, license or develop any product or technology (except licenses granted in the ordinary course of business), other than agreements entered into by or on behalf of any Group Company in the ordinary course of business, are disclosed in Section 9 of the Disclosure Schedule and have been made available for inspection by the Investor and its counsel.  Such Contract, indebtedness, liabilities and obligations are valid and binding, in full force and effect and enforceable against such Group Company in accordance with its terms.  None of the Group Companies is in default or breach under any of such Contract, indebtedness, liabilities and obligations.

 

(b)                                 For purposes of this Section 9 of EXHIBIT D, “material” shall mean (i) having an aggregate value, cost or amount, or imposing liability or contingent liability on any Group Company, in excess of US$200,000 or that extend for more than one (1) year beyond the date of this Agreement, (ii) not terminable upon thirty (30) days notice without incurring any penalty or obligation, (iii) containing exclusivity, non-competition, or similar clauses that impair, restrict or impose conditions on any Group Company’s right to offer or sell products or services in specified areas, during specified periods, or otherwise, (iv) not entering into in the ordinary course of business, (v) transferring or licensing any Proprietary Assets to or from any Group Company (other than licenses granted in the ordinary course of business or licenses for commercially readily available “off the shelf” computer software) or (vi) an agreement the termination of which could be reasonably likely to have a Material Adverse Effect on any Group Company.

 

10.                               Litigation.  There is no action, suit, proceeding, claim, litigation, arbitration or investigation (the “Action”) pending or currently threatened, against any of the Covenantors, any Covenantor’s activities, properties or assets, or, to the best knowledge of the Covenantors, against any officer, director, employee or shareholder of a Group Company in connection with such officer’s, director’s, employee’s or shareholder’s relationship with, or actions taken for or on behalf of, the Group Company or otherwise.  No Acton with respect to any Applicable Law relating to anti-money laundry is taking place or threatened against any Covenantor in any court or Governmental Authority.  To the best knowledge of the Covenantors, there is no factual or legal basis for any such Action that could be likely to result, individually or in the aggregate, in any Material Adverse Effect on any Covenantor.  None of the Covenantors is a party to or subject to the provisions of any order, writ, injunction, judgment or decree of any court or Governmental Authority or instrumentality and there is no Action by any Covenantor currently pending or which it intends to initiate.

 

11.                               Compliance with Laws; Consents and Permits.

 

(a)                                 None of the Group Companies is in violation of any Applicable Law in respect of its formation or the conduct of its business or the ownership of its properties.  Each Group Company has complied with all Applicable Laws, including Applicable Laws relating to anti-money laundry within the relevant jurisdictions.

 

34

 

(b)                                 All consents, permits, approvals, orders, authorizations or registrations, qualifications, designations, declarations or filings by or with any Governmental Authority or any third party, which are required to be obtained or made by each Covenantor in connection with the consummation of the transactions contemplated under the Transaction Agreements shall have been obtained or made prior to and be effective as of each Closing.  Each Group Company has all franchises, permits, licenses and any similar authority necessary for the conduct of its business as currently conducted and as proposed to be conducted, which are in full force and effect, and the absence of which could reasonably be expected to have a Material Adverse Effect.  None of the Group Companies is in default under any of such franchise, permit, license or other similar authority.

 

(c)                                  For purposes of this Agreement, “Government Official” means (i) a governmental official or (ii) an officer, employee or Person acting in an official capacity for or on behalf of a government, Governmental Authority or public international organization.  No Covenantor or any director, officer, agent, employee or representative or any other Person associated with or acting for or on behalf of the foregoing has (A) offered to pay, paid, promised to pay, or authorized the payment of any money, or (B) offered to give, given, promised to give, or authorized the giving of any gift, to any Government Official or political party or official thereof or any candidate for political office (or a Person that a Covenantor could reasonably expect to deliver such money or gift to a Government Official or political party or official thereof or any candidate for political office) for the purpose of:

 

(i)                         (x) influencing any act or decision of such Government Official or political party or official thereof or any candidate for political office, (y) inducing a Government Official or political party or official thereof or any candidate for political office to do or omit to do any act in violation of the lawful duty of such Government Official or political party or official thereof or any candidate for political office, or (z) securing any improper advantage; or

 

(ii)                      inducing such Government Official or political party or official thereof or any candidate for political office to use his or her or its influence with any Governmental Authority to affect or influence any act or decision of such Governmental Authority, in order to help a Covenantor obtain, retain business for or with, or direct business to the Covenantor.

 

12.                               Non-Contravention.  None of the Group Companies is in, nor shall the conduct of its business as currently or proposed to be conducted result in, violation, breach or default of (a) any term of the Constitutional Documents of such Group Company, or (b) in any material respect any term or provision of any Contract to which such Group Company is a party or by which it may be bound, including without limitation the Restructuring Documents (the “Group Company Contracts”) or (c) any provision of any judgment, decree, order or Applicable Law applicable to or binding upon such Group Company.  None of the activities, Contract, or rights of any Group Company is ultra vires or unauthorized or in violation of any Applicable Law.  The execution, delivery and performance of and compliance with the Transaction Agreements and

 

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the consummation of the transactions contemplated hereby or thereby do not and will not result in any such violation, breach or default, or conflict with or constitute, with or without the passage of time or the giving of notice or both, either a default under any Constitutional Documents of any Group Company or any Group Company Contract, or a violation of any Applicable Law, or an event which results in the creation of any Encumbrance (or any obligation to create any Encumbrance) upon any asset of any Group Company.

 

13.                               Disclosure.  Each of the Covenantors has provided the Investor with all the information that the Investor has requested for deciding whether to purchase the Subscribed Shares and all information that each of the Covenantors believes is reasonably necessary to enable the Investor to make such decision.  No representation or warranty by the Covenantors in the Transaction Agreements and no information or materials provided by the Covenantors to the Investor in connection with the negotiation, execution, delivery or performance of the Transaction Agreements contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances in which they are made, not misleading, including without limitation the Financial Statements and any information contained therein.

 

14.                               Registration Rights.  Except as provided in the Transaction Agreements or as disclosed in Section 14 of the Disclosure Schedule, none of the Covenantors has granted or agreed to grant any Person any registration rights with respect to, nor is the Company obliged to list or register, any of the Company’s equity (or any other Group Company’s equity or registered capital) on any securities exchange.

 

15.                              Activities Since Financial Statements.  Since the date of the Financial Statements, (a) each Group Company has conducted their respective businesses in ordinary course, in substantially the same manner in which they had been previously conducted, and has not taken any actions that could require the consent of the Investor Director or any Investor or any holder of Series B-1 Shares under any Transaction Agreement and (b) there has not been any event or condition of any character which might have a Material Adverse Effect on any Group Company.

 

16.                               Tax Matters.

 

(a)                                 Each of the Group Companies has timely filed all tax returns and reports as required by Applicable Law.  Such tax returns and reports are true and correct in all material respects.  All taxes actually assessed against each of the Group Companies (whether or not shown on any tax return or report) have been paid on or prior to the due date for such taxes.  None of Group Companies is currently the beneficiary of an extension of time within which to file any tax return or report with any applicable taxing authority.

 

(b)                                 There has been no deficiency for taxes assessed against any of the Group Companies by any taxing authority and no circumstances exist, to the knowledge of the Covenantors, that could reasonably be expected to cause any Group Company to be assessed for a material tax deficiency.

 

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17.                               Interested Party Transactions.

 

(a)                                 None of the Covenantors, officer, employee or director of a Group Company or any Affiliate or Associate of any such Person has any Contract, understanding, proposed transaction with, or is indebted to, any Group Company, nor is any Group Company indebted (or committed to make loans or extend or guarantee credit) to any of such Persons (other than for accrued salaries, reimbursable expenses or other standard employee benefits) (other than those transactions contemplated in the Transaction Agreements).

 

(b)                                 Neither any officer, employee or director of a Group Company, nor any Affiliate or Associate of any such Person has any direct or indirect ownership interest in any firm or corporation with which a Covenantor is affiliated or with which a Covenantor has a business relationship, or any firm or corporation that competes with a Group Company.  Neither any Founder nor any of his or her Affiliate or Associate has any direct or indirect ownership interest in any firm or corporation with which a Group Company is affiliated or with which a Group Company has a business relationship, or any firm or corporation that competes with a Group Company (other than other Group Companies).

 

(c)                                  None of the Covenantors nor officer, employee or director of a Group Company or any Affiliate or Associate of any such Person has had, either directly or indirectly, a material interest in: (i) any Person which purchases from or sells, licenses or furnishes to a Group Company any goods, property, intellectual or other property rights or services; or (ii) any Contract to which another Covenantor is a party or by which it may be bound or affected (other than those Contracts contemplated in the Transaction Agreements).

 

(d)                                 All transactions entered or to be entered into by any Group Company shall be “arm-length” transactions.

 

18.                               Employee Matters.  Each Group Company has complied in all material aspects with all applicable employment and labor laws.  To the best knowledge of the Covenantors, none of the Group Company’s officers or key employees intends to terminate his or her employment with such Group Company, nor does any Group Company have a present intention to terminate the employment of any officer or key employee.  None of the Group Companies is a party to or bound by any currently effective incentive plan (other than the ESOP), profit sharing plan, retirement agreement or other employee compensation agreement.  Each Founder, employee, director, officer and consultant of the Group Companies has duly executed a non-complete, non-solicitation, confidential information and invention assignment agreement with such Group Company in form and substance satisfactory to the Investor (the “Confidentiality Agreement”).  The Covenantors have no knowledge that any of such Founders, employees, directors, officers or consultants are in violation thereof.  Unless disclosed in Section 18 of the Disclosure Schedule, neither the Founders, nor the officers or key employees of any Group Company are involved in any daily business, operation, management and administration of any entity other than the Group Companies.  Each of the officers and key employees of the Group Companies and the Founders has devoted his/her full business efforts and time to the Group Companies, and the performance of his/her duties to the Group Companies will not constitute a breach of, or otherwise contravene, the terms of any employment or other agreement or policy to which he/she is a party or is otherwise bound.  Nothing

 

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contained in the Confidentiality Agreement or other related agreements will modify the provisions hereof and in the case of any conflict, this provision shall prevail.

 

19.                               No Other Business.  The Company was formed solely to acquire and hold an equity interest in the BVI Subsidiary.  Since its formation, the Company has not engaged in any other business and, subject to Section 6 of EXHIBIT D, has not incurred any liability.  The BVI Subsidiary was formed solely to acquire and hold an equity interest in the HK Subsidiary.  Since its formation, the BVI Subsidiary has not engaged in any other business and, subject to Section 6 of EXHIBIT D, has not incurred any liability.   The HK Subsidiary was formed solely to acquire and hold an equity interest in the PRC Subsidiary.  Since its formation, the HK Subsidiary has not engaged in any other business and, subject to Section 6 of EXHIBIT D, has not incurred any liability.  The PRC Subsidiary since established is engaged solely in the PRC Subsidiary Principal Business and has no other business activities.  Each of the Domestic Enterprise and the Domestic Subsidiaries since established is engaged solely in the Domestic Principal Business and has no other business activities.

 

20.                               Financial Advisor Fees.  There exists no Contract between any Covenantor or any of its Affiliates on one hand, and any investment bank or other financial advisor on the other hand under which such Covenantor may owe any brokerage, placement or other fees relating to the transactions contemplated by this Agreement or by other Transaction Agreements.

 

21.                               Other Representations and Warranties Relating to the PRC Subsidiary, the Domestic Enterprise and the Domestic Subsidiaries.

 

(a)                                 The Constitutional Documents and certificates and related contracts and agreements of the PRC Subsidiary, the Domestic Enterprise and the Domestic Subsidiaries are valid and binding and have been duly approved or issued (as applicable) by the competent PRC Governmental Authorities.

 

(b)                                 All consents, approvals, authorizations or licenses required under PRC Applicable Law for the due and proper establishment and operation of each of the PRC Subsidiary, the Domestic Enterprise and the Domestic Subsidiaries have been duly obtained from the relevant PRC Governmental Authorities and are in full force and effect.

 

(c)                                  All filings and registrations with the PRC Governmental Authorities required in respect of each of the PRC Subsidiary, the Domestic Enterprise and the Domestic Subsidiaries and its respective operations, including but not limited to the registrations with the Ministry of Commerce, the State Administration of Industry and Commerce, the State Administration for Foreign Exchange (the “SAFE”), tax bureau and customs authorities have been duly completed in accordance with the relevant PRC Applicable Laws.

 

(d)                                 The registered capital of each of the PRC Subsidiary, the Domestic Enterprise and the Domestic Subsidiaries is fully paid up.  The HK Company legally holds and beneficially owns hundred percent (100%) of the equity interest in the PRC Subsidiary (on a fully diluted basis), free from any Encumbrance.  Each of Jinbo Yao, Jianbo Su, Baoshan Wang, Mingke He and Beijing Wanglintong Information Technology Co., Ltd.  (北京网邻通信息技术有限

 

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公司) owns thirty-four point seven nine percent (34.79%), nine point zero four percent (9.04%), three point zero one percent (3.01%), thirty-nine point eight two percent (39.82%) and thirteen point three four percent (13.34%) of the equity interest in the Domestic Enterprise respectively (on a fully diluted basis), free from any Encumbrance other than the Encumbrance created under the Restructuring Documents.  The Domestic Enterprise legally holds and beneficially owns such percentage of the equity interest in each Domestic Subsidiary (on a fully diluted basis) as set forth in EXHIBIT N, free from any Encumbrance.  There are no outstanding rights, or commitments made by the PRC Subsidiary or the Domestic Enterprise or any Domestic Subsidiary to sell any of its equity interest.

 

(e)                                  None of the PRC Subsidiary, the Domestic Enterprise and the Domestic Subsidiaries is in receipt of any letter or notice from any relevant Governmental Authority notifying revocation of any permits or licenses issued to it for noncompliance or the need for compliance or remedial actions in respect of the activities carried out directly or indirectly by it.

 

(f)                                   Each of the PRC Subsidiary, the Domestic Enterprise and the Domestic Subsidiaries has been conducting and will conduct its business activities within the permitted scope of business or is otherwise operating its business in full compliance in all material aspects with all Applicable Law and with all requisite licenses, permits and approvals granted by the competent PRC Governmental Authorities.

 

(g)                                  In respect of approvals, licenses or permits requisite for the conduct of any part of the business of the PRC Subsidiary or the Domestic Enterprise or any Domestic Subsidiary which are subject to periodic renewal, none of the Covenantors has any reason to believe that such requisite renewals will not be timely granted by the relevant PRC Governmental Authorities.

 

(h)                                 With regard to employment and staff or labor management, each of the PRC Subsidiary, the Domestic Enterprise and the Domestic Subsidiaries has complied with all PRC Applicable Laws in all material respects, including without limitation, laws and regulations pertaining to welfare funds, social benefits, medical benefits, insurance, retirement benefits, and pensions.

 

22.                               Minute Books.  The internal records of each Group Company contain a complete summary of all material meetings and actions taken by directors and equity interest holders of such Group Company since its time of formation, and reflect all transactions referred to in such minutes accurately in all material respects.

 

23.                               Insurance.  Section 23 of the Disclosure Schedule provides a complete list of each Group Company’s insurance policies currently in effect.  Each of the Group Companies maintains insurance which meets the relevant legal requirement in accordance with the Applicable Laws.  None of the Group Companies has done or omitted to do or suffered anything to be done or not to be done other than any acts in the ordinary course of business which has or would render any policies of insurance taken out by it or by any other Person in relation to any of such Group Company’s assets void or voidable or which could result in an increase in the rate of premiums on the said policies and there are no claims outstanding and, to the Covenantors’ best

 

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knowledge, no circumstances which could give rise to any claim under any of such policies of insurance.  None of the Group Companies has received notice that any insurer under any such policy is denying liability with respect to a claim or defending under a reservation of rights clause.  All such policies are legal, valid, binding and enforceable, and are in full force and effect and have not been cancelled.  All premiums on such policies have been paid in full when due and the policies are not subject to cancellation.  None of the Group Companies is in breach or default of any policy.  There are no claims that have not been reimbursed to any Group Company.

 

24.                               No Immunity.  Each of the Covenantors is generally subject to civil and commercial law with respect to its obligations under each of the Transaction Agreements to which it is a party; the execution, delivery and performance of the Transaction Agreements by it constitutes private and commercial acts and neither it nor any of its assets enjoy any right of immunity from set-off, suit or execution in respect of its obligations under each of the Transaction Agreements to which it is a party.

 

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EXHIBIT E

 

REPRESENTATIONS AND WARRANTIES OF INVESTOR

 

1.                                      Due Organization.  Such Investor is duly organized, validly existing and in good standing (or equivalent status in the relevant jurisdiction) under, and by virtue of, the laws of the place of its incorporation or establishment.

 

2.                                      Authorization. Such Investor has all requisite power, authority and capacity to enter into the Transaction Agreements to which it is a party, and to perform its obligations hereunder and thereunder.  Each Transaction Agreements to which it is a party has been duly authorized, executed and delivered by such Investor.  Each Transaction Agreements to which it is a party, when executed and delivered by such Investor, will constitute valid and legally binding obligations of such Investor, enforceable against it in accordance with its terms, except as may be limited by (a) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, and (b) the effect of rules of law governing the availability of equitable remedies.

 

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EXHIBIT F

 

COVENANTS OF COVENANTORS

 

1.                                      Conversion.  The Company covenants to at all times reserve sufficient Ordinary Shares or, if the reservation is insufficient, the Covenantors undertake to take all actions necessary to authorize such additional Ordinary Shares, for issuance upon conversion of all Series B-1 Shares under the Transaction Agreements.

 

2.                                      Use of Proceeds from the Sale of Subscribed Shares.  Unless otherwise determined by the Investor, the proceeds from the issuance of the Subscribed Shares (the “Proceeds”) shall be used exclusively by the Group Companies for customer acquisition, product development, internal management improvement, brand building, working capital and other general business activities in the Company, in its consolidated Subsidiaries, in the PRC Subsidiary Principal Business or in the Domestic Principal Business.

 

3.                                      Business of the Company.  Unless otherwise determined by the Investor, the business of the Company shall be restricted to the holding, management and disposition of an equity interest in the BVI Subsidiary.

 

4.                                      Business of the BVI Subsidiary.  Unless otherwise determined by the Investor, the business of the BVI Subsidiary shall be restricted to the holding, management and disposition of an equity interest in the HK Subsidiary.

 

5.                                      Business of the HK Subsidiary. Unless otherwise determined by the Investor, the business of the HK Subsidiary shall be restricted to the holding, management and disposition of an equity interest in the PRC Subsidiary.

 

6.                                      Business of the PRC Subsidiary, the Domestic Enterprise and the Domestic Subsidiaries.  Unless otherwise determined by the Investor, the business of the PRC Subsidiary shall be restricted to the PRC Subsidiary Principal Business, and the business of the Domestic Enterprise and each Domestic Subsidiary shall be restricted to the Domestic Principal Business.

 

7.                                      Governance of Group Company.  The board of directors of any Group Company shall be re-constituted so that it shall have the same number of directors as the Company, and the Series B Shareholders and the Series B-1 Shareholders shall be entitled to appoint the same number of directors to any Group Company as they are entitled to appoint to the Company.  All directors of any Group Company shall be appointed and removed only by the Company pursuant to action of the Board.  The Covenantors shall procure that (a) all corporate actions of any Group Company shall be pursuant to action by the Board; (b) none of the Group Companies shall take any action that has not been approved by the Board; and (c) the Group Companies will take the action if it has been approved and adopted by the Board.

 

8.                                      Board Meeting.  At least one (1) Board meeting shall be held every three (3) months.  Four (4) directors of the Company (which must include at least the director designated by each of (i) the holders of a majority of the then outstanding Ordinary Shares, (ii) the holders of a majority of the then outstanding Series A Shares, (iii) the holders of a majority of the then outstanding Series A-1 Shares and (iv) the holders of more than

 

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fifty percent (50%) of the aggregate number of Ordinary Shares into which the then outstanding Series B Shares and Series B-1 Shares are convertible, respectively) present in person or by proxy shall constitute a quorum which shall be necessary for the conduct of business at any meeting of the Board.

 

9.                                      Equity Compensation.  The Board and the shareholders of the Company shall have duly adopted the employee equity incentive plans or purchase plans in form and substance satisfactory to the Investor (the “ESOP”) and duly reserved 16,729,892 Ordinary Shares for the ESOP (and out of which 6,760,696 Ordinary Shares are unissued) to the satisfaction of the Investor; provided that such number of unissued Ordinary Shares under the ESOP shall not exceed 4.8788% of the fully diluted capital of the Company immediately after the First Closing and, if there is the Second Closing, immediately after the Second Closing contemplated under this Agreement.  The Company shall not directly or indirectly issue Ordinary Shares, share options or other forms of equity of any Group Company to employees, directors or consultants, except in accordance with the ESOP or other employee equity compensation plans to be approved by the Board pursuant to terms and conditions of the Shareholders Agreement.

 

10.                               Confidentiality Agreement.  The Covenantors shall cause all of the respective current and future employees, directors, officers and consultants of any Group Company and each of the Founders to enter into each applicable Group Company’s standard form Confidentiality Agreement in form and substance satisfactory to the Investor.

 

11.                              Additional Covenants.  Except as required by this Agreement, no resolution of the directors, owners, or shareholders of any of the Group Companies shall be passed, nor shall any Contract be entered into, in each case, prior to the First Closing without the prior written consent of the Investor, except that each of the Group Companies may carry on its respective business in the same manner as heretofore and may pass resolutions and enter into Contracts for so long as they are effected in the ordinary course of business.

 

12.                               Conduct of Business.  Between the date hereof and the date of the First Closing, each Group Company shall conduct its respective business in the ordinary course, unless otherwise contemplated by the Transaction Agreements.

 

13.                               Notice of Changes.  Between the date hereof and the date of the First Closing, if any of the Covenantors becomes aware of any fact or event that could cause the representations and warranties of the Covenantors set forth in EXHIBIT D to (a) fail to be true and correct in all material respects, or (b) be materially misleading, such Covenantor shall give immediate written notice thereof to the Investor in which event the Investor may within fifteen (15) Business Days after receiving such notice terminate this Agreement by written notice without any penalty whatsoever and without prejudice to any rights that the Investor may have under this Agreement, any Transaction Agreement or Applicable Law.  In such case, each of the Covenantors shall jointly and severally indemnify the Investor against all Losses incurred by it in connection with the negotiation, preparation and termination of the Transaction Agreements.

 

14.                               Restated Articles and Shareholders Agreement.  At or prior to the First Closing, each Covenantor shall, and procure each of the Series A Shareholder, the Series A-1

 

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Shareholders, the Series B Shareholders, and other shareholders of the Company to, (a) take all necessary or appropriate corporate and other actions to adopt the Second Amended and Restated Memorandum and Articles of Association of the Company, substantially in form attached hereto as EXHIBIT I (in form and substance satisfactory to the Investor) (the “Restated Articles”) and (b) execute and deliver an amended and restated shareholders agreement, substantially in form attached hereto as EXHIBIT J (in form and substance satisfactory to the Investor) (the “Shareholders Agreement”) which shall terminate and replace the existing Shareholders Agreement dated July 6, 2011 entered into by and among, inter alios, the Company, the Series A Shareholder, the Series A-1 Shareholders and the Series B Shareholders.

 

15.                               Bank Account.  The Proceeds shall be deposited with the Closing Account of the Company outside the PRC the details of which shall be specified by the Company in writing prior to the First Closing, unless otherwise agreed by the Company and by the Investor.

 

16.                               Further Assurance.  Each of the Covenantors shall jointly and severally (a) cooperate with the Investor to provide all due diligence requested by the Investor; (b) take all necessary or appropriate corporate and other actions to consummate the transactions contemplated by this Agreement and by other Transaction Agreements, including the satisfaction of the closing conditions set forth in any Transaction Agreement; and (c) do and perform, or cause to be done and performed, all such further acts, and execute and deliver all such other agreements, certificates, instruments and documents required to give effect to the terms and intent of this Agreement and other Transaction Agreements.

 

17.                               Compliance.

 

(a)                                 Each of the Covenantors shall at all times ensure that all activities of the Group Companies shall be in compliance with all Applicable Laws.

 

(b)                                 Each of the Covenantors shall at all time ensure that all Group Companies shall maintain valid, and in full force and effect, any and all material licenses and permits.

 

(c)                                  Each of the Covenantors undertakes that it shall not, and each of them shall not cause or permit any Group Company, director, officer, agent, employee, representative or any other Person associated with or acting for or on behalf of the foregoing to, offer, pay, promise to pay, or authorize the payment of any money, or offer, give, promise to give, or authorize the giving of any gift, to any Government Official, political party or official thereof or any candidate for political office (or to any Person that any of the Covenantors could reasonably expect to deliver such money or gift to a Government Official, political party or official thereof or any candidate for political office) for the purposes as specified in Section 11(c)(i) or Section 11(c)(ii) of EXHIBIT D.  The Covenantors shall immediately notify the Investor of any action that may constitute a violation of this Section 17 of EXHIBIT F.

 

18.                               Interested Party Transactions.  All transactions entered or to be entered into by any Group Company shall be “arm-length” transactions.

 

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19.                               Non-Compete Covenants. Each of the Covenantors shall not, and shall procure none of his or her or its Affiliate or Associate will, directly or indirectly, either by himself or herself or itself or in conjunction with or through any other Person:

 

(a)                                 during the Relevant Period and for a period of two (2) years after the Relevant Period (collectively “Restriction Period”), participate, assist, advise, consult, be concerned with, engaged or interested in, any business or Person in any manner, which is in competition with the business carried on by any Group Company at any time during the Restriction Period;

 

(b)                                 during the Restriction Period, solicit in any manner any Person who is or has been during the Restriction Period a customer or client of any Group Company for the purpose of offering to such Person any goods or services similar to or competing with any of the businesses conducted by any Group Company at any time during the Restriction Period;

 

(c)                                  during the Restriction Period, solicit or entice away, or endeavour to solicit or entice away, any employee or officer of any Group Company; or

 

(d)                                 at any time disclose to any Person, or use for any purpose (except for the ordinary business of the Group Companies), any information concerning the business, accounts, finance, transactions or Proprietary Assets rights of any Group Company or any trade secrets or confidential information of or relating to any of the Group Companies.

 

Each undertaking in paragraphs (a), (b), (c), and (d) of this Section 19 of EXHIBIT F shall be treated as independent of the other undertakings so that, if any of them is held to be invalid or unenforceable for any reason, the remaining undertakings shall be valid to the extent that they are not affected.

 

Each of the Covenantors hereby expressly acknowledges and declares that he has duly considered the undertakings set out in this Section 19 of EXHIBIT F and considers that they are reasonable in the circumstances and warrants and undertakes to the Investor that he shall not challenge or query the validity and enforceability of these undertakings.

 

For the purposes of this Section 19 of EXHIBIT F, “Relevant Period” means, in relation to a Founder or his Affiliate or Associate, the period during which he or his Affiliate or Associate is a shareholder, director, employee and/or has any direct or indirect interest (legal or beneficial) in the capital of any of the Group Companies.

 

20.                               Equity Transfer.  Unless with the Investor’s written approval and notwithstanding other provisions of the Transaction Agreements, none of the Founders shall directly or indirectly transfer or dispose of any of his or her equity interest in any Group Company, nor shall they grant an option over such equity interest or enter into any agreement in respect of the votes attached to such equity interest, to any other Person so long as an Investor directly or indirectly owns or holds any interest in any Group Company.

 

21.                               SAFE Registration.  Each Founder shall fully comply with all legal requirements with respect to his or her direct or indirect holding of the Ordinary Shares or other

 

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securities in the Company (if any) and with respect to the Restructuring Documents on a continuing basis, including but not limited to registering such shareholding with the SAFE, in a timely manner, as required under the Circular of the State Administration of Foreign Exchange on Relevant Issues concerning Foreign Exchange Administration of Financing and Inbound Investment through Offshore Special Purpose Companies by PRC Residents (《关于境内居民通过境外特殊目的公司境外融资及返程投资外汇管理有关问题的通知》) (the “SAFE Circular”) if it is applicable, and any other applicable requirements imposed by the PRC Governmental Authorities, and obtaining all necessary consents, approvals, permits and registrations in connection therewith.  Without limiting the generality of the preceding sentence, each of the Founders shall have filed for registration and received approvals from the Beijing Administration of Foreign Exchange Department of the SAFE pursuant to the SAFE Circular and other relevant circulars issued by the SAFE (a) prior to the date of the First Closing in relation to his or her direct or indirect holding of the Ordinary Shares and other securities in the Company (if any) and in relation to the Restructuring Documents and (b) within one (1) month after the date of each Closing in relation to the transactions contemplated hereunder and provided a copy of such approvals obtained from the Beijing Administration of Foreign Exchange Department of the SAFE to the Investor.

 

22.                               Fulfillment of Closing Conditions. Each of the Covenantors shall use their best endeavors to fulfill each of the closing conditions set forth in this Agreement and other Transaction Agreements, including without limitation Section 6.1 hereof.

 

23.                               RESERVED.

 

24.                               Exclusivity.  From the date hereof until the Termination Date, each Covenantor agrees not to (a) discuss the sale of any equity interest or securities of, or any other debt financing transaction of, any Group Company with any third party, or (b) to provide any information with respect to any Group Company to a third party in connection with a potential investment by such third party in the equity interest or securities of, or any other debt financing transaction of, any Group Company, or (c) to close any equity or debt financing transaction of any Group Company with any third party.  This Section 24 of EXHIBIT F shall terminate and be of no further force and effect immediately following the Second Closing.

 

25.                               Transfer of Registered Proprietary Assets.  Unless otherwise determined by the Investor, the Covenantors shall (a) transfer such technologies, technical platforms and Proprietary Assets of the Domestic Enterprise or any Domestic Subsidiary, and/or (b) immediately after such Proprietary Assets of the Domestic Enterprise or any Domestic Subsidiary being registered, filed with or recorded by any Governmental Authority, transfer such registered Proprietary Assets, to the PRC Subsidiary as determined by the Investor as necessary for the operation of the PRC Subsidiary at no consideration, free from any Encumbrance and in accordance with Applicable Laws, to the satisfaction of the Investor.  Without prejudice to the foregoing sentence, Yao and each other Covenantors shall transfer (a) the domain name disclosed in the Disclosure Schedule to the Domestic Enterprise within three (3) months after the date of First Closing and (b) the registered trademarks, trademark applications and software copyrights disclosed in the Disclosure Schedule to the PRC Subsidiary within six (6) months after the date of First Closing, in each case, at no consideration,

 

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free from any Encumbrance and in accordance with Applicable Laws, to the satisfaction of the Investor.

 

26.                               Restructuring Documents.  Each Covenantor shall procure (and to the satisfaction of the Investor) that each Restructuring Document is valid and binding, in full force and effect and enforceable in accordance with its terms.  Each of the Parties hereto undertakes that to the extent that any of the Restructuring Documents is or becomes unenforceable or invalid, the Parties hereto shall make an alternative arrangements so as to maintain the economic interests of the shareholders of the Company and consolidate the financial results of the Group Companies (including without limitation the PRC Subsidiary, the Domestic Enterprise and the Domestic Subsidiaries) into the Company’s financial statements.

 

27.                               Due Diligence.  If there is any material finding of due diligence investigation (such investigation shall be carried out prior to the Second Closing) that the Investor is not satisfied with, the Covenantors shall provide and fulfill, and cause other relevant Group Company to provide and fulfill, remedial undertakings as reasonably requested by the Investor.

 

28.                               Equal Treatment.  The Covenantors agree that to the extent that any holder of Ordinary Shares, Series A Shares, Series A-1 Shares, Series B Shares or other securities of any Group Company in any financing transaction (including without limitation equity or debt financing transaction and whether consummated before or after the date hereof) enjoys any right, option, preference or privilege that is superior or more favorable or in addition to those granted to the Investor under this Agreement or under any other Transaction Agreements, the Company shall, and the Covenantors shall procure the Company to, also immediately grant the Investor such right, option, preference or privilege.

 

29.                               CFC/PFIC.  The Covenantors agree, and shall procure other Group Companies, to provide the Investor upon demand with books and records of the Group Companies, information with respect to shareholders and other relevant information, to cooperate with the Investor to fulfill the Investor’s obligations, liabilities and tax election demands under U.S. tax law, and to comply with all necessary reporting requirements.

 

47

 

EXHIBIT G

 

CONDITIONS TO INVESTOR’S OBLIGATIONS AT FIRST CLOSING

 

1.                                      Representations and Warranties. The representations and warranties made by the Covenantors in EXHIBIT D hereof shall be true and correct and complete in all respects, as of the date hereof and as of the date of the First Closing, with the same force and effect as if they were made on and as of such date.

 

2.                                      Performance of Obligations.  Each of the Covenantors shall have performed and complied with all agreements, obligations and conditions contained in the Transaction Agreements that are required to be performed or complied with by it on or before the First Closing.  The Company shall have delivered each of the items that are required to be delivered by it under Section 3 of this Agreement.

 

3.                                      Proceedings and Documents.  All corporate and other proceedings on the part of the Group Companies in connection with the transactions contemplated under this Agreement and other Transaction Agreements and all documents and instruments incident to such transactions shall be completed and satisfactory in substance and form to the Investor, and the Investor shall have received all such counterpart originals or certified or other copies of such documents as it may reasonably request.

 

4.                                      No Material Adverse Effect.  Since the date of this Agreement, no Group Company has suffered a Material Adverse Effect.

 

5.                                      Compliance Certificate.  Each of the Covenantors shall deliver to the Investor a certificate, dated the date of the First Closing, signed by the director of each of the Company, the BVI Subsidiary and the HK Subsidiary, the legal representative of each of the PRC Subsidiary and the Domestic Enterprise, and the Founders certifying that closing conditions set forth in this Agreement (including without limitation this EXHIBIT G) have been fulfilled.

 

6.                                      Approvals, Consents and Waivers. Each Covenantor shall have obtained all approvals, consents and waivers necessary for consummation of the transactions contemplated by this Agreement and other Transaction Agreements, including, but not limited to, (a) all permits, authorizations, approvals or consents of, notice to or registration with any Governmental Authority or regulatory body or other Person in relation to transactions contemplated under or as required by this Agreement and the Transaction Agreements, and (b) the waiver by the existing shareholders of the Company of any anti-dilution rights, rights of first refusal, preemptive rights and all similar rights in connection with the issuance of the Subscribed Shares at each Closing.

 

7.                                      No Order.  No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Applicable Law that has the effect of making any of the transactions contemplated by this Agreement and other Transaction Agreements illegal or otherwise restraining or prohibiting any of the items above mentioned.

 

8.                                      Securities Exemptions. The offer and sale of the Subscribed Shares to the Investor pursuant to this Agreement shall be exempt from the registration and/or qualification requirements of all applicable securities laws.

 

48

 

9.                                      Restated Articles Effective. The Restated Articles shall have been duly adopted by the Company by all necessary corporate action of its Board and its shareholders and duly filed with the Registrar of Companies in the Cayman Islands.  Constitutional Documents of each Group Company shall be to the satisfaction of the Investor.

 

10.                               Appointment of Company Directors.  The Board shall consist of five (5) directors: two (2) directors nominated by the holders of at least a majority of the then outstanding Ordinary Shares (initially Jinbo Yao and Wensheng Cai), one (1) director nominated by the holders of at least a majority of the then outstanding Series A Shares (initially Dong Yang), one (1) director nominated by the holders of at least a majority of the then outstanding Series A-1 Shares (initially Frank Lin, aka, Hurst Lin) and one (1) director nominated by the holders of at least a majority of the then outstanding Series B Shares and Series B-1 Shares (initially Mr. Julian Cheng).

 

11.                               Employment Agreement.  Each key officer and employee of the Group Companies (the “Key Employees”) as set forth in EXHIBIT K hereto or Persons acting in such capacities, other employees, directors and officers shall have entered into an employment agreement in form and substance satisfactory to the Investor.

 

12.                               Confidentiality Agreement.  Each Key Employee, the Founders, director, officer and consultant of the Group Companies shall have entered into a Confidentiality Agreement in form and substance satisfactory to the Investor.

 

13.                               Due Diligence.  The Investor shall have completed its legal, financial, technical, business and personnel due diligence investigation of the Group Companies, the Covenantors and the Key Employees to its satisfaction.  The Company shall have delivered a Disclosure Schedule to the satisfaction of the Investor prior to the First Closing.

 

14.                               Legal Opinion.  The Cayman counsel to the Group Companies shall have delivered to the Investor a legal opinion dated as of the date of the First Closing addressed to the Investor in form and substance satisfactory to the Investor.

 

15.                               Execution of Transaction Agreements.  Each party (other than the Investor) to the Transaction Agreements (including without limitation the Shareholders Agreement and the Restructuring Documents) shall have duly executed and delivered to the Investor each of the Transaction Agreements to the satisfaction of the Investor.

 

16.                               Tax.  Tax liability arising out of, relating to, connected with or incidental to from, the Transaction Agreements shall be minimized to the greatest extent permitted by Applicable Laws, to the satisfaction of the Investor.

 

17.                               No Contravention.  None of the Covenators is in violation, breach or default of any term or provision of the Restructuring Documents and other Transaction Agreements.

 

18.                               Operations Plan.  The Company shall have delivered to the Investor a detailed eighteen (18)-month operations plan and capital expenditure plan of the Group Companies in form and substance satisfactory to the Investor.

 

19.                               No Dividend.  From the date of this Agreement until the First Closing, no dividend or other distributions has been paid directly or indirectly to any Founder, or any

 

49

 

shareholder of any Group Company, unless with the prior written approval of the Investor.

 

20.                               Bank Account.  The Company shall have established and maintained a separate bank account outside the PRC to hold the Proceeds (the “Closing Account”).  The Closing Account shall be located at a bank to be mutually agreed upon by the Company and the Investor.  The details of the Closing Account shall have been advised to the Investor in writing.

 

50

 

EXHIBIT H

 

CONDITIONS TO COMPANY’ OBLIGATIONS AT FIRST CLOSING

 

1.                                      Representations and Warranties.  The representations and warranties of the Investor with respect to itself contained in EXHIBIT E hereof shall be true and correct in all material respects as of the date hereof and as of the date of the First Closing.

 

2.                                      Securities Exemptions.  The offer and sale of the Subscribed Shares to the Investor pursuant to this Agreement shall be exempt from the registration and/or qualification requirements of all applicable securities laws.

 

3.                                      Execution of Transaction Agreements.  The Investor shall have executed and delivered to the Company the relevant Transaction Agreements to which it is a party.

 

51

 

EXHIBIT I

 

RESTATED ARTICLES

 

52

 

EXHIBIT J

 

SHAREHOLDERS AGREEMENT

 

 

EXHIBIT K

 

LIST OF KEY EMPLOYEES

 

	
Jinbo Yao
    	
 
    	
Chief  Executive Officer
    
	
Xiaohua Chen
    	
 
    	
Senior Vice   President
    
	
Jinfeng Cui
    	
 
    	
Chief Technology   Officer
    
	
Lin Cong
    	
 
    	
Chief Financial   Officer
    
	
Jiandong Zhuang
    	
 
    	
Vice President
    
	
Guipeng Xu
    	
 
    	
Vice President
    
	
Yusong Jin
    	
 
    	
Vice President
    
	
Bo Gao
    	
 
    	
Vice President
    
	
Qiao Lian
    	
 
    	
Director
    

 

 

EXHIBIT L

 

NOTICE

 

For the purpose of the notice provisions contained in the Transaction Agreements, the following are the initial addresses of each party thereto:

 

In case of the Founders:

 

	
JINBO YAO (姚劲波)
    
	
Address:
    	
 
    	
Yi 108 Block E,   North American International Business Center, Beiyuan Road, Chaoyang   District, Beijing, PRC
    
	
Post Code:
    	
 
    	
100101
    
	
Attention:
    	
 
    	
Jinbo Yao
    
	
Fax Number:
    	
 
    	
(86) 10-6445-9926
    
	
Email:
    	
 
    	
yaojb@58.com
    
	
 
    	
 
    	
 
    
	
JIANBO SU (苏剑波)
    
	
Address:
    	
 
    	
Yi 108 Block E,   North American International Business Center, Beiyuan Road, Chaoyang   District, Beijing, PRC
    
	
Post Code:
    	
 
    	
100101
    
	
Attention:
    	
 
    	
Jianbo Su
    
	
Fax Number:
    	
 
    	
(86)-10-6445-9926
    
	
Email:
    	
 
    	
hardylin@188.com
    
	
 
    	
 
    	
 
    
	
BAOSHAN WANG (王宝珊)
    
	
Address:
    	
 
    	
Yi 108 Block E,   North American International Business Center, Beiyuan Road, Chaoyang   District, Beijing, PRC
    
	
Post Code:
    	
 
    	
100101
    
	
Attention:
    	
 
    	
Baoshan Wang
    
	
Fax Number:
    	
 
    	
(86)-10-6445-9926
    
	
Email:
    	
 
    	
cws@cncn.com
    
	
 
    	
 
    	
 
    
	
NIHAO CHINA CORPORATION
    
	
Address:
    	
 
    	
Yi 108 Block E,   North American International Business Center, Beiyuan Road, Chaoyang   District, Beijing, PRC
    
	
Post Code:
    	
 
    	
100101
    
	
Attention:
    	
 
    	
Jinbo Yao
    
	
Fax Number:
    	
 
    	
(86) 10-6445-9926
    
	
Email:
    	
 
    	
yaojb@58.com
    
	
 
    	
 
    	
 
    
	
In case of any Group Company:
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
Yi 108 Block E,   North American International Business Center, Beiyuan Road, Chaoyang   District, Beijing, PRC
    
	
Post Code:
    	
 
    	
100101
    
	
Attention:
    	
 
    	
Jinbo Yao
    
	
Fax Number:
    	
 
    	
(86)-10-6445-9926
    
	
Email:
    	
 
    	
yaojb@58.com
    

 

 

	
In case of the Investor:
    
	
 
    
	
c/o Warburg Pincus Asia LLC
    
	
Suite 6703 Two International Finance Centre 
    
	
8 Finance Street
    
	
Hong Kong
    
	
Attention:
    	
Julian Cheng
    
	
Fax Number:
    	
(852) 2521 3869
    
	
Email:
    	
julian.cheng@warburgpincus.com
    

 

 

56

 

EXHIBIT M

 

PARTICULARS OF DOMESTIC ENTERPRISE

 

	
Registered Company   Name:
    	
 
    	
BEIJING 58 INFORMATION   TECHNOLOGY CO., LTD.

(北京五八信息技术有限公司)
    
	
 
    	
 
    	
 
    
	
Company Number:
    	
 
    	
110108009196418
    
	
 
    	
 
    	
 
    
	
Registered Office:
    	
 
    	
No. 2   Pingfang Yi 108 Beiyuan Road, Chaoyang District, Beijing
    
	
 
    	
 
    	
 
    
	
Date of
   Incorporation:
    	
 
    	
December 12,   2005
    
	
 
    	
 
    	
 
    
	
Place of
   Incorporation:
    	
 
    	
Chaoyang Beijing
    
	
 
    	
 
    	
 
    
	
Legal   Representative:
    	
 
    	
Jinbo Yao
    
	
 
    	
 
    	
 
    
	
Directors:
    	
 
    	
Jinbo Yao
    
	
 
    	
 
    	
 
    
	
Registered   Capital:
    	
 
    	
RMB1,000,000
    
	
 
    	
 
    	
 
    
	
Shareholders:
    	
 
    	
Jinbo Yao, Jianbo   Su, Baoshan Wang, Mingke He and Beijing Wanglintong Information Technology   Co., Ltd. (北京网邻通信息技术有限公司)
    
	
 
    	
 
    	
 
    
	
Shareholding held   by
   each Shareholder (in
   Percentage) (on a
   Fully-Diluted Basis):
    	
 
    	
Jinbo Yao owns   34.79%;  
    Jianbo Su   owns 9.04%;  
    Baoshan   Wang owns 3.01%;  
    Mingke He   owns 39.82%; and  
    Beijing   Wanglintong Information Technology Co., Ltd. (北京网邻通信息技术有限公司) owns 13.34%
    
	
 
    	
 
    	
 
    
	
Scope of Business:
    	
 
    	
互联网信息服务业务(除新闻、出版、教育、医疗保健、药品、医疗器械以外的内容);技术推广服务;利用自有媒介发布广告
    
	
 
    	
 
    	
 
    
	
Branches:
    	
 
    	
Changsha, Chengdu,   Dalian, Guangzhou, Harbin, Jinan, Nanjing, Qingdao, Shanghai, Shenzhen,   Shenyang, Shijiazhuang, Suzhou, Wuhan, Chongqing, Tianjin, Zhengzhou,   Nanning, Wuxi, Zhongshan, Changchun, Dongguan, Foshang, Nanchang, Taiyuan,   Xiamen, Hangzhou and Hefei
    
	
 
    	
 
    	
 
    
	
Subsidiaries:
    	
 
    	
北京同城通信息技术有限公司
    

 

 

EXHIBIT N

 

PARTICULARS OF DOMESTIC SUBSIDIARIES

 

	
Registered Company
   Name:
    	
 
    	
北京同城通信息技术有限公司
    
	
 
    	
 
    	
 
    
	
Company Number:
    	
 
    	
110108009471194
    
	
 
    	
 
    	
 
    
	
Registered Office:
    	
 
    	
Suite 1105E,   Building 1, No.39 Anding Road, Chaoyang District, Beijing
    
	
 
    	
 
    	
 
    
	
Date of
   Incorporation:
    	
 
    	
April 6, 2006
    
	
 
    	
 
    	
 
    
	
Place of
   Incorporation:
    	
 
    	
Chaoyang Beijing
    
	
 
    	
 
    	
 
    
	
Legal   Representative:
    	
 
    	
Jinbo Yao
    
	
 
    	
 
    	
 
    
	
Directors:
    	
 
    	
Jinbo Yao
    
	
 
    	
 
    	
 
    
	
Registered   Capital:
    	
 
    	
RMB100,000
    
	
 
    	
 
    	
 
    
	
Shareholders:
    	
 
    	
The Domestic   Enterprise
    
	
 
    	
 
    	
 
    
	
Shareholding held   by
   each Shareholder (in
   Percentage) (on a
   Fully-Diluted Basis):
    	
 
    	
100%
    
	
 
    	
 
    	
 
    
	
Scope of Business:
    	
 
    	
技术推广服务;计算机系统服务;市场调查。
    
	
 
    	
 
    	
 
    
	
Branches:
    	
 
    	
None
    
	
 
    	
 
    	
 
    
	
Subsidiaries:
    	
 
    	
None

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00221-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00221-of-00352.parquet"}]]