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Exhibit 10.3
MARSEC HOLDINGS, INC.
(a Cayman Islands Company)
SHAREHOLDERS' AGREEMENT
Dated as of September 15, 2000
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SHAREHOLDERS AGREEMENT
This SHAREHOLDERS' AGREEMENT, dated as of September 15, 2000, (the
"Agreement"), is entered into by and among MARSEC Holdings, Inc., a Cayman
Islands company (the "Company"), the individuals set forth on the signature page
hereof (collectively, the "Founders," and each a "Founder") and AsiaInfo
Holdings, Inc., a Delaware corporation (the "Parent"). The Founders and the
Parent may individually be referred to herein as "Shareholder" or collectively
as the "Shareholders."
WHEREAS, the authorized capital of the Company consists of 3,000,000
shares, of which 2,000,000 are ordinary shares, par value US$0.01 per share (the
"Ordinary Shares"), and 1,000,000 are series a preferred shares, par value
US$0.01 per share (the "Preferred Shares");
WHEREAS, in consideration of services they have rendered and will
render to the Company pursuant to the terms of those certain employment
agreements to be entered into by and between the Company and each of the
Founders (the "Employment Agreements"), the Company has issued an aggregate of
250,000 Ordinary Shares to the Founders pursuant to the terms of the Employment
Agreements, representing 25% of the currently issued and outstanding Shares (as
defined below) of the Company;
WHEREAS, in consideration of US$2,000,000 the Company has issued
750,000 Preferred Shares to the Parent, representing 75% of the currently issued
and outstanding Shares of the Company, together with a warrant dated as of
September 15, 2000 (the "Warrant") to purchase an additional 200,000 Preferred
Shares;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and intending to be legally bound hereby, the
parties hereto agree as follows:
Section 1. Defined Terms. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"Agreement" shall mean this Agreement, as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Board" shall have the meaning given to such term in Section 5.01 hereof.
"Bona Fide Offer" shall have the meaning given to such term in Section
3.07 hereof.
"Business Day" shall mean any calendar day on which banks in Beijing are
open for business.
"Commission" shall mean the United States Securities and Exchange
Commission.
"Directors" shall have the meaning given to such term in Section 5.01
hereof.
"Excluded Shares" shall have the meaning given to such term in Section
3.03 hereof.
"First Offer Price" shall mean the price at which the Ordinary Shares or
the Preferred Shares were first offered pursuant to Section 3.06 hereof.
"Initial Public Offering" shall mean the first time a registration
statement filed by the Company under the Securities Act, in respect of a firm
commitment underwritten public offering of Shares, is declared effective by the
Commission and the sale of such Shares by the Company in such offering is
consummated or any public
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offering of ordinary shares and/or preferred shares on an internationally
recognized stock exchange is completed.
"Initial Public Offering Date" shall mean the date on which the Initial
Public Offering is consummated.
"Memorandum of Association" shall mean the Company's Memorandum and
Articles of Association as filed with the Registrar of the Cayman Islands on
August 11, 2000, as the same may be amended from time to time.
"Offered Securities" shall have the meaning given to such term in Section
3.06 hereof.
"Offering Shareholder" shall have the meaning given to such term in
Section 3.06 hereof.
"Person" shall mean any natural person, company, corporation, limited
liability company, association, partnership, organization, business, firm, joint
venture, trust, unincorporated organization or any other entity or organization,
including a government or any political subdivision, department or agency of any
government.
"Preemptive Notice" shall have the meaning given to such term in Section
3.08 hereof.
"Preemptive Shares" shall have the meaning given to such term in Section
3.08 hereof.
"Proportionate Amount" shall have the meaning given to such term in
Section 3.08 hereof.
"Reoffer Notice" shall have the meaning given to such term in Section 3.06
hereof.
"Reoffer Price" shall have the meaning given to such term in Section 3.06
hereof.
"Restricted Shares" shall have the meaning given to such term in Section
3.02 hereof.
"Rule 144" shall mean Rule 144 promulgated by the Commission under the
Securities Act, or any successor federal statute, as the same shall be in effect
from time to time.
"Section 3.06 Closing" shall have the meaning given to such term in
Section 3.06 hereof.
"Section 3.06 Closing Date" shall have the meaning given to such term in
Section 3.06 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Shares" shall mean the Ordinary Shares and/or the Preferred Shares, as
applicable.
"Shareholder" shall have the meaning given to such term in the recital
hereof.
"Transfer" shall mean the making of any sale, exchange assignment or gift
of the granting of any security interest, pledge or other encumbrance in, or of
the creation of, any voting trust or other agreement or arrangement with respect
to the transfer of voting rights in, the Shares, or the creation of any other
claim thereof
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or any other transfer or disposition whatsoever, whether voluntary or
involuntary, affecting the right, title or interest or possession in or to the
Shares.
"Transfer Notice" shall have the meaning given to such term in Section
3.06 hereof.
Section 2. Representations and Warranties. Each Shareholder (in respect of
itself only and not in respect of any other Shareholder) represents and warrants
to the other Shareholders and the Company, and the Company represents and
warrants to each Shareholder, as follows:
2.01. Good Standing. If it is not a natural person, it is duly
incorporated and validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the corporate power to enter into
and perform its obligations under this Agreement.
2.02. Authorization of Agreement. It has full power and authority to
execute, deliver and perform this Agreement and the documents contemplated
hereby. If it is not a natural person, the execution, delivery and performance
of this Agreement and the documents contemplated hereby and the consummation of
the transactions contemplated hereby and thereby have been duly and validly
authorized by it and no other action on its part is necessary. This Agreement
and the documents contemplated hereby to which it is a party have been duly
executed and delivered by it and constitutes its valid and binding obligation
and are enforceable against it in accordance with their respective terms.
2.03. No Conflicts. The execution, delivery and performance of this
Agreement by such Shareholder or the Company (as the case may be) and the
consummation of the transactions contemplated hereby will not (with or without
the giving of notice, lapse of time, or both): (i) with respect to any
Shareholder which is not a natural person, violate or conflict with any of the
provisions of its governing documents; (ii) will not conflict with, result in a
breach of, or constitute a default under any applicable law, judgment, order,
ordinance, decree, rule, regulation, or ruling of any court or governmental
instrumentality applicable to such Shareholder; or (iii) conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of any agreement, instrument, license, or permit to which
such Shareholder is a party or by which such Shareholder or any of its assets or
properties may be bound.
Section 3. Transfer of Shares.
3.01. Legend. (a) Each certificate evidencing the Shares (other
than Excluded Shares) shall be stamped or imprinted with a legend
substantially as follows:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER
THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE TRANSFER
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE
CONDITIONS SPECIFIED IN THE SHAREHOLDERS AGREEMENT DATED AS OF
SEPTEMBER 15, 2000. A COPY OF SUCH CONDITIONS WILL BE FURNISHED BY
THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT
CHARGE. THESE SECURITIES MAY BE RESOLD OR TRANSFERRED ONLY (1)
PURSUANT TO THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, (2) OUTSIDE THE
UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES
ACT, (3) IN RELIANCE UPON ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT SUBJECT, IN EACH
CASE DESCRIBED ABOVE, TO THE RECEIPT BY THE COMPANY OF ANY NECESSARY
CERTIFICATIONS OR ENDORSEMENTS RELATING TO COMPLIANCE WITH THE
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RESTRICTIONS ON TRANSFER APPLICABLE TO THE SECURITIES AND, IN THE
CASE OF ANY TRANSFER PURSUANT TO CLAUSES (1) AND (3) ABOVE, AN
OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, OR (4) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH APPLICABLE STATE AND OTHER SECURITIES
LAWS.
3.02. Securities Act Compliance. Each Shareholder who is a holder of
a certificate evidencing Shares which bears the restrictive legend set forth in
Section 3.01 above (the "Restricted Shares"), and who proposes to Transfer any
Restricted Shares, shall give written notice (the "Sale Notice") to the Company
of such Shareholder's intention to effect such transfer. Each such notice shall
describe the manner and circumstances of the proposed sale or other disposition
in sufficient detail and may be accompanied by an opinion of legal counsel to
the Shareholder. Promptly upon receipt of the Sale Notice, the Company shall
present a copy thereof (together with any accompanying opinion of legal counsel
to the Shareholder) to its legal counsel, and, subject to the additional
restrictions on Transfer of the Shares set forth herein, the following
provisions shall apply:
(a) If, in the opinion of legal counsel to such Shareholder, such
opinion to be reasonably satisfactory in form and substance to the Company and
its legal counsel, or if such notice was not accompanied by an opinion of legal
counsel to the Shareholder, then, if, in the opinion of legal counsel to the
Company, the proposed sale or other disposition may be effected without
registering the Restricted Shares involved under the Securities Act or under
state securities laws (or equivalent laws in any other jurisdiction outside the
United States), such Shareholder shall be entitled to Transfer such Restricted
Shares in accordance with the terms of the notice delivered to the Company. The
Company will advise the Shareholder, within 10 business days after submission of
such notice, whether such Shareholder is entitled to so transfer the Restricted
Shares. If the Shareholder is entitled to so Transfer, he shall submit the share
certificate or certificates evidencing the Restricted Shares to be Transferred
to the Company in proper form for transfer and accompanied by appropriate
instruments of Transfer. Restricted Shares thus Transferred (and each of the
certificates evidencing any untransferred balance of the Restricted Shares not
so Transferred) shall bear the restrictive legend set forth in Section 3.1,
unless, in the opinion of both such legal counsel (or legal counsel to the
Company if the Shareholder did not present an opinion of its legal counsel),
such legend is not required by the applicable provisions of the Securities Act
or state securities laws; and
(b) If in the reasonable opinion of either of such legal counsel (or
legal counsel to the Company if the Shareholder did not present an opinion of
its legal counsel), the proposed Transfer cannot be effected without registering
the Restricted Shares involved under the Securities Act or state securities
laws, such Shareholder shall not offer to Transfer or Transfer such Restricted
Shares unless and until such Restricted Shares have been registered under the
Securities Act or state securities laws for such purpose.
3.03. Restrictions on Transfer. Until the Initial Public Offering
Date, no Shareholder shall Transfer any Shares to any person unless such
Transfer is made: (i) to a Permissible Transferee as defined in and in
accordance with the terms and provisions of Section 3.04; or (ii) in accordance
with the terms and provisions of Sections 3.06, 3.07 and 3.08. Any transferee of
Shares who receives Shares without violation of this Agreement, other than a
transferee who receives Shares in a public offering pursuant to an effective
registration statement filed pursuant to the Securities Act or in a public sale
of such Shares pursuant to Rule 144 (such Shares being "Excluded Shares") shall
(i) take and hold such Shares subject to this Agreement and to all the
obligations and restrictions upon the transferor, (ii) observe and comply with
this Agreement and with such obligations and restrictions, and (iii) as a
condition of Transfer, execute and deliver to the Company and each other
Shareholder a Joinder Agreement substantially in the form of Exhibit A hereto.
Notwithstanding any of the terms herein, each Parent and the
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Founders acknowledges that it has acquired the Shares for its own account and
not with a view to any direct or indirect resale or distribution thereof.
3.04. Permissible Transfers. Notwithstanding any provision (other
than Section 3.02) to the contrary contained in this Agreement, any Shareholder
(which term includes Permissible Transferees for the purposes of this
Agreement), may transfer Shares to: (i) a spouse or any lineal ancestor or
descendant of such Shareholder; (ii) the trustee or trustees of a trust or
trusts at any time established for the primary benefit of such Shareholder or
the spouse or any lineal ancestor or descendant of such Shareholder, provided
that each and every trustee who may vote any Shares shall be such Shareholder or
a person referred to in this Section 3.04 or a bank or trust Company; (iii) if
the Shareholder is a trust, to the beneficiaries of such trust, their spouses,
lineal descendants and trusts for the benefit of any of them or to any
Shareholder; (iv) a partnership, each general and limited partner of which is,
or a limited liability Company, each member of which is, a Shareholder and/or
one or more of the persons referred to in this Section 3.04 (other than a bank
or trust Company); provided, however, that any such trust, partnership or
limited liability Company shall have no terms inconsistent with the obligations
of the transferor Shareholder under this Agreement. Furthermore, notwithstanding
anything to the contrary herein, nothing in this Agreement shall restrict
transfers (i) to the personal representative of a Shareholder (A) upon the death
of such Shareholder for purposes of administration of such Shareholder's estate
or (B) upon the incompetency of such Shareholder for purposes of the protection
and management of such Shareholder's assets, but such personal representative
may not Transfer such Shares other than as permitted under this Agreement; or
(ii) that are required under law or judicial order. In addition, any Shareholder
may transfer Shares to any limited partnership with the same general partner, or
to any company that directly, or indirectly, controls or is controlled by or is
under ordinary control with the Shareholder, where ownership of 50% or more of
the voting securities of a company shall constitute control. Any person
receiving any Shares in a transaction pursuant to this Section 3.04 is herein
referred to as a "Permissible Transferee" with respect to such transaction, and
shall execute and deliver to the Company and each of the Shareholders a Joinder
Agreement substantially in the form of Exhibit A hereto.
3.05. Failure to Comply. Any purported Transfer of Shares in
violation of this Agreement shall be void and of no force or effect, and no
such Transfer shall be made or recorded on the books of the Company.
3.06. Rights of First Offer.
(a) Right of First Offer. Except as provided in Section 3.04,
no Shareholder shall Transfer or accept an offer to Transfer any Shares to
any person unless:
(i) If the proposed transferor Shareholder (hereinafter
referred to as the "Offering Shareholder") shall at any time desire to directly
or indirectly Transfer the Shares owned by the Offering Shareholder other than
to a Permissible Transferee pursuant to Section 3.04, such Offering Shareholder
shall first give written notice (the "Transfer Notice") to the Company, which
Transfer Notice shall state (x) such Offering Shareholder's desire to make such
Transfer, (y) the number of Shares proposed to be transferred (the "Offered
Securities"), and (z) the consideration and other material terms and conditions
(the "First Offer Price") which such Offering Shareholder proposes to be paid
for such Offered Securities. If the Offering Shareholder fails to give the
Transfer Notice with respect to any such proposed transfer of his Shares, then
any such purported transfer shall be void and shall not be made or recorded on
the books of the Company.
(ii) Subject to Section 3.06(a)(vii) and other relevant laws,
upon the giving of a Transfer Notice, the Company shall have the irrevocable and
exclusive option, but not the obligation, to purchase all, but not less than
all, of the Offered Securities at the First Offer Price. Such option shall be
exercised by so notifying the Offering Shareholder (with copies to all other
Shareholders) within 30 days of the delivery of the Transfer Notice failing
which, such option shall automatically lapse and terminate. Failure by the
Company to
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deliver the notice required by this Section 3.06(a)(ii) shall be deemed an
election not to purchase the Offered Securities.
(iii) If the Company exercises its option to purchase all, but
not less than all, of the Offered Securities at the First Offer Price or the
Reoffer Price (as defined below), the Company shall repurchase such Shares (a
"Section 3.06 Closing") not later than 60 days after the date of the notice
copy, or if later, the fifth Business Day after all applicable governmental and
third party permits, approvals and notices have been given or obtained, relevant
laws complied with, and all legally required waiting periods have expired (a
"Section 3.06 Closing Date"), and the Company shall pay to the Offering
Shareholder in accordance with the provisions of Section 3.06(b) the total
amount of the First Offer Price in respect of all of the Offered Securities so
repurchased. Upon such repurchase, the Offered Securities shall be cancelled.
(iv) If the Company does not exercise its option to repurchase
the Offered Securities at the First Offer Price, then the Offering Shareholder
shall give a Transfer Notice to the other Shareholders (any such recipient of a
Transfer Notice, an "Offeree Shareholder"), which Transfer Notice shall state
the information as set forth in paragraph (i) of this Section. If the Offering
Shareholder fails to give the Transfer Notice with respect to any such proposed
transfer of his shares, then any such proposed transfer shall be void and shall
not be made or recorded on the books of the Company.
(v) Subject to Section 3.06(a)(vii), upon the giving of a
Transfer Notice, each of the Offeree Shareholders, as a group, shall have the
irrevocable option, but not the obligation, to purchase all (but not less than
all) of the Offered Securities at the First Offer Price on a pro rata basis,
based on such Offeree Shareholder's percentage equity interest at such time.
Such option shall be exercised by so notifying the Offering Shareholder (with
copies to all other Shareholders) within 15 days of the delivery of the Transfer
Notice, failing which, such option shall automatically lapse and terminate in
respect of the relevant Offeree Shareholder. Failure by the applicable Offeree
Shareholder to deliver the notice required by this Section 3.06(a)(v) shall be
deemed an election not to purchase the Offered Securities and the other Offeree
Shareholders may then purchase the balance of such Offered Securities on a
first-come, first-serve basis.
(vi) If no Offeree Shareholders exercise their option to
purchase the Offered Securities at the First Offer Price or if options are
exercised in respect of any part of the Offered Securities, then the Offering
Shareholder who has duly given such Transfer Notice shall be entitled, for a
period of 60 days beginning on the earlier of (x) the third day after the last
date for the giving of a written notice of exercise by the Offeree Shareholders
pursuant to paragraph (v) of this Section or (y) the date such Offering
Shareholder shall have received written notices from the Offeree Shareholders
stating that the Offeree Shareholders do not intend to exercise the option
granted under this Section, to enter into definitive agreements to Transfer all
or less than all of the Offered Securities, at a price equal to or greater than
the First Offer Price and on the other terms and conditions set out in the
Transfer Notice.
(vii) In the event that, prior to the expiration of the 60-day
period referred to in paragraph (vi) of this Section, an Offering Shareholder
wishes to Transfer any Offered Securities at a price that is less than the First
Offer Price specified by such Offering Shareholder, such Offering Shareholder
shall not Transfer any of the Offered Securities at such lesser price unless
such Offering Shareholder shall first reoffer such Offered Securities at such
lesser price to the Company by giving written notice (the "Reoffer Notice") to
the Company of such selling Offering Shareholder's intention to make such
Transfer at such lower price (the "Reoffer Price"). The Company shall then have
an irrevocable and exclusive option to purchase all of the Offered Securities at
the Reoffer Price, exercisable in the same manner as provided in paragraph (ii)
of this Section except that the Company's option under this paragraph (vii)
shall be exercisable for 15 days after the Reoffer Notice has been received by
the Company. If the Company does not then elect to repurchase all of the Offered
Securities, then the Offering Shareholders shall give the Reoffer Notice to the
Offeree Shareholders. The Offeree Shareholders
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shall then have an irrevocable and exclusive option to purchase all of the
Offered Securities at the Reoffer Price on a pro rata basis, exercisable in the
same manner as provided in paragraph (v) of the Section, except that the Offeree
Shareholder's option under this paragraph (vii) shall be exercisable for 15 days
after the Reoffer Notice has been received by the Purchasers. The Offering
Shareholder shall be entitled for a period beginning on the earlier of (x) the
third day after the last date for the giving of a written notice of exercise by
the Offeree Shareholders in response to the Reoffer Notice pursuant to this
paragraph (vii) or (y) the date such Offering Shareholder shall have received
written notice from the Offeree Shareholder stating that the Offeree Shareholder
does not intend to exercise the option granted under this Section, and ending on
the later of (x) 30 days thereafter or (y) the end of the period referred to in
paragraph (iv) of this Section to enter into a definitive agreement to Transfer
to any third party all or any part of the Offered Securities, at a price equal
to or greater than the Reoffer Price and on the other terms and conditions set
out in the Reoffer Notice or Transfer Notice.
(viii) If neither the Company nor any of the Offeree
Shareholders exercise their option to purchase all of the Offered Securities at
the First Offer Price or the Reoffer Price, and the Offering Shareholder
desiring to Transfer shall not have Transferred all of the Offered Securities
for any reason before the expiration of the period described in paragraph (vii)
of this Section in the event of a Reoffer, or, if no Reoffer Notice is given,
the 30-day period described in paragraph (vi) of this Section, then no Transfer
subject to this Section (including Transfers of any Shares that were previously
deemed Offered Securities) by such Offering Shareholder thereafter shall be
consummated unless all of the provisions of this Section are again complied
with.
(ix) If the Offeree Shareholders exercise their option to
purchase all of the Offered Securities at the First Offer Price or the Reoffer
Price, the Company shall record the transfer of those Shares to such exercising
Offeree Shareholders (a "Section 3.06 Closing") in the Company's register of
members, not later than 30 days after the date of the notice of exercise, and
the Offering Shareholder shall deliver to the Offeree Shareholder certificates
for those shares and duly executed instruments of transfer (a "Section 3.06
Closing Date").
(x) If the exercising Offeree Shareholders shall have elected
to purchase a number of the Offered Securities at the first Offer Price or the
Reoffer Price which, in the aggregate, exceeds the number of Offered Securities
available, such Offered Securities shall be allocated, pro rata, in the same
proportion that the number of Shares owned by each such exercising Offeree
Shareholder bears to the total number of Shares owned by all such exercising
Offeree Shareholders on the date of delivery of the Transfer Notice.
(b) Payment, Delivery of Certificates, etc.
(i) If any party hereto purchases any Shares pursuant to the
provisions of this Section 3.06, at the Section 3.06 Closing, such party shall
pay the purchase price in the manner set forth in the Transfer Notice.
(ii) At the Section 3.06 Closing, the transferor Shareholder
shall deliver to the party hereto, duly endorsed instrument of transfer and
original certificates for all of the Shares being purchased by such party and
sold at such Section 3.06 Closing and, in addition, such signature guarantees
and other documents as may be reasonably requested in order to confirm the
transferor Shareholder's title to such Shares and his authority to act in
connection with the sale thereof.
3.07. Tag-Along. Until the Initial Public Offering Date, no
Shareholder shall voluntarily Transfer 10% or more of the Company's share
capital to any person pursuant to a bona fide offer to purchase Shares by a
third party (a "Bona Fide Offer") unless such Transfer is made in accordance
with this Section 3.07.
(a) The proposed transferor Shareholder shall afford each other
Shareholder (the "Other Shareholders") the opportunity to sell, in the same
transaction contemplated by the Bona Fide Offer, at the same price and on the
same
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terms, the same proportion of the number of Shares being sold pursuant to the
Bona Fide Offer as the total number of Shares owned by such Other Shareholders
bears to the total number of Shares owned by all ordinary Shareholders on such
date.
(b) Each Other Shareholder shall, within 15 days of the date of
delivery of the Transfer Notice pursuant to Section 3.06, notify the proposed
transferor Shareholder of its election to sell its Shares pursuant to Section
3.07(a). The failure by any Other Shareholder to deliver a notice pursuant to
this Section 3.07(b) shall be deemed an election by such Other Shareholder not
to sell the Shares owned by it pursuant to Section 3.07(a).
3.08. Pre-emptive Rights. Except as otherwise provided herein, and
except for Shares to be made available for compensation purposes pursuant to the
Stock Option Plan (as defined in Section 4.01 below) and acquisitions approved
by the Board or which are otherwise permitted under that Section, the Company
shall not offer, issue or sell, or enter into any agreement or commitment to
offer, issue or sell any of its shares or any options, rights or other
securities to acquire any such shares (collectively, the "Preemptive Shares"),
unless the Company shall first offer in writing to sell to each of the
Shareholders, on the same terms and conditions and at the same equivalent price,
the number of shares equal to the Proportionate Amount (as defined below);
provided that in the event a Shareholder elects not to exercise its rights
pursuant to this Section 3.08, whether in full or in part, each other
Shareholder shall have the right to subscribe for such non-electing
Shareholder's Proportionate Amount. In the event the subscription by each other
Shareholder for the non-electing Shareholder's Proportionate Amount exceeds the
Proportionate Amount, each other Shareholder shall be entitled to subscribe for
the pro rata portion of such Proportionate Amount based on the number of Shares
held by each Shareholder on such date. The "Proportionate Amount" shall be equal
to the product of (x) all such shares and securities to be sold or issued and
(y) a fraction (i) the numerator of which shall be the number of Shares owned by
such Shareholder and (ii) the denominator of which shall be the aggregate number
of outstanding Shares. Such offer shall remain outstanding for at least 14 days
from the date of such written notice and shall be exercised by a Shareholder
giving written notice to the Company within such 14 day period (a "Preemptive
Notice"). Following the completion of such 14 day period, the Company shall have
the right, for a period of 60 days to sell any Preemptive Shares not purchased
by existing Shareholders, on substantially similar terms and at a price per
share not less than the per share price in respect of the Preemptive Shares
offered to such Shareholders. Thereafter, any offer, sale or issuance of
Preemptive Shares shall again be subject to the provisions of this Section 3.08.
The terms of this Section 3.08 shall terminate and be null and void on the date
that Initial Public Offering is completed.
Section 4. Employee Stock Option Plan and Award Agreement. As a way to
incentivize employees of the Company, the Company shall implement an employee
share option plan (the "Stock Option Plan") to be approved by the Board. Unless
otherwise approved by the Board, the total number of option shares issuable
under such Stock Option Plan shall not exceed 200,000 Ordinary Shares (the
"Stock Option Plan Limit").
Section 5. Corporate Governance.
5.01. Board of Directors. (a) The Board of Directors of the Company
(the "Board") shall initially consist of five directors (the "Directors"). The
Parent shall have the right to designate three Directors and the Founders shall
have the right to designate two Directors. The Board shall hold regular meetings
to be held at the Company's offices in Beijing or such other location as
determined by the Board, not less than quarterly.
(b) As of the date hereof, the individuals designated in Schedule A
hereto are appointed as Directors of the Company.
(c) The Board shall have two standing committees: (i) an audit
committee and (ii) a compensation committee, each of which shall initially be
comprised of such members as designated in Schedule A hereto.
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5.02. Termination of Employee/Director. In the event the Board is
considering the termination of any employee of the Company for cause who is also
a member of the Board, the affected employee/Director shall not be entitled to
vote as a Board member during the consideration of his/her termination.
5.03. Management. The Parent shall have the right to appoint the
Chief Financial Officer and the Director of Human Resources of the Company.
5.04 Independent Auditors. The Parent shall have the right to
appoint the independent auditors of the Company. As of the date hereof, the
independent auditors specified in Schedule A hereto are appointed as independent
auditors of the Company.
Section 6. Confidentiality. Each Parent agrees that it will keep
confidential and will not disclose or divulge any confidential, proprietary or
secret information, including any plans of the Company to conduct the Initial
Public Offering, which such Parent may obtain from the Company about the Company
or any of its Subsidiaries pursuant to financial statements, reports and other
materials submitted to the Parent, unless such information is known, or until
such information becomes known, to the public.
Section 7. Binding Effect, No Third Party Beneficiaries. This Agreement
and all of the provisions hereof shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors, heirs,
executors, administrators and permitted assigns, as the case may be, whether so
expressed or not, except as specifically otherwise provided. In addition,
whether or not any express assignment shall have been made, the provisions of
this Agreement shall also be binding upon, for the benefit of, and enforceable
by any subsequent holder of any of the Shares other than a holder who acquired
his Shares (i) in a transaction for which a registration statement under the
Securities Act was effective at the time or in a sale complying with Rule 144 or
(ii) in contravention of the provisions hereof.
Section 8. Notices. All notices or other documents which are required or
contemplated by this Agreement shall be personally delivered, sent by certified
or registered first class mail, sent by reputable overnight delivery service, or
by facsimile (with confirmation copy sent by reputable overnight delivery
service unless receipt of the facsimile is confirmed), in all cases with postage
or charges prepaid, to the parties entitled to receive such notices at the
addresses set forth on the signature page hereof, or at such other address as
such party is directed to send notices by a notice given in conformity with the
requirements of this Section 8. Any such notice shall be deemed to have been
received (i) if mailed by certified or registered first class mail, on the
fourth business day after the post-marked date thereof, (ii) if sent by
overnight delivery service, on the business day following delivery of the notice
to the delivery service, (iii) if given by personal delivery, at the time it is
delivered, or (iv) if sent by facsimile, on the business day immediately
following the sending.
Section 9. Entire Agreement; Amendment. This Agreement, the schedules and
exhibits hereto, represent the entire understanding of the parties with respect
to the subject matter hereof. No termination, revocation, waiver, modification,
amendment or supplement to this Agreement shall be binding unless (i) in writing
and signed by the Company, and (ii) consented to in writing by the holders of
75% of the Ordinary Shares and the Preferred Shares outstanding.
Section 10. Governing Law. This Agreement shall be interpreted and
construed in accordance with the laws of New York without regard to its
conflicts of laws provisions to the extent such provisions would cause the laws
of another jurisdiction to apply.
Section 11. Arbitration. Any dispute, claim or difference of any kind
whatsoever arising out of or in connection with this Agreement, including any
question in connection with the existence, construction, interpretation,
validity, termination or implementation of this Agreement, shall be referred to
and finally settled by arbitration by China International Economic and Trade
Arbitration
<PAGE> 11
Commission in Beijing ("CIETAC") in accordance with CIETAC's rules in effect at
the time of the application for arbitration.
Section 12. Interpretation. As used in this Agreement, the masculine
gender shall include the feminine or neuter gender and the plural shall include
the singular wherever appropriate. The titles of the paragraphs and sections
have been inserted as a matter of convenience of reference only and shall not
control or affect the meaning or construction of any of the terms or provisions
hereof. Nothing herein shall be construed against or more favorably toward any
party by reason of any party having drafted this Agreement or any portion
hereof.
Section 13. Severability. Any provision of this Agreement that is invalid,
illegal or unenforceable in any jurisdiction shall be automatically reformed and
construed so as to be valid, operative and enforceable to the maximum extent
permitted by law, or if no reformation is permissible, shall be ineffective to
the extent of such invalidity, illegality or unenforceability without
invalidating or rendering unenforceable the remaining provisions of this
Agreement, and any such invalidity, illegality or unenforceability shall not, of
itself, affect the validity, legality or enforceability of such provision in any
other jurisdiction.
Section 14. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall constitute one and the same instrument.
Section 15. Specific Performance. Each of the parties hereto recognizes
and acknowledges that a breach of covenants or agreements contained in this
Agreement will cause the aggrieved party to sustain injury for which it would
not have an adequate remedy at law for money damages. Therefore each of the
parties hereto agrees that, in the event of any such breach, the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and preliminary and permanent injunctive and other equitable relief
in addition to any other remedy to which it may be entitled, at law or in
equity, and each of the parties hereto further agrees to waive any requirement
for the securing or posting of any bond in connection with the obtaining of any
such injunctive or other equitable relief.
Section 16. No Waiver. No failure or delay on the part of any of the
parties in exercising any right or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power
preclude any other right or power.
Section 17. Conflicts. To the extent the terms and conditions of this
Agreement are inconsistent with the Memorandum of Association or the terms and
conditions of any agreement among any shareholders of the Company which are also
parties to this Agreement, the terms and conditions of this Agreement shall
prevail.
Section 18. Notice and Cure. Each of the Shareholders, and the Company
will notify the other parties to this Agreement in writing of, and
contemporaneously will provide the other parties to this Agreement with true and
complete copies of any and all information or documents relating to, and will
use all commercially reasonable efforts to cure within 30 days after the
effective receipt of such notices by the other parties, any event, transaction
or circumstance occurring after the date of this Agreement that causes or will
cause any covenant or agreement of the Founders, the Parent or the Company, as
the case may be, under this Agreement to be breached as if the same were made on
or as of the date of such event, transaction or circumstance. Each of the
Shareholders and the Company also will notify the other parties to the Agreement
in writing within 30 days of, and will use all commercially reasonable efforts
to cure within 30 days after the effective receipt of such notices by the other
parties, any violation or breach of any covenant or agreement made by the
Shareholders, Founders or the Company, as the case may be, in this Agreement
occurring or arising after the date of this Agreement. No notice given pursuant
to this Section shall have any effect on the covenants or agreements contained
in this Agreement for purposes of determining satisfaction of any condition
contained herein.
<PAGE> 12
IN WITNESS WHEREOF, the parties hereto have duly executed this
Shareholders Agreement as of the day and year first above written.
MARSEC HOLDINGS, INC.
By: /s/ Fan Bao
--------------------------------------------
Name: Fan Bao
Title: Chairman of the Board
ASIAINFO HOLDINGS, INC.
By: /s/ Fan Bao
--------------------------------------------
Name: Fan Bao
Title: Vice President Business Development
YAN TING
/s/ Yan Ting
--------------------------------------------------
WANG WEIXUN
/s/ Wang Weixun
--------------------------------------------------
WU YUNKUN
/s/ Wu Yunkun
--------------------------------------------------
CHANG XIAOGUANG
/s/ Chang Xiaoguang
--------------------------------------------------
<PAGE> 13
ZHAO GUOFU
/s/ Zhao Guofu
--------------------------------------------------
WANG JIAN
/s/ Wang Jian
--------------------------------------------------
JIANG XIAOJUN
/s/ Jiang Xiaojun
--------------------------------------------------
GU MAOLIN
/s/ Gu Maolin
--------------------------------------------------
ZHANG GUANGLONG
/s/ Zhang Guanglong
--------------------------------------------------
<PAGE> 14
SCHEDULE A
MEMBERS OF THE BOARD OF DIRECTORS
FAN BAO (CHAIRMAN)
JI PING
JOHN HO
YAN TING
WANG WEIXUN
MEMBERS OF THE AUDIT COMMITTEE
FAN BAO
JI PING
JOHN HO
MEMBERS OF THE COMPENSATION COMMITTEE
FAN BAO
JI PING
JOHN HO
INDEPENDENT AUDITORS
DELOITTE TOUCHE TOHMATSU
<PAGE> 15
EXHIBIT A
JOINDER AGREEMENT
WHEREAS, the undersigned is acquiring simultaneously with the execution of
this Agreement ________ Ordinary Shares, par value US$0.01 per share, (the
"Ordinary Shares"), of MARSEC Holdings, Inc., a Cayman Islands corporation (the
"Company"), from an existing Shareholder;
WHEREAS, as a condition to the acquisition of the Ordinary Shares, the
undersigned has agreed to join in a certain Shareholders Agreement (the
"Shareholders Agreement") dated as of _______________, 2000 by and among the
Company and the Shareholders named therein;
WHEREAS, the undersigned understands that execution of this Agreement is a
condition precedent to the acquisition of the Ordinary Shares;
NOW, THEREFORE, the undersigned agrees to become a party to the
Shareholders Agreement and agrees to be bound by all of the terms and provisions
thereof as a Shareholder to the full extent that [the transferor] is bound
thereby and represents and warrants to the Company and the Shareholders as to
those matters set forth in Section 2 of the Shareholders Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement
this _________ day of _______________, _______.
