TABLE OF CONTENTS

 

1.	Definitions and Interpretations	1
2.	Sale and Purchase	9
3.	Purchase Price	9
4.	Conditions	13
5.	Closing	14
6.	Representations and Warranties	17
7.	Post-Closing Covenants	19
8.	Indemnification	22
9.	Confidentiality	25
10.	Further Assurance	25
11.	No Partnership	25
12.	Remedies	25
13.	Consents	26
14.	Costs	26
15.	Assignment	26
16.	Entire Agreement	26
17.	Amendment	26
18.	Notices	26
19.	Waiver	29
20.	Severability	30
21.	Counterparts	30
22.	Governing Law	30
23.	Dispute Resolution	30

 

 

THIS SHARE PURCHASE AGREEMENT (this “ Agreement ”) is made on October 8, 2008

 

AMONG:

 

(1)            China HR.com Holdings Ltd, a company established under the laws of the Cayman Islands with its registered office at Scotia Centre, 4th Floor, P.O. Box 2804, George Town, Grand Cayman, Cayman Islands (the “ Company ”);

 

(2)            the shareholders of the Company listed on Part I of Schedule 2 hereto (the “ Sellers ”);

 

(3)           Jiexian ZHANG, ([CHINESE CHARACTERS]) an individual with PRC Identity Card No. 510102196410128492 (“ Mr.  Jiexian Zhang ”); Jianguo ZHANG ([CHINESE CHARACTERS]), an individual with PRC Identity Card No. 620105630516101 (“ Mr. Jianguo Zhang ”); Xuebin LU ([CHINESE CHARACTERS]), an individual with PRC Identity Card No. 340825197305264615 (“ Mr. Xuebin Lu ”); Shengping TANG ([CHINESE CHARACTERS]), an individual with PRC Identity Card No. 110108197409170034 (“ Mr. Shengping Tang ”); Xiaowen ZHANG ([CHINESE CHARACTERS]), an individual with PRC Identity Card No. 650104196905140710 (“ Mr. Xiaowen Zhang ”);

 

(4)            Monster Worldwide Netherlands B.V., a company established under the laws of the Netherlands (the “ Purchaser ”);

 

(5)            Monster Worldwide Limited (formerly known as TMP Worldwide Limited), a company established under the laws of England (“ TMP ”);

 

(6)            the shareholders of the Company listed on Part II of Schedule 2 hereto (the “ ESOP Holders ”); and

 

(7)            Monster Worldwide, Inc., a Delaware corporation (“ MWI ”).

 

RECITALS

 

WHEREAS:

 

The Sellers and the ESOP Holders desire to sell or procure to be sold an aggregate of 30,907,569 ordinary shares of the Company with a par value of $0.05 per share (the “ Shares ”) registered in their names to the Purchaser, and the Purchaser desires to purchase the Shares from the Sellers and the ESOP Holders upon the terms and conditions set forth herein.

 

IT IS AGREED as follows:

 

1.              DEFINITIONS AND INTERPRETATIONS

 

1.1            Definitions.

 

In this Agreement, unless the context requires otherwise:

 

“ Accounts ” means, in relation to a Group Company, its Audited Accounts and its Management Accounts;

 

“ Affiliate ” means, in relation to any Person, any Person which is Controlled by, and Controls or is under common Control with, the first-mentioned Person;

 

“ Agreed Claim ” has the meaning given in Clause 3.5.2(a);

 

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“ Agreement ” has the meaning given in the Preamble;

 

“ AIC ” means the relevant PRC Administration for Industry and Commerce;

 

“ Approval ” means any written approval, authorization, concession, consent, certificate, license, permit, entitlement and the like of or from relevant PRC Authorities;

 

“ Applicable Laws ” means with respect to any Person or matter, any and all provisions of any constitution, treaty, statute, law, rules of common law or equity, legislation, regulation, ordinance, code, rule, judgment, order, decree, conditions of any Approval, requirement, directive, guideline, policy or other restriction or any decision of, or determination by, or any interpretation or administration of any of the foregoing by any governmental, administrative, legislative judicial or securities regulatory authority, including any stock exchange, or board on which the Shares or any Person are listed, whether at the national or any local level, whether in effect as of the date hereof or thereafter and in each case as amended from time to time, applicable to such Person or matter;

 

“ Arbitrated Claim Amount ” has the meaning given in Clause 3.5.4;

 

“ Audited Accounts ” means, in relation to a Group Company, its audited financial statements for the financial year ending on December 31, 2007, a copy of which has been delivered to the Purchaser;

 

“ Business ” means the business of the Group Companies as operated as of the Closing Date;

 

“ Business Day ” means a calendar day (except Saturdays or Sundays) on which banks operating in the PRC, Hong Kong and the U.S. are open for ordinary business and dealings in inter-bank deposits and payments can take place;

 

“ BVI HoldCo ” means China-HR.com Corporation, a company established under the laws of the British Virgin Island with its registered office at P.O. Box 957, Offshore Incorporation Centre, Road Town, Tortola, British Virgin Islands;

 

“ Cash Balance” means the aggregate cash and bank balances of the Group Companies taken as a whole as of the end of the Closing Date, which, for the avoidance of doubt, shall not include the amount of RMB2,074,239.50 (which is the amount deposited with E-Career Beijing to pay the individual income tax liabilities of the ESOP Holders with respect their option exercises) but shall include the ESOP Exercise Price;

 

“ China ” or “ PRC ” means the People’s Republic of China but excluding, for the purposes of this Agreement, Hong Kong, the Macau Special Administrative Region and Taiwan;

 

“ Claim ” has the meaning given in Clause 8.1.8;

 

“ Close Relatives ” means in relation to any individual, such individual’s spouse, parents, siblings and children (including step children);

 

“ Closing ” means the taking of the steps referred to in Clause 5;

 

“ Closing Date ” means the date on which all the Conditions are satisfied (other than those Conditions which have been waived in accordance with this Agreement, and those Conditions whose satisfaction by their terms or nature can only be determined on such date), or such other date as may be agreed between the Parties in writing;

 

“Company ” has the meaning given in the Preamble;

 

“Condition ” means a condition set out in Clause 4.1;

 

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“ Contract ” means any agreement, lease, evidence of Indebtedness, mortgage, indenture, security agreement or other contract (whether written or oral);

 

“ Contributing Seller ” has the meaning given in Clause 3.3;

 

“ Control ” means, in relation to a Person (other than a natural person): (i) the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person whether through the ownership of voting securities, by contract, credit arrangement or proxy, or as trustee, executor, agent or otherwise; (ii) the possession, directly or indirectly, of more than one-half of the voting power of such Person (or more than twenty-five percent (25%) of such voting power for the purposes of Clause 7.2.3); or (iii) the power, directly or indirectly, to appoint a majority of the members of, or otherwise control, the board of directors or similar governing body of such Person (or more than twenty-five percent (25%) of the members of such governing entity for the purposes of Clause 7.2.3);

 

“ Counter Notice ” has the meaning given in Clause 3.5.2(a);

 

“ Directors ” means the directors from time to time of any Group Company; and each is referred to as a “ Director ”;

 

“ Disclosure Schedule ” means the schedule of exceptions, dated the date of this Agreement, attached as Schedule 7;

 

“ Disputed Claim ” has the meaning given in Clause 3.5.2(b);

 

“ Dispute Period ” has the meaning given in Clause 3.5.2(a);

 

“ DOC ” has the meaning given in Clause 18.5.1, Part II of Schedule 3;

 

“ E-Career Beijing ” means E-career (Beijing), Ltd. ([CHINESE CHARACTERS]), a cooperative joint venture established under the laws of the PRC with its registered office at Rooms 810 and 812, Yanyuan Resources Tower, 151 Zhongguancun North Street, Haidian District, Beijing, PRC;

 

“ E-Career Shanghai ” means E-career Network Technology (Shanghai) Co., Ltd. ([CHINESE CHARACTERS]), a cooperative joint venture established under the laws of the PRC with its registered office at Room 108, No. 3618, Tanglu Road, Pudong District, Shanghai, PRC;

 

“ E-Career Suzhou ” means E-career (Suzhou) Co., Ltd. ([CHINESE CHARACTERS]) a wholly foreign-owned enterprise established under the laws of the PRC with its registered office at 8 ^th Floor, Phase III of International Technology Park, No. 328 Jichang Road, Suzhou Industrial Park, Suzhou, PRC;

 

“ E-Channel Beijing ” means Beijing E-Channel Enterprise Management Consulting Co., Ltd. ([CHINESE CHARACTERS]), a domestic limited liability company established under the laws of the PRC with its registered office at 4 ^th Floor, Tower 2, CITIC Tower, No. 19 Jianguomenwai Street, Chaoyang District, Beijing, PRC;

 

“ Encumbrance ” means any mortgage, assessment, security interest, lease, charge, pledge, lien, hypothecation, easements, rights of way, retention of title, conditional sale, adverse claim or levy, or other encumbrance of any kind, or any conditional sale Contract, title retention Contract or other Contract to give any of the foregoing, whether arising by operation of law or otherwise; and shall

 

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include any agreement, commitment or arrangement to create or effect any of the above; and “ Encumber ” shall be construed accordingly;

 

“ ESOP Cash Amount ” has the meaning given in Clause 3.2(ii);

 

“ ESOP Exercise Price ” has the meaning given in Clause 3.2(iv);

 

“ ESOP Holders ” has the meaning given in the Preamble;

 

“ Escrow Account ” has the meaning given in Clause 3.3;

 

“ Escrow Agent ” has the meaning given in Clause 3.3;

 

“ Escrow Amount ” has the meaning given in Clause 3.3;

 

“ Escrow Agreement ” means that certain Escrow Agreement by and among JPMorgan Chase, the Seller Representatives and the Purchaser dated as of October 6, 2008;

 

“ Escrow Fees ” has the meaning given in Clause 3.5.6;

 

“ Escrow Period ” has the meaning given in Clause 3.3;

 

“ ESOP Cash Amount ” has the meaning given in Clause 3.2(ii);

 

“ FCPA ” has the meaning given in Clause 18.3, Part II of Schedule 3;

 

“ First Company Board Resolutions ” has the meaning given in Clause 5.2.2(b);

 

“ Group Companies ” means the Company, BVI HoldCo, HKCo and the PRC Subsidiaries, the details for which are set forth in Schedule 1; and “ Group Company ” means any of the Group Companies;

 

“ HKCo ” means China HR.com (Hong Kong) Limited, a company established under the laws of Hong Kong, with its registered address at 9/F., Tung Ning Building, 249–253, Des Voeux Road, Central, Hong Kong;

 

“ HKIAC ” has the meaning given in Clause 23.2;

 

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

 

“ Indebtedness ” means of any Person means all obligations of such Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar instruments, (iii) for the deferred purchase price of goods or services (other than trade payables or accruals incurred in the ordinary course of business), (iv) under capital leases, or (v) in the nature of guarantees of the obligations described in clauses (i) through (iv) above of any other Person;

 

“ Indemnified Party ” has the meaning given in Clause 8.1.8;

 

“ Indemnifying Party ” has the meaning given in Clause 8.1.8;

 

“ Initial Sellers Cash Amount ” has the meaning given in Clause 3.2(i);

 

“ Internet Recruiting Business ” has the meaning given in Clause 7.2.3(a);

 

“ JPMorgan Chase ” means JPMorgan Chase Bank, National Association, Hong Kong Branch;

 

“ Key Employee ” means each of the Persons listed on Schedule 13;

 

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“ Last Accounting Date ” has the meaning given in Clause 6.3, Part II of Schedule 3;

 

“ Leased Properties ” means the properties (and their particulars) that are set out in Schedule 5;

 

“ Liable Seller ” has the meaning given in Clause 3.5.2(e);

 

“ Lists ” has the meaning given in Clause 18.5.1, Part II of Schedule 3;

 

“ Losses ” means any losses, liabilities, costs, expenses (including interest), charges, dues, actions, damages, injuries, claims, fines, penalties, late payment charges, demands, judgments, costs, expenses (including reasonable legal fees and other reasonable professional fees and disbursements), Taxes, deficiencies, suits or proceedings (including appeals);

 

“ Mr. Jiexian Zhang ” has the meaning given in the Preamble;

 

“ Mr. Jianguo Zhang ” has the meaning given in the Preamble;

 

“ Mr. Shengping Tang ” has the meaning given in the Preamble;

 

“ Mr. Xiaowen Zhang ” has the meaning given in the Preamble;

 

“Mr. Xuebin Lu ” has the meaning given in the Preamble;

 

“ Management Accounts ” means, in relation to a Group Company, its unaudited management accounts for the period commencing on the day after the period covered by its Audited Accounts and ending on July 31, 2008, a copy of which is attached as Schedule 8;

 

“ Management Shareholders ” means Union Advance Group Limited, Great Strategies Group Limited and Empire People Limited, and “ Management Shareholder ” means any one of them;

 

“ Management Warranties ” has the meaning given in Clause 6.2;

 

“ Material Adverse Change ” means any change, effect, event, circumstance or development (each a “Material Adverse Change ”, and collectively, “ Material Adverse Changes ”), individually or in the aggregate, and taken together with all other Changes, that is materially adverse to the business, assets, operations, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole;

 

“ Material Contracts ” means any Contract other than (i) Contracts for the purchase of supplies and services that were entered into in the ordinary course of business that do not involve more than Twenty-Five Thousand United States Dollars (US$25,000) and do not extend for more than one year beyond the date hereof, (ii) sales Contracts entered into in the ordinary course of business, (iii) Contracts terminable at will by such Group Company on no more than thirty (30) days’ notice without cost or liability to such Group Company which neither involve any employment or consulting arrangement nor are material to the conduct of the Company’s business, and (iv) Contracts provided for in this Agreement;

 

“ MWI ” has the meaning given in the Preamble;

 

“ Non-Management Shareholders ” means E-Career Holdings Ltd., Good Connection Enterprises Ltd., All United Consultants Limited, Surbiton Investments Ltd., Full Moon Resources Ltd., Macintosh Associates Ltd. and Beauchamp Int’l Limited; and “ Non-Management Shareholder ” means any one of them;

 

“Notice of Arbitration” has the meaning given in Clause 23.2;

 

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“ Notice of Claim ” means written notice of a Claim specifying in reasonable detail material aspects of the Claim (including the nature and basis of the Claim, the individual items included in the Claim, the date such item of the Claim was either paid, properly accrued, or arose, and the aggregate amount of the Claim or the Purchaser’s bona fide estimate of the amount of Claim);

 

“ OFAC ” has the meaning given in Clause 18.4, Part II of Schedule 3;

 

“ Order ” and “ Orders ” have the meaning given in Clause 18.4, Part II of Schedule 3;

 

“ Organizational Documents ” means with respect to any Person other than a natural person, the memorandum of association, articles of association, certificates of incorporation, registration certificates, by-laws, business license, shareholders’ agreement, joint venture contracts, partnership agreements and other agreements, certificates, instruments or documents, individually or collectively, pursuant to which such Person is established or organized, and/or which govern internal affairs of such Person, as may from time to time be amended;

 

“ Parties ” means the parties to this Agreement and “ Party ” means any one of them;

 

“ Person ” means any natural person, company, corporation, general partnership, limited partnership, proprietorship, joint venture, firm, trust, union, government, statutory or public authority, or any entity or incorporated or unincorporated organization or association;

 

“ PRC Authorities ” means the central, provincial, and local governments of all levels in the PRC, including all the ministries, departments, commissions, bureaus and branches of national, provincial, county or other administrative level;

 

“ PRC Laws ” means the Applicable Laws of the PRC;

 

“ PRC Subsidiaries ” means E-Career Beijing, E-Career Shanghai, E-Career Suzhou, Shanghai Huaying and E-Channel Beijing, and “ PRC Subsidiary ” means any of the PRC Subsidiaries;

 

“ Prior Agreement ” has the meaning given in Clause 5.4;

 

“ Purchase Price ” has the meaning given in Clause 3.1;

 

“ Purchaser ” has the meaning given in the Preamble.

 

“ Registered Capital ” means the registered capital of the PRC Subsidiaries from time to time and shall include all rights and interests attaching thereto;

 

“ RMB ” or “ Renminbi ” means Renminbi, the lawful currency of PRC;

 

“ SAFE ” means the PRC State Administration of Foreign Exchange, the Chinese government authority responsible for implementing and enforcing foreign exchange controls in China;

 

“ SAFE Circulars ” means the SAFE Circular on Issues relating to the Administration of Foreign Exchange of Company Financing through Offshore Special Purpose Vehicles and Round-Tripping Investment by PRC Residents issued by SAFE with effect from November 1, 2005 and any PRC Laws in force from time to time which operate to implement, restate, amend or repeal any of the aforesaid circular or any part thereof;

 

“ Second Company Board Resolutions ” has the meaning given in Clause 5.2.3(b);

 

“ Seller A ESOP Amount ” has the meaning given in Clause 3.2(v);

 

“ Seller B ESOP Amount ” has the meaning given in Clause 3.2(vi);

 

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“ Sellers ” has the meaning given in the Preamble;

 

“ Sellers Trust Amount ” has the meaning given in Clause 3.2(iii);

 

“ Seller Representatives ” means initially each of Union Advance Group Limited, Good Connection Enterprises Ltd. E-Career Holdings Ltd. and Full Moon Resources Ltd. or any other representative appointed pursuant to the Seller Side Agreement dated as of October 8, 2008 amongst the Contributing Sellers;

 

“ Seller Warranties ” has the meaning given in Clause 6.1;

 

“ Selling Parties ” means the Sellers, ESOP Holders, Mr. Jiexian Zhang, Mr. Jianguo Zhang, Mr. Xuebin Lu, Mr. Shengping Tang and Mr. Xiaowen Zhang.

 

“ Settled Claim ” has the meaning given in Clause 3.5.2(b);

 

“ Shares ” has the meaning given in the Recitals;

 

“ Shanghai Huaying ” means Shanghai Huaying Network Technology Co., Ltd. ([CHINESE CHARACTERS]), a domestic limited liability company established under the laws of the PRC with its registered office at Room 202, No. 3528 (Yi), Tanglu Road, Pudong District, Shanghai, PRC;

 

“ Social Insurance Premiums ” means the social insurance premiums, including retirement insurance, unemployment insurance, medical insurance, birth insurance, employment injury insurance, housing reserve fund and any other social security funds, payable under PRC Laws;

 

“ Subsidiary ” means any corporate Person in which the Company or any subsidiary holds, directly or indirectly, shares, registered capital, or any other equity interest from time to time, including without limitation the PRC Subsidiaries, and “ Subsidiaries ” shall mean all such Persons, including E-Channel Beijing;

 

“ Taxes ” means:

 

(i) all forms of taxation, whether levied by reference to income, profits, gains, asset values, turnover, added value, payroll, ownership of any asset or occupation of premises or other matters of any kind; and

 

(ii) all statutory, governmental, national, state, provincial, local governmental or municipal impositions, duties, contributions, rates and levies of whatever nature,

 

in each case, whenever and wherever imposed (whether imposed by way of a withholding or deduction for or on account of tax or otherwise), including individual income tax relating to employees, and all penalties, charges, costs and interest relating thereto;

 

“ TMP ” has the meaning given in the Preamble;

 

 “ US Dollars ” or “ US$ ” means United States Dollar, the lawful currency of the U.S.A;

 

“ U.S. ” or “ U.S.A. ” means the United States of America;

 

“ US GAAP ” means the generally accepted accounting principles in the U.S.A. consistently applied; and

 

“ Warranties ” means the Seller Warranties, the Management Warranties and the representations and warranties given by the Purchaser under this Agreement.

 

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1.2	Interpretations.
	1.2.1	Any references, express or implied, to statutes or statutory provisions shall be construed as references to those statutes or provisions as respectively amended or re-enacted or as their application is modified from time to time by other provisions (whether before or after the date hereof) and shall include any statutes or provisions of which they are re-enactments (whether with or without modification) and any orders, regulations, instruments or other subordinate legislation under the relevant statute or statutory provision. References to sections of consolidating legislation shall wherever necessary or appropriate in the context be construed as including references to the sections of the previous legislation from which the consolidating legislation has been prepared.
	1.2.2	References to any document (including this Agreement) are references to that document as amended, consolidated, supplemented, novated or replaced from time to time.
	1.2.3	References herein to Recitals, Clauses and Schedules are to the recitals of, clauses in and the schedules to this Agreement unless the context requires otherwise and the Recitals, the Schedules and the Appendices to this Agreement shall be deemed to form part of this Agreement.
	1.2.4	The expressions “Seller” and the “Purchaser” shall, where the context permits, include their respective successors and permitted assigns.
	1.2.5	The expressions “including” or “includes” means including or includes without limitation.
	1.2.6	Where under this Agreement the day on which any act, matter or thing is to be done is a day other than a Business Day, such act, matter or thing shall be done on the immediately succeeding Business Day, unless otherwise specified. If a period of time is specified and dates from, after or before a given day or the day of an act or event, it is to be calculated exclusive of that day unless otherwise specified.
	1.2.7	All reference to time shall be to Beijing, PRC time unless otherwise specified.
	1.2.8	To be effective under this Agreement, any consent, approval, permission or authorization to be given by a Party must be in writing, signed by or on its behalf. Nothing in this Agreement is to be construed as imposing any obligation on a Party not to refuse any consent, approval, permission or authorization unreasonably or without delay, save where expressly provided in this Agreement. The Party may impose any conditions it deems appropriate to any consent, approval, permission or authorization it gives (if any).
	1.2.9	Any consent, approval, permission or authorization given by a Party shall operate as a consent, approval, permission or authorization only for the particular matter to which it relates and not as a general waiver or release of any of the provisions of this Agreement nor shall it be construed as dispensing with the necessity of obtaining consent, approval, permission or authorization from another Person (if required by Applicable Laws or otherwise) or the specific consent, approval, permission or authorization of that Party in future, unless expressly so provided.
	1.2.10	Unless the context requires otherwise, words importing the singular include the plural and vice versa and words importing a gender include every gender.

 

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1.2.11                   All references to the obtaining of an Approval include:

 

(a)                                  the obtaining of all applicable written approvals, authorizations, concessions, consents, certificates, licenses, permits, entitlements and the like of or from the relevant PRC Authorities;

 

(b)                                 the completion of all required filings, registration, notification or the like of the same with or to the relevant PRC Authorities in regards to the Approval; and

 

(c)                                  the obtaining of all certificates or other documentary evidence issued by the relevant PRC Authorities and delivered to the applying party for (i) any of the above written approvals, authorizations, concessions, consents, certificates, licenses, permits, entitlements or the like and (ii) the completion of all filings, registrations, notifications or procedures or the like.

 

1.2.12                 References to any specified Chinese government authority in this Agreement shall include the PRC Authorities succeeding or from time to time exercising the functions of the first mentioned Chinese government authority relevant to this Agreement.

 

1.2.13                 Headings are inserted for convenience only and shall not affect the construction of this Agreement.

 

1.2.14                 Where a word or phrase is defined, its other grammatical forms have a corresponding meaning.

 

1.2.15                 Where any statement is to the effect that any Person is not aware of any matter or circumstance or is a statement qualified by the expression “to the Person’s knowledge” or “so far as the Person is aware” or any similar expression, that statement (a) shall be deemed to refer to the actual knowledge of a fact of such Person and (if applicable) its directors and employees and (b) shall include a further statement that it has been made after due and careful enquiries.

 

2.                                       SALE AND PURCHASE

 

2.1                                  Sale of Shares.

 

Subject to the terms and conditions of this Agreement, the Purchaser shall purchase all rights, title and interests in the Shares from the Sellers and the ESOP Holders, and each Seller and ESOP Holder shall sell to the Purchaser the number of Shares in the Company set forth opposite such Seller’s name in Part I of Schedule 2 and set forth opposite such ESOP Holder’s name in Part II of Schedule 2, respectively, in each case free from all Encumbrances and together with all rights attaching or accruing to them at Closing.

 

2.2                               The Parties hereto acknowledge and agree that the Purchaser shall not be obliged to complete the purchase of any Shares unless the purchase of all Shares is completed simultaneously in accordance with this Agreement.

 

3.                                       PURCHASE PRICE

 

3.1                                  Each Seller and ESOP Holder shall be entitled to receive consideration in cash in respect of the Shares held by such Seller or ESOP Holder in such aggregate amount as set forth opposite such Seller’s name in Schedule 2 and such ESOP Holder’s name in Schedule 2.  The total consideration payable by the Purchaser for the Shares shall be US$174,000,000 as adjusted pursuant to Clauses 3.3, 3.4 and 3.5 below (the “ Purchase Price ”).

 

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3.2                                  Closing Date Payment.

 

At the Closing, the Purchaser shall deliver:

 

(i) an aggregate amount of US$106,799,380.32  (the “ Initial Sellers Cash Amount ”), to the Sellers, payable to the Sellers in such amounts and to the bank accounts as set forth opposite the Sellers’ name in Part I of Schedule 2;

 

(ii) an aggregate amount of US$20,296,572.67 (the “ ESOP Cash Amount ”) to the Escrow Agent, pursuant to the terms and conditions of the Escrow Agreement;

 

(iii) an aggregate amount of US$1,600,000.00 (the “ Sellers Trust Amount ”) to the account of Morrison & Foerster LLP as set forth in Part II of Schedule 2;

 

(iv) an aggregate amount of US$2,657,127.22 (the “ ESOP Exercise Price ”) to the account of the Company as set forth in Part II of Schedule 2;

 

(v) an amount of US$2,377,378.35 (the “ Seller A ESOP Amount ”) to the account of Seller A to the bank account as set forth opposite his or her name in Part II of Schedule 2; and

 

(vi) an amount of US$269,541.41 (the “ Seller B ESOP Amount ”) to the account of Seller B to the bank account as set forth opposite his or her name in Part II of Schedule 2.

 

The Purchaser’s obligation to pay the Initial Sellers Cash Amount, ESOP Cash Amount, Sellers Trust Amount, ESOP Exercise Price, the Seller A ESOP Amount and the Seller B ESOP Amount portions of the Purchase Price shall be fully discharged upon such payments being delivered in accordance with this Clause 3.2.

 

3.3                                  Escrow Amount.

 

Of the Purchase Price, US$40,000,000 (the “ Escrow Amount ”) shall be paid by the Purchaser into an interest-bearing account (the “ Escrow Account ”) in the name of JPMorgan Chase Bank, N.A. Hong Kong Branch (the “ Escrow Agent ”) governed by the Escrow Agreement and shall be held there for a period of no longer than eighteen (18) months from the Closing Date (the “ Escrow Period ”).  With respect to each Seller and applicable ESOP Holder, those amounts set forth opposite such Seller’s name in Part I of Schedule 2 and such ESOP Holder’s name in Part II of Schedule 2, shall be deemed to have been contributed to the Escrow Amount by that Seller or ESOP Holder.  Each Seller and ESOP Holder who is deemed to have contributed any amount to the Escrow Account is referred to as a “ Contributing Seller ”.  During the Escrow Period, the Escrow Amount shall be made available to the Purchaser to satisfy Claims in accordance with the provisions of Clause 3.5.

 

3.4                                  Prior to the Closing Date, the Purchaser and the Seller Representatives shall enter into the Escrow Agreement with the Escrow Agent in order to open the Escrow Account.  The Purchaser shall remit the ESOP Cash Amount and the Escrow Amount in accordance with the Escrow Agreement on the Closing Date.  As soon as practicable after the Closing Date, the Purchaser and a Seller Representative shall jointly notify the Escrow Agent in writing that the Closing has occurred.  The Seller Representatives shall act as the authorized representatives of the Contributing Sellers with respect to the Escrow Account, and all written decisions of at least three (3) Seller Representatives with respect to the Escrow Account shall be binding on all Contributing Sellers.

 

3.5                                  Payment of Escrow Amount.

 

3.5.1                       The Escrow Agent shall only act pursuant to the provisions of the Escrow Agreement, which shall contain substantially the same payment procedures as set forth below.

 

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3.5.2                         In the event that the Purchaser shall have delivered a Notice of Claim to the Seller Representatives, the Contributing Sellers and the Escrow Agent before the expiration of the Escrow Period, the following procedure shall apply:

 

(a)                                   If none of the Seller Representatives contest such Notice of Claim by giving the Purchaser and the Escrow Agent a written counter notice (“ Counter Notice ”) within twenty (20) Business Days after the delivery of the Notice of Claim (the “ Dispute Period ”), the Escrow Agent shall, without the need for any further action by any Seller Representative or the Purchaser, release the amount of the Claim set forth in the Notice of Claim (an “ Agreed Claim ”), and any accrued interest thereof, to the Purchaser within three (3) Business Days after the expiration of the Dispute Period with respect to such Claim.

 

(b)                                  If a Counter Notice is delivered by any Seller Representative with respect to a Claim pending resolution of the dispute (a “ Disputed Claim ”), the Escrow Agent shall make payment with respect to a Disputed Claim only in accordance with (i) the joint written instructions of the Purchaser and at least three (3) Seller Representatives, (ii) an arbitral award or (iii) a final court order of competent jurisdiction, which payment of such Claim (a “ Settled Claim ”) and any accrued interest thereof shall be made within three (3) Business Days from the date the Escrow Agent receives the joint written instructions of the Purchaser and at least three (3) Seller Representatives or, as the case may be, such arbitral award or final court order regarding such Settled Claim.

 

(c)                                   Upon delivery by any Seller Representative of a Counter Notice, the parties agree to attempt to resolve any Disputed Claim by holding good faith discussions between at least three (3) Seller Representatives and the duly authorized representative(s) of the Purchaser.  If the Disputed Claim is not resolved within twenty (20) Business Days after the delivery of the Counter Notice pursuant to Clause 3.5.2(a) or such other date as may be agreed between at least three (3) Seller Representatives and the Purchaser in writing, any Seller Representative or the Purchaser may refer the Disputed Claim to arbitration in accordance with Clause 23.

 

(d)                                  Notwithstanding anything in this Agreement to the contrary, the liability of each Seller for a Claim under Clause 8 shall be subject to the limitations on liability set forth in Clauses 8.1.5 and 8.1.6 and limited to the amount remaining in the Escrow Account and any accrued interest thereof that has not yet been released to the Contributing Sellers or the Purchaser, as the case may be, pursuant to this Clause 3.

 

(e)                                   Notwithstanding Clause 3.3 or any other provision to the contrary in this Agreement, each Contributing Seller agrees that the Purchaser shall be entitled to apply the Escrow Amount (and any accrued interest thereof) towards the satisfaction of any Agreed Claim or Settled Claim to the extent permitted under this Clause 3.5 regardless of whether such Contributing Seller is liable under the relevant Claim and regardless of the amounts the Contributing Seller who is liable under the relevant Claim (the “ Liable Seller ”) has contributed to the Escrow Amount, and each Contributing Seller shall not raise, and shall procure the Seller Representatives not to raise, any objection in relation to such application on the ground that such Contributing Seller is not the Liable Seller and the amount it contributed to the Escrow Amount may not be used to satisfy the Claim.

 

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3.5.3                       All payments with respect to Agreed Claims and Settled Claims under this Clause 3.5 shall be paid out subject to the provisions of Clause 8.

 

3.5.4                       Within fifteen (15) Business Days after expiration of the Escrow Period, the Purchaser and a Seller Representative shall jointly instruct the Escrow Agent to release the amount remaining in the Escrow Amount to each of the Contributing Sellers in accordance with the terms of the Escrow Agreement, after having deducted the amounts required to satisfy all Agreed Claims and Settled Claims (including any accrued interest thereof) which are outstanding and unpaid, and any Claims in respect of which arbitration has been commenced in accordance with Clause 23 and the HKIAC Administered Arbitration Rules at the expiration of the Escrow Period (the “ Arbitrated Claim Amount ”).  The Escrow Agent shall release any Arbitrated Claim Amount (and any accrued interest thereof) in accordance (i) the joint written instructions of the Purchaser and at least three (3) Seller Representatives, (ii) an arbitral award or (iii) a final court order of competent jurisdiction, and such release shall be made within three (3) Business Days from the date the Escrow Agent receives such joint instructions or, as the case may be, such arbitral award or final court order regarding such Arbitrated Claim Amount.

 

3.5.5                       Any interest accruing on the Escrow Account shall be for the benefit of the Contributing Sellers as set forth in the Escrow Agreement, provided , however, that the Purchaser shall be entitled to interest attributable to any Agreed Claims or Settled Claims paid to the Purchaser.

 

3.5.6                       All fees and expenses of the Escrow Agent pursuant to the Escrow Agreement which shall be US$10,000 (the “ Escrow Fees ”) shall be borne