{"id":43595,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/series-b-preferred-stock-purchase-agreement-internet.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"series-b-preferred-stock-purchase-agreement-internet","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/series-b-preferred-stock-purchase-agreement-internet.html","title":{"rendered":"Series B Preferred Stock Purchase Agreement &#8211; Internet Technologies China Inc."},"content":{"rendered":"<pre>                  SERIES B PREFERRED STOCK PURCHASE AGREEMENT\n                  -------------------------------------------\n\n\n\nThis Series B Preferred Stock Purchase Agreement (the 'Agreement') is entered\n                                                       ---------              \ninto as of _____________, 1998 (the 'Effective Date'), by and between Internet\n                                     --------------                            \nTechnologies China Incorporated, a Delaware corporation (the 'Company'), and\n                                                              -------        \nthe persons and entities set forth on Exhibit A hereto (each, an 'Investor'\nand, collectively, the 'Investors').  Charles Zhang is a party to this\nAgreement for the sole purpose of making the representations and warranties set\nforth in Section 4B hereof.\n\nIn consideration of the mutual promises, covenants and conditions hereinafter\nset forth, the parties hereto agree as follows:\n\n     1.   DEFINITIONS.\n          ----------- \n\n          1.1  Certain Defined Terms.  As used in this Agreement, the following\n               ---------------------                                           \nterms shall have the following respective meanings:\n\n          'Common Stock' shall mean the Company's Common Stock, $.01 par\n           ------------                                                   \nvalue.\n\n          'Proceeds' shall mean whatever is received when assets, whether\n           --------                                                       \ntangible or intangible, are sold, changed, collected or otherwise disposed of,\nboth cash and non-cash, including the Proceeds of insurance payable by reason of\nloss or damage to Proceeds.\n\n          'Proprietary Assets' shall mean all patents, patent applications,\n           ------------------                                               \ntrademarks, service marks, trade names, copyrights, moral rights, maskworks,\ntrade secrets, confidential and proprietary information, compositions of matter,\nformulas, designs, proprietary rights, know-how, processes, domain names and\nURLs.\n\n          1.2  Index of Other Defined Terms.  In addition to the terms defined\n               ----------------------------                                   \nabove, the following terms shall have the respective meanings given thereto in\nthe sections indicated below:\n\n\n<font size=\"2\">               Defined Term                       Section\n               ------------                       -------\n\n          'Act'                                    4.5(b)\n           ---                                     \n          'Agreement'                             Preamble\n           ---------\n          'Business Plan'                           4.25\n           -------------\n          'Bylaws'                                  4.12\n           ------\n          'CERCLA'                                  4.22\n           ------\n          'Certificate'                              2.1\n           -----------\n          'Code'                                    4.20\n           ----\n          'Company'                               Preamble\n           -------\n          'Confidential Information'                9.13\n           ------------------------\n          'Conversion Shares'                      4.2(c)\n           -----------------\n          'Disclosing Party'                        9.13\n           ----------------\n\n                                      -1-\n\n \n          'Effective Date'                        Preamble\n           --------------\n          'Financial Statements'                    4.16\n           --------------------\n          'First Closing'                            3.1\n           -------------\n          'Hazardous Materials'                     4.22\n           -------------------\n          'Investor'                              Preamble\n           --------\n          'Non-Disclosing Party'                    9.13\n           --------------------\n          'Disclosure Schedule'                       4\n           -------------------\n          'SEC'                                     4.14\n           ---\n          'Second Closing'                           3.2\n           --------------\n          'Shares'                                   2.3\n           ------\n          'Tranche I Shares'                         2.2\n           ----------------\n          'Tranche II Shares'                        2.3\n           -----------------\n\n\n2.   AGREEMENT TO PURCHASE AND SELL STOCK\n     ------------------------------------\n\n<\/font>          2.1. Authorization. As of the First Closing (as defined below), the\n               -------------\nCompany will have authorized the issuance, pursuant to the terms and conditions\nof this Agreement, of up to 390,000 shares of the Company's Series B Convertible\nPreferred Stock, $0.01 par value, ('Series B Preferred Stock') having the\nrights, preferences, privileges and restrictions set forth in the Amended and\nRestated Certificate of Incorporation of the Company attached to this Agreement\nas Exhibit B (the 'Certificate').\n   ---------       -----------\n\n          2.2. Agreement to Purchase and Sell at the First Closing. Subject to\n               --------------------------------------------------- \nthe terms and conditions hereof, on the date of the First Closing, the Company\nwill issue and sell to the Investors, and the Investors agree to purchase from\nthe Company, an aggregate of 125,653 shares of Series B Convertible Preferred\nStock (the 'Tranche I Shares') at a price of $5.173 per share for an aggregate\n            ----------------\npurchase price of $650,002.98. The number of Tranche I Shares to be purchased by\neach Investor is set forth next to such Investor's name in Exhibit A. The\npurchase price for the Tranche I Shares shall be paid by wire transfer of funds\nto a designated account of the Company, provided that wire transfer instructions\nare delivered to each Investor at least one (1) business day prior to the First\nClosing.\n\n          2.3  Agreement to Purchase and Sell at the Second Closing. Subject to\n               ----------------------------------------------------\nthe terms and conditions hereof (including without limitation, the satisfaction\nof the conditions of Section 7), on the date of the Second Closing (as defined\nbelow), the Company will issue and sell to the Investors, and the Investors\nagree to purchase from the Company, between 125,653 and 260,309 shares of Series\nB Preferred Stock (the 'Tranche II Shares') at a price of $5.173 per share for\n                        -----------------\nan aggregate purchase price between $650,002.97 and $1,346,578.46. The number of\nTranche II Shares to be purchased by each Investor is set forth next to such\nInvestor's name on Exhibit A. At the Second Closing, each of and Kummell\nInvestments Limited ('Kummell') shall purchase at least 19,331 Tranche II Shares\nand, together, Harrison Enterprises, Inc. ('Harrison') and Kummell shall have\nthe right, at their option and as they may mutually agree, to purchase an\naggregate total of 154,650 Tranche II Shares. At the Second Closing, PTV-China,\nInc. ('PTV China') shall purchase at least 9,666 Tranche II Shares and shall\nhave the right, at its option, to purchase an aggregate total of 28,334 Tranche\nII Shares. The purchase price for the Tranche II \n\n                                       2\n\n \nShares shall be paid by wire transfer of funds to a designated account of the\nCompany, provided that wire transfer instructions are delivered to each Investor\nat least one (1) business day prior to the Second Closing. The Tranche I Shares\nand the Tranche II Shares are sometimes referred to herein collectively as the\n'Shares.'\n\n          2.4  Currency.  All monetary amounts set forth herein shall be in\n               --------                                                    \nUnited States dollars.\n\n3.   CLOSING; DELIVERY.\n     ----------------- \n\n          3.1. The First Closing.  The purchase and sale of the Tranche I\n               -----------------                                         \nShares hereunder shall be held at the offices of Gibson, Dunn &amp; Crutcher LLP,\n1530 Page Mill Road, Palo Alto, California 94304, on ______________, 1998, or at\nsuch other time and place as the Company and the purchasers of a majority of the\nShares may mutually agree upon (the 'First Closing').\n                                     -------------    \n\n          3.2  The Second Closing.  The purchase and sale of the Tranche II\n               ------------------                                          \nShares hereunder, if consummated, shall be held at the offices of Gibson, Dunn &amp; Crutcher LLP, 1530 Page Mill Road, Palo Alto, California 94304, on June 30,\n1998, or at such other time and place as Company and the holders of a majority\nof the Shares may mutually agree upon (the 'Second Closing').\n                                            --------------    \n\n          3.3. Delivery.   At the First Closing, and also at the Second Closing\n               --------                                                        \nif consummated, the Company will deliver to each Investor a certificate\nrepresenting the Shares to be purchased by each Investor hereunder against\npayment of the full purchase price therefor by wire transfer.\n\n4.   COMPANY REPRESENTATIONS AND WARRANTIES.  The Company hereby represents and\n     --------------------------------------                                    \nwarrants to the Investors that, except as set forth in the Disclosure Schedule\n('Disclosure Schedule') attached to this Agreement as Exhibit C (which\n             --------                                 ---------       \nDisclosure Schedule shall be deemed to be representations and warranties to the\nInvestors), the statements in the following paragraphs of this Section 4 are all\ntrue and correct:\n\n          4.1. Organization, Good Standing and Qualification.   The Company is\n               ---------------------------------------------                  \na corporation duly organized, validly existing and in good standing under, and\nby virtue of, the laws of the State of Delaware and has all requisite corporate\npower and authority to own its properties and assets and to carry on its\nbusiness as now conducted and as presently proposed to be conducted.  The\nCompany is qualified to do business as a foreign corporation in each\njurisdiction where failure to be so qualified would have a material adverse\neffect on its financial condition, business, prospects or operations.\n\n          4.2. Capitalization.  Immediately before the First Closing, the\n               --------------                                            \nauthorized capital stock of the Company will consist of the following:\n\n               (a)  Common Stock. A total of 5,000,000 authorized shares of\n                    ------------\nCommon Stock ($0.01 par value) of which 712,719 shares are issued and\noutstanding.\n\n                                       3\n\n \n               (b)  Preferred Stock.  A total of 625,000 authorized shares of\n                    ---------------                                          \nPreferred Stock ($0.01 par value), of which 225,000 are designated as Series A\nConvertible Preferred Stock ('Series A Preferred Stock'), all of which are be\noutstanding, and 400,000 are designated as Series B Convertible Preferred Stock,\nnone of which are issued or outstanding.\n\n               (c)  Options, Warrants, Reserved Shares. The Company has reserved\n                    ----------------------------------\n400,000 shares of its Common Stock for possible issuance upon the conversion of\nthe shares of Series B Preferred Stock to be issued hereunder (the 'Conversion\n                                                                    ----------\nShares').  Except for (i) the conversion privileges of the Series B Preferred\n------                                                                        \nStock to be issued hereunder, (ii) the rights to acquire the Tranche II Shares\nas set forth herein, (iii) the 120,000 shares of Common Stock reserved for\nissuance or to be reserved for issuance under the Company's stock option plan\nunder which options to purchase 23,125 shares of Common Stock are outstanding,\nand (iv) warrants to purchase up to 33,531 shares33,531shares of Common Stock of\nthe Company, issued in connection with the Company's bridge financing in\nDecember 1997, provided that such warrants shall be exercisable for only an\naggregate of 5,781 shares of Common Stock if such bridge financing is repaid\nbefore June 30, 1998, there are no options, warrants, conversion privileges or\nother rights, or agreements with respect to the issuance thereof, presently\noutstanding to purchase any of the capital stock of the Company.  Apart from the\nexceptions noted in this Section 4.2, no shares (including the Shares and\nConversion Shares) of the Company's outstanding capital stock, or stock\nissuable upon exercise or exchange of any outstanding options or other stock\nissuable by the Company, are subject to any rights of first refusal or other\nrights to purchase such stock (whether in favor of the Company or any other\nperson), pursuant to any agreement or commitment of the Company.\n\n               (d)  Outstanding Security Holders. Section 4.2(d) of the\n                    ----------------------------\nDisclosure Schedule sets forth a complete list of all outstanding shareholders,\noption holders and other security holders of the Company as of the Effective\nDate.\n\n          4.3. Subsidiaries.   The Company owns all of the issued and\n               ------------                                          \noutstanding stock of ITC Electronic Technology Beijing Co. Ltd., a company\norganized under the laws of the People's Republic of China ('ITC China').\nITC China is a wholly foreign owned enterprise (WFOE) authorized by the\ngovernment of China and has the government permits, approvals authorizations and\nlicenses necessary to engage in the business currently conducted and currently\nproposed to be conducted by ITC China.  No other person or entity other than the\nCompany has any right to acquire any equity or other ownership interest of ITC\nChina.  Except for the Company's ownership of ITC China, the Company does not\npresently own or control, directly or indirectly, any interest in any other\ncorporation, partnership, limited liability company, trust, joint venture,\nassociation, or other entity.\n\n          4.4. Due Authorization.   All corporate action on the part of the\n               -----------------                                           \nCompany and ITC China, their officers, directors and shareholders necessary for\nthe authorization, execution and delivery of, and the performance of all\nobligations of the Company under, this Agreement, and the authorization,\nissuance, reservation for issuance and delivery of all of the Shares being sold\nunder this Agreement has been taken or will be taken before the First Closing.\nThis Agreement is a valid and binding obligation of the Company enforceable in\naccordance with its terms, subject, as to enforcement of remedies, to applicable\nbankruptcy, insolvency, moratorium, \n\n                                       4\n\n \nreorganization and similar laws affecting creditors' rights generally and to\ngeneral equitable principles. The Shares are not subject to any preemptive\nrights or rights of first refusal.\n\n          4.5. Valid Issuance of Stock.\n               ----------------------- \n\n               (a)  The Shares, when issued, sold and delivered in accordance\nwith the terms of this Agreement, will be duly and validly issued, fully paid\nand nonassessable. The Conversion Shares have been duly and validly reserved for\nissuance and, upon issuance in accordance with the terms of the Certificate,\nwill be duly and validly issued, fully paid and nonassessable.\n\n               (b)  The outstanding shares of the capital stock of the Company\nand ITC China are duly and validly issued, fully paid and nonassessable, and\nsuch shares of such capital stock, and all outstanding stock, options and other\nsecurities of the Company and ITC China have been issued in full compliance with\nthe registration and prospectus delivery requirements of the Securities Act of\n1933, as amended (the 'Act'), and the registration and qualification\n                       ---\nrequirements of all applicable state securities laws, or in compliance with\napplicable exemptions therefrom, and all other provisions of applicable federal\nand state securities laws, including, without limitation, anti-fraud provisions.\n\n          4.6. Liabilities.   Other than promissory notes in the amount of\n               -----------                                                \n$100,000 issued in connection with the Company's bridge financing in December\n1997, plus interest accrued at 10% since such date, neither the Company nor ITC\nChina has any indebtedness for borrowed money that the Company or ITC China has\ndirectly or indirectly created, incurred, assumed, or guaranteed, or with\nrespect to which the Company or ITC China has otherwise become directly or\nindirectly liable.\n\n          4.7. Title to Properties and Assets.   Each of the Company and ITC\n               ------------------------------                               \nChina has good and marketable title to its properties and assets held in each\ncase subject to no mortgage, pledge, lien, encumbrance, security interest or\ncharge of any kind.  With respect to the property and assets it leases, each of\nthe Company and ITC China is in compliance with such leases and, to the best of\nthe Company's knowledge, each of the Company and ITC China holds valid\nleasehold interests in such assets free of any liens, encumbrances, security\ninterests or claims of any party other than the lessors of such property and\nassets.\n\n          4.8. Status of Proprietary Assets.\n               ---------------------------- \n\n               (a)  Ownership. Each of the Company and ITC China has full title\n                    ---------\nand ownership of, or has license to, all Proprietary Assets necessary to enable\nit to carry on its business as now conducted and as presently proposed to be\nconducted without any conflict with or infringement of the rights of others. No\nthird party has any ownership right, title, interest, claim in or lien on any of\nthe Company's or ITC China's Proprietary Assets and the Company and ITC China\nhave taken, and in the future will use their best efforts to take, all steps\nreasonably necessary to preserve their respective legal rights in, and the\nsecrecy of, all its Proprietary Assets, except those for which disclosure is\nrequired for legitimate business or legal reasons.\n\n                                       5\n\n \n               (b)  Licenses; Other Agreements. Neither the Company nor ITC\n                    --------------------------\nChina has granted, and there are not outstanding, any options, licenses or\nagreements of any kind relating to any Proprietary Asset of the Company or ITC\nChina, nor is the Company or ITC China bound by or a party to any option,\nlicense or agreement of any kind with respect to any of their respective\nProprietary Assets. Neither the Company nor ITC China is obligated to pay any\nroyalties or other payments to third parties with respect to the marketing,\nsale, distribution, manufacture, license or use of any Proprietary Asset or any\nother property or rights.\n\n               (c)  No Infringement. Neither the Company nor ITC China has\n                    ---------------\nviolated or infringed, and is not currently violating or infringing any\nProprietary Asset of any other person or entity. Neither the Company nor ITC\nChina has received any communications alleging that the Company or ITC China (or\nany of their respective employees or consultants) has violated or infringed or,\nby conducting its business as proposed, would violate or infringe, any\nProprietary Asset of any other person or entity.\n\n               (d)  No Breach by Employee. After due inquiry, neither the\n                    ---------------------\nCompany nor ITC China is aware that any employee or consultant of the Company or\nITC China is obligated under any agreement (including licenses, covenants or\ncommitments of any nature) or subject to any judgment, decree or order of any\ncourt or administrative agency, or any other restriction that would interfere\nwith the use of his or her best efforts to carry out his or her duties for the\nCompany or ITC China or to promote the interests of the Company or ITC China or\nthat would conflict with the Company's or ITC China's business as proposed to be\nconducted. The carrying on of each of the Company's and ITC China's business by\nthe employees and contractors of the Company and ITC China and the conduct of\nthe Company's and ITC China's business as presently proposed, will not, to the\nbest of the Company's knowledge, conflict with or result in a breach of the\nterms, conditions or provisions of, or constitute a default under, any contract,\ncovenant or instrument under which any of such employees or contractors of the\nCompany or ITC China are now obligated. Neither the Company nor ITC China\nbelieves it is or will be necessary to utilize any inventions of any employees\nof the Company or ITC China (or persons the Company or ITC China currently\nintends to hire) made prior to their employment by the Company or ITC China. To\nthe best of the Company's knowledge, at no time during the conception of or\nreduction of any of the Company's or ITC China's Proprietary Assets to practice\nwas any developer, inventor or other contributor to such patents operating under\nany grants from any governmental entity or agency or private source, performing\nresearch sponsored by any governmental entity or agency or private source or\nsubject to any employment agreement or invention assignment or nondisclosure\nagreement or other obligation with any third party that could adversely affect\nthe Company's or ITC China's rights in such Proprietary Assets.\n\n          4.9. Material Contracts and Obligations.   All agreements, contracts,\n               ----------------------------------                              \nleases, licenses, instruments, commitments (oral or written), indebtedness,\nliabilities and other obligations to which the Company or ITC China is a party\nor by which they are bound that (i) are material to the conduct and operations\nof the businesses and properties of the Company or ITC China; (ii) involve any\nof the officers, consultants, directors, employees or shareholders of the\nCompany or ITC China; or (iii) obligate the Company or ITC China to share,\nlicense or develop any product or technology are listed in Section 4.9 of the\nDisclosure Schedule and have been made available for inspection by the Investors\nand their respective counsel.  For purposes of this \n\n                                       6\n\n \nSection 4.9, 'material' shall mean any agreement, contract, indebtedness,\nliability or other obligation either: (i) having an aggregate value, cost or\namount in excess of $10,000, or (ii) not terminable upon thirty days notice.\n\n          4.10.  Litigation.   There is no action, suit, proceeding, claim,\n                 ----------                                                \narbitration or investigation ('Action') pending (or, to the best of the\n                               ------                                   \nCompany's knowledge, currently threatened) against the Company or ITC China,\ntheir activities, properties or assets or, to the best of the Company's\nknowledge, against any officer, director or employee of the Company or ITC China\nin connection with such officer's, director's or employee's relationship\nwith, or actions taken on behalf of the Company or ITC China.  To the best of\nthe Company's knowledge, there is no factual or legal basis for any such Action\nthat might result, individually or in the aggregate, in any material adverse\nchange in the business, properties, assets, financial condition, affairs or\nprospects of the Company or ITC China.  By way of example but not by way of\nlimitation, there are no Actions pending or, to the best of the Company's\nknowledge, threatened (or any basis therefor known to the Company or ITC China)\nrelating to the prior employment of any of the Company's or ITC China's\nemployees or consultants, their use in connection with the Company's or ITC\nChina's business of any information, technology or techniques allegedly\nproprietary to any of their former employers, clients or other parties, or their\nobligations under any agreements with prior employers, clients or other parties.\nNeither the Company nor ITC China is a party to or subject to the provisions of\nany order, writ, injunction, judgment or decree of any court or government\nagency or instrumentality and there is no Action by the Company or ITC China\ncurrently pending or which the Company or ITC China intends to initiate.\n\n          4.11.  Governmental Consents.   All consents, approvals, orders,\n                 ---------------------                                    \nauthorizations or registrations, qualifications, designations, declarations or\nfilings with any federal, state or local governmental authority on the part of\neach of the Company and ITC China required in connection with the consummation\nof the transactions contemplated herein shall have been obtained prior to and be\neffective as of the First Closing.  Based in part on the representations of the\nInvestors set forth in Section 5 below, the offer, sale and issuance of the\nShares in conformity with the terms of this Agreement are exempt from the\nregistration and prospectus delivery requirements of the Act.\n\n          4.12.  Compliance with Other Instruments.   Neither the Company nor\n                 ---------------------------------                           \nITC China is in, nor will the conduct of their businesses as proposed to be\nconducted result in, any violation, breach or default of any term of the\nCompany's Certificate or ITC China's charter or the Company's or ITC China's\nbylaws (collectively, the 'Bylaws') or in any material respect of any term or\nprovision of any mortgage, indenture, contract, agreement or instrument to which\nthe Company or ITC China is a party or by which it may be bound, or of any\nprovision of any foreign or domestic state or federal judgment, decree, order,\nstatute, rule or regulation applicable to or binding upon the Company or ITC\nChina.  The execution, delivery and performance of and compliance with this\nAgreement and the consummation of the transactions contemplated hereby will not\nresult in any such violation or default, or be in conflict with or constitute,\nwith or without the passage of time or the giving of notice or both, either a\ndefault under the Company's Certificate or Bylaws or ITC China's charter or\nBylaws, or any agreement or contract of the Company or ITC China, or, to the\nbest of the Company's knowledge, a violation of any statutes, \n\n                                       7\n\n \nlaws, regulations or orders, or an event which results in the creation of any\nlien, charge or encumbrance upon any asset of the Company or ITC China.\n\n          4.13.  Disclosure.   No representation or warranty by the Company in\n                 ----------                                                   \nthis Agreement or in any statement or certificate signed by any officer of the\nCompany or ITC China furnished or to be furnished to the Investors pursuant to\nthis Agreement contains or will contain any untrue statement of a material fact\nor omits or will omit to state any material fact required to be stated therein\nor necessary in order to make the statements therein, in light of the\ncircumstances in which they are made, not misleading.\n\n          4.14.  Registration Rights.   Except as provided in the Investor\n                 -------------------                                      \nRights Agreement, neither the Company nor ITC China has granted or agreed to\ngrant any person or entity any rights (including piggyback registration rights)\nto have any securities of the Company or ITC China registered with the United\nStates Securities and Exchange Commission ('SEC') or any other governmental\n                                            ---                             \nauthority.\n\n          4.15.  Insurance.   Each of the Company and ITC China have obtained,\n                 ---------                                                    \nor will obtain (within 15 days of the First Closing) and will maintain, fire and\ncasualty insurance policies with extended coverage, sufficient in amount\n(subject to reasonable deductibles) to allow it to replace any of its properties\nthat might be damaged or destroyed.\n\n          4.16.  Financial Statements.   Section 4.16(a) of the Disclosure\n                 --------------------                                     \nSchedule sets forth an unaudited income statement of the Company for the period\nended December 31, 1997 (the 'Financial Statements').  The Financial\n                              --------------------                   \nStatements include the consolidated financial results of the Company and ITC\nChina.  Such Financial Statements (a) are in accordance with the books and\nrecords of the Company, and (b) are true, correct and complete and present\nfairly the results of operations for the period therein specified.  Other than\npromissory notes in the amount of $100,000 issued in connection with the\nCompany's bridge financing in December 1997, plus interest accrued at 10% since\nsuch date, neither the Company nor ITC China has any material indebtedness or\nother material liability.  From and after the date hereof (beginning with the\nmonthly financial statements for March 1998 which shall be delivered on or prior\nto April 30, 1998), all financial statements prepared by the Company shall be\nprepared in accordance with United States generally accepted accounting\nprinciples (GAAP), and all audits of the Company's financial statements shall\nbe conducted by one of the United States based 'Big Six' accounting firms.\nSection 4.16(b) of the Disclosure Schedule sets forth the Company current\nbusiness plan and the Company's projections as to the Company's possible\nfinancial performance for each quarter of the fiscal year ending December 31,\n1998.  Such projections were prepared by the Company in good faith and based on\nassumptions which the Company believes to be reasonable in view of information\ncurrently available to the Company; provided that the Company makes no\nrepresentation or warranty that such projections will be met.\n\n          4.17.  Certain Actions.   Since December 31, 1997, neither the Company\n                 ---------------                                                \nnor ITC China has:  (a) declared or paid any dividends, or authorized or made\nany distribution upon or with respect to any class or series of its capital\nstock; (b) incurred any indebtedness for money borrowed or incurred any other\nliabilities individually in excess of $10,000 or in excess of $25,000 in the\naggregate; (c) made any loans or advances to any person, other than ordinary\n\n                                       8\n\n \nadvances for travel expenses; (d) sold, exchanged or otherwise disposed of any\nmaterial assets or rights other than the sale of inventory in the ordinary\ncourse of its business; or (e) entered into any transactions with any of its\nofficers, directors or employees or any entity controlled by any of such\nindividuals.\n\n          4.18.  Activities Since Income Statement Date.   Since December 31,\n                 --------------------------------------                      \n1997, there has not been:\n\n          (a)    any damage, destruction or loss, whether or not covered by\n                 insurance, materially and adversely affecting the assets,\n                 properties, financial condition, operating results, prospects\n                 or business of the Company or ITC China (as presently conducted\n                 and as presently proposed to be conducted);\n\n          (b)    any waiver by the Company or ITC China of a valuable right or\n                 of a material debt owed to it;\n\n          (c)    any satisfaction or discharge of any lien, claim or encumbrance\n                 or payment of any obligation by the Company or ITC China,\n                 except such a satisfaction, discharge or payment made in the\n                 ordinary course of business that is not material to the assets,\n                 properties, financial condition, operating results or business\n                 of the Company or ITC China;\n\n          (d)    any material change or amendment to a material contract or\n                 arrangement by which the Company or ITC China or any of their\n                 assets or properties is bound or subject, except for changes or\n                 amendments which are expressly provided for or disclosed in\n                 this Agreement;\n\n          (e)    any material change in any compensation arrangement or\n                 agreement with any present or prospective employee, contractor\n                 or director not approved by the Company's or ITC China's Board\n                 of Directors; or\n\n          (f)    to the Company's knowledge, any other event or condition of any\n                 character which would materially and adversely affect the\n                 assets, properties, financial condition, operating results or\n                 business of the Company or ITC China.\n\n          4.19.  Tax Matters.   The Company has made sufficient provision for,\n                 -----------                                                  \nand has adequate resources to pay, all accrued and unpaid federal, state,\nprovincial, foreign, county and local taxes of each of the Company and ITC\nChina, whether or not assessed or disputed as of the date hereof.  There have\nbeen no examinations or audits of any tax returns or reports by any applicable\nfederal, state or local governmental agency.  Except as set forth in the\nDisclosure Schedule, each of the Company and ITC China have duly filed all\nfederal, state, county and local tax returns required to have been filed by it\nand paid all taxes shown to be due on such returns.  To the extent that any tax\nreturns have not been filed as reflected on the Disclosure Schedule , such\nfailure to file has not had and will not have any material adverse effect on the\nCompany or \n\n                                       9\n\n \nITC China. There are in effect no waivers of applicable statutes of limitations\nwith respect to taxes for any year.\n\n          4.20.  Tax Elections.   Neither the Company nor ITC China has elected\n                 -------------                                                 \npursuant to the Internal Revenue Code of 1986, as amended (the 'Code'), to be\n                                                                ----          \ntreated as an 'S' corporation or a collapsible corporation pursuant to Section\n341(f) or Section 1362(a) of the Code, nor has the Company or ITC China  made\nany other elections pursuant to the Code (other than elections which relate\nsolely to matters of accounting, depreciation or amortization) which would have\na material affect on the Company or ITC China, their financial conditions, their\nbusinesses as presently conducted or presently proposed to be conducted or any\nof their properties or material assets.\n\n          4.21.  Invention Assignment and Confidentiality Agreement.   The\n                 --------------------------------------------------       \nCompany has used its best efforts to caused each employee, officer, consultant\nand contractor of each of the Company and ITC China to enter into and execute an\nInvention Assignment and Confidentiality Agreement in the form attached to this\nAgreement as Exhibit D, an employment or consulting agreement containing\n             ----------                                                 \nsubstantially similar terms, or the Employee, Non-Competition, Confidential\nInformation and Work Product Agreement described on page 9 of the attachment to\nSection 4.9 (Material Contracts) of the Disclosure Schedule.  The persons listed\non page 9 of such attachment have signed the agreement described on page 9 of\nthe attachment.\n\n          4.22.  Environmental Matters.   During the period that each of the\n                 ---------------------                                      \nCompany and ITC China has owned or leased its properties and facilities, (a)\nthere have been no disposals, releases or threatened releases of Hazardous\nMaterials (as defined below) on, from or under such properties or facilities,\n(b) neither the Company nor ITC China, nor to the Company's knowledge any third\nparty, has used, generated, manufactured or stored on, under or about such\nproperties or facilities or transported to or from such properties or facilities\nany Hazardous Materials.  Neither the Company nor ITC China has knowledge of any\npresence, disposals, releases or threatened releases of Hazardous Materials on,\nfrom or under any of such properties or facilities, which may have occurred\nprior to the Company or ITC China having taken possession of any of such\nproperties or facilities.  For purposes of this Agreement, the terms \n'disposal', 'release', and 'threatened release' shall have the definitions\n --------    -------        ------------------                             \nassigned thereto by the Comprehensive Environmental Response, Compensation and\nLiability Act of 1980, 42 U.S.C. Section 9601 et seq., as amended ('CERCLA').\n                                                                    ------     \nFor the purposes of this Section, 'Hazardous Materials' shall mean any\n                                   -------------------                 \nhazardous or toxic substance, material or waste which is regulated under, or\ndefined as a 'hazardous substance', 'pollutant', 'contaminant', 'toxic\nchemical', 'hazardous material', 'toxic substance', or 'hazardous\nchemical' under (1) CERCLA; (2) the Emergency Planning and Community Right-to-\nKnow Act, 42 U.S.C. Section 11001 et seq.; (3) the Hazardous Materials\n                                  -- ---                              \nTransportation Act, 49 U.S.C. Section 1801, et seq.; (4) the Toxic Substances\n                                            -- ---                           \nControl Act, 15 U.S.C. Section 2601 et seq.; (5) the Occupational Safety and\n                                    -- ---                                  \nHealth Act of 1970, 29 U.S.C. Section 651 et seq.; (6) regulations promulgated\n                                          -- ---                              \nunder any of the above statutes; or (7) any applicable state or local statute,\nordinance, rule, or regulation that has a scope or purpose similar to those\nstatutes identified above.\n\n          4.23.  Interested Party Transactions.   To the best knowledge of the\n                 -----------------------------                                \nCompany, no officer or director of the Company or ITC China or any 'affiliate'\nor 'associate' (as those terms\n\n                                       10\n\n \nare defined in Rule 405 promulgated under the 1933 Act) of any such person has\nhad, either directly or indirectly, a material interest in:  (i) any person or\nentity which purchases from or sells, licenses or furnishes to the Company or\nITC China any goods, property, technology, intellectual or other property rights\nor services; or (ii) any contract or agreement to which the Company or ITC China\nis a party or by which it may be bound or affected.\n\n          4.24.  Stock Restriction Agreements.   Each person who, pursuant of\n                 ----------------------------                                \nany benefit, bonus or incentive plan of the Company or ITC China, holds any\ncurrently outstanding shares of Common Stock or other securities of either the\nCompany or ITC China or any option, warrant or right to acquire such shares or\nother securities, has entered into or is otherwise bound by, an agreement\ngranting the Company or ITC China (i) the right to repurchase the shares for the\noriginal purchase price, or to cancel the option, warrant or right, in the event\nthe holder's employment or services with the Company or ITC China terminate for\nany reason, subject to release of such repurchase or cancellation right on terms\nand conditions specified by the Board of Directors of the Company, and (ii) a\nright of first refusal with respect to all such shares.  Each of the Company and\nITC China has furnished to each Investor true and complete copies of the forms\nof all such stock restriction agreements.\n\n          4.25   Business Plan.  The business plan prepared by the Company and\n                 -------------                                                \ndelivered to each Investor on or before the date hereof (the 'Business Plan')\nwas prepared in good faith and is not materially misleading.\n\n     4B.  REPRESENTATIONS AND WARRANTIES OF CHARLES ZHANG.   Charles Zhang\n          -----------------------------------------------                 \nrepresents and warrants to the Investors as follows:\n\n          4B.1   Conflicting Agreements. He is not, as a result of the nature of\n                 ----------------------                                         \nthe business conducted or proposed to be conducted by the Company or for any\nother reason, in violation of (i) any fiduciary or confidential relationship,\n(ii) any term of any contract or covenant (either with the Company or with\nanother entity) relating to employment, patents, proprietary information\ndisclosure, non-competition or non-solicitation, or (iii) any other contract or\nagreement, or any judgment, decree or order of any court or administrative\nagency relating to or affecting the right of Mr. Zhang to be employed by the\nCompany. No such relationship, term, judgment, decree, or order conflicts with\nMr. Zhang obligations to use his best efforts to promote the interests of the\nCompany nor does the execution and delivery of this Agreement and the\ntransactions contemplated hereby, nor the carrying on of the Company's business\nas an officer or key employee of the Company, conflict with any such\nrelationship, term, judgment, decree or order.\n\n          4B.2   Litigation. There is no action, suit or proceeding, or\n                 ----------                                            \ngovernmental inquiry or investigation, pending or, to the best of Mr. Zhang's\nknowledge, threatened against Mr. Zhang and, to the best of his knowledge, there\nis no basis for any such action, suit, proceeding, or governmental inquiry or\ninvestigation.\n\n          4B.3  Stockholder Agreements. Except as contemplated by or disclosed\n                ----------------------                                        \nin this Agreement, Mr. Zhang is not a party to and has no knowledge of any\nagreements, written or oral, relating to the acquisition, disposition,\nregistration under the Securities Act, or voting of the capital stock of the\nCompany.\n\n                                       11\n\n \n     5.  REPRESENTATIONS AND WARRANTIES OF THE INVESTORS.   Each Investor\n         -----------------------------------------------                 \nrepresents and warrants to the Company as follows:\n\n          5.1.   Authorization.   This Agreement when executed and delivered by\n                 -------------                                                 \nthe Investor will constitute a valid and legally binding obligation of the\nInvestor, subject, as to enforcement of remedies, to applicable bankruptcy,\ninsolvency, moratorium, reorganization and similar laws affecting creditors'\nrights generally and to general equitable principles.\n\n          5.2.   Investigation; Economic Risk.   The Investor acknowledges that\n                 ----------------------------                                  \nit is an 'accredited investor' within the meaning that term as defined in Rule\n50l(a) of Regulation D of the Securities Act.  The Investor's address set forth\non the Exhibit A represents its state of domicile, upon which the Company may\n       ---------                                                             \nrely for the purpose of complying with applicable state 'Blue Sky' laws.  The\nInvestor acknowledges that it has had an opportunity to discuss the business,\naffairs and current prospects of the Company with its officers.  The Investor\nfurther acknowledges having had access to information about the Company that it\nhas requested.  The Investor acknowledges that it is able to fend for itself in\nthe transactions contemplated by this Agreement and has the ability to bear the\neconomic risks of its investment pursuant to this Agreement.\n\n          5.3.   Purchase for Own Account. The Shares and the Conversion Shares\n                 ------------------------        \nwill be acquired for its own account, not as a nominee or agent, and not with a\nview to or in connection with the sale or distribution of any part thereof.\n\n          5.4.   Exempt from Registration; Restricted Securities.   The Investor\n                 -----------------------------------------------                \nunderstands that the Shares and the Conversion Shares will not be registered\nunder the Act, on the ground that the sale provided for in this Agreement is\nexempt from registration under of the Act, and that the reliance of the Company\non such exemption is predicated in part on the Investor's representations set\nforth in this Agreement.  The Investor understands that the Shares and the\nConversion Shares being purchased hereunder are restricted securities within the\nmeaning of Rule 144 under the Act; that the Shares and the Conversion Shares are\nnot registered and must be held indefinitely unless they are subsequently\nregistered or an exemption from such registration is available.\n\n          5.5.   Restrictive Legends.   It is understood that each certificate\n                 -------------------                                          \nrepresenting (a) the Shares, (b) the Conversion Shares, and (c) any other\nsecurities issued in respect of the any of the foregoing upon any stock split,\nstock dividend, recapitalization, merger or similar event shall be stamped or\notherwise imprinted with a legend substantially in the following form:\n\n   THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE\n   SECURITIES ACT OF 1933, AS AMENDED (THE 'ACT'), OR UNDER THE SECURITIES\n   LAWS OF CERTAIN STATES.  THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON\n   TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS\n   PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO\n   REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY\n\n                                       12\n\n \n   REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY\n   TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN\n   COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.\n\n          5.6    Removal of Restrictive Legend. The legend set forth above shall\n                 -----------------------------                          \nbe removed by the Company from any certificate evidencing Shares or Conversion\nShares upon delivery to the Company of an opinion by counsel, reasonably\nsatisfactory to the Company, that a registration statement under the Act is at\nthat time in effect with respect to the legended security or that such security\ncan be freely transferred in a public sale without such a registration statement\nbeing in effect and that such transfer will not jeopardize the exemption or\nexemptions from registration pursuant to which the Company issued the Shares or\nConversion Shares.\n\n     6.   COVENANTS OF THE COMPANY.  The Company covenants to each Investor as\n          ------------------------                                            \nfollows:\n\n          6.1    Use of Proceeds. The Company will use the Proceeds from the\n                 ---------------                                            \nsale of the Shares for business expansion, capital expenditures, general working\ncapital and the repayment of promissory notes of the Company, including accrued\ninterest thereon, in the aggregate principal amount of $100,000.\n\n          6.2    Implementation of Business Plan. The Company shall use its best\n                 -------------------------------                          \nefforts to take all necessary actions to implement and carry out the Business\nPlan, including, without limitation, hiring employees, renting office space,\nemploying legal and technical consultants and undertaking other customary\nbusiness activities.\n\n          6.3    Other Investors.  The Company shall not engage any strategic\n                 ---------------                                             \ninvestors for the purpose of obtaining additional financing without the prior\nwritten consent of the holders of a majority of the Shares.\n\n          6.4    Vesting.  In addition, any Common Stock or other securities of\n                 -------                                                       \nthe Company issued after the First Closing to employees, directors and\nconsultants of the Company pursuant to any benefit, bonus or incentive plan of\nthe Company shall be subject to customary vesting provisions over a period of\nfour (4) years (other than Common Stock issued pursuant to the exercise of\noptions held by Edward Roberts and Andrew Mason as of the date hereof), and a\nminimum of 50% of the shares issued to Charles Zhang shall be subject to four\n(4) years of customary vesting and repurchase provisions at the original issue\nprice.\n\n          6.4    Expenses of Directors.  The Company shall promptly reimburse in\n                 ---------------------                                          \nfull each director of the Company who is not an employee of the Company for all\nof his reasonable out-of-pocket expenses incurred in attending each meeting of\nthe Board of Directors of the Company or any committee hereof.\n\n     7.   CONDITIONS TO THE INVESTORS' OBLIGATIONS AT THE CLOSINGS.   The\n          ----------------------------------------------------------      \nobligations of each Investor to purchase the Tranche I Shares at the First\nClosing and the Tranche II Shares at the Second Closing are subject to the\nfulfillment, to the satisfaction each\n\n                                       13\n\n \nInvestor, on or before the First Closing and Second Closing, respectively, of\nthe following conditions:\n\n          7.1.   Representations and Warranties Correct. The representations and\n                 --------------------------------------                    \nwarranties made by the Company in Section 4 hereof shall be true and correct (i)\nwhen made, (ii) as of the date of the First Closing, and (iii) as of the date of\nthe Second Closing, if consummated; such representations and warranties shall\nhave the same force and effect as if made on and as of such dates, subject to\nchanges contemplated by this Agreement; and the Company shall have performed all\nobligations and conditions herein required to be performed or observed by it (i)\non or before the First Closing, with respect to the issuance and sale of the\nTranche I Shares, and (ii) on or before the Second Closing, if consummated, with\nrespect to the issuance and sale of the Tranche II Shares.\n\n          7.2.   Performance of Obligations.   The Company shall have performed\n                 --------------------------                                    \nand complied with all agreements, obligations and conditions contained in this\nAgreement that are required to be performed or complied with by it (i) on or\nbefore the First Closing, with respect to the issuance and sale of the Tranche I\nShares, and (ii) on or before the Second Closing, with respect to the issuance\nand sale of the Tranche II Shares;  and the Company shall have obtained all\napprovals, consents and qualifications necessary to complete the purchases and\nsales described herein.\n\n          7.3.   Proceedings and Documents. All corporate and other proceedings\n                 -------------------------                                 \nin connection with the transactions contemplated hereby and all documents and\ninstruments incident to such transactions shall be satisfactory in substance and\nform to the Investor, and the Investor shall have received all such counterpart\noriginals or certified or other copies of such documents as it may reasonably\nrequest.\n\n          7.4.   Consents and Waivers.   The Company shall have obtained any and\n                 --------------------                                           \nall consents and waivers necessary or appropriate for consummation of the\ntransactions contemplated by this Agreement.\n\n          7.5.   Compliance Certificate. At the First Closing, the Company shall\n                 ----------------------                                     \ndeliver to each Investor a certificate, dated as of the First Closing, signed by\nthe Company's President certifying that the conditions specified in Paragraphs\n7.1 and 7.2 have been fulfilled. In addition, at the Second Closing, if\nconsummated, the Company shall deliver to each Investor another certificate,\ndated as of the Second Closing, signed by the Company's President certifying\nthat the conditions specified in Sections 7.1 and 7.2 have been fulfilled.\n\n          7.6.   Securities Laws.   The offer and sale of the Shares to the\n                 ---------------                                           \nInvestors pursuant to this Agreement shall be exempt from the registration\nrequirements of the Act and the registration and\/or qualification requirements\nof all applicable state securities laws.\n\n          7.7.   Amendment to Certificate. The Certificate shall have been duly\n                 ------------------------                                   \nadopted by the Company by all necessary corporate action of its Board of\nDirectors and shareholders and shall have been duly filed with and accepted by\nthe Secretary of State of the State of Delaware.\n\n                                       14\n\n \n          7.8.   Opinion of Company's Counsel.  At both the First Closing and\n                 -----------------------------                                 \nthe Second Closing, each Investor shall have received from counsel to the\nCompany an opinion addressed to the Investor, dated the date of the respective\nClosing, in form and substance reasonably acceptable to the Investor.\n\n          7.9.   Board of Directors. The Company's Certificate of Incorporation\n                 ------------------   \nand bylaws shall provide for a Board of 45 Directors. The number of Directors\nshall not be changed except by amendment. The Company's Board of Directors on\nthe date of both First Closing and Second Closing shall consist of Charles\nZhang, Edward B. Roberts and two representatives selected by the holders of the\nSeries B Preferred Stock. The fifth seat on the Board of Directors shall be\neither vacant or filled by vote of the Common Stock, Series A Preferred Stock\nand Series B Preferred Stock, voting together as a single class.\n\n          7.10   Achievement of Revenue Plan; Audited Financial Statements;\n                 ----------------------------------------------------------\nInformation Rights.  With respect to the obligation of the Investors to purchase\n------------------                                                              \nthe Tranche II Shares at the Second Closing, the Company shall (i) have achieved\nrevenues of at least $117,090 with respect to the period from January 1, 1998,\nthrough May 31, 1998, (ii) have provided audited financial statements for both\nthe Company and ITC China for the year ending December 31, 1997, no later than\nMay 31, 1998, and (iii) be in compliance with Sections 1.1 and 1.3 of that\ncertain Investor Rights Agreement, dated as of the date hereof, by and between\nthe Company and the Investors.\n\n     8.   CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSINGS.  The obligations\n          ----------------------------------------------------                  \nof the Company under this Agreement are subject to the fulfillment, on or before\nboth the First Closing and the Second Closing, of the following conditions:\n\n          8.1.   Representations and Warranties.    The representations and\n                 ------------------------------                            \nwarranties of the Investors contained in Section 5 hereof shall be true as of\nboth the First and Second Closing.\n\n          8.2.   Payment of Purchase Price.   Each Investor shall have delivered\n                 -------------------------                                      \nto the Company the purchase price in accordance with the provisions of Section\n3.\n\n          8.3.   Certificate Effective.   The Certificate shall have been duly\n                 ---------------------                                        \nadopted by the Company by all necessary corporate action of its Board of\nDirectors and shareholders, and shall have been duly filed with and accepted by\nthe Secretary of State of the State of Delaware.\n\n          8.4.   Securities Exemptions.   The offer and sale of the Shares to\n                 ---------------------\nthe Investors pursuant to this Agreement shall be exempt from the registration\nrequirements of the Act, and the registration and\/or qualification requirements\nof all applicable state securities laws.\n\n     9.   MISCELLANEOUS.\n          ------------- \n\n          9.1.   Governing Law. This Agreement shall be governed in all respects\n                 -------------                                               \nby the laws of the State of Delaware without regard to provisions regarding\nchoice of laws.\n\n          9.2.   Survival.   The representations, warranties, covenants and\n                 --------                                                  \nagreements made herein shall survive any investigation made by any party hereto\nand the closing of all the transactions contemplated hereby.\n\n                                       15\n\n \n          9.3.   Successors and Assigns. Except as otherwise expressly provided\n                 ----------------------                                     \nherein, the provisions hereof shall inure to the benefit of, and be binding\nupon, the successors, assigns, heirs, executors and administrators of the\nparties hereto whose rights or obligations hereunder are affected by such\namendments. This Agreement and the rights and obligations therein may not be\nassigned by any Investor without the written consent of the Company except to a\nparent corporation, a subsidiary or affiliate. This Agreement and the rights and\nobligations therein may not be assigned by the Company without the written\nconsent of the holders of a majority of the Shares purchased by Intel\nCorporation pursuant hereto and the holders of a majority of the Shares\npurchased by Harrison and Kummell pursuant hereto.\n\n          9.4.   Entire Agreement. This Agreement and the exhibits hereto which\n                 ----------------                                           \nare hereby expressly incorporated herein by this reference constitute the entire\nunderstanding and agreement between the parties with regard to the subjects\nhereof and thereof; provided, however, that nothing in this Agreement shall be\n                    --------  -------                                         \ndeemed to terminate or supersede the provisions of any confidentiality and\nnondisclosure agreements executed by the parties hereto prior to the date\nhereof, which agreements shall continue in full force and effect until\nterminated in accordance with their respective terms.\n\n          9.5.   Notices.   Except as may be otherwise provided herein, all\n                 -------                                                   \nnotices, requests, waivers and other communications made pursuant to this\nAgreement shall be in writing and shall be conclusively deemed to have been duly\ngiven (a) when hand delivered to the other party; (b) when received when sent by\nfacsimile at the address and number set forth below; (c) three business days\nafter deposit in the U.S. mail with first class or certified mail receipt\nrequested postage prepaid and addressed to the other party as set forth below;\nor (d) the next business day after deposit with a national overnight delivery\nservice, postage prepaid, addressed to the parties as set forth in Exhibit A\nwith next-business-day delivery guaranteed, provided that the sending party\nreceives a confirmation of delivery from the delivery service provider.  Each\nperson making a communication hereunder by facsimile shall promptly confirm by\ntelephone to the person to whom such communication was addressed each\ncommunication made by it by facsimile pursuant hereto but the absence of such\nconfirmation shall not affect the validity of any such communication.  A party\nmay change or supplement the addresses given in Exhibit A, or designate\nadditional addresses, for purposes of this Section 9.5 by giving the other party\nwritten notice of the new address in the manner set forth above.\n\n          9.6.   Amendments and Waivers.   Any term of this Agreement may be\n                 ----------------------                                     \namended only with the written consent of the Company and the holders of a\nmajority of shares of Series B Preferred Stock, or rights to acquire Shares.\n\n          9.7.   Delays or Omissions.   No delay or omission to exercise any\n                 -------------------                                        \nright, power or remedy accruing to the Company or to any Investor, upon any\nbreach or default of any party hereto under this Agreement, shall impair any\nsuch right, power or remedy of the Company, or the Investor nor shall it be\nconstrued to be a waiver of any such breach or default, or an acquiescence\ntherein, or of any similar breach of default thereafter occurring; nor shall any\nwaiver of any other breach or default theretofore or thereafter occurring. Any\nwaiver, permit, consent or approval of any kind or character on the part of the\nCompany or any Investor of any breach of default under this Agreement or any\nwaiver on the part of the Company or any Investor\n\n                                       16\n\n \nof any provisions or conditions of this Agreement, must be in writing and shall\nbe effective only to the extent specifically set forth in such writing. All\nremedies, either under this Agreement, or by law or otherwise afforded to the\nCompany or any Investor shall be cumulative and not alternative.\n\n          9.8.   Legal Fees.   In the event of any action at law, suit in equity\n                 ----------                                                     \nor arbitration proceeding in relation to this Agreement or any Shares or other\nsecurities of the Company issued or to be issued, the prevailing party, shall be\npaid by the other party a reasonable sum for attorney's fees and expenses for\nsuch prevailing party.\n\n          9.9.   Finder's Fees.   Each party (a) represents and warrants to the\n                 -------------                                                 \nother party hereto that, except as set forth in Section 9.9 of the Disclosure\nSchedule, it has retained no finder or broker in connection with the\ntransactions contemplated by this Agreement, and (b) hereby agrees to indemnify\nand to hold harmless the other party hereto from and against any liability for\nany commission or compensation in the nature of a finder's fee of any broker or\nother person or firm (and the costs and expenses of defending against such\nliability or asserted liability) for which the indemnifying party or any of its\nemployees or representatives are responsible.\n\n          9.10.  Titles and Subtitles.   The titles of the paragraphs and\n                 --------------------                                    \nsubparagraphs of this Agreement are for convenience of reference only and are\nnot to be considered in construing this Agreement.\n\n          9.11.  Counterparts.   This Agreement may be executed in any number of\n                 ------------                                                   \ncounterparts, each of which shall be an original, but all of which together\nshall constitute one instrument.\n\n          9.12.  Severability.   Should any provision of this Agreement be\n                 ------------                                             \ndetermined to be illegal or unenforceable, such determination shall not affect\nthe remaining provisions of this Agreement.\n\n          9.13   Protection of Confidential Information.  Confidential or\n                 --------------------------------------                  \nproprietary information disclosed by either party under this Agreement, as well\nas the terms of this Agreement and each Investor's investment in the Company,\nshall be considered confidential information (the 'Confidential Information')\nand shall not be disclosed by the Company or any other party to this Agreement\nto any third party, subject to Section 9.14 below.  Each party shall immediately\nnotify the other parties of any information that comes to its attention which\nmight indicate that there has been a loss of confidentiality with respect to the\nConfidential Information.  In the event that the Company or any other party\nbecomes legally compelled (by statute or regulation or by oral questions,\ninterrogatories, request for information or documents, subpoena, criminal or\ncivil investigative demand or similar process, including without limitation, in\nconnection with any public or private offering of the Company's capital stock)\nto disclose any of the Confidential Information, such party (the 'Disclosing\nParty') shall provide the other party (the 'Non-Disclosing Party') with prompt\nwritten notice of that fact so that the appropriate party may seek (with the\ncooperation and reasonable efforts of the other parties) a protective order,\nconfidential treatment or other appropriate remedy. In such event, the\nDisclosing Party shall furnish only that portion of the Confidential Information\nwhich is legally required and shall\n\n                                       17\n\n \nexercise reasonable efforts to obtain reliable assurance that confidential\ntreatment will be accorded the Confidential Information to the extent reasonably\nrequested by the Non-Disclosing Party. The provisions of this Section 9.13 shall\nbe in addition to, and not in substitution for, the provisions of any separate\nnondisclosure agreement executed by the parties hereto with respect to the\ntransaction contemplated hereby.\n\n          9.14   Disclosure of Terms; Press Releases.  Notwithstanding the\n                 -----------------------------------                      \nprovisions of Section 9.13 above, from and after the First Closing, the Company\nmay disclose the existence of this Agreement and the terms hereof, as well as\neach Investor's investment in the Company solely to the Company's investors,\ninvestment bankers, lenders, accountants, legal counsel, business partners, and\nbona fide prospective investors, employees, lenders and business partners, in\neach case only where such persons or entities are under appropriate\nnondisclosure obligations.  In addition, the Company may disclose the fact that\nthe Investor is an investor in the Company to third parties without the\nrequirement of nondisclosure obligations.  Within sixty (60) days of the First\nClosing, the Company may issue a press release disclosing that the Investor has\ninvested in the Company; provided that the release does not disclose the amount\nor other specific terms of the investment and is approved in advance in writing\nby the Investor.  Each Investor, at its sole discretion, may provide an\nexecutive quote or other material regarding its investment in the Company.  No\nother announcement regarding the Investor's investment in the Company in a\npress conference, in any professional or trade publication, in any marketing\nmaterials or otherwise to the general public may be made without the prior\nwritten consent of the Investor, which consent may be withheld at the sole\ndiscretion of the Investor.  Notwithstanding the foregoing, the Investor may\ndisclose its investment in the Company and the terms thereof to third parties or\nto the public at its discretion, and the Company shall have the right to\ndisclose to third parties any such information disclosed by the Investor in a\npress release or other public announcement.  If the Company or the Investor\ndetermines that any disclosure not otherwise authorized by this Agreement is\nrequired by law or regulation, then the provisions of Section 9.13 regarding\ndisclosure of Confidential Information by a Disclosing Party shall govern.\n\n          9.15   Dispute Resolution. The parties agree to negotiate in good\n                 ------------------                                       \nfaith to resolve any dispute between them regarding this Agreement. If the\nnegotiations do not resolve the dispute to the reasonable satisfaction of both\nparties, then each party shall nominate one senior officer of the rank of Vice\nPresident or higher as its representative. These representatives shall, within\nthirty (30) days of a written request by either party to call such a meeting,\nmeet in person and alone (except for one assistant for each party) and shall\nattempt in good faith to resolve the dispute. If the disputes cannot be resolved\nby such senior managers in such meeting, the parties agree that they shall, if\nrequested in writing by either party, meet within thirty (30) days after such\nwritten notification for one day with an impartial mediator and consider dispute\nresolution alternatives other than litigation. If an alternative method of\ndispute resolution is not agreed upon within thirty (30) days after the one day\nmediation, either party may begin litigation proceedings. This procedure shall\nbe a prerequisite before taking any additional action hereunder.\n\n                                       18\n\n \n     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of\nthe day and year herein above first written.\n\n                                        INVESTOR\n\nINTERNET TECHNOLOGIES\nCHINA INCORPORATED                      ___________________________\n                                            (Name of Investor)\n\n \n_______________________                 ___________________________\nSignature                               Signature\n\n \n_______________________                 ___________________________\nPrinted Name                            Printed Name\n\n \n_______________________                 ___________________________\nTitle                                   Title\n\n\nCHARLES ZHANG\n\nExecuted solely for the purpose of making\nthe representations and warranties set\nforth in Section 4B hereof:\n\n \n_______________________\nCharles C.Y. Zhang\n\n\n\n                    [SIGNATURE PAGE FOR SERIES B PREFERRED\n                        STOCK PURCHASE AGREEMENT]\n\n                                      -19-\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8856],"corporate_contracts_industries":[9510],"corporate_contracts_types":[9622,9627],"class_list":["post-43595","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-sohucom-inc","corporate_contracts_industries-technology__programming","corporate_contracts_types-planning","corporate_contracts_types-planning__purchase"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43595","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43595"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43595"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43595"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43595"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}