{"id":43597,"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-c-preferred-stock-purchase-agreement-sohu-com.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"series-c-preferred-stock-purchase-agreement-sohu-com","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/series-c-preferred-stock-purchase-agreement-sohu-com.html","title":{"rendered":"Series C Preferred Stock Purchase Agreement &#8211; Sohu.com"},"content":{"rendered":"<pre> \n                  SERIES C PREFERRED STOCK PURCHASE AGREEMENT\n                  -------------------------------------------\n\n\nThis Series C Preferred Stock Purchase Agreement (the 'Agreement') is entered\n                                                       ---------             \ninto as of October 18, 1999 (the 'Effective Date'), by and between Sohu.com, a\n                                  --------------                              \nDelaware corporation formerly known as Internet Technologies China Incorporated\n(the 'Company'), ITC Electronic Technology Beijing Co. Ltd., a company organized\n      -------                                                                   \nunder the laws of the People's Republic of China ('ITC China'), the persons and\nentities set forth on Exhibit A-1 hereto (each, a 'Tranche I Investor' and,\n                      -----------                  ------------------      \ntogether, the 'Tranche I Investors'), and the persons and entities set forth on\n               -------------------                                             \nExhibit A-2 hereto (each, a 'Tranche II Investor' and, collectively, the\n-----------                  -------------------                        \n'Tranche II Investors') (each Tranche I Investor or Tranche II Investor, an\n---------------------                                                      \n'Investor' and the Tranche I Investors and Tranche II Investors collectively,\n---------                                                                    \nthe 'Investors').\n     ---------   \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, $.001 par value.\n           ------------                                                         \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     '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\n                                       1\n\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     'Disclosure Schedule'                                        4.0\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     'Investors', 'Investor'                                    Preamble\n      ---------    --------\n     'Investor Rights Agreement'                                  4.2(c)\n      -------------------------\n     'ITC China'                                                Preamble\n      ---------\n     'Kummell'                                                    2.2\n      -------\n     'Kummell Note'                                               2.2\n      ------------\n     'Non-Disclosing Party'                                       9.13\n      --------------------\n     'Right of First Refusal and Co-Sale Agreement'               7.8\n      --------------------------------------------\n     'Second Closing'                                             3.2\n      --------------\n     'Stockholders' Voting Agreement'                             7.8\n      ------------------------------\n     'SEC'                                                        4.14\n      ---\n     'Securities Act'                                             4.5(b)\n      --------------\n     'Series C Preferred Stock'                                   2.1\n      ------------------------\n     'Shares'                                                     2.2\n      ------\n     'Tranche I Shares'                                           2.2\n      ----------------\n     'Tranche II Shares'                                          2.3\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 has authorized the issuance, pursuant to the terms and conditions of\nthis Agreement, of up to 1,848,885 shares of the Company's Series C Convertible\nPreferred Stock ('Series C Preferred Stock') having the rights, preferences,\nprivileges and restrictions set forth in the form of the Third 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 hereof, (a) the Company will issue\nand sell to Kummell Investments Limited ('Kummell') and Kummell agrees to\npurchase from the Company 1,318,588 shares of Series C Preferred Stock, (b) the\nCompany will issue and sell to Edward B. Roberts, as trustee of the Roberts\nFamily Trust (Mr. Roberts as trustee, 'Roberts') and Roberts agrees to purchase\nfrom the Company 31,902 shares of Series C Preferred Stock, (c) the Company will\nissue and sell to Brant C. Binder ('Binder') and Binder agrees to purchase from\nthe Company 31,902 shares of Series C Preferred Stock, and (d) the Company will\nissue and sell to Nicholas Negroponte, to one or more designees consisting of\nMr. Negroponte's ancestors, descendants or spouse, one or more trusts for the\nbenefit of such persons, or an entity owned solely by Mr. Negroponte or one or\nmore of such persons, or to any combination of \n\n                                       2\n\n \nMr. Negroponte and one or more such designees (Mr. Negroponte and each such\ndesignee, 'Negroponte'), and Negroponte agrees to purchase from the Company\n31,902 shares of Series C Preferred Stock (the 'Tranche I Shares'), in each case\n                                                ----------------  \nat a price of $4.702 per share for an aggregate purchase price of $6,650,010.\nThe purchase price for the Tranche I Shares shall be paid by wire transfer of\nfunds to a designated account of the Company, provided that (i) wire transfer\ninstructions are delivered to Kummell, Roberts, Binder and Negroponte at least\none (1) business day prior to the First Closing and (ii) the purchase price for\n319,013 of the Shares purchased by Kummell shall be paid through the conversion\nand cancellation (in accordance with the terms and conditions thereof) of that\ncertain Convertible Promissory Note of the Company to Kummell, dated as of July\n20, 1999 in the original principal amount of $1,500,000 (the 'Kummell Note').\n\n           2.3  Agreement to Issue and Sell at the Second Closing. Subject to\n                -------------------------------------------------\nthe terms and conditions hereof, on the date of the Second Closing (as defined\nbelow), the Company will issue and sell to the Tranche II Investors, at the\nelection of each Tranche II Investor, up to an aggregate of 433,454 shares of\nSeries C Preferred Stock (the 'Tranche II Shares') at a price of $4.702 per\n                               -----------------\nshare for an aggregate purchase price of up to $2,038,101. The number of Tranche\nII Shares that may be purchased by each Tranche II Investor is set forth next to\nsuch Investor's name on Exhibit A-2. The purchase price for the Tranche II\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 Shares\n                -----------------                                               \nhereunder shall be held at the offices of Goulston &amp; Storrs, P.C. on the date\nhereof (the 'First Closing').\n             -------------   \n\n          3.2.  The Second Closing. The purchase and sale of the Tranche II\n                ------------------                                         \nShares hereunder (the 'Second Closing') shall be held at the offices of Goulston\n                       --------------                                           \n&amp; Storrs, P.C. on that date which is 28 days after the date of this Agreement\n(provided that if such date falls on a day which is not a business day, the\nSecond Closing will occur on the next succeeding business day) or such earlier\ndate as the Company and the Tranche II Investors may agree upon.\n\n          3.3  Delivery. At the First Closing, and also at the Second Closing,\n               --------                                                       \nthe Company will deliver to each Investor a certificate representing the Shares\npurchased by each Investor hereunder against payment of the full purchase price\ntherefor by wire transfer (and against delivery of the Kummell Note for\ncancellation in the case of the Tranche I Shares to be purchased by conversion\nand cancellation of the Kummell Note).\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\n                                       3\n\n \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 a\n               ---------------------------------------------                   \ncorporation duly organized, validly existing and in good standing under, and by\nvirtue 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 11,000,000 authorized shares of \n                    ------------ \nCommon Stock ($0.001 par value) of which 3,621,410 shares are issued and\noutstanding.\n\n               (b)  Preferred Stock.  A total of 5,100,000 authorized shares of\n                    ---------------                                            \nPreferred Stock ($0.001 par value), of which 1,125,000 are designated as Series\nA Convertible Preferred Stock ('Series A Preferred Stock'), all of which are\noutstanding; 1,738,910 are designated as Series B Convertible Preferred Stock\n('Series B Preferred Stock'), all of which are outstanding; 338,295 are\ndesignated as Series B-1 Convertible Preferred Stock ('Series B-1 Preferred\nStock'), all of which are outstanding; and 1,848,885 are designated as Series C\nPreferred, none of which is issued or outstanding.\n\n               (c)  Options, Warrants, Reserved Shares.  The Company has \n                    ---------------------------------- \nreserved up to 1,441,880 shares of its Common Stock for possible issuance upon\nthe conversion of the shares of the Series C Preferred (the 'Conversion\n                                                             ----------\nShares'). Except as set forth in Section 4.2(d) of the Disclosure Schedule and\n------                           --------------\nexcept for (i) the conversion privileges of the Series A Preferred, the Series B\nPreferred and the Series B-1 Preferred, (ii) the conversion privileges of the\nSeries C Preferred to be issued hereunder and one or more similar agreements,\n(iii) the 472,810 shares of Common Stock reserved for issuance upon the exercise\nof options granted or contemplated to be granted to employees of the Company,\nunder which options to purchase 117,500 shares of Common Stock (including\noptions for the purchase of 50,000 shares of Common Stock to be granted to\nCharles Zhang effective upon the First Closing) are outstanding, and (iv)\nwarrants to purchase 17,345 shares of Common Stock of the Company, issued in\nconnection with the Company's bridge financing in December 1997, there are no\noptions, warrants, conversion privileges or other rights, or agreements with\nrespect to the issuance thereof, presently outstanding to purchase any of the\ncapital stock of the Company. Apart from the exceptions noted in this Section\n4.2, no shares (including the Shares and Conversion Shares) of the Company's\noutstanding capital stock, or stock issuable upon exercise or exchange of any\noutstanding options or other stock issuable by the Company, are subject to any\nrights of first refusal or other rights to purchase such stock (whether in favor\nof the Company or any other person), pursuant to any agreement or commitment of\nthe Company, except as set forth in the Amended and Restated Investor Rights\nAgreement dated as of August 18, 1998 (the 'Investor Rights Agreement') between\nthe Company and the persons listed in Schedule B thereto.\n\n                                       4\n\n \n               (d)  Outstanding Security Holders.  Section 4.2(d) of the \n                    ----------------------------   --------------   \nDisclosure Schedule sets forth a complete and accurate list of all outstanding\nshareholders, option holders and other security holders of the Company as of the\nEffective Date.\n\n          4.3.  Subsidiaries.  The Company owns all of the issued and \n                ------------                                         \noutstanding stock of ITC China.  ITC China is a wholly foreign owned enterprise\n(WFOE) authorized by the government of China and seeks to have the government\npermits, approvals authorizations and licenses necessary to engage in the\nbusiness currently conducted and currently proposed to be conducted by ITC\nChina.  ITC China may not be licensed to engage in all aspects of its business\nin the People's Republic of China (the 'PRC'), however, and Minister Wu Jichuan\nof the PRC Ministry of the Information Industry announced recently that PRC law\nprohibits foreign ownership of Internet content providers.  No other person or\nentity other than the Company has any right to acquire any equity or other\nownership interest of ITC China.  Except for the Company's ownership of ITC\nChina, the Company does not presently own or control, directly or indirectly,\nany interest in any other corporation, partnership, limited liability company,\ntrust, joint venture, association, 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 Closing.  This\nAgreement 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, reorganization and similar laws affecting\ncreditors' rights generally and to general equitable principles.  The Shares are\nnot subject to any preemptive rights or rights of first refusal, except such as\nhave been waived or are being accommodated under the terms of this Agreement.\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 'Securities 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 as evidenced by the Kummell Note, \n               -----------                                               \nneither the Company nor ITC China has any indebtedness for borrowed money that\nthe Company or ITC \n\n                                       5\n\n \nChina has directly or indirectly created, incurred, assumed, or guaranteed, or\nwith respect 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 leasehold\ninterests in such assets free of any liens, encumbrances, security interests or\nclaims of any party other than the lessors of such property and assets.\n\n          4.8. Status of Proprietary Assets.\n               ---------------------------- \n\n               (a)  Ownership.  Each of the Company and ITC China has full \n                    --------- \ntitle and ownership of, or has license to, all Proprietary Assets necessary to\nenable it to carry on its business as now conducted and as presently proposed to\nbe conducted, including but not limited to those Proprietary Assets set forth in\nSchedule 4.8(a) of the Disclosure Schedule, without any conflict with or\n---------------\ninfringement of the rights of others.  No third party has any ownership right,\ntitle, interest, claim in or lien on any of the Company's or ITC China's\nProprietary Assets and the Company and ITC China have taken, and in the future\nwill use their best efforts to take, all steps reasonably necessary to preserve\ntheir respective legal rights in, and the secrecy of, all its Proprietary\nAssets, except those for which disclosure is required for legitimate business or\nlegal reasons.\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 \n\n                                       6\n\n \ncontractors of the Company and ITC China and the conduct of the Company's and\nITC China's business as presently proposed, will not, to the best of the\nCompany's knowledge, conflict with or result in a breach of the terms,\nconditions 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\n                                                           -----------       \nDisclosure Schedule and have been made available for inspection by the Investors\nand their respective counsel.  For purposes of this Section 4.9, 'material'\nshall mean any agreement, contract, indebtedness, liability or other obligation\nhaving an aggregate value, cost or amount in excess of $10,000.\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 with,\nor actions taken on behalf of the Company or ITC China.  To the best of the\nCompany's knowledge, there is no factual or legal basis for any such Action that\nmight result, individually or in the aggregate, in any material adverse change\nin the business, properties, assets, financial condition, affairs or prospects\nof the Company or ITC China.  By way of example but not by way of limitation,\nthere are no Actions pending or, to the best of the Company's knowledge,\nthreatened (or any basis therefor known to the Company or ITC China) relating to\nthe prior employment of any of the Company's or ITC China's employees or\nconsultants, their use in connection with the Company's or ITC China's business\nof any information, technology or techniques allegedly proprietary to any of\ntheir former employers, clients or other parties, or their obligations under any\nagreements with prior employers, clients or other parties.  Neither the Company\nnor ITC China is a party to or subject to the provisions of any order, writ,\ninjunction, judgment or decree of any court or government agency or\ninstrumentality and there is no Action by the Company or ITC China currently\npending 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 \n\n                                       7\n\n \ngovernmental authority on the part of each of the Company and ITC China required\nin connection with the consummation of the transactions contemplated herein have\nbeen obtained prior to and be effective as of the First Closing and will have\nbeen obtained prior to and be effective as of the Second Closing. Based in part\non the representations of the Investors set forth in Section 5 below, the offer,\nsale and issuance of the Shares in conformity with the terms of this Agreement\nare exempt from the registration and prospectus delivery requirements of the\nSecurities Act.\n\n          4.12.  Compliance with Other Instruments.  Neither the Company nor ITC\n                 ---------------------------------                              \nChina 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 (together, 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, except that Minister Wu Jichuan of the PRC Ministry of the Information\nIndustry announced recently that PRC law prohibits foreign ownership of Internet\ncontent providers, and ITC China may not be fully licensed to conduct its\nbusiness in the PRC.  The execution, delivery and performance of and compliance\nwith this Agreement and the consummation of the transactions contemplated hereby\nwill not result in any such violation or default, or be in conflict with or\nconstitute, with or without the passage of time or the giving of notice or both,\neither a default under the Company's Certificate or Bylaws or ITC China's\ncharter or Bylaws, or any agreement or contract of the Company or ITC China, or,\nto the best of the Company's knowledge, a violation of any statutes, laws,\nregulations or orders, or an event which results in the creation of any lien,\ncharge 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 Rights\n                 -------------------                                            \nAgreement, neither the Company nor ITC China has granted or agreed to grant any\nperson or entity any rights (including piggyback registration rights) to have\nany securities of the Company or ITC China registered with the United States\nSecurities and Exchange Commission ('SEC') or any other governmental authority.\n                                     ---                                       \n\n          4.15.  Insurance.  Each of the Company and ITC China has obtained and\n                 ---------                                                     \nwill maintain, fire and casualty insurance policies with extended coverage,\nsufficient in amount (subject to reasonable deductibles) to allow it to replace\nany of its properties that might be damaged or destroyed.\n\n          4.16.  Financial Statements.  The Company has supplied to the\n                 --------------------                                  \nInvestors (i) the audited balance sheet of the Company as at December 31, 1998\nand the related audited \n\n                                       8\n\n \nstatements of income, changes in stockholders' equity and cash flow of the\nCompany for the fiscal year then ended, accompanied by the report thereon by\nCoopers &amp; Lybrand CIEC, the Company's independent certified public accountants\n(together with the related schedules and notes thereto, the 'Audited Financial\nStatements') and (ii) the unaudited balance sheet of the Company as at July 31,\n1999 and the related unaudited statements of income, changes in stockholders'\nequity and cash flow of the Company for the quarter then ended (the 'Interim\nFinancial Statements'). The Financial Statements present fairly the financial\ncondition of the Company as of the respective dates thereof, and the income,\nchanges in stockholders' equity and cash flow of the Company for the year and\nperiod then ended and have been prepared in accordance with United States\ngenerally accepted accounting principles ('GAAP') applied consistently\nthroughout the periods involved, except that some or all footnotes required by\nGAAP for year-end financial statements are not included in the Interim Financial\nStatements. Other than as set forth in the Disclosure Schedule, neither the\nCompany nor ITC China has any material indebtedness or other material liability.\n\n          4.17. Certain Actions.  Since the date of the Audited Financial\n                ---------------                                          \nStatements, neither the Company nor ITC China has:  (a) declared or paid any\ndividends, or authorized or made any distribution upon or with respect to any\nclass or series of its capital stock; (b) incurred any indebtedness for money\nborrowed or incurred any other liabilities individually in excess of $10,000 or\nin excess of $25,000 in the aggregate (other than as evidenced by the Kummell\nNote); (c) made any loans or advances to any person, other than ordinary\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 Audited Financial Statement Date.  Since the\n                -------------------------------------------------            \ndate of the Audited Financial Statements, 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 or\n                business of the Company or ITC China (as presently conducted and\n                as presently proposed to be conducted);\n\n          (b)   any waiver by the Company or ITC China of a valuable right or of\n                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, except\n                such a satisfaction, discharge or payment made in the ordinary\n                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 this\n                Agreement;\n\n                                       9\n\n \n          (e)   any material change in any compensation arrangement or agreement\n                with any present or prospective employee, contractor or director\n                not approved by the Company's or ITC China's Board of Directors;\n                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, and\n                -----------                                                 \nhas 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. Each of the Company and ITC China\nhas duly filed all federal, state, county and local tax returns required to have\nbeen filed by it and paid all taxes shown to be due on such returns. There are\nin effect no waivers of applicable statutes of limitations with respect to taxes\nfor 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 Company\n                --------------------------------------------------      \nhas caused each employee, officer, consultant and contractor of each of the\nCompany and ITC China to enter into and execute an agreement as to assignment to\nthe Company of inventions made during employment and the confidentiality of\nproprietary information of the Company.\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 'disposal',\n                                                                      --------  \n'release', and 'threatened release' shall have the definitions assigned thereto\n -------        ------------------                                             \nby the Comprehensive Environmental Response, Compensation and Liability Act of\n1980, 42 U.S.C. Section 9601 et seq., as amended ('CERCLA').  For the purposes\n                                                   ------                     \nof this Section, 'Hazardous Materials' shall mean any hazardous or toxic\n                  -------------------                                   \nsubstance, material or waste which is regulated under, or defined as a\n'hazardous substance', 'pollutant', 'contaminant', 'toxic chemical', 'hazardous\nmaterial', \n\n                                       10\n\n \n'toxic substance', or 'hazardous chemical' under (1) CERCLA; (2) the\nEmergency Planning and Community Right-to-Know Act, 42 U.S.C. Section 11001 et\n                                                                            --\nseq.; (3) the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et\n---                                                                           --\nseq.; (4) the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; (5)\n---                                                                -- ---      \nthe Occupational Safety and Health Act of 1970, 29 U.S.C. Section 651 et seq.;\n                                                                      -- ---  \n(6) regulations promulgated under any of the above statutes; or (7) any\napplicable state or local statute, ordinance, rule, or regulation that has a\nscope or purpose similar to those statutes 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 are defined in Rule 405 promulgated under the\nSecurities Act) of any such person has had, either directly or indirectly, a\nmaterial interest in: (i) any person or entity which purchases from or sells,\nlicenses or furnishes to the Company or ITC China any goods, property,\ntechnology, intellectual or other property rights or services; or (ii) any\ncontract or agreement to which the Company or ITC China is a party or by which\nit may be bound or affected, except that Charles Zhang is a stockholder of a\nChinese entity popularly referred to as 'Sohu.'\n\n          4.24.  Stock Restriction Agreements.  Each person who, pursuant to any\n                 ----------------------------                                   \nbenefit, 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 the right to repurchase the shares for the\noriginal purchase price, or to cancel the unvested portion of the option,\nwarrant or right, in the event the holder's employment or services with the\nCompany or ITC China terminate for any reason, subject to release of such\nrepurchase or cancellation right on terms and conditions specified by the Board\nof Directors of the Company.\n\n          4.25.  Year 2000 Compatibility.  All of the Company's and ITC China's\n                 -----------------------                                       \nsystems will record, store, process and calculate and present calendar dates\nfalling on and after January 1, 2000, and will calculate any information\ndependent on or relating to such dates in the same manner and with the same\nfunctionality, data integrity and performance as the products record, store,\nprocess, calculate and present calendar dates on or before December 31, 1999, or\ncalculate any information dependent on or relating to such dates (collectively\n'Year 2000 Compliant'). All of the Company's and ITC China's systems will lose\nno functionality with respect to the introduction of records containing dates\nfalling on or after January 1, 2000. All of the Company's and ITC China's\ninternal computer systems, including without limitation, its accounting systems,\nare Year 2000 Compliant.\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 \n\n                                       11\n\n \naffecting the right of Mr. Zhang to be employed by the Company. No such\nrelationship, term, judgment, decree, or order conflicts with Mr. Zhang\nobligations to use his best efforts to promote the interests of the Company nor\ndoes the execution and delivery of this Agreement and the transactions\ncontemplated hereby, nor the carrying on of the Company's business as an officer\nor key employee of the Company, conflict with any such relationship, term,\njudgment, 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     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 it\n                ----------------------------                                    \nis an 'accredited investor' within the meaning that term as defined in Rule\n50l(a) of Regulation D of the Securities Act (meaning that, in the case of a\ncorporation, partnership, or limited liability company, it either has total\nassets in excess of $5,000,000 and was not formed for the specific purpose of\nacquiring the Shares, or each of its equity owners are 'accredited investors'\nand, in the case of an individual, that the Investor has either (a) net worth\n(or net worth with the Investor's spouse) in excess of $1 million, or net income\n(not including any net income of the Investor's spouse) in excess of $200,000,\nor joint income with the Investor's spouse in excess of $300,000, in each of the\ntwo most recent years, with a reasonable expectation of reaching the same income\nlevel in the current year). The Investor's address as set forth on Exhibit A\nhereto represents its state or other jurisdiction of domicile, upon which the\nCompany may rely for the purpose of complying with applicable state 'Blue Sky'\nlaws. The Investor acknowledges that it has had an opportunity to discuss the\nbusiness, affairs and current prospects of the Company with its officers. The\nInvestor further acknowledges having had access to information about the Company\nthat it has requested. The Investor acknowledges that it is able to fend for\nitself in the transactions contemplated by this Agreement and has the ability to\nbear the economic risks of its investment pursuant to this Agreement. The\nInvestor acknowledges that it is aware that Minister Wu Jichuan of the PRC\nMinistry of the Information Industry announced recently that PRC law prohibits\nforeign ownership of Internet content providers.\n\n                                       12\n\n \n          5.3.  Purchase for Own Account.  The Shares and the Conversion Shares\n                ------------------------                                       \nwill be acquired for the Investor's own account, not as a nominee or agent, and\nnot with a view to or in connection with the sale or distribution of any part\nthereof.\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 Securities Act, on the ground that the sale provided for in this\nAgreement is exempt from registration under the Securities Act, and that the\nreliance of the Company on such exemption is predicated in part on the\nInvestor's representations set forth in this Agreement. The Investor understands\nthat the Shares and the Conversion Shares being purchased hereunder are\nrestricted securities within the meaning of Rule 144 under the Securities Act;\nthat the Shares and the Conversion Shares are not registered and must be held\nindefinitely unless they are subsequently registered or an exemption from such\nregistration 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\n     THE SECURITIES ACT OF 1933, AS AMENDED (THE 'ACT'), OR UNDER THE\n     SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT\n     TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE\n     TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE\n     APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR\n     EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE\n     AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY\n     SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED\n     TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY\n     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 of counsel, reasonably\nsatisfactory to the Company, that a registration statement under the Securities\nAct is at that time in effect with respect to the legended security or that such\nsecurity can be freely transferred in a public sale without such a registration\nstatement being in effect and that such transfer will not jeopardize the\nexemption or exemptions from registration pursuant to which the Company issued\nthe Shares or Conversion Shares.\n\n     5A.  ACKNOWLEDGMENTS AND RELEASES BY HOLDERS OF SERIES A CONVERTIBLE\n          ---------------------------------------------------------------\nPREFERRED STOCK.  Edward B. Roberts ('Ed Roberts'), Binder and Negroponte, in\n---------------                                                              \ntheir capacities as holders of Common Stock of the Company and\/or Series A\nPreferred Stock, each hereby acknowledges and agrees as follows:\n\n                                       13\n\n \n          5A.1  No Preemptive Rights; Settlement of Dispute.  As a holder of\n                -------------------------------------------                 \nCommon Stock of the Company and\/or Series A Preferred Stock, he has no\npreemptive rights with respect to the issuance and sale by the Company of shares\nof its capital stock. Nevertheless, in order to prevent any future dispute, and\nto resolve and settle any claims he may believe he may have as to the fairness,\nfrom a financial point of view, to the Company and its stockholders of the\ntransactions contemplated by this Agreement, the Company, acting through its\nBoard of Directors, has offered to him or his designees the opportunity to\npurchase 31,902 shares of Series C Preferred Stock as set forth herein.\n\n          5A.2  Waiver of Certain Rights by Holders of Series B Preferred Stock\n                ---------------------------------------------------------------\nand Series B-1 Preferred Stock.  Holders of shares of Series B Preferred Stock\n------------------------------                                                \nand Series B-1 Preferred Stock have preemptive rights with respect to the\nissuance of capital stock of the Company. Nevertheless, in order to facilitate\nthe prevention of any future dispute and the resolution and settlement of any\npotential claims of Ed Roberts, Binder or Negroponte as described above, such\nholders have agreed to waive such preemptive rights with respect to the shares\nof Series C Preferred Stock being offered to and purchased by Ed Roberts, Binder\nand Negroponte or their designees as set forth herein.\n\n          5A.3  Acknowledgment and Release.  In consideration of the foregoing,\n                --------------------------                                     \nand the Company's issuance and sale of shares of Series C Preferred Stock in\naccordance with this Agreement, each of Ed Roberts, Binder and Negroponte hereby\n(1) acknowledges that he has relied on no representations, warranties or\nagreements of the Company or its directors, officers, stockholders or agents\nexcept as set forth in this Agreement in making the acknowledgments and\nagreements set forth in this Section 5A , (2) acknowledges that he has had the\nopportunity to consult with legal counsel as to the subject matter hereof, (3)\nacknowledges and agrees that the transactions contemplated by this Agreement are\nfair, from a financial point of view, to the Company and each of its\nstockholders, and (4) releases and forever discharges the Company and each of\nits subsidiary and affiliate corporations, successors, assigns, officers,\ndirectors, agents, consultants, attorneys, stockholders, employees, and insurers\nfrom any and all claims, demands, liabilities, rights or causes of action,\nactions, suits, and costs and fees of any kind or nature whatsoever relating to\nthe fairness, from a financial point of view, to the Company and each of its\nstockholders of the transactions contemplated by this Agreement.\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 and general\nworking capital.\n\n          6.2   Vesting.  Any Common Stock or other securities of the Company\n                -------                                                      \nissued after the First Closing to employees, directors and consultants of the\nCompany pursuant to any benefit, bonus or incentive plan of the Company shall be\nsubject to customary vesting provisions over a period of four (4) years (other\nthan Common Stock issued pursuant to the exercise of options held by Edward\nRoberts and Andrew Mason as of the date hereof), and a minimum of 50% of the\nshares issued to Charles Zhang shall be subject to four (4) years of customary\nvesting and repurchase provisions at the original issue price, except that\noptions for the purchase of \n\n                                       14\n\n \n50,000 shares of Common Stock, at an exercise price of $4.702 being granted to\nMr. Zhang effective upon the First Closing will vest quarterly over a one-year\nperiod.\n\n          6.3   Initial Public Offering.  The Company will use its efforts to\n                -----------------------                                      \nconduct a firm commitment underwritten public offering of its Common Stock\nwithin twelve months after the date hereof.\n\n     7.   CONDITIONS TO THE INVESTORS' OBLIGATIONS AT THE CLOSINGS. The\n          ---------------------------------------------------------    \nobligations of each Tranche I Investor to purchase the Tranche I Shares at the\nFirst Closing and of each Tranche II Investor who has elected to purchase Shares\nto purchase Tranche II Shares at the Second Closing are subject to the\nfulfillment, to the satisfaction each Investor, on or before the First Closing\nand Second Closing, respectively, of the 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)\nas of the date of the First Closing, and (ii) as of the date of the Second\nClosing, subject to changes contemplated by this Agreement; and the Company\nshall have performed all obligations and conditions herein required to be\nperformed or observed by it (i) on or before the First Closing, with respect to\nthe issuance and sale of the Tranche I Shares, and (ii) on or before the Second\nClosing, if consummated, with respect to the issuance and sale of the Tranche II\nShares.\n\n          7.2.  Performance of Obligations. The Company shall have performed and\n                --------------------------                                      \ncomplied 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 Tranche I Investor a certificate, dated as of the First Closing,\nsigned by the Company's President certifying that the conditions specified in\nParagraphs 7.1 and 7.2 have been fulfilled. At the Second Closing the Company\nshall deliver to each Tranche II Investor another certificate, dated as of the\nSecond Closing, signed by the Company's President certifying that the conditions\nspecified in Sections 7.1 and 7.2 have been fulfilled.\n\n                                       15\n\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 Securities Act and the registration and\/or qualification\nrequirements of 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 stockholders and shall have been duly filed with and accepted by\nthe Secretary of State of the State of Delaware.\n\n          7.8   Execution and Delivery of Other Agreements.  Execution and\n                ------------------------------------------                \ndelivery of amendments to accommodate and include the Series C therein and the\nInvestors as parties thereto of (a) the Investor Rights Agreement, (b) that\ncertain Amended and Restated Right of First Refusal and Co-Sale Agreement dated\nas of August 18, 1998 between the Company, the persons listed on Exhibit B\nthereto, Charles Zhang, Brant Binder, Nicholas Negroponte and Edward B. Roberts\n(the 'Right of First Refusal and Co-Sale Agreement') and (c) that certain\nAmended and Restated Stockholders' Voting Agreement dated as of August 18, 1998\nbetween the Company, the persons listed on Exhibit B thereto, Charles Zhang,\nBrant Binder, Nicholas Negroponte and Edward B. Roberts (the 'Stockholders'\nVoting Agreement'), in each case by the parties whose participation is necessary\nto effectuate such respective amendments.\n\n          7.9.  Opinion of Company's Counsel.  At the First Closing each Tranche\n                ----------------------------                                    \nI Investor and, at the Second Closing, each Tranche II Investor, shall have\nreceived from counsel to the Company an opinion addressed to the Investor, dated\nthe date of the Closing, in form and substance reasonably acceptable to the\nInvestor.\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\nthe First Closing and the Second Closing, of the following conditions:\n\n          8.1.  Representations and Warranties.   The representations and\n                ------------------------------                           \nwarranties of the Tranche I Investors contained in Section 5 hereof shall be\ntrue as of the First Closing and the representations and warranties of the\nTranche II Investors contained in Section 5 hereof shall be true as of the\nSecond 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 the\n                ---------------------                                          \nInvestors pursuant to this Agreement shall be exempt from the registration\nrequirements of the Securities Act, and the registration and\/or qualification\nrequirements of all applicable state securities laws.\n\n          8.5   Execution of Other Agreements.  Execution and delivery by the\n                -----------------------------                                \nInvestors of amendments to accommodate and include the Series C therein and the\nInvestors as parties thereto or beneficiaries of rights equivalent to those set\nforth in (a) the Investor Rights \n\n                                       16\n\n \nAgreement, (b) the Right of First Refusal and Co-Sale Agreement and (c) the\nStockholders' Voting Agreement.\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          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.\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) for notices between\nparties both of which are located in the United States, three business days\nafter deposit in the U.S. mail with first class or certified mail return receipt\nrequested postage prepaid and addressed to the other party as set forth below;\nor (d) when received, if sent by a national overnight delivery service, postage\nprepaid, addressed to the parties as set forth below, provided that the sending\nparty receives a confirmation of delivery from the delivery service provider.\nEach person making a communication hereunder by facsimile shall promptly confirm\nby telephone 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 below, or designate additional\naddresses, for purposes of this Section 9.5 by giving the other party written\nnotice of the new address in the manner set forth above.\n\n                                       17\n\n \n          If to the Company:\n\n\n          Sohu.com Inc.\n          7 Jianguomen Nei Avenue\n          Bright China Chang An Building\n          Tower 2 Room 519\n          Beijing, China  100005\n          Phone: 011 8610 6510 2165\n          Fax: 011 8610 6510 2159\n\n          with a copy to:\n\n          Goulston &amp; Storrs, P.C.\n          400 Atlantic Avenue\n          Boston, MA 02110\n          Attn: Timothy B. Bancroft\n          Phone: (617) 574-3511\n          Fax: (617) 574-4112\n\n          If to the Investors to the address for such Investors set forth on\n          Exhibit A hereto.\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 the shares of Series C Preferred Stock.\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 of any provisions or\nconditions of this Agreement, must be in writing and shall be effective only to\nthe extent specifically set forth in such writing. All remedies, either under\nthis Agreement, or by law or otherwise afforded to the Company or any Investor\nshall 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.  Except as set forth in Section 9.9 of the\n                -------------                          -----------       \nDisclosure Schedule, each party (a) represents and warrants to the other party \nhereto that 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 \n\n                                       18\n\n \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 exercise reasonable efforts to obtain\nreliable assurance that confidential treatment will be accorded the Confidential\nInformation to the extent reasonably requested by the Non-Disclosing Party. The\nprovisions of this Section 9.13 shall be in addition to, and not in substitution\nfor, the provisions of any separate nondisclosure agreement executed by the\nparties hereto with respect to the transaction contemplated hereby; provided\nthat, except as expressly set forth herein, disclosure of information and\nexchange of information between the Company and Intel Corporation ('Intel')\n(including without limitation any exchanges or disclosures of information with\nany Intel board observer) shall be governed by the terms of the Corporate Non-\nDisclosure Agreement, No. 101698, executed by Intel and ITC.\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, \n\n                                       19\n\n \nin each case only where such persons or entities are under appropriate\nnondisclosure obligations. In addition, the Company may disclose the fact that\nany 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 any 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 Investors. Each Investor, at its sole discretion, may provide an\nexecutive quote or other material regarding its investment in the Company. No\nother announcement regarding an Investor's investment in the Company in a press\nconference, in any professional or trade publication, in any marketing materials\nor otherwise to the general public may be made without the prior written consent\nof such Investor, which consent may be withheld at the sole discretion of the\nInvestor. Notwithstanding the foregoing, an Investor may disclose its investment\nin the Company to third parties or to the public at its discretion, and the\nCompany shall have the right to disclose to third parties any such information\ndisclosed by the Investor in a press release or other public announcement. If\nthe Company or an Investor determines that any disclosure not otherwise\nauthorized by this Agreement is required by law or regulation, then the\nprovisions of Section 9.13 regarding disclosure of Confidential Information by a\nDisclosing 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                           [SIGNATURE PAGE FOLLOWS]\n\n                                       20\n\n \n     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of\nthe day and year herein above first written.\n\nSOHU.COM INC.                                 For and on behalf of          \n                                              KUMMELL INVESTMENTS LIMITED   \nBy: __________________________                                              \nPrinted Name: __________________              _______________________________\nTitle: _________________________              Printed Name: _________________\n                                              Title: ________________________\n                                                                            \nITC ELECTRONIC TECHNOLOGY                                                   \nBEIJING CO. LTD.                              _______________________________\n                                              Printed Name: _________________\n                                              Title: ________________________\nBy: __________________________                                              \nPrinted Name: __________________                                            \nTitle: _________________________                                            \n                                                                            \n                                                                            \nHARRISON ENTERPRISES, INC.                    INTEL CORPORATION             \n                                                                            \nBy: __________________________                By: __________________________ \nPrinted Name: __________________              Printed Name: _________________\nTitle: _________________________              Title: ________________________\n                                                                            \n                                                                            \nDOW JONES &amp; COMPANY, INC.                     PTV-CHINA, INC.               \n                                                                            \n                                                                            \nBy: __________________________                By: __________________________ \nPrinted Name: __________________              Printed Name: _________________\nTitle: _________________________              Title: ________________________\n                                                                            \n                                                                            \n____________________________                  ____________________________   \nEDWARD B. ROBERTS, as trustee of the          NICHOLAS NEGROPONTE            \nRoberts Family Trust and individually as to \nSection 5A\n\n____________________________\nBRANT C. BINDER\n\n\n  SIGNATURE PAGES OF SERIES C PREFERRED STOCK PURCHASE AGREEMENT\n\n                                     -21-\n\n \nCHARLES ZHANG\n\nExecuted solely for the purpose of making \nthe representations and warranties set forth \nin Section 4B hereof:\n\n \n_____________________________________\nCharles C.Y. Zhang\n\n\n  SIGNATURE PAGES OF SERIES C PREFERRED STOCK PURCHASE AGREEMENT\n\n                                       22\n\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-43597","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\/43597","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=43597"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43597"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43597"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43597"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}