On July 6, 2004, we sold 6,521,962 Series A preference shares at a purchase price of US$ 2.455 per share to Baring Asia II Holdings (22) Limited or Baring Asia, which purchased 6,114,340 shares, and Alpha Century Assets Limited, which purchased 407,622 shares. Each of the purchasers was an unrelated third party prior to the issuance and sale of the Series A preference shares. The value of the Series A preference shares was determined based on arm’s-length negotiations between the purchasers and us and was approved by our board of directors. The Series A preference shares are convertible into our ordinary shares at the option of their holders at any time before the completion of this offering. Each preference share will automatically convert into one ordinary share upon the closing of this offering.
On March 16, 2007, certain of our ordinary shareholders and Baring Asia completed a sale of 903,952 ordinary shares and 1,628,114 Series A preference shares, respectively, to Lehman Brothers Commercial Corporation Asia Limited at a purchase price of US$ 5,000,000 and US$ 10,000,000, respectively. In addition, we granted a warrant to Lehman Brothers to purchase up to a certain number of our newly issued ordinary shares at any time during a one-year period commencing six months after our initial public offering. The exercise price of the warrant is based on the average market closing price of our shares for the 20 consecutive trading days immediately prior to the exercise date. The number of shares Lehman Brothers is entitled to purchase under the warrant is equal to US$ 7,500,000 divided by the exercise price, rounded up to the nearest whole number.
On April 13, 2007, three of our ordinary shareholders, Jointly Gold Technologies Ltd., First Win Technologies Ltd. and Global Wise Technologies Ltd., sold an aggregate of 162,812 ordinary shares to Great Joy Group Limited at a total purchase price of US$ 1,000,000.