AsiaInfo-Linkage, Inc.

AsiaInfo-Linkage, Inc.

AsiaInfo-Linkage, Inc. Securities Settlement

The lawsuit was settled for additional disclosures in the proxy statement mailed to shareholders. The following is a summary of the proceedings in this lawsuit: ‘The Consolidated Action arises out of an agreement and plan of merger entered into on May 12, 2013 by and among, AsiaInfo, Skipper Limited, and Merger Sub, a wholly owned subsidiary of Skipper Limited, pursuant to which Merger Sub merged with and into AsiaInfo for US$12.00 in cash per AsiaInfo share. The Merger Agreement resulted from a sales process that began with an initial proposal from CITIC Capital Partners on January 12, 2012. Skipper Limited and Merger Sub are owned indirectly by CITIC Capital Partners (together with Skipper Limited and Merger Sub. Equity financing for the transaction was provided by a private investor consortium led by CITIC. Also on May 12, 2013, certain AsiaInfo stockholders, including Defendants Tian, Ding, and Zhang, Jean Qin Long (Mr. Tian spouse), PacificInfo Limited (an entity owned by Mr. Tian), and New Media China Investment I, Ltd. (an entity owned by Mr. Ding), entered into agreements to rollover their AsiaInfo shares into a post-Merger holding company. These rolling stockholders, along with certain members of AsiaInfo management, also executed an agreement pursuant to which they agreed to vote their shares, which represented approximately 11.6% of the total outstanding shares of AsiaInfo common stock, in favor of the adoption of the Merger Agreement. On May 13, 2013, AsiaInfo and CITIC issued a press release announcing the Merger and the Merger Agreement. On May 21, 2013, Plaintiff Guanghui Cai filed a complaint challenging the Merger and commencing the action captioned Cai v. AsiaInfo-Linkage, Inc., C.A. No. 8583-VCP. The complaint alleged that the Individual Defendants and Libin Sun (another AsiaInfo director) breached their fiduciary duties to AsiaInfo stockholders by approving the Merger and the Merger Agreement and that AsiaInfo and Merger Sub aided and abetted these breaches. On June 11, 2013, Plaintiff Dawan Liu filed a complaint challenging the Merger and commencing the action captioned Liu v. AsiaInfo-Linkage, Inc., C.A. No. 8639-VCP. The complaint alleged that the Individual Defendants breached their fiduciary duties to AsiaInfo stockholders by approving the Merger and the Merger Agreement and that AsiaInfo and Merger Sub aided and abetted these breaches. On July 1, 2013, Plaintiff Loren Lowry filed a complaint challenging the Merger and commencing the action captioned Lowry v. AsiaInfo-Linkage, Inc., C.A. No. 8695-VCP. The complaint alleged that the Individual Defendants and Mr. Sun breached their fiduciary duties to AsiaInfo stockholders by approving the Merger and the Merger Agreement and that AsiaInfo and Merger Sub aided and abetted these breaches. On July 23, 2013, AsiaInfo filed a preliminary proxy statement on Schedule 14A with the United States Securities and Exchange Commission. On August 6, 2013, the Court of Chancery entered an order, which, among other things (a) consolidated the Cai Action, the Liu Action, and the Lowry Action under the caption, In re AsiaInfo-Linkage, Inc. Stockholders Litigation, Consol. C.A. No. 8583-VCP; and (b) appointed the law firms Levi & Korsinsky, LLP, Pomerantz LLP, and Brodsky & Smith, LLC as co-lead counsel and the law firm Rigrodsky & Long, P.A. as liaison counsel in the Consolidated Action. On August 9, 2013, Plaintiffs filed a Verified Consolidated Amended Class Action Complaint in the Consolidated Action. The Complaint alleges that each member of AsiaInfo board of directors breached his fiduciary duties to the Company stockholders by favoring CITIC over other potential purchasers, favoring his own interests over the interests of the Company stockholders, failing to take appropriate steps to maximize the value of the Company to its stockholders, agreeing to preclusive deal protection devices and otherwise agreeing to sell the Company for an unfairly low price. Plaintiffs have further alleged that AsiaInfo and Merger Sub aided and abetted those alleged breaches of fiduciary duty. In addition, plaintiffs have alleged that the Preliminary Proxy omitted certain material information essential to the Company stockholders in order to allow them to cast a fully-informed vote at the upcoming stockholders meeting concerning the Merger. On August 19, 2013, Co-Lead Counsel sent counsel to Defendants a letter setting forth their concerns about the Merger, as set forth in the Complaint, and proposed grounds upon which to resolve the Consolidated Action. On August 30, 2013, the Parties to the Consolidated Action executed a stipulation and proposed order to govern discovery in the Consolidated Action, which proposed order was entered by the Court on September 10, 2013. On August 30, 2013, AsiaInfo and the Individual Defendants commenced the production of confidential materials to Co-Lead Counsel, during which Defendants produced more than 3,300 pages of non-public documents, and Plaintiffs retained a financial expert to assist in the review of the confidential materials. On October 4, 2013 and October 9, 2013, Co-Lead Counsel took the depositions of the chairman of the special committee of the AsiaInfo board of directors and a representative of Goldman Sachs (Asia), the financial advisor to the special committee. During the period late August 2013 through October 2013, counsel for Plaintiffs and Defendants engaged in arm-length discussions regarding the allegations made by Plaintiffs in the Consolidated Action. In connection with such discussions and negotiations regarding a potential resolution of the claims asserted in the Consolidated Action, counsel to the Parties negotiated various supplemental disclosures that Plaintiffs and their counsel demanded for inclusion in the definitive proxy statement to be filed on Schedule 14A with the SEC. On October 28, 2013, the Parties executed a memorandum of understanding setting forth an agreement-in-principle to resolve the Consolidated Action. On October 30, 2013, pursuant to the MOU, AsiaInfo filed Amendment No. 1 to the Preliminary Proxy with the SEC, which contained, among other things, the Supplemental Disclosures. On November 18, 2013, AsiaInfo filed the Definitive Proxy Statement with the SEC, which contained, among other things, the Supplemental Disclosures.’

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