☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Lei Zhao Newlink Center, Area G, Building 7, Huitong Times Square, No.1 Yaojiayuan South Road, Chaoyang District, Beijing 100024 ChinaTelephone: +86 (10) 8551 1066 |
Shu Du, Esq. Skadden, Arps, Slate, Meagher & Flom LLP c/o 42/F, Edinburgh Tower, The Landmark 15 Queen’s Road Central Hong Kong +852 3740-4700 | |
(Name, Telephone, Email and/or Facsimile Number and Address of Company Contact Person) |
Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered | ||
American depositary shares, each representing 10 Class A ordinary shares, par value US$0.01 per share Class A ordinary shares, par value US$0.01 per share* |
NAAS |
* | Not for trading, but only in connection with the listing of American depositary shares on the Nasdaq Capital market. |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Emerging growth company | ☒ |
† | The term “new or revised financial accounting standard ” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
U.S. GAAP ☐ |
International Financial Reporting Standards as issued | Other ☐ | ||||||
by the International Accounting Standards Board ☒ |
• | “ADS” means American depositary share, each representing 10 ordinary shares, par value US$0.01 per share, as listed on Nasdaq under the symbol “NAAS.” |
• | “CAC” means the Cyberspace Administration of China. |
• | “China” or “PRC” refers to the People’s Republic of China, excluding, for the purpose of this Shell Company Report on Form 20-F only, Taiwan, Hong Kong, and Macau. |
• | “CIC” means China Insights Industry Consultancy Limited, an independent research firm who was commissioned to provide certain information regarding our industry and our market position in this Shell Company Report on Form 20-F. |
• | “Class A ordinary share” means each of our Class A ordinary share, par value $0.01 per share. |
• | “Class B ordinary share” means each of our Class B ordinary share, par value $0.01 per share. |
• | “Class C ordinary share” means each of our Class C ordinary share, par value $0.01 per share. |
• | “Code” means the U.S. Internal Revenue Code of 1986, as amended. |
• | “CSRC” means the Chinese Securities Regulatory Commission. |
• | “COVID-19” means SARS-CoV-2 COVID-19, and any evolutions thereof. |
• | “Dada Auto” means Dada Auto Inc., an exempted company incorporated with limited liability under the laws of the Cayman Islands. |
• | “DCFC” means direct current fast charger with 30kW power output or more. |
• | “dedicated charger” or “dedicated DCFC” means non-DCFC EV charger or DCFC, as applicable, that is dedicated to public utility vehicles or used exclusively by government agencies, corporations, or other specific groups of users. |
• | “Effective Time” means the effective time of the Merger, which was on June 10, 2022. |
• | “end-users” means EV drivers, being the end-users of our EV charging services. |
• | “EV” means electric vehicle. |
• | “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. |
• | “IFRS” means International Financial Reporting Standards as issued by the International Accounting Standards Board. “IRS” means the U.S. Internal Revenue Service. |
• | “JOBS Act” means the United States Jumpstart Our Business Startups Act of 2012. |
• | “ Kuaidian |
• | “Merger” or “Mergers” has the meaning ascribed to it in “Part I – Brief Introduction.” |
• | “Merger Agreement” has the meaning ascribed to it in “Part I – Brief Introduction.” |
• | “NaaS” means (i) prior to the completion of the Restructuring, subsidiaries of Newlink that provided EV charging services in China, and (ii) upon and after the completion of the Restructuring, Dada Auto and its subsidiaries; |
• | “Nasdaq” means The Nasdaq Stock Market LLC. |
• | “Newlink” means Newlinks Technology Limited, an exempted company incorporated with limited liability incorporated under the laws of the Cayman Islands. |
• | “non-private charger” means either public charger or dedicated charger. |
• | “ordinary share” means (i) each of our ordinary share, par value $0.01 per share, outstanding immediately prior to the Effective Time, and (ii) each of our Class A ordinary share, Class B ordinary share, and Class C ordinary share, par value $0.01 per share, outstanding upon and after the Effective Time. |
• | “PCAOB” means the Public Company Accounting Oversight Board. |
• | “private charger” means privately owned EV charger that is dedicated to private cars and for personal or family use. |
• | “public charger” or “public DCFC” means non-DCFC EV charger or DCFC, as applicable, that is installed in public area and accessible to the general public, and excludes, for the avoidance of doubt, dedicated charger. |
• | “Renminbi” or “RMB” refers to the legal currency of China, and “US$” or “U.S. dollars” refers to the legal currency of the United States. |
• | “Restructuring” means the series of transactions that NaaS completed to restructure its organization and its EV charging service business, as described in greater detail in “Item 4. Information on the Company—A. History and Development of the Company.” |
• | “RISE” refers to RISE Education Cayman Ltd, an exempted company incorporated with limited liability under the laws of the Cayman Islands, and, if applicable, its consolidated subsidiaries. |
• | “SEC” means the United States Securities and Exchange Commission. |
• | “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. |
• | “Transactions” has the meaning ascribed to it in “Part I – Brief Introduction.” |
• | “VIE” means variable interest entity. |
• | “we,” “us,” “our,” “our company,” or the “Company” means, upon and after consummation of the Mergers, NaaS Technology Inc. and its subsidiaries and, prior to the consummation of the Mergers, RISE Education Cayman Ltd and its consolidated subsidiaries. |
• | our goals and strategies; |
• | our future business development, financial conditions and results of operations; |
• | our ability to continuously develop new technology, services and products and keep up with changes in the industries in which we operate; |
• | the expected growth of China’s EV charging industry and EV charging service industry and our future business development; |
• | our expectations regarding demand for and market acceptance of our products and services; |
• | our ability to protect and enforce our intellectual property rights; |
• | our ability to attract and retain qualified executives and personnel; |
• | the ongoing COVID-19 pandemic and the effects of government and other measures seeking to contain its spread; |
• | U.S.-China trade war and its effect on our operation, fluctuations of the RMB exchange rate, and our ability to obtain adequate financing for our planned capital expenditure requirements; |
• | our expectations regarding our relationships with end-users, customers, suppliers and other business partners; |
• | our ability to achieve anticipated benefits of the Mergers; |
• | competition in our industry; |
• | relevant government policies and regulations related to our industry; and |
• | fluctuations in general economic and business conditions in China and globally. |
A. |
Directors and Senior Management |
Name |
Position/Title |
Business Address | ||
Zhen Dai | Chairman of the Board of Directors and Director | c/o Newlink Center, Area G, Building 7, Huitong Times Square, No.1 Yaojiayuan South Road, Chaoyang District, Beijing, People’s Republic of China | ||
Yang Wang | Chief Executive Officer and Director | c/o Newlink Center, Area G, Building 7, Huitong Times Square, No.1 Yaojiayuan South Road, Chaoyang District, Beijing, People’s Republic of China | ||
Weilin Sun | Director | c/o Newlink Center, Area G, Building 7, Huitong Times Square, No.1 Yaojiayuan South Road, Chaoyang District, Beijing, People’s Republic of China | ||
Zhongjue Chen | Director | Suite 2501, Level 25, One Pacific Place, 88 Queensway, Hong Kong | ||
Bin Liu | Director | 8F, Beijing Shougang International Building, Xizhimen North Street, Haidian District, Beijing, People’s Republic of China | ||
Guangming Ren | Independent Director | 12-2 Lang Yueyuan, Yayun Xinxin Jiayuan, Chaoyang District, Beijing, People’s Republic of China | ||
Xiaoli Liu | Independent Director | Room 1902, Unit 1, Building 11, No. 8, Huamao City, Chaoyang District, Beijing, People’s Republic of China | ||
Lei Zhao | Chief Financial Officer | c/o Newlink Center, Area G, Building 7, Huitong Times Square, No.1 Yaojiayuan South Road, Chaoyang District, Beijing, People’s Republic of China |
B. |
Advisors |
C. |
Auditor |
A. |
Selected Financial Data |
For the year ended December 31, |
||||||||||||
2020 |
2021 |
|||||||||||
RMB’000 |
RMB’000 |
US$’000 |
||||||||||
Selected combined statements of loss and other comprehensive loss |
||||||||||||
Revenues, Gross |
37,206 | 160,916 | 25,251 | |||||||||
Online EV Charging Solutions |
36,498 | 153,246 | 24,048 | |||||||||
Offline EV Charging Solutions |
565 | 7,060 | 1,107 | |||||||||
Non-Charging Solutions and Other Services |
143 | 610 | 96 | |||||||||
Incentive to end-users |
(31,374 | ) | (143,142 | ) | (22,462 | ) | ||||||
|
|
|
|
|
|
|||||||
Revenues, Net |
5,832 |
17,774 |
2,789 |
|||||||||
Other losses, net |
(19 |
) |
(1,402 |
) |
(220 |
) | ||||||
Operating costs |
||||||||||||
Cost of revenues |
(8,625 | ) | (18,863 | ) | (2,960 | ) | ||||||
Selling and marketing expenses |
(47,214 | ) | (183,165 | ) | (28,743 | ) | ||||||
Administrative expenses |
(11,755 | ) | (28,458 | ) | (4,466 | ) | ||||||
Research and development expenses |
(20,448 | ) | (37,158 | ) | (5,831 | ) | ||||||
|
|
|
|
|
|
|||||||
Total operating costs |
(88,042 |
) |
(267,644 |
) |
(42,000 |
) | ||||||
|
|
|
|
|
|
|||||||
Operating loss |
(82,229 |
) |
(251,272 |
) |
(39,431 |
) | ||||||
Finance income/(costs), net |
89 | (640 | ) | (100 | ) | |||||||
|
|
|
|
|
|
|||||||
Net loss before income tax |
(82,140 |
) |
(251,912 |
) |
(39,531 |
) | ||||||
Income tax expenses |
(42 | ) | (398 | ) | (62 | ) | ||||||
|
|
|
|
|
|
|||||||
Net loss for the year |
(82,182 |
) |
(252,310 |
) |
(39,593 |
) | ||||||
|
|
|
|
|
|
|||||||
Basic and diluted loss per share for loss attributable to the ordinary equity holders of the Company (Expressed in RMB per share) |
||||||||||||
Basic loss per share |
(55,906 | ) | (50,462 | ) | (7,919 | ) | ||||||
Diluted loss per share |
(55,906 | ) | (50,462 | ) | (7,919 | ) |
As of December 31, |
||||||||||||
2020 |
2021 |
|||||||||||
RMB’000 |
RMB’000 |
US$’000 |
||||||||||
Selected combined statements of financial position |
||||||||||||
Cash and cash equivalents |
3,665 | 8,726 | 1,369 | |||||||||
Total current assets |
48,358 | 126,964 | 19,923 | |||||||||
Total assets |
67,604 | 153,403 | 24,072 | |||||||||
Total liabilities |
57,840 | 128,334 | 20,138 | |||||||||
Total equity |
9,764 | 25,069 | 3,934 |
B. |
Capitalization and Indebtedness |
As of December 31, 2021 |
||||||||||||||||||||||||||||||||
RISE |
NaaS |
Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||||||||
RMB’000 |
US$’000 |
RMB’000 |
US$’000 |
RMB’000 |
US$’000 |
RMB’000 |
US$’000 |
|||||||||||||||||||||||||
Current liabilities |
||||||||||||||||||||||||||||||||
Current lease liabilities |
— | — | 8,061 | 1,265 | — | — | 8,061 | 1,265 | ||||||||||||||||||||||||
Trade payables |
— | — | 437 | 68 | — | — | 437 | 68 | ||||||||||||||||||||||||
Other payables and accruals |
8,625 | 1,353 | 107,440 | 16,860 | 8,624 | 1,353 | 124,689 | 19,566 | ||||||||||||||||||||||||
Total current liabilities |
8,625 |
1,353 |
115,938 |
18,193 |
8,624 |
1,353 |
133,187 |
20,899 |
||||||||||||||||||||||||
Non-current liabilities |
||||||||||||||||||||||||||||||||
Non-current lease liabilities |
— | — | 12,396 | 1,945 | — | — | 12,396 | 1,945 | ||||||||||||||||||||||||
Other non-current liabilities |
2,838 | 445 | — | — | — | — | 2,838 | 445 | ||||||||||||||||||||||||
Convertible loan from related parties |
108,334 | 17,000 | — | — | (108,334 | ) | (17,000 | ) | — | — | ||||||||||||||||||||||
T otal non-cur r ent liabilities |
11 1,172 |
17,445 |
12,396 |
1,945 |
(108,334 |
) |
(17,000 |
) |
15,234 |
2,390 |
||||||||||||||||||||||
T otal liabilities |
1 19,797 |
18,798 |
128,334 |
20,138 |
(99 ,710 |
) |
(15,647 |
) |
148,421 |
23,289 |
||||||||||||||||||||||
E quity |
||||||||||||||||||||||||||||||||
Ordinary shares |
6,964 | 1,093 | — | * | — | ** | 129,511 | 20,323 | 136,475 | 21,416 | ||||||||||||||||||||||
Additional paid in capital |
274,036 | 43,002 | 415,601 | 65,217 | 532,322 | 83,533 | 1,221,959 | 191,752 | ||||||||||||||||||||||||
Accumulated losses |
(403,149 | ) | (63,263 | ) | (390,532 | ) | (61,283 | ) | 27,240 | 4,275 | (766,441 | ) | (120,271 | ) | ||||||||||||||||||
Accumulated other comprehensive income |
33,007 | 5,181 | — | — | (33,007 | ) | (5,181 | ) | — | — | ||||||||||||||||||||||
T otal equity |
(89,142 |
) |
(13,987 |
) |
25,069 |
3,934 |
656,066 |
102,950 |
591,993 |
92,897 |
||||||||||||||||||||||
T otal equity and liabilities |
30,655 |
4,8 1 1 |
153,403 |
24,072 |
556,356 |
87,303 |
740,414 |
1 16,186 |
* | Representing amount less than RMB1,000. |
** | Representing amount less than US$1,000. |
C. |
Reasons For the Offer and Use of Proceeds |
D. |
Risk Factors |
• | NaaS is an early-stage company with a history of losses, and we expect to incur significant expenses and continuing losses for the near term. |
• | NaaS experienced rapid growth and we expect to invest in growth for the foreseeable future. If we fail to manage growth effectively, our business, operating results and financial condition could be adversely affected. |
• | NaaS has a limited operating history. NaaS recently restructured certain aspects of its corporate organization and business operations, adopted a new and unproven business model and expanded into new business segments, and we are subject to significant risks in relation to such transition. |
• | The EV charging industry and its technology are rapidly evolving and may be subject to unforeseen changes. |
• | We face intense competition, including from a number of companies in China, and expect to face significant competition in the future as the public EV charging service industry develops. |
• | Newlink exercises substantial influence over us. Our operation is dependent on our collaboration with Newlink. |
• | We rely on our collaborative arrangements with the operator of Kuaidian in delivering our EV charging solutions. |
• | Failure to effectively expand our sales and marketing capabilities could harm our ability to efficiently deliver our solutions, retain existing customers, increase our customer base, or achieve broader market acceptance of our solutions. |
• | We face risks related to pandemics and epidemics, including the coronavirus pandemic, natural disasters, terrorist activities, political unrest and military conflicts, which could disrupt our production, delivery, and operations and materially and adversely affect our business, financial condition, and results of operations. |
• | We currently have a concentrated customer base with a limited number of key customers. The loss of one or more of our key customers, or a failure to renew our agreements with one or more of our key customers, could adversely affect our results of operations and ability to market our products and services. |
• | Our future growth and success is highly correlated with and thus dependent upon the continuing rapid adoption of EVs for passenger and fleet applications. |
• | Demand for EVs may also be affected by factors directly impacting automobile prices or the cost of purchasing and operating automobiles, such as sales and financing incentives, prices of raw materials and parts and components, cost of fuel and governmental regulations, including tariffs, import regulation and other taxes. Volatility in demand may lead to lower vehicle unit sales, which may result in reduced demand for EV charging services and related solutions and therefore adversely affect our business, financial condition and operating results. |
• | Our business is subject to complex and evolving PRC laws and regulations regarding cybersecurity and data privacy. |
• | The PRC government has significant oversight over our business operation which, if exercised, could result in a material adverse change in our operations. |
• | Changes in China’s economic, political or social conditions, or government policies could materially and adversely affect our business and operations. |
• | Uncertainties with respect to the PRC legal system could adversely affect us. |
• | The PCAOB is currently unable to inspect our auditors in relation to their audit work performed for the financial statements included elsewhere in this Shell Company Report on Form 20-F and the inability of the PCAOB to conduct inspections over our auditors deprives our investors of the benefits of such inspections. |
• | Our ADSs will be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act, or the HFCAA, in 2024 if the PCAOB is unable to inspect or fully investigate auditors located in China, or in 2023 if proposed changes to the law are enacted. The delisting of our ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment. |
• | We may be required to obtain additional licenses in relation to our ongoing business operations and may be subject to penalties for failing to obtain certain licenses with respect to our past operations. |
• | The approval of and filing with the CSRC or other PRC government authorities may be required retrospectively in connection with the Mergers and the Transactions under PRC law, and, if required, it is uncertain whether such approval can be obtained or filing completed or how long it will take to obtain such approval or complete such filing. |
• | Our multi-class share structure with different voting rights will significantly limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of the Class A ordinary shares and the ADSs may view as beneficial. |
• | The trading price of the ADSs is likely to be volatile, which could result in substantial losses to investors. |
• | We are a “controlled company” within the meaning of the Nasdaq Stock Market Rules, and as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies. |
• | We will not pay dividends for the foreseeable future, you must rely on price appreciation of the ADSs for return on your investment. |
• | Substantial future sales or perceived sales of the ordinary shares or ADSs in the public market could cause the price of the ADSs to decline. |
• | Your right to participate in any future rights offerings may be limited, which may cause dilution to your holdings, and you may not receive cash dividends if it is impractical to make them available to you. |
• | manage changes in our business operations following the Restructuring; |
• | navigate an evolving and complex regulatory environment; |
• | improve and maintain our operational efficiency; |
• | establish, retain and expand our customer base; |
• | successfully market our product and service offerings; |
• | attract, retain, and motivate talented employees; |
• | anticipate and adapt to changing market conditions and demands, including technological developments and changes in competitive landscape; and |
• | build a well-recognized and respected brand as we cease to conduct our business through Kuaidian |
• | perceptions about EV features, quality, safety, performance and cost; |
• | perceptions about the limited range over which EVs may be driven on a single battery charge; |
• | competition, including from other types of alternative fuel vehicles, plug-in hybrid electric vehicles and high fuel-economy internal combustion engine vehicles; |
• | volatility in the cost of oil and gasoline; |
• | concerns regarding the stability of the electrical grid; |
• | the decline of EV battery’s ability to hold a charge over time; |
• | availability of service for EVs; |
• | consumers’ perception about the convenience and cost of charging EVs; |
• | increases in fuel efficiency; |
• | government regulations and economic incentives, including adverse changes in, or expiration of, favorable tax incentives related to EVs, EV charging stations or decarbonization generally; |
• | relaxation of government mandates or quotas regarding the sale of EVs; and |
• | concerns about the future viability of EV manufacturers. |
• | regulatory developments affecting us or our industry; |
• | variations in our revenues, earnings, cash flow and data related to our operations; |
• | changes in market condition, market potential and competitive landscape; |
• | announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; |
• | fluctuations in global and Chinese economies; |
• | changes in financial estimates by securities analysts; |
• | adverse publicity about us or our industry; |
• | additions or departures of key personnel and senior management; |
• | release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; and |
• | potential litigation or regulatory investigations. |
• | the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K; |
• | the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; |
• | the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and |
• | the selective disclosure rules by issuers of material nonpublic information under Regulation FD promulgated by SEC. |
A. |
History and Development of the Company |
• | Dada Auto, through Zhejiang Anji Intelligent Electronics Holding Co., Ltd. (“Anji Zhidian”), a subsidiary in China, entered into a series of contractual arrangements (“VIE Agreements”) with Kuaidian Power Beijing and shareholders of Kuaidian Power Beijing, as a result of which Kuaidian Power Beijing was treated as a VIE of NaaS; |
• | Anji Zhidian acquired 100% of the ownership interest in Beijing Chezhubang from Chezhubang Technology, and Beijing Chezhubang in turn acquired 100% of the ownership interest in Zhidian Youtong, in conjunction with which (a) Anji Zhidian further acquired 100% of the equity interests in Cosmo Light in March 2022, and (b) Anji Zhidian acquired 100% of the equity interests in QHM New Energy in March 2022; and |
• | In April 2022, all the VIE Agreements were terminated and Anji Zhidian acquired 100% of the equity interests in Kuaidian Power Beijing. |
• | ordinary shares of NaaS that were issued and outstanding immediately prior to the Effective Time (as defined in the Merger Agreement) (other than any Excluded Shares (as defined below) or ordinary share of NaaS held by Newlink) were cancelled in exchange for fully paid and non-assessable Class A ordinary shares; |
• | ordinary shares of NaaS that were issued and outstanding immediately prior to the Effective Time (other than any Excluded Shares) and held by Newlink were cancelled in exchange for a total of 248,888,073 Class B ordinary shares and 1,398,659,699 Class C ordinary shares; |
• | Series A preferred shares of NaaS that were issued and outstanding immediately prior to the Effective Time were cancelled in exchange for fully paid and non-assessable Class A ordinary shares; |
• | shares of NaaS that were held in treasury or owned by RISE, Merger Sub or Merger Sub II or any other wholly-owned subsidiary of RISE, Merger Sub or Merger Sub II immediately prior to the Effective Time (each an “Excluded Share”), were cancelled and extinguished without any conversion thereof or payment therefor; |
• | each of RISE ordinary share that was issued and outstanding immediately prior to the Effective Time was converted into and became one fully paid and non-assessable Class A ordinary shares; |
• | each ordinary share, par value $0.01 per share, of Merger Sub that was issued and outstanding immediately prior to the Effective Time was converted into and became one fully paid and non-assessable ordinary share, par value $0.01 per share, of the Surviving Entity; and |
• | each ordinary share, par value $0.01 per share, of the Surviving Entity that was issued and outstanding immediately prior to the Second Effective Time (as defined in the Merger Agreement) was converted into and became one fully paid and non-assessable ordinary share, par value $0.01 per share, of the Surviving Company. |
B. |
Business Overview |
• | Online EV Charging Solutions end-users with suitable charging infrastructure through different traffic channels. We also provide other online solutions, including SaaS products that digitalize and upgrade key aspects of the operations and the management of charging stations. |
• | Offline EV Charging Solutions end-to-end |
• | Non-Charging Servicesnon-charging services (such as food and beverage services) to station operators to help them generate diversified revenue streams, creating a new charging experience for end-users. |
• | Scarcity of private parking spaces |
• | Constraints in grid capacity and difficulty in changing infrastructure in residential areas |
• | Community objections to the installation of private charging facilities |
• | online EV charging solutions; |
• | offline EV charging solutions; and |
• | services related to non-charging businesses. |
• | the comprehensiveness of our EV charging solutions and strategic focus on DCFC infrastructure, and our ability to continuously upgrade and develop products and services to meet the changing needs, preferences and demands of our customers and end-users; |
• | the first-mover advantage we have gained and the market leadership that we have fostered in terms of market share and coverage of charging station operators and facilities; |
• | the adoption of an asset-light business model that allows for accelerated expansion and growth; |
• | the vision and proven execution capability of our management team; and |
• | the effectiveness of our sales and marketing strategies. |
C. |
Organizational Structure |
D. |
Property, Plants and Equipment |
Location |
Space (square meters) |
Use |
Lease Term | |||
Room 3801-3804, 38th Floor, Building A, Gemdale Plaza, |
408m 2 |
Office | 2 years and 2 months from January 1, 2019 | |||
91 Jianguo Road, Chaoyang District., Beijing, China |
||||||
Room 701-702, 11th Floor,Wanda Plaza, Yard No.93, Jianguo Road, Chaoyang District, Beijing, China |
366m 2 |
Office | 2 years and 2 months from May 22, 2019 | |||
Room 1507, Unit 1, 12th Floor, Building 99, Chaoyang North Road, Chaoyang District, Beijing |
113m 2 |
Office | 1 year from April 1, 2021 | |||
3/F, Newlink Center, Area G, Building 7, Huitong Times Square, No.1 Yaojiayuan South Road, Chaoyang District, Beijing | 896m 2 |
Office | 5 years from November 9, 2020 | |||
3/F, Newlink Center, Area G, Building 7, Huitong Times Square, No.1 Yaojiayuan South Road, Chaoyang District, Beijing | 904m 2 |
Office | 5 years from November 9, 2020 | |||
2/F, Newlink Center, Area G, Building 7, Huitong Times Square, No.1 Yaojiayuan South Road, Chaoyang District, Beijing | 600m 2 |
Office | 5 years from November 9, 2020 |
A. |
Operating Results |
For the year ended December 31, |
||||||||||||||||||||
2020 |
2021 |
|||||||||||||||||||
RMB’000 |
% |
RMB’000 |
US$’000 |
% |
||||||||||||||||
Revenues, Gross |
37,206 | 100.0 | 160,916 | 25,251 | 100.0 | |||||||||||||||
Online EV Charging Solutions |
36,498 | 98.1 | 153,246 | 24,048 | 95.2 | |||||||||||||||
Offline EV Charging Solutions |
565 | 1.5 | 7,060 | 1,107 | 4.4 | |||||||||||||||
Non-Charging Solutions and Other Services |
143 | 0.4 | 610 | 96 | 0.4 | |||||||||||||||
Incentive to end-users |
(31,374 | ) | (84.3 | ) | (143,142 | ) | (22,462 | ) | (89.0 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Revenues, Net |
5,832 |
15.7 |
17,774 |
2,789 |
11.0 |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
For the year ended December 31, |
||||||||||||||||||||
2020 |
2021 |
|||||||||||||||||||
RMB’000 |
% |
RMB’000 |
US$’000 |
% |
||||||||||||||||
Cost of revenues: |
||||||||||||||||||||
Cost of Online EV Charging Solutions |
8,454 | 22.7 | 12,005 | 1,884 | 7.5 | |||||||||||||||
Cost of Offline EV Charging Solutions |
— | — | 6,432 | 1,009 | 4.0 | |||||||||||||||
Cost of Non-Charging Solutions |
171 | 0.5 | 426 | 67 | 0.2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total cost of revenues |
8,625 |
23.2 |
18,863 |
2,960 |
11.7 |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
For the year ended December 31, |
||||||||||||||||||||
2020 |
2021 |
|||||||||||||||||||
RMB’000 |
% |
RMB’000 |
US$’000 |
% |
||||||||||||||||
Operating expenses: |
||||||||||||||||||||
Selling and marketing expenses |
47,214 | 126.9 | 183,165 | 28,743 | 113.8 | |||||||||||||||
Administrative expenses |
11,755 | 31.6 | 28,458 | 4,466 | 17.7 | |||||||||||||||
Research and development expenses |
20,448 | 55.0 | 37,158 | 5,831 | 23.1 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total operating expenses |
79,417 |
213.5 |
248,781 |
39,040 |
154.6 |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
B. |
Liquidity and Capital Resources |
For the Year Ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Net cash (used in) continuing operating activities |
(20,158 | ) | (18,615 | ) | (29,945 | ) | (4,698 | ) | ||||||||
Net cash (used in) discontinued operating activities |
(19,696 | ) | (187,127 | ) | (509,825 | ) | (80,003 | ) | ||||||||
Net cash (used in) operating activities |
(39,854 |
) |
(205,742 |
) |
(539,770 |
) |
(84,701 |
) | ||||||||
Net cash generated from continuing investing activities |
— | — | 15,932 | 2,500 | ||||||||||||
Net cash (used in) discontinued investing activities |
(114,716 | ) | (111,782 | ) | (53,535 | ) | (8,401 | ) | ||||||||
Net cash (used in) investing activities |
(114,716 |
) |
(111,782 |
) |
(37,603 |
) |
(5,901 |
) | ||||||||
Net cash (used in) continuing financing activities |
(140,732 | ) | (60,674 | ) | (15,841 | ) | (2,486 | ) | ||||||||
Net cash (used in) discontinued financing activities |
— | — | (23,308 | ) | (3,658 | ) | ||||||||||
Net cash (used in) financing activities |
(140,732 |
) |
(60,674 |
) |
(39,149 |
) |
(6,144 |
) | ||||||||
Effect of foreign exchange rate changes |
1,342 | (5,443 | ) | (6,635 | ) | (1,041 | ) | |||||||||
Net (decrease) in cash, cash equivalents and restricted cash |
(293,960 | ) | (383,641 | ) | (623,157 | ) | (97,787 | ) | ||||||||
Cash, cash equivalents and restricted cash at beginning of year |
1,316,785 | 1,022,825 | 639,184 | 100,302 | ||||||||||||
Cash, cash equivalents and restricted cash at end of year |
1,022,825 | 639,184 | 16,027 | 2,515 | ||||||||||||
Less: Cash, cash equivalents and restricted cash of discontinued operations at end of year |
998,674 | 628,806 | — | — | ||||||||||||
Cash, cash equivalents and restricted cash of continuing operations at end of year |
24,151 |
10,378 |
16,027 |
2,515 |
For the year ended December 31, |
||||||||||||
2020 |
2021 |
|||||||||||
RMB’000 |
RMB’000 |
US$’000 |
||||||||||
Summary Combined Cash Flow Data: |
||||||||||||
Net cash used in operating activities |
(63,014 | ) | (250,035 | ) | (39,236 | ) | ||||||
Net cash used in investing activities |
— | (5,606 | ) | (880 | ) | |||||||
Net cash generated from financing activities |
64,555 | 260,702 | 40,910 | |||||||||
|
|
|
|
|
|
|||||||
Net increase in cash, cash equivalents, and restricted cash |
1,541 | 5,061 | 794 | |||||||||
Cash, cash equivalents, and restricted cash at beginning of year |
2,124 | 3,665 | 575 | |||||||||
Cash, cash equivalents, and restricted cash at end of year |
3,665 | 8,726 | 1,369 | |||||||||
|
|
|
|
|
|
Payment Due by Period |
||||||||||||||||||||||||
Total |
Less Than 1 year |
1-2 Years |
2-3 Years |
3-5 Years |
Over 5 Years |
|||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
(RMB in thousands) |
||||||||||||||||||||||||
Operating lease commitments |
29,151 | 15,756 | 6,191 | 4,117 | 3,087 | — |
C. |
Research and Development, Patents and Licenses, etc. |
D. |
Trend Information |
E. |
Critical Accounting Estimates |
• | Determining criteria for significant increase in credit risk; |
• | Selecting appropriate models and assumptions for the measurement of ECL; and |
• | Establishing the relative probability weightings of forward-looking scenarios. |
A. |
Directors and Senior Management |
Directors and Executive Officers |
Age |
Position/Title | ||
Zhen Dai | 44 | Chairman of the Board of Directors and Director | ||
Yang Wang | 33 | Chief Executive Officer and Director | ||
Weilin Sun | 46 | Director | ||
Zhongjue Chen | 43 | Director | ||
Bin Liu | 43 | Director | ||
Guangming Ren | 49 | Independent Director | ||
Xiaoli Liu | 44 | Independent Director | ||
Lei Zhao | 40 | Chief Financial Officer |
B. |
Compensation |
Name |
Number of Ordinary Shares Underlying Options |
Exercise Price (US$/Share) |
Date of Grant |
Date of Expiration |
||||||||||||
Zhen Dai |
112,334,243 | 0.000003 | March 18, 2022 | March 18, 2032 | ||||||||||||
Yang Wang |
37,443,045 | 0.000003 | March 18, 2022 | March 18, 2032 | ||||||||||||
Weilin Sun |
8,903,558 | 0.000003 | February 1, 2022 | February 1, 2032 | ||||||||||||
Zhongjue Chen |
— | — | — | — | ||||||||||||
Bin Liu |
— | — | — | — | ||||||||||||
Guangming Ren |
— | — | — | — | ||||||||||||
Xiaoli Liu |
— | — | — | — | ||||||||||||
Lei Zhao |
* | 0.000003 | February 1, 2022 | February 1, 2032 |
* | Aggregate number of shares beneficially owned by the person account for less than 1% of our total outstanding ordinary shares. |
C. |
Board Practices |
• | appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; |
• | reviewing with the independent auditors any audit problems or difficulties and management’s response; |
• | discussing the annual audited financial statements with management and the independent auditors; |
• | reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; |
• | reviewing and approving all proposed related party transactions; |
• | meeting separately and periodically with management and the independent auditors; and |
• | monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
• | reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; |
• | reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; |
• | reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and |
• | selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management. |
• | selecting and recommending to the board nominees for election by the shareholders or appointment by the board; |
• | reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; |
• | making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and |
• | advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken. |
• | convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings; |
• | declaring dividends and distributions; |
• | appointing officers and determining the term of office of the officers; |
• | exercising the borrowing powers of our company and mortgaging the property of our company; and |
• | approving the transfer of shares in our company, including the registration of such shares in our share register. |
Board Diversity Matrix (As of May 31, 2022) | ||||||||
Country of Principal Executive Offices: | People’s Republic of China | |||||||
Foreign Private Issuer | Yes | |||||||
Disclosure Prohibited Under Home Country Law | No | |||||||
Total Number of Directors | 7 |
Female |
Male |
Non-Binary |
Did Not Disclose Gender | |||||
Part I: Gender Identity | ||||||||
Directors | 1 | 6 | - | - | ||||
Part II: Demographic Background | ||||||||
Underrepresented Individual in Home Country Jurisdiction |
- | |||||||
LGBTQ+ |
- | |||||||
Did Not Disclose Demographic Background |
2 |
D. |
Employees |
Function |
Number of Employees |
Percentage |
||||||
Operating & Marketing Strategy |
25 | 11 | % | |||||
Business Development |
110 | 50 | % | |||||
Research and development |
56 | 25 | % | |||||
Administration |
31 | 14 | % | |||||
|
|
|
|
|||||
Total |
222 |
100 |
% | |||||
|
|
|
|
E. |
Share Ownership |
• | each of our directors and executive officers; and |
• | each person known to us to own beneficially more than 5% of our ordinary shares. |
Amount of Beneficial Ownership |
||||||||||||||||||||||||
Name and Address of Beneficial Owner |
Class A Ordinary Shares † |
Class B Ordinary Shares † |
Class C Ordinary Shares † |
Percent Ownership † † |
Percent Voting Power † † † |
Percent Voting Power (Upon Full Distribution by Newlink) † † † † |
||||||||||||||||||
Directors and Executive Officers: ** |
||||||||||||||||||||||||
Zhen Dai (1) |
56,167,121 | 248,888,073 | — | 13.9 | % | 43.6 | % | 57.3 | % | |||||||||||||||
Yang Wang (2) |
18,721,539 | — | 38,349,393 | 2.6 | % | 1.6 | % | 1.3 | % | |||||||||||||||
Weilin Sun (3) |
— | — | 30,305,208 | 1.4 | % | 1.0 | % | 0.7 | % | |||||||||||||||
Zhongjue Chen |
— | — | — | — | — | — | ||||||||||||||||||
Bin Liu |
* | — | — | * | * | * | ||||||||||||||||||
Guangming Ren |
— | — | — | — | — | — | ||||||||||||||||||
Xiaoli Liu |
— | — | — | — | — | — | ||||||||||||||||||
Lei Zhao |
— | — | — | — | — | — | ||||||||||||||||||
All directors and executive officers as a group |
144,015,952 | 248,888,073 | 68,654,601 | 18.0 | % | 46.3 | % | 59.3 | % | |||||||||||||||
Principal Shareholders: |
||||||||||||||||||||||||
Bain Capital Rise Education IV Cayman Limited (4) |
138,094,376 | — | 278,117,323 | 19.4 | % | 12.0 | % | 9.5 | % | |||||||||||||||
Newlinks Technology Limited (5) |
— | 248,888,073 | 1,398,659,699 | 76.9 | % | 91.5 | % | 88.7 | % | |||||||||||||||
Beijing Zhenwei Qingfeng Economic Management Consulting Partnership (L.P.) (6) |
253,891,329 | — | — | 11.9 | % | 4.4 | % | 5.8 | % |
* | Less than 1% |
** | The business address of Mr. Zhongjue Chen is Suite 2501, Level 25, One Pacific Place, 88 Queensway, Hong Kong. The business address of Mr. Bin Liu is 8F, Beijing Shougang International Building, Xizhimen North Street, Haidian District, Beijing, People’s Republic of China. The business address of Mr. Guangming Ren is 12-2 Lang Yueyuan, Yayun Xinxin Jiayuan, Chaoyang, District, Beijing, People’s Republic of China. The business address of Mr. Xiaoli Liu is Room 1902, Unit 1, Building 11, No. 8, Huamao City, Chaoyang District, Beijing, People’s Republic of China. The business address of our other directors and executive officers is c/o Newlink Center, Area G, Building 7, Huitong Times Square, No.1 Yaojiayuan South Road, Chaoyang District, Beijing, People’s Republic of China. |
† | Each Class B ordinary share and each Class C ordinary share is convertible into one Class A ordinary share at any time by the holder thereof, subject to certain conditions. Class A ordinary shares are not convertible into Class B ordinary shares or Class C ordinary shares under any circumstances. |
†† | A total of 2,141,595,809 ordinary shares were outstanding immediately after the consummation of the Mergers. |
††† | Holders of Class A ordinary shares are entitled to one vote per share. Holders of Class B ordinary shares and Class C ordinary shares are entitled to ten votes per share and two votes per share, respectively. Upon the Closing, Newlink directly holds Class B ordinary shares and Class C ordinary shares, with the voting power of all Class B ordinary shares controlled by Mr. Dai and the voting power of Class C ordinary shares controlled by shareholders of Newlink other than Mr. Dai on a look-through basis proportional to those shareholders’ relative shareholding percentage in Newlink. This column sets out the voting power percentages on the foregoing basis, prior to Newlink’s distribution of any Class B ordinary shares or Class C ordinary shares to its own shareholders. |
†††† | Class B ordinary shares and Class C ordinary shares will be automatically and immediately converted into an equal number of Class A ordinary shares upon the occurrence of any direct or indirect sale, transfer, assignment or disposition of such number of Class B ordinary shares or Class C ordinary shares by the holder thereof or the direct or indirect transfer or assignment of the voting power attached to such number of Class B ordinary shares or Class C ordinary shares through voting proxy or otherwise to any person that is not Mr. Dai or his affiliates (Newlinks Technology Limited being deemed not to be his affiliate). Therefore, all Class B ordinary shares distributed by Newlink to Mr. Dai or his affiliates will remain Class B ordinary shares, and all Class C ordinary shares distributed by Newlink to its own shareholders (other than Mr. Dai and his affiliates) will be automatically converted into Class A ordinary shares. This column sets out the voting power percentages assuming full distribution by Newlink of Class B ordinary shares to Mr. Dai or his affiliates and of Class C ordinary shares to its own shareholders (other than Mr. Dai and his affiliates). Whether and to what extent to conduct such distribution would be a corporate decision by Newlink that requires approval by the board of directors and/or shareholders of Newlink, as applicable. |
(1) | Represents (i) the 56,167,121 Class A ordinary shares underlying certain options issued to Mr. Dai, which became vested and exercisable immediately upon consummation of the Mergers, and (ii) the 248,888,073 Class B ordinary shares held by Newlinks Technology Limited immediately after the Closing based on Zenki Luck Limited’s ownership interest in Newlinks Technology Limited by way of holding 67,126,520 ordinary shares of Newlinks Technology Limited. Zenki Luck Limited is 100% beneficially owned by Mr. Dai. The registered address of Zenki Luck Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110 British Virgin Islands. |
(2) | Represents (i) the 18,721,539 Class A ordinary shares underlying certain options issued to Ms. Wang, which became vested and exercisable immediately upon consummation of the Mergers, and (ii) a portion of the 1,398,659,699 Class C ordinary shares held by Newlinks Technology Limited immediately after the Closing (which Class C ordinary shares are subject to automatic conversion into Class A ordinary shares in certain events as described in the footnote above), based on Young King Luck Holding Limited’s ownership interest in Newlinks Technology Limited by way of holding 9,665,588 ordinary shares of Newlinks Technology Limited. Young King Luck Holding Limited is 100% beneficially owned by Ms. Wang. The registered address of Young King Luck Holding Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110 British Virgin Islands. |
(3) | Represents a portion of the 1,398,659,699 Class C ordinary shares held by Newlinks Technology Limited immediately after the Closing (which Class C ordinary shares are subject to automatic conversion into Class A ordinary shares in certain events as described in the footnote above), based on Phoenix Sun Luck Tech Limited’s ownership interest in Newlinks Technology Limited by way of holding 7,638,148 ordinary shares of Newlinks Technology Limited. Phoenix Sun Luck Tech Limited is 100% beneficially owned by Mr. Sun. The registered address of Phoenix Sun Luck Tech Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110 British Virgin Islands. |
(4) | Represents (i) 119,372,236 Class A ordinary shares held by Bain Capital Rise Education IV Cayman Limited immediately after the Closing, (ii) 18,722,140 Class A ordinary shares held by BCPE Nutcracker Cayman, L.P. immediately after the Closing, and (iii) a portion of the 1,398,659,699 Class C ordinary shares held by Newlinks Technology Limited immediately after the Closing (which Class C ordinary shares are subject to automatic conversion into Class A ordinary shares in certain events as described in the footnote above), based on BCPE Nutcracker Cayman, L.P.’s ownership interest in Newlinks Technology Limited by way of holding 70,096,905 ordinary shares of Newlinks Technology Limited. Bain Capital Rise Education IV Cayman Limited is owned by Bain Capital Asia Integral Investors, L.P. Bain Capital Investors, LLC, or BCI, is the general partner of Bain Capital Asia Integral Investors, L.P. The governance, investment strategy and decision-making process with respect to investments held by Bain Capital Rise Education IV Cayman Limited is directed by the Global Private Equity Board of BCI. As a result of the relationships described above, BCI may be deemed to share beneficial ownership of the shares held by Bain Capital Rise Education IV Cayman Limited. Bain Capital Rise Education IV Cayman Limited has an address c/o Bain Capital Private Equity, LP, 200 Clarendon Street, Boston, Massachusetts 02116. BCPE Nutcracker GP, LLC is the general partner of BCPE Nutcracker Cayman, L.P. and has its registered address at Maples Corporate Service Limited, POBox 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. |
(5) | Principal shareholders of Newlinks Technology Limited include Mr. Dai, Yang Wang, Weilin Sun, Joy Capital, Bain Capital and CMC Capital. |
(6) | Zhenwei Investment Fund Management Co., Ltd. is the general partner of Beijing Zhenwei Qingfeng Economic Management Consulting Partnership (L.P.). and has its registered address at 8/F, 60 Xizhimen North Avenue, Haidian District, Beijing, China. |
A. |
Major Shareholders |
B. |
Related Party Transactions |
C. |
Interests of Experts and Counsel. |
A. |
Consolidated Statements and Other Financial Information |
B. |
Significant Changes |
A. |
Offer and Listing Details |
• | each ordinary share of RISE issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) was automatically converted into one validly issued, fully paid and non-assessable Class A ordinary share, par value of $0.01 per share; |
• | each ordinary share and preferred share of NaaS issued and outstanding immediately prior to the Effective Time was cancelled in exchange for the right to receive 32.951 Class A ordinary shares, except for (a) any ordinary share of NaaS owned by Newlink, then controlling shareholder of NaaS and (b) any ordinary share of NaaS held by NaaS as treasury shares, or owned by us, Merger Sub or Merger Sub II or any other wholly-owned subsidiary of ours, Merger Sub or Merger Sub II was cancelled and ceased to exist; and |
• | the 50,000,000 ordinary shares of NaaS issued and outstanding immediately prior to the Effective Time and held by Newlink were cancelled in exchange for the right to receive a total of 248,888,073 Class B ordinary shares and 1,398,659,699 Class C ordinary shares, respectively (on a 32.951 Class B ordinary shares or Class C ordinary shares per ordinary share of NaaS conversion basis). |
B. |
Plan of Distribution |
C. |
Markets |
D. |
Selling Shareholders |
E. |
Dilution |
F. |
Expense of the Issue |
A. |
Share Capital |
B. |
Memorandum and Articles of Association |
• | the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer; |
• | the instrument of transfer is in respect of only one class of ordinary shares; |
• | the instrument of transfer is properly stamped, if required; |
• | in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four; and |
• | a fee of such maximum sum as Nasdaq may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof. |
• | the designation of the series; |
• | the number of shares of the series; |
• | the dividend rights, dividend rates, conversion rights, voting rights; and |
• | the rights and terms of redemption and liquidation preferences. |
• | authorize our board of directors to issue preference shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preference shares without any further vote or action by our shareholders; and |
• | limit the ability of shareholders to requisition and convene general meetings of shareholders. |
• | does not have to file an annual return of its shareholders with the Registrar of Companies; |
• | is not required to open its register of members for inspection; |
• | does not have to hold an annual general meeting; |
• | may issue negotiable or bearer shares or shares with no par value; |
• | may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance); |
• | may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
• | may register as a limited duration company; and |
• | may register as a segregated portfolio company. |
• | the statutory provisions as to the required majority vote have been met; |
• | the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class; |
• | the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and |
• | the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act. |
• | a company acts or proposes to act illegally or ultra vires; |
• | the act complained of, although not ultra vires, could only be effected duly if authorized by more than a simple majority vote that has not been obtained; and |
• | those who control the company are perpetrating a “fraud on the minority.” |
C. |
Material Contracts |
D. |
Exchange Controls |
E. |
Taxation |
• | banks and other financial institutions; |
• | insurance companies; |
• | pension plans; |
• | cooperatives; |
• | regulated investment companies; |
• | real estate investment trusts; |
• | broker-dealers; |
• | traders that elect to use a mark-to-market |
• | certain former U.S. citizens or long-term residents; |
• | tax-exempt entities (including private foundations); |
• | holders who acquire their ADSs or Class A ordinary shares pursuant to any employee share option or otherwise as compensation; investors that will hold their ADSs or Class A ordinary shares as part of a straddle, hedge, conversion, constructive sale or other integrated transaction for U.S. federal income tax purposes; |
• | investors that have a functional currency other than the U.S. dollar; |
• | persons that actually or constructively own ADSs or ordinary shares representing 10% or more of our stock (by vote or value); or |
• | partnerships or other entities taxable as partnerships for U.S. federal income tax purposes, or persons holding ADSs or Class A ordinary shares through such entities. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created in, or organized under the law of the United States or any state thereof or the District of Columbia; |
• | an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or |
• | a trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise validly elected to be treated as a U.S. person under the Code. |
• | the excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the ADSs or Class A ordinary shares; |
• | the amount allocated to the current taxable year and any taxable years in the U.S. Holder’s holding period prior to the first taxable year in which we are classified as a PFIC (each, a “pre-PFIC year”) will be taxable as ordinary income; |
• | the amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect for individuals or corporations, as appropriate, for that year; and |
• | an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the tax attributable to each prior taxable year, other than a pre-PFIC year. |
F. |
Dividends and Paying Agents |
G. |
Statements by Experts |
H. |
Documents on Display |
I. |
Subsidiary Information |
* | Filed herewith. |
† | Portions of this exhibit have been omitted. |
NaaS Technology Inc. | ||
By: | /s/ DAI Zhen | |
Name: DAI Zhen | ||
Title: Chairman of Board of Directors |
Page |
||||
F-2 |
||||
F-3 |
||||
F-4 |
||||
F-5 |
||||
F-6 |
||||
F-7 | ||||
F-9 |
||||
F-10 |
F-46 |
||||
F-48 |
||||
F-49 |
||||
F-50 |
||||
F-51 |
||||
F-52 |
As at December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
ASSETS |
||||||||||||
Current assets: |
||||||||||||
Cash and cash equivalents |
5,134 | 16,027 | 2,515 | |||||||||
Restricted cash |
5,244 | — | — | |||||||||
Amounts due from related parties |
181 | 177 | 28 | |||||||||
Prepayments and other current assets |
4,509 | 14,451 | 2,268 | |||||||||
Current assets of discontinued operations (including current assets of the variable interest entity (“VIE”) without recourse to the Company amounting to RMB420,254 and RMB nil as of December 31, 2020 and 2021, respectively) |
729,500 | — | — | |||||||||
Total current assets |
744,568 |
30,655 |
4,811 |
|||||||||
Non-current assets: |
||||||||||||
Non-current assets of discontinued operations (including non-current assets of the VIE without recourse to the Company amounting to RMB1,134,372 and RMB nil as of December 31, 2020 and 2021, respectively) |
1,681,837 | — | — | |||||||||
Total non-current assets |
1,681,837 |
— |
— |
|||||||||
Total assets |
2,426,405 |
30,655 |
4,811 |
|||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||
Current liabilities: |
||||||||||||
Current portion of long-term loan |
226,744 | — | — | |||||||||
Accrued expenses and other current liabilities |
1,469 | 8,625 | 1,353 | |||||||||
Current liabilities of discontinued operations (including current liabilities of the variable interest entity (“VIE”) without recourse to the Company amounting to RMB882,038 and RMB nil as of December 31, 2020 and 2021, respectively) |
940,142 | — | — | |||||||||
Total current liabilities |
1,168,355 |
8,625 |
1,353 |
|||||||||
Non-current liabilities: |
||||||||||||
Long-term loan |
191,397 | — | — | |||||||||
Other non-current liabilities |
— | 2,838 | 445 | |||||||||
Convertible loan from related parties |
— | 108,334 | 17,000 | |||||||||
Non-current liabilities of discontinued operations (including non-current liabilities of the VIE without recourse to the Company amounting to RMB499,092 and RMB nil as of December 31, 2020 and 2021, respectively) |
565,147 | — |
— |
|||||||||
Total non-current liabilities |
756,544 |
111,172 |
17,445 |
|||||||||
Total liabilities |
1,924,899 |
119,797 |
18,798 |
|||||||||
Commitments and contingencies |
||||||||||||
Shareholders’ equity: |
||||||||||||
Ordinary shares (US$0.01 par value; 200,000,000 and 200,000,000 shares authorized, 112,951,232 and 113,030,392 shares issued and outstanding as of December 31, 2020 and 2021, respectively) |
6,959 | 6,964 | 1,093 | |||||||||
Additional paid-in capital |
603,173 | 274,036 | 43,002 | |||||||||
Statutory reserves |
105,357 | — | — | |||||||||
Accumulated deficit |
(260,019 | ) | (403,149 | ) | (63,263 | ) | ||||||
Accumulated other comprehensive income |
39,642 | 33,007 | 5,181 | |||||||||
Total RISE Education Cayman Ltd shareholders’ equity (deficit) |
495,112 |
(89,142 |
) |
(13,987 |
) | |||||||
Non-controlling interests |
6,394 | — | — | |||||||||
Total equity (deficit) |
501,506 |
(89,142 |
) |
(13,987 |
) | |||||||
Total liabilities, non-controlling interests and shareholders’ equity |
2,426,405 |
30,655 |
4,811 |
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Operating expenses: |
||||||||||||||||
General and administrative |
(15,275 | ) | (17,606 | ) | (30,003 | ) | (4,708 | ) | ||||||||
Total operating expenses |
(15,275 |
) |
(17,606 |
) |
(30,003 |
) |
(4,708 |
) | ||||||||
Operating loss |
(15,275 |
) |
(17,606 |
) |
(30,003 |
) |
(4,708 |
) | ||||||||
Interest income |
80 | 13 | 2 | — | ||||||||||||
Gain on troubled debt restructuring |
— | — | 279,097 | 43,796 | ||||||||||||
Net income/(loss)from continuing operations before income tax expense |
(15,195 |
) |
(17,593 |
) |
249,096 |
39,088 |
||||||||||
Net income/(loss) from continuing operations |
(15,195 |
) |
(17,593 |
) |
249,096 |
39,088 |
||||||||||
Net income/(loss) from discontinued operations, net of tax |
159,755 |
(123,851 |
) |
(507,280 |
) |
(79,603 |
) | |||||||||
Net income/(loss) |
144,560 |
(141,444 |
) |
(258,184 |
) |
(40,515 |
) | |||||||||
Net income /(loss) from continuing operations attributable to non-controlling interests |
— | — | — | — | ||||||||||||
Loss from discontinued operations attributable to non-controlling interests |
(3,540 | ) | (9,011 | ) | (9,697 | ) | (1,522 | ) | ||||||||
Less: Net loss attributable to non-controlling interests |
(3,540 | ) | (9,011 | ) | (9,697 | ) | (1,522 | ) | ||||||||
Net income/(loss) attributable to RISE Education Cayman Ltd |
148,100 |
(132,433 |
) |
(248,487 |
) |
(38,993 |
) | |||||||||
Net income/(loss) from continuing operations attributable to RISE Education Cayman Ltd |
(15,195 | ) | (17,593 | ) | 249,096 | 39,088 | ||||||||||
Net income/(loss) from discontinued operations attributable to RISE Education Cayman Ltd, net of tax |
163,295 | (114,840 | ) | (497,583 | ) | (78,081 | ) | |||||||||
Net income/(loss) attributable to RISE Education Cayman Ltd |
148,100 |
(132,433 |
) |
(248,487 |
) |
(38,993 |
) | |||||||||
Net income/(loss) per share - Basic: |
||||||||||||||||
Continuing operations |
(0.13 | ) | (0.15 | ) | 2.21 | 0.35 | ||||||||||
Discontinued operations |
1.44 | (1.02 | ) | (4.41 | ) | (0.69 | ) | |||||||||
Total net income/(loss) per share - Basic |
1.31 | (1.17 | ) | (2.20 | ) | (0.34 | ) | |||||||||
Net income/(loss) per share - Diluted: |
||||||||||||||||
Continuing operations |
(0.13 | ) | (0.15 | ) | 2.21 | 0.35 | ||||||||||
Discontinued operations |
1.42 | (1.02 | ) | (4.41 | ) | (0.69 | ) | |||||||||
Total net income/(loss) per share - Diluted |
1.29 | (1.17 | ) | (2.20 | ) | (0.34 | ) | |||||||||
Net income/(loss) per ADS*- Basic: |
||||||||||||||||
Continuing operations |
(0.26 | ) | (0.31 | ) | 4.42 | 0.70 | ||||||||||
Discontinued operations |
2.88 | (2.04 | ) | (8.82 | ) | (1.38 | ) | |||||||||
Total net income/(loss) per ADS - Basic |
2.62 | (2.35 | ) | (4.40 | ) | (0.68 | ) | |||||||||
Net income/(loss) per ADS* - Diluted: |
||||||||||||||||
Continuing operations |
(0.25 | ) | (0.31 | ) | 4.42 | 0.70 | ||||||||||
Discontinued operations |
2.84 | (2.04 | ) | (8.82 | ) | (1.38 | ) | |||||||||
Total net income/(loss) per ADS - Diluted |
2.59 | (2.35 | ) | (4.40 | ) | (0.68 | ) | |||||||||
Shares used in net income/(loss) per share computation |
||||||||||||||||
Basic |
113,187,721 | 112,813,031 | 112,868,532 | 112,868,532 | ||||||||||||
Diluted |
114,464,108 | 112,813,031 | 112,868,532 | 112,868,532 |
*1 | ADS represents 2 ordinary shares |
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Net income/(loss) |
144,560 |
(141,444 |
) |
(258,184 |
) |
(40,515 |
) | |||||||||
Other comprehensive income/(loss), net of tax of nil: |
||||||||||||||||
Foreign currency translation adjustments |
(1,542 |
) |
(1,275 |
) |
(6,635 |
) |
(1,041 |
) | ||||||||
Other comprehensive income/(loss) |
(1,542 | ) | (1,275 | ) | (6,635 |
) |
(1,041 |
) | ||||||||
Comprehensive income/(loss) |
143,018 |
(142,719 |
) |
(264,819 |
) |
(41,556 |
) | |||||||||
Less: comprehensive income (loss) attributable to non-controlling interests |
(3,540 | ) | (9,011 | ) | (9,697 | ) | (1,522 | ) | ||||||||
Comprehensive income/(loss) attributable to RISE Education Cayman Ltd |
146,558 |
(133,708 |
) |
(255,122 |
) |
(40,034 |
) |
Ordinary shares (Number) |
Ordinary Shares (Amount) |
Additional paid-in capital |
Treasury shares |
Statutory reserves |
Accumulated deficit |
Accumulative other comprehensive income/(loss) |
Total RISE Education Cayman Ltd shareholder’s equity |
Non- controlling interests |
Total shareholders’ equity |
|||||||||||||||||||||||||||||||
Balance at January 1, 2019 |
113,779,244 |
7,074 |
600,011 |
(23,460 |
) |
78,345 |
(248,674 |
) |
42,459 |
455,755 |
(14,921 |
) |
440,834 |
|||||||||||||||||||||||||||
Net income |
— | — | — | — | — | 148,100 | — | 148,100 | (3,540 | ) | 144,560 | |||||||||||||||||||||||||||||
Acquisition of subsidiary |
— | — | — | — | — | — | — | — | 33,866 | 33,866 | ||||||||||||||||||||||||||||||
Share-based compensation |
— | — | 47,889 | — | — | — | — | 47,889 | — | 47,889 | ||||||||||||||||||||||||||||||
Issuances in relation to share option exercise |
468,384 | 32 | 4,615 | — | — | — | — | 4,647 | — | 4,647 | ||||||||||||||||||||||||||||||
Other comprehensive income |
— | — | — | — | — | — | (1,542 | ) | (1,542 | ) | — | (1,542 | ) | |||||||||||||||||||||||||||
Repurchase of ordinary shares* |
(1,492,308 | ) | — | — | (45,953 | ) | — | — | — | (45,953 | ) | — | (45,953 | ) | ||||||||||||||||||||||||||
Retirement of treasury shares* |
— | (160 | ) | (69,253 | ) | 69,413 | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Appropriation of statutory reserves |
— | — | — | — | 26,485 | (26,485 | ) | — | — | — | — | |||||||||||||||||||||||||||||
Balance at December 31, 2019 |
112,755,320 |
6,946 |
583,262 |
— |
104,830 |
(127,059 |
) |
40,917 |
608,896 |
15,405 |
624,301 |
|||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | (132,433 | ) | — | (132,433 | ) | (9,011 | ) | (141,444 | ) | ||||||||||||||||||||||||||
Share-based compensation |
— | — | 17,999 | — | — | — | — | 17,999 | — | 17,999 | ||||||||||||||||||||||||||||||
Issuances in relation to share option exercise |
195,912 | 13 | 1,912 | — | — | — | — | 1,925 | — | 1,925 | ||||||||||||||||||||||||||||||
Other comprehensive income |
— | — | — | — | — | — | (1,275 | ) | (1,275 | ) | — | (1,275 | ) | |||||||||||||||||||||||||||
Appropriation of statutory reserves |
— | — | — | — | 527 | (527 | ) | — | — | — | — | |||||||||||||||||||||||||||||
Balance at December 31, 2020 |
112,951,232 |
6,959 |
603,173 |
— |
105,357 |
(260,019 |
) |
39,642 |
495,112 |
6,394 |
501,506 |
* | In November 2018, the Board of Directors approved share repurchase program to purchase up to US$30,000 of the Company’s ordinary shares. As of December 31, 2019, pursuant to the share repurchase program, the Company repurchased 1,158,741 outstanding ADS representing 2,317,482 outstanding ordinary shares for an aggregated purchase price of RMB69,413. All shares repurchased were retired as of December 31, 2019 (Note 2). |
Ordinary shares (Number) |
Ordinary Shares (Amount) |
Additional paid-in capital |
Treasury shares |
Statutory reserves |
Accumulated deficit |
Accumulative other comprehensive income/(loss) |
Total RISE Education Cayman Ltd shareholder’s equity |
Non- controlling interests |
Total shareholders’ equity |
|||||||||||||||||||||||||||||||
Balance at December 31, 2020 |
112,951,232 |
6,959 |
603,173 |
— |
105,357 |
(260,019 |
) |
39,642 |
495,112 |
6,394 |
501,506 |
|||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | (248,487 | ) | — | (248,487 | ) | (9,697 | ) | (258,184 | ) | ||||||||||||||||||||||||||
Share-based compensation |
— | — | 9,537 | — | — | — | — | 9,537 | — | 9,537 | ||||||||||||||||||||||||||||||
Issuances in relation to share option exercise |
79,160 | 5 | 807 | — | — | — | — | 812 | — | 812 | ||||||||||||||||||||||||||||||
Other comprehensive income |
— | — | — | — | — | — | (6,635 | ) | (6,635 | ) | — | (6,635 | ) | |||||||||||||||||||||||||||
Appropriation of statutory reserves |
— | — | — | — | 1,565 | (1,565 | ) | — | — | — | — | |||||||||||||||||||||||||||||
Disposal of RISE IP&RISE HK |
— | — | (339,481 | ) | — | — | — | — | (339,481 | ) | — | (339,481 | ) | |||||||||||||||||||||||||||
Disposal of WFOE |
— | — | — | — | (106,922 | ) | 106,922 | — | — | 3,303 | 3,303 | |||||||||||||||||||||||||||||
Balance at December 31, 2021 |
113,030,392 |
6,964 |
274,036 |
— |
— |
(403,149 |
) |
33,007 |
(89,142 |
) |
— |
(89,142 |
) | |||||||||||||||||||||||||||
Balance at December 31, 2021 (US$) |
113,030,392 |
1,093 |
43,002 |
— |
— |
(63,263 |
) |
5,181 |
(13,987 |
) |
— |
(13,987 |
) |
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||||||||||
Net income/(loss) from continuing operations |
(15,195 | ) | (17,593 | ) | 249,096 | 39,088 | ||||||||||
Gain on troubled debt restructuring |
— | — | (279,097 | ) | (43,796 | ) | ||||||||||
Changes in operating assets and liabilities: |
||||||||||||||||
Prepayments and other current assets |
(5,946 | ) | 1,437 | (9,942 | ) | (1,560 | ) | |||||||||
Accrued expenses and other current liabilities |
983 | (2,459 | ) | 7,160 | 1,125 | |||||||||||
Other non-current liabilities |
— | — | 2,838 | 445 | ||||||||||||
Net cash (used in) continuing operating activities |
(20,158 |
) |
(18,615 |
) |
(29,945 |
) |
(4,698 |
) | ||||||||
Net cash (used in) discontinued operating activities |
(19,696 |
) |
(187,127 |
) |
(509,825 |
) |
(80,003 |
) | ||||||||
Net cash (used in) operating activities |
(39,854 |
) |
(205,742 |
) |
(539,770 |
) |
(84,701 |
) | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||||||||||
Proceeds from disposal of subsidiaries |
— | — | 15,932 | 2,500 | ||||||||||||
Net cash generated from continuing investing activities |
— | — | 15,932 |
2,500 |
||||||||||||
Net cash (used in) discontinued investing activities |
(114,716 |
) |
(111,782 |
) |
(53,535 |
) |
(8,401 |
) | ||||||||
Net cash (used in) investing activities |
(114,716 |
) |
(111,782 |
) |
(37,603 |
) |
(5,901 |
) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||||||||||
Repurchase of ordinary shares |
(48,047 | ) | — | — | — | |||||||||||
Principal repayments on loans |
(97,332 | ) | (62,599 | ) | (124,987 | ) | (19,613 | ) | ||||||||
Proceeds from exercise of share options |
4,647 | 1,925 | 812 | 127 | ||||||||||||
Convertible loan from related party |
— | — | 108,334 | 17,000 | ||||||||||||
Net cash generated used in continuing financing activities |
(140,732 |
) |
(60,674 |
) |
(15,841 |
) |
(2,486 |
) | ||||||||
Net cash (used in) discontinued financing activities |
— |
— |
(23,308 |
) |
(3,658 |
) | ||||||||||
Net cash (used in) financing activities |
(140,732 |
) |
(60,674 |
) |
(39,149 |
) |
(6,144 |
) | ||||||||
Effects of exchange rate changes |
1,342 | (5,443 | ) | (6,635 | ) | (1,041 | ) | |||||||||
Net decrease in cash, cash equivalents and restricted cash |
(293,960 | ) | (383,641 | ) | (623,157 | ) | (97,787 | ) | ||||||||
Cash, cash equivalents and restricted cash at beginning of year |
1,316,785 | 1,022,825 | 639,184 | 100,302 | ||||||||||||
Cash, cash equivalents and restricted cash at end of year |
1,022,825 |
639,184 |
16,027 |
2,515 |
||||||||||||
Less: Cash, cash equivalents and restricted cash of discontinued operations at end of year |
998,674 | 628,806 | — | — | ||||||||||||
Cash, cash equivalents and restricted cash of continuing operations at end of year |
24,151 |
10,378 |
16,027 |
2,515 |
||||||||||||
Supplemental disclosures of cash flow information of continuing operations: |
||||||||||||||||
Cash and cash equivalents |
14,043 | 5,134 | 16,027 | 2,515 | ||||||||||||
Restricted cash |
10,108 | 5,244 | — | — |
1. |
ORGANIZATION AND BASIS OF PRESENTATION |
1. |
ORGANIZATION AND BASIS OF PRESENTATION (Continued) |
Name |
Date of establishment |
Place of establishment |
Percentage of equity interest attributable to the Company |
Principal activity | ||||||
Subsidiaries of the Company: |
||||||||||
RISE Education Cayman III Ltd (“Cayman III”) |
July 29, 2013 | Cayman Islands | 100 | % | Investment holding | |||||
RISE Education Cayman I Ltd (“Cayman”) |
June 19, 2013 | Cayman Islands | 100 | % | Investment holding |
1. |
ORGANIZATION AND BASIS OF PRESENTATION (Continued) |
2. |
SIGNIFICANT ACCOUNTING POLICIES |
2. |
SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SIGNIFICANT ACCOUNTING POLICIES (Continued) |
Electronic equipment |
3 years | |
Furniture |
3 – 5 years | |
Vehicles |
4 years | |
Leasehold improvements |
Shorter of the lease term or estimated useful life |
2. |
SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SIGNIFICANT ACCOUNTING POLICIES (Continued) |
Category |
Estimated Useful Life |
|||
Courseware license |
15 years | |||
Franchise agreements |
2.5-3 years |
|||
Student base |
3-5 years |
|||
Trademarks |
10-15 years |
|||
Purchased software |
3-5 years |
|||
Licensed copyright |
|
The shorter of contractual terms or estimated useful lives of the assets |
||
Teaching course materials |
10 years |
2. |
SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SIGNIFICANT ACCOUNTING POLICIES (Continued) |
(a) | Educational programs |
2. |
SIGNIFICANT ACCOUNTING POLICIES (Continued) |
(a) | Educational programs (Continued) |
(b) | Franchise revenues |
(c) | Other revenues |
2. |
SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SIGNIFICANT ACCOUNTING POLICIES (Continued) |
3. |
DISCONTINUED OPERATIONS |
Percentage |
||||||||
of equity |
||||||||
interest |
||||||||
attributable |
||||||||
Date of |
Place of |
to the |
Principal | |||||
Name |
establishment |
establishment |
company |
activity | ||||
Subsidiaries of the Company: |
||||||||
Rise IP (Cayman) Limited (“Rise IP”) |
24-Jul-13 |
Cayman Islands | 100% | Educational consulting | ||||
Edge Franchising Co., Limited (“Edge Franchising”) |
16-Mar-16 |
Hong Kong | 100% | Educational consulting | ||||
Rise Education International Limited (“Rise HK”) |
24-Jun-13 |
Hong Kong | 100% | Educational consulting | ||||
Edge Online Co., Limited |
1-Apr-18 | Hong Kong | 100% | Educational consulting | ||||
Rise (Tianjin) Education Information Consulting Co., Ltd. (“Rise Tianjin” or “WFOE”) |
12-Aug-13 |
PRC | 100% | Educational consulting, Sale of course materials, study tour service | ||||
VIE: |
||||||||
Beijing Step Ahead Education Technology Development Co., Ltd. |
2-Jan-08 |
PRC | — | Educational consulting | ||||
VIE’s subsidiaries and schools: |
||||||||
Beijing Haidian District Step Ahead Training School |
18-Sep-08 |
PRC | — | Language education | ||||
Beijing Shijingshan District Step Ahead Training School |
14-Jul-09 |
PRC | — | Language education | ||||
Beijing Changping District Step Ahead Training School |
3-Jul-09 |
PRC | — | Language education | ||||
Beijing Chaoyang District Step Ahead Training School |
20-Jul-09 |
PRC | — | Language education | ||||
Beijing Xicheng District RISE Immersion Subject English Training School |
5-Feb-10 |
PRC | — | Language education | ||||
Beijing Dongcheng District RISE Immersion Subject English Training School |
30-Jul-10 |
PRC | — | Language education | ||||
Beijing Tongzhou District RISE Immersion Subject English Training School |
19-Apr-11 | PRC | — | Language education | ||||
Beijing Daxing District RISE Immersion Subject English Training School |
31-Mar-13 |
PRC | — | Language education | ||||
Beijing Fengtai District RISE Immersion Subject English Training School |
28-Feb-12 |
PRC | — | Language education |
3. |
DISCONTINUED OPERATIONS (Continued) |
Percentage |
||||||||
of equity |
||||||||
interest |
||||||||
attributable |
||||||||
Date of |
Place of |
to the |
Principal | |||||
Name |
establishment |
establishment |
company |
activity | ||||
Beijing RISE Immersion Subject English Training School Co., Ltd. |
26-Oct-18 |
PRC | — | Language education | ||||
Beijing Step Ahead Rise Education Technology Co., Ltd. |
11-Dec-19 |
PRC | — | Language education | ||||
Beijing Huairou Ruida Education Training School |
19-Jan-18 |
PRC | Language education | |||||
Shanghai Boyu Investment Management Co., Ltd. |
29-Jan-12 |
PRC | — | Language education | ||||
Shanghai Riverdeep Education Information Consulting Co., Ltd. |
8-Mar-10 |
PRC | Educational consulting services | |||||
Shanghai Ruiaidisi English Training School Co., Ltd. |
5-Aug-19 |
PRC | — | Language education | ||||
Kunshan Ruiaidisi Education Technology Co., Ltd. |
30-Jul-19 |
PRC | — | Language education | ||||
Guangzhou Ruisi Education Technology Development Co., Ltd. |
17-Aug-12 |
PRC | — | Training services | ||||
Guangzhou Yuexiu District RISE Immersion Subject English Training School |
29-Apr-14 | PRC | — | Language education | ||||
Guangzhou Haizhu District RISE Immersion Subject English Training School-Chigang |
8-Dec-14 |
PRC | — | Language education | ||||
Guangzhou Tianhe District RISE Immersion Subject English Training School |
11-Jul-17 |
PRC | — | Language education | ||||
Guangzhou Liwan District Rise Education Training Center Co., Ltd. |
25-Nov-19 |
PRC | — | Language education | ||||
Guangzhou Tianhe District Ruisi Education Consulting Co., Ltd. |
11-Jul-17 |
PRC | — | Language education | ||||
Foshan Nanhai District Step Ahead Education Consulting Co., Ltd. |
21-Jan-20 |
PRC | — | Language education | ||||
Shenzhen Mei Ruisi Education Management Co., Ltd. |
28-Feb-14 |
PRC | — | Training services | ||||
Shenzhen Futian District Rise Training Center |
8-Jan-15 |
PRC | — | Language education | ||||
Shenzhen Nanshan District Rise Training Center |
26-May-15 |
PRC | — | Language education | ||||
Shenzhen Luohu District Rise Education Training Center |
3-Aug-17 |
PRC | — | Language education | ||||
Shenzhen Longhua District Minzhi Rise Training Center |
27-May-20 |
PRC | — | Language education |
3. |
DISCONTINUED OPERATIONS (Continued) |
Percentage |
||||||||
of equity |
||||||||
interest |
||||||||
attributable |
||||||||
Date of |
Place of |
to the |
Principal | |||||
Name |
establishment |
establishment |
company |
activity | ||||
Wuxi Rise Foreign Language Training Co., Ltd. |
5-Jun-13 |
PRC | — | Training services | ||||
Wuxi Ruiying English Training Center Co., Ltd. |
10-Jun-19 |
PRC | — | Language education | ||||
Ruisixing (Tianjin) Travel Services Co., Ltd. |
3-Jul-18 |
PRC | — | Traveling services | ||||
Hebei Camphor Tree Information Technology Co., Ltd. |
5-Nov-15 |
PRC | — | Investment holding | ||||
Shijiazhuang Forest Rock Education Technology Co., Ltd. |
28-Aug-18 |
PRC | — | Investment holding | ||||
Shijiazhuang Xinhua District Oriental Red American Education Training School |
14-Nov-19 |
PRC | — | Language education | ||||
Shijiazhuang Xinhua District Zhuoshuo Training School Co., Ltd. |
13-Dec-19 |
PRC | — | Language education | ||||
Shijiazhuang Yuhua District Ai Ruisi Education Training School |
1-Feb-19 |
PRC | — | Language education | ||||
Shijiazhuang Yuhua District Oriental Red Education Training School |
1-Feb-19 |
PRC | — | Language education | ||||
Shijiazhuang Chang’an District Jinshuo Culture Education Training School Co., Ltd. |
1-Apr-19 | PRC | — | Language education | ||||
Shijiazhuang Qiaoxi District Deshuo Training School Co., Ltd. |
27-Aug-20 |
PRC | — | Language education | ||||
Shijiazhuang Yuhua District Boshuo Training School Co., Ltd. |
2-Jan-20 |
PRC | — | Language education |
3. |
DISCONTINUED OPERATIONS (Continued) |
As at December 31, 2020 |
||||
RMB |
||||
ASSETS |
||||
Current assets: |
||||
Cash and cash equivalents |
549,486 | |||
Restricted cash |
79,320 | |||
Accounts receivable, net |
2,281 | |||
Amounts due from related parties |
552 | |||
Inventories |
7,814 | |||
Prepayments and other current assets |
90,047 | |||
Total current assets of discontinued operations |
729,500 |
|||
Non-current assets: |
||||
Property and equipment, net |
107,537 | |||
Intangible assets, net |
185,647 | |||
Long-term investment |
— | |||
Goodwill |
659,255 | |||
Deferred tax assets, net |
34,241 | |||
Other non-current assets |
55,853 | |||
Operating lease right-of-use |
639,304 | |||
Total non-current assets of discontinued operations |
1,681,837 |
|||
Total assets belong to discontinued operations |
2,411,337 |
|||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||
Current liabilities |
||||
Accounts payable |
11,028 | |||
Accrued expenses and other current liabilities |
162,724 | |||
Deferred revenue and customer advances |
563,736 | |||
Income taxes payable |
5,556 | |||
Current portion of operating lease liabilities |
197,098 | |||
Total current liabilities of discontinued operations |
940,142 |
|||
Non-current liabilities non-current liabilities of the VIE without recourse to the Company amounting to RMB499,092 (US$76,489) as of December 31, 2020): |
||||
Deferred revenue and customer advances |
38,204 | |||
Operating lease liabilities |
452,485 | |||
Deferred tax liabilities, net |
24,011 | |||
Other non-current liabilities |
50,447 | |||
Total non-current liabilities of discontinued operations |
565,147 |
|||
Total liabilities of discontinued operations |
1,505,289 |
3. |
DISCONTINUED OPERATIONS (Continued) |
2019 |
2020 |
2021 |
||||||||||
RMB |
RMB |
RMB |
||||||||||
Revenues |
1,529,447 | 958,467 | 890,386 | |||||||||
Cost of revenues |
(694,693 | ) | (602,934 | ) | (596,412 | ) | ||||||
Gross profit |
834,754 |
355,533 |
293,974 |
|||||||||
Operating expenses: |
||||||||||||
Selling and marketing |
(307,339 | ) | (233,687 | ) | (191,816 | ) | ||||||
General and administrative |
(289,351 | ) | (242,633 | ) | (417,381 | ) | ||||||
Research and development expenses |
— | — | — | |||||||||
Total operating expenses |
(596,690 |
) |
(476,320 |
) |
(609,197 |
) | ||||||
Operating income/(loss) |
238,064 |
(120,787 |
) |
(315,223 |
) | |||||||
Interest income |
17,872 | 15,078 | 8,640 | |||||||||
Interest expense |
(34,093 | ) | (23,611 | ) | (16,823 | ) | ||||||
Foreign currency exchange gain/(loss) |
(1,506 | ) | (187 | ) | 1,627 | |||||||
Other income, net |
10,115 | 26,961 | (78,908 | ) | ||||||||
Impairment loss of long-term investment |
— | (37,000 | ) | — | ||||||||
Income/(loss) before income tax expense |
230,452 |
(139,546 |
) |
(400,687 |
) | |||||||
Loss on sale of discontinued operations |
— | — | (97,777 |
) | ||||||||
Income tax (expense)/benefit |
(70,697 | ) | 15,695 | (8,816 | ) | |||||||
Net income/(loss) from discontinued operations |
159,755 |
(123,851 |
) |
(507,280 |
) | |||||||
Net cash (used in) discontinued operating activities |
(19,696 |
) |
(187,127 |
) |
(509,825 |
) | ||||||
Net cash (used in) discontinued investing activities |
(114,716 |
) |
(111,782 |
) |
(53,535 |
) | ||||||
Net cash (used in) discontinued financing activities |
— |
— |
(23,308 |
) |
4. |
CONCENTRATION OF RISKS |
5. |
BUSINESS COMBINATION |
RMB |
||||
Purchase consideration |
44,061 | |||
Net assets acquired, excluding intangible assets and the related deferred tax liabilities |
(83,813 | ) | ||
Intangible assets |
15,800 | |||
Student base |
15,800 | |||
Deferred tax liabilities |
(4,742 | ) | ||
Non-controlling interest |
(33,866 | ) | ||
Goodwill |
150,682 |
For the year ended December 31, 2019 |
||||||||
pro forma (unaudited) |
As reported |
|||||||
RMB |
RMB |
|||||||
Revenues |
1,555,302 | 1,529,447 | ||||||
Net income |
152,669 | 148,100 |
5. |
BUSINESS COMBINATION (Continued) |
6. |
PREPAYMENTS AND OTHER CURRENT ASSETS |
As at December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Prepayments to suppliers |
4,365 | 14,311 | 2,246 | |||||||||
Deposits |
144 | 140 | 22 | |||||||||
4,509 |
14,451 |
2,268 |
7. |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
As at December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Accrued other operating expenses |
1,469 | 7,889 | 1,238 | |||||||||
Others |
— | 736 | 115 | |||||||||
1,469 |
8,625 |
1,353 |
8. |
TROUBLED DEBT RESTRUCTURING |
US$ |
||||
March 18, 2022 |
3,250 | |||
March 18, 2023 |
8,125 | |||
March 18, 2024 |
11,375 | |||
March 18, 2025 |
16,250 | |||
March 18, 2026 |
26,000 | |||
65,000 |
9. |
RELATED PARTY TRANSACTIONS |
For the years ended December 31, |
||||||||||||||||||||
Notes |
2019 |
2020 |
2021 |
2021 |
||||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||
Bain Capital Education IV |
(i | ) | — | — | 108,334 | 17,000 | ||||||||||||||
Bain Capital Education IV |
— | — | 15,932 | 2,500 | ||||||||||||||||
Wuhan Xinsili Culture Development Co., Ltd. |
(ii | ) | — | — | — | — |
(i) | The Company entered into a convertible loan deed with the Bain Capital Education IV (the “Shareholder”) on December 1, 2021 (the “Convertible Loan Deed”), pursuant to which the Shareholder will provide an interest-free convertible loan of US$17,000 to the Company for the period ended June 30, 2023, convertible into ordinary shares of the Company at US$0.35 per share, or US$0.70 per ADS. If the Company fails to pay any amount payable under this Deed on its due date, interest shall accrue on such amount from the due date at a rate two percent. The Group determined the appropriate accounting treatment of its convertible debt in accordance with the terms in relation to the conversion feature. After considering the impact of such features, the Group may account for such instrument as a liability in its entirety, or separate the instrument into debt and equity components following the respective guidance described under ASC 815 Derivatives and Hedging and ASC 470 Debt. The Group evaluated the equity components immaterial, and accounted for the convertible loan as a non-current liability as of December 31, 2021 |
Year ended December 31, 2021 |
||||||||||
Loan granted |
Principal |
Interest Rate |
Period | |||||||
Convertible loan |
108,334 | — | December 1, 2021 to June 30, 2023 |
(ii) |
The CEO of the Company, Ms. Lihong Wang is the chairman of Wuhan Xinsili Culture Development Co., Ltd. As refer to Note 1, pursuant to the WFOE Purchase Agreement, the Company has agreed to, through Rise HK, sell all of the equity interests in WFOE to Wuhan Xinsili Culture Development Co., Ltd., in consideration of the Buyer SPV (i) paying to Rise HK a nominal consideration, and (ii) assuming all liabilities of WFOE and its subsidiaries. |
9. |
RELATED PARTY TRANSACTIONS (Continued) |
As at December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Bain Capital Education IV |
181 | 177 | 28 |
As at December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Bain Capital Education IV |
— | 108,334 | 17,000 |
10. |
INCOME/(LOSS) PER SHARE |
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
USD |
|||||||||||||
Numerator: |
||||||||||||||||
Net income/(loss) from continuing operations attributable to RISE Education Cayman Ltd |
(15,195 | ) | (17,593 | ) | 249,096 | 39,088 | ||||||||||
Net income/(loss) from discontinued operations attributable to RISE Education Cayman Ltd |
163,295 | (114,840 | ) | (497,583 | ) | (78,081 | ) | |||||||||
Net income/(loss) attributable to RISE Education Cayman Ltd |
148,100 | (132,433 | ) | (248,487 | ) | (38,993 | ) | |||||||||
Denominator: |
||||||||||||||||
Weighted average number of ordinary shares outstanding-basic |
113,187,721 | 112,813,031 | 112,868,532 | 112,868,532 | ||||||||||||
Weighted average number of ordinary shares outstanding-diluted |
114,464,108 | 112,813,031 | 112,868,532 | 112,868,532 | ||||||||||||
Net income/(loss) per share - Basic: |
||||||||||||||||
Continuing operations |
(0.13 | ) | (0.15 | ) | 2.21 | 0.35 | ||||||||||
Discontinued operations |
1.44 | (1.02 | ) | (4.41 | ) | (0.69 | ) | |||||||||
Total net income/(loss) per share - Basic |
1.31 | (1.17 | ) | (2.20 | ) | (0.34 | ) | |||||||||
Net income/(loss) per share - Diluted: |
||||||||||||||||
Continuing operations |
(0.13 | ) | (0.15 | ) | 2.21 | 0.35 | ||||||||||
Discontinued operations |
1.42 | (1.02 | ) | (4.41 | ) | (0.69 | ) | |||||||||
Total net income/(loss) per share - Diluted |
1.29 | (1.17 | ) | (2.20 | ) | (0.34 | ) | |||||||||
Net income/(loss) per ADS - Basic: |
||||||||||||||||
Continuing operations |
(0.26 | ) | (0.31 | ) | 4.42 | 0.70 | ||||||||||
Discontinued operations |
2.88 | (2.04 | ) | (8.82 | ) | (1.38 | ) | |||||||||
Total net income/(loss) per ADS - Basic |
2.62 | (2.35 | ) | (4.40 | ) | (0.68 | ) | |||||||||
Net income/(loss) per ADS - Diluted: |
||||||||||||||||
Continuing operations |
(0.25 | ) | (0.31 | ) | 4.42 | 0.70 | ||||||||||
Discontinued operations |
2.84 | (2.04 | ) | (8.82 | ) | (1.38 | ) | |||||||||
Total net income/(loss) per ADS - Diluted |
2.59 | (2.35 | ) | (4.40 | ) | (0.68 | ) |
11. |
SHARE- BASED PAYMENTS |
11. |
SHARE-BASED PAYMENTS (Continued) |
Number of options |
Weighted– average exercise price |
Weighted- average grant date fair value |
Weighted- average remaining contractual term |
Aggregate intrinsic value |
||||||||||||||||
US$ |
US$ |
US$ |
||||||||||||||||||
Outstanding, December 31, 2020 |
1,861,474 | 1.44 | N/A | 4.61 | 2,988 | |||||||||||||||
Exercised |
(50,000 | ) | 1.44 | N/A | N/A | 16 | ||||||||||||||
Forfeited/Cancelled |
(110,000 | ) | 1.44 | N/A | N/A | |||||||||||||||
Outstanding, December 31, 2021 |
1,701,474 | 0.64 | N/A | 1.00 | — | |||||||||||||||
Vested and expected to vest at December 31, 2021 |
1,701,474 | 0.64 | N/A | 1.00 | — | |||||||||||||||
Exercisable at December 31, 2021 |
1,701,474 | 0.64 | N/A | 1.00 | — |
11. |
SHARE-BASED PAYMENTS (Continued) |
Number of options |
Weighted– average exercise price |
Weighted- average grant date fair value |
Weighted- average remaining contractual term |
Aggregate intrinsic value |
||||||||||||||||
US$ |
US$ |
US$ |
||||||||||||||||||
Outstanding, December 31, 2020 |
3,873,506 | 1.89 | 1.76 | 8.86 | 4,731 | |||||||||||||||
Granted |
850,000 | 1.75 | 0.63 | |||||||||||||||||
Exercised |
(23,300 | ) | 1.75 | 3.09 | 14 | |||||||||||||||
Forfeited/Cancelled |
(3,030,852 | ) | 1.93 | 1.52 | ||||||||||||||||
Outstanding, December 31, 2021 |
1,669,354 | 0.46 | 2.15 | 1.00 | — | |||||||||||||||
Vested and expected to vest at December 31, 2021 |
1,669,354 | 0.46 | 2.15 | 1.00 | — | |||||||||||||||
Exercisable at December 31, 2021 |
1,669,354 | 0.46 | 2.15 | 1.00 | — |
11. |
SHARE-BASED PAYMENTS (Continued) |
Number of options |
Weighted– average exercise price |
Weighted- average grant date fair value |
Weighted- average remaining contractual term |
Aggregate intrinsic value |
||||||||||||||||
US$ |
US$ |
US$ |
||||||||||||||||||
Outstanding, December 31, 2020 |
3,645,494 | 1.75 | 1.49 | 9.70 | 4,721 | |||||||||||||||
Exercised |
(5,860 | ) | 1.75 | 1.59 | 3 | |||||||||||||||
Forfeited/Cancelled |
(2,932,538 | ) | 1.75 | 1.47 | ||||||||||||||||
Outstanding, December 31, 2021 |
707,096 | 0.57 | 1.60 | 1.00 | — | |||||||||||||||
Vested and expected to vest at December 31, 2021 |
707,096 | 0.57 | 1.60 | 1.00 | — | |||||||||||||||
Exercisable at December 31, 2021 |
707,096 | 0.57 | 1.60 | 1.00 | — |
11. |
SHARE-BASED PAYMENTS (Continued) |
2016 Equity Incentive Plan |
||||||||||||
For the years ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
Risk-free interest rate |
2.41%-3.34% | N/A | N/A | |||||||||
Expected volatility range |
53.70%-55.20% |
N/A | N/A | |||||||||
Suboptimal exercise factor |
2.80 | N/A | N/A | |||||||||
Fair value per ordinary share as at valuation date |
US$4.11~US$5.37 | N/A | N/A |
2017 Share Incentive Plan and Modified 2017 Share |
||||||||||||
Incentive Plan |
||||||||||||
For the years ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
Risk-free interest rate |
3.29% | 1.65%~1.69% | 1.00%~2.30% | |||||||||
Expected volatility range |
54.80% | 55.10%~55.80% | 57.00%~114.50% | |||||||||
Suboptimal exercise factor |
2.80 | 2.80 | 2.80 | |||||||||
Fair value per ordinary share as at valuation date |
US$4.94 | US$1.99~US$2.69 | US$0.25~US$1.60 |
2020 Share Incentive Plan and Modified 2020 Share |
||||||||||||
For the years ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
Risk-free interest rate |
N/A | 1.69%~1.86% | 1.00% | |||||||||
Expected volatility range |
N/A | 55.10%~55.80% | 114.50% | |||||||||
Suboptimal exercise factor |
N/A | 2.80 | 2.80 | |||||||||
Fair value per ordinary share as at valuation date |
N/A | US$2.52~US$2.69 | US$0.25 |
11. |
SHARE-BASED PAYMENTS (Continued) |
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
USD |
|||||||||||||
Cost of revenues |
2,617 | 1,821 | (895 | ) | (141 | ) | ||||||||||
Selling and marketing expenses |
1,016 | 1,497 | (1,124 | ) | (176 | ) | ||||||||||
General and administrative expenses |
44,256 | 14,681 | 11,556 | 1,813 | ||||||||||||
Total |
47,889 |
17,999 |
9,537 |
1,496 |
Foreign currency translation adjustments |
||||
RMB |
||||
Balance as of January 1, 2019 |
42,459 | |||
Foreign currency translation adjustments, net of tax of nil |
(1,542 | ) | ||
Balance as of December 31, 2019 |
40,917 | |||
Foreign currency translation adjustments, net of tax of nil |
(1,275 | ) | ||
Balance as of December 31, 2020 |
39,642 | |||
Foreign currency translation adjustments, net of tax of nil |
(6,635 | ) | ||
Balance as of December 31, 2021 |
33,007 | |||
US$ |
||||
Balance as of December 31, 2021 |
5,181 |
• |
We have evaluated the appropriateness of the revenue recognition policies as adopted by the management; |
• |
We have obtained an understanding of and assessing the design, implementation and operating effectiveness of key internal control including the information technology general control (“ITGC”) and the information technology activity control (“ITAC”) which govern such revenue recognition to ensure input and output information were properly recorded; |
• |
We have performed ITGC audit procedures on the Company’s IT system and the online platform to ensure that the database is reliable; |
• |
We have engaged IT specialists to assist us in testing the data flow accuracy and the calculation logic relevant to the recognition of revenue; |
• |
We have performed audit procedures that included, among others, testing the clerical accuracy and consistency with IFRS of the accounting model developed by the Company to recognize revenue; |
• |
We have tested the payment receipts against third-party payments platforms and instruments such as Alipay and WeChat. |
* | Representing amount less than RMB1,000. |
Note |
Combined capital |
Additional paid- in capital |
Accumulated losses |
Total |
||||||||||||||||
RMB’000 |
RMB’000 |
RMB’000 |
RMB’000 |
|||||||||||||||||
Balance at January 1, 2020 |
— |
* |
79,286 |
(56,040 |
) |
23,246 |
||||||||||||||
Comprehensive loss |
||||||||||||||||||||
Loss for the year |
— | — | (82,182 | ) | (82,182 | ) | ||||||||||||||
Total comprehensive loss for the year |
— |
— |
(82,182 |
) |
(82,182 |
) | ||||||||||||||
Transactions with equity holders: |
||||||||||||||||||||
Issuance of ordinary shares |
— |
* |
— | — | — | * | ||||||||||||||
Contribution from a shareholder |
13 | — | 68,700 | — | 68,700 | |||||||||||||||
Balance at December 31, 2020 and January 1, 2021 |
— |
* |
147,986 |
(138,222 |
) |
9,764 |
||||||||||||||
Comprehensive loss |
||||||||||||||||||||
Loss for the year |
— | — | (252,310 | ) | (252,310 | ) | ||||||||||||||
Total comprehensive loss for the year |
— |
— |
(252,310 |
) |
(252,310 |
) | ||||||||||||||
Transactions with equity holders: |
||||||||||||||||||||
Contribution from a shareholder |
13 | — | 267,615 | — | 267,615 | |||||||||||||||
Balance at December 31, 2021 |
— |
* |
415,601 |
(390,532 |
) |
25,069 |
||||||||||||||
* | Representing amount less than RMB1,000. |
Year ended December 31, |
||||||||||||
Note |
2020 |
2021 |
||||||||||
RMB’000 |
RMB’000 |
|||||||||||
Cash flows from operating activities |
||||||||||||
Cash used in operations |
20(a |
) |
(63,297 |
) |
(250,153 |
) | ||||||
Interest received |
283 | 118 | ||||||||||
|
|
|
|
|||||||||
Net cash used in operating activities |
(63,014 |
) |
(250,035 |
) | ||||||||
|
|
|
|
|||||||||
Cash flows from investing activities |
||||||||||||
Purchase of property, plant and equipment |
— | (606 | ) | |||||||||
Purchase of financial asset at fair value through profit or loss |
10 |
— | (5,000 | ) | ||||||||
|
|
|
|
|||||||||
Net cash flows used in investing activities |
— |
(5,606 |
) | |||||||||
|
|
|
|
|||||||||
Cash flows from financing activities |
||||||||||||
Interests paid |
9 |
(189 | ) | (767 | ) | |||||||
Payments of lease liabilities |
9 |
(3,956 | ) | (6,146 | ) | |||||||
Contribution from a shareholder |
13 |
68,700 | 267,615 | |||||||||
|
|
|
|
|||||||||
Net cash flows generated from financing activities |
64,555 |
260,702 |
||||||||||
|
|
|
|
|||||||||
Net increase in cash and cash equivalents |
1,541 |
5,061 |
||||||||||
Cash and cash equivalents at the beginning of the financial year |
2,124 | 3,665 | ||||||||||
|
|
|
|
|||||||||
Cash and cash equivalents at end of year |
5 | 3,665 |
8,726 |
|||||||||
|
|
|
|
1. |
Corporate information |
1.1 |
General information |
1.2 |
History and reorganization of the Group |
1. |
Corporate information (Continued) |
1.3 |
Subsidiaries |
Name of entity |
Place of incorporated |
Date of incorporation/ establishment |
Effective interest held upon completion of reorganization |
Principal activities | ||||||
Subsidiaries |
||||||||||
Kuaidian Power (Beijing) New Energy Technology Co., Ltd. | Beijing, China | August 20, 2019 | 100 | % | Online EV Charging Solutions, Non-Charging Solutions and Other Services | |||||
Beijing Chezhubang New Energy Technology Co., Ltd. | Beijing, China | July 18, 2018 | 100 | % | Online EV Charging Solutions | |||||
Zhidian Youtong Technology Co., Ltd. | Shandong, China | September 27, 2020 | 100 | % | Offline EV Charging Solutions | |||||
Shaanxi Kuaidian Mobility Technology Co., Ltd. | Shaanxi, China | May 29, 2018 | 100 | % | Offline EV Charging Solutions | |||||
Qingdao Hill Matrix New Energy Technology Co., Ltd. | Shandong, China | April 26, 2021 | 100 | % | Offline EV Charging Solutions | |||||
Cosmo Light (Beijing) New Energy Technology Co., Ltd. | Beijing, China | February 22, 2021 | 100 | % | Online EV Charging Solutions |
1.4 |
Basis of presentation |
2. |
Summary of significant accounting policies |
2.1 |
Basis of preparation |
2. |
Summary of significant accounting policies (Continued) |
2.1 |
Basis of preparation (Continued) |
2.1.1 |
New and amendments to the accounting standards adopted and recent accounting pronouncements |
Standards and amendments |
Effective for annual periods beginning on or after | |
IAS 16 (Amendment) ‘Property, plant and equipment – proceeds before intended use’ | January 1, 2022 | |
IAS 37 (Amendment) ‘Onerous contracts – cost of fulfilling a contract’ | January 1, 2022 | |
IFRS 3 (Amendment) ‘Reference to the conceptual Framework’ | January 1, 2022 | |
Annual Improvements to IFRS Standards 2018-2020 | January 1, 2022 | |
IFRS 17 Insurance Contracts | January 1, 2023 | |
IFRS 17 (Amendment) Insurance Contracts | January 1, 2023 | |
IAS 1 (Amendment) ‘Classification of liabilities as current or non-current’ |
January 1, 2023 | |
IAS 1 and IFRS Practice Statement 2 (Amendment) - Disclosure of Accounting Policies | January 1, 2023 | |
IAS 8 (Amendment) - Definition of Accounting Estimates | January 1, 2023 | |
Amendments to IFRS 4 - Extension of the Temporary Exemption from Applying IFRS 9 | January 1, 2023 | |
Amendments to IAS 12 - Deferred Tax related to Assets and Liabilities arising from a Single Transaction Tax | January 1, 2023 | |
Amendment to IFRS 10 and IAS 28 regarding sales or contribution assets between an investor and its associate or joint venture | To be determined |
2. |
Summary of significant accounting policies (Continued) |
2.2 |
Going concern basis |
2.3 |
Subsidiaries and non-controlling interests |
2.4 |
Segment reporting |
2.5 |
Foreign currency translation |
2. |
Summary of significant accounting policies (Continued) |
2.5 |
Foreign currency translation (Continued) |
(i) | assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of reporting period ended. |
(ii) | income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and |
(iii) | all resulting currency translation differences are recognised in other comprehensive income or loss. |
2.6 |
Property, plant and equipment |
– | Electronic equipment | 5 years |
2.7 |
Investments and other financial assets |
• | those to be measured subsequently at fair value (either through other comprehensive income or through profit or loss), and, |
• | those to be measured at amortised cost. |
2. |
Summary of significant accounting policies (Continued) |
2.7 |
Investments and other financial assets (Continued) |
• | the carrying amount of the financial asset transferred; and |
• | the sum of the consideration received from the transfer and any cumulative gains or losses that has been recognised directly in equity. |
2. |
Summary of significant accounting policies (Continued) |
2.8 |
Trade receivables and other receivables |
2.9 |
Cash and cash equivalents |
2.10 |
Share capital |
2.11 |
Trade and other payables |
2.12 |
Current and deferred income tax |
2. |
Summary of significant accounting policies (Continued) |
2.12 |
Current and deferred income tax (Continued) |
2.13 |
Employee benefits |
2. |
Summary of significant accounting policies (Continued) |
2.13 |
Employee benefits (Continued) |
2.14 |
Revenue recognition |
i. | provides all of the benefits received and consumed simultaneously by the customer; |
ii. | creates and enhances an asset that the customer controls as the Group performs; or |
iii. | does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. |
2. |
Summary of significant accounting policies (Continued) |
2.14 |
Revenue recognition (Continued) |
2. |
Summary of significant accounting policies (Continued) |
2.14 |
Revenue recognition (Continued) |
2.15 |
Cost of revenue |
2.16 |
Selling and marketing expenses |
2. |
Summary of significant accounting policies (Continued) |
2.17 |
Administrative expenses |
2.18 |
Research and development expenses |
2.19 |
Income tax |
2.20 |
Provisions and contingent liabilities |
2.21 |
Loss per share |
• | the loss attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares; and |
• | by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year/period and excluding treasury shares. |
• | the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and |
• | the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. |
2. |
Summary of significant accounting policies (Continued) |
2.22 |
Leases |
• | the amount of the initial measurement of lease liabilities; |
• | any lease payments made at or before the commencement date less any lease incentives received; |
• | any initial direct costs; and |
• | restoration costs. |
2.23 |
Finance income/(costs), net |
3. |
Financial risk management |
3.1 |
Financial risk factors |
3. |
Financial risk management (Continued) |
3.1 |
Financial risk factors (Continued) |
Less than 1 year |
Between 1 and 2 years |
Between 2 and 5 years |
Total |
Carrying amount |
||||||||||||||||
RMB’000 |
RMB’000 |
RMB’000 |
RMB’000 |
RMB’000 |
||||||||||||||||
At December 31, 2020 |
||||||||||||||||||||
Other payables and accruals (excluding Employee benefit payables and taxes payables) |
14,580 | — | — | 14,580 | 14,580 | |||||||||||||||
Lease liabilities |
5,005 | 4,117 | 11,321 | 20,443 | 18,606 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
19,585 | 4,117 | 11,321 | 35,023 | 33,186 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
At December 31, 2021 |
||||||||||||||||||||
Trade payables |
437 | — | — | 437 | 437 | |||||||||||||||
Other payables and accruals (excluding Employee benefit payables and taxes payables) |
52,009 | — | — | 52,009 | 52,009 | |||||||||||||||
Lease liabilities |
8,265 | 6,191 | 7,204 | 21,660 | 20,457 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
60,711 | 6,191 | 7,204 | 74,106 | 72,903 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
3. |
Financial risk management (Continued) |
3.2 |
Capital management |
Year ended December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Lease liabilities – repayable within one year |
(4,216 | ) | (8,061 | ) | ||||
Lease liabilities – repayable after one year |
(14,390 | ) | (12,396 | ) | ||||
Cash and cash equivalents |
3,665 | 8,726 | ||||||
|
|
|
|
|||||
Net debt |
(14,941 | ) |
(11,731 | ) | ||||
|
|
|
|
Cash and cash equivalents |
Lease liabilities |
Total |
||||||||||
RMB’000 |
RMB’000 |
RMB’000 |
||||||||||
Net debt as at January 1, 2020 |
2,124 | (3,741 | ) |
(1,617 | ) | |||||||
|
|
|
|
|
|
|||||||
Cash flows |
1,541 | 4,145 | 5,686 | |||||||||
Lease |
— |
(19,010 | ) | (19,010 | ) | |||||||
|
|
|
|
|
|
|||||||
Net debt as at December 31, 2020 |
3,665 | (18,606 | ) |
(14,941 | ) | |||||||
|
|
|
|
|
|
|||||||
Cash flows |
5,061 | 6,913 | 11,974 | |||||||||
Lease |
— |
(8,764 | ) | (8,764 | ) | |||||||
|
|
|
|
|
|
|||||||
Net debt as at December 31, 2021 |
8,726 | (20,457 | ) |
(11,731 | ) | |||||||
|
|
|
|
|
|
3. |
Financial risk management (Continued) |
3.3 |
Fair value estimation |
(1) | Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1); |
(2) | Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2); and |
(3) | Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3). |
Level 3 |
Total |
|||||||
RMB’000 |
RMB’000 |
|||||||
Recurring fair value measurements |
||||||||
At December 31, 2021 |
||||||||
Financial asset at fair value through profit or loss |
5,000 | 5,000 | ||||||
|
|
|
|
• | The use of quoted market prices or investor quotes for similar instruments; and |
• | The discounted cash flow model and unobservable inputs mainly including assumptions of expected future cash flows and discount rate; and |
• | The latest round financing, i.e. the prior transaction price or the third-party pricing information; and |
• | A combination of observable and unobservable inputs, including risk-free rate, expected volatility, discount rate for lack of marketability, market multiples, etc. |
Fair values as of December 31, |
Unobservable inputs |
Change of inputs at December 31, |
Relationship of unobservable inputs to fair value | |||||||||||||||||
2020 |
2021 |
2020 |
2021 |
|||||||||||||||||
Description |
RMB’000 |
RMB’000 |
||||||||||||||||||
Investments in unlisted companies |
— | 5,000 | Expected volatility | — | 51 | % | The higher the expected volatility, the lower the fair value | |||||||||||||
Discount for lack of marketability (“DLOM”) | — | 19 | % | The higher the DLOM, the lower the fair value |
4. |
Critical accounting estimates and judgements |
• |
Determining criteria for significant increase in credit risk; |
• |
Selecting appropriate models and assumptions for the measurement of ECL; |
• |
Establishing the relative probability weightings of forward-looking scenarios. |
4. |
Critical accounting estimates and judgements (Continued) |
5. |
Cash and cash equivalents |
As of December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Cash at bank |
1,210 | 3,971 | ||||||
Deposits held at licensed payment platforms |
2,455 | 4,755 | ||||||
|
|
|
|
|||||
3,665 | 8,726 | |||||||
|
|
|
|
6. |
Trade receivables |
As of December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Trade receivables |
— |
740 |
||||||
Provision on Impairment |
— |
— |
||||||
|
|
|
|
|||||
— |
740 |
|||||||
|
|
|
|
As of December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
0 – 90 days |
— |
727 |
||||||
91 – 180 days |
— |
13 |
||||||
|
|
|
|
|||||
— |
740 |
|||||||
|
|
|
|
7. |
Prepayments, other receivables and other assets |
As of December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Receivables for pile sales |
2,783 | 36,113 | ||||||
Prepayments to charging stations |
19,833 | 31,930 | ||||||
VAT recoverable |
16,080 | 30,455 | ||||||
Prepayment for rental, facility and utilities |
— | 5,797 | ||||||
Prepayments for charging piles procurement |
1,951 | 5,186 | ||||||
Receivables from other platforms |
2,437 | 3,102 | ||||||
Prepayments for miscellaneous |
293 | 2,250 | ||||||
Employee advances |
654 | 1,507 | ||||||
Deposits |
300 | 1,462 | ||||||
Others |
418 | 1,168 | ||||||
|
|
|
|
|||||
Less: credit loss allowances |
(56 | ) | (1,472 | ) | ||||
|
|
|
|
|||||
44,693 |
117,498 |
|||||||
|
|
|
|
8. |
Financial instruments by category |
As of December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Assets as per statement of financial position |
||||||||
Financial asset measured at fair value through profit or loss: |
||||||||
—Financial asset at fair value through profit or loss |
— |
5,000 | ||||||
— | 5,000 | |||||||
Financial asset measured at amortized costs: |
||||||||
Financial asset |
||||||||
—Trade receivables |
— | 740 | ||||||
—Other receivables, prepayments and deposits (excluding prepayments to suppliers and prepaid expenses). |
22,616 | 71,897 | ||||||
—Cash and cash equivalents |
3,665 | 8,726 | ||||||
Total |
26,281 |
86,363 |
||||||
As of December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Liabilities as per statement of financial position |
||||||||
Financial liabilities measured at amortized cost: |
||||||||
— Trade payables |
— | 437 | ||||||
— Other payables and accruals (excluding employee benefit payables and taxes payables) |
14,580 | 52,009 | ||||||
— Lease liabilities |
18,606 | 20,457 | ||||||
Total |
33,186 |
72,903 |
||||||
9 . |
Leases |
Office buildings |
Charging stations |
Total |
||||||||||
RMB’000 |
RMB’000 |
RMB’000 |
||||||||||
Year ended December 31, 2020 |
||||||||||||
Opening net book amount |
3,955 | — | 3,955 | |||||||||
Additions |
18,822 | — | 18,822 | |||||||||
Depreciation charge |
(3,540 | ) | — | (3,540 | ) | |||||||
Closing net book amount |
19,237 |
— |
19,237 |
|||||||||
As of December 31, 2020 |
||||||||||||
Cost |
25,313 | — | 25,313 | |||||||||
Accumulated depreciation |
(6,076 | ) | — | (6,076 | ) | |||||||
Net book value |
19,237 |
— |
19,237 |
|||||||||
Year ended December 31, 2021 |
||||||||||||
Opening net book amount |
19,237 | — | 19,237 | |||||||||
Additions |
— | 8,014 | 8,014 | |||||||||
Depreciation charge |
(4,723 | ) | (1,974 | ) | (6,697 | ) | ||||||
Closing net book amount |
14,514 |
6,040 |
20,554 |
|||||||||
As of December 31, 2021 |
||||||||||||
Cost |
25,313 | 8,014 | 33,327 | |||||||||
Accumulated depreciation |
(10,799 | ) | (1,974 | ) | (12,773 | ) | ||||||
Net book value |
14,514 |
6,040 |
20,554 |
|||||||||
As of December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Right-of-use |
||||||||
Office buildings |
19,237 | 14,514 | ||||||
Charging stations |
— | 6,040 | ||||||
19,237 |
20,554 |
|||||||
As of December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Lease liabilities |
||||||||
Current |
4,216 | 8,061 | ||||||
Non-current |
14,390 | 12,396 | ||||||
18,606 |
20,457 |
|||||||
9. |
Leases (Continued) |
As of December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Depreciation charge of right-of-use |
||||||||
Office buildings |
3,540 | 4,723 | ||||||
Charging stations |
— | 1,974 | ||||||
Interest expense (included in finance cost) |
189 | 748 | ||||||
Expense relating to short-term leases not included in lease liabilities (included in cost of revenues, selling and marketing expenses, administrative expenses and research and development expenses) |
— | 4,421 | ||||||
3,729 |
11,866 |
|||||||
As of December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Principal elements of lease payments |
3,956 | 6,146 | ||||||
Related interest paid |
189 | 767 | ||||||
4,145 |
6,913 |
|||||||
10 . |
Financial asset at fair value through profit or loss |
As of December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Investment(a) |
— |
5,000 | ||||||
As of December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
At the beginning of the year |
— |
— |
||||||
Additions (Note i) |
— |
5,000 | ||||||
At the end of the year |
— |
5,000 |
||||||
(i) | During the year ended December 31, 2021, the Group invested in a company engaging in EV charging hardware and technology industry for RMB5.0 million, and there is no fair value change within the year. |
11. |
Property, plant and equipment |
12. |
Other payables and accruals |
As of December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
VAT payable |
19,546 | 41,111 | ||||||
Advances from transacting users |
8,387 | 22,433 | ||||||
Payables to charging stations |
3,836 | 12,657 | ||||||
Accrued expenses |
775 | 10,605 | ||||||
Employee benefit payables |
3,744 | 9,784 | ||||||
Payables for charging piles procurement |
484 | 3,618 | ||||||
Income tax payable |
51 | 777 | ||||||
Others |
2,411 | 6,455 | ||||||
39,234 |
107,440 |
|||||||
13. |
Combined capital and additional paid in capital |
Number of ordinary shares |
Nominal value of ordinary shares |
Combined capital |
Additional paid-in capital |
Total |
||||||||||||||||
USD |
RMB |
RMB’000 |
RMB’000 |
|||||||||||||||||
At January 1, 2020 (note i) |
1,000 |
— |
* |
1 |
79,286 |
79,286 |
||||||||||||||
Issuance of ordinary shares (note ii) |
4,000 | — | * | 3 | — | — | ** | |||||||||||||
Contribution of a shareholder (note iii) |
— | — | — | 68,700 | 68,700 | |||||||||||||||
At December 31, 2020 |
5,000 |
1 |
4 |
147,986 |
147,986 |
|||||||||||||||
At January 1, 2021 |
5,000 |
1 |
4 |
147,986 |
147,986 |
|||||||||||||||
Contribution of a shareholder |
— | — | — | 267,615 | 267,615 | |||||||||||||||
At December 31, 2021 |
5,000 |
1 |
4 |
415,601 |
415,601 |
|||||||||||||||
* | Representing amount less than US$1.00. |
** | Representing amount less than RMB1,000. |
13. |
Combined capital and additional paid in capital (Continued) |
14. |
Revenues |
Year ended December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Revenue, gross |
37,206 | 160,916 | ||||||
Revenue from Online EV Charging Solutions |
36,498 | 153,246 | ||||||
Revenue from Offline EV Charging Solutions |
565 | 7,060 | ||||||
Revenue from Non-Charging Solutions and Other Services |
143 | 610 | ||||||
Incentive to end-users |
(31,374 | ) | (143,142 | ) | ||||
|
|
|
|
|||||
Revenue, net |
5,832 |
17,774 |
||||||
|
|
|
|
1 5 . |
Other losses, net |
Year ended December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Credit loss allowances |
(56 | ) | (1,416 | ) | ||||
Others |
37 | 14 | ||||||
|
|
|
|
|||||
(19 |
) |
(1,402 |
) | |||||
|
|
|
|
1 6 . |
Operating costs by nature |
Year ended December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
End-user incentives |
24,910 | 107,360 | ||||||
Employee benefit expenses |
40,802 | 102,703 | ||||||
Promotion and advertising |
3,597 | 10,403 | ||||||
Traveling, entertainment and general office expenses |
3,125 | 8,249 | ||||||
Auditor’s remuneration |
— | 7,066 | ||||||
VAT surcharges |
6,089 | 6,839 | ||||||
Depreciation of right-of-use |
3,540 | 6,697 | ||||||
Rental, facility and utilities |
669 | 4,923 | ||||||
Bandwidth expenses and server custody costs |
2,707 | 4,794 | ||||||
Payment processing cost |
1,691 | 4,108 | ||||||
Online service costs |
538 | 2,434 | ||||||
Professional service fee |
203 | 1,365 | ||||||
Depreciation of property, plant and equipment |
— | 58 | ||||||
Others |
171 | 645 | ||||||
|
|
|
|
|||||
Total operating costs |
88,042 |
267,644 |
||||||
|
|
|
|
1 7 . |
Finance income/(costs), net |
Year ended December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Interest income from bank deposits |
283 | 118 | ||||||
Interest expense from lease liabilities |
(189 | ) | (748 | ) | ||||
Bank charges |
(5 | ) | (10 | ) | ||||
|
|
|
|
|||||
Finance income/(costs), net |
89 |
(640 |
) | |||||
|
|
|
|
18. |
Taxation |
18. |
Taxation (Continued) |
Year ended December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Current income tax |
51 | 726 | ||||||
Deferred income tax |
(9 | ) | (328 | ) | ||||
Total income tax expense |
42 | 398 | ||||||
Year ended December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Loss before income tax |
(82,140 | ) | (251,912 | ) | ||||
Tax calculated at statutory income tax rate of 25% in mainland China |
(20,535 | ) | (62,978 | ) | ||||
Tax effects of: |
||||||||
— Expenses not deductible for income tax purposes |
469 | 1,069 | ||||||
— Tax losses for which no deferred tax assets were recognized |
20,108 | 64,141 | ||||||
— Utilization of previously unrecognized tax losses |
— | (1,834 | ) | |||||
42 | 398 | |||||||
18. |
Taxation (Continued) |
As of December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
The deferred tax assets comprise temporary differences attributable to: |
||||||||
Credit loss allowances on financial asset |
9 | 337 | ||||||
Total deferred tax assets |
9 |
337 |
||||||
As of December 31, | ||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Deferred tax assets: |
||||||||
to be recovered after more than 12 months |
9 |
337 |
||||||
9 |
337 |
|||||||
Prepayment, other receivables and other assets |
Total |
|||||||
RMB’000 |
RMB’000 |
|||||||
At January 1, 2020 |
— |
— |
||||||
Credited to income statement |
9 |
9 |
||||||
At December 31, 2020 and January 1, 2021 |
9 |
9 |
||||||
Credited to income statement |
328 |
328 |
||||||
At December 31, 2021 |
337 |
337 |
||||||
As of December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
2023 |
34 | 34 | ||||||
2024 |
27,025 | 22,854 | ||||||
2025 |
61,781 | 58,165 | ||||||
2026 |
— | 256,618 | ||||||
Total unrecorded tax losses carry forwards |
88,840 |
337,671 |
||||||
1 9 . |
Loss per share |
19. |
Loss per share (Continued) |
Year ended December 31, |
||||||||
2020 |
2021 |
|||||||
Net loss attributable to equity holders of the Company (RMB’000) |
82,182 | 252,310 | ||||||
Weighted average number of ordinary shares in issue |
1,470 | 5,000 | ||||||
Basic loss per share (RMB per share) |
55,906 | 50,462 | ||||||
20. |
Cash flow information |
Year ended December 31, | ||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
N et Loss before income tax |
(82,140 |
) |
(251,912 |
) | ||||
Adjustments for: |
||||||||
Depreciation of property, plant and equipment (Note 16) |
— |
58 |
||||||
Depreciation of right-of-use assets (Note 16) |
3,540 |
6,697 |
||||||
Credit loss allowances on financial asset (Note 15) |
56 |
1,416 |
||||||
Interest income (Note 17) |
(283 |
) |
(118 |
) | ||||
Interest expense (Note 17) |
189 |
748 |
||||||
Increase in trade receivables |
— |
(740 |
) | |||||
Increase in prepayments, other receivables and other assets |
(11,666 |
) |
(74,221 |
) | ||||
Increase in trade and other payables |
27,007 |
67,919 |
||||||
|
|
|
|
|||||
Cash used in operations |
(63,297 |
) |
(250,153 |
) | ||||
|
|
|
|
21. |
Commitments |
Year ended December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Within one year |
— | 7,491 | ||||||
|
|
|
|
|||||
Total |
— |
7,491 | ||||||
|
|
|
|
22 . |
Contingencies |
2 3 . |
Related party transactions |
23. |
Related party transactions (Continued) |
(a) |
Key management personal compensation |
Year ended December 31, |
||||||||
2020 |
2021 |
|||||||
RMB’000 |
RMB’000 |
|||||||
Short-term employee benefits |
1,022 | 2,692 | ||||||
|
|
|
|
|||||
1,022 |
2,692 |
|||||||
|
|
|
|
2 4 . |
Event occurring after the reporting period |
(a) |
Option arrangement |
(b) |
Raise funding through convertible redeemable preference shares |
(c) |
Plan of Merger |
(d) |
Data Striping |
(i) |
Shareholders of NaaS are expected to own approximately 93% of the fully-diluted ordinary shares of the combined company immediately following the closing of the transaction contemplated by the Merger Agreement (the “Transaction”); |
(ii) |
the largest individual shareholder of the combined entity is an existing shareholder of NaaS; |
(iii) |
directors appointed by NaaS will hold a majority of board seats of the combined company; and |
(iv) |
NaaS’ senior management will be the senior management of the combined company following consummation of the Mergers (as defined below). |
Company |
NaaS |
Pro Forma Adjustments |
Note 2 |
Pro Forma Combined |
||||||||||||||||
RMB’000 |
RMB’000 |
RMB’000 |
RMB’000 |
|||||||||||||||||
ASSETS |
||||||||||||||||||||
CURRENT ASSETS |
||||||||||||||||||||
Cash and cash equivalents |
16,027 |
8,726 |
556,356 |
(a |
) |
581,109 |
||||||||||||||
Trade receivables |
— |
740 |
— |
740 |
||||||||||||||||
Prepayments, other receivables and other assets |
14,451 |
117,498 |
— |
131,949 |
||||||||||||||||
Amounts due from related parties |
177 |
— |
— |
177 |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total current assets |
30,655 |
126,964 |
556,356 |
713,975 |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Non-current assets |
||||||||||||||||||||
Right-of-use |
— |
20,554 |
— |
20,554 |
||||||||||||||||
Financial asset at fair value through profit or loss |
— |
5,000 |
— |
5,000 |
||||||||||||||||
Property, plant and equipment |
— |
548 |
— |
548 |
||||||||||||||||
Deferred tax assets |
— |
337 |
— |
337 |
||||||||||||||||
Total non-current assets |
— |
26,439 |
— |
26,439 |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total assets |
30,655 |
153,403 |
556,356 |
740,414 |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
LIABILITIES AND EQUITY |
||||||||||||||||||||
Current liabilities |
||||||||||||||||||||
Current lease liabilities |
— |
8,061 |
— |
8,061 |
||||||||||||||||
Trade payables |
— |
437 |
— |
437 |
||||||||||||||||
Other payables and accruals |
8,625 |
107,440 |
8,624 |
(a |
) |
124,689 |
||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total current liabilities |
8,625 |
115,938 |
8,624 |
133,187 |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Non-current liabilities |
||||||||||||||||||||
Non-current lease liabilities |
— |
12,396 |
— |
12,396 |
||||||||||||||||
Other non-current liabilities |
2,838 |
— |
— |
2,838 |
||||||||||||||||
Convertible loan from related parties |
108,334 |
— |
(108,334 |
) |
(b |
) |
— |
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total non-current liabilities |
111,172 |
12,396 |
(108,334 |
) |
15,234 |
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total liabilities |
119,797 |
128,334 |
(99,710 |
) |
148,421 |
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
EQUITY |
||||||||||||||||||||
Ordinary shares |
— |
— |
* |
136,475 |
(c |
) |
136,475 |
|||||||||||||
6,964 |
— |
(6,964 |
) |
(d |
) |
— |
||||||||||||||
Additional paid in capital |
274,036 |
415,601 |
547,732 |
(a |
) |
1,237,369 |
||||||||||||||
— |
— |
108,334 |
(b |
) |
108,334 |
|||||||||||||||
— |
— |
(136,475 |
) |
(c |
) |
(136,475 |
) | |||||||||||||
— |
— |
(363,178 |
) |
(d |
) |
(363,178 |
) | |||||||||||||
— |
— |
375,909 |
(e |
) |
375,909 |
|||||||||||||||
Accumulated losses |
(403,149 |
) |
(390,532 |
) |
403,149 |
(d |
) |
(390,532 |
) | |||||||||||
— |
— |
(375,909 |
) |
(e |
) |
(375,909 |
) | |||||||||||||
Accumulated other comprehensive income |
33,007 |
— |
(33,007 |
) |
(d |
) |
— |
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total equity |
(89,142 |
) |
25,069 |
656,066 |
591,993 |
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total equity and liabilities |
30,655 |
153,403 |
556,356 |
740,414 |
||||||||||||||||
|
|
|
|
|
|
|
|
* |
Representing amount less than RMB1,000. |
Company |
NaaS |
Pro Forma Adjustments |
Note 2 |
Pro Forma Combined |
||||||||||||||||
RMB’000 |
RMB’000 |
RMB’000 |
RMB’000 |
|||||||||||||||||
Revenues, gross |
— |
160,916 |
— |
160,916 |
||||||||||||||||
Online EV Charging Solutions |
— |
153,246 |
— |
153,246 |
||||||||||||||||
Offline EV Charging Solutions |
— |
7,060 |
— |
7,060 |
||||||||||||||||
Non-Charging Solutions and Other Services |
— |
610 |
— |
610 |
||||||||||||||||
Incentive to end-users |
— |
(143,142 |
) |
— |
(143,142 |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Revenues, net |
— |
17,774 |
— |
17,774 |
||||||||||||||||
Other losses, net |
— |
(1,402 |
) |
— |
(1,402 |
) | ||||||||||||||
Operating costs |
||||||||||||||||||||
Cost of revenues |
— |
(18,863 |
) |
— |
(18,863 |
) | ||||||||||||||
Selling and marketing expenses |
— |
(183,165 |
) |
— |
(183,165 |
) | ||||||||||||||
Administrative expenses |
(30,003 |
) |
(28,458 |
) |
— |
(58,461 |
) | |||||||||||||
Research and development expenses |
— |
(37,158 |
) |
— |
(37,158 |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total operating costs |
(30,003 |
) |
(267,644 |
) |
— |
(297,647 |
) | |||||||||||||
Operating loss |
(30,003 |
) |
(251,272 |
) |
— |
(281,275 |
) | |||||||||||||
Finance income/(costs), net |
2 |
(640 |
) |
— |
(638 |
) | ||||||||||||||
Gain on troubled debt restructuring |
279,097 |
— |
— |
279,097 |
||||||||||||||||
Equity-settled listing cost |
— |
— |
(375,909 |
) |
(e |
) |
(375,909 |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net loss before income tax |
249,096 |
(251,912 |
) |
(375,909 |
) |
(378,725 |
) | |||||||||||||
Income tax expenses |
— |
(398 |
) |
— |
(398 |
) | ||||||||||||||
Net income/(loss) from continuing operations |
249,096 |
(252,310 |
) |
(375,909 |
) |
(379,123 |
) | |||||||||||||
Net loss from discontinued operations, net of tax |
(507,280 |
) |
— |
— |
(507,280 |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net loss |
(258,184 |
) |
(252,310 |
) |
(375,909 |
) |
(886,403 |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net loss attributable to parent company |
(248,487 |
) |
(252,310 |
) |
(375,909 |
) |
(876,706 |
) | ||||||||||||
Net loss attributable to non-controlling interests |
(9,697 |
) |
— |
— |
(9,697 |
) |
(a) |
Reflects an adjustment for the pro forma effect of fund raising by NaaS through the issuance of convertible redeemable preference shares, as if it had occurred on December 31, 2021. NaaS entered into share subscription agreements on January 14 and January 26, 2022, according to which NaaS issued 9,923,135 Series A convertible redeemable preference shares with an issuance price of US$8.8 per share, for a total cash consideration of US$87.3 million (RMB556.3 million). The issuance costs for Series A preferred shares were RMB8.6 million, which is reflected in other payables and accruals. |
(b) |
Reflects an adjustment for conversion of the convertible note previously issued by the Company to Bain Capital Rise Education IV Cayman Limited in the principal amount of $17 million at the conversion price that equals $0.70 per American Depositary Share, each representing two ordinary shares of the Company, par value $0.01 per share. |
(c) |
The unaudited pro forma condensed combined financial statements assume there will be (i) 494,048,037 Class A ordinary shares outstanding par value $0.01 per share, of which 167,071,258 shares will be owned by shareholders of the Company as consideration for the Merger, (ii) 248,888,073 Class B ordinary shares outstanding par value $0.01 per share, and (iii) 1,398,659,699 Class C ordinary shares outstanding par value $0.01 per share, upon completion of the Mergers and conversion of the Series A preferred shares. |
(d) |
Represents the elimination of the historical equity of the Company. |
(e) |
Reflects an adjustment for deemed consideration in respect of the reverse acquisition. The fair value of the deemed consideration for the transaction is RMB286.8 million, and the fair value of the net liabilities acquired is RMB89.1 million, the difference of them is RMB375.9 million, which was recognized as expenses in the statement of operations in the year ended December 31, 2021, representing the cost of the listing under IFRS 2. |
Exhibit 1.1
THE COMPANIES ACT (AS REVISED)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
MEMORANDUM OF ASSOCIATION
OF
NAAS TECHNOLOGY INC.
(Adopted by a Special Resolution passed on April 29, 2022 and effective immediately prior to the consummation of the mergers as contemplated in the Agreement and Plan of Merger dated February 8, 2022 by and between RISE Education Cayman Ltd, Dada Merger Sub Limited, Dada Merger Sub II Limited and Dada Auto Inc.)
1. | The name of the Company is NaaS Technology Inc. |
2. | The Registered Office of the Company will be situated at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other location within the Cayman Islands as the Directors may from time to time determine. |
3. | The objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by the Companies Act or any other law of the Cayman Islands. |
4. | The Company shall have and be capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit as provided by the Companies Act. |
5. | The Company will not trade in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the Company carried on outside the Cayman Islands; provided that nothing in this section shall be construed as to prevent the Company effecting and concluding contracts in the Cayman Islands, and exercising in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands. |
6. | The liability of each Shareholder is limited to the amount, if any, unpaid on the Shares held by such Shareholder. |
7. | The authorized share capital of the Company is US$25,000,000 divided into 2,500,000,000 shares comprising of (i) 700,000,000 Class A Ordinary Shares of a par value of US$0.01 each, (ii) 300,000,000 Class B Ordinary Shares of a par value of US$0.01 each, (iii) 1,400,000,000 Class C Ordinary Shares of a par value of US$0.01 each and (iv) 100,000,000 shares as such Class or series (however designated) as the board of directors of the Company may determine in accordance with the Articles. Subject to the Companies Act and the Articles, the Company shall have power to redeem or purchase any of its Shares and to increase or reduce its authorized share capital and to sub-divide or consolidate the said Shares or any of them and to issue all or any part of its capital whether original, redeemed, increased or reduced with or without any preference, priority, special privilege or other rights or subject to any postponement of rights or to any conditions or restrictions whatsoever and so that unless the conditions of issue shall otherwise expressly provide every issue of shares whether stated to be ordinary, preference or otherwise shall be subject to the powers on the part of the Company hereinbefore provided. |
8. | The Company has the power contained in the Companies Act to deregister in the Cayman Islands and be registered by way of continuation in some other jurisdiction. |
9. | Capitalized terms that are not defined in this Memorandum of Association bear the same meanings as those given in the Articles of Association of the Company. |
2
THE COMPANIES ACT (AS REVISED)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
NAAS TECHNOLOGY INC.
(Adopted by a Special Resolution passed on April 29, 2022 and effective immediately prior to the consummation of the mergers as contemplated in the Agreement and Plan of Merger dated February 8, 2022 by and between RISE Education Cayman Ltd, Dada Merger Sub Limited, Dada Merger Sub II Limited and Dada Auto Inc.)
TABLE A
The regulations contained or incorporated in Table A in the First Schedule of the Companies Act shall not apply to the Company and the following Articles shall comprise the Articles of Association of the Company.
INTERPRETATION
1. | In these Articles the following defined terms will have the meanings ascribed to them, if not inconsistent with the subject or context: |
ADS | means an American Depositary Share representing Class A Ordinary Shares; | |
Affiliate | means in respect of a Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person, and (i) in the case of a natural person, shall include, without limitation, such persons spouse, parents, children, siblings, mother-in-law, father-in-law, brothers-in-law and sisters-in-law, a trust for the benefit of any of the foregoing, and a corporation, partnership or any other entity wholly or jointly owned by any of the foregoing, and (ii) in the case of an entity, shall include a partnership, a corporation or any other entity or any natural person which directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such entity. The term control shall mean the ownership, directly or indirectly, of shares possessing more than fifty percent (50%) of the voting power of the corporation, partnership or other entity (other than, in the case of a corporation, securities having such power only by reason of the happening of a contingency), or having the power to control the management or elect a majority of members to the board of directors or equivalent decision-making body of such corporation, partnership or other entity; |
3
4
5
means a resolution: (a) passed by a simple majority of the votes cast by such Shareholders as, being entitled to do
so, vote in person or, where proxies are allowed, by proxy or, in the case of corporations, by their duly authorized representatives at a general meeting of the Company held in accordance with these Articles; or (b) approved in writing by
all of the Shareholders entitled to vote at a general meeting of the Company in one or more instruments each signed by one or more of the Shareholders and the effective date of the resolution so adopted shall be the date on which the instrument, or
the last of such instruments, if more than one, is executed; 6
7
means a special resolution of the Company passed in accordance with the Companies Act, being a resolution: (a) passed by not less than two-thirds of the votes cast by such Shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy or, in the case of corporations, by their duly authorized representatives, at a
general meeting of the Company of which notice specifying the intention to propose the resolution as a special resolution has been duly given; or (b) approved in writing by all of the Shareholders entitled to vote at a general meeting of the
Company in one or more instruments each signed by one or more of the Shareholders and the effective date of the special resolution so adopted shall be the date on which the instrument or the last of such instruments, if more than one, is
executed; 8
In these Articles, save where the context requires otherwise: words importing the singular number shall include the plural number and vice versa; words importing the masculine gender only shall include the feminine gender and any Person as the context may
require; the word may shall be construed as permissive and the word shall shall be construed as
imperative; reference to a dollar or dollars (or US$) and to a cent or cents is reference to dollars and cents of the
United States; reference to a statutory enactment shall include reference to any amendment or
re-enactment thereof for the time being in force; reference to any determination by the Directors shall be construed as a determination by the Directors in their
sole and absolute discretion and shall be applicable either generally or in any particular case; reference to in writing shall be construed as written or represented by any means reproducible in
writing, including any form of print, lithograph, email, facsimile, photograph or telex or represented by any other substitute or format for storage or transmission for writing including in the form of an electronic record or partly one and partly
another; any requirements as to delivery under the Articles include delivery in the form of an electronic record or an
electronic communication; any requirements as to execution or signature under the Articles, including the execution of the Articles
themselves, can be satisfied in the form of an electronic signature as defined in the Electronic Transactions Act; and Sections 8 and 19(3) of the Electronic Transactions Act shall not apply. 9
Subject to the last two preceding Articles, any words defined in the Companies Act shall, if not inconsistent
with the subject or context, bear the same meaning in these Articles. PRELIMINARY The business of the Company may be conducted as the Directors see fit. The Registered Office shall be at such address in the Cayman Islands as the Directors may from time to time
determine. The Company may in addition establish and maintain such other offices and places of business and agencies in such places as the Directors may from time to time determine. The expenses incurred in the formation of the Company and in connection with the offer for subscription and
issue of Shares shall be paid by the Company. Such expenses may be amortized over such period as the Directors may determine and the amount so paid shall be charged against income or capital in the accounts of the Company as the Directors shall
determine. The Directors shall keep, or cause to be kept, the Register at such place as the Directors may from time to
time determine and, in the absence of any such determination, the Register shall be kept at the Registered Office. SHARES Subject to these Articles, all Shares for the time being unissued shall be under the control of the Directors
who may, in their absolute discretion and without the approval of the Members, cause the Company to: issue, allot and dispose of Shares (including, without limitation, preferred shares) (whether in certificated
form or non-certificated form) to such Persons, in such manner, on such terms and having such rights and being subject to such restrictions as they may from time to time determine; grant rights over Shares or other securities to be issued in one or more classes or series as they deem
necessary or appropriate and determine the designations, powers, preferences, privileges and other rights attaching to such Shares or securities, including dividend rights, voting rights, conversion rights, terms of redemption and liquidation
preferences, any or all of which may be greater than the powers, preferences, privileges and rights associated with the then issued and outstanding Shares, at such times and on such other terms as they think proper; and 10
grant options with respect to Shares and issue warrants or similar instruments with respect thereto.
The Directors may authorize the division of Shares into any number of Classes and the different Classes shall
be authorized, established and designated (or re-designated as the case may be) and the variations in the relative rights (including, without limitation, voting, dividend and redemption rights), restrictions,
preferences, privileges and payment obligations as between the different Classes (if any) may be fixed and determined by the Directors or by a Special Resolution. The Directors may issue Shares with such preferred or other rights, all or any of
which may be greater than the rights of Ordinary Shares, at such time and on such terms as they may think appropriate. Notwithstanding Article 17, the Directors may issue from time to time, out of the authorised share capital of the Company (other
than the authorised but unissued Ordinary Shares), series of preferred shares in their absolute discretion and without approval of the Members; provided, however, before any preferred shares of any such series are issued, the Directors shall by
resolution of Directors determine, with respect to any series of preferred shares, the terms and rights of that series, including: the designation of such series, the number of preferred shares to constitute such series and the subscription
price thereof if different from the par value thereof; whether the preferred shares of such series shall have voting rights, in addition to any voting rights provided
by law, and, if so, the terms of such voting rights, which may be general or limited; the dividends, if any, payable on such series, whether any such dividends shall be cumulative, and, if so, from
what dates, the conditions and dates upon which such dividends shall be payable, and the preference or relation which such dividends shall bear to the dividends payable on any shares of any other class or any other series of shares;
whether the preferred shares of such series shall be subject to redemption by the Company, and, if so, the
times, prices and other conditions of such redemption; whether the preferred shares of such series shall have any rights to receive any part of the assets available
for distribution amongst the Members upon the liquidation of the Company, and, if so, the terms of such liquidation preference, and the relation which such liquidation preference shall bear to the entitlements of the holders of shares of any other
class or any other series of shares; 11
whether the preferred shares of such series shall be subject to the operation of a retirement or sinking fund
and, if so, the extent to and manner in which any such retirement or sinking fund shall be applied to the purchase or redemption of the preferred shares of such series for retirement or other corporate purposes and the terms and provisions relative
to the operation thereof; whether the preferred shares of such series shall be convertible into, or exchangeable for, shares of any other
class or any other series of preferred shares or any other securities and, if so, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same, and any other terms and conditions of conversion or
exchange; the limitations and restrictions, if any, to be effective while any preferred shares of such series are
outstanding upon the payment of dividends or the making of other distributions on, and upon the purchase, redemption or other acquisition by the Company of, the existing shares or shares of any other class of shares or any other series of preferred
shares; the conditions or restrictions, if any, upon the creation of indebtedness of the Company or upon the issue of
any additional shares, including additional shares of such series or of any other class of shares or any other series of preferred shares; and any other powers, preferences and relative, participating, optional and other special rights, and any
qualifications, limitations and restrictions thereof; and, for such purposes, the Directors may reserve an appropriate
number of Shares for the time being unissued. The Company shall not issue Shares to bearer. The Company may insofar as may be permitted by law, pay a commission to any Person in consideration of his
subscribing or agreeing to subscribe whether absolutely or conditionally for any Shares. Such commissions may be satisfied by the payment of cash or the lodgment of fully or partly paid-up Shares or partly in
one way and partly in the other. The Company may also pay such brokerage as may be lawful on any issue of Shares. The Directors may refuse to accept any application for Shares, and may accept any application in whole or in
part, for any reason or for no reason. 12
CLASS A ORDINARY SHARES, CLASS B ORDINARY SHARES AND CLASS C ORDINARY SHARES Holders of Class A Ordinary Shares, Class B Ordinary Shares and Class C Ordinary Shares shall at
all times vote together as one class on all resolutions submitted to a vote by the Members. Each Class A Ordinary Share shall entitle the holder thereof to one (1) vote on all matters subject to vote at general meetings of the Company,
each Class B Ordinary Share shall entitle the holder thereof to ten (10) votes on all matters subject to vote at general meetings of the Company, and each Class C Ordinary Share shall entitle the holder thereof to two (2) votes
on all matters subject to vote at general meetings of the Company. Each Class B Ordinary Share is convertible into one (1) Class A Ordinary Share at any time at
the option of the holder thereof. Each Class C Ordinary Share is convertible into one (1) Class A Ordinary Share at any time at the option of the holder thereof. The right to convert shall be exercisable by the holder of the
Class B Ordinary Share or Class C Ordinary Share (as the case may be) delivering a written notice to the Company that such holder elects to convert a specified number of Class B Ordinary Shares or Class C Ordinary Shares into
Class A Ordinary Shares. In no event shall Class A Ordinary Shares be convertible into Class B Ordinary Shares or Class C Ordinary Shares. In no event shall Class B Ordinary Shares be convertible into Class C Ordinary
Shares, nor shall Class C Ordinary Shares be convertible into Class B Ordinary Shares. Any conversion of Class B Ordinary Shares or Class C Ordinary Shares (as the case may be) into
Class A Ordinary Shares pursuant to these Articles shall be effected by means of the re-designation and re-classification of each relevant Class B Ordinary
Share or Class C Ordinary Share (as the case may be) as a Class A Ordinary Share. Such conversion shall become effective forthwith upon entries being made in the Register to record the re-designation
and re-classification of the relevant Class B Ordinary Shares or Class C Ordinary Shares (as the case may be) as Class A Ordinary Shares. 13
Any number of Class B Ordinary Shares held by the Founder or any Founder Affiliate shall be automatically
and immediately converted into an equal number of Class A Ordinary Shares on the earlier to occur of (i) the total number of Class B Ordinary Shares directly and indirectly owned by the Founder and any and all Founder Affiliates,
which shall equal the sum of (A) the total number of Class B Ordinary Shares directly held by the Founder and any and all Founder Affiliates, plus (B) the total number of Class B Ordinary Shares indirectly held by the Founder and
any and all Founder Affiliates through Newlink, which shall be deemed as the product of the number of Class B Ordinary Shares then held by Newlink multiplied by the Retention Ratio, is smaller than 50% of the total number of the issued and
outstanding Class B Ordinary Shares as of immediately after the consummation of the Business Combination Closing, and (ii) the Founder having been convicted in a final and non-appealable judgment of,
or having entered a plea of guilty to, a felony or criminal act resulting in his inability to perform his official duties in the Company for a period of more than 90 days. Any number of Class B Ordinary Shares or Class C Ordinary Shares, as the case may be, held by a
holder thereof will be automatically and immediately converted into an equal number of Class A Ordinary Shares upon the occurrence of any direct or indirect sale, transfer, assignment or disposition of such number of Class B Ordinary
Shares and/or Class C Ordinary Shares by the holder thereof or the direct or indirect transfer or assignment of the voting power attached to such number of Class B Ordinary Shares and/or Class C Ordinary Shares through voting proxy or
otherwise to any Person that is not the Founder or a Founder Affiliate. Notwithstanding the foregoing, the creation of any pledge, charge, encumbrance or other third party right of whatever description on any of Class B Ordinary Shares and/or
Class C Ordinary Shares or on the issued and outstanding voting securities or the assets of a holder of Class B Ordinary Shares and/or Class C Ordinary Shares (as the case may be) to secure contractual or legal obligations shall not
be deemed as a sale, transfer, assignment or disposition unless and until any such pledge, charge, encumbrance or other third party right is enforced and results in a third party that is not the Founder or a Founder Affiliate holding directly or
indirectly beneficial ownership or voting power through voting proxy or otherwise to the related Class B Ordinary Shares and/or Class C Ordinary Shares or to the related issued and outstanding voting securities or the assets (as the case
may be) of the holder of Class B Ordinary Shares and/or Class C Ordinary Shares, in which case all the related Class B Ordinary Shares and/or Class C Ordinary Shares shall be automatically converted into the same number of
Class A Ordinary Shares. Any Class B Ordinary Shares held by Newlink shall not be sold, assigned, disposed of or otherwise
transferred to any Person other than the Founder and Founder Affiliates. Save and except for voting rights and conversion rights as set out in Articles 12 to 15 (inclusive) and Article
77, the Class A Ordinary Shares, the Class B Ordinary Shares and the Class C Ordinary Shares shall rank pari passu with one another and shall have the same rights, preferences, privileges and restrictions.
14
MODIFICATION OF RIGHTS Whenever the capital of the Company is divided into different Classes the rights attached to any such
Class may, subject to any rights or restrictions for the time being attached to any Class, only be materially and adversely varied with the consent in writing of the holders of at least two-thirds of the
issued Shares of that Class or with the sanction of a Special Resolution passed at a separate meeting of the holders of the Shares of that Class. To every such separate meeting all the provisions of these Articles relating to general meetings
of the Company or to the proceedings thereat shall, mutatis mutandis, apply, except that the necessary quorum shall be one or more Persons holding or representing by proxy at least one-third in
nominal or par value amount of the issued Shares of the relevant Class (but so that if at any adjourned meeting of such holders a quorum as above defined is not Present, those Shareholders who are Present shall form a quorum) and that, subject to
any rights or restrictions for the time being attached to the Shares of that Class, every Shareholder of the Class shall on a poll have one vote for each Share of the Class held by him. For the purposes of this Article the Directors may
treat all the Classes or any two or more Classes as forming one Class if they consider that all such Classes would be affected in the same way by the proposals under consideration, but in any other case shall treat them as separate Classes.
The rights conferred upon the holders of the Shares of any Class issued with preferred or other rights
shall not, subject to any rights or restrictions for the time being attached to the Shares of that Class, be deemed to be materially and adversely varied by, inter alia, the creation, allotment or issue of further Shares ranking pari passu
with or subsequent to them or the redemption or purchase of any Shares of any Class by the Company. The rights of the holders of Shares shall not be deemed to be materially and adversely varied by the creation or issue of Shares with preferred
or other rights including, without limitation, the creation of Shares with enhanced or weighted voting rights. CERTIFICATES Every Person whose name is entered as a Member in the Register may, without payment and upon its written
request, request a certificate within two calendar months after allotment or lodgment of transfer (or within such other period as the conditions of issue shall provide) in the form determined by the Directors. All certificates shall specify the
Share or Shares held by that Person, provided that in respect of a Share or Shares held jointly by several Persons the Company shall not be bound to issue more than one certificate, and delivery of a certificate for a Share to one of several joint
holders shall be sufficient delivery to all. All certificates for Shares shall be delivered personally or sent through the post addressed to the Member entitled thereto at the Members registered address as appearing in the Register unless
otherwise specified in writing by such Member. 15
Every share certificate of the Company shall bear legends required under the applicable laws, including the
Securities Act. Any two or more certificates representing Shares of any one Class held by any Member may at the
Members request be cancelled and a single new certificate for such Shares issued in lieu on payment (if the Directors shall so require) of one dollar (US$1.00) or such smaller sum as the Directors shall determine. If a share certificate shall be damaged or defaced or alleged to have been lost, stolen or destroyed, a new
certificate representing the same Shares may be issued to the relevant Member upon request, subject to delivery up of the old certificate or (if alleged to have been lost, stolen or destroyed) compliance with such conditions as to evidence and
indemnity and the payment of out-of-pocket expenses of the Company in connection with the request as the Directors may think fit. In the event that Shares are held jointly by several Persons, any request may be made by any one of the joint
holders and if so made shall be binding on all of the joint holders. FRACTIONAL SHARES The Directors may issue fractions of a Share and, if so issued, a fraction of a Share shall be subject to and
carry the corresponding fraction of liabilities (whether with respect to nominal or par value, premium, contributions, calls or otherwise), limitations, preferences, privileges, qualifications, restrictions, rights (including, without prejudice to
the generality of the foregoing, voting and participation rights) and other attributes of a whole Share. If more than one fraction of a Share of the same Class is issued to or acquired by the same Shareholder such fractions shall be
accumulated. LIEN The Company has a first and paramount lien on every Share (whether or not fully paid) for all amounts (whether
presently payable or not) payable at a fixed time or called in respect of that Share. The Company also has a first and paramount lien on every Share registered in the name of a Person indebted or under liability to the Company (whether he is the
sole registered holder of a Share or one of two or more joint holders) for all amounts owing by him or his estate to the Company (whether or not presently payable). The Directors may at any time declare a Share to be wholly or in part exempt from
the provisions of this Article. The Companys lien on a Share extends to any amount payable in respect of it, including but not limited to dividends. 16
The Company may sell, in such manner as the Directors in their absolute discretion think fit, any Share on
which the Company has a lien, but no sale shall be made unless an amount in respect of which the lien exists is presently payable nor until the expiration of fourteen (14) calendar days after a notice in writing, demanding payment of such part
of the amount in respect of which the lien exists as is presently payable, has been given to the registered holder for the time being of the Share, or the Persons entitled thereto by reason of his death or bankruptcy. For giving effect to any such sale the Directors may authorize a Person to transfer the Shares sold to the
purchaser thereof. The purchaser shall be registered as the holder of the Shares comprised in any such transfer and he shall not be bound to see to the application of the purchase money, nor shall his title to the Shares be affected by any
irregularity or invalidity in the proceedings in reference to the sale. The proceeds of the sale after deduction of expenses, fees and commissions incurred by the Company shall be
received by the Company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable, and the residue shall (subject to a like lien for sums not presently payable as existed upon the Shares prior to
the sale) be paid to the Person entitled to the Shares immediately prior to the sale. CALLS ON SHARES Subject to the terms of the allotment, the Directors may from time to time make calls upon the Shareholders in
respect of any moneys unpaid on their Shares, and each Shareholder shall (subject to receiving at least fourteen (14) calendar days notice specifying the time or times of payment) pay to the Company at the time or times so specified the
amount called on such Shares. A call shall be deemed to have been made at the time when the resolution of the Directors authorizing such call was passed. The joint holders of a Share shall be jointly and severally liable to pay calls in respect thereof.
If a sum called in respect of a Share is not paid before or on the day appointed for payment thereof, the
Person from whom the sum is due shall pay interest upon the sum at the rate of eight percent per annum from the day appointed for the payment thereof to the time of the actual payment, but the Directors shall be at liberty to waive payment of that
interest wholly or in part. 17
The provisions of these Articles as to the liability of joint holders and as to payment of interest shall apply
in the case of non-payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the amount of the Share, or by way of premium, as if the same had become
payable by virtue of a call duly made and notified. The Directors may make arrangements with respect to the issue of partly paid Shares for a difference between
the Shareholders, or the particular Shares, in the amount of calls to be paid and in the times of payment. The Directors may, if they think fit, receive from any Shareholder willing to advance the same all or any part
of the moneys uncalled and unpaid upon any partly paid Shares held by him, and upon all or any of the moneys so advanced may (until the same would, but for such advance, become presently payable) pay interest at such rate (not exceeding without the
sanction of an Ordinary Resolution, eight percent per annum) as may be agreed upon between the Shareholder paying the sum in advance and the Directors. No such sum paid in advance of calls shall entitle the Member paying such sum to any portion of a
dividend declared in respect of any period prior to the date upon which such sum would, but for such payment, become presently payable. FORFEITURE OF SHARES If a Shareholder fails to pay any call or instalment of a call in respect of partly paid Shares on the day
appointed for payment, the Directors may, at any time thereafter during such time as any part of such call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with any
interest which may have accrued. The notice shall name a further day (not earlier than the expiration of fourteen (14) calendar days from
the date of the notice) on or before which the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time appointed, the Shares in respect of which the
call was made will be liable to be forfeited. If the requirements of any such notice as aforesaid are not complied with, any Share in respect of which the
notice has been given may at any time thereafter, before the payment required by notice has been made, be forfeited by a resolution of the Directors to that effect. A forfeited Share may be sold or otherwise disposed of on such terms and in such manner as the Directors think
fit, and at any time before a sale or disposition the forfeiture may be cancelled on such terms as the Directors think fit. 18
A Person whose Shares have been forfeited shall cease to be a Shareholder in respect of the forfeited Shares,
but shall, notwithstanding, remain liable to pay to the Company all moneys which at the date of forfeiture were payable by him to the Company in respect of the Shares forfeited, but his liability shall cease if and when the Company receives payment
in full of the amount unpaid on the Shares forfeited. A certificate in writing under the hand of a Director that a Share has been duly forfeited on a date stated in
the certificate shall be conclusive evidence of the facts in the declaration as against all Persons claiming to be entitled to the Share. The Company may receive the consideration, if any, given for a Share on any sale or disposition thereof
pursuant to the provisions of these Articles as to forfeiture and may execute a transfer of the Share in favour of the Person to whom the Share is sold or disposed of and that Person shall be registered as the holder of the Share and shall not be
bound to see to the application of the purchase money, if any, nor shall his title to the Shares be affected by any irregularity or invalidity in the proceedings in reference to the disposition or sale. The provisions of these Articles as to forfeiture shall apply in the case of
non-payment of any sum which by the terms of issue of a Share becomes due and payable, whether on account of the amount of the Share, or by way of premium, as if the same had been payable by virtue of a call
duly made and notified. TRANSFER OF SHARES The instrument of transfer of any Share shall be in writing and in any usual or common form or such other form
as the Directors may, in their absolute discretion, approve and be executed by or on behalf of the transferor and if in respect of a nil or partly paid up Share, or if so required by the Directors, shall also be executed on behalf of the transferee
and shall be accompanied by the certificate (if any) of the Shares to which it relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer. The transferor shall be deemed to remain
a Shareholder until the name of the transferee is entered in the Register in respect of the relevant Shares. The Directors may decline to register any transfer of any Share unless: the instrument of transfer is lodged with the Company, accompanied by the certificate for the Shares to which
it relates and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer; 19
the instrument of transfer is in respect of only one Class of Shares; the instrument of transfer is properly stamped, if required; in the case of a transfer to joint holders, the number of joint holders to whom the Share is to be transferred
does not exceed four; and a fee of such maximum sum as the Designated Stock Exchange may determine to be payable, or such lesser sum as
the Board of Directors may from time to time require, is paid to the Company in respect thereof. The registration of transfers may, on ten (10) calendar days notice being given by advertisement in
such one or more newspapers, by electronic means or by any other means in accordance with the Designated Stock Exchange Rules, be suspended and the Register closed at such times and for such periods as the Directors may, in their discretion, from
time to time determine. All instruments of transfer that are registered shall be retained by the Company. If the Directors refuse to
register a transfer of any Shares, they shall within three calendar months after the date on which the transfer was lodged with the Company send notice of the refusal to each of the transferor and the transferee. TRANSMISSION OF SHARES The legal personal representative of a deceased sole holder of a Share shall be the only Person recognized by
the Company as having any title to the Share. In the case of a Share registered in the name of two or more holders, the survivors or survivor, or the legal personal representatives of the deceased survivor, shall be the only Person recognized by the
Company as having any title to the Share. Any Person becoming entitled to a Share in consequence of the death or bankruptcy of a Shareholder shall, upon
such evidence being produced as may from time to time be required by the Directors, have the right either to be registered as a Shareholder in respect of the Share or, instead of being registered himself, to make such transfer of the Share as the
deceased or bankrupt Person could have made; but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the deceased or bankrupt Person before the
death or bankruptcy. 20
A Person becoming entitled to a Share by reason of the death or bankruptcy of a Shareholder shall be entitled
to the same dividends and other advantages to which he would be entitled if he were the registered Shareholder, except that he shall not, before being registered as a Shareholder in respect of the Share, be entitled in respect of it to exercise any
right conferred by membership in relation to meetings of the Company, provided however, that the Directors may at any time give notice requiring any such Person to elect either to be registered himself or to transfer the Share, and if the notice is
not complied with within ninety (90) calendar days, the Directors may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the Share until the requirements of the notice have been complied with.
REGISTRATION OF EMPOWERING INSTRUMENTS The Company shall be entitled to charge a fee not exceeding one U.S. dollar (US$1.00) on the registration of
every probate, letters of administration, certificate of death or marriage, power of attorney, notice in lieu of distringas, or other instrument. ALTERATION OF SHARE CAPITAL The Company may from time to time by Ordinary Resolution increase the share capital by such sum, to be divided
into Shares of such Classes and amount, as the resolution shall prescribe. The Company may by Ordinary Resolution: increase its share capital by new Shares of such amount as it thinks expedient; consolidate and divide all or any of its share capital into Shares of a larger amount than its existing Shares;
subdivide its Shares, or any of them, into Shares of an amount smaller than that fixed by the Memorandum,
provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced Share shall be the same as it was in case of the Share from which the reduced Share is derived; and cancel any Shares that, at the date of the passing of the resolution, have not been taken or agreed to be taken
by any Person and diminish the amount of its share capital by the amount of the Shares so cancelled. The Company may by Special Resolution reduce its share capital and any capital redemption reserve in any manner
authorized by the Companies Act. 21
REDEMPTION, PURCHASE AND SURRENDER OF SHARES Subject to the provisions of the Companies Act and these Articles, the Company may: issue Shares that are to be redeemed or are liable to be redeemed at the option of the Shareholder or the
Company. The redemption of Shares shall be effected in such manner and upon such terms as may be determined, before the issue of such Shares, by either the Board or by the Shareholders by Special Resolution; purchase its own Shares (including any redeemable Shares) on such terms and in such manner and terms as have
been approved by the Board or by the Members by Ordinary Resolution, or are otherwise authorized by these Articles; and make a payment in respect of the redemption or purchase of its own Shares in any manner permitted by the
Companies Act, including out of capital. The purchase of any Share shall not oblige the Company to purchase any other Share other than as may be
required pursuant to applicable law and any other contractual obligations of the Company. The holder of the Shares being purchased shall be bound to deliver up to the Company the certificate(s) (if
any) thereof for cancellation and thereupon the Company shall pay to him the purchase or redemption monies or consideration in respect thereof. The Directors may accept the surrender for no consideration of any fully paid Share. TREASURY SHARES The Directors may, prior to the purchase, redemption or surrender of any Share, determine that such Share shall
be held as a Treasury Share. The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms as they think
proper (including, without limitation, for nil consideration). GENERAL MEETINGS All general meetings other than annual general meetings shall be called extraordinary general meetings.
22
At these meetings the report of the Directors (if any) shall be presented. A Shareholders requisition is a requisition of Members holding at the date of deposit of the requisition
Shares which carry in aggregate not less than one-third (1/3) of all votes attaching to all issued and outstanding Shares of the Company that as at the date of the deposit carry the right to vote at general
meetings of the Company. The requisition must state the objects of the meeting and must be signed by the requisitionists and deposited
at the Registered Office, and may consist of several documents in like form each signed by one or more requisitionists. If there are no Directors as at the date of the deposit of the Shareholders requisition, or if the
Directors do not within twenty-one (21) calendar days from the date of the deposit of the requisition duly proceed to convene a general meeting to be held within a further forty-five (45) calendar
days, the requisitionists, or any of them representing more than one-half (1/2) of the total voting rights of all of them, may themselves convene a general meeting, but any meeting so convened shall not be
held after the expiration of three calendar months after the expiration of the said forty-five (45) calendar days. A general meeting convened as aforesaid by requisitionists shall be convened in the same manner as nearly as
possible as that in which general meetings are to be convened by Directors. NOTICE OF GENERAL MEETINGS At least seven (7) calendar days notice shall be given for any general meeting. Every notice shall
be exclusive of the day on which it is given or deemed to be given and of the day for which it is given and shall specify the place, the day and the hour of the meeting and the general nature of the business and shall be given in the manner
hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided that a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether or not the provisions of
these Articles regarding general meetings have been complied with, be deemed to have been duly convened if it is so agreed: in the case of an annual general meeting, by all the Shareholders (or their proxies) entitled to attend and
vote thereat; and 23
in the case of an extraordinary general meeting, by two-thirds (2/3) of
the Shareholders having a right to attend and vote at the meeting, Present at the meeting. The accidental omission to give notice of a meeting to or the
non-receipt of a notice of a meeting by any Shareholder shall not invalidate the proceedings at any meeting. PROCEEDINGS AT GENERAL MEETINGS No business except for the appointment of a chairman for the meeting shall be transacted at any general meeting
unless a quorum of Shareholders is Present at the time when the meeting proceeds to business. One or more Shareholders holding Shares which carry in aggregate (or representing by proxy) not less than one-third
(1/3) of all votes attaching to all Shares in issue and entitled to vote at such general meeting and Present at the meeting shall be a quorum for all purposes. If within half an hour from the time appointed for the meeting a quorum is not Present, the meeting shall be
dissolved. If the Directors wish to make this facility available for a specific general meeting or all general meetings of
the Company, attendance and participation in any general meeting of the Company may be by means of Communication Facilities. Without limiting the generality of the foregoing, the Directors may determine that any general meeting may be held as a
Virtual Meeting. The notice of any general meeting at which Communication Facilities will be utilized (including any Virtual Meeting) must disclose the Communication Facilities that will be used, including the procedures to be followed by any
Shareholder or other participant of the meeting who wishes to utilize such Communication Facilities for the purposes of attending and participating in such meeting, including attending and casting any vote thereat. The Chairman, if any, shall preside as chairman at every general meeting of the Company. If there is no such Chairman, or if at any general meeting he is not Present within fifteen minutes after the
time appointed for holding the meeting or is unwilling to act as chairman of the meeting, any Director or Person nominated by the Directors shall preside as chairman of that meeting, failing which the Shareholders Present shall choose any Person
Present to be chairman of that meeting. 24
The chairman of any general meeting (including any Virtual Meeting) shall be entitled to attend and participate
at any such general meeting by means of Communication Facilities, and to act as the chairman of such general meeting, in which event the following provisions shall apply: The chairman of the meeting shall be deemed to be Present at the meeting; and If the Communication Facilities are interrupted or fail for any reason to enable the chairman of the meeting to
hear and be heard by all other Persons participating in the meeting, then the other Directors Present at the meeting shall choose another Director Present to act as chairman of the meeting for the remainder of the meeting; provided that if no other
Director is Present at the meeting, or if all the Directors Present decline to take the chair, then the meeting shall be automatically adjourned to the same day in the next week and at such time and place as shall be decided by the Board of
Directors. The chairman of the meeting may with the consent of any general meeting at which a quorum is Present (and shall
if so directed by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.
When a meeting, or adjourned meeting, is adjourned for fourteen (14) calendar days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to give any notice of
an adjournment or of the business to be transacted at an adjourned meeting. The Directors may cancel or postpone any duly convened general meeting at any time prior to such meeting,
except for general meetings requisitioned by the Shareholders in accordance with these Articles, for any reason or for no reason, upon notice in writing to Shareholders. A postponement may be for a stated period of any length or indefinitely as the
Directors may determine. At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless
a poll is (before or on the declaration of the result of the show of hands) demanded by the chairman of the meeting or any Shareholder holding not less than ten percent (10%) of the votes attaching to the Shares Present, and unless a poll is so
demanded, a declaration by the chairman of the meeting that a resolution has, on a show of hands, been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the book of the proceedings of the Company,
shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favor of, or against, that resolution. 25
If a poll is duly demanded it shall be taken in such manner as the chairman of the meeting directs, and the
result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. All questions submitted to a meeting shall be decided by an Ordinary Resolution except where a greater majority
is required by these Articles or by the Companies Act. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded, shall be
entitled to a second or casting vote. A poll demanded on the election of a chairman of the meeting or on a question of adjournment shall be taken
forthwith. A poll demanded on any other question shall be taken at such time as the chairman of the meeting directs. VOTES OF SHAREHOLDERS Subject to any rights and restrictions for the time being attached to any Share, on a show of hands every
Shareholder Present at the meeting shall, at a general meeting of the Company, each have one vote and on a poll every Shareholder Present at the meeting shall have one (1) vote for each Class A Ordinary Share, ten (10) votes for each
Class B Ordinary Share and two (2) votes for each of Class C Ordinary Share of which it is the holder. In the case of joint holders the vote of the senior who tenders a vote whether in person or by proxy (or, if a
corporation or other non-natural person, by its duly authorized representative or proxy) shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be
determined by the order in which the names stand in the Register. Shares carrying the right to vote that are held by a Shareholder of unsound mind, or in respect of whom an
order has been made by any court having jurisdiction in lunacy, may be voted, whether on a show of hands or on a poll, by his committee, or other Person in the nature of a committee appointed by that court, and any such committee or other Person may
vote in respect of such Shares by proxy. No Shareholder shall be entitled to vote at any general meeting of the Company unless all calls, if any, or
other sums presently payable by him in respect of Shares carrying the right to vote held by him have been paid. On a poll votes may be given either personally or by proxy. 26
Each Shareholder, other than a recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)),
may only appoint one proxy on a show of hand. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorized in writing or, if the appointor is a corporation, either under Seal or under the
hand of an officer or attorney duly authorized. A proxy need not be a Shareholder. An instrument appointing a proxy may be in any usual or common form or such other form as the Directors may
approve. The instrument appointing a proxy shall be deposited at the Registered Office or at such other place as is
specified for that purpose in the notice convening the meeting, or in any instrument of proxy sent out by the Company: not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named
in the instrument proposes to vote; or in the case of a poll taken more than 48 hours after it is demanded, be deposited as aforesaid after the poll
has been demanded and not less than 24 hours before the time appointed for the taking of the poll; or where the poll is not taken forthwith but is taken not more than 48 hours after it was demanded be delivered at
the meeting at which the poll was demanded to the chairman of the meeting or to the secretary or to any Director; provided that the Directors may in the notice convening the meeting, or in an instrument of proxy sent out by the Company, direct that the
instrument appointing a proxy may be deposited at such other time (no later than the time for holding the meeting or adjourned meeting) at the Registered Office or at such other place as is specified for that purpose in the notice convening the
meeting, or in any instrument of proxy sent out by the Company. The chairman of the meeting may in any event at his discretion direct that an instrument of proxy shall be deemed to have been duly deposited. An instrument of proxy that is not
deposited in the manner permitted shall be invalid. The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll.
A resolution in writing signed by all the Shareholders for the time being entitled to receive notice of and to
attend and vote at general meetings of the Company (or being corporations by their duly authorized representatives) shall be as valid and effective as if the same had been passed at a general meeting of the Company duly convened and held.
27
CORPORATIONS ACTING BY REPRESENTATIVES AT MEETINGS Any corporation which is a Shareholder or a Director may by resolution of its directors or other governing body
authorize such Person as it thinks fit to act as its representative at any meeting of the Company or of any meeting of holders of a Class or of the Directors or of a committee of Directors, and the Person so authorized shall be entitled to
exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual Shareholder or Director. DEPOSITARY AND CLEARING HOUSES If a recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)) is a Member of the Company
it may, by resolution of its directors or other governing body or by power of attorney, authorize such Person(s) as it thinks fit to act as its representative(s) at any general meeting of the Company or of any Class of Shareholders provided
that, if more than one Person is so authorized, the authorization shall specify the number and Class of Shares in respect of which each such Person is so authorized. A Person so authorized pursuant to this Article shall be entitled to exercise
the same powers on behalf of the recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)) which he represents as that recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)) could exercise if it were an
individual Member holding the number and Class of Shares specified in such authorization, including the right to vote individually on a show of hands. DIRECTORS The Chairman shall be the Founder, as long as the Founder is a Director. In the event that the Founder is not a
Director, the Board of Directors shall elect and appoint a Chairman by a majority of the Directors then in office. The period for which the Chairman will hold office will also be determined by a majority of all of the Directors then in office. The
Chairman shall preside as chairman at every meeting of the Board of Directors. To the extent the Chairman is not present at a meeting of the Board of Directors within thirty (30) minutes after the time appointed for holding the same, the
attending Directors may choose one of their number to be the chairman of the meeting. The Company may by Ordinary Resolution appoint any person to be a Director. 28
Notwithstanding anything to the contrary in these Articles, if a Member holds no less than sixty percent (60%)
of the total number of issued and outstanding shares of the Company, such Member shall be entitled to nominate four (4) individuals to serve as Directors. The Board may, by the affirmative vote of a simple majority of the remaining Directors present and voting at a
Board meeting, appoint any person as a Director, to fill a casual vacancy on the Board or as an addition to the existing Board. An appointment of a Director may be on terms that the Director shall automatically retire from office (unless
he has sooner vacated office) at the next or a subsequent annual general meeting or upon any specified event or after any specified period in a written agreement between the Company and the Director, if any; but no such term shall be implied in the
absence of express provision. Each Director whose term of office expires shall be eligible for re-election at a meeting of the Shareholders or re-appointment by the
Board. A Director may be removed from office by Ordinary Resolution (except with regard to the Chairman, who may be
removed from office by Special Resolution), notwithstanding anything in these Articles or in any agreement between the Company and such Director (but without prejudice to any claim for damages under such agreement). A vacancy on the Board created by
the removal of a Director under the previous sentence may be filled by Ordinary Resolution or by the affirmative vote of a simple majority of the remaining Directors present and voting at a Board meeting. The notice of any meeting at which a
resolution to remove a Director shall be proposed or voted upon must contain a statement of the intention to remove that Director and such notice must be served on that Director not less than ten (10) calendar days before the meeting. Such
Director is entitled to attend the meeting and be heard on the motion for his removal. The Board may, from time to time, and except as required by applicable law or Designated Stock Exchange Rules,
adopt, institute, amend, modify or revoke the corporate governance policies or initiatives of the Company and determine on various corporate governance related matters of the Company as the Board shall determine by resolution of Directors from time
to time. A Director shall not be required to hold any Shares in the Company by way of qualification. A Director who is
not a Member of the Company shall nevertheless be entitled to attend and speak at general meetings. 29
The remuneration of the Directors may be determined by the Directors or by Ordinary Resolution.
The Directors shall be entitled to be paid for their travelling, hotel and other expenses properly incurred by
them in going to, attending and returning from meetings of the Directors, or any committee of the Directors, or general meetings of the Company, or otherwise in connection with the business of the Company, or to receive such fixed allowance in
respect thereof as may be determined by the Directors from time to time, or a combination partly of one such method and partly the other. ALTERNATE DIRECTOR OR PROXY Any Director may in writing appoint another Person to be his alternate and, save to the extent provided
otherwise in the form of appointment, such alternate shall have authority to sign written resolutions on behalf of the appointing Director, but shall not be required to sign such written resolutions where they have been signed by the appointing
director, and to act in such Directors place at any meeting of the Directors at which the appointing Director is unable to be present. Every such alternate shall be entitled to attend and vote at meetings of the Directors as a Director when
the Director appointing him is not personally present and where he is a Director to have a separate vote on behalf of the Director he is representing in addition to his own vote. A Director may at any time in writing revoke the appointment of an
alternate appointed by him. Such alternate shall be deemed for all purposes to be a Director of the Company and shall not be deemed to be the agent of the Director appointing him. The remuneration of such alternate shall be payable out of the
remuneration of the Director appointing him and the proportion thereof shall be agreed between them. Any Director may appoint any Person, whether or not a Director, to be the proxy of that Director to attend and
vote on his behalf, in accordance with instructions given by that Director, or in the absence of such instructions at the discretion of the proxy, at a meeting or meetings of the Directors which that Director is unable to attend personally. The
instrument appointing the proxy shall be in writing under the hand of the appointing Director and shall be in any usual or common form or such other form as the Directors may approve, and must be lodged with the chairman of the meeting of the
Directors at which such proxy is to be used, or first used, prior to the commencement of the meeting. POWERS AND
DUTIES OF DIRECTORS Subject to the Companies Act, these Articles and to any resolutions passed in a general meeting, the business
of the Company shall be managed by the Directors, who may pay all expenses incurred in setting up and registering the Company and may exercise all powers of the Company. No resolution passed by the Company in general meeting shall invalidate any
prior act of the Directors that would have been valid if that resolution had not been passed. 30
Subject to these Articles, the Directors may from time to time appoint any natural person or corporation,
whether or not a Director to hold such office in the Company as the Directors may think necessary for the administration of the Company, including but not limited to, chief executive officer, and for such term and at such remuneration (whether by
way of salary or commission or participation in profits or partly in one way and partly in another), and with such powers and duties as the Directors may think fit. Any natural person or corporation so appointed by the Directors may be removed by
the Directors. The Directors may also appoint one or more of their number to the office of managing director upon like terms, but any such appointment shall ipso facto terminate if any managing director ceases for any cause to be a Director, or if
the Company by Ordinary Resolution resolves that his tenure of office be terminated. The Directors may appoint any natural person or corporation to be a Secretary (and if need be an assistant
Secretary or assistant Secretaries) who shall hold office for such term, at such remuneration and upon such conditions and with such powers as they think fit. Any Secretary or assistant Secretary so appointed by the Directors may be removed by the
Directors or by the Company by Ordinary Resolution. The Directors may delegate any of their powers to committees consisting of such member or members of their body
as they think fit; any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Directors. The Directors may from time to time and at any time by power of attorney (whether under Seal or under hand) or
otherwise appoint any company, firm or Person or body of Persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys or authorized signatory (any such Person being an Attorney or Authorized
Signatory, respectively) of the Company for such purposes and with such powers, authorities and discretion (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions
as they may think fit, and any such power of attorney or other appointment may contain such provisions for the protection and convenience of Persons dealing with any such Attorney or Authorized Signatory as the Directors may think fit, and may also
authorize any such Attorney or Authorized Signatory to delegate all or any of the powers, authorities and discretion vested in him. The Directors may from time to time provide for the management of the affairs of the Company in such manner as
they shall think fit and the provisions contained in the three next following Articles shall not limit the general powers conferred by this Article. 31
The Directors from time to time and at any time may establish any committees, local boards or agencies for
managing any of the affairs of the Company and may appoint any natural person or corporation to be a member of such committees or local boards and may appoint any managers or agents of the Company and may fix the remuneration of any such natural
person or corporation. The Directors from time to time and at any time may delegate to any such committee, local board, manager or
agent any of the powers, authorities and discretions for the time being vested in the Directors and may authorize the members for the time being of any such local board, or any of them to fill any vacancies therein and to act notwithstanding
vacancies and any such appointment or delegation may be made on such terms and subject to such conditions as the Directors may think fit and the Directors may at any time remove any natural person or corporation so appointed and may annul or vary
any such delegation, but no Person dealing in good faith and without notice of any such annulment or variation shall be affected thereby. Any such delegates as aforesaid may be authorized by the Directors to
sub-delegate all or any of the powers, authorities, and discretion for the time being vested in them. BORROWING POWERS OF DIRECTORS The Directors may from time to time at their discretion exercise all the powers of the Company to raise or
borrow money and to mortgage or charge its undertaking, property and assets (present and future) and uncalled capital or any part thereof, to issue debentures, debenture stock, bonds and other securities, whether outright or as collateral security
for any debt, liability or obligation of the Company or of any third party. THE SEAL The Seal shall not be affixed to any instrument except by the authority of a resolution of the Directors
provided always that such authority may be given prior to or after the affixing of the Seal and if given after may be in general form confirming a number of affixing of the Seal. The Seal shall be affixed in the presence of a Director or a Secretary
(or an assistant Secretary) or in the presence of any one or more Persons as the Directors may appoint for the purpose and every Person as aforesaid shall sign every instrument to which the Seal is so affixed in their presence.
32
The Company may maintain a facsimile of the Seal in such countries or places as the Directors may appoint and
such facsimile Seal shall not be affixed to any instrument except by the authority of a resolution of the Directors provided always that such authority may be given prior to or after the affixing of such facsimile Seal and if given after may be in
general form confirming a number of affixing of such facsimile Seal. The facsimile Seal shall be affixed in the presence of such Person or Persons as the Directors shall for this purpose appoint and such Person or Persons as aforesaid shall sign
every instrument to which the facsimile Seal is so affixed in their presence and such affixing of the facsimile Seal and signing as aforesaid shall have the same meaning and effect as if the Seal had been affixed in the presence of and the
instrument signed by a Director or a Secretary (or an assistant Secretary) or in the presence of any one or more Persons as the Directors may appoint for the purpose. Notwithstanding the foregoing, a Secretary or any assistant Secretary shall have the authority to affix the
Seal, or the facsimile Seal, to any instrument for the purposes of attesting authenticity of the matter contained therein but which does not create any obligation binding on the Company. DISQUALIFICATION OF DIRECTORS The office of Director shall be vacated, if the Director: becomes bankrupt; dies or is found to be or becomes of unsound mind; resigns his office by notice in writing to the Company; without leave of absence from the Board, is absent from meetings of the Board for three consecutive meetings
and the Board resolves that his office be vacated; or is removed from office pursuant to any other provision of these Articles. PROCEEDINGS OF DIRECTORS The Directors may meet together (either within or outside the Cayman Islands) for the dispatch of business,
adjourn, and otherwise regulate their meetings and proceedings as they think fit. Questions arising at any meeting shall be decided by a majority of votes. At any meeting of the Directors, each Director present in person or represented by his proxy
or alternate shall be entitled to one (1) vote. In case of an equality of votes the Chairman shall have a second or casting vote. A Director may, and a Secretary or assistant Secretary on the requisition of a Director shall, at any time summon
a meeting of the Directors. 33
A Director may participate in any meeting of the Directors, or of any committee appointed by the Directors of
which such Director is a member, by means of telephone or similar communication equipment by way of which all Persons participating in such meeting can communicate with each other and such participation shall be deemed to constitute presence in
person at the meeting. The quorum necessary for the transaction of the business of the Board may be fixed by the Directors, and unless
so fixed, the quorum shall be a majority of Directors then in office, including the Chairman; provided, however, a quorum shall nevertheless exist at a meeting at which a quorum would exist but for the fact that the Chairman is absent from the
meeting and notifies the Board of his decision to be absent from that meeting, before or at the meeting. A Director represented by proxy or by an alternate Director at any meeting shall be deemed to be present for the purposes of determining whether
or not a quorum is present. A Director who is in any way, whether directly or indirectly, interested in a contract or transaction or
proposed contract or transaction with the Company shall declare the nature of his interest at a meeting of the Directors. A general notice given to the Directors by any Director to the effect that he is a member of any specified company or firm and
is to be regarded as interested in any contract or transaction which may thereafter be made with that company or firm shall be deemed a sufficient declaration of interest in regard to any contract so made or transaction so consummated. Subject to
the Designated Stock Exchange Rules and disqualification by the chairman of the relevant Board meeting, a Director may vote in respect of any contract or transaction or proposed contract or transaction notwithstanding that he may be interested
therein and if he does so his vote shall be counted and he may be counted in the quorum at any meeting of the Directors at which any such contract or transaction or proposed contract or transaction shall come before the meeting for consideration.
A Director may hold any other office or place of profit under the Company (other than the office of auditor) in
conjunction with his office of Director for such period and on such terms (as to remuneration and otherwise) as the Directors may determine and no Director or intending Director shall be disqualified by his office from contracting with the Company
either with regard to his tenure of any such other office or place of profit or as vendor, purchaser or otherwise, nor shall any such contract or arrangement entered into by or on behalf of the Company in which any Director is in any way interested
be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realized by any such contract or arrangement by reason of such Director holding that office or of the fiduciary
relation thereby established. A Director, notwithstanding his interest, may be counted in the quorum present at any meeting of the Directors whereat he or any other Director is appointed to hold any such office or place of profit under the Company
or whereat the terms of any such appointment are arranged and he may vote on any such appointment or arrangement. 34
Any Director may act by himself or through his firm in a professional capacity for the Company, and he or his
firm shall be entitled to remuneration for professional services as if he were not a Director; provided that nothing herein contained shall authorize a Director or his firm to act as auditor to the Company. The Directors shall cause minutes to be made for the purpose of recording: all appointments of officers made by the Directors; the names of the Directors present at each meeting of the Directors and of any committee of the Directors; and
all resolutions and proceedings at all meetings of the Company, and of the Directors and of committees of
Directors. When the chairman of a meeting of the Directors signs the minutes of such meeting the same shall be deemed to
have been duly held notwithstanding that all the Directors have not actually come together or that there may have been a technical defect in the proceedings. A resolution in writing signed by all the Directors or all the members of a committee of Directors entitled to
receive notice of a meeting of Directors or committee of Directors, as the case may be (an alternate Director, subject as provided otherwise in the terms of appointment of the alternate Director, being entitled to sign such a resolution on behalf of
his appointer), shall be as valid and effectual as if it had been passed at a duly called and constituted meeting of Directors or committee of Directors, as the case may be. When signed a resolution may consist of several documents each signed by
one or more of the Directors or his duly appointed alternate. The continuing Directors may act notwithstanding any vacancy in their body but if and for so long as their
number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of Directors, the continuing Directors may act for the purpose of increasing the number, or of summoning a general meeting of the Company, but for no
other purpose. Subject to any regulations imposed on it by the Directors, a committee appointed by the Directors may elect a
chairman of its meetings. If no such chairman is elected, or if at any meeting the chairman is not present within fifteen minutes after the time appointed for holding the meeting, the committee members present may choose one of their member to be
chairman of the meeting. 35
A committee appointed by the Directors may meet and adjourn as it thinks proper. Subject to any regulations
imposed on it by the Directors, questions arising at any meeting shall be determined by a majority of votes of the committee members present and in case of an equality of votes the chairman shall have a second or casting vote. All acts done by any meeting of the Directors or of a committee of Directors, or by any Person acting as a
Director, shall notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such Director or Person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such Person had
been duly appointed and was qualified to be a Director. PRESUMPTION OF ASSENT A Director who is present at a meeting of the Board of Directors at which an action on any Company matter is
taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent from such action with the person acting as the chairman or secretary of the
meeting before the adjournment thereof or shall forward such dissent by registered post to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action.
DIVIDENDS Subject to any rights and restrictions for the time being attached to any Shares, the Directors may from time
to time declare dividends (including interim dividends) and other distributions on Shares in issue and authorize payment of the same out of the funds of the Company lawfully available therefor. Subject to any rights and restrictions for the time being attached to any Shares, the Company by Ordinary
Resolution may declare dividends, but no dividend shall exceed the amount recommended by the Directors. The Directors may, before recommending or declaring any dividend, set aside out of the funds legally available
for distribution such sums as they think proper as a reserve or reserves which shall, in the absolute discretion of the Directors, be applicable for meeting contingencies or for equalizing dividends or for any other purpose to which those funds may
be properly applied, and pending such application may in the absolute discretion of the Directors, either be employed in the business of the Company or be invested in such investments (other than Shares of the Company) as the Directors may from time
to time think fit. 36
Any dividend payable in cash to the holder of Shares may be paid in any manner determined by the Directors. If
paid by cheque it will be sent by mail addressed to the holder at his address in the Register, or addressed to such person and at such addresses as the holder may direct. Every such cheque or warrant shall, unless the holder or joint holders
otherwise direct, be made payable to the order of the holder or, in the case of joint holders, to the order of the holder whose name stands first on the Register in respect of such Shares, and shall be sent at his or their risk and payment of the
cheque or warrant by the bank on which it is drawn shall constitute a good discharge to the Company. The Directors may determine that a dividend shall be paid wholly or partly by the distribution of specific
assets (which may consist of the shares or securities of any other company) and may settle all questions concerning such distribution. Without limiting the generality of the foregoing, the Directors may fix the value of such specific assets, may
determine that cash payment shall be made to some Shareholders in lieu of specific assets and may vest any such specific assets in trustees on such terms as the Directors think fit. Subject to any rights and restrictions for the time being attached to any Shares, all dividends shall be
declared and paid according to the amounts paid up on the Shares, but if and for so long as nothing is paid up on any of the Shares dividends may be declared and paid according to the par value of the Shares. No amount paid on a Share in advance of
calls shall, while carrying interest, be treated for the purposes of this Article as paid on the Share. If several Persons are registered as joint holders of any Share, any of them may give effective receipts for
any dividend or other moneys payable on or in respect of the Share. No dividend shall bear interest against the Company. Any dividend unclaimed after a period of six calendar years from the date of declaration of such dividend may
be forfeited by the Board of Directors and, if so forfeited, shall revert to the Company. ACCOUNTS, AUDIT AND ANNUAL
RETURN AND DECLARATION The books of account relating to the Companys affairs shall be kept in such manner as may be determined
from time to time by the Directors. The books of account shall be kept at the Registered Office, or at such other place or places as the Directors
think fit, and shall always be open to the inspection of the Directors. 37
The Directors may from time to time determine whether and to what extent and at what times and places and under
what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Shareholders not being Directors, and no Shareholder (not being a Director) shall have any right to inspect any account or book or
document of the Company except as conferred by law or authorized by the Directors or by Ordinary Resolution. The accounts relating to the Companys affairs shall be audited in such manner and with such financial
year end as may be determined from time to time by the Directors or failing any determination as aforesaid shall not be audited. The Directors may appoint an auditor of the Company who shall hold office until removed from office by a
resolution of the Directors and may fix his or their remuneration. Every auditor of the Company shall have a right of access at all times to the books and accounts and vouchers
of the Company and shall be entitled to require from the Directors and officers of the Company such information and explanation as may be necessary for the performance of the duties of the auditors. The auditors shall, if so required by the Directors, make a report on the accounts of the Company during their
tenure of office at the next annual general meeting following their appointment, and at any time during their term of office, upon request of the Directors or any general meeting of the Members. The Directors in each calendar year shall prepare, or cause to be prepared, an annual return and declaration
setting forth the particulars required by the Companies Act and deliver a copy thereof to the Registrar of Companies in the Cayman Islands. CAPITALISATION OF RESERVES Subject to the Companies Act, the Directors may: resolve to capitalize an amount standing to the credit of reserves (including a Share Premium Account, capital
redemption reserve and profit and loss account), which is available for distribution; appropriate the sum resolved to be capitalized to the Shareholders in proportion to the nominal amount of
Shares (whether or not fully paid) held by them respectively and apply that sum on their behalf in or towards: paying up the amounts (if any) for the time being unpaid on Shares held by them respectively, or
38
paying up in full unissued Shares or debentures of a nominal amount equal to that sum, and allot the Shares or debentures, credited as fully paid, to the Shareholders (or as they may direct) in those proportions, or partly in one
way and partly in the other, but the Share Premium Account, the capital redemption reserve and profits which are not available for distribution may, for the purposes of this Article, only be applied in paying up unissued Shares to be allotted to
Shareholders credited as fully paid; make any arrangements they think fit to resolve a difficulty arising in the distribution of a capitalized
reserve and in particular, without limitation, where Shares or debentures become distributable in fractions the Directors may deal with the fractions as they think fit; authorize a Person to enter (on behalf of all the Shareholders concerned) into an agreement with the Company
providing for either: the allotment to the Shareholders respectively, credited as fully paid, of Shares or debentures to which they
may be entitled on the capitalization, or the payment by the Company on behalf of the Shareholders (by the application of their respective proportions of
the reserves resolved to be capitalized) of the amounts or part of the amounts remaining unpaid on their existing Shares, and any such agreement made under this authority being effective and binding on all those Shareholders; and generally do all acts and things required to give effect to the resolution. Notwithstanding any provisions in these Articles and subject to the Companies Act, the Directors may resolve to
capitalize an amount standing to the credit of reserves (including the share premium account, capital redemption reserve and profit and loss account) or otherwise available for distribution by applying such sum in paying up in full unissued Shares
to be allotted and issued to: employees (including Directors) or service providers of the Company or its Affiliates upon exercise or vesting
of any options or awards granted under any share incentive scheme or employee benefit scheme or other arrangement which relates to such persons that has been adopted or approved by the Directors or the Members; 39
any trustee of any trust or administrator of any share incentive scheme or employee benefit scheme to whom
shares are to be allotted and issued by the Company in connection with the operation of any share incentive scheme or employee benefit scheme or other arrangement which relates to such persons that has been adopted or approved by the Directors or
Members; or any depositary of the Company for the purposes of the issue, allotment and delivery by the depositary of ADSs
to employees (including Directors) or service providers of the Company or its Affiliates upon exercise or vesting of any options or awards granted under any share incentive scheme or employee benefit scheme or other arrangement which relates to such
persons that has been adopted or approved by the Directors or the Members. SHARE PREMIUM ACCOUNT The Directors shall in accordance with the Companies Act establish a Share Premium Account and shall carry to
the credit of such account from time to time a sum equal to the amount or value of the premium paid on the issue of any Share. There shall be debited to any Share Premium Account on the redemption or purchase of a Share the difference
between the nominal value of such Share and the redemption or purchase price provided always that at the discretion of the Directors such sum may be paid out of the profits of the Company or, if permitted by the Companies Act, out of capital.
NOTICES Except as otherwise provided in these Articles, any notice or document may be served by the Company or by the
Person entitled to give notice to any Shareholder either personally, or by posting it by airmail or a recognized courier service in a prepaid letter addressed to such Shareholder at his address as appearing in the Register unless otherwise specified
in writing by such Shareholder, or by electronic mail to any electronic mail address such Shareholder may have specified in writing for the purpose of such service of notices, or by facsimile to any facsimile number such Shareholder may have
specified in writing for the purpose of such service of notices, or by placing it on the Companys Website should the Directors deem it appropriate. In the case of joint holders of a Share, all notices shall be given to that one of the joint
holders whose name stands first in the Register in respect of the joint holding, and notice so given shall be sufficient notice to all the joint holders. Notices sent from one country to another shall be sent or forwarded by prepaid airmail or a recognized courier
service. 40
Any Shareholder Present, at any meeting of the Company shall for all purposes be deemed to have received due
notice of such meeting and, where requisite, of the purposes for which such meeting was convened. Any notice or other document, if served by: post, shall be deemed to have been served five (5) calendar days after the time when the letter containing
the same is posted; facsimile, shall be deemed to have been served upon production by the transmitting facsimile machine of a
report confirming transmission of the facsimile in full to the facsimile number of the recipient; recognized courier service, shall be deemed to have been served 48 hours after the time when the letter
containing the same is delivered to the courier service; or electronic means, shall be deemed to have been served immediately (i) upon the time of the transmission to
the electronic mail address supplied by the Shareholder to the Company or (ii) upon the time of its placement on the Companys Website. In proving service by post or courier service it shall be sufficient to prove that the letter containing the notice or documents was properly
addressed and duly posted or delivered to the courier service. Any notice or document delivered or sent by post to or left at the registered address of any Shareholder
(unless otherwise specified in writing by such Shareholder) in accordance with the terms of these Articles shall notwithstanding that such Shareholder be then dead or bankrupt, and whether or not the Company has notice of his death or bankruptcy, be
deemed to have been duly served in respect of any Share registered in the name of such Shareholder as sole or joint holder, unless his name shall at the time of the service of the notice or document have been removed from the Register as the holder
of the Share, and such service shall for all purposes be deemed a sufficient service of such notice or document on all Persons interested (whether jointly with or as claiming through or under him) in the Share. Notice of every general meeting of the Company shall be given to: all Shareholders holding Shares with the right to receive notice and who have supplied to the Company an
address for the giving of notices to them; and 41
every Person entitled to a Share in consequence of the death or bankruptcy of a Shareholder, who but for his
death or bankruptcy would be entitled to receive notice of the meeting. No other Person shall be entitled to receive
notices of general meetings. INFORMATION Subject to the relevant laws, rules and regulations applicable to the Company, no Member shall be entitled to
require discovery of any information in respect of any detail of the Companys trading or any information which is or may be in the nature of a trade secret or secret process which may relate to the conduct of the business of the Company and
which in the opinion of the Board would not be in the interests of the Members of the Company to communicate to the public. Subject to due compliance with the relevant laws, rules and regulations applicable to the Company, the Board
shall be entitled to release or disclose any information in its possession, custody or control regarding the Company or its affairs to any of its Members including, without limitation, information contained in the Register and transfer books of the
Company. INDEMNITY Every Director (including for the purposes of this Article any alternate Director appointed pursuant to the
provisions of these Articles), Secretary, assistant Secretary, or other officer for the time being and from time to time of the Company (but not including the Companys auditors) and the personal representatives of the same (each an
Indemnified Person) shall be indemnified and secured harmless against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such Indemnified Person, other than by reason of such
Indemnified Persons own dishonesty, willful default or fraud, in or about the conduct of the Companys business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers,
authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such Indemnified Person in defending (whether successfully or otherwise) any civil proceedings
concerning the Company or its affairs in any court whether in the Cayman Islands or elsewhere. No Indemnified Person shall be liable: for the acts, receipts, neglects, defaults or omissions of any other Director or officer or agent of the
Company; or 42
for any loss on account of defect of title to any property of the Company; or on account of the insufficiency of any security in or upon which any money of the Company shall be invested; or
for any loss incurred through any bank, broker or other similar Person; or for any loss occasioned by any negligence, default, breach of duty, breach of trust, error of judgement or
oversight on such Indemnified Persons part; or for any loss, damage or misfortune whatsoever which may happen in or arise from the execution or discharge of
the duties, powers, authorities, or discretions of such Indemnified Persons office or in relation thereto; unless
the same shall happen through such Indemnified Persons own dishonesty, willful default or fraud. FINANCIAL YEAR Unless the Directors otherwise prescribe, the financial year of the Company shall end on December 31st in each
calendar year and shall begin on January 1st in each calendar year. NON-RECOGNITION OF TRUSTS No Person shall be recognized by the Company as holding any Share upon any trust and the Company shall not,
unless required by law, be bound by or be compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any Share or (except only as otherwise provided by these Articles or as the
Companies Act requires) any other right in respect of any Share except an absolute right to the entirety thereof in each Shareholder registered in the Register. WINDING UP If the Company shall be wound up the liquidator may, with the sanction of a Special Resolution of the Company
and any other sanction required by the Companies Act, divide amongst the Members in species or in kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may for that purpose value
any assets and determine how the division shall be carried out as between the Members or different classes of Members. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit
of the Members as the liquidator, with the like sanction, shall think fit, but so that no Member shall be compelled to accept any asset upon which there is a liability. 43
If the Company shall be wound up, and the assets available for distribution amongst the Members shall be
insufficient to repay the whole of the share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Members in proportion to the par value of the Shares held by them. If in a winding up the assets
available for distribution amongst the Members shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst the Members in proportion to the par value of the
Shares held by them at the commencement of the winding up subject to a deduction from those Shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise. This Article is without prejudice to the
rights of the holders of Shares issued upon special terms and conditions. AMENDMENT OF ARTICLES OF ASSOCIATION
Subject to the Companies Act, the Company may at any time and from time to time by Special Resolution alter or
amend these Articles in whole or in part. CLOSING OF REGISTER OR FIXING RECORD DATE For the purpose of determining those Shareholders that are entitled to receive notice of, attend or vote at any
meeting of Shareholders or any adjournment thereof, or those Shareholders that are entitled to receive payment of any dividend, or in order to make a determination as to who is a Shareholder for any other purpose, the Directors may provide that the
Register shall be closed for transfers for a stated period which shall not exceed in any case thirty (30) calendar days in any calendar year. In lieu of or apart from closing the Register, the Directors may fix in advance a date as the record date for
any such determination of those Shareholders that are entitled to receive notice of, attend or vote at a meeting of the Shareholders and for the purpose of determining those Shareholders that are entitled to receive payment of any dividend the
Directors may, at or within ninety (90) calendar days prior to the date of declaration of such dividend, fix a subsequent date as the record date for such determination. If the Register is not so closed and no record date is fixed for the determination of those Shareholders
entitled to receive notice of, attend or vote at a meeting of Shareholders or those Shareholders that are entitled to receive payment of a dividend, the date on which notice of the meeting is posted or the date on which the resolution of the
Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of Shareholders. When a determination of those Shareholders that are entitled to receive notice of, attend or vote at a meeting of
Shareholders has been made as provided in this Article, such determination shall apply to any adjournment thereof. 44
REGISTRATION BY WAY OF CONTINUATION The Company may by Special Resolution resolve to be registered by way of continuation in a jurisdiction outside
the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing. In furtherance of a resolution adopted pursuant to this Article, the Directors may cause an application to be made to the Registrar
of Companies to deregister the Company in the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing and may cause all such further steps as they consider appropriate to be taken to effect
the transfer by way of continuation of the Company. DISCLOSURE The Directors, or any service providers (including the officers, the Secretary and the Registered Office
provider of the Company) specifically authorized by the Directors, shall be entitled to disclose to any regulatory or judicial authority or to any stock exchange on which securities of the Company may from time to time be listed any information
regarding the affairs of the Company including without limitation information contained in the Register and books of the Company. EXCLUSIVE FORUM For the avoidance of doubt and without limiting the jurisdiction of the Cayman Courts to hear, settle or
determine disputes related to the Company, the courts of the Cayman Islands shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of
a fiduciary duty owed by any Director, officer, or other employee of the Company to the Company or the Members, (iii) any action asserting a claim arising pursuant to any provision of the Companies Act or these Articles including but not
limited to any purchase or acquisition of Shares, security, or guarantee provided in consideration thereof, or (iv) any action asserting a claim against the Company which if brought in the United States would be a claim arising under the
internal affairs doctrine (as such concept is recognized under the laws of the United States from time to time). 45
Unless the Company consents in writing to the selection of an alternative forum, the United States District
Court for the Southern District of New York (or, if the United States District Court for the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts in New York County, New York) shall be the
exclusive forum within the United States for the resolution of any complaint asserting a cause of action arising out of or relating in any way to the federal securities laws of the United States, regardless of whether such legal suit, action, or
proceeding also involves parties other than the Company. Any person or entity purchasing or otherwise acquiring any Share or other securities in the Company, or purchasing or otherwise acquiring American depositary shares issued pursuant to deposit
agreements, shall be deemed to have notice of and consented to the provisions of this Article. Without prejudice to the foregoing, if the provision in this Article is held to be illegal, invalid or unenforceable under applicable law, the legality,
validity or enforceability of the rest of these Articles shall not be affected and this Article shall be interpreted and construed to the maximum extent possible to apply in the relevant jurisdiction with whatever modification or deletion may be
necessary so as best to give effect to the intention of the Company. 46
Articles
means these articles of association of the Company, as amended or substituted from time to time;
Board and Board of Directors and Directors
means the directors of the Company for the time being, or as the case may be, the directors assembled as a board or as a committee thereof;
Business Combination Closing
means the consummation of the mergers as contemplated in the Agreement and Plan of Merger dated February 8, 2022 by and between RISE Education Cayman Ltd, Dada Merger Sub Limited, Dada Merger Sub II Limited and Dada Auto
Inc.
Chairman
means the chairman of the Board of Directors;
Change of Control
means any direct or indirect sale, transfer, assignment or disposition of a majority of the issued and outstanding voting securities of, or the direct or indirect transfer or assignment of the voting power attached to such voting
securities through voting proxy or otherwise, or the direct or indirect sale, transfer, assignment or disposition of all or substantially all of the assets of, an entity
Class or Classes
means any class or classes of Shares as may from time to time be issued by the Company;
Class A Ordinary Share
means an Ordinary Share of a par value of US$0.01 in the capital of the Company, designated as a Class A Ordinary Shares and having the rights, preferences, privileges and restrictions provided for in these Articles;
Class B Ordinary Share
means an Ordinary Share of a par value of US$0.01 in the capital of the Company, designated as a Class B Ordinary Share and having the rights, preferences, privileges and restrictions provided for in these Articles;
Class C Ordinary Share
means an Ordinary Share of a par value of US$0.01 in the capital of the Company, designated as a Class C Ordinary Share and having the rights, preferences, privileges and restrictions provided for in these Articles;
Commission
means the Securities and Exchange Commission of the United States or any other federal agency for the time being administering the Securities Act;
Communication Facilities
means video, video-conferencing, internet or online conferencing applications, telephone or tele-conferencing or any other video-communications, internet or online conferencing application or telecommunications facilities by means
of which all Persons participating in a meeting are capable of hearing and being heard by each other;
Company
means NaaS Technology Inc., a Cayman Islands exempted company;
Companies Act
means the Companies Act (As Revised) of the Cayman Islands and any statutory amendment or re-enactment thereof;
Companys Website
means the main corporate/investor relations website of the Company, the address or domain name of which has been disclosed in any registration statement filed by the Company with the Commission in connection with its initial public
offering of ADSs, or which has otherwise been notified to Shareholders;
Designated Stock Exchange
means the stock exchange in the United States on which any Shares or ADSs are listed for trading;
Designated Stock Exchange Rules
means the relevant code, rules and regulations, as amended, from time to time, applicable as a result of the original and continued listing of any Shares or ADSs on the Designated Stock Exchange;
electronic
has the meaning given to it in the Electronic Transactions Act and any amendment thereto or re-enactments thereof for the time being in force and includes every other law incorporated
therewith or substituted therefor;
electronic communication
means electronic posting to the Companys Website, transmission to any number, address or internet website or other electronic delivery methods as otherwise decided and approved by not less than
two-thirds of the vote of the Board;
Electronic Transactions Act
means the Electronic Transactions Act (As Revised) of the Cayman Islands and any statutory amendment or re-enactment thereof;
electronic record
has the meaning given to it in the Electronic Transactions Act and any amendment thereto or re-enactments thereof for the time being in force and includes every other law incorporated
therewith or substituted therefor;
Founder
means Mr. Zhen Dai;
Founder Affiliate
means an Affiliate of the Founder; provided, that Newlink shall not be deemed to be a Founder Affiliate.
Memorandum of Association
means the memorandum of association of the Company, as amended or substituted from time to time;
Newlink
means Newlinks Technology Limited.
Ordinary Resolution
Ordinary Share
means a Class A Ordinary Share or a Class B Ordinary Share or a Class C Ordinary Share;
paid up
means paid up as to the par value in respect of the issue of any Shares and includes credited as paid up;
Person
means any natural person, firm, company, joint venture, partnership, corporation, association or other entity (whether or not having a separate legal personality) or any of them as the context so requires;
Present
means in respect of any Person, such Persons presence at a general meeting of Shareholders (or any meeting of the holders of any Class of Shares), which may be satisfied by means of such Person or, if a corporation or
other non-natural Person, its duly authorized representative (or, in the case of any Shareholder, a proxy which has been validly appointed by such Shareholder in accordance with these Articles), being:
(a) physically present at the meeting; or (b) in the case of any meeting at which Communication Facilities are permitted in accordance with these Articles, including any Virtual Meeting, connected by means of the use of such Communication
Facilities;
Register
means the register of Members of the Company maintained in accordance with the Companies Act;
Registered Office
means the registered office of the Company as required by the Companies Act;
Retention Ratio
means a fraction, the numerator of which is the number of shares of Newlink beneficially owned by the Founder and any and all Founder Affiliates as of the applicable date of determination, and the denominator of which is the number
of shares of Newlink beneficially owned by the Founder and any and all Founder Affiliates as of immediately after the consummation of the Business Combination Closing.
Seal
means the common seal of the Company (if adopted) including any facsimile thereof;
Secretary
means any Person appointed by the Directors to perform any of the duties of the secretary of the Company;
Securities Act
means the Securities Act of 1933 of the United States, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time;
Share
means a share in the capital of the Company. All references to Shares herein shall be deemed to be Shares of any or all Classes as the context may require. For the avoidance of doubt in these Articles the expression
Share shall include a fraction of a Share;
Shareholder or Member
means a Person who is registered as the holder of one or more Shares in the Register;
Share Premium Account
means the share premium account established in accordance with these Articles and the Companies Act;
signed
means bearing a signature or representation of a signature affixed by mechanical means or an electronic symbol or process attached to or logically associated with an electronic communication and executed or adopted by a Person with
the intent to sign the electronic communication;
Special Resolution
Treasury Share
means a Share held in the name of the Company as a treasury share in accordance with the Companies Act;
United States
means the United States of America, its territories, its possessions and all areas subject to its jurisdiction; and
Virtual Meeting
means any general meeting of the Shareholders (or any meeting of the holders of any Class of Shares) at which the Shareholders (and any other permitted participants of such meeting, including without limitation the chairman of
the meeting and any Directors) are permitted to attend and participate solely by means of Communication Facilities.
2.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
3.
4.
5.
6.
7.
8.
(a)
(b)
(c)
9.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
10.
11.
12.
13.
14.
15.
(a)
(b)
(c)
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
(a)
The Directors may in their absolute discretion decline to register any transfer of Shares which is not fully paid up or on which the Company has a lien.
(b)
(i)
(ii)
(iii)
(iv)
(v)
45.
46.
47.
48.
49.
50.
51.
52.
(a)
(b)
(c)
(d)
53.
54.
(a)
(b)
(c)
55.
56.
57.
58.
59.
60.
61.
(a)
The Company may (but shall not be obliged to) in each calendar year hold a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it. The annual general meeting shall be held at
such time and place as may be determined by the Directors.
(b)
62.
(a)
The Chairman or a majority of the Directors may call general meetings, and they shall on a Shareholders requisition forthwith proceed to convene an extraordinary general meeting of the Company.
(b)
(c)
(d)
(e)
63.
(a)
(b)
64.
65.
66.
67.
68.
69.
70.
(a)
(b)
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
82.
83.
84.
(a)
(b)
(c)
85.
86.
87.
88.
89.
(a)
Unless otherwise determined by the Company in general meeting, the number of Directors shall not be less than three (3) Directors, the exact number of Directors to be determined from time to time by the Board of
Directors.
(b)
(c)
(d)
(e)
(f)
90.
91.
92.
93.
94.
95.
96.
97.
98.
99.
100.
101.
102.
103.
104.
105.
106.
107.
108.
109.
110.
(a)
(b)
(c)
(d)
(e)
111.
112.
113.
114.
115.
116.
117.
(a)
(b)
(c)
118.
119.
120.
121.
122.
123.
124.
125.
126.
127.
128.
129.
130.
131.
132.
133.
134.
135.
136.
137.
138.
139.
140.
141.
142.
(a)
(b)
(i)
(ii)
(c)
(d)
(i)
(ii)
(e)
143.
(a)
(b)
(c)
144.
145.
146.
147.
148.
149.
(a)
(b)
(c)
(d)
150.
151.
(a)
(b)
152.
153.
154.
155.
(a)
(b)
(c)
(d)
(e)
(f)
156.
157.
158.
159.
160.
161.
162.
163.
164.
165.
166.
167.
Exhibit 2.2
NaaS Technology Inc. - Class A Ordinary Shares
(Incorporated under the laws of the Cayman Islands)
Number | Shares |
Share capital is US$25,000,000 divided into
(i) 700,000,000 Class A ordinary shares of a par value of US$0.01 each;
(ii) 300,000,000 Class B ordinary shares of a par value of US$0.01 each;
(iii) 1,400,000,000 Class C ordinary shares of a par value of US$0.01 each;
and (iv) 100,000,000 shares of a par value of US$0.01 each of such class or series (however designated)
as the board of directors of the Company may determine in accordance with the articles of association.
THIS IS TO CERTIFY THAT
is the registered holder of
Shares in the above-named Company subject to the Memorandum and Articles of Association thereof .
EXECUTED for and on behalf of the said Company on |
by: |
DIRECTOR
Exhibit 4.5
AMENDMENT TO THE SUPPORT AGREEMENT
THIS AMENDMENT TO THE SUPPORT AGREEMENT (this Amendment), dated as of June 10, 2022, is made by and between each of the undersigned parties.
Reference is made to that certain Support Agreement, dated as of February 8, 2022, by and between RISE Education Cayman Limited, an exempted company incorporated with limited liability under the laws of Cayman Islands (ListCo), Dada Auto Inc., an exempted company incorporated with limited liability under the laws of Cayman Islands (the Company) and Bain Capital Rise Education IV Cayman Limited, an exempted company incorporated with limited liability under the laws of Cayman Islands (Shareholder) (the Support Agreement). Capitalized terms used and not defined in this Amendment shall have the meanings given to them in the Support Agreement, unless otherwise indicated.
WHEREAS, each of the undersigned, being a party to the Support Agreement, desires to effect certain amendments to the Support Agreement;
WHEREAS, pursuant to Section 5.2 of the Support Agreement, the Support Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed by all parties thereto;
WHEREAS, the undersigned together constitute all parties to the Support Agreement; and
WHEREAS, the ListCo Shareholder Approval as defined in that certain agreement and plan of merger dated as of February 8, 2022 by and between Listco, the Company and certain other parties thereto (as amended, the Merger Agreement) has been duly obtained.
NOW, THEREFORE, each of the undersigned agrees to the amendment to the Support Agreement and certain other matters as set forth below.
Section 1. Termination of the Support Agreement. Section 4.5 of the Support Agreement shall be deleted in its entirety and replaced by the following:
4.5 Termination. This Agreement shall terminate upon the earlier of:
(a) the end of the calendar year subsequent to the calendar year in which the Closing occurs, provided, that upon such termination, this Section 4.5, Section 5.1 and Section 5.4 shall survive indefinitely; provided, further, that, notwithstanding the foregoing, Section 4.2 of this Agreement shall terminate and be of no further force or effect upon the Closing; and
(b) the termination of the Merger Agreement in accordance with its terms, and upon such termination, no party shall have any liability hereunder other than for its breach of this Agreement prior to such termination.
Section 2. ListCo Shareholder Approval. Shareholder hereby acknowledges that it has duly voted the Subject Shares in favor of the ListCo Shareholder Approval (as defined in the Merger Agreement) at its extraordinary general meeting of shareholders held on April 29, 2022 (the April 2022 EGM). Shareholder hereby acknowledges that the ListCo Shareholder Approval was duly obtained in the April 2022 EGM. Shareholder hereby agrees to do all things and execute all documents as Listco or the Company may request to re-affirm its vote in favor of or consent to all transactions contemplated in the Merger Agreement including the Transactions (as defined in the Merger Agreement) and all other matters put forward in the April 2022 EGM, namely, (a) change of the name of ListCo from RISE Education Cayman Ltd to NaaS Technology Inc., (b) increase and re-designation of the authorized share capital of ListCo such that following such changes, the authorized share capital of ListCo will be US$25,000,000 divided into (i) 700,000,000 Class A ordinary shares of US$0.01 each, (ii) 300,000,000 Class B ordinary shares of US$0.01 each, (iii) 1,400,000,000 Class C ordinary shares of US$0.01 each and (iv) 100,000,000 shares as such class or series (however designated) as the board of directors of ListCo may determine in accordance with the memorandum and articles of association of ListCo, (c) amendment and restatement of the amended and restated memorandum and article of association of ListCo, and (d) authorization of each of the directors and officers of ListCo to do all things necessary to give effect to the foregoing.
Section 3. Effectiveness. This Amendment shall become effective immediately on the date hereof.
Section 4. Effect. Except as expressly amended by this Amendment, the Support Agreement shall remain in full force and effect as the same was in effect immediately prior to the effectiveness of this Amendment. All references in the Support Agreement to this Agreement shall be deemed to refer to the Support Agreement as amended by this Amendment.
Section 5. Further Assurance. Each of the undersigned hereby agrees to execute and deliver all such other and additional instruments and documents and do all such other acts and things as may be necessary or appropriate to effect this Amendment.
Section 6. Miscellaneous. Section 5.1 (Notice), Section 5.4 (Governing Law) and Section 5.6 (Counterparts) of the Support Agreement are hereby incorporated into this Amendment, mutatis mutandis.
[remainder of this page intentionally left blank]
2
IN WITNESS WHEREOF, the parties hereto have hereunto caused this Amendment to be duly executed as of the date hereof.
RISE EDUCATION CAYMAN LIMITED | ||
By: | /s/ Alex Wu | |
Name: Alex Wu | ||
Title: Acting Chief Financial Officer |
[Signature Page to Amendment to Support Agreement]
IN WITNESS WHEREOF, the parties hereto have hereunto caused this Amendment to be duly executed as of the date hereof.
DADA AUTO INC. | ||
By: | /s/ WANG Yang | |
Name: WANG Yang | ||
Title: Director |
[Signature Page to Amendment to Support Agreement]
IN WITNESS WHEREOF, the parties hereto have hereunto caused this Amendment to be duly executed as of the date hereof.
BAIN CAPITAL RISE EDUCATION IV CAYMAN LIMITED | ||
By: | /s/ Lihong Wang | |
Name: Lihong Wang | ||
Title: Director |
[Signature Page to Amendment to Support Agreement]
Exhibit 4.8
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this Agreement) is made as of June 10, 2022, by and among RISE Education Cayman Ltd., an exempted company incorporated under the laws of the Cayman Islands with limited liability, which, upon completion of the Mergers (as defined below), is expected to be known as NaaS Technology Inc. (Nasdaq: NAAS) (the Company), Bain Capital RISE Education IV Cayman Limited, an exempted company incorporated under the laws of the Cayman Islands with limited liability (the Bain Investor), and each Person who executes a Joinder to this Agreement. Except as otherwise specified herein, all capitalized terms used in this Agreement are defined in Exhibit A attached hereto.
WHEREAS, the Company, Dada Auto Inc., an exempted company incorporated with limited liability under the laws of the Cayman Islands (Dada), Dada Merger Sub Limited, an exempted company incorporated with limited liability under the laws of the Cayman Islands (Merger Sub) and Dada Merger Sub II Limited, an exempted company incorporated with limited liability under the laws of the Cayman Islands (Merger Sub II) are parties to an agreement and plan of merger, dated as of February 8, 2022 (as may be amended, supplemented or otherwise modified from time to time in accordance with its terms, the Merger Agreement), which provides, among other things, for the merger of Merger Sub with and into Dada, with Dada continuing as the surviving corporation (the Merger) and for the merger of the surviving corporation from the Merger with and into Merger Sub II, with Merger Sub II continuing as the surviving corporation and a wholly-owned subsidiary of the Company (the Second Merger, together with the Merger, the Mergers), upon the terms and subject to the conditions set forth in the Merger Agreement; upon completion of the Mergers (the Closing), the Company is expected to be known as NaaS Technology Inc.;
WHEREAS, the Bain Investor, as of the date hereof and immediately prior to the completion of the Mergers, holds 119,372,236 ordinary shares of the Company, par value $0.01 per share (Company Ordinary Shares, and together with any equity securities of the Company issued or issuable with respect to such Company Ordinary Shares held by the Bain Investor as of the date hereof by way of dividend, distribution, split or combination of securities, or any recapitalization, re-designation, re-classification, merger, consolidation or other reorganization, including, for the avoidance of doubt, such Company Ordinary Shares held by the Bain Investor immediately prior to the Closing that will be re-designated as Company Class A Shares upon the Closing, the Registrable Securities); and
WHEREAS, the Bain Investor and the Company desire to enter into this Agreement in connection with the Closing to provide certain registration rights with respect to the Registrable Securities, on the terms and subject to the conditions set forth in this Agreement.
In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:
Section 1 Demand Registrations.
(a) Requests for Registration. At any time and from time to time, any Holder holding at least twenty percent (20%) of the Registrable Securities then outstanding (such Holder, the Requesting Holder) may request registration under the Securities Act of all or any portion of the Registrable Securities on Form F-1 or any similar long-form registration statement (Long-Form Registrations) or on Form F-3 or any similar short-form registration statement (Short-Form Registrations), if available. The Requesting Holder may request that any Demand Registration be made pursuant to Rule 415 under the Securities Act (a Shelf Registration) and (if the Company is a WKSI at the time any such request is submitted to the Company or will become one by the time of the filing of such Shelf Registration) that such Shelf Registration be an automatic shelf registration statement (as defined in Rule 405 under the Securities Act) (an Automatic Shelf Registration Statement). All registrations requested pursuant to this Section 1 are referred to herein as Demand Registrations. Each request for a Demand Registration must specify the approximate number or dollar value of Registrable Securities requested to be registered by the Requesting Holder and (if known) the intended method of distribution. Any Holder holding at least twenty percent (20%) of the Registrable Securities then outstanding will be entitled to request an unlimited number of Demand Registrations for which the Company will pay all Registration Expenses, whether or not any such registration is consummated.
(b) Notice to Other Holders. Within ten (10) Business Days after receipt of any such request, the Company will give written notice of the Demand Registration to all other Holders and, subject to the terms of Section 1(e), will include in such Demand Registration (and in all related registrations and qualifications under state blue sky laws and in any related underwriting) all Registrable Securities with respect to which the Company has received written requests for inclusion therein within twenty (20) days after the receipt of the Companys notice; provided that, with the written consent of the Requesting Holder, the Company may, or at the written request of the Requesting Holder, the Company shall, instead provide notice of the Demand Registration to all other Holders within three (3) Business Days following the non-confidential filing of the registration statement with respect to the Demand Registration so long as such registration statement is not an Automatic Shelf Registration Statement.
(c) Form of Registrations. All Long-Form Registrations will be underwritten registrations unless otherwise approved by the Requesting Holder. Demand Registrations will be Short-Form Registrations whenever the Company is permitted to use any applicable short form unless otherwise requested by the Requesting Holder.
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(d) Shelf Registrations.
(i) For so long as a registration statement for a Shelf Registration (a Shelf Registration Statement) is and remains effective, the Requesting Holder will have the right at any time or from time to time to elect to sell pursuant to an offering (including an underwritten offering) Registrable Securities pursuant to such registration statement (Shelf Registrable Securities). If the Requesting Holder desires to sell Registrable Securities pursuant to an underwritten offering, then the Requesting Holder may deliver to the Company a written notice (a Shelf Offering Notice) specifying the number of Shelf Registrable Securities that the Requesting Holder desires to sell pursuant to such underwritten offering (the Shelf Offering). As promptly as practicable, but in no event later than two (2) Business Days after receipt of a Shelf Offering Notice, the Company will give written notice of such Shelf Offering Notice to all other Holders of Shelf Registrable Securities that have been identified as selling stockholders in such Shelf Registration Statement and are otherwise permitted to sell in such Shelf Offering, which such notice shall request that each such Holder specify, within seven (7) days after the Companys receipt of the Shelf Offering Notice, the maximum number of Shelf Registrable Securities such Holder desires to be disposed of in such Shelf Offering. The Company, subject to Section 1(e) and Section 6, will include in such Shelf Offering all Shelf Registrable Securities with respect to which the Company has received timely written requests for inclusion. The Company will, as expeditiously as possible (and in any event within fourteen (14) days after the receipt of a Shelf Offering Notice), but subject to Section 1(e), use its best efforts to consummate such Shelf Offering.
(ii) If the Requesting Holder desires to engage in an underwritten block trade or bought deal pursuant to a Shelf Registration Statement (either through filing an Automatic Shelf Registration Statement or through a take-down from an already existing Shelf Registration Statement) (each, an Underwritten Block Trade), then notwithstanding the time periods set forth in Section 1(d)(i), such Requesting Holder may notify the Company of the Underwritten Block Trade not less than two (2) Business Days prior to the day such offering is first anticipated to commence. If requested by the Requesting Holder, the Company will promptly notify other Holders of such Underwritten Block Trade and such notified Holders (each, a Potential Participant) may elect whether or not to participate no later than the next Business Day (i.e. one (1) Business Day prior to the day such offering is to commence) (unless a longer period is agreed to by the Requesting Holder), and the Company will as expeditiously as possible use its best efforts to facilitate such Underwritten Block Trade (which may close as early as two (2) Business Days after the date it commences). Any Potential Participants request to participate in an Underwritten Block Trade shall be binding on the Potential Participant.
(iii) All determinations as to whether to complete any Shelf Offering and as to the timing, manner, price and other terms of any Shelf Offering contemplated by this Section 1(d) shall be determined by the Requesting Holder, and the Company shall use its best efforts to cause any Shelf Offering to occur in accordance with such determinations as promptly as practicable.
(iv) The Company will, at the request of the Requesting Holder, file any prospectus supplement or any post-effective amendments and otherwise take any action necessary to include therein all disclosure and language deemed necessary or advisable by the Requesting Holder to effect such Shelf Offering.
(e) Priority on Demand Registrations and Shelf Offerings. The Company will not include in any Demand Registration any securities which are not Registrable Securities without the prior written consent of the Requesting Holder. If a Demand Registration or a Shelf Offering is an underwritten offering and the managing underwriters advise the Company in writing that in their opinion the number of Registrable Securities and (if permitted hereunder) other securities requested to be included in such offering exceeds the number of Registrable Securities and other securities (if any), which can be sold therein without adversely affecting the marketability, proposed offering price, timing or method of distribution of the offering, then the Company will include in such offering the number of Registrable Securities requested to be included which, in the opinion of such underwriters, can be sold, without any such adverse effect, pro rata among the respective Holders on the basis of the number of Registrable Securities owned by each such Holder. Unless otherwise consented to in writing by the Company and the Requesting Holder, any Persons other than Holders who participate in Demand Registrations which are not at the Companys expense must pay their share of the Registration Expenses as provided in Section 5 hereto.
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(f) Restrictions on Demand Registration and Shelf Offerings.
(i) The Company may postpone, for up to forty-five (45) days from the date of the request (the Suspension Period), the filing or the effectiveness of a registration statement for a Demand Registration or suspend the use of a prospectus that is part of a Shelf Registration Statement (and therefore suspend sales of the Shelf Registrable Securities) by providing written notice to the Holders if the following conditions are met: (A) the Company determines that the offer or sale of Registrable Securities would reasonably be expected to have a material adverse effect on any proposal or plan by the Company or any Subsidiary to engage in any material acquisition of assets or shares (other than in the ordinary course of business) or any material merger, consolidation, tender offer, recapitalization, reorganization, financing or other transaction involving the Company and (B) upon advice of counsel, the sale of Registrable Securities pursuant to the registration statement would require disclosure of material non-public information not otherwise required to be disclosed under applicable law, and either (x) the Company has a bona fide business purpose for preserving the confidentiality of such transaction, (y) disclosure would have a material adverse effect on the Company or the Companys ability to consummate such transaction, or (z) such transaction renders the Company unable to comply with SEC requirements, in each case under circumstances that would make it impractical or inadvisable to cause the registration statement for a Demand Registration or the Shelf Registration Statement (or such filings) to become effective or to promptly amend or supplement the registration statement for a Demand Registration or the Shelf Registration Statement on a post effective basis, as applicable. The Company may delay or suspend the effectiveness of a Demand Registration or Shelf Registration Statement pursuant to this Section 1(f)(i) only once in any twelve (12)-month period (for avoidance of doubt, in addition to the Companys rights and obligations under Section 3(a)(vi)).
(ii) In the case of an event that causes the Company to suspend the use of a Shelf Registration Statement as set forth in Section 1(f)(i) above or pursuant to Section 3(a)(vi) (a Suspension Event), the Company will give a written notice to the Holders whose Registrable Securities are registered pursuant to such Shelf Registration Statement (a Suspension Notice) to suspend sales of such Registrable Securities and such notice must state generally the basis for such notice and that such suspension will continue only for so long as the Suspension Event or its effect is continuing. Each Holder agrees not to effect any sales of its Registrable Securities pursuant to such Shelf Registration Statement (or such filings) at any time after it has received a Suspension Notice from the Company and prior to receipt of an End of Suspension Notice. A Holder may recommence effecting sales of the Registrable Securities pursuant to the Shelf Registration Statement (or such filings) following further written notice to such effect (an End of Suspension Notice) from the Company, which End of Suspension Notice will be given by the Company to the Holders promptly following the conclusion of any Suspension Event (and in any event during the permitted Suspension Period).
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(iii) Notwithstanding any provision herein to the contrary, if the Company gives a Suspension Notice with respect to any Shelf Registration Statement pursuant to this Section 1(f), the Company will extend the period of time during which such Shelf Registration Statement will be maintained effective pursuant to this Agreement by the number of days during the period from the date of receipt by the Holders of the Suspension Notice to and including the date of receipt by the Holders of the End of Suspension Notice and provide copies of the supplemented or amended prospectus necessary to resume sales, with respect to each Suspension Event.
(g) Selection of Underwriters. The Requesting Holder and the Company shall jointly select the legal counsel to the Company, the investment banker(s) and manager(s) to administer any underwritten offering in connection with any Demand Registration or Shelf Offering.
(h) Revocation of Demand Notice or Shelf Offering Notice. At any time prior to the effective date of the registration statement relating to a Demand Registration or the pricing of any offering relating to a Shelf Offering Notice, any Holder may revoke or withdraw such notice of a Demand Registration or Shelf Offering Notice on behalf of itself without liability to other Holders, in each case by providing written notice to the Company.
(i) Confidentiality. Each Holder agrees to treat as confidential the receipt of any notice hereunder (including notice of a Demand Registration, a Shelf Offering Notice and a Suspension Notice) and the information contained therein, and not to disclose or use the information contained in any such notice (or the existence thereof) without the prior written consent of the Company until such time as the information contained therein is or becomes available to the public generally (other than as a result of disclosure by such Holder in breach of the terms of this Agreement), and other than as required by applicable law or the rules or regulations of the SEC or any applicable securities exchange.
Section 2 Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to register any of its equity securities under the Securities Act (including primary and secondary registrations, and other than pursuant to an Excluded Registration) and the registration form to be used may be used for the registration of Registrable Securities (a Piggyback Registration), the Company will give prompt written notice (and in any event thirty (30) days prior to the anticipated filing of the registration statement relating to the Piggyback Registration) to all Holders of its intention to effect such Piggyback Registration and, subject to the terms of Section 2(b) and Section 2(c), will include in such Piggyback Registration (and in all related registrations or qualifications under blue sky laws and in any related underwriting) all Registrable Securities with respect to which the Company has received written requests for inclusion therein within twenty (20) days after delivery of the Companys notice. Each Holder may withdraw its request for inclusion at any time prior to executing the underwriting agreement, or if none, prior to the applicable registration statement becoming effective.
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(b) Priority on Primary Registrations. If a Piggyback Registration is an underwritten primary registration on behalf of the Company, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without adversely affecting the marketability, proposed offering price, timing or method of distribution of the offering, the Company will include in such registration (i) first, the securities the Company proposes to sell that, in the opinion of such underwriters, can be sold without any such adverse effect, (ii) second, the Registrable Securities requested to be included in such registration which, in the opinion of the underwriters, can be sold without any such adverse effect, pro rata among the requesting Holders of such Registrable Securities on the basis of the number of Registrable Securities owned by each such Holder, and (iii) third, other securities requested to be included in such registration which, in the opinion of the underwriters, can be sold without any such adverse effect.
(c) Priority on Secondary Registrations. If a Piggyback Registration is an underwritten secondary registration on behalf of holders of the Companys equity securities (other than pursuant to Section 1 hereof), and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without adversely affecting the marketability, proposed offering price, timing or method of distribution of the offering, the Company will include in such registration (i) first, the securities requested to be included therein by the holders initially requesting such registration which, in the opinion of the underwriters, can be sold without any such adverse effect, (ii) second, the Registrable Securities requested to be included in such registration which, in the opinion of the underwriters, can be sold without any such adverse effect, pro rata among the Holders of such Registrable Securities on the basis of the number of Registrable Securities owned by each such Holder, and (iii) third, other securities requested to be included in such registration which, in the opinion of the underwriters, can be sold without any such adverse effect.
(d) Right to Terminate Registration. The Company will have the right to terminate or withdraw any registration initiated by it under this Section 2, whether or not any holder of Registrable Securities has elected to include securities in such registration.
(e) Selection of Underwriters. If any Piggyback Registration is an underwritten offering, the selection of the legal counsel, the investment banker(s) and manager(s) of the Company for the offering shall be approved by the Holders of a majority of all Registrable Securities then outstanding (the Majority Holders), which approval shall not be unreasonably withheld, conditioned or delayed.
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Section 3 Registration Procedures.
(a) Company Obligations. Whenever the Holders have requested that any Registrable Securities be registered pursuant to this Agreement or have initiated a Shelf Offering, the Company will use its best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof, and pursuant thereto the Company will as expeditiously as possible:
(i) prepare and file with (or submit confidentially to) the SEC a registration statement, and all amendments and supplements thereto and related prospectuses, with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, all in accordance with the Securities Act and all applicable rules and regulations promulgated thereunder (provided that before filing or confidentially submitting a registration statement or prospectus or any amendments or supplements thereto, the Company will furnish to the counsel selected by the relevant Holder covered by such registration statement copies of all such documents proposed to be filed or submitted, which documents will be subject to the review and comment of such counsel);
(ii) notify each Holder of (A) the issuance by the SEC of any stop order suspending the effectiveness of any registration statement or the initiation of any proceedings for that purpose, (B) the receipt by the Company or its counsel of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, and (C) the effectiveness of each registration statement filed hereunder;
(iii) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period ending when all of the securities covered by such registration statement have been disposed of in accordance with the intended methods of distribution by the sellers thereof set forth in such registration statement (but not in any event before the expiration of any longer period required under the Securities Act or, if such registration statement relates to an underwritten Public Offering, such longer period as in the opinion of counsel for the underwriters a prospectus is required by law to be delivered in connection with sale of Registrable Securities by an underwriter or dealer) and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement;
(iv) furnish, without charge, to each seller of Registrable Securities thereunder and each underwriter, if any, such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus) (in each case including all exhibits and documents incorporated by reference therein), each amendment and supplement thereto, each Free Writing Prospectus and such other documents as such seller or such underwriter, if any, may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller (the Company hereby consenting to the use in accordance with all applicable laws of each such registration statement, each such amendment and supplement thereto, and each such prospectus (or preliminary prospectus or supplement thereto) or Free Writing Prospectus by each such seller of Registrable Securities and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such registration statement or prospectus);
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(v) use its best efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as any seller reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller (provided that the Company will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(a)(v) or (B) consent to general service of process in any such jurisdiction or (C) subject itself to taxation in any such jurisdiction);
(vi) notify in writing each seller of such Registrable Securities (A) promptly after it receives notice thereof, of the date and time when such registration statement and each post-effective amendment thereto has become effective or a prospectus or supplement to any prospectus relating to a registration statement has been filed and when any registration or qualification has become effective under a state securities or blue sky law or any exemption thereunder has been obtained, (B) promptly after receipt thereof, of any comment or request by the SEC for the amendment or supplementing of such registration statement or prospectus or for additional information, and (C) at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event or of any information or circumstances as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, and, subject to Section 1(f), if required by applicable law or to the extent requested by any such seller, the Company will use its best efforts to promptly prepare and file a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading and (D) if at any time the representations and warranties of the Company in any underwriting agreement, securities sale agreement, or other similar agreement, relating to the offering shall cease to be true and correct;
(vii) (A) use best efforts to cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed and, if not so listed, to be listed on a securities exchange and, without limiting the generality of the foregoing, to arrange for at least two market markers to register as such with respect to such Registrable Securities with FINRA, and (B) comply (and continue to comply) with the requirements of any self-regulatory organization applicable to the Company, including without limitation all corporate governance requirements;
(viii) cooperate with each Holder and each underwriter or agent participating in the disposition of Registrable Securities and their respective counsel in connection with any filings required to be made by FINRA;
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(ix) use best efforts to provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement;
(x) enter into and perform such customary agreements (including, as applicable, underwriting agreements in customary form) and take all such other actions as the holders of the majority of the Registrable Securities being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (including, without limitation, making available the executive officers of the Company and participating in road shows, investor presentations, marketing events and other selling efforts and effecting a share split or combination, recapitalization or reorganization);
(xi) make available for inspection by any seller of Registrable Securities, any underwriter participating in any disposition or sale pursuant to such registration statement and any attorney, accountant or other agent retained by any such seller or underwriter, all financial and other records, pertinent corporate and business documents and properties of the Company as will be necessary to enable them to exercise their due diligence responsibility, and cause the Companys officers, directors, employees, agents, representatives and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement and the disposition of such Registrable Securities pursuant thereto;
(xii) take all actions to ensure that any Free-Writing Prospectus utilized in connection with any Demand Registration or Piggyback Registration or Shelf Offering hereunder complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act to the extent required thereby and, when taken together with the related prospectus, prospectus supplement and related documents, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
(xiii) comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Companys first full calendar quarter after the effective date of the registration statement, which earnings statement will satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(xiv) permit any Holder which in its sole and exclusive judgment, might be deemed to be an underwriter or a controlling person of the Company, to participate in the preparation of such registration or comparable statement and to allow such Holder to provide language for insertion therein, in form and substance satisfactory to the Company, which in the reasonable judgment of such Holder and its counsel should be included;
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(xv) use best efforts to (A) make Short-Form Registration available for the sale of Registrable Securities and (B) prevent the issuance of any stop order suspending the effectiveness of a registration statement, or the issuance of any order suspending or preventing the use of any related prospectus or suspending the qualification of any Common Equity included in such registration statement for sale in any jurisdiction, and in the event any such order is issued, use best efforts to obtain promptly the withdrawal of such order;
(xvi) use its best efforts to cause such Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the sellers thereof to consummate the disposition of such Registrable Securities;
(xvii) cooperate with the Holders covered by the registration statement and the managing underwriter or agent, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends (or arrange for book entry transfer of securities in the case of uncertificated securities), and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriter, or agent, if any, or such Holders may request;
(xviii) if requested by any managing underwriter, include in any prospectus or prospectus supplement updated financial or business information for the Companys most recent period or current quarterly period (including estimated results or ranges of results) if required for purposes of marketing the offering in the view of the managing underwriter;
(xix) take no direct or indirect action prohibited by Regulation M under the Exchange Act; provided, however, that to the extent that any prohibition is applicable to the Company, the Company will take such action as is necessary to make any such prohibition inapplicable;
(xx) cooperate with each Holder covered by the registration statement and each underwriter or agent participating in the disposition of such Registrable Securities and their respective counsel in connection with the preparation and filing of applications, notices, registrations and responses to requests for additional information with FINRA, the New York Stock Exchange, Nasdaq or any other national securities exchange on which the shares of Common Equity are or are to be listed, and to the extent required by the rules and regulations of FINRA, retain a Qualified Independent Underwriter acceptable to the managing underwriter;
(xxi) in the case of any underwritten offering, use its best efforts to obtain, and deliver to the underwriter(s), in the manner and to the extent provided for in the applicable underwriting agreement, one or more cold comfort letters from the Companys independent public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters;
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(xxii) use its best efforts to provide (A) a legal opinion of the Companys outside counsel, dated the effective date of such registration statement addressed to the Company, (B) on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a Demand Registration or Shelf Offering, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the closing date of the applicable sale, (1) one or more legal opinions of the Companys outside counsel, dated such date, in form and substance as customarily given to underwriters in an underwritten public offering or, in the case of a non-underwritten offering, to the broker, placement agent or other agent of the Holders assisting in the sale of the Registrable Securities and (2) one or more negative assurances letters of the Companys outside counsel, dated such date, in form and substance as is customarily given to underwriters in an underwritten public offering or, in the case of a non-underwritten offering, to the broker, placement agent or other agent of the Holders assisting in the sale of the Registrable Securities, in each case, addressed to the underwriters, if any, or, if requested, in the case of a non-underwritten offering, to the broker, placement agent or other agent of the Holders assisting in the sale of the Registrable Securities and (3) customary certificates executed by authorized officers of the Company as may be requested by any Holder or any underwriter of such Registrable Securities;
(xxiii) if the Company files an Automatic Shelf Registration Statement covering any Registrable Securities, use its best efforts to remain a WKSI (and not become an ineligible issuer (as defined in Rule 405 under the Securities Act)) during the period during which such Automatic Shelf Registration Statement is required to remain effective;
(xxiv) if the Company does not pay the filing fee covering the Registrable Securities at the time an Automatic Shelf Registration Statement is filed, pay such fee at such time or times as the Registrable Securities are to be sold; and
(xxv) if the Automatic Shelf Registration Statement has been outstanding for at least three (3) years, at the end of the third year, refile a new Automatic Shelf Registration Statement covering the Registrable Securities, and, if at any time when the Company is required to re-evaluate its WKSI status the Company determines that it is not a WKSI, use its best efforts to refile the Shelf Registration Statement on Form F-3 and, if such form is not available, Form F-1 and keep such registration statement effective during the period during which such registration statement is required to be kept effective.
(b) Officer Obligations. Each Holder that is an officer of the Company agrees that if and for so long as he or she is employed by the Company or any Subsidiary thereof, he or she will participate fully in the sale process in a manner customary for persons in like positions and consistent with his or her other duties with the Company, including the preparation of the registration statement and the preparation and presentation of any road shows (including taking such actions as set forth in Section 3(a)(x)).
(c) Automatic Shelf Registration Statements. If the Company files any Automatic Shelf Registration Statement for the benefit of the holders of any of its securities other than the Holders, and none of the Holders requests that its Registrable Securities be included in such Shelf Registration Statement, the Company agrees that, at the request of any Holder, it will include in such Automatic Shelf Registration Statement such disclosures as may be required by Rule 430B in order to ensure that such Holder may be added to such Shelf Registration Statement at a later time through the filing of a prospectus supplement rather than a post-effective amendment. If the Company has filed any Automatic Shelf Registration Statement for the benefit of the holders of any of its securities other than the Holders, the Company shall, at the request of any Holder, file any post-effective amendments necessary to include therein all disclosure and language necessary to ensure that the Holders of Registrable Securities may be added to such Shelf Registration Statement.
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(d) Additional Information. If any registration is being effected as to any Registrable Securities, the Company may require each seller of Registrable Securities to furnish the Company such information regarding such seller and the distribution of such securities as the Company may from time to time reasonably request in writing, as a condition to such sellers participation in such registration.
(e) In-Kind Distributions. If any Holder (and/or any of its Affiliates) seeks to effectuate an in-kind distribution of all or part of their Registrable Securities to its respective direct or indirect equityholders, the Company will work with the foregoing Persons to facilitate such in-kind distribution in the manner reasonably requested and consistent with the Companys obligations under the Securities Act.
(f) Suspended Distributions. Each Person participating in a registration hereunder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(a)(vi), such Person will immediately discontinue the disposition of its Registrable Securities pursuant to the registration statement until such Persons receipt of the copies of a supplemented or amended prospectus as contemplated by Section 3(a)(vi), subject to the Companys compliance with its obligations under Section 3(a)(vi).
(g) Registerable Securities Transactions. If requested by any Holder in connection with any transaction involving any Registrable Securities (including any sale or other transfer of such securities without registration under the Securities Act, any margin loan with respect to such securities and any pledge of such securities), the Company agrees to provide such Holder with customary and reasonable assistance to facilitate such transaction, including, without limitation, (i) such action as such Holder may reasonably request from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act and (ii) entering into an issuers agreement in connection with any margin loan with respect to such securities in customary form.
(h) Other. To the extent that any of the Holders is or may be deemed to be an underwriter of Registrable Securities pursuant to any SEC comments or policies, the Company agrees that (i) the indemnification and contribution provisions contained in Section 5 shall be applicable to the benefit of such Holder in their role as an underwriter or deemed underwriter in addition to their capacity as a Holder and (ii) such Holder shall be entitled to conduct the due diligence which they would normally conduct in connection with an offering of securities registered under the Securities Act, including without limitation receipt of customary opinions and comfort letters addressed to such Holder.
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Section 4 Registration Expenses.
Except as expressly provided herein, all out-of-pocket expenses incurred by the Company or the Requesting Holder (or, with respect to any particular Demand Registration, Shelf Offering, Piggyback Registration or Underwritten Block Trade, any Holder that has been the requesting Holder thereof) in connection with the performance of or compliance with this Agreement and/or in connection with any Demand Registration, Piggyback Registration or Shelf Offering or Underwritten Block Trade, whether or not the same shall become effective, shall be paid by the Company, including, without limitation: (a) all registration and filing fees, and any other fees and expenses associated with filings required to be made with the SEC or FINRA, (b) all fees and expenses in connection with compliance with any securities or blue sky laws, (c) all printing, duplicating, word processing, messenger, telephone, facsimile and delivery expenses (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company or other depositary and of printing prospectuses and Company Free Writing Prospectuses), (d) all fees and disbursements of counsel for the Company and of all independent certified public accountants of the Company (including the expenses of any special audit and cold comfort letters required by or incident to such performance), (e) Securities Act liability insurance or similar insurance if the Company so desires or the underwriters so require in accordance with then-customary underwriting practice, (f) all fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange on which similar securities of the Company are then listed, (g) all applicable rating agency fees with respect to the Registrable Securities, (h) all fees and disbursements of legal counsel for the Company, (i) all reasonable fees and disbursements of one legal counsel selected by the selling Holder (which may be the same counsel as selected for the Company) together with any necessary local counsel as may be required by the selling Holder, (j) any fees and disbursements of underwriters customarily paid by issuers or sellers of securities, (k) all fees and expenses of any special experts or other Persons retained by the Company or the Requesting Holder in connection with any Registration, (l) all of the Companys internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties) and (m) all expenses related to the road-show for any underwritten offering, including all travel, meals and lodging. All such expenses are referred to herein as Registration Expenses. The Company shall not be required to pay (except in the case of a Piggyback Registration in which the Company is selling on its own account), and each Person that sells securities pursuant to a Demand Registration, Shelf Offering or Piggyback Registration hereunder will bear and pay, all underwriting discounts and commissions and all transfer taxes (if any) attributable to the sale of Registrable Securities on a pro rata basis based on the number of Registrable Securities or shares included in such Demand Registration, Shelf Offering or Piggyback Registration.
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Section 5 Indemnification and Contribution.
(a) By the Company. The Company will indemnify and hold harmless, to the fullest extent permitted by law and without limitation as to time, each Holder, such Holders officers, directors employees, agents, fiduciaries, stockholders, managers, partners, members, affiliates, direct and indirect equityholders, consultants and representatives, and any successors and assigns thereof, and each Person who controls such holder (within the meaning of the Securities Act) (the Indemnified Parties) against all losses, claims, actions, damages, liabilities and expenses (including with respect to actions or proceedings, whether commenced or threatened, and including reasonable attorney fees and expenses) (collectively, Losses) caused by, resulting from, arising out of, based upon or related to any of the following (each, a Violation) by the Company: (i) any untrue or alleged untrue statement of material fact contained in (A) any registration statement, prospectus, preliminary prospectus or Free-Writing Prospectus, or any amendment thereof or supplement thereto or (B) any application or other document or communication (in this Section 5, collectively called an application) executed by or on behalf of the Company or based upon written information furnished by or on behalf of the Company filed in any jurisdiction in order to qualify any securities covered by such registration under the blue sky or securities laws thereof, (ii) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading or (iii) any violation or alleged violation by the Company of the Securities Act or any other similar federal or state securities laws or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance. In addition, the Company will reimburse such Indemnified Party for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such Losses. Notwithstanding the foregoing, the Company will not be liable in any such case to the extent that any such Losses directly result from, arise out of, are based upon, or relate to an untrue statement or omission, made in such registration statement, any such prospectus, preliminary prospectus or Free-Writing Prospectus or any amendment or supplement thereto, or in any application, in reliance upon, and in conformity with, written information prepared and furnished in writing to the Company by such Indemnified Party expressly for use therein or by such Indemnified Partys failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto after the Company has furnished such Indemnified Party with a sufficient number of copies of the same. In connection with an underwritten offering, the Company will indemnify such underwriters, their officers and directors, and each Person who controls such underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the Indemnified Parties or as otherwise agreed to in the underwriting agreement executed in connection with such underwritten offering. Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of such securities by such seller.
(b) By Holder. In connection with any registration statement in which a Holder is participating, each such Holder will furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such registration statement or prospectus and, to the extent permitted by law, will indemnify the Company, its officers, directors, employees, agents and representatives, and each Person who controls the Company (within the meaning of the Securities Act) against any Losses resulting from (as determined by a final and non-appealable judgment, order or decree of a court of competent jurisdiction) any untrue statement of material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission was made in reliance upon, and in conformity with, written information or affidavit prepared and furnished in writing to the Company by such Holder expressly for use therein; provided that the obligation to indemnify will be individual, not joint and several, for each Holder and will be limited to the net amount of proceeds received by such Holder from the sale of Registrable Securities pursuant to such registration statement.
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(c) Claim Procedure. Any Person entitled to indemnification hereunder will (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice will impair any Persons right to indemnification hereunder only to the extent such failure has prejudiced the indemnifying party) and (ii) unless in such indemnified partys reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party will not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld, conditioned or delayed). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. In such instance, the conflicted indemnified parties will have a right to retain one separate counsel, chosen by the majority of the conflicted indemnified parties involved in the indemnification and approved by the indemnifying party, at the expense of the indemnifying party.
(d) Contribution. If the indemnification provided for in this Section 5 is held by a court of competent jurisdiction to be unavailable to, or is insufficient to hold harmless, an indemnified party or is otherwise unenforceable with respect to any Loss referred to herein, then such indemnifying party will contribute to the amounts paid or payable by such indemnified party as a result of such Loss, (i) in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other hand in connection with the statements or omissions which resulted in such Loss as well as any other relevant equitable considerations or (ii) if the allocation provided by clause (i) of this Section 5(d) is not permitted by applicable law, then in such proportion as is appropriate to reflect not only such relative fault but also the relative benefit of the Company on the one hand and of the sellers of Registrable Securities and any other sellers participating in the registration statement on the other hand in connection with the statement or omissions which resulted in such Losses, as well as any other relevant equitable considerations; provided that the maximum amount of liability in respect of such contribution will be limited, in the case of each seller of Registrable Securities, to an amount equal to the net proceeds actually received by such seller from the sale of Registrable Securities effected pursuant to such registration. The relative fault of the indemnifying party and of the indemnified party will be determined by reference to, among other things, whether the untrue (or, as applicable alleged) untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just or equitable if the contribution pursuant to this Section 5(d) were to be determined by pro rata allocation or by any other method of allocation that does not take into account such equitable considerations. The amount paid or payable by an indemnified party as a result of the Losses referred to herein will be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending against any action or claim which is the subject hereof. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who is not guilty of such fraudulent misrepresentation.
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(e) Release. No indemnifying party will, except with the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.
(f) Non-exclusive Remedy; Survival. The indemnification and contribution provided for under this Agreement will be in addition to any other rights to indemnification or contribution that any indemnified party may have pursuant to law or contract (and the Company and its Subsidiaries shall be considered the indemnitors of first resort in all such circumstances to which this Section 5 applies) and will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and will survive the transfer of Registrable Securities and the termination or expiration of this Agreement.
Section 6 Cooperation with Underwritten Offerings. No Person may participate in any underwritten registration hereunder unless such Person (i) agrees to sell such Persons securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements (including, without limitation, pursuant to the terms of any over-allotment or green shoe option requested by the underwriters; provided that no Holder will be required to sell more than the number of Registrable Securities such Holder has requested to include in such registration) and (ii) completes, executes and delivers all questionnaires, powers of attorney, stock powers, custody agreements, indemnities, underwriting agreements and other documents and agreements required under the terms of such underwriting arrangements or as may be reasonably requested by the Company and the lead managing underwriter(s); provided that no Holder included in any underwritten registration shall be required to make any representations or warranties to the Company or the underwriters, other than customary representations or warranties for minority selling shareholders to make in an underwriting agreement (including with respect to such Holders Registrable Securities free and clear of liens or encumbrances, due authorization and due execution by such Holder, due organization of such Holder and the absence of conflicts with respect to such Holders organizational documents, applicable laws and agreements binding upon such Holder, and not including any representations or warranties in respect of the business of the Company or its subsidiaries or regarding statements of fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission of a fact required to be stated therein or necessary to make the statements therein not misleading (except to the extent that such untrue statement or omission was made in reliance upon, and in conformity with, written information or an affidavit prepared and furnished in writing to the Company by such Holder expressly for use therein) (Customary Warranties)), or to undertake any indemnification obligations in respect of such representations or warranties (other than those Customary Warranties), except as otherwise provided in Section 6. To the extent that any such agreement is entered into pursuant to, and consistent with, Section 3 and/or this Section 6, the respective rights and obligations created under such agreement will supersede the respective rights and obligations of the Holders, the Company and the underwriters created thereby with respect to such registration.
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Section 7 Subsidiary Public Offering.
If, after an initial Public Offering of the equity securities of one of its Subsidiaries, the Company distributes securities of such Subsidiary to its equityholders, then the rights and obligations of the Company pursuant to this Agreement will apply, mutatis mutandis, to such Subsidiary, and the Company will cause such Subsidiary to comply with such Subsidiarys obligations under this Agreement as if it were the Company hereunder.
Section 8 Assignment of Registration Right.
(a) Assignment. The right to cause the Company to register Registrable Securities pursuant to this Agreement may be assigned (with all related obligations) by any Holder to an Affiliate of such Holder or a third party transferee of at least twenty percent (20%) of the Registrable Securities held by such Holder immediately prior to the transfer (the Assignee Holder); provided that (i) the Company is furnished with written notice of the name of such Assignee Holder and the amount of Registrable Securities with respect to which such rights are being transferred, and (ii) such Assignee Holder delivers to the Company a copy of the Joinder duly executed by such Assignee Holder. Reference to the Holder in this Agreement shall include such Assignee Holder as a right holder, with the rights and obligations of any other Holder and such Assignee Holder being in proportion to their then respective holding of the Registrable Securities unless otherwise agreed between the transferring Holder and such Assignee Holder. For the avoidance of doubt, depositing Registrable Securities with a depositary shall not be deemed as a transfer and such depositary shall not be deemed as the Assignee Holder.
(b) Legend. Each certificate (if any) evidencing any Registrable Securities and each certificate issued in exchange for or upon the transfer of any Registrable Securities (unless such Registrable Securities would no longer be Registrable Securities after such transfer) will be stamped or otherwise imprinted with a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS SET FORTH IN A REGISTRATION RIGHTS AGREEMENT DATED AS OF JUNE 10, 2022 AMONG THE ISSUER OF SUCH SECURITIES (THE COMPANY) AND CERTAIN OF THE COMPANYS EQUITYHOLDERS, AS AMENDED. A COPY OF SUCH AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.
The Company will imprint such legend on certificates evidencing Registrable Securities outstanding prior to the date hereof. The legend set forth above will be removed from the certificates evidencing any securities that have ceased to be Registrable Securities.
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Section 9 No Inconsistent Agreements.
The Company shall not hereafter enter into, and is not currently a party to, any agreement with respect to its securities that is inconsistent in any material respect with, or superior to, the registration rights granted to the Holders hereunder, including any agreement that would allow any current or future holder of equity securities of the Company to require the Company to include securities in any registration statement filed by the Company for the Holders hereunder on a basis other than pari passu with, or expressly subordinate to, the registration rights of the Holders hereunder provided. Notwithstanding any other rights and remedies the Holders may have in respect of the Company pursuant to this Agreement, if the Company enters into any other registration rights or similar agreement with respect to any of its securities that contains provisions that violate the preceding sentence, the terms and conditions of this Agreement shall immediately be deemed to have been amended without further action by the Company or the Holders, so that the Holders shall be entitled to the benefit of any such more favorable or less restrictive terms or conditions, as the case may be.
Section 10 General Provisions.
(a) Amendments and Waivers. Except as otherwise provided herein, the provisions of this Agreement may be amended, modified or waived only with the prior written consent of the Company and the Bain Investor (or, if the Bain Investor ceases to be a Holder, the Majority Holders). The failure or delay of any Person to enforce any of the provisions of this Agreement will in no way be construed as a waiver of such provisions and will not affect the right of such Person thereafter to enforce each and every provision of this Agreement in accordance with its terms. A waiver or consent to or of any breach or default by any Person in the performance by that Person of his, her or its obligations under this Agreement will not be deemed to be a consent or waiver to or of any other breach or default in the performance by that Person of the same or any other obligations of that Person under this Agreement.
(b) Remedies. The parties to this Agreement will be entitled to enforce their rights under this Agreement specifically (without posting a bond or other security), to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights existing in their favor. The parties hereto agree and acknowledge that a breach of this Agreement would cause irreparable harm and money damages would not be an adequate remedy for any such breach and that, in addition to any other rights and remedies existing hereunder, any party will be entitled to specific performance and/or other injunctive relief from any court of law or equity of competent jurisdiction (without posting any bond or other security) in order to enforce or prevent violation of the provisions of this Agreement.
(c) Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited, invalid, illegal or unenforceable in any respect under any applicable law or regulation in any jurisdiction, such prohibition, invalidity, illegality or unenforceability will not affect the validity, legality or enforceability of any other provision of this Agreement in such jurisdiction or in any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such prohibited, invalid, illegal or unenforceable provision had never been contained herein.
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(d) Entire Agreement. Except as otherwise provided herein, this Agreement contains the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties hereto, written or oral, which may have related to the subject matter hereof in any way.
(e) Successors and Assigns. Except as otherwise provided herein, this Agreement will bind and inure to the benefit and be enforceable by the Company and its successors and permitted assigns and the Holders and their respective successors and permitted assigns (whether so expressed or not).
(f) Notices. Any notice, demand or other communication to be given under or by reason of the provisions of this Agreement will be in writing and will be deemed to have been given (i) when delivered personally to the recipient, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; but if not, then on the next Business Day, (iii) one Business Day after it is sent to the recipient by reputable overnight courier service (charges prepaid) or (iv) three (3) Business Days after it is mailed to the recipient by first class mail, return receipt requested. Such notices, demands and other communications will be sent to the Company at the address specified on the signature page hereto or any Joinder and to any holder, or at such address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party. Any party may change such partys address for receipt of notice by giving prior written notice of the change to the sending party as provided herein. The Companys address is:
or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.
(g) Business Days. If any time period for giving notice or taking action hereunder expires on a day that is not a Business Day, the time period will automatically be extended to the Business Day immediately following such Saturday, Sunday or legal holiday.
(h) Governing Law. The corporate law of the State of New York will govern all issues and questions concerning the relative rights of the Company and its equityholders. All other issues and questions concerning the construction, validity, interpretation and enforcement of this Agreement and the exhibits and schedules hereto will be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York. In furtherance of the foregoing, the internal law of the State of New York will control the interpretation and construction of this Agreement (and all schedules and exhibits hereto), even though under that jurisdictions choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.
(i) MUTUAL WAIVER OF JURY TRIAL. AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL), EACH PARTY HERETO EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.
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(j) CONSENT TO JURISDICTION AND SERVICE OF PROCESS. EACH OF THE PARTIES IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW YORK, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY. EACH OF THE PARTIES HERETO FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO SUCH PARTYS RESPECTIVE ADDRESS SET FORTH ABOVE WILL BE EFFECTIVE SERVICE OF PROCESS FOR ANY ACTION, SUIT OR PROCEEDING WITH RESPECT TO ANY MATTERS TO WHICH IT HAS SUBMITTED TO JURISDICTION IN THIS PARAGRAPH. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW YORK, AND HEREBY AND THEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(k) No Recourse. Notwithstanding anything to the contrary in this Agreement, the Company and each Holder agrees and acknowledges that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement, will be had against any current or future director, officer, employee, general or limited partner or member of any Holder or any Affiliate or assignee thereof, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever will attach to, be imposed on or otherwise be incurred by any current or future officer, agent or employee of any Holder or any current or future member of any Holder or any current or future director, officer, employee, partner or member of any Holder or of any Affiliate or assignee thereof, as such for any obligation of any Holder under this Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.
(l) Descriptive Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. The use of the word including in this Agreement will be by way of example rather than by limitation.
(m) No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction will be applied against any party.
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(n) Counterparts. This Agreement may be executed in multiple counterparts, any one of which need not contain the signature of more than one party, but all such counterparts taken together will constitute one and the same agreement.
(o) Electronic Delivery. This Agreement, the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent executed and delivered by means of a photographic, photostatic, facsimile or similar reproduction of such signed writing using a facsimile machine or electronic mail will be treated in all manner and respects as an original agreement or instrument and will be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto will re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument will raise the use of a facsimile machine or electronic mail to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or electronic mail as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.
(p) Further Assurances. In connection with this Agreement and the transactions contemplated hereby, each Holder agrees to execute and deliver any additional documents and instruments and perform any additional acts that may be necessary or appropriate to effectuate and perform the provisions of this Agreement and the transactions contemplated hereby.
(q) Termination. The rights of any particular Holder to require the Company to register securities under Section 1 shall terminate with respect to such Holder when such Holder no longer holds any Registrable Securities.
(r) Dividends, Recapitalizations, Etc. If at any time or from time to time there is any change in the capital structure of the Company by way of a share split, share dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment will be made in the provisions hereof so that the rights and privileges granted hereby will continue.
(s) No Third-Party Beneficiaries. Other than as provided in Section 6, no term or provision of this Agreement is intended to be, or shall be, for the benefit of any Person not a party hereto, and no such other Person shall have any right or cause of action hereunder, except as otherwise expressly provided herein.
(t) Current Public Information. At all times after the Company has filed a registration statement with the SEC pursuant to the requirements of either the Securities Act or the Exchange Act, the Company will file all reports required to be filed by it under the Securities Act and the Exchange Act and will take such further action as any Holder may reasonably request, all to the extent required to enable such Holder to sell Registrable Securities, unless otherwise agreed by such Holder.
[Signature pages follow]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.
RISE EDUCATION CAYMAN LTD. | ||
By: | /s/ Alex Wu | |
Name: Alex Wu | ||
Title: Acting Chief Financial Officer |
BAIN CAPITAL RISE EDUCATION IV CAYMAN LIMITED | ||
By: | /s/ Lihong Wang | |
Name: Lihong Wang | ||
Title: Directors |
[Signature Page to Registration Rights Agreement]
EXHIBIT A
DEFINITIONS
EXHIBIT B
Exhibit 4.9
DADA AUTO INC.
2022 SHARE INCENTIVE PLAN
ARTICLE 1.
PURPOSE
The purpose of this DADA AUTO INC. Share Incentive Plan (the Plan) is to promote the success and enhance the value of DADA AUTO INC. (the Company) by linking the personal interests of the members of the Board, Employees, and Consultants to those of Company shareholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to Company shareholders. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees, and Consultants upon whose judgment, interest, and special effort the successful conduct of the Companys operation is largely dependent.
ARTICLE 2.
DEFINITIONS AND CONSTRUCTION
Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates.
2.1 Administrator shall mean the entity (in such capacity and, in the event of an entity that is not the Board, within its delegated authority) that conducts the general administration of the Plan as provided in Article 9. With reference to the duties of the Committee under the Plan which have been delegated to one or more persons pursuant to Section 9.2, or as to which the Board has assumed, the term Administrator shall refer to such person(s) unless the Committee or the Board has revoked such delegation or the Board has terminated the assumption of such duties.
2.2 Applicable Laws means (i) the laws of the Cayman Islands as they relate to the Company and its Shares; (ii) the legal requirements relating to the Plan and the Awards under applicable provisions of the corporate, securities, tax and other laws, rules, regulations and government orders of any jurisdiction applicable to Awards granted to residents; and, (iii) if applicable, the rules of any applicable securities exchange, national market system or automated quotation system on which the Shares are listed, quoted or traded.
2.3 Article means an article of this Plan.
1
2.4 Award shall mean an Option, a Restricted Share or a Restricted Share Unit award pursuant to the Plan or any other equity incentive award granted to a Holder by the Company pursuant to the authorizations of the Administrator under the Plan.
2.5 Award Agreement shall mean any written notice, agreement, terms and conditions, contract or other instrument or document evidencing an Award, including through electronic medium.
2.6 Board shall mean the Board of Directors of the Company.
2.7 Cause with respect to a Holder means (unless otherwise expressly provided in the applicable Award Agreement, or another applicable contract with the Holder that defines such term for purposes of determining the effect that a for cause termination has on the Holders Awards) a termination of employment or service based upon a finding by the Service Recipient, acting in good faith and based on its reasonable belief at the time, that the Holder:
(a) has been negligent in the discharge of his or her duties to the Service Recipient, has refused to perform stated or assigned duties or is incompetent in or (other than by reason of a disability or analogous condition) incapable of performing those duties;
(b) has been dishonest or committed or engaged in an act of theft, embezzlement or fraud, a breach of confidentiality, an unauthorized disclosure or use of inside information, customer lists, trade secrets or other confidential information;
(c) has breached a fiduciary duty, or willfully and materially violated any other duty, law, rule, regulation or policy of the Service Recipient; or has been convicted of, or plead guilty or nolo contendere to, a felony or misdemeanor (other than minor traffic violations or similar offenses);
(d) has materially breached any of the provisions of any agreement with or any policy of the Service Recipient;
(e) has engaged in unfair competition with, or otherwise acted intentionally in a manner injurious to the reputation, business or assets of, the Service Recipient; or
(f) has improperly induced a vendor or customer to break or terminate any contract with the Service Recipient or induced a principal for whom the Service Recipient acts as agent to terminate such agency relationship.
A termination for Cause shall be deemed to occur (subject to reinstatement upon a contrary final determination by the Administrator) on the date on which the Service Recipient first delivers written notice to the Holder of a finding of termination for Cause.
2.8 Code shall mean the United States Internal Revenue Code of 1986, as amended from time to time.
2.9 Committee shall have the meaning as set forth in Section 9.1.
2
2.10 Company shall mean DADA AUTO INC., a Cayman Islands corporation.
2.11 Consultant means any consultant or adviser if: (a) the consultant or adviser renders bona fide services to a Service Recipient; (b) the services rendered by the consultant or adviser are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Companys securities; and (c) the consultant or adviser is a natural person who has contracted directly with the Service Recipient to render such services.
2.12 Corporate Transaction means, except in connection with any initial public offering of Shares, any of the following transactions, provided, however, that the Committee shall determine under (f) and (g) whether multiple transactions are related, and its determination shall be final, binding and conclusive:
(a) an amalgamation, arrangement, consolidation or scheme of arrangement in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the jurisdiction in which the Company is incorporated or which following such transaction the holders of the Companys voting securities immediately prior to such transaction own fifty percent (50%) or more of the surviving entity;
(b) the direct or indirect acquisition by any person or related group of persons (other than an acquisition from or by the Company or by a Company-sponsored employee benefit plan or by a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Companys outstanding securities pursuant to a tender or exchange offer made directly to the Companys shareholders which a majority of the Incumbent Board (as defined below) who are not affiliates or associates of the offeror under Rule 12b-2 promulgated under the Exchange Act do not recommend such shareholders accept;
(c) the individuals who, as of the Effective Date, are members of the Board (the Incumbent Board), cease for any reason to constitute at least fifty percent (50%) of the Board; provided, that if the election, or nomination for election by the Companys shareholders, of any new member of the Board is approved by a vote of at least fifty percent (50%) of the Incumbent Board, such new member of the Board shall be considered as a member of the Incumbent Board.
(d) the sale, transfer or other disposition of all or substantially all of the assets of the Company (other than to a Parent, Subsidiary or Related Entity);
(e) the completion of a voluntary or insolvent liquidation or dissolution of the Company;
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(f) any reverse takeover or scheme of arrangement, or series of related transactions culminating in a reverse takeover or scheme of arrangement (including, but not limited to, a tender offer followed by a reverse takeover) in which the Company survives but (A) the Shares of the Company outstanding immediately prior to such transaction are converted or exchanged by virtue of the transaction into other property, whether in the form of securities, cash or otherwise, or (B) in which securities possessing more than fifty percent (50%) of the total combined voting power of the Companys outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such transaction culminating in such takeover or scheme of arrangement, but excluding any such transaction or series of related transactions that the Committee determines shall not be a Corporate Transaction; or
(g) acquisition in a single or series of related transactions by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Companys outstanding securities but excluding any such transaction or series of related transactions that the Committee determines shall not be a Corporate Transaction. Director shall mean a member of the Board, as constituted from time to time.
2.13 Effective Date shall have the meaning set forth in Section 11.1.
2.14 Eligible Individual shall have the meaning set forth in Section 4.1.
2.15 Employee means any person, including an officer or a Director, who is in the employment of a Service Recipient, subject to the control and direction of the Service Recipient as to both the work to be performed and the manner and method of performance. The payment of a directors fee by a Service Recipient shall not be sufficient to constitute employment by the Service Recipient.
2.16 Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
2.17 Fair Market Value means, as of any date, the value of Shares determined as follows:
(a) If the Shares are listed on one or more established and regulated securities exchanges, national market systems or automated quotation system on which Shares are listed, quoted or traded, its Fair Market Value shall be the closing sales price for such shares (or the closing bid, if no sales were reported) as quoted on the principal exchange or system on which the Shares are listed (as determined by the Administrator) on the date of determination (or, if no closing sales price or closing bid was reported on that date, as applicable, on the last trading date such closing sales price or closing bid was reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or
(b) In the absence of an established market for the Shares of the type described in (a), above, the Fair Market Value thereof shall be determined by the Administrator in good faith and in its discretion by reference to (i) the placing price of the latest private placement of the Shares and the development of the Companys business operations and the general economic and market conditions since such latest private placement, (ii) other third party transactions involving the Shares and the development of the Companys business operation and the general economic and market conditions since such sale, (iii) an independent valuation of the Shares, or (iv) such other methodologies or information as the Administrator determines to be indicative of Fair Market Value, relevant.
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2.18 Holder shall mean a person who has been granted an Award.
2.19 Incentive Option shall mean an Option that is intended to meet the applicable provisions of Section 422 of the Code.
2.20 Non-Employee Director shall mean a Director of the Company who is not an Employee.
2.21 Non-Qualified Option shall mean an Option that is not an Incentive Option.
2.22 Option shall mean a right to purchase of Shares at a specified exercise price, granted under Article 5. An Option shall be either a Non-Qualified Option or an Incentive Option; provided, however, that Incentive Options may only be granted to Employees.
2.23 Parent means any entity whether domestic or foreign, in an unbroken chain of entities ending with the Company, if each of the entities other than the Company beneficially owns, at the time of the determination, securities or interests representing more than fifty percent (50%) of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.
2.24 Plan shall mean this DADA AUTO INC. Share Incentive Plan, as it may be amended or restated from time to time.
2.25 Related Entity means any business, corporation, partnership, limited liability company or other entity in which the Company, a Parent or Subsidiary of the Company holds a substantial economic interest, directly or indirectly, through ownership or contractual arrangements but which is not a Subsidiary and which the Board designates as a Related Entity for purposes of the Plan.
2.26 Restricted Share shall mean Shares awarded under Article 6 that is subject to certain restrictions and may be subject to risk of forfeiture or repurchase.
2.27 Restricted Share Units shall mean the right to receive Shares awarded under Article 7.
2.28 Securities Act shall mean the Securities Act of 1933, as amended.
2.29 Service Recipient means the Company, any Parent or Subsidiary of the Company and any Related Entity to which an Eligible Individual provides services as an Employee, Consultant or as a Director.
2.30 Share means an ordinary share of the Company, and such other securities of the Company that may be substituted for Shares pursuant to Article 10.
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2.31 Subsidiary means any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing more than fifty percent (50%) of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.
2.32 Termination of Service shall mean,
(a) As to a Consultant, the time when the engagement of a Holder as a Consultant to a Service Recipient is terminated for any reason, with or without cause, including, without limitation, by resignation, discharge, death or retirement, but excluding terminations where the Consultant simultaneously commences or remains in employment or service with the Company, any Parent, any Subsidiary or any Related Entity.
(b) As to a Non-Employee Director, the time when a Holder who is a Non-Employee Director ceases to be a Director for any reason, including, without limitation, a termination by resignation, failure to be elected, death or retirement, but excluding terminations where the Holder simultaneously commences or remains in employment or service with the Company, any Parent, any Subsidiary or any Related Entity.
(c) As to an Employee, the time when the employee-employer relationship between a Holder and the Service Recipient is terminated for any reason, including, without limitation, a termination by resignation, discharge, death, disability or retirement; but excluding terminations where the Holder simultaneously commences or remains in employment or service with the Company, any Parent, any Subsidiary or any Related Entity.
The Administrator, in its sole discretion, shall determine the effect of all matters and questions relating to Terminations of Service, including, without limitation, the question of whether a Termination of Service resulted from a discharge for cause and all questions of whether particular leaves of absence constitute a Termination of Service; provided, however, that, with respect to Incentive Options, unless the Administrator otherwise provides in the terms of the Award Agreement or otherwise, a leave of absence, change in status from an employee to an independent contractor or other change in the employee-employer relationship shall constitute a Termination of Service only if, and to the extent that, such leave of absence, change in status or other change interrupts employment for the purposes of Section 422(a)(2) of the Code and the then applicable regulations and revenue rulings under said Section. For purposes of the Plan, subject to Sections 10.2 and 10.3, a Holders employee-employer relationship or consultancy relations shall be deemed to be terminated in the event that the Parent, Subsidiary or Related Entity employing or contracting with such Holder ceases to remain a Parent, Subsidiary or Related Entity following any merger, sale of securities or other corporate transaction or event (including, without limitation, a spin-off).
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ARTICLE 3.
SHARES SUBJECT TO THE PLAN
3.1 Number of Shares.
(a) Subject to Section 10.1 and Section 3.1(b) the aggregate number of shares of Share which may be issued or transferred pursuant to Awards under the Plan is (A) 6,818,182 Shares outstanding (on an as converted basis) or (B) such greater number of shares of Share as determined by the Committee and approved by the shareholders of the Company.
(b) To the extent that an Award terminates, expires, or lapses for any reason, or is settled in cash and not Shares, then any Shares subject to the Award shall again be available for the grant of an Award pursuant to the Plan. Shares delivered by the Holder or withheld by the Company upon the exercise of any Award under the Plan, in payment of the exercise price thereof or tax withholding thereon, may again be optioned, granted or awarded hereunder, subject to the limitations of Section 3.1(a). If any Shares forfeited by the Holder or repurchased by the Company, such Shares may again be optioned, granted or awarded hereunder, subject to the limitations of Section 3.1(a). Notwithstanding the provisions of this Section 3.1(b), no Shares may again be optioned, granted or awarded if such action would cause an Incentive Option to fail to qualify as an incentive stock option under Section 422 of the Code.
3.2 Share Distributed. Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares, treasury Shares (subject to Applicable Laws) or Shares purchased on the open market.
ARTICLE 4.
GRANTING OF AWARDS
4.1 Eligibility. Persons eligible to participate in this Plan may include Employees, Consultants, and Directors, the general scope of which shall be determined by the Committee (Eligible Individuals).
4.2 Participation. The Administrator may, from time to time, select from among all Eligible Individuals, those to whom an Award will be granted and shall determine the nature and amount of each Award, which shall not be inconsistent with the requirements of the Plan. No Eligible Individual shall have any right to be granted an Award pursuant to the Plan.
4.3 Award Agreement. Each Award shall be evidenced by an Award Agreement. Award Agreements evidencing Incentive Options shall contain such terms and conditions as may be necessary to meet the applicable provisions of Section 422 of the Code.
4.4 Jurisdictions. Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in the jurisdictions in which the Service Recipients are formed, operate or have Eligible Individuals, or in order to comply with the requirements of any securities exchange, the Administrator, in its sole discretion, shall have the power and authority to: (a) determine which Company, Parents, Subsidiaries and Related Entities shall be covered by the Plan; (b) determine which Eligible Individuals are eligible to participate in the Plan; (c) modify the terms and conditions of any Award granted to Eligible Individuals to comply with Applicable Laws; (d) establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable (any such subplans and/or modifications shall be attached to the Plan as appendices); provided, however, that no such subplans and/or modifications shall increase the share limitations contained in Sections 3.1; and (e) take any action, before or after an Award is made, that it deems advisable to obtain approval under or comply with any Applicable Laws including necessary local governmental regulatory exemptions or approvals or listing requirements of any such securities exchange. Notwithstanding the foregoing, the Administrator may not take any actions hereunder, and no Awards shall be granted, that would violate the any Applicable Laws.
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ARTICLE 5.
OPTIONS
5.1 General. The Administrator is authorized to grant Options to Eligible Individuals on the following terms and conditions:
(a) Exercise Price. The exercise price per Share subject to an Option shall be determined by the Administrator and set forth in the Award Agreement which may be a fixed or variable price related to the Fair Market Value of the Shares; provided, however, that no Option may be granted to an individual subject to taxation in the United States at less than the Fair Market Value on the date of grant, without compliance with Section 409A of the Code, or the Holders consent. The exercise price per Share subject to an Option may be amended or adjusted in the absolute discretion of the Administrator, the determination of which shall be final, binding and conclusive. For the avoidance of doubt, to the extent not prohibited by Applicable Laws (including any applicable exchange rule), a downward adjustment of the exercise prices of Options mentioned in the preceding sentence shall be effective without the approval of the Companys shareholders or the approval of the affected Holders and in no event shall the exercise price after the downward adjustment be lower than the par value of the relevant underlying shares.
(b) Vesting. The period during which the right to exercise, in whole or in part, an Option vests in the Holder shall be set by the Administrator and the Administrator may determine that an Option may not be exercised in whole or in part for a specified period after it is granted. Such vesting may be based on service with the Service Recipient or any other criteria selected by the Administrator. At any time after grant of an Option, the Administrator may, in its sole discretion and subject to whatever terms and conditions it selects, accelerate the period during which an Option vests. No portion of an Option which is unexercisable at a Holders Termination of Service shall thereafter become exercisable, except as may be otherwise provided by the Administrator either in the Award Agreement or by action of the Administrator following the grant of the Option.
(c) Time and Conditions of Exercise. The Administrator shall determine the time or times at which an Option may be exercised in whole or in part, including exercise prior to vesting and that a partial exercise must be with respect to a minimum number of shares. The Administrator shall also determine any conditions, if any, that must be satisfied before all or part of an Option may be exercised.
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(d) Partial Exercise. An exercisable Option may be exercised in whole or in part. However, an Option shall not be exercisable with respect to fractional shares and the Administrator may require that, by the terms of the Option, a partial exercise must be with respect to a minimum number of shares.
(e) Manner of Exercise. All or a portion of an exercisable Option shall be deemed exercised upon delivery of all of the following to the Secretary of the Company, or such other person or entity designated by the Administrator, or his, her or its office, as applicable:
(i) A written or electronic notice complying with the applicable rules established by the Administrator stating that the Option, or a portion thereof, is exercised. The notice shall be signed by the Holder or other person then entitled to exercise the Option or such portion of the Option;
(ii) Such representations and documents as the Administrator, in its sole discretion, deems necessary or advisable to effect compliance with all Applicable Laws. The Administrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect such compliance including, without limitation, placing legends on share certificates and issuing stop-transfer notices to agents and registrars;
(iii) In the event that the Option shall be exercised pursuant to Section 8.3 by any person or persons other than the Holder, appropriate proof of the right of such person or persons to exercise the Option, as determined in the sole discretion of the Administrator; and
(iv) Full payment of the exercise price and applicable withholding taxes to share administrator of the Company for the Shares with respect to which the Option, or portion thereof, is exercised, in a manner permitted by Section 8.1 and 8.2.
(f) Term. The term of any Option granted under the Plan shall not exceed ten years. Except as limited by the requirements of Section 409A or Section 422 of the Code and regulations and rulings thereunder, the Administrator may extend the term of any outstanding Option, and may extend the time period during which vested Options may be exercised, in connection with any Termination of Service of the Holder, and may amend any other term or condition of such Option relating to such a Termination of Service.
(g) Evidence of Grant. All Options shall be evidenced by an Award Agreement between the Company and the Holder. The Award Agreement shall include such additional provisions as may be specified by the Administrator.
(h) Effects of Termination of Employment or Service on Options. Termination of employment or service shall have the following effects on Options granted to the Holders unless otherwise provided in the Award Agreement:
(i) Dismissal for Cause. Unless otherwise provided in the Award Agreement, if a Holders employment by or service to the Service Recipient is terminated by the Service Recipient for Cause, the Holders Options will terminate upon such termination, whether or not the Option is then vested and/or exercisable;
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(ii) Death or Disability. Unless otherwise provided in the Award Agreement, if a Holders employment by or service to the Service Recipient terminates as a result of the Holders death or disability:
(A) the Holder (or his or her legal representative or beneficiary, in the case of the Holders disability or death, respectively), will have until the date that is 90 days after the Holders termination of employment or service to exercise the Holders Options (or portion thereof) to the extent that such Options were vested and exercisable on the date of the Holders termination of employment or service on account of death or disability;
(B) the Options, to the extent not vested and exercisable on the date of the Holders termination of employment or service, shall terminate upon the Holders termination of employment or service on account of death or disability; and
(C) the Options, to the extent exercisable for the 90-day period following the Holders termination of employment or service and not exercised during such period, shall terminate at the close of business on the last day of the 90-day period.
(iii) Other Terminations of Employment or Service. Unless otherwise provided in the Award Agreement, if a Holders employment by or service to the Service Recipient terminates for any reason other than a termination by the Service Recipient for Cause or because of the Holders death or disability:
(A) the Holder will have until the date that is 30 days after the Holders termination of employment or service to exercise his or her Options (or portion thereof) to the extent that such Options were vested and exercisable on the date of the Holders termination of employment or service;
(B) the Options, to the extent not vested and exercisable on the date of the Holders termination of employment or service, shall terminate upon the Holders termination of employment or service; and
(C) the Options, to the extent exercisable for the 30-day period following the Holders termination of employment or service and not exercised during such period, shall terminate at the close of business on the last day of the 30-day period.
5.2 Incentive Options. Incentive Options may be granted to Employees of the Company, a Parent or Subsidiary of the Company. Incentive Options may not be granted to Employees of a Related Entity or to Non-Employee Directors or Consultants. The terms of any Incentive Options granted pursuant to the Plan, in addition to the requirements of Section 5.1, must comply with the following additional provisions of this Section 5.2:
(a) Expiration of Option. No Award of an Incentive Option may be made pursuant to this Plan after the tenth anniversary of the Effective Date.
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(b) Individual Dollar Limitation. The aggregate Fair Market Value (determined as of the time the Option is granted) of all Shares with respect to which Incentive Options are first exercisable by a Holder in any calendar year may not exceed U.S. $100,000 or such other limitation as imposed by Section 422(d) of the Code, or any successor provision. To the extent that Incentive Options are first exercisable by a Holder in excess of such limitation, the excess shall be considered Non-Qualified Options.
(c) Ten Percent Owners. An Incentive Option shall be granted to any individual who, at the date of grant, owns Shares possessing more than ten percent of the total combined voting power of all classes of shares of the Company only if such Option is granted at a price that is not less than 110% of Fair Market Value on the date of grant and the Option is exercisable for no more than five years from the date of grant.
(d) Transfer Restriction. The Holder shall give the Company prompt notice of any disposition of Shares acquired by exercise of an Incentive Option within (i) two years from the date of grant of such Incentive Option or (ii) one year after the transfer of such Shares to the Holder, whichever period ends later.
(e) Expiration of Incentive Options. No Award of an Incentive Option may be made pursuant to this Plan after the tenth anniversary of the Effective Date.
(f) Right to Exercise. During a Holders lifetime, an Incentive Option may be exercised only by the Holder.
ARTICLE 6.
AWARD OF RESTRICTED STOCK
6.1 Grant of Restricted Shares. The Administrator, at any time and from time to time, may grant Restricted Shares to Eligible Individuals as the Administrator, in its sole discretion, shall determine. The Administrator, in its sole discretion, shall determine the number of Restricted Shares to be granted to each Holder.
6.2 Restricted Shares Award Agreement. Each Award of Restricted Shares shall be evidenced by an Award Agreement that shall specify the period of restriction, the number of Restricted Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, shall determine. Unless the Administrator determines otherwise, Restricted Shares shall be held by the Company as escrow agent until the restrictions on such Restricted Shares have lapsed.
6.3 Restrictions. All Restricted Shares (including any shares received by Holders thereof with respect to Restricted Shares as a result of share dividends, share splits or any other form of recapitalization) shall, in the terms of each individual Award Agreement, be subject to such restrictions and vesting requirements as the Administrator shall provide. Such restrictions may include, without limitation, restrictions concerning voting rights and transferability and such restrictions may lapse separately or in combination at such times and pursuant to such circumstances or based on such criteria as selected by the Administrator, including, without limitation, criteria based on the Holders duration of employment, directorship or consultancy with the Service Recipient, or other criteria selected by the Administrator. By action taken after the Restricted Shares are issued, the Administrator may, on such terms and conditions as it may determine to be appropriate, accelerate the vesting of such Restricted Shares by removing any or all of the restrictions imposed by the terms of the Award Agreement. Unless otherwise provided in the applicable Award Agreement, Restricted Shares may not be sold, transferred or encumbered until all applicable restrictions are terminated or expire.
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6.4 Certificates for Restricted Share. Restricted Shares granted pursuant to the Plan may be evidenced in such manner as the Administrator shall determine. Certificates or book entries evidencing Restricted Shares must include an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Share, and the Company may, in it sole discretion, retain physical possession of any share certificate until such time as all applicable restrictions lapse.
ARTICLE 7.
RESTRICTED SHARE UNITS
7.1 Grant of Restricted Share Units. The Administrator, at any time and from time to time, may grant Restricted Share Units to Eligible Individuals as the Administrator, in its sole discretion, shall determine. The Administrator, in its sole discretion, shall determine the number of Restricted Share Units to be granted to each Holder.
7.2 Restricted Share Units Award Agreement. Each Award of Restricted Share Units shall be evidenced by an Award Agreement that shall specify any vesting conditions, the number of Restricted Share Units granted, and such other terms and conditions as the Administrator, in its sole discretion, shall determine.
7.3 Form and Timing of Payment of Restricted Share Units. At the time of grant, the Administrator shall specify the date or dates on which the Restricted Share Units shall become fully vested and nonforfeitable. Upon vesting, the Administrator, in its sole discretion, may pay Restricted Share Units in the form of cash, Shares or a combination thereof.
ARTICLE 8.
ADDITIONAL TERMS OF AWARDS
8.1 Payment. The Administrator shall determine the methods by which payments by any Holder with respect to any Awards granted under the Plan shall be made, including, without limitation: (a) cash or check, (b) Shares (including, in the case of payment of the exercise price of an Award, Shares issuable pursuant to the exercise of the Award) or Shares held for such period of time as may be required by the Administrator in order to avoid adverse accounting consequences under the applicable accounting standards, in each case, having a Fair Market Value on the date of delivery equal to the aggregate payments required, (c) following the trading date, delivery of a notice that the Holder has placed a market sell order with a broker with respect to Shares then issuable upon exercise or vesting of an Award, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate payments required, provided, that payment of such proceeds is then made to the Company upon settlement of such sale, or (d) other form of legal consideration acceptable to the Administrator. The Administrator shall also determine the methods by which Shares shall be delivered or deemed to be delivered to Holders. Notwithstanding any other provision of the Plan to the contrary, no Holder shall be permitted to make payment with respect to any Awards granted under the Plan to the extent prohibited by Applicable Laws.
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8.2 Tax Withholding. Unless otherwise approved by the Administrator, no Shares shall be delivered under the Plan to any Holder until such Holder has made arrangements acceptable to the Administrator for the satisfaction of any income, employment, social welfare or other tax withholding obligations under Applicable Laws. Each Service Recipient shall have the authority and the right to deduct or withhold, or require a Holder to remit to the applicable Service Recipient, an amount sufficient to satisfy federal, state, local and foreign taxes (including the Holders employment, social welfare or other tax obligations) required by Applicable Laws to be withheld with respect to any taxable event concerning a Holder arising as a result of the Plan. The Administrator may in its sole discretion and in satisfaction of the foregoing requirement allow a Holder to elect to have the Company withhold Shares otherwise issuable under an Award (or allow the surrender of Shares). The number of Shares which may be so withheld or surrendered shall, unless otherwise approved by the Administrator, be limited to the number of Shares which have a Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for tax purposes that are applicable to such taxable income.
8.3 Transferability of Awards.
(a) Except as otherwise provided in Section 8.3(b):
(i) No Award under the Plan may be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Administrator, as required under applicable domestic relations laws, unless and until such Award has been exercised, or the shares underlying such Award have been issued, and all restrictions applicable to such shares have lapsed;
(ii) No Award or interest or right therein shall be liable for the debts, contracts or engagements of the Holder or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence; and
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(iii) During the lifetime of the Holder, only the Holder (or in the case of disability of the Holder, its representative pursuant to Applicable Laws) may exercise an Award (or any portion thereof) granted to him under the Plan, unless it has been disposed of pursuant to applicable domestic relations law; after the death of the Holder, any exercisable portion of an Award may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Award Agreement, be exercised by his personal representative or by any person empowered to do so under the deceased Holders will or under the then Applicable Laws of descent and distribution.
(b) Notwithstanding Section 8.3(a), the Administrator, in its sole discretion, may determine to permit a Holder to transfer an Award other than an Incentive Option to certain persons or entities related to the Holder, including but not limited to members of the Holders family, charitable institutions, or trusts or other entities whose beneficiaries or beneficial owners are members of the Holders family and/or charitable institutions, pursuant to such conditions and procedures as the Administrator may establish, including the following conditions: (i) an Award transferred shall not be assignable or transferable other than by will or the laws of descent and distribution; (ii) an Award transferred shall continue to be subject to all the terms and conditions of the Award as applicable to the original Holder (other than the ability to further transfer the Award); and (iii) the Holder and the permitted transferee shall execute any and all documents requested by the Administrator, including, without limitation documents to (A) confirm the status of the transferee as a permitted transferee, (B) satisfy any requirements for an exemption for the transfer under Applicable Laws and (C) evidence the transfer.
8.4 Conditions to Issuance of Shares.
(a) Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates or make any book entries evidencing Shares pursuant to the exercise of any Award, unless and until the Administrator has determined, with advice of counsel, that the issuance of such Shares is in compliance with all Applicable Laws and the Shares are covered by an effective registration statement or applicable exemption from registration. In addition to the terms and conditions provided herein, the Administrator may require that a Holder make such reasonable covenants, agreements, and representations as the Administrator, in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements.
(b) All Share certificates delivered pursuant to the Plan and all Shares issued pursuant to book entry procedures are subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with all Applicable Laws. The Administrator may place legends on any Shares certificate or book entry to reference restrictions applicable to the Shares.
(c) The Administrator shall have the right to require any Holder to comply with any timing or other restrictions with respect to the settlement, distribution or exercise of any Award, including a window-period limitation, as may be imposed in the sole discretion of the Administrator.
(d) No fractional Shares shall be issued and the Administrator shall determine, in its sole discretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shall be eliminated by rounding down.
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(e) Notwithstanding any other provision of the Plan, unless otherwise determined by the Administrator or required by any Applicable Laws, the Company shall not deliver to any Holder certificates evidencing Shares issued in connection with any Award and instead such Shares shall be recorded in the books of the Company (or, as applicable, the Administrator or the transfer agent of the Company).
8.5 Forfeiture Provisions. Pursuant to its general authority to determine the terms and conditions applicable to Awards under the Plan, the Administrator shall have the right to provide, in the terms of Awards made under the Plan, or to require a Holder to agree by separate written instrument, that the Awards are subject to certain forfeiture/repurchase restrictions as determined by the Administrator.
8.6 Applicable Currency. Unless otherwise required by Applicable Laws, or as determined in the discretion of the Administrator, all Awards shall be designated in U.S. dollars. A Holder may be required to provide evidence that any currency used to pay the exercise price of any Award were acquired and taken out of the jurisdiction in which the Holder resides in accordance with Applicable Laws, including foreign exchange control laws and regulations. In the event the exercise price for an Award is paid in another foreign currency, as permitted by the Administrator, the amount payable will be determined by conversion from U.S. dollars at the exchange rate as selected by the Administrator on the date of exercise.
ARTICLE 9.
ADMINISTRATION
9.1 Administration. This Plan shall be administered by and all Awards under this Plan shall be authorized by the Board or one or more committees consisting of Directors appointed by the Board (the Committee) or another committee (within its delegated authority pursuant to Section 9.2 below) that has the authority to administer all or certain aspects of this Plan pursuant to Section 9.2 below. Reference to the Committee shall refer to the Board in absence of the Committee. Notwithstanding the foregoing, the full Board, acting by majority of its members in office, shall conduct the general administration of the Plan if required by Applicable Laws.
9.2 Delegation of Authority. To the extent permitted by Applicable Laws, the Board or Committee may from time to time delegate to a committee of one or more officers of the Company the authority to grant or amend Awards or to take other administrative actions; provided, however, that in no event shall an officer be delegated the authority to grant awards to, or amend awards held by the officers of the Company (or Directors) to whom authority to grant or amend Awards has been delegated hereunder. Any delegation hereunder shall be subject to the restrictions and limits that the Board or Committee specifies at the time of such delegation, and the Board may at any time rescind the authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 9.2 shall serve in such capacity at the pleasure of the Board and the Committee.
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9.3 Duties and Powers of Administrator. It shall be the duty of the Administrator to conduct the general administration of the Plan in accordance with its provisions. The Administrator shall have the power to interpret the Plan and the Award Agreement, and to adopt such rules for the administration, interpretation and application of the Plan as are not inconsistent therewith, to interpret, amend or revoke any such rules and to amend any Award Agreement provided that the rights or obligations of the Holder of the Award that is the subject of any such Award Agreement are not affected adversely by such amendment, unless the consent of such Holder is obtained or such amendment is otherwise permitted under this Plan. Any such grant or award under the Plan need not be the same with respect to each Holder. Any such interpretations and rules with respect to Incentive Options shall be consistent with the provisions of Section 422 of the Code. In its sole discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan.
9.4 Authority of Administrator. Subject to any specific designation in the Plan, the Administrator has the exclusive power, authority and sole discretion to:
(a) Designate Eligible Individuals to receive Awards;
(b) Determine the type or types of Awards to be granted to each Eligible Individual;
(c) Determine the number of Awards to be granted and the number of shares of Shares to which an Award will relate;
(d) Determine the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, or purchase price, any reload provision, any restrictions or limitations on the Award, any schedule for vesting, lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, and any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Administrator in its sole discretion determines;
(e) Determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;
(f) Prescribe the form of each Award Agreement, which need not be identical for each Holder;
(g) Decide all other matters that must be determined in connection with an Award;
(h) Establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan;
(i) Interpret the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; and
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(j) Make all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary or advisable to administer the Plan.
9.5 Decisions Binding. The Administrators interpretation of the Plan, any Awards granted pursuant to the Plan, any Award Agreement and all decisions and determinations by the Administrator with respect to the Plan are final, binding, and conclusive on all parties.
ARTICLE 10.
CHANGES IN CAPITAL STRUCTURE
10.1 Adjustments. In the event of any distribution, share split, combination or exchange of Shares, amalgamation, arrangement or consolidation, reorganization of the Company, including the Company becoming a subsidiary in a transaction not involving a Corporate Transaction, spin-off, recapitalization or other distribution (other than normal cash dividends) of Company assets to its shareholders, or any other change affecting the Shares or the share price of a Share, the Administrator shall make such proportionate and equitable adjustments, if any, to reflect such change with respect to (a) the aggregate number and type of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3.1 and substitutions of shares in a parent or surviving company); (b) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); and (c) the grant or exercise price per share for any outstanding Awards under the Plan. The form and manner of any such adjustments shall be determined by the Administrator in its sole discretion.
10.2 Corporate Transactions. Except as may otherwise be provided in any Award Agreement or any other written agreement entered into by and between the Company and a Holder, if a Corporate Transaction occurs and a Holders Awards are not converted, assumed, or replaced by a successor as provided in Section 10.3, such Awards shall become fully exercisable and all forfeiture restrictions on such Awards shall lapse. Upon, or in anticipation of, a Corporate Transaction, the Administrator may in its sole discretion provide for (a) any and all Awards outstanding hereunder to terminate at a specific time in the future and shall give each Holder the right to exercise such Awards during a period of time as the Administrator shall determine, (b) either the purchase of any Award for an amount of cash equal to the amount that could have been attained upon the exercise of such Award or realization of the Holders rights had such Award been currently exercisable or payable or fully vested (and, for the avoidance of doubt, if as of such date the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Holders rights, then such Award may be terminated by the Company without payment), or (c) the replacement of such Award with other rights or property selected by the Administrator in its sole discretion or the assumption of or substitution of such Award by the successor or surviving corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of Shares and prices.
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10.3 Assumption of Awards Corporate Transactions. In the event of a Corporate Transaction, each Award may be assumed by the successor entity or Parent thereof in connection with the Corporate Transaction. Except as provided otherwise in an individual Award Agreement, an Award will be considered assumed if the Award either is (a) assumed by the successor entity or Parent thereof or replaced with a comparable award (as determined by the Administrator) with respect to capital shares (or equivalent) of the successor entity or Parent thereof or (b) replaced with a cash incentive program of the successor entity which preserves the compensation element of such Award existing at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same vesting schedule applicable to such Award. If an Award is assumed in a Corporate Transaction, then such Award, the replacement award or the cash incentive program automatically shall become fully vested, exercisable and payable and be released from any restrictions on transfer (other than transfer restrictions applicable to Options) and repurchase or forfeiture rights, immediately upon termination of the Holders employment or service with all Service Recipients within twelve (12) months of the Corporate Transaction without Cause.
10.4 Outstanding Awards Other Changes. In the event of any other change in the capitalization of the Company or corporate change other than those specifically referred to in this Article 10, the Administrator may, in its absolute discretion, make such adjustments in the number and class of shares subject to Awards outstanding on the date on which such change occurs and in the per share grant or exercise price of each Award as the Administrator may consider appropriate to prevent dilution or enlargement of rights.
10.5 No Other Rights. Except as expressly provided in the Plan, no Holder shall have any rights by reason of any subdivision or consolidation of shares of any class, the payment of any dividend, any increase or decrease in the number of shares of any class or any dissolution, liquidation, merger, or consolidation of the Company or any other corporation. Except as expressly provided in the Plan or pursuant to action of the Administrator under the Plan, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of shares subject to an Award or the grant or exercise price of any Award.
ARTICLE 11.
MISCELLANEOUS PROVISIONS
11.1 Effective Date. The Plan will be effective as of the date it is approved by the Board (the Effective Date).
11.2 Expiration Date. The Plan will expire on, and no Award may be granted pursuant to the Plan after, the tenth anniversary of the Effective Date. Any Awards that are outstanding on the tenth anniversary of the Effective Date shall remain in force according to the terms of the Plan and the applicable Award Agreement.
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11.3 Amendment, Suspension or Termination of the Plan. Except as otherwise provided in this Section 11.3, at any time and from time to time, the Committee may terminate, amend or modify the Plan; provided, however, that (a) to the extent necessary and desirable to comply with Applicable Laws the Company shall obtain shareholder approval of any Plan amendment in such a manner and to such a degree as required, and (b) shareholder approval is required for any amendment to the Plan that (i) increases the number of Shares available under the Plan (other than any adjustment as provided by Article 10), (ii) permits the Administrator to extend the term of the Plan or the exercise period for an Option beyond ten years from the date of grant, or (iii) results in a material increase in benefits.
11.4 No Shareholders Rights. Except as otherwise provided herein, a Holder shall have none of the rights of a shareholder with respect to Shares covered by any Award until the Holder becomes the record owner of such Shares.
11.5 Paperless Administration. In the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Holder may be permitted through the use of such an automated system.
11.6 Effect of Plan upon Other Compensation Plans. The adoption of the Plan shall not affect any other compensation or incentive plans in effect for a Service Recipient. Nothing in the Plan shall be construed to limit the right of a Service Recipient: (a) to establish any other forms of incentives or compensation for Eligible Individuals or other persons, or (b) to grant or assume options or other rights or awards otherwise than under the Plan in connection with any proper corporate purpose including without limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, securities or assets of any corporation, partnership, limited liability company, firm or association.
11.7 Compliance with Laws. The Plan, the granting and vesting of Awards under the Plan and the issuance and delivery of Shares and the payment of money under the Plan or under Awards granted or awarded hereunder are subject to compliance with all Applicable Laws (including but not limited to securities law and margin requirements), and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Any securities delivered under the Plan shall be subject to such restrictions, and the person acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure compliance with all applicable legal requirements. To the extent permitted by Applicable Laws, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such Applicable Laws.
11.8 Titles and Headings, References to Sections of the Code or Exchange Act. The titles and headings of the Sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. References to sections of the Code or the Exchange Act shall include any amendment or successor thereto.
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11.9 Governing Law. The Plan and any agreements hereunder shall be administered, interpreted and enforced under the internal laws of the Cayman Islands without regard to conflicts of laws thereof.
11.10 Section 409A. To the extent that the Administrator determines that any Award granted under the Plan is subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code. To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date the Administrator determines that any Award may be subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the Effective Date), the Administrator may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance and thereby avoid the application of any penalty taxes under such Section.
11.11 No Rights to Awards. No Eligible Individual or other person shall have any claim to be granted any Award pursuant to the Plan, and neither the Company nor the Administrator is obligated to treat Eligible Individuals, Holders or any other persons uniformly.
11.12 No Right to Employment or Services. Nothing in the Plan or any Award Agreement shall interfere with or limit in any way the right of the Service Recipient to terminate any Holders employment or services at any time, nor confer upon any Holder any right to continue in the employment or service of any Service Recipient.
11.13 Unfunded Status of Awards. The Plan is intended to be an unfunded plan for incentive compensation. With respect to any payments not yet made to a Holder pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Holder any rights that are greater than those of a general creditor of the Company, any Subsidiary or any Related Entity.
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11.14 Indemnification. To the extent allowable pursuant to Applicable Laws, each member of the Committee or of the Board and each Administrator shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Companys Amended and Restated Memorandum of Association and Articles of Association, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
11.15 Relationship to other Benefits. No payment pursuant to the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of any Service Recipient except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.
11.16 Expenses. The expenses of administering the Plan shall be borne by the Service Recipients.
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Exhibit 4.10
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this Agreement) dated as of , by and between NaaS Technology Inc., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the Company), and (the Indemnitee).
RECITALS
A. The Company (f/k/a RISE Education Cayman Ltd), Dada Auto Inc., an exempted company incorporated with limited liability under the laws of the Cayman Islands (Dada), Dada Merger Sub Limited, an exempted company incorporated with limited liability under the laws of the Cayman Islands (Merger Sub) and Dada Merger Sub II Limited, an exempted company incorporated with limited liability under the laws of the Cayman Islands (Merger Sub II) are parties to an agreement and plan of merger, dated as of February 8, 2022 (as may be amended, supplemented or otherwise modified from time to time in accordance with its terms, the Merger Agreement), which provides, among other things, for the merger of Merger Sub with and into Dada, with Dada continuing as the surviving corporation (the Merger) and for the merger of the surviving corporation from the Merger with and into Merger Sub II, with Merger Sub II continuing as the surviving corporation and a wholly-owned subsidiary of the Company (the Second Merger, together with the Merger, the Mergers), upon the terms and subject to the conditions set forth in the Merger Agreement.
B. At the Closing (as defined in the Merger Agreement), the board of directors of the Company (the Company Board) intends to appoint certain individuals to serve on the Company Board and certain directors serving on the Company Board immediately prior to the Closing intend to resign from their positions on the Company Board.
C. Pursuant to Section 8.03 of the Merger Agreement, the Company wishes to provide indemnification and expense advances to each such resigning director and each new director appointed to serve on the Company Board after the Closing.
D. In view of the considerations set forth above, the Company desires that the Indemnitee be indemnified by the Company as set forth herein.
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and the Indemnitee hereby agree as follows:
1. Indemnification.
(a) Indemnification. Subject to Section 8 below, the Company shall indemnify and hold harmless the Indemnitee to the fullest extent permitted by law if the Indemnitee was or is or becomes a party to or witness of or other participant in, or is threatened to be made a party to or witness of, any threatened, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, or any hearing, inquiry or investigation that the Indemnitee reasonably believes might lead to the institution of any such action, suit, proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, investigative or other (including any appeal therefrom, and any direct or derivative action by or in the right of the Company) (hereinafter, a Claim) (i) by reason of the fact that the Indemnitee is or was a director or officer of the Company or any subsidiary of the Company, or is or was serving at the request of the Company as a director or an officer of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, or by reason of any action or inaction on the part of the Indemnitee while serving in such capacity, or (ii) as a direct or indirect result of any Claim (A) made by any shareholder of the Company or any subsidiary of the Company against the Indemnitee, or (B) made by a third party (including any Governmental Authorities) against the Indemnitee based on any misstatement or omission of a material fact by the Company (regardless of whether such misstatement or omission of a material fact was made after the Closing, or prior to the Closing by the Company in connection with the Mergers, Dada or the business of Dada or any subsidiary of Dada) in violation of any duty of disclosure imposed on the Company or any subsidiary of the Company by any federal or state securities or common laws (each event as set forth in clauses (i) or (ii), an Indemnification Event) against any and all Expenses (as defined in Section 10(c) hereof), judgment, fines, penalties and amounts paid in settlement reasonably incurred by the Indemnitee in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness of, or responding to, or objecting to, a request to provide discovery in, or participating in (including on appeal) such Claim.
(b) Contribution. If the indemnification provided for in Section 1(a) for any reason other than the statutory limitations of applicable law or as provided in Section 8, is held by a final decision by a court of competent jurisdiction or an arbitral tribunal to be unavailable to the Indemnitee in respect of any losses, claims, damages, expenses or liabilities in which the Company is jointly liable with the Indemnitee, as the case may be (or would be jointly liable if joined), then the Company, in lieu of indemnifying the Indemnitee thereunder, shall contribute to the amount actually and reasonably incurred and paid or payable by the Indemnitee as a result of such losses, claims, damages, expenses or liabilities in such proportion as is appropriate to reflect (i) the relative benefits received by the Company and the Indemnitee, and (ii) the relative fault of the Company and the Indemnitee in connection with the action or inaction that resulted in such losses, claims, damages, expenses or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company and the Indemnitee shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Indemnitee and the parties relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances resulting in such losses, claims, damages, expenses or liabilities.
The Company and the Indemnitee agree that it would not be just and equitable if contribution pursuant to this Section 1(b) were determined by pro rata or per capita allocation or by any other method of allocation which does not take into account the equitable considerations referred to in the immediately preceding paragraph. No person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act of 1933, as amended) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation.
(c) Survival Regardless of Investigation. The indemnification and contribution provided for in this Section 1 will remain in full force and effect regardless of any investigation made by or on behalf of the Indemnitee.
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2. Expenses; Indemnification Procedure.
(a) Advancement of Expenses. Except as prohibited by applicable law, the Company shall advance all Expenses incurred by the Indemnitee in connection with any Indemnification Event (including all Expenses incurred by the Indemnitee in connection with the investigation, defense, settlement or appeal of any Claim relating to such Indemnification Event). Subject to Section 8, the Indemnitee hereby undertakes to promptly repay such amounts advanced only if, and to the extent that, a final decision by a court of competent jurisdiction or an arbitral tribunal shall determine that the Indemnitee is not entitled to be indemnified by the Company under the provisions of this Agreement, the memorandum and articles of association of the Company, or applicable law. The advances to be made hereunder shall be paid by the Company to the Indemnitee as soon as practicable but in any event no later than fifteen (15) days after written demand by the Indemnitee therefor to the Company.
(b) Notice by Indemnitee. The Indemnitee shall give the Company notice in writing promptly after receipt of notice of commencement of any Claim or the threat of the commencement of any Claim, made against the Indemnitee for which indemnification will or could be sought under this Agreement. Notice to the Company shall be delivered in accordance with Section 14 hereof. The failure of the Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.
(c) No Presumptions; Burden of Proof. For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that the Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law.
(d) Notice to Insurers. If, at the time of the receipt by the Company of a notice of a Claim pursuant to Section 2(b), the Company has liability insurance in effect which may cover such Claim, the Company shall give prompt written notice of the commencement of such Claim to the insurers in accordance with the procedures set forth in any applicable policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee in connection with the Claim, all amounts payable as a result of such Claim in accordance with the terms of such policies, provided, however, that nothing contained in this Section 2(d) shall excuse the Company from its obligations to pay or advance any Expenses to the Indemnitee as provided herein.
(e) Application for Enforcement. In the event the Company fails to make timely payments as set forth in this Agreement, the Indemnitee shall have the right to apply to any court of competent jurisdiction or an arbitral tribunal for the purpose of specifically enforcing the Indemnitees right to indemnification or advancement of expenses pursuant to this Agreement.
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(f) Selection of Counsel. In the event the Company shall be obligated hereunder to pay the Expenses of any Claim, the Company shall be entitled to assume the defense of such Claim, with counsel reasonably approved by the Indemnitee, upon the delivery to the Indemnitee of written notice of its election to do so. After delivery of such notice, approval of such counsel by the Indemnitee and the retention of such counsel by the Company, the Company will not be liable to the Indemnitee under this Agreement for any fees of counsel subsequently incurred by the Indemnitee with respect to the same Claim; provided that, (i) the Indemnitee shall have the right to employ the Indemnitees counsel in any such Claim at the Indemnitees expense; (ii) the Indemnitee shall have the right to employ its own counsel in connection with any such proceeding, at the expense of the Company, if such counsel serves in a review, observer, advice and counseling capacity and does not otherwise materially control or participate in the defense of such proceeding; and (iii) if (A) the employment of counsel by the Indemnitee has been previously authorized by the Company, (B) the Indemnitee shall have reasonably concluded that there is a conflict of interest between the Company and the Indemnitee in the conduct of any such defense, or (C) the Company shall not in fact continue to retain such counsel to defend such Claim, then the fees and expenses of the Indemnitees counsel shall be at the expense of the Company. The Company shall conduct the defense of such Claim in good faith and in consultation with the Indemnitee and legal counsel, and the Company shall not settle any claim against the Indemnitee without the express written consent of the Indemnitee which shall not be unreasonably withheld.
3. Additional Indemnification Rights; Non-exclusivity.
(a) Scope. The Company hereby agrees to indemnify the Indemnitee to the fullest extent permitted by law (except as provided in Section 8) with respect to Claims for Indemnification Events, even if such indemnification is not specifically authorized by the other provisions of this Agreement, any other agreement or by statute. In the event of any change after the date of this Agreement in any applicable law, statute or rule which expands the right of a Cayman Islands company to indemnify a member of its Board of Directors or an officer, it is the intent of the parties hereto that the Indemnitee shall enjoy by this Agreement the greater benefits afforded by such change. In the event of any change in any applicable law, statute or rule which narrows the right of a Cayman Islands company to indemnify a member of its Board of Directors or an officer, such change, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties rights and obligations hereunder except as set forth in Section 8.
(b) Non-exclusivity. Notwithstanding anything in this Agreement, the right to indemnification provided by this Agreement shall be in addition to any rights to which the Indemnitee may be entitled under any applicable law (including the laws of the Cayman Islands), any agreement, any vote of shareholders or disinterested directors, or otherwise. Notwithstanding anything in this Agreement, the indemnification provided under this Agreement shall continue as to the Indemnitee for any action the Indemnitee took or did not take while serving in an indemnified capacity even though the Indemnitee may have ceased to serve in such capacity and such indemnification shall inure to the benefit of the Indemnitee from and after the Indemnitees first day of service as a director or an officer of the Company or affiliation with a director or an officer from and after the date the Indemnitee commences services as the Indemnitee a director or an officer of the Company.
4. No Duplication of Payments. Notwithstanding anything to the contrary in this Agreement, the Company shall not be liable under this Agreement to make any payment in connection with any Claim made against the Indemnitee to the extent the Indemnitee has otherwise actually received payment under any directors and officers liability insurance policy maintained by the Company of the amounts otherwise indemnifiable hereunder.
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5. Partial Indemnification. If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for any portion of Expenses incurred in connection with any Claim, but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify the Indemnitee for the portion of such Expenses to which the Indemnitee is entitled.
6. Mutual Acknowledgement. The Company and the Indemnitee acknowledge that in certain instances, applicable law or public policy may prohibit the Company from indemnifying its directors, officers, employees, controlling persons, agents or fiduciaries under this Agreement or otherwise.
7. Liability Insurance. To the extent the Company maintains liability insurance applicable to its directors or officers, the Company shall use commercially reasonable efforts to provide that the Indemnitee shall be covered by such policies in such a manner as to provide the Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Companys directors and officers.
8. Exceptions. Any other provision herein to the contrary notwithstanding but without prejudice to the Companys obligations under Section 2, the Company shall not be obligated pursuant to the terms of this Agreement:
(a) Claims under Section 16(b). to indemnify the Indemnitee for expenses and the payment of profits or an accounting thereof arising from the purchase and sale by the Indemnitee of securities in violation the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act), or any similar provisions of any international, federal, state or local statutory law;
(b) Unauthorized Settlements. to indemnify the Indemnitee hereunder for any amounts paid in settlement of a proceeding unless the Company consents in advance in writing to such settlement, which consent shall not be unreasonably withheld;
(c) Unlawful Indemnification. to indemnify the Indemnitee if a final decision by a court of competent jurisdiction or an arbitral tribunal shall determine that such indemnification is not lawful under applicable law; in this respect, the Company and the Indemnitee have been advised that the Securities and Exchange Commission takes the position that indemnification for liabilities arising under the federal securities laws is against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to appropriate courts for adjudication;
(d) Fraud. to indemnify the Indemnitee if a final decision by a court of competent jurisdiction in the matter or an arbitral tribunal shall determine that the Indemnitee has committed fraud on the Company; or
(e) Company Contracts. subject to Section 13, to indemnify the Indemnitee with respect to any Claim related to any dispute or breach arising under any contract or similar obligation between the Company and the Indemnitee.
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9. Period of Limitations. No legal action shall be brought and no cause of action shall be asserted by or in the right of the Company against the Indemnitee, the Indemnitees estate, spouse, heirs, executors or personal or legal representatives after the expiration of five (5) years from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such five (5)-year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, such shorter period shall govern.
10. Construction of Certain Phrases and Interpretation.
(a) For purposes of this Agreement, references to the Company shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors and officers, so that if the Indemnitee is or was or may be deemed a director or officer of such constituent corporation, or is or was or may be deemed to be serving at the request of such constituent corporation as a director or officer of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, the Indemnitee shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as the Indemnitee would have with respect to such constituent corporation if its separate existence had continued. For the avoidance of doubt, the Company as used in this Agreement shall include the Companys predecessor, RISE Education Cayman Ltd. and the subsidiaries of the Company as used in this Agreement shall include the subsidiaries of the Companys predecessor, RISE Education Cayman Ltd.
(b) For purposes of this Agreement, references to other enterprises shall include employee benefit plans; references to fines shall include any excise taxes assessed on the Director with respect to an employee benefit plan; and references to serving at the request of the Company shall include any service as a director or officer of the Company which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or its beneficiaries.
(c) For the purpose of this Agreement, Expenses shall include all reasonable attorneys fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Claim, or responding to, or objecting to, a request to provide discovery in any Claim. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Claim and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by the Indemnitee without the Companys prior written consent or the amount of judgments or fines against the Indemnitee.
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(d) For the purpose of this Agreement, Governmental Authority means any nation or government, any state, province or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any court, arbitrator or arbitral panel (public or private) or other body or administrative, regulatory or quasi-judicial authority, self-regulated organization, stock exchange, or quasi-governmental authority, or any agency, department, board, commission or instrumentality of any federal, state, local or foreign jurisdiction.
(e) Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply: (i) any reference in this Agreement to a Section shall mean a Section of this Agreement; (ii) any reference in this Agreement to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa; (iii) the word including or any variation thereof means (unless the context of its usage otherwise requires) including, without limitation and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it; (iv) words such as herein, hereinafter, hereof and hereunder refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires; and (v) the word extent in the phrase to the extent means the degree to which a subject or other thing extends and such phrase shall not mean simply if.
11. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute an original, and all of which together shall constitute one and the same agreement.
12. Binding Effect; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company, spouses, heirs, and personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance reasonably satisfactory to the Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall continue in effect with respect to Claims relating to Indemnification Events regardless of whether the Indemnitee continues to serve as a director or an officer of the Company or of any other enterprise, including subsidiaries of the Company, at the Companys request.
13. Attorneys Fees. Subject to Section 8 and except as prohibited by applicable law, in the event that any action is instituted by the Indemnitee under this Agreement or under any liability insurance policies maintained by the Company to enforce or interpret any of the terms hereof or thereof, the Indemnitee shall be entitled to be paid all Expenses actually incurred by the Indemnitee with respect to such action if the Indemnitee is ultimately successful in such action. In the event of an action instituted by or in the name of the Company under this Agreement to enforce or interpret any of the terms of this Agreement, the Indemnitee shall be entitled to be paid Expenses actually incurred by the Indemnitee in defense of such action (including costs and expenses incurred with respect to the Indemnitees counterclaims and cross-claims made in such action), and shall be entitled to the advancement of Expenses with respect to such action in accordance with the procedures set forth in Section 2(a).
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14. Notice. All notices and other communications required or permitted hereunder shall be in writing, shall be deemed to have been duly given when delivered in person or upon receipt of confirmation of error-free transmission when transmitted by email or on the next business day if transmitted by international overnight courier (fees prepaid), and shall be addressed at the addresses as set forth beneath the parties signatures to this Agreement, or at such other address as such party may designate by ten (10) days advance written notice to the other parties hereto.
15. Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction or an arbitral tribunal to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitations, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
16. Choice of Law. This Agreement shall be governed by and its provisions construed and enforced in accordance with the laws of Hong Kong, without regard to the conflict of laws principles thereof.
17. Dispute Resolution.
(a) | Any dispute, controversy or claim arising out of or relating to this Agreement, or the interpretation, breach, termination or validity hereof, shall be resolved through consultation. Such consultation shall begin immediately after one party hereto has delivered to the other party hereto a written request for such consultation. If within thirty (30) days following the date on which such notice is given the dispute cannot be resolved, the dispute shall be submitted to arbitration upon the request of any party with notice to the other. |
(b) | The arbitration shall be conducted in Hong Kong Special Administrative Region of the Peoples Republic of China under the auspices of the Hong Kong International Arbitration Centre (the Centre). There shall be three arbitrators. The Indemnitee shall appoint one member of the arbitral tribunal and the Company shall appoint one member of the arbitral tribunal. The appointment of the third arbitrator shall be jointly agreed by the first two members of the arbitral tribunal. If they fail to reach such an agreement, the Centre shall appoint the third arbitrator. |
(c) | The arbitration proceedings shall be conducted in English. The arbitral tribunal shall apply the Hong Kong International Arbitration Centre Administered Arbitration Rules in force at the time of the arbitration. |
(d) | In the course of arbitration, the parties shall continue to implement the terms of this Agreement except (as between the disputing parties) for the matters under arbitration. |
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(e) | The award of the arbitral tribunal shall be final and binding upon the disputing parties, and the prevailing party may apply to a court of competent jurisdiction for enforcement of such award. |
(f) | Any party shall be entitled to seek preliminary injunctive relief from any court of competent jurisdiction pending the constitution of the arbitral tribunal. |
18. Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the applicable Indemnitee who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company to effectively bring suit to enforce such rights.
19. Amendment and Termination. Except as provided in Section 21, no amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by the parties to be bound thereby. Notice of same shall be provided to all parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
20. No Construction as Employment Agreement. Nothing contained in this Agreement shall be construed as giving the Indemnitee any right to be retained in the employment or service of the Company or any of its subsidiaries.
21. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and negotiations, written and oral, between the parties with respect to the subject matter of this Agreement; provided, however, that this Agreement is a supplement to and in furtherance of the constitutional documents of the Company and any other applicable law, and shall not be deemed a substitute therefor, and does not diminish or abrogate any rights of Indemnitee thereunder. Without limiting the generality of the foregoing, to the extent that there was an existing indemnification agreement or other similar agreement, understanding or negotiation, written and oral, between the Indemnitee and RISE Education Cayman Ltd prior to the Closing, such agreement, understanding or negotiation shall automatically terminate upon the effectiveness of this Agreement.
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22. Other Indemnitors. The Company hereby acknowledges that the Indemnitee may have certain rights to indemnification, advancement of expenses and/or insurance provided by other indemnitors (collectively, the Other Indemnitors). The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to the Indemnitee are primary and any obligation of the Other Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee are secondary), (ii) that it shall be required to advance the full amount of expenses incurred by the Indemnitee and shall be liable for the full amount of all Expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement, the constitutional documents of the Company and any other agreement between the Company and the Indemnitee, without regard to any rights the Indemnitee may have against the Other Indemnitors, and (iii) that it irrevocably waives, relinquishes and releases the Other Indemnitors from any and all claims against the Other Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Other Indemnitors on behalf of the Indemnitee with respect to any claim for which the Indemnitee have sought indemnification from the Company shall affect the foregoing and the Other Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of the Indemnitee against the Company. The Company and the Indemnitee agree that the Other Indemnitors are express third party beneficiaries of the terms of this Section 22.
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IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as of the day and year first above written.
NaaS Technology, Inc. |
By: |
Name: | ||
Title: |
IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as of the day and year first above written.
Indemnitee: | ||
Name: |
||
Address: |
Exhibit 4.11
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the Agreement) is entered into as of _____________, 2022 by and between NaaS Technology Inc., an exempted company incorporated and existing under the laws of the Cayman Islands (the Company) and _____________ (Passport/ID Card No. _____________) (the Executive).
RECITALS
WHEREAS, the Company desires to employ the Executive and to assure itself of the services of the Executive during the term of Employment (as defined below) and under the terms and conditions of the Agreement;
WHEREAS, the Executive desires to be employed by the Company during the term of Employment and under the terms and conditions of the Agreement;
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the Company and the Executive agree as follows:
1. | EMPLOYMENT |
The Company hereby agrees to employ the Executive and the Executive hereby accepts such employment, on the terms and conditions hereinafter set forth (the Employment).
2. | TERM |
Subject to the terms and conditions of the Agreement, the initial term of the Employment shall be _____ years, commencing on _____________, 2022 (the Effective Date) and ending on _____________, _____ (the Initial Term), unless terminated earlier pursuant to the terms of the Agreement. Upon expiration of the Initial Term of the Employment, the Employment shall be automatically extended for successive periods of _____ months each (each, an Extension Period) unless either party shall have given 60 days advance written notice to the other party, in the manner set forth in Section 19 below, prior to the end of the Initial Term or the Extension Period in question, as applicable, that the term of this Agreement that is in effect at the time such written notice is given is not to be extended or further extended, as the case may be (the period during which this Agreement is effective being referred to hereafter as the Term).
3. | POSITION AND DUTIES |
(a) | During the Term, the Executive shall serve as the _____________ of the Company or in such other position or positions with a level of duties and responsibilities consistent with the foregoing with the Company and/or its subsidiaries and affiliates as the Board of Directors of the Company (the Board) may specify from time to time and shall have the duties, responsibilities and obligations customarily assigned to individuals serving in the position or positions in which the Executive serves hereunder and as assigned by the Board, or with the Boards authorization, by the Companys Chief Executive Officer. |
(b) | The Executive agrees to serve without additional compensation, if elected or appointed thereto, as a director of the Company or any subsidiaries or affiliated entity of the Company (collectively, the Group) and as a member of any committees of the board of directors of any such entity, provided that the Executive is indemnified for serving in any and all such capacities on a basis no less favorable than is currently provided to any other director of any member of the Group. |
(c) | The Executive agrees to devote all of his/her working time and efforts to the performance of his/her duties for the Company and to faithfully and diligently serve the Company in accordance with the Agreement and the guidelines, policies and procedures of the Company approved from time to time by the Board. |
4. | NO BREACH OF CONTRACT |
The Executive hereby represents to the Company that: (i) the execution and delivery of the Agreement by the Executive and the performance by the Executive of the Executives duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any other agreement or policy to which the Executive is a party or by which the Executive is otherwise bound, except that the Executive does not make any representation with respect to agreements required to be entered into by and between the Executive and any member of the Group pursuant to the applicable law of the jurisdiction in which the Executive is based, if any; (ii) that the Executive is not in possession of any information (including, without limitation, confidential information and trade secrets) the knowledge of which would prevent the Executive from freely entering into the Agreement and carrying out his/her duties hereunder; and (iii) that the Executive is not bound by any confidentiality, trade secret or similar agreement with any person or entity other than any member of the Group.
5. | LOCATION |
The Executive will be based in __________, China or any other location as requested by the Company during the Term.
6. | COMPENSATION AND BENEFITS |
(a) | Cash Compensation. As compensation for the performance by the Executive of his/her obligations hereunder, during the Term, the Company shall pay the Executive cash compensation (inclusive of the statutory benefit contributions that the Company is required to set aside for the Executive under applicable law) pursuant to Schedule A hereto, subject to annual review and adjustment by the Board or any committee designated by the Board. |
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(b) | Equity Incentives. During the Term, the Executive shall be eligible to participate, at a level comparable to similarly situated executives of the Company, in such long-term compensation arrangements as may be authorized from time to time by the Board, including any share incentive plan the Company may adopt from time to time in its sole discretion. |
(c) | Benefits. During the Term, the Executive shall be entitled to participate in all of the employee benefit plans and arrangements made available by the Company to its similarly situated executives, including, but not limited to, any retirement plan, medical insurance plan and travel/holiday policy, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements. |
7. | TERMINATION OF THE AGREEMENT |
The Employment may be terminated as follows:
(a) | Death. The Employment shall terminate upon the Executives death. |
(b) | Disability. The Employment shall terminate if the Executive has a disability, including any physical or mental impairment which, as reasonably determined by the Board, renders the Executive unable to perform the essential functions of his/her position at the Company, even with reasonable accommodation that does not impose an undue burden on the Company, for more than 180 days in any 12-month period, unless a longer period is required by applicable law, in which case that longer period shall apply. |
(c) | Cause. The Company may terminate the Executives employment hereunder for Cause. The occurrence of any of the following, as reasonably determined by the Company, shall be a reason for Cause, provided that, if the Company determines that the circumstances constituting Cause are curable, then such circumstances shall not constitute Cause unless and until the Executive has been informed by the Company of the existence of Cause and given an opportunity of ten business days to cure, and such Cause remains uncured at the end of such ten-day period: |
(1) | continued failure by the Executive to satisfactorily perform his/her duties; |
(2) | willful misconduct or gross negligence by the Executive in the performance of his/her duties hereunder, including insubordination; |
(3) | the Executives conviction or entry of a guilty or nolo contendere plea of any felony or any misdemeanor involving moral turpitude; |
(4) | the Executives commission of any act involving dishonesty that results in material financial, reputational or other harm, monetary or otherwise, to any member of the Group, including but not limited to an act constituting misappropriation or embezzlement of the property of any member of the Group as determined in good faith by the Board; or |
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(5) | any material breach by the Executive of this Agreement. |
(d) | Good Reason. The Executive may terminate his/her employment hereunder for Good Reason upon the occurrence, without the written consent of the Company, of an event constituting a material breach of this Agreement by the Company that has not been fully cured within ten business days after written notice thereof has been given by the Executive to the Company setting forth in sufficient detail the conduct or activities the Executive believes constitute grounds for Good Reason, including but not limited to: |
(1) | the failure by the Company to pay to the Executive any portion of the Executives current compensation or to pay to the Executive any portion of an installment of deferred compensation under any deferred compensation program of the Company, within 20 business days of the date such compensation is due; or |
(2) | any material breach by the Company of this Agreement. |
(e) | Without Cause by the Company; Without Good Reason by the Executive. The Company may terminate the Executives employment hereunder at any time without Cause upon 60-day prior written notice to the Executive. The Executive may terminate the Executives employment voluntarily for any reason or no reason at any time by giving 60-day prior written notice to the Company. |
(f) | Notice of Termination. Any termination of the Executives employment under the Agreement shall be communicated by written notice of termination (Notice of Termination) from the terminating party to the other party. The notice of termination shall indicate the specific provision(s) of the Agreement relied upon in effecting the termination. |
(g) | Date of Termination. The Date of Termination shall mean (1) the date set forth in the Notice of Termination, or (2) if the Executives employment is terminated by the Executives death, the date of his/her death. |
(h) | Compensation upon Termination. |
(1) | Death. If the Executives employment is terminated by reason of the Executives death, the Company shall have no further obligations to the Executive under this Agreement and the Executives benefits shall be determined under the Companys retirement, insurance and other benefit and compensation plans or programs then in effect in accordance with the terms of such plans and programs. |
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(2) | By Company without Cause or by the Executive for Good Reason. If the Executives employment is terminated by the Company other than for Cause or by the Executive for Good Reason, the Company shall (A) continue to pay and otherwise provide to the Executive, during any notice period, all compensation, base salary and previously earned but unpaid incentive compensation, if any, and shall continue to allow the Executive to participate in any benefit plans in accordance with the terms of such plans during such notice period; and (B) pay to the Executive, in lieu of benefits under any severance plan or policy of the Company, any such amount as may be agreed between the Company and the Executive. |
(3) | By Company for Cause or by the Executive other than for Good Reason. If the Executives employment shall be terminated by the Company for Cause or by the Executive other than for Good Reason, the Company shall pay the Executive his/her base salary at the rate in effect at the time Notice of Termination is given through the Date of Termination, and the Company shall have no additional obligations to the Executive under this Agreement. |
(i) | Return of Company Property. The Executive agrees that following the termination of the Executives employment for any reason, or at any time prior to the Executives termination upon the request of the Company, he/she shall return all property of the Group that is then in or thereafter comes into his/her possession, including, but not limited to, any Confidential Information (as defined below) or Intellectual Property (as defined below), or any other documents, contracts, agreements, plans, photographs, projections, books, notes, records, electronically stored data, and all copies, excerpts, or summaries of the foregoing, as well as any automobile or other materials or equipment supplied by the Group to the Executive, if any. |
(j) | Requirement for a Release. Notwithstanding the foregoing, the Companys obligations to pay or provide any benefits shall (1) cease as of the date the Executive breaches any of the provisions of Sections 8, 9, and 11 hereof, and (2) be conditioned on the Executive signing the Companys customary release of claims in favor of the Group and the expiration of any revocation period provided for in such release. |
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8. | CONFIDENTIALITY AND NONDISCLOSURE |
(a) | Confidentiality and Non-Disclosure. |
(1) | The Executive acknowledges and agrees that: (A) the Executive holds a position of trust and confidence with the Company and that his/her employment by the Company will require that the Executive have access to and knowledge of valuable and sensitive information, material, and devices relating to the Company and/or its business, activities, products, services, customers, and vendors, including, but not limited to, the following, regardless of the form in which the same is accessed, maintained or stored: the identity of the Companys actual and prospective customers and, as applicable, their representatives; prior, current or future research or development activities of the Company; the products and services provided or offered by the Company to customers or potential customers and the manner in which such services are performed or to be performed; the product and/or service needs of actual or prospective customers; pricing and cost information; information concerning the development, engineering, design, specifications, acquisition or disposition of products, and/or services of the Company; user base personal data, programs, software and source codes, licensing information, personnel information, advertising client information, vendor information, marketing plans and techniques, forecasts, and other trade secrets (Confidential Information); and (B) the direct and indirect disclosure of any such Confidential Information would place the Company at a competitive disadvantage and would do damage, monetary or otherwise, to the Companys business. |
(2) | During the Term and at all times thereafter, the Executive shall not, directly or indirectly, whether individually, as a director, stockholder, owner, partner, employee, consultant, principal or agent of any business, or in any other capacity, publish or make known, disclose, furnish, reproduce, make available, or utilize any of the Confidential Information without the prior express written approval of the Company, other than in the proper performance of the duties contemplated herein, unless and until such Confidential Information is or shall become general public knowledge through no fault of the Executive. |
(3) | In the event that the Executive is required by law to disclose any Confidential Information, the Executive agrees to give the Company prompt advance written notice thereof and to provide the Company with reasonable assistance in obtaining an order to protect the Confidential Information from public disclosure. |
(4) | The failure to mark any Confidential Information as confidential shall not affect its status as Confidential Information under this Agreement. |
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(c) | Third Party Information in the Executives Possession. The Executive agrees that he/she shall not, during the Term, (1) improperly use or disclose any proprietary information or trade secrets of any former employer or other person or entity with which the Executive has an agreement or duty to keep in confidence information acquired by Executive, if any, or (2) bring into the premises of Company any document or confidential or proprietary information belonging to such former employer, person or entity unless consented to in writing by such former employer, person or entity. The Executive will indemnify the Company and hold it harmless from and against all claims, liabilities, damages and expenses, including reasonable attorneys fees and costs of litigation, arising out of or in connection with any violation of the foregoing. |
(d) | Third Party Information in the Companys Possession. The Executive recognizes that the Company may have received, and in the future may receive, from third parties their confidential or proprietary information subject to a duty on the Companys part to maintain the confidentiality of such information and to use it only for certain limited purposes. The Executive agrees that the Executive owes the Company and such third parties, during the Term and thereafter, a duty to hold all such confidential or proprietary information in strict confidence and not to disclose such information to any person or firm, or otherwise use such information, in a manner inconsistent with the limited purposes permitted by the Companys agreement with such third party. |
This Section 8 shall survive the termination of the Agreement for any reason. In the event the Executive breaches this Section 8, the Company shall have right to seek remedies permissible under applicable law.
9. | INTELLECTUAL PROPERTY |
(a) | Prior Inventions. The Executive has attached hereto, as Schedule B, a list describing all inventions, ideas, improvements, designs and discoveries, whether or not patentable and whether or not reduced to practice, original works of authorship and trade secrets made or conceived by or belonging to the Executive (whether made solely by the Executive or jointly with others) that (1) were developed by Executive prior to the Executives employment by the Company (collectively, Prior Inventions), (2) relate to the Company actual or proposed business, products or research and development, and (3) are not assigned to the Company hereunder; or, if no such list is attached, the Executive represents that there are no such Prior Inventions. Except to the extent set forth in Schedule B, the Executive hereby acknowledges that, if in the course of his/her service for the Company, the Executive incorporates into a Company product, process or machine a Prior Invention owned by the Executive or in which he/she has an interest, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide right and license (which may be freely transferred by the Company to any other person or entity) to make, have made, modify, use, sell, sublicense and otherwise distribute such Prior Invention as part of or in connection with such product, process or machine. |
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(b) | Assignment of Intellectual Property. The Executive hereby assigns to the Company or its designees, without further consideration and free and clear of any lien or encumbrance, the Executives entire right, title, and interest (within the United States and all foreign jurisdictions) to any and all inventions, discoveries, improvements, developments, works of authorship, concepts, ideas, plans, specifications, software, formulas, databases, designees, processes and contributions to Confidential Information created, conceived, developed or reduced to practice by the Executive (alone or with others) during the Term which (1) are related to the Companys current or anticipated business, activities, products, or services, (2) result from any work performed by Executive for the Company, or (3) are created, conceived, developed or reduced to practice with the use of Company property, including any and all Intellectual Property Rights (as defined below) therein (Work Product). Any Work Product which falls within the definition of work made for hire, as such term is defined in the U.S. Copyright Act, shall be considered a work made for hire, the copyright in which vests initially and exclusively in the Company. The Executive waives any rights to be attributed as the author of any Work Product and any droit morale (moral rights) in Work Product. The Executive agrees to immediately disclose to the Company all Work Product. For purposes of this Agreement, Intellectual Property shall mean any patent, copyright, trademark or service mark, trade secret, or any other proprietary rights protection legally available. |
(c) | Patent and Copyright Registration. The Executive agrees to execute and deliver any instruments or documents and to do all other things reasonably requested by the Company in order to more fully vest the Company with all ownership rights in the Work Product. If any Work Product is deemed by the Company to be patentable or otherwise registrable, the Executive shall assist the Company (at the Companys expense) in obtaining letters of patent or other applicable registration therein and shall execute all documents and do all things, including testifying (at the Companys expense) as necessary or appropriate to apply for, prosecute, obtain, or enforce any Intellectual Property right relating to any Work Product. Should the Company be unable to secure the Executives signature on any document deemed necessary to accomplish the foregoing, whether due to the Executives disability or other reason, the Executive hereby irrevocably designates and appoints the Company and each of its duly authorized officers and agents as the Executives agent and attorney-in-fact to act for and on the Executives behalf and stead to take any of the actions required of Executive under the previous sentence, with the same effect as if executed and delivered by the Executive, such appointment being coupled with an interest. |
This Section 9 shall survive the termination of the Agreement for any reason. In the event the Executive breaches this Section 9, the Company shall have right to seek remedies permissible under applicable law.
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10. | CONFLICTING EMPLOYMENT |
The Executive hereby agrees that, during the Term, he/she will not engage in any other employment, occupation, consulting or other business activity related to the business in which the Company is now involved or becomes involved during the Term, nor will the Executive engage in any other activities that conflict with his/her obligations to the Company without the prior written consent of the Company.
11. | NON-COMPETITION AND NON-SOLICITATION |
(a) | Non-Competition. In consideration of the compensation provided to the Executive by the Company hereunder, the adequacy of which is hereby acknowledged by the parties hereto, the Executive agree that during the Term and for a period of _____ year(s) following the termination of the Employment for whatever reason, the Executive shall not engage in Competition (as defined below) with the Group. For purposes of this Agreement, Competition by the Executive shall mean the Executives engaging in, or otherwise directly or indirectly being employed by or acting as a consultant or lender to, or being a director, officer, employee, principal, agent, stockholder, member, owner or partner of, or permitting the Executives name to be used in connection with the activities of, any other business or organization which competes, directly or indirectly, with the Group in the Business; provided, however, it shall not be a violation of this Section 11(a) for the Executive to become the registered or beneficial owner of up to five percent (5%) of any class of the capital stock of a publicly traded corporation in Competition with the Group, provided that the Executive does not otherwise participate in the business of such corporation. |
For purposes of this Agreement, Business means the operation of electric vehicle charging services and any other business which the Group engages in, or is preparing to become engaged in, during the Term.
(b) | Non-Solicitation; Non-Interference. During the Term and for a period of one year following the termination of the Executives employment for any reason, the Executive agrees that he/she will not, directly or indirectly, for the Executives benefit or for the benefit of any other person or entity, do any of the following: |
(1) | solicit from any customer doing business with the Group during the Term business of the same or of a similar nature to the Business; |
(2) | solicit from any known potential customer of the Group business of the same or of a similar nature to that which has been the subject of a known written or oral bid, offer or proposal by the Group, or of substantial preparation with a view to making such a bid, proposal or offer; |
(3) | solicit the employment or services of, or hire or engage, any person who is known to be employed or engaged by the Group; or |
(4) | otherwise interfere with the business or accounts of the Group, including, but not limited to, with respect to any relationship or agreement between the Group and any vendor or supplier. |
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(c) | Injunctive Relief; Indemnity of Company. The Executive agrees that any breach or threatened breach of subsections (a) and (b) of this Section 11 would result in irreparable injury and damage to the Company for which an award of money to the Company would not be an adequate remedy. The Executive therefore also agrees that in the event of said breach or any reasonable threat of breach, the Company shall be entitled to seek an immediate injunction and restraining order to prevent such breach and/or threatened breach and/or continued breach by the Executive and/or any and all persons and/or entities acting for and/or with the Executive. The terms of this paragraph shall not prevent the Company from pursuing any other available remedies for any breach or threatened breach hereof, including, but not limited to, remedies available under this Agreement and the recovery of damages. The Executive and the Company further agree that the provisions of this Section 11 are reasonable. The Executive agrees to indemnify and hold harmless the Company from and against all reasonable expenses (including reasonable fees and disbursements of counsel) which may be incurred by the Company in connection with, or arising out of, any violation of this Agreement by the Executive. This Section 11 shall survive the termination of the Agreement for any reason. |
12. | WITHHOLDING TAXES |
Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to the Agreement such national, state, provincial, local or any other income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.
13. | ASSIGNMENT |
The Agreement is personal in its nature and neither of the parties hereto shall, without the consent of the other, assign or transfer the Agreement or any rights or obligations hereunder; provided, however, that the Company may assign or transfer the Agreement or any rights or obligations hereunder to any member of the Group without such consent. If the Executive should die while any amounts would still be payable to the Executive hereunder if the Executive had continued to live, all such amounts unless otherwise provided herein shall be paid in accordance with the terms of this Agreement to the Executives devisee, legatee, or other designee or, if there be no such designee, to the Executives estate. The Company will require any and all successors (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive to compensation from the Company in the same amount and on the same terms as the Executive would be entitled to hereunder if the Company had terminated the Executives employment other than for Cause, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Section 13, Company shall mean the Company as herein before defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 13 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.
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14. | SEVERABILITY |
If any provision of the Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of the Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of the Agreement are declared to be severable.
15. | ENTIRE AGREEMENT |
The Agreement constitutes the entire agreement and understanding between the Executive and the Company regarding the terms of the Employment and supersedes all prior or contemporaneous oral or written agreements concerning such subject matter. The Executive acknowledges that he/she has not entered into the Agreement in reliance upon any representation, warranty or undertaking which is not set forth in the Agreement.
16. | GOVERNING LAW |
The Agreement shall be governed by and construed in accordance with the laws of the Cayman Islands.
17. | AMENDMENT |
The Agreement may not be amended, modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to the Agreement, which agreement is executed by both of the parties hereto.
18. | WAIVER |
Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under the Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.
19. | NOTICES |
All notices, requests, demands, and other communications required or permitted under the Agreement shall be in writing and shall be deemed to have been duly given and made if (i) delivered by hand, (ii) otherwise delivered against receipt therefor, (iii) sent by a recognized courier with next-day or second-day delivery to the last known address of the other party; or (iv) sent by e-mail with confirmation of receipt.
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20. | COUNTERPARTS |
The Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument. The Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.
21. | NO INTERPRETATION AGAINST DRAFTER |
Each party recognizes that the Agreement is a legally binding contract and acknowledges that such party has had the opportunity to consult with legal counsel of choice. In any construction of the terms of the Agreement, the same shall not be construed against either party on the basis of that party being the drafter of such terms.
[Remainder of the page intentionally left blank.]
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Schedule A
Cash Compensation
Amount
|
Pay Period
| |||
Base Salary
|
||||
Cash Bonus
|
Schedule B
List of Prior Inventions
Title |
Date |
Identifying Number or Brief Description |
______ No inventions or improvements
______ Additional Sheets Attached
Signature of Executive: ________________
Print Name of Executive: _______________
Date: ____________
|
Exhibit 4.12
THE SYMBOL [Redacted] DENOTES PLACES WHERE CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) IS THE TYPE THAT THE COMPANY TREATS AS PRIVATE OR CONFIDENTIAL
Investment Agreement
This Investment Agreement (this Agreement) is made on December 31, 2021 (the Date of Signing) by and between:
A. | Newlinks Technology Limited, a limited liability company duly established and validly existing under the laws of the Cayman Islands (Party A); |
B. | Dada Auto Inc., a limited liability company duly established and validly existing under the laws of the Cayman Islands (Party B); |
Party A and Party B are hereinafter individually referred to as a Party and collectively as the Parties.
Recital
WHEREAS,
1) | Party A and its controlled affiliates (collectively, Newlinks Group, which, for the purpose of this Agreement, excludes Party B and its controlling entities) are comprehensive internet platforms mainly supplying Al, SaaS and other products and services to help the players in energy retail sectors such as gas stations to participate in the digital transformation to reduce costs and increase efficiency. Party B and its controlled affiliates (collectively, NaaS) are mainly engaged in the business negotiation services and related value-added services for new energy vehicle charging facility operators to access the Kuaidian platforms. |
2) | As at the Date of Signing, Party A holds 500 ordinary shares of Party B, accounting for 100% shares of Party B; |
3) | As at the Date of Signing, Newlinks Group has provided a total of RMB [Redacted] million to NaaS to support its daily operation; |
4) | Party B plans to split its shares at the ratio of 1:10 in the near future and issue new shares to Party A. |
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NOW THEREFORE, following the principle of equality and mutual benefit and through friendly negotiation, both Parties agree on investment related matters as follows.
Chapter 1 Investment
1.1 Issuance of Shares
Both Parties acknowledge that within one month after the Date of Signing, Party B shall split its shares at the ratio of 1:10, and issue 49,9995,000 ordinary shares (Newly Issued Shares) to Party A, so that Party A holds 50,000,000 ordinary shares of Party B. After the issuance of shares, Party Bs shareholding structure is shown in the table below.
Shareholder |
Number of shares held |
Shareholding ratio |
||||||
Newlinks Technology Limited |
50,000,000 | 100.00 | % | |||||
Total |
50,000,000 | 100.00 | % |
1.2 Payment of Investment Amount
Both Parties acknowledge that the total amount of funds that Newlinks Group has provided to NaaS is RMB [Redacted] million (Investment Amount), which shall be regarded as the consideration for the Newly Issued Shares issued by Party B to Party A. Except for that, Newlinks Group does not need to pay any other consideration for the Newly Issued Shares. After Party A obtains the Newly Issued Shares, Newlinks Group shall have no right to require NaaS to return such Investment Amount.
For the avoidance of doubt, both Parties acknowledge that the Investment Amount is not actually the loan provided by Newlinks Group to NaaS. After Party A obtains the Newly Issued Shares, Newlinks Group will no longer have any creditors rights against NaaS with respect to the Investment Amount.
Notwithstanding the foregoing, if, for tax planning or other considerations, Party A actually pays any other amount to Party B overseas after the signing of this Agreement as the consideration for the Newly Issued Shares (Additional Investment Amount), Party B shall pay the Additional Investment Amount to its subsidiary established in China as soon as possible, and shall cause such subsidiary to immediately return the Additional Investment Amount to the entity designated by Party A.
2
Chapter 2 Representations and Warranties
Each Party represents and warrants to the other Party that:
1) | It is an entity duly incorporated or registered and validly existing under the applicable laws of the place of its incorporation or registration. It has the capacity for civil rights and civil conduct to execute this Agreement and perform its obligations hereunder. |
2) | It has effectively executed this Agreement and obtained all necessary authorizations, licenses and approvals for its execution, delivery and performance of this Agreement, and its exercise of its rights and fulfillment of its obligations hereunder. Its obligations and liabilities hereunder are legal, valid and enforceable. |
3) | Its execution, delivery and performance of this Agreement and its exercise of its rights and fulfillment of its obligations hereunder will not violate any laws and regulations applicable to it, its assets or business, or violate its articles of association or other organizational documents (if applicable), or violate any court judgment, ruling, arbitral award, administrative decision or order binding upon or applicable to it. |
Chapter 3 Breach
3.1 Breach and Early Termination
(a) | Either Party (the Breaching Party) who fails to perform its obligations hereunder shall constitute a breach of this Agreement (Breach); |
(b) | In case of serious Breach by the Breaching Party, the non-breaching Party (the Non-breaching Party) shall have the right to notify the Breaching Party in writing of its Breach, and the Breaching Party shall remedy its Breach within thirty (30) days from the date of the notice. If the Breaching Party fails to remedy the Breach at the expiration of such thirty (30) days, the Non-breaching Party shall have the right to terminate this Agreement. If either Party has already made it clear (orally, in writing or by act) before the expiration of the term hereof that it will not perform its major obligations hereunder, or the Breach of the Breaching Party (including a Breach caused by force majeure) has made both Parties unable to achieve the basic purpose of this Agreement, the Non-breaching Party shall have the right to terminate this Agreement. |
3
3.2 Compensation for Breach
The Breaching Party shall compensate the Non-breaching Party for all direct costs, liabilities, or losses incurred due to its Breach.
3.3 Specific Performance
In addition to other rights and remedies hereunder, the Non-breaching Party shall also have the right to require the Breaching Party to specifically and fully perform its obligations hereunder.
Chapter 4 Termination
4.1 Termination
This Agreement shall be terminated under any of the following circumstances: (1) in case either Party goes bankrupt, becomes insolvent, goes into liquidation or dissolution procedures, suspends business or cannot pay off its due debts or cannot exist for other reasons during the cooperation period, the Party shall submit a written explanation to the other Party, and the other Party shall have the right to send a written notice to terminate this Agreement thirty (30) days in advance; (2) both Parties agree to rescind or terminate this Agreement through consultation in writing.
4.2 Effect of Termination
If this Agreement is terminated in accordance with the provisions of this Chapter 4, the rights and obligations hereunder shall be terminated as well, and this Agreement will no longer be binding upon either Party, provided that (1) the provisions of Chapter 3 (Breach), Chapter 4 (Termination), Chapter 5 (Confidentiality) and Chapter 6 (Governing Law and Dispute Resolution) shall survive; and (2) the termination of this Agreement shall not exempt either Partys liability for its Breach hereunder.
Chapter 5 Confidentiality
5.1 Confidential Information
Both Parties acknowledge that this Agreement, the contents of this Agreement and the transactions contemplated hereunder shall be treated as confidential information.
4
5.2 Confidentiality Obligations
Both Parties agree that they shall, and shall ensure that their affiliates and their respective officers, directors, employees, agents, representatives, accountants and legal advisers to, keep all confidential information received or obtained by them confidential and shall not disclose to any third party or use it.
5.3 Excluded Disclosure
The confidentiality obligations under this Chapter shall not apply to: (i) any information permitted to be disclosed in accordance with the provisions hereof; (ii) any information that is publicly available at the time of disclosure and is not disclosed due to any breach of this Agreement by either Party or its affiliates, or its or its affiliates officers, employees, agents, representatives, accountants and legal advisers; (iii) any information obtained by either Party from a bona fide third party without confidentiality obligations; or (iv) any information disclosed to the extent mutually agreed by both Parties. In addition, each Party may disclose the said information to its affiliates and its or its affiliates investors, officers, directors, employees, partners, shareholders, agents, representatives, accountants and legal advisers to the extent necessary for the purpose of performing this Agreement, provided that it shall ensure that such persons undertake the same confidentiality obligations.
Chapter 6 Governing Law and Dispute Resolution
6.1 Governing Law
The conclusion, validity, interpretation and performance of this Agreement and the resolution of any dispute arising therefrom shall be governed by the laws of China.
6.2 Dispute Resolution
(a) | Any dispute, controversy or claim arising from or in connection with this Agreement or its Breach, termination or invalidity (collectively, Disputes) shall be resolved by both Parties through friendly negotiation. If such negotiation fails, either Party may submit the dispute to the court with jurisdiction for litigation; |
(b) | The above provisions of this Article 6.2 shall not prevent the Parties from applying for any pre-litigation preservation or injunctive relief available for any reason, including but not limited to the subsequent application for enforcement of the judgment of the litigation. |
5
Chapter 7 General Provisions
7.1 Fees and Taxes
Any costs, expenses and taxes incurred by each Party for the execution of this Agreement and the performance of the transactions contemplated hereunder shall be borne by each Party respectively in accordance with the applicable laws of China.
7.2 Assignment and Succession
Unless otherwise expressly agreed herein or agreed by both Parties in writing, neither Party shall transfer this Agreement or any of its rights and obligations hereunder for any reason. Notwithstanding the foregoing, each Party may transfer its rights and obligations hereunder to its affiliates without the consent of the other Party, but the transferring Party shall notify the other Party in advance of the transfer and the information of its affiliate to which its rights and obligations are transferred, and such affiliate shall have the qualification and ability to conduct the investment as agreed in Chapter 1 hereof. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.
7.3 Severability
If any term or other provision of this Agreement is deemed invalid, illegal or unenforceable in accordance with any laws, regulations or public policies, all other terms and provisions of this Agreement shall remain in full force and effect as long as the economic or legal substance of the transactions contemplated hereunder has not been materially and adversely affected to either Party in any form. When any term or other provision of this Agreement is deemed invalid, illegal or unenforceable, both Parties shall negotiate in good faith to amend this Agreement to realize the original intention of both Parties as close as possible in an acceptable manner, so as to complete the transactions contemplated hereunder as far as possible according to the original plan.
7.4 Entire Agreement
This Agreement contains all understandings and agreements between the Parties with respect to the transactions contemplated hereunder, and shall supersede all written and oral agreements and commitments between the Parties with respect to the transactions contemplated hereunder prior to the Date of Signing.
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7.5 Waiver
Either Party may (a) extend the period for the other Party to perform any obligation or take any action, (b) waive the right to hold the other Party accountable for any inaccuracy of the representations and warranties made by it in this Agreement or any other transaction document, or (c) waive the right to request the other Partys compliance with any covenant or condition contained herein. Such extension or waiver shall be effective only after the Party bound has signed a written document expressly stating the extension or waiver. Either Partys waiver of any breach of the terms of this Agreement shall not be deemed or construed as a further waiver or continuing waiver of such breach, or a waiver of any other breach or subsequent breach. Except as otherwise provided herein, either Partys failure to exercise or delay in exercising any right, power or remedy under this Agreement or otherwise available in accordance with laws and regulations shall not be deemed as its waiver of such right, power or remedy, nor such Partys single or partial exercise of such right, power or remedy shall exclude any other or further exercise of such right, power or remedy, or the exercise of any other right, power or remedy.
7.6 Amendment
No modification or amendment to this Agreement shall take effect unless it is made and signed by both Parties in writing.
7.7 Counterpart
This Agreement is made in two (2) copies, one (1) for each Party respectively, which shall be deemed as an original once signed.
(Followed by Signature Pages.)
7
IN WITNESS WHEREOF, this Agreement has been executed by the Parties on the date first above written.
Newlinks Technology Limited | ||
Signature: | /s/ DAI Zhen | |
Name: DAI Zhen | ||
Title: Director |
Signature page to the Investment Agreement
IN WITNESS WHEREOF, this Agreement has been executed by the Parties on the date first above written.
Dada Auto Inc. | ||
Signature: | /s/ WANG Yang | |
Name: WANG Yang | ||
Title: Director |
Signature page to the Investment Agreement
Exhibit 4.13
THE SYMBOL [Redacted] DENOTES PLACES WHERE CERTAIN IDENTIFIED
INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS
BOTH (I) NOT MATERIAL, AND (II) IS THE TYPE THAT THE COMPANY
TREATS AS PRIVATE OR CONFIDENTIAL
Assets Transfer Agreement
On
Kuaidian Platforms
Between
Kuaidian Power (Beijing) New Energy Technology Co., Ltd.
And
Zhejiang Anji Jiayu Big Data Technology Service Co., Ltd
Signed at: Chaoyang, Beijing
Signed on: February 1, 2022
Party A (Transferor): Kuaidian Power (Beijing) New Energy Technology Co., Ltd.
Legal representative: Zheng Linyi
Address: Room 202, 2/F, Block G, Building 7, Yard 1, Yaojiayuan South Road, Chaoyang District, Beijing
Party B (Transferee): Zhejiang Anji Jiayu Big Data Technology Service Co., Ltd
Legal Representative: Yang Tianyue
Address: 205, Building 8, Lingfeng Street Resort Management Committee, Fuyu South Road, Lingfeng Street, Anji County, Huzhou City, Zhejiang Province (self declaration)
WHEREAS:
(A) Party A owns the Transferred Fixed Assets (as defined below); and
(B) Party A agrees to sell to Party B, and Party B agrees to acquire from Party A, the Transferred Fixed Assets according to the terms and conditions hereof.
NOW THEREFORE, both Parties, through friendly negotiation, agree on the transfer of the said fixed assets as follows.
1. Definition
Unless otherwise defined in the terms or context of this Agreement, the following terms shall have the meanings as follows.
1.1 Kuaidian Platforms: refer to an APP program independently developed by Party A for mobile internet charging service (i.e., Kuaidian APP) and other online applications.
1.2 Users: refer to the natural persons registered on the Kuaidian Platforms, including the users merely registered and the users who have transactions on the platform, etc.
1.3 Operator: refers to the new energy vehicle charging facilities operator who has reached an interconnection cooperation with Party A, and such operator can provide charging services to Users with new energy charging needs through the Kuaidian Platforms.
1.4 Commercial Contracts: refer to the cooperation agreements signed by Party A with other companies and institutions to ensure the normal operation of the Kuaidian Platforms, such as the interconnection cooperation agreement signed with the Operator, the payment cooperation agreement signed with third-Party payment institutions, etc.
1.5 Transferred Fixed Assets: refer to the Kuaidian Platforms and all technical and commercial information and records related to the Kuaidian Platforms, including but not limited to the following assets. For details, see Article 3 hereof Details of Asset Transfer.
1.5.1 All past transaction data, including but not limited to the list of validated User, information and materials of Users (including those provided by validated Users and those obtained by Party A), past transaction records, and other information and data of Users;
1.5.2 Relevant systems serving the charge poles operator and the transaction data recorded in the systems;
1.5.3 Commercial Contracts;
1.5.4 For all of the above cases, no matter in what form or medium the information or record is contained or recorded.
1.6 Closing Date: refers to the date when the Transferred Fixed Assets hereof are transferred by Party A to Party B. As of the Closing Date, Party B has the ownership of the Transferred Fixed Assets and has the right to dispose of them at its own discretion.
2. Outline of the Transfer
2.1 Background
With the continuous improvement of the National Security Law, the Network Security Law, the Data Security Law, the Network Security Review Measures and other relevant laws, data compliance plays a crucial role in a companys business compliance, sustainable operation and capital market operation. In order to strengthen the compliance with respect to network security, data security and personal information protection, reduce the possibility of endangering national security, and ensure that Party As capital market operation in the future will not endanger national security, both Parties concluded a Restructuring Agreement on [], under which Party A will complete the data stripping from the aspects of equity structure and business adjustment. Specifically, for the business adjustment, Party A will transfer to Party B the Transferred Fixed Assets such as relevant businesses operated based on Kuaidian App and other online applications (collectively, Kuaidian Platforms) and data (including the Users personal information collected and held based on the Kuaidian Platforms and charging pile data that may be considered as important data).
2.2 Transfer Intention
Party A has held a shareholders meeting at the workplace of Building 7, Yard 1, Yaojiayuan South Road, Chaoyang District, Beijing and formed a resolution (Resolution of the Shareholders Meeting) on the transfer of the Transferred Fixed Assets such as the Kuaidian Platforms and relevant businesses and data.
After conducting due diligence on Party As Transferred Fixed Assets, Party B agrees to acquire such Transferred Fixed Assets so transferred by Party A within the scope agreed herein.
3. Details of the Transferred Fixed Assets
The assets to be transferred by Party A to Party B are as follows:
3.1 Kuaidian App, including but not limited to the Kuaidian App itself and all source codes, databases, documents, technical data, graphics, pictures, images and other data and information in various forms, formats and media.
3.2 Kuaidian applet, including WeChat applet, Alipay applet and Kuaidian EE applet.
3.3 Social media accounts, including WeChat official account and Tiktok account opened in the name of Party A, subject to the final confirmation of both Parties.
3.4 All business data of the Kuaidian Platforms as of the Closing Date, including but not limited to member Users purchase records, Users activity participation records, etc.
3.5 Kuaidian merchant system, including but not limited to all source codes, databases, documents, technical data, graphics, pictures, images and other data and information in various forms, formats and media.
3.6 All business data of the Kuaidian merchant system as of the Closing Date, including but not limited to the list of operators, operators system docking technical documents, and all the charging pile data collected by the Kuaidian merchant system as of the Closing Date.
4. Transfer Process and Schedule
In view of the large amount of the Transferred Fixed Assets, both Parties need to carry out assets docking, system online implementing / commissioning and other works several times, so both Parties agree to form a special project team for unified deployment and implementation.
4.1 Both Parties jointly designated Zhang Youxing (title: CTO; contact information: [Redacted]) as the general person in charge of the project and to be responsible for the overall implementation, follow-up and supervision of the asset transfer, and handling the problems arising from the asset transfer. The general person in charge may designate the persons in charge of each itemized work in the asset transfer, and give guidance on relevant matters to ensure that the asset transfer is completed on time and as scheduled.
4.2 The asset transfer shall commence in February 2022 and complete no later than June 2022. In case the period of asset transfer needs to be postponed due to the occurrence of any unforeseen and uncontrollable event, or an itemized work needs to be adjusted or changed during the process of asset transfer, both Parties shall conclude a supplementary agreement separately.
4.3 Specific schedule of asset transfer:
4.3.1 Stage I: Counting of the Transferred Fixed Assets
The project team shall organize the personnel of both Parties to count the transferred assets.
4.3.2 Stage II: Delivery of the Transferred Fixed Assets
1) After both Parties complete the counting in Stage I, the project team shall, within 3 working days, organize the personnel of both Parties to jointly effect the transfer and handle the handover procedures according to the transfer list, hand over all source codes, documents, technical materials, etc. related to the Kuaidian App and merchant management system, and assist Party B in online operation test, transfer all business data and other business materials and information. When all of the said conditions are satisfied, the transaction of asset transfer can be legally closed on the same day.
4.3.3 Stage III: Subsequent matters
As of the Closing Date, Party B will become the legal owner of the Transferred Fixed Assets and enjoy all the rights and undertake all the obligations related to the Transferred Fixed Assets, while Party A shall no longer enjoy any rights or undertake any obligations and liabilities related to the Transferred Fixed Assets (unless otherwise specified herein). That is, Party B shall perform corresponding obligations in accordance with the Commercial Contracts and the supplementary agreement related to this transfer, and bear all liabilities arising therefrom.
4.4 Even if a successful transfer of the Transferred Fixed Assets, after the closing of the transfer transaction, Party A still needs to assist Party B in handling the disputes or events arising or occurring prior to the Closing Date until the disputes or events are resolved or handled.
4.5 Use and license of trademarks
Party A guarantees that the trademark owner will grant Party B the license to use relevant trademarks free of charge, subject to the Trademark License Contract signed between Party B and the trademark owner.
4.6 Arrangement of relevant employees
For the employees who intend to sign a labor contract with Party B, Party A will terminate the labor contracts with them in accordance with the labor contract law, so that such employees can sign the labor contract with Party B.
5. Arrangement for the Transition Period
5.1 The period from the Closing Date to June 2022 shall be the transition period of the Transferred Fixed Assets. During the transition period, Party A shall assist Party B in maintaining the normal operation of the businesses related to the Transferred Fixed Assets.
5.2 During the transition period, Party A undertakes to take all necessary measures to assist Party B in concluding relevant Commercial Contracts with its partners, or concluding relevant tripartite supplementary agreements and new business agreements. Both Parties shall reach an agreement with other parties to the said contracts on matters related to the transfer, so that Party B can obtain all the interests under the said contracts and perform its obligations thereunder from the date of successful transfer.
5.3 Party A shall assist Party B in updating the Users contracts on the Kuaidian Platforms.
5.4 During the transition period, all expenses and income arising from business operation shall be owned by Party B.
6. Representations and Warranties
6.1 Party A warrants to transfer the Transferred Fixed Assets to Party B on the Closing Date specified herein and complete the works required in the transition period with due diligence.
6.2 As of the date of signing this Agreement until the handover of the Transferred Fixed Assets in accordance with the provisions hereof, Party A represents and warrants to Party B as follows:
6.2.1 Party A has legal, effective and full ownership of the Transferred Fixed Assets, and guarantees that it has not created any creditors right, mortgage, pledge, recourse or any other security agreement or third-party interest on the Transferred Fixed Assets.
6.2.2 Party As transfer of its company assets is legal and effective under the laws and regulations and other relevant provisions of China and the articles of association of Party A, and Party As shareholders meeting has adopted a resolution unanimously approving the assets transfer.
6.2.3 The documents and materials related to Party A and the Transferred Fixed Assets that Party A submitted to Party B are true, accurate and complete.
6.3 Party B undertakes and warrants that its execution of this Agreement and acquisition of the Transferred Fixed Assets hereunder have been approved and authorized by the management organ of the company, and its execution of this Agreement is a legal and effective act of the company.
7. Confidentiality
Both Parties shall keep confidential the contents of this Agreement and the other Partys trade secrets, technical secrets, Users resources and other information obtained hereunder, and shall not disclose them to a third party without prior written consent of the other Party. Otherwise, the disclosing Party shall bear all the liabilities with respect thereto. For any confidentiality agreement signed or reached between Party A and the Users prior to the Closing Date, Party B agrees and guarantees to succeed Party As obligations thereunder to Users.
8. Liability for Breach
Each Party shall exercise its rights and perform its obligations in accordance with this Agreement. Unless otherwise agreed herein, either Party who fails to perform its obligations hereunder or in accordance with the provisions hereof and thus cause loss to the other Party shall compensate the other Party accordingly.
9. Dispute Resolution
9.1 For any dispute arising from or in connection with this Agreement, both Parties shall try their best to settle them amicably.
9.2 Any dispute, controversy or claim arising out of or in connection with this Agreement, including disputes related to the existence, effectiveness, establishment, validity, interpretation, performance or termination of this Agreement, shall be submitted to arbitration for final resolution. The arbitration shall be conducted by the Beijing Arbitration Commission in accordance with its current arbitration rules, which will be incorporated into this Article by reference. The place of arbitration shall be Beijing, China. The number of arbitrators shall be three, all appointed in accordance with the arbitration rules. The arbitration award shall be final and binding upon both Parties.
10. Force Majeure
10.1 In case of an unforeseen or force majeure event as a result of which the Agreement cannot be performed or cannot be fully performed and which is confirmed by both Parties in writing, neither Party shall be held liable for breach of contract.
10.2 The Party suffering force majeure event shall notify the other Party of the event, preliminary loss and preliminary analysis of the cause of the event within one day after the occurrence of the event. After the event is eliminated, both Parties shall actively cooperate with each other to resume the performance of their respective obligations.
11. Miscellaneous
11.1 After the signing of this Agreement, no modification or amendment shall be made to this Agreement unless it is made by both Parties through a written supplement / amendment agreement.
11.2 A Partys waiver of any provision of this Agreement shall take effect only after such Party signs a written document confirming the waiver. A Partys failure to exercise or delay in exercising any right, power or remedy hereunder shall not constitute such Partys waiver of such right, power or remedy, nor a single or partial exercise of any right, power or remedy hereunder shall preclude its further exercise of such right, power or remedy or the exercise of any other right, power or remedy. Without limiting the generality of the foregoing provisions, a Partys waiver of the other Partys breach of any provision of this Agreement shall not be deemed as a waiver of any subsequent breach of that provision, nor shall it be deemed as a waiver of a breach of any other provision of this Agreement.
11.3 Each provision of this Agreement shall be deemed to be an independent obligation and shall be enforceable separately, even if any obligation is unenforceable in whole or in part. If any provision of this Agreement is enforceable, such provision shall be deemed to be deleted from this Agreement, and such deletion shall not affect the enforceability of other provisions of this Agreement.
11.4 Any and all taxes and fees (including but not limited to value-added tax) arising from the execution and performance of this Agreement shall be borne by Party A. In case Party B incurs any taxes or fees due to the execution and performance of this Agreement, Party A shall make full compensation.
11.5 This Agreement shall come into force after being sealed by both Parties. This Agreement is made in two (2) copies, with each Party holding one of them.
(End of the Body Text)
(This is the signature page of the Asset Transfer Agreement only).
Party A:
Kuaidian Power (Beijing) New Energy Technology Co., Ltd.. (seal)
Signature: | /s/ ZHENG Linyi | |
Name: ZHENG Linyi | ||
Title: Legal Representative |
(This is the signature page of the Asset Transfer Agreement only).
Party B:
Zhejiang Anji Jiayu Big Data Technology Service Co., Ltd. (seal)
Signature: | /s/ YANG Tianyue | |
Name: YANG Tianyue | ||
Title: Legal Representative |
Exhibit 4.14
THE SYMBOL [Redacted] DENOTES PLACES WHERE CERTAIN
IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE
EXHIBIT BECAUSE IT IS BOTH (I)NOT MATERIAL, AND (II)IS
THE TYPE THAT THE COMPANY TREATS AS PRIVATE OR
CONFIDENTIAL
DADA AUTO INC.
SERIES A SHARE PURCHASE AGREEMENT
Date: January 14, 2022
TABLE OF CONTENTS
Page | ||||
1. DEFINITIONS |
2 | |||
2. SALE AND PURCHASE, CLOSING |
12 | |||
3. REPRESENTATIONS AND WARRANTIES OF THE WARRANTORS |
14 | |||
4. REPRESENTATIONS AND WARRANTIES OF THE FOUNDER AND THE CONTROLLING SHAREHOLDER |
35 | |||
5. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS |
38 | |||
6. COVENANTS OF THE WARRANTORS |
39 | |||
7. CONDITIONS TO INVESTORS OBLIGATIONS AT THE CLOSING |
44 | |||
8. CONDITIONS TO COMPANYS OBLIGATIONS AT THE CLOSING |
46 | |||
9. INDEMNIFICATION |
47 | |||
10. MISCELLANEOUS |
49 | |||
SCHEDULE OF NOTICE |
66 | |||
EXHIBIT A-1 LIST OF INVESTORS |
67 | |||
EXHIBIT A-2 LIST OF PRC SUBSIDIARIES |
68 | |||
EXHIBIT B LIST OF KEY EMPLOYEES |
69 | |||
EXHIBIT C CAPITALIZATION TABLE |
70 | |||
EXHIBIT D DISCLOSURE SCHEDULE |
71 | |||
EXHIBIT E AMENDED M&AA |
72 | |||
EXHIBIT F SHAREHOLDERS AGREEMENT |
73 | |||
EXHIBIT G ONSHORE INVESTMENT AGREEMENTS |
74 | |||
EXHIBIT H WARRANTS |
75 | |||
EXHIBIT I CONDUCT OF GROUP COMPANIES PRE-CLOSING |
76 | |||
EXHIBIT J REORGANIZATION PLAN |
77 |
EXHIBITS
Schedule of Notice | ||
Exhibit A-1 | List of Investors | |
Exhibit A-2 | List of PRC Subsidiaries | |
Exhibit B | List of Key Employees | |
Exhibit C | Capitalization Table | |
Exhibit D | Disclosure Schedule | |
Exhibit E | Amended M&AA | |
Exhibit F | Shareholders Agreement | |
Exhibit G | Onshore Investment Agreements | |
Exhibit H | Warrants | |
Exhibit I | Conduct of Group Companies Pre-Closing | |
Exhibit J | Reorganization Plan |
THIS SERIES A SHARE PURCHASE AGREEMENT (the Agreement) is made and entered into as of January 14, 2022 by and among:
(1) Dada Auto Inc., an exempted company duly incorporated and validly existing under the Laws of the Cayman Islands with its registered address at Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands (the Company);
(2) Fleetin HK Limited, a company duly incorporated and validly existing under the Laws of Hong Kong with its registered address at Suite 3101, Everbright Centre 108, Gloucester Road, Wanchai, Hong Kong (the HK Company);
(3) Zhejiang Anji Intelligent Electronics Holding Co., Ltd. (浙江安吉智电控股有限公司), a limited liability company duly incorporated and validly existing under the Laws of the PRC (the WFOE);
(4) Each of the Major PRC Subsidiaries listed in Part I of Exhibit A-2;
(5) Kuaidian Power (Beijing) New Energy Technology Co., Ltd. (快电动力( 北京)新能源科技有限公司), a limited liability company duly incorporated and validly existing under the Laws of the PRC (the Domestic Company);
(6) Newlinks Technology Limited, an exempted company duly incorporated and validly existing under the Laws of the Cayman Islands (the Controlling Shareholder);
(7) DAI Zhen (戴震), a Chinese citizen, ID number [Redacted] (the Founder); and
(8) Each of the entities listed in Exhibit A-1 (collectively the Investors and each an Investor).
The Company, the HK Company, the WFOE, the Domestic Company, the Major PRC Subsidiaries, the Controlling Shareholder and the Investors may hereinafter collectively be referred to as the Parties and respectively referred to as a Party.
Unless otherwise defined herein, capitalized terms used in this Agreement shall have the meanings ascribed to them in Section 1.
RECITALS
A. The Domestic Company, the Investors, and certain other parties thereto shall enter into certain onshore investment agreements (境内投资协议) (the Onshore Investment Agreements), in substantially the form attached hereto as Exhibit G, for the funds in a principal amount set forth opposite the name of the Investors in Exhibit A-1 (the Advanced Investment Funds).
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B. Subject to the terms and conditions set forth in this Agreement, the Company desires to issue and sell to the Investors the Warrants (as defined below), pursuant to which 9,495,072 Series A Preferred Shares would be allotted and issued to the Investors upon the exercise of such Warrants, and the Investors intend to subscribe for and purchase such Warrants from the Company.
C. The Parties intend to enter into this Agreement and make the respective representations, warranties, covenants and agreements set forth herein.
1.1 Certain Defined Terms.
For purposes of this Agreement:
Action means any notice, charge, claim, action, demand, complaint, petition, investigation, suit or other proceeding, whether administrative, civil or criminal, whether at law or in equity, and whether or not before any mediator, arbitrator or Governmental Authority.
Additional HK Companies means the Hong Kong companies that shall have been established by the Company prior to the Closing Date in accordance with the Reorganization Plan and Section 7.11 of this Agreement.
Additional WFOEs means the wholly foreign owned enterprises that the relevant Additional HK Companies will establish under the Laws of PRC after the Closing Date in accordance with the Reorganization Plan and Section 6.17 of this Agreement.
Affiliate means, (a) with respect to a Person, any other Person that, directly or indirectly, Controls, is Controlled by or is under common Control with such Person; and (b) in the case of an individual, shall include immediate family members of such individual (including his spouse, child, brother, sister, parent, mother-in-law, father-in-law, brother-in-law, sister-in-law, collectively, his Immediate Family Members), and trustee of any trust in which such individual or any of his Immediate Family Members is a beneficiary or a discretionary object, or any entity or company Controlled by any of the aforesaid persons. In the case of an Investor, the term Affiliate also includes (v) any direct or indirect shareholder of such Investor, (w) any of such shareholders or such Investors general partners or limited partners, (x) the fund manager managing or advising such shareholder or such Investor (and general partners, limited partners and officers thereof) and other funds managed or advised by such fund manager, and (y) trusts controlled by or for the benefit of any such Person referred to in (v), (w) or (x), and (z) any fund or holding company formed for investment purposes that is promoted, sponsored, managed, advised or serviced by such Investor. For the avoidance of doubt, the Investors shall not be deemed to be an Affiliate of any Group Company.
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Approval means any approval, license, permit, authorization, release, order, consent or franchise required to be obtained from, or any registration, qualification, certificate, designation, declaration, filing, notice, statement or other communication required to be filed with or delivered to, any Governmental Authority or any other Person, or any waiver of any of the foregoing.
Benefit Plan means any deferred compensation agreement, bonus plan, incentive plan, profit sharing plan, retirement agreement or other employment compensation agreement or any other plan established or maintained by any Group Company (or any predecessor of a Group Company) which provides or provided benefits for any employee of any Group Company or with respect to which contributions are or have been made by any Group Company on account of an employee of any Group Company.
Business Day means any day that is not a Saturday, Sunday, legal holiday or other day on which commercial banks are required or authorized by Law to be closed in the PRC or the Cayman Islands.
Business means the business any Group Company conducts or proposes to conduct from time to time.
Captive Structure means the structure under which the WFOE Controls Domestic Company through the Restructuring Documents and the financial statements of Domestic Company will be fully consolidated with those of the Company and the WFOE in accordance with the applicable accounting standards.
CFC means a controlled foreign corporation as defined in the Code.
Charter Documents means, as to a Person, such Persons certificate of incorporation, formation or registration (including, if relevant, certificates of change of name), memorandum of association, articles of association or incorporation, charter, by-laws, trust deed, trust instrument, joint venture or shareholders agreement or equivalent documents, and business license, in each case as amended; and means, as to PRC limited liability companies, the business license, articles of association, shareholders agreement or equivalent documents.
Circular 37 means the Circular 37, issued by SAFE on July 4, 2014, titled Circular on Issues concerning Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles (关于境内居民通过特殊目的公司境外投融资及返程投资外汇管理有关问题的通知 ), effective as of July 4, 2014, and any implementation successor rule or regulation under the PRC Law, and in each case, as amended.
CICC means CICC (Changde) Emerging Industry Venture Capital Partnership L.P. (中金(常德)新兴产业创业投资合伙企业(有限合伙)).
Code means the Internal Revenue Code of 1986, as amended.
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Contract means, as to any Person, any contract, agreement, undertaking, understanding, indenture, note, bond, loan, instrument, lease, mortgage, deed of trust, franchise, or license to which such Person is a party or by which such Person or any of its property is bound, whether oral or written.
Control of a given Person means the power or authority, whether exercised or not, to direct the business, management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, which power or authority shall conclusively be presumed to exist upon possession of beneficial ownership or power to direct the vote of more than fifty percent (50%) of the votes entitled to be cast at a meeting of the members or shareholders of such Person or power to control the composition of more than fifty percent (50%) of the board of directors of such Person; the term Controlled and Controlling have the meaning correlative to the foregoing.
Contributed Assets means the Transferred Assets, the Transferred Contracts, and the Transferred Employees.
Disclosure Schedule means the Disclosure Schedule attached to this Agreement as Exhibit D, dated as of the date hereof delivered by the Warrantors to the Investors on the date hereof in connection with this Agreement. Notwithstanding anything to the contrary contained in the Disclosure Schedule or in this Agreement, the information and disclosures contained in any section of the Disclosure Schedule shall be deemed to be disclosed and incorporated by reference in any other section of the Disclosure Schedule as though fully set forth in such other section for which the applicability of such information and disclosure is reasonably apparent on the face of such information or disclosure.
Domestic Resident has the meaning set forth in Circular 37 and/or other Law related to Circular 37.
Equity Securities means, with respect to a Person, any shares, share capital, registered capital, ownership interest, equity interest, or other securities of such Person, and any option, warrant, or right to subscribe for, acquire or purchase any of the foregoing, or any other security or instrument convertible into or exercisable or exchangeable for any of the foregoing, or any equity appreciation, phantom equity, equity plans or similar rights with respect to such Person, or any Contract of any kind for the purchase or acquisition from such Person of any of the foregoing, either directly or indirectly.
Fully Diluted Basis means the calculation is to be made assuming the exercise of all options, warrants or other securities that are convertible, exercisable or exchangeable into Companys shares and the conversion of all outstanding Preferred Shares (or would be outstanding assuming full exercise of all options, warrants or other securities that are convertible, exercisable or exchangeable into Companys Preferred Shares) into Companys Ordinary Shares.
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Governmental Authority means any nation or government, or any federation, province or state or any other political subdivision thereof; any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any government authority, agency, department, board, commission or instrumentality of the PRC, the Cayman Islands, Hong Kong or any other country, or any political subdivision thereof, any court, tribunal or arbitrator, and any self-regulatory organization.
Governmental Order means any applicable order, ruling, decision, verdict, decree, writ, subpoena, mandate, precept, command, directive, consent, approval, award, judgment, injunction or other similar determination or finding by, before or under the supervision of any Governmental Authority.
Group Companies means the Company and its Subsidiaries (including the HK Company, the WFOE, the Domestic Company, the PRC Subsidiaries, each Person (except individuals) Controlled by the Company and their respective Subsidiaries from time to time), and Group Company means any of them, unless otherwise specified in this Agreement. For the avoidance of doubt, Group Companies shall include the Additional WFOEs and the Additional HK Companies (upon their incorporation or establishment under the Laws of applicable jurisdictions).
Hong Kong means the Hong Kong Special Administrative Region of the Peoples Republic of China.
IFRS means the International Financial Reporting Standards promulgated by the International Accounting Standards Board (IASB) (which includes standards and interpretations approved by the IASB and International Accounting Principles issued under previous constitutions), together with its pronouncements thereon from time to time, and applied on a consistent basis.
Indemnifiable Loss means, with respect to any Person, any action, claim, cost, damage, diminution in value, disbursement, expense, liability, loss, obligation, penalty, settlement, or suit of any kind or nature, together with all interest, penalties, and reasonable and documented legal, accounting and other professional fees and expenses incurred in the investigation, collection, prosecution and defense of claims and amounts paid in settlement, that have been actually imposed on or otherwise actually incurred or suffered by such Person, whether directly or indirectly.
Intellectual Property means any and all intellectual property, industrial property and proprietary rights in any jurisdiction throughout the world, including: (a) patents, all patent rights and all applications therefor and all reissues, reexaminations, continuations, continuations-in-part, divisions, and patent term extensions thereof, (b) inventions (whether patentable or not), discoveries, improvements, concepts, innovations and industrial models, (c) registered and unregistered copyrights, copyright registrations and applications, authors rights, moral rights, mask works, copyrightable works, and works of authorship (including artwork of any kind and software of all types in whatever medium, inclusive of computer programs, and related documentation), (d) domain names and social media accounts, and any part thereof, (e) technical information, know-how, trade secrets, drawings, designs, design protocols, specifications for parts and devices, quality assurance and control procedures, design tools, manuals, research data concerning historic and current research and development efforts, and confidential information, including the results of successful and unsuccessful designs, databases and proprietary data, (f) proprietary processes, technology, engineering, formulae, algorithms and operational procedures, (g) trade names, corporate names, trade dress, trademarks, service marks, other indicia of source, origin or quality, and registrations and applications therefor, and (h) the goodwill of the business symbolized or represented by the foregoing, customer lists and other proprietary information and common-law rights.
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Key Employees means the key employees of the Group Companies listed in Exhibit B, and each a Key Employee.
Knowledge including the phrase to the best Knowledge of the Warrantors or to the Knowledge of the Warrantor means, (i) with respect to a Warrantor that is an individual, the actual knowledge of such Warrantor, and that knowledge which should have been acquired by such individual after making such due inquiry and exercising such due diligence as a prudent business person would have made or exercised in the management of his or her business affairs, and (ii) with respect to a Warrantor that is an institution, the Warrantor will be deemed to have Knowledge of a particular fact or other matter if any of its officers at the department head level or above, directors, Key Employees, consultants and professional advisers (including attorneys, accountants and auditors and to the extent of such individuals who are principally responsible for handling current matters for the Group Companies) is actually aware of such fact or other matter or should have become aware of such fact or other matter after making such due inquiry and exercising such due diligence as a prudent business person would have made or exercised in the management of his or her business affairs, and where any statement in the representations and warranties hereunder is expressed to be given or made to a Persons Knowledge, or so far as a party is aware, or is qualified in some other manner having a similar effect, the statement shall be deemed to be supplemented by the additional statement that such party has made such due inquiry and due diligence.
Law or Laws means any constitutional provision, statute or other law, rule, regulation, official policy or interpretation of any Governmental Authority and any Governmental Order.
Liabilities means, with respect to any Person, all debts, obligations, liabilities owed by such Person of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become due.
Lien means any mortgage, pledge, claim, security interest, encumbrance, title defect, lien, charge, easement, adverse claim, restrictive covenant, or other restriction or limitation of any kind whatsoever, including any restriction on the use, voting, transfer, receipt of income, or exercise of any attributes of ownership.
6
Material Adverse Effect means any (a) event, occurrence, fact, condition, change or development that has had, has, or would reasonably be expected to have a material adverse effect on the business, properties, assets, results of operations, condition (financial or otherwise), prospects or liabilities of the Group Companies taken as a whole, (b) material impairment of the ability of any Warrantor to perform its obligations under any Transaction Document or the Restructuring Documents that are material to the transactions contemplated therein; or (c) material impairment on the validity or enforceability of the Transaction Documents or the Restructuring Documents against the Warrantors which are a party thereto; provided, however, that in no event shall any change or event generally affecting the economic, financial market or political conditions in which the Group Companies operate be deemed to constitute a Material Adverse Effect unless such event has had a disproportionate impact on the Group Companies compared to other companies that operate in the territories or industries in which the Group Companies operate.
MIIT mean the Ministry of Industry and Information Technology of the PRC, including its local counterparts.
MOFCOM means the Ministry of Commerce of the PRC, including its local counterparts.
NDRC means the National Development and Reform Commission of the PRC, including its local counterparts.
Ordinary Shares means the ordinary shares in the capital of the Company with a par value of US$0.0001 per share.
PBOC means the Peoples Bank of China or any of its local branches.
Person means any individual, corporation, partnership, limited partnership, proprietorship, association, limited liability company, firm, trust, estate or other enterprise or entity.
PFIC means a passive foreign investment company as defined in the Code.
PRC Anti-Corruption Law means any Laws, regulations, rules, provisions, implementation regulations, orders, notices, guidance and procedures issued by legislators and/or empowered Governmental Authorities of the PRC, that are effective and are amended from time to time, regulating corruption, governmental bribery, commercial and private bribery, bribery facilitation, unfair-competition, unlawful solicitation and any other related activity or conduct, which includes, but is not limited to, the Criminal Law of the Peoples Republic of China, the Anti-Unfair Competition Law of the Peoples Republic of China, the Interim Provisions on the Prohibition of Commercial Bribery, the Implementation Measures for the Code of Ethics for Officials of the Communist Party of China, the rules and procedures set by the Supreme Peoples Court of the Peoples Republic of China and the Supreme Peoples Procuratorate of the Peoples Republic of China, and the rules and procedures of the Commission for Discipline Inspection of the Central Committee of the Chinese Communist Party and its local counterparts.
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PRC Companies means the WFOE, the Domestic Company, and the PRC Subsidiaries.
PRC Subsidiaries means the entities listed in Exhibit A.
PRC GAAP means the generally accepted accounting principles in the PRC in effect from time to time.
PRC means the Peoples Republic of China but solely for purposes of this Agreement, does not include Hong Kong, the Macau Special Administrative Region and Taiwan.
Preferred Shares means the Series A Preferred Shares.
Public Official means (a) any employee or official of any Governmental Authority, including any employee or official of any entity owned or controlled by a Governmental Authority, (b) any employee or official of a political party, (c) any candidate for political office or his employee or associate, (d) any employee or official of an international organization, or (e) any person who acts in an official capacity for or on behalf of any of the foregoing.
Reorganization Plan means the transactions for the transfer of the Contributed Assets to the Group Companies from third parties and from other Subsidiaries of the Controlling Shareholder.
Restructuring Documents means the restructuring documents executed by the WFOE, the Domestic Company, the shareholders of the Domestic Company and other relevant parties on January 5, 2022, which includes the Exclusive Business Cooperation Agreement, Equity Interest Pledge Agreement, Exclusive Option Agreement and Power of Attorney.
RMB means Renminbi, the lawful currency of the PRC.
SAFE means the State Administration of Foreign Exchange of the PRC, including its local counterparts.
SAMR means the State Administration for Market Regulation of the PRC, including its local counterparts.
Securities Act means the U.S. Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder.
Series A Preferred Shares means series A preferred shares in the capital of the Company then outstanding and issued, with a par value of US$0.0001 per share, having the rights and privileges in the Shareholders Agreement and Amended M&AA.
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Statement Date means July 31, 2021.
Subsidiary means, with respect to a specific entity, (i) any entity (x) more than fifty percent (50%) of whose shares or other interests entitled to vote or (y) more than a fifty percent (50%) of whose interests in the profits or capital of such entity are owned or Controlled directly or indirectly by the subject entity or through one (1) or more Subsidiaries of the subject entity; (ii) any entity whose assets, or portions thereof, are consolidated with the net earnings of the subject entity and are recorded on the books of the subject entity for financial reporting purposes in accordance with PRC GAAP, U.S. GAAP or IFRS; or (iii) any entity with respect to which the subject entity has the power to otherwise direct the business and policies of that entity directly or indirectly. For the avoidance of doubt, the Subsidiaries of the Company shall include the HK Company, the WFOE, the Domestic Company, the PRC Subsidiaries, the Additional HK Companies and the Additional WFOEs (upon their incorporation or establishment under the Laws of applicable jurisdictions) and any other Subsidiary to be established by any of them from time to time.
Tax Return means any return, declaration, report, estimate, claim for refund, claim for extension, information return, or statement relating to any Tax, including any schedule or attachment thereto.
Tax means any national, provincial or local income, sales and use, excise, franchise, real and personal property, gross receipt, capital stock, production, business and occupation, disability, employment, payroll, severance or withholding tax or any other type of tax, levy, assessment, custom duty or charge imposed by any Governmental Authority, any interest and penalties (civil or criminal) related thereto or to the non-payment thereof, and any loss or tax Liability incurred in connection with the determination, settlement or litigation of any Liability arising therefrom.
Transaction Documents means this Agreement, the Amended M&AA, the Shareholders Agreement, the Warrants, the Onshore Investment Agreements, the Restructuring Documents, the exhibits attached to any of the foregoing and each of the agreements and other documents otherwise required in connection with implementing the transactions contemplated by any of the foregoing.
Transferred Assets means all the assets (whether tangible and intangible, including without limitation the Intellectual Property), which were not currently owned by any Group Company that are wholly attributable to the Business and set forth with particularly in the Reorganization Plan.
Transferred Contracts means all the Contracts, which were not previously signed by any Group Company that are wholly attributable to the Business and set forth with particularly in the Reorganization Plan.
Transferred Employees means all the employees, who are not currently employed by a Group Company but who will be employed by a Group Company as set forth with particularity in the Reorganization Plan.
9
U.S. means the United States of America.
U.S. GAAP means the generally accepted accounting principles in the U.S. in effect from time to time.
US$ or $ means the lawful currency of the U.S.
1.2 Definitions.
The following terms have the meanings set forth in the Sections set forth below:
Advanced Investment Funds |
Recital | |
Agreement |
Preamble | |
Amended M&AA |
Section 2.1 | |
Anti-Corruption Laws |
Section 3.18(d) | |
Arbitration Rules |
Section 10.13 | |
Board |
Section 3.2(a) | |
Capital Injection Amount |
Section 6.16 | |
Closing |
Section 2.3 | |
Closing Date |
Section 2.3 | |
Company |
Preamble | |
Confidential Information |
Section 10.10(a) | |
Conversion Shares |
Section 3.2(c) | |
Disclosing Party |
Section 10.10(c) | |
Domestic Company |
Preamble | |
ESOP |
Section 3.2(a)(iii) | |
FCPA |
Section 3.18(d) | |
Financial Statements |
Section 3.13(a) | |
HK Company |
Preamble | |
HKIAC |
Section 10.13 | |
Immediate Family Members |
Section 1.1 | |
Indemnified Person |
Section 9.1 | |
Investor or Investors |
Preamble | |
Material Contracts |
Section 3.17(a) |
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Money Laundering Laws Onshore Investment Agreements Party or Parties Permits Proceeds Prohibited Person Related Party Related Party Contract Representatives Reserved Preferred Shares Sanctioned Country Sanctions Shareholders Agreement Social Welfare Warrants Warrantor or Warrantors WFOE 1.3 Interpretation and Rules of Construction. In this Agreement, except to the extent otherwise provided or that the context otherwise requires: (a) when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or
an Exhibit or Schedule to, this Agreement unless otherwise indicated; (b) the table of contents and headings for this Agreement are for
reference purposes only and do not affect in any way the meaning or interpretation of this Agreement; (c) whenever the words
include, includes or including are used in this Agreement, they are deemed to be followed by the words without limitation; (d) the words hereof, herein and hereunder and words of similar import, when used in this Agreement, refer
to this Agreement as a whole and not to any particular provision of this Agreement; 11
(e) all terms defined in this Agreement have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto, unless otherwise defined therein; (f) the definitions contained in this
Agreement are applicable to the singular as well as the plural forms of such terms; (g) references to a Person are also to its successors
and permitted assigns; (h) the use of or is not intended to be exclusive unless expressly indicated otherwise; (i) any reference to a contract or document is to that contract or document as amended, novated, supplemented, restated or replaced from time
to time; and (j) if any rights or obligations under this Agreement fall on a day or date which is not a Business Day, such rights or
obligations shall instead fall on the next succeeding Business Day after such stated day or date. 2. SALE AND PURCHASE, CLOSING
2.1 Authorization. As of the Closing, the Company will have authorized the issuance, pursuant to the terms and conditions of this Agreement, of a total of
9,495,072 Series A Preferred Shares, each having the rights, preferences, privileges and restrictions set forth in the Second Amended and Restated Memorandum and Articles of Association of the Company attached hereto as Exhibit E (the
Amended M&AA) and the Shareholders Agreement attached hereto as Exhibit F (the Shareholders Agreement). 2.2 Agreement to Purchase and Sale. (a) Agreement to Issue the Warrants. (i) Subject to the terms and conditions hereof and entering into the Onshore Investment Agreements, at the Closing, the Company shall issue to
each of the Investors, and each of the Investors hereby agrees to accept from the Company a warrant in the form attached hereto as Exhibit H respectively (the Warrants) to purchase such number of Series A Preferred Shares
set forth opposite the name of such Investor in Exhibit A-1; (ii) The Warrants shall be
issued by the Company, and subscribed for by the Investors, for no additional consideration other than the Investors provision of the principal amount of the Advanced Investment Funds to be provided to the Domestic Company in accordance with
the terms under the Onshore Investment Agreements. 12
(b) Exercise of the Warrants. Each Party hereby agrees that, subject to
Section 2.2(a), within ten (10) Business Days after the relevant Investor and/or its Affiliates has completed the ODI Approvals (as defined in its Warrant), such Investor shall deliver the exercise notice to the Company to exercise its
Warrant pursuant to the terms and conditions of its Warrant. The Company and each other Party undertake to use their best efforts to cooperate with and assist, and undertake to procure that each shareholder of the Company use its best efforts to
cooperate with and assist in completing the exercise of such Investors Warrant, including executing any and all necessary agreements and documents to approve such transactions, waiving any pre-emptive right, right of first refusal,
anti-dilution rights and any other similar rights, and amending the relevant Transaction Documents. 2.3 Closing. The consummation of the purchase and sale of the Warrants shall be conducted remotely by exchange of documents and signatures, on a date no
later than fifteen (15) Business Days after the fulfilment or waiver of the conditions to the Closing as set forth in Section 7 and Section 8 respectively, or at such other place and time, with respect to each Investor, as the Company
and such Investor may mutually agree upon (with respect to such Investor, the Closing, and the date of the Closing, the Closing Date). For avoidance of any doubt, the Closing may occur
respectively for each Investor without being conditional or dependent on the occurrence of the Closing(s) between any other Investors and the Company. 2.4 Pre-Money Valuation. The total price payable by the Investors for purchasing the Warrants represents a pre-money valuation
of the Company equal to US$500,000,000, including 6,818,182 Ordinary Shares reserved under the ESOP. 2.5 Deliverables by the Company at
the Closing. Subject to Sections 7 and 8, prior to or at the Closing, the Company shall deliver the following items to each Investor:
(a) subject to Section 2.2, the Warrant issued by the Company to such Investor, in substantially the form attached hereto as
Exhibit H; (b) the counterparts of each Transaction Document duly executed by each of the parties thereto (other than such
Investor); (c) the certified true copies of the board and/or shareholders resolutions of each Warrantor approving, among other things, the
transactions contemplated by this Agreement and any other Transaction Documents to which it is a party; 13
(d) a compliance certificate dated as of the Closing signed by each Warrantor or a duly
authorized representative of each Warrantor, as applicable, certifying that all of the conditions set forth in Section 7 have been fulfilled. 2.6 Deliverables by the Investors at the Closing. Subject to the satisfaction or waiver of all the conditions set forth in Section 7 below and against the delivery of applicable items set
for the in Section 2.5 above, (i) on the Closing Date, each Investor shall have entered into the relevant Onshore Investment Agreement, and (ii) subject to the satisfaction of the conditions set forth in the relevant Onshore
Investment Agreement, each Investor shall extend the applicable Advanced Investment Funds in the amount as set forth in the Exhibit A-1 hereto in accordance with such Investors Onshore Investment
Agreement by remittance of immediately available funds to the bank account as designated in writing by the Domestic Company and delivered to it at least fifteen (15) Business Days prior to the funding of such Advance Investment Funds. 2.7 Several and Not Joint Obligations. The Investors respective obligations, undertakings, warranties, representations and liabilities under this Agreement are several and not
joint. In the event that any Investor fails to or decides not to close the purchase and sale of the Purchase Shares or the Warrants, the other Investors shall not be subject to any liability or claim or otherwise adversely affected and may elect at
its sole discretion to proceed or not to proceed with the Closing, provided that if any of such other Investors elects to proceed with the Closing, the relevant provisions under the Transaction Documents shall be adjusted accordingly as appropriate.
3. REPRESENTATIONS AND WARRANTIES OF THE WARRANTORS Each of the Founder, the Controlling Shareholder, the Company, the HK Company, the WFOE, the Domestic Company and the Major PRC Subsidiaries
(collectively the Warrantors and each a Warrantor) hereby jointly and severally represents and warrants to the Investors that, except as set forth in the Disclosure Schedule, which exceptions shall be deemed to
be part of the representations and warranties made hereunder, each of the statements contained in this Section 3 is true, accurate and complete from the date hereof to the Closing Date (unless otherwise specified) hereunder (or, if such
representations and warranties are made with respect to a certain date, as of such date). 3.1 Organization, Good Standing and
Qualification. Each Group Company is duly organized, validly existing and in good standing (or equivalent status in the relevant
jurisdiction) under, or by virtue of, the Laws of the jurisdiction of its incorporation or establishment. Each Group Company has all requisite legal and corporate power and authority to own, lease and operate its properties and assets and to carry
on the Business, and is duly qualified to transact business in each jurisdiction in which the failure to so qualify would reasonably be expected to result in a Material Adverse Effect. Each of the Company and the HK Company was formed solely to
acquire and hold the equity interests in the other Group Companies and since its formation has not engaged in any other business and has not incurred any Liability. No order has been made or petition presented or resolution passed for the winding
up, liquidation or dissolution of any Group Company and no distress, execution or other process has been levied on any Group Companys assets. 14
3.2 Capitalization. Immediately prior to the Closing (but after giving effect to the adoption of the Amended M&AA, which will become effective on the Closing
Date), the authorized share capital of the Company consists of the following: (a) Ordinary Shares. 490,504,928 Ordinary Shares, par
value US$0.0001 per share, of which: (i) 50,000,000 shares are issued and outstanding; (ii) 9,495,072 shares are reserved for issuance upon conversion of the Series A Preferred Shares; and (iii) 6,818,182 shares are reserved for issuance to the selected employees and members of the Group Companies management team as
approved by the board of directors of the Company (the Board) pursuant to the Companys employee share option plan (or any equivalent equity incentive program or arrangement) (the ESOP) adopted by the
Company. (b) Series A Preferred Shares. 9,495,072 Series A Preferred Shares, par value US$0.0001 per share, none of which are
issued and outstanding. (c) Options, Warrants, Reserved Shares. The Company has reserved sufficient Ordinary Shares for issuance
(i) upon the conversion of the Preferred Shares, and (ii) pursuant to ESOP (collectively, the Conversion Shares). The Company has reserved sufficient Preferred Shares for issuance upon the exercise of the Warrants (the
Reserved Preferred Shares). Except (i) as described above and (ii) as contemplated under the Transaction Documents, there are no options, warrants, conversion privileges or other rights, or agreements with respect to the
issuance thereof, presently outstanding to purchase any of the Equity Securities of the Group Companies. Apart from the exceptions noted in this Section 3.2 and the Transaction Documents, no shares (including the Ordinary Shares and Series A
Preferred Shares) of the Companys outstanding share capital, or shares issuable upon exercise or exchange of any outstanding options or other shares issuable by the Company, are subject to any pre-emptive rights, rights of first refusal or
other rights to purchase such shares (whether in favor of the Company or any other Person). (d) Section 3.2(d) of the Disclosure
Schedule completely and accurately lists, as of (i) immediately prior to the Closing; (ii) immediately after the Closing, the outstanding and authorized Equity Securities of each Group Company, and the record and beneficial holders
thereof. 15
(e) The registered capital of the Domestic Company has been timely paid in accordance with
the PRC Law and its articles of association as of the date hereof. (f) All presently outstanding Equity Securities of each of the Company
or the HK Company were duly and validly issued (or subscribed for) in compliance with all applicable Laws, pre-emptive rights of any Person, and applicable Contracts, and are fully paid and non-assessable. All share capital of each Group Company is and as of the Closing shall be free and clear of any and all Liens or other third-party rights, claims or interests (except as provided under the
Transaction Documents). Except as contemplated under the Transaction Documents, there are no (a) resolutions pending to increase the share capital of any Group Company or cause the liquidation, winding up, or dissolution of any Group Company or
(b) dividends which have accrued or been declared but are unpaid by any Group Company. (g) Other than the Transaction Documents, no
Group Companys Contracts relating to its Equity Securities that are subject to any vesting schedule provides for acceleration of vesting (or lapse of a repurchase right) or other changes in the vesting provisions or other terms of such
agreement or understanding upon the occurrence of any event or combination of events. Other than those contemplated in the Transaction Documents, no Group Company has ever adjusted or amended the exercise price of any share options previously
awarded (if any), whether through amendment, cancellation, replacement grant, repricing, or any other means. (h) After giving effect to
the transactions contemplated in the Transaction Documents, except as provided in the Shareholders Agreement, the Company has not granted or agreed to grant any person or entity any registration rights (including piggyback registration
rights). 3.3 Subsidiaries. Section 3.3 of the Disclosure Schedule sets forth a complete structure chart showing the Group Companies, and
indicating the ownership and Control relationships among all Group Companies, the Controlling Shareholder and other shareholders (if any). The Company is the sole legal and beneficial owner of the HK Company free and clear of any and all Liens or
other third-party rights, claims or interests, and the HK Company is the sole legal and beneficial owner of the WFOE free and clear of any and all Liens or other third-party rights, claims or interests. Except for the Restructuring Documents, there
is no agreement among the Controlling Shareholder or any Group Company, on one hand, and any Group Company, any other shareholder of any Group Company and/or any other Person, on the other hand, with respect to the ownership or Control of any of the
Group Companies. No Group Company currently owns or Controls, directly or indirectly, any interest or share in any other Person (other than another Group Company) or is currently a participant in any joint venture, partnership or similar
arrangement. No Group Company is obligated to make any investment in or capital contribution in or on behalf of any other Person. Other than the Warrants, no Group Company has or is bound by any outstanding subscriptions, options, warrants, calls,
commitments, rights agreements or agreements of any character calling for it to issue, deliver or sell, or cause to be issued, delivered or sold, any of its Equity Securities. Other than the Transaction Documents, there are no outstanding
contractual obligations of any Group Company to repurchase, redeem or otherwise acquire any of its Equity Securities. 16
3.4 PRC Companies. Except as disclosed in Section 3.4 of the Disclosure Schedule: (a) The registered capital of the WFOE is fully paid as required under its articles of association and one hundred percent (100%) of the equity
interest of the WFOE is duly vested in the HK Company as the sole investor in and owner of the WFOE in accordance with applicable PRC Law. (b) One hundred percent (100%) of the equity interests of each PRC Company is duly vested in its shareholders as its sole investors and owners
in accordance with applicable PRC Law. (c) Except as provided under the Restructuring Documents, there are no outstanding rights, or
commitments made by each of the PRC Companies to issue or sell or any of its investors and owners, to purchase any equity interest in each of the PRC Companies. (d) Except as contemplated under the Transaction Documents, there are no bonds, debentures, notes or other indebtedness of any of the PRC
Companies having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of equity interests of each of the PRC Companies may vote. (e) Each of the WFOE and the Domestic Company has operations in its respective registered office. (f) The incorporation documents relating to each of the PRC Companies are valid and have been duly approved or issued (as applicable) by the
appropriate PRC authorities and are valid and in full force. (g) Except as disclosed in Section 3.4(g) of the
Disclosure Schedule, all material Approvals from Governmental Authorities required for the qualifications of each PRC Companies for its Businesses under PRC Laws as currently operated, or contemplated to be operated, have been duly obtained from
the appropriate PRC authorities and are in full force and effect. (h) All filings and registrations with the PRC Governmental Authorities
required in respect of each of the PRC Companies and its operations, including MOFCOM, SAMR, SAFE, MIIT, PBOC, the supervision and administration department of safety in production, tax bureau, customs authorities, product registration authorities
and health regulatory authorities, as applicable, have been duly completed, in all material respects, in accordance with the relevant Laws. 17
(i) None of the PRC Companies has received any letter or notice from any relevant
Governmental Authority notifying each of the PRC Companies of the revocation of any Approvals from Governmental Authorities issued to it for non-compliance or the need for compliance or remedial actions in respect of the activities carried out
directly or indirectly by each of the PRC Companies. (j) No Group Company has any reason to believe that any Approvals from Governmental
Authorities requisite for the conduct of any part of each of the PRC Companies Business which are subject to periodic renewal will not be granted or renewed by the relevant PRC Governmental Authorities. (k) With respect to any land use right, building, property and investment held or leased by each of the PRC Companies, it has exclusive, full
and unimpaired legal and beneficial ownership of its rights, leasehold interests, property and investments free from any mortgages or security interests of any nature, third party rights, conditions, orders or other restrictions and has obtained all
material Approvals and effected all material registrations with Government Authorities with respect thereto. (l) All applicable Laws with
respect to the opening and operation of foreign exchange accounts and foreign exchange activities of each of the PRC Companies have been complied with in all material respects, and all material Approvals from the SAFE in relation thereto have been
duly obtained. (m) With regard to employment and staff or labour management, each of the PRC Companies has complied in all material
respects with all applicable PRC Laws, other than Laws pertaining to Social Welfare, with regard to which each of the PRC Companies has complied with all such Laws, except for any such failure to comply with Laws pertaining to Social Welfare that
would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect. (n) There are no outstanding
stock options with respect to each of the PRC Companies. 3.5 Restructuring Documents. (a) The execution, delivery and performance by each and all of the Warrantors of their respective obligations under each and all of the
Restructuring Documents, and the consummation of the transactions contemplated thereunder, do not and will not result in any violation of their respective Charter Documents or any applicable PRC Laws. (b) Each Restructuring Document is, and all the Restructuring Documents taken as a whole are, legal, valid, enforceable and admissible as
evidence under PRC Laws, and constitute the legal and binding obligations of the relevant parties. 18
(c) As of the Closing Date, the WFOE shall have effective control of the Domestic Company
and is the sole beneficiary of the Domestic Company, such that the financial statements of the Domestic Company can be consolidated with those of the other Group Companies in accordance with the applicable accounting principles. There have been no
disputes, disagreements, claims or any legal proceedings of any nature, raised by any Governmental Authority or any other party, pending or, to the Knowledge of the Warrantors, threatened against or affecting any of the Company, WFOE or the Domestic
Company that: (i) challenge the validity or enforceability of any part or all of the Restructuring Documents taken as whole; (ii) challenge the Captive Structure as set forth in the Restructuring Documents; (iii) claim any ownership,
share, equity or interest in WFOE or the Domestic Company, or claim any compensation for not being granted any ownership, share, equity or interest in WFOE or the Domestic Company; or (iv) claim any of the Restructuring Documents or the Captive
Structure thereof or any arrangements or performance of or in accordance with the Restructuring Documents was, is or will violate any PRC Laws. 3.6 Due Authorization. Each Warrantor has all requisite power and authority to execute and deliver the Transaction Documents to which it is a party and to carry out
and perform its obligations thereunder. All action on the part of each Warrantor (and, as applicable, its officers, directors and shareholders) necessary for the authorization, execution and delivery of the Transaction Documents to which it is a
party, the performance of all obligations of each Warrantor thereunder, and, in the case of the Company, the authorization, issuance (or reservation for issuance), sale, transfer and delivery of the Purchased Shares, the Warrants, the Reserved
Preferred Shares and the Conversion Shares issuable upon conversion of the Series A Preferred Shares, will be taken at the Closing pursuant to Section 2.3. The Company has, prior to the date hereof, obtained irrevocable waivers from all
existing shareholders or warrant holders of the Company of their pre-emptive rights to subscribe for the Purchased Shares, the Warrants and the Reserved Preferred Shares. This Agreement has been duly executed
and delivered by each Warrantor. This Agreement and each of the other Transaction Documents are, or when executed and delivered by such Warrantor shall be, valid and legally binding obligations of such Warrantor, enforceable against such Warrantor
in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other Laws of general application affecting enforcement of creditors rights generally, and (ii) as limited by
Laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. 3.7 Valid Issuance. (a) The Purchased Shares, the Warrants and the Reserved Preferred Shares, when issued, sold and delivered in accordance with the terms of this
Agreement and the Warrants for the consideration expressed herein, will be duly and validly issued, fully paid and non-assessable, free and clear of any Liens (except as provided under applicable securities
Laws and under the Transaction Documents). The Conversion Shares with respect to the Purchased Shares and the Reserved Preferred Shares have been duly and validly reserved for issuance and, upon issuance in accordance with the terms of the Amended
M&AA, will be duly and validly issued, fully paid and non-assessable (except as provided under the Transaction Documents and applicable Laws). 19
(b) All currently outstanding Equity Securities of the Company are duly and validly issued,
fully paid and non-assessable and free of any Liens, and in each case such Equity Securities have been issued in full compliance with the requirements of all applicable securities Laws and regulations,
including the Securities Act, and all other antifraud and other provisions of applicable securities Laws. 3.8 Governmental
Consents. No Approval from Governmental Authorities with respect to or on the part of any Group Company or the Controlling Shareholder
is required in connection with its valid execution, delivery, or performance of this Agreement, Restructuring Documents or the other Transaction Documents or the offer, sale, issuance, transfer or reservation for issuance of any Purchased Shares
and/or the Warrants in accordance with and as contemplated by this Agreement. 3.9 Exempt Offering. The offer, sale, transfer and issuance of the Purchased Shares and/or the Warrants as contemplated by the Transaction Documents, are exempt
from the qualification, registration and prospectus delivery requirements of the Securities Act and any other applicable securities Laws of any Governmental Authorities. 3.10 Regulatory Matters. (a) Without limiting any particular representations and warranties of the foregoing, (i) the Founder and the Group Companies have obtained
any and all material Approvals from applicable Governmental Authorities and have fulfilled any and all material filings and registration requirements with applicable Governmental Authorities necessary with respect to the Group Companies and their
operations; and (ii) all material filings and registrations with applicable Governmental Authorities required with respect to the Group Companies and the Founder have been duly completed in accordance with applicable Laws. No Group Company or
Founder has received any letter or notice from any applicable Governmental Authorities notifying it of the revocation of any Approval issued to it or the need for compliance or remedial actions with respect to the activities carried out directly or
indirectly by such Person. Each Group Company has been substantively conducting its Business activities within the permitted scope of business or is otherwise operating its Businesses in substantive compliance with all relevant Laws in all material
respects. There are no outstanding fines or penalties asserted against the Group Companies by any Governmental Authority, and none of the Founder and the Group Companies has reason to believe that any authorization of any Governmental Authority,
license or permit required for the conduct of any part of its Business which is subject to periodic renewal will not be granted or renewed by the relevant Governmental Authorities. 20
(b) The Founder has completed the reporting and registration requirements for the Founder
under Circular 37 or any other applicable SAFE rules and regulations (collectively, the SAFE Rules and Regulations) in order to effect his indirect holding of Ordinary Shares of the Company and believes that he can update the
Circular 37 Registration in connection with the transactions as contemplated under the Transaction Documents if required by applicable Laws (including the SAFE Rules and Regulations) or by SAFE. To the best Knowledge of the Warrantors, each holder
of any Equity Securities of the Company (for the avoidance of doubt, excluding the holders of the Preferred Shares and the holders of the preferred shares of the Controlling Shareholder) (each, a Company Security Holder), who is a
Domestic Resident (or has Domestic Resident(s) as its beneficial owner) and subject to any of the registration or reporting requirements of SAFE Rules and Regulations, will complete such reporting and registration requirements under the SAFE Rules
and Regulations in order to effect his or her direct or indirect holding of Ordinary Shares of the Company, prior to the recording to the name of such Company Security Holder on the register of members of the Company. Neither the Warrantors nor, to
the best Knowledge of the Warrantors, any of the Company Security Holders has received any oral or written inquiries, notifications, orders or any other forms of official correspondence from SAFE or any of its local branches with respect to any
actual or alleged non-compliance with the SAFE Rules and Regulations and the Company and, to the best Knowledge of the Warrantors, the Company Security Holders have made all written filings, registrations,
reporting or any other communications required by SAFE or any of its local branches. The Domestic Company has not conducted any foreign exchange transactions or other transactions subject to Approvals from SAFE. To the best Knowledge of the
Warrantors, there exists no grounds on which any of the Group Companies may be subject to liability or penalties for any Persons failure or defect of registration, misrepresentation or failure to disclose any material information to the
issuing SAFE authority. 3.11 Tax Matters. (a) Each Group Company (i) has timely filed (taking into account any extension of time within which to file) all Tax Returns that are
required to be filed by it with any Governmental Authority, (ii) has timely paid all Taxes owed by it which are due and payable (whether or not shown on any Tax Return) and withheld and remitted to the appropriate Governmental Authority all
Taxes which it is obligated to withhold and remit from amounts owing to any employee, creditor, customer or third party, and (iii) has not waived any statute of limitations with respect to Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency other than, in the case of clauses (i) and (ii), unpaid Taxes that are in contest with the Tax authority by any Group Company in good faith or are nonmaterial in amount. 21
(b) Each Tax Return referred to in paragraph (a) above was properly prepared in
compliance with applicable Laws and was (and will be) true, correct and complete in all respects. None of such Tax Returns contains a statement that is false or misleading or omits any matter that is required to be included or without which the
statement would be false or misleading. No reporting position was taken on any such Tax Return which has not been disclosed to the appropriate Tax authority or in such Tax Return, as may be required by Law. All records relating to such Tax Returns
or to the preparation thereof required by applicable Law to be maintained by applicable Group Company have been duly maintained. No written claim has been made by a Governmental Authority in a jurisdiction where any Group Company does not file Tax
Returns that such Group Company is or may be subject to taxation by that jurisdiction. (c) The assessment of any additional Taxes with
respect to the applicable Group Company for periods for which Tax Returns have been filed is not expected to exceed the recorded Liability therefor in the most recent balance sheet in the Financial Statements, and to the Knowledge of the Warrantors,
there are no unresolved questions or claims concerning any Tax Liability of any Group Company. Since the Statement Date, no Group Company has incurred any Liability for Taxes outside the ordinary course of business or otherwise inconsistent with
past custom and practice. There is no pending dispute with, or notice from, any Tax authority relating to any of the Tax Returns filed by any Group Company, and to the best Knowledge of the Warrantors, there is no proposed Liability for a deficiency
in any Tax to be imposed upon the properties or assets of any Group Company. (d) No Group Company has been the subject of any examination
or investigation by any Tax authority relating to the conduct of its Business or the payment or withholding of Taxes that has not been resolved or is currently the subject of any examination or investigation by any Tax authority relating to the
conduct of its Business or the payment or withholding of Taxes. No Group Company is responsible for the Taxes of any other Person by reason of contract, successor liability or otherwise. (e) No Group Company is or has ever been a PFIC or CFC. To the best Knowledge of the Warrantors, no Group Company anticipates that it will
become a PFIC or CFC for the current taxable year or any future taxable year. 3.12 Charter Documents; Books and Records. The Charter Documents of each Group Company are in the form provided to the Investors. Each Group Company has made available to the Investors
or its counsel a copy of its minute books. Such copy is true, correct and complete, and contains all amendments and all minutes of meetings and actions taken by its shareholders and directors since the time of formation through the date hereof and
reflects in all material respects all transactions referred to in such minutes accurately. Each Group Company maintains its books of accounts and records in the usual, regular and ordinary manner, on a basis consistent with prior practice. 22
3.13 Financial Statements and Internal Controls. (a) The Warrantors have provided the Investors with the financial statements of the Group Companies consisting of the unaudited balance sheet,
income statement and cash flow statement of the Group Companies for the period from January 1, 2019 to the Statement Date prepared by the respective Group Company in accordance with PRC GAAP applied on a consistent basis (the Financial
Statements). The Financial Statements (i) have been prepared in accordance with the books and records of the relevant Group Company, (ii) are true, correct and complete to the extent that they fairly present, in accordance with
PRC GAAP, the financial condition and position of the relevant Group Company as of the dates indicated therein and the results of operations and cash flows of the relevant Group Company for the periods indicated therein in all material respects, and
(iii) were prepared in accordance with PRC GAAP applied on a consistent basis throughout the periods involved, except for the omission of notes thereto and normal year-end audit adjustments. All of the
accounts receivable owing to any of the Group Companies, including all accounts receivable set forth on the Financial Statements, constitute valid and enforceable claims and are good and collectible in the ordinary course of business, net of any
reserves shown on the Financial Statements (which reserves are adequate and were calculated on a basis consistent with PRC GAAP), and no further goods or services are required to be provided in order to complete the sales and to entitle the
applicable Group Company to collect in full. To the best Knowledge of the Warrantors, there are no material contingent or asserted claims, refusals to pay, or other rights of set-off with respect to any
accounts receivable of the Group Companies. The Group Companies have good and marketable title to all assets set forth on the Financial Statements, except for such assets as have been spent, sold or transferred in the ordinary course of business
since the Statement Date. Each Group Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with generally accepted accounting principles as required in the jurisdiction where it is
incorporated. (b) Each Group Company has maintained its (x) books and records reflecting its assets and liabilities that are accurate
in all material respects, and (y) adequate and effective internal accounting controls which provide the assurance that (i) such system is in accordance with applicable Laws and applicable accounting principles, (ii) transactions by it are
executed in accordance with managements general or specific authorization, (iii) transactions by it are recorded as necessary to permit preparation of financial statements in conformity with the applicable accounting principles and to
maintain asset accountability, (iv) access to assets of it is permitted only in accordance with managements general or specific authorization, (v) the recorded inventory of assets is compared with the existing tangible assets at
reasonable intervals and appropriate action is taken with respect to any material differences, (vi) segregating duties for cash deposits, cash reconciliation, cash payment, proper approval is established, and (vii) no personal assets or
bank accounts of the employees, directors, officers are mingled with the corporate assets or corporate bank account, and no Group Company uses any personal bank accounts of any employees, directors, officers thereof during the operation of the
Business. 23
3.14 Activities since the Statement
Date. Since the Statement Date and except as provided by or contemplated under the Transaction Documents or otherwise disclosed
in Section 3.14 of the Disclosure Schedule, the Group Companies have (i) operated the Business in the ordinary course of business consistent with past practice, (ii) used its reasonable best efforts to
preserve its Business, (iii) collected receivables and paid payables and similar obligations in the ordinary course of business consistent with past practice, and (iv) not engaged in any new line of business outside the Business or entered
into any material agreement, transaction or activity or made any commitment with respect to the following, except those in the ordinary course of business or pursuant to the Reorganization Plan, and there has not been any material adverse change in
the way the Group Companies conduct the Business, including that there has not been by or with respect to any Group Company, except any act taken or omission made in accordance with paragraph 2 of Exhibit I: (a) any purchase, acquisition, sale, lease, disposal of or other transfer of any assets (including any (i) license of, grant of other
rights under, Intellectual Property rights to third parties, (ii) abandonment or permission to lapse of, or permission to be subject to any Lien with respect to, Intellectual Property rights, or (iii) other than in the ordinary course of
business consistent with past practice and under appropriate confidentiality agreements, disclosure of confidential information) that are individually or in the aggregate material to its Business, whether tangible or intangible, other than the
purchase or sale of inventory in the ordinary course of business consistent with past practice, and no acquisition (by merger, consolidation or other combination, or acquisition of stock or assets, or otherwise) of any business or other Person or
division thereof; (b) any waiver, termination, settlement or compromise of a right, debt or claim exceeding RMB5,000,000; (c) any incurrence, creation, assumption, repayment, satisfaction, or discharge of (i) any Lien in an amount exceeding RMB5,000,000 or
(ii) any indebtedness or guarantee, or the making of any loan or advance (other than reasonable and normal advances to employees for bona fide expenses that are incurred in the ordinary course of business consistent with past practice), or the
making of any investment or capital contribution; (d) any amendment to any Material Contract, any entering of any new Contract, or any
termination of any Contract that would have been a Material Contract if in effect on the date hereof, or any amendment to any Charter Document, or any amendment to or waiver under any Charter Document; (e) any material change in any compensation arrangement or agreement with the Key Employee, or adoption of any new Benefit Plan, or any change
in any existing Benefit Plan; (f) any resignation or termination of any Key Employee; (g) any declaration, setting aside or payment or other distribution with respect to any Equity Securities, or any direct or indirect
redemption, purchase or other acquisition of any Equity Securities; (h) any damage, destruction or loss, whether or not covered by
insurance, that would have a Material Adverse Effect to any Group Company; 24
(i) any material change in accounting methods or practices or any revaluation of any of its
assets other than those contemplated in the Financial Statements; (j) except in the ordinary course of business consistent with past
practice, entry into any closing agreement with respect to Taxes, settlement of any claim or assessment with respect to any Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment with respect to
any Taxes, entry or change of any Tax election, change of any method of accounting resulting in any amount of additional Tax or filing of any amended Tax Return; (k) any commencement or settlement of any Action; (l) except for the issuance of Equity Securities as contemplated in the Transaction Documents, any action to authorize, create or issue new
shares or new securities of any class or series of any Group Company; (m) to the Knowledge of the Warrantors, any other event or condition
of any character which is reasonably expected to have, individually or in the aggregate, a Material Adverse Effect; or (n) any agreement
or commitment to do any of the things described above in this Section 3.14. 3.15 Action and Governmental Orders. There is no Governmental Order restraining, enjoining or otherwise prohibiting the operation of the Business or the consummation of the
transactions contemplated by this Agreement, Restructuring Documents or any other Transaction Documents. Except as set forth in Section 3.15 of the Disclosure Schedule, there is no Action pending or, to the best Knowledge
of the Warrantors, currently threatened against any Group Company or any of the directors or Key Employees of any Group Company with respect to the respective businesses or proposed business activities of each Group Company, nor is any Warrantor
aware of any basis for any of the foregoing, including with respect to any Action involving the prior employment of any employees of any Group Company, their use in connection with such Group Companys Business of any information or
technologies allegedly proprietary to any of their former employers or their obligations under any agreements with prior employers. 3.16
Liabilities. Except as set forth in Section 3.16 of the Disclosure Schedule, no Group Company has any
Liabilities except for (i) Liabilities set forth in the Financial Statements that have not been satisfied since the Statement Date, and (ii) current Liabilities incurred since the Statement Date in the ordinary course of business
consistent with past practice. None of the Group Companies is a guarantor or indemnitor of any Liabilities of any other Person that is not a Group Company. 25
3.17 Material Contracts. (a) Section 3.17 of the Disclosure Schedule contains the Contracts the term of which has not yet expired and to which a Group Company is
bound that (i) are material operating agreements, (ii) are material strategic cooperation agreements, (iii) are agreements in relation to the sale, issuance, purchase, repurchase or redemption of Series A Preferred Shares, (iv) are
preferred equity financing agreements or debt financing, (v) are material real property lease agreements and material service agreements, (vi) if any, are material agreements involving Intellectual Property that is material to a Group
Company (other than generally-available off-the-shelf shrink-wrap software licenses obtained by the Group Companies on
non-exclusive and non-negotiated terms), (vii) if any, restrict the ability of a Group Company to compete or to conduct or engage in any business or activity in any territory, (viii) if any, are with a
Related Party (as defined below), (ix) if any, involve the lease, license, sale, use, disposition or acquisition of a material amount of assets (including any Intellectual Property rights) or of a business, (x) if any, involve the
establishment, contribution to, or operation of a partnership, joint venture or involving a sharing of profits or losses, or any investment in, loan to or acquisition or sale of the securities, equity interests or assets of any Person, (xi) are
with any Governmental Authority, (xii) are with any state-owned enterprise and material to the Group Companies, (xi) are with any commercial bank or any other financial institution, and (xiii) contain any performance metrics provision
(collectively, the Material Contracts). (b) A complete, accurate, true, and fully-executed copy of each Material
Contract has been delivered to the Investors. Each Material Contract is a valid and binding agreement of the Group Company that is a party thereto, the performance of which does not and will not violate any applicable Law in any material respect,
and is in full force and effect, and such Group Company has duly performed all of its material obligations under each Material Contract to the extent that such obligations to perform have accrued, and no material breach or default, alleged material
breach or default, or event which would (with the passage of time, notice or both) constitute a material breach or default thereunder by such Group Company or any other party or obligor with respect thereto, has occurred, or as a result of the
execution, delivery, and performance of the Restructuring Documents and the other Transaction Documents will occur. No Group Company has given notice (whether or not written) that it intends to terminate a Material Contract or that any other party
thereto has breached, violated or defaulted under any Material Contract. No Group Company has received any notice (whether written or not) that it has breached, violated or defaulted under any Material Contract or that any other party thereto
intends to terminate such Material Contract. 3.18 Compliance with Laws. (a) Each Group Company has been and is in compliance with all Laws in all material respects that are applicable to it or to the conduct or
operation of its Business or the ownership or use of any of its assets or properties. 26
(b) To the Knowledge of the Warrantors, no event has occurred and no circumstance exists
that (with or without notice or lapse of time) (i) may constitute or result in a violation by any Group Company of, or a failure on the part of such Group Company to comply with, any Law, in any material respect, or (ii) may give rise to
any obligation on the part of a Group Company to undertake, or to bear all or any portion of the cost of, any remedial action of any nature in order to comply with applicable Laws in all material respects. (c) No Group Company (i) has received any notice from any Governmental Authority regarding any actual, alleged, possible or potential
violation of, or failure to comply with, any Law or (ii) has received any notice from any Governmental Authority regarding any actual, alleged, possible or potential obligation on the part of such Group Company to undertake, or to bear all or
any portion of the cost of, any remedial action of any nature or (iii) is under investigation by any Governmental Authority with respect to a violation of any Law of which it has received notice from such Governmental Authority. (d) Each Group Company, and each of its directors, officers, employees, agents and other persons explicitly authorized to act on its behalf
(collectively, the Representatives), are familiar with and are in compliance with and have complied with, in all material respects, all applicable anti-bribery, anti-corruption, anti-money laundering, recordkeeping and internal
controls Laws (collectively, the Anti-Corruption Laws) including the Foreign Corrupt Practices Act of the United States of America (the FCPA) as if it were a U.S. Person. Without limiting the foregoing, neither
any Group Company nor any Representative has, directly or indirectly, in any material respect, offered, authorized, promised, condoned, participated in, or received notice of any allegation of the following: (i) the making of any gift or
payment of anything of value to any Public Official by any Person to obtain any improper advantage, affect or influence any act or decision of any such Public Official with respect to any Group Company or the Business of any Group Company, or assist
any Group Company in obtaining or retaining business for, or with, or directing business to, any Person; (ii) the taking of any action by any Person which would violate the PRC Anti-Corruption Law; (iii) the taking of any action by any
Person which would violate the FCPA, as amended, if taken by an entity subject to the FCPA, or could reasonably be expected to constitute a violation of any applicable Law; (iv) the making of any false or fictitious entries in the books or
records of any Group Company by any Person; or (v) the using of any assets of any Group Company for the establishment of any unlawful or unrecorded fund of monies or other assets, or the making of any unlawful or undisclosed payment. No Group
Company or any of its Representatives has ever been found by a Governmental Authority to have violated any criminal or securities Laws or is subject to any indictment or any government investigation for bribery. No Public Official (a) holds an
ownership or other economic interest, direct or indirect, in any of the Group Companies or in the contractual relationship formed hereunder, or (b) serves as an officer, director or employee of any Group Company. Neither the Company nor any of
its Affiliates has violated the applicable anti-bribery Laws by offering or taking property or other interests to obtain improper benefits, such as corruptly paying anything of value to business partners, including but not limited to Governmental
Authorities, non-government customers, suppliers or distributors, owners, directors, managers or other employees of the entities identified above (Business Partners), that would result in a
violation of any applicable anti-bribery Laws, or receiving anything of value from Business Partners that constitutes commercial bribery in violation of applicable anti-bribery Laws. 27
(e) The Business of each Group Company as now conducted is, in compliance with all Laws and
regulations that may be applicable, including all Laws of the PRC with respect to telecommunication, dangerous chemicals, mergers, acquisitions, foreign investment and foreign exchange transactions. 3.19 Compliance with OFAC. (a) No Group Company or, to the best Knowledge of the Warrantors, any of its directors, officers, employees, Affiliates, shareholders or any
other Person acting on behalf thereof is, or is Controlled or 50% or more owned in the aggregate by or is acting on behalf of, one or more individuals or entities (collectively, the Prohibited Person) that are: (i) the subject of any sanctions administered or enforced by the U.S. Department of Treasurys Office of Foreign Assets Control (OFAC),
the United Nations Security Council (UN), the European Union (EU), Her Majestys Treasury (UK HMT), the Swiss Secretariat of Economic Affairs (SECO), the Hong Kong Monetary Authority (HKMA), the Monetary Authority of Singapore (MAS), or other
relevant sanctions authority (collectively, Sanctions); nor (ii) located, organized or resident in a country or
territory that is the subject of Sanctions (including, without limitation, Crimea, Burma/Myanmar, Cuba, Iran, North Korea, Venezuela and Syria) (each a Sanctioned Country). and no one that to the Knowledge of the Warrantors is a Prohibited Person has been given or will be given an offer to become an employee,
officer, consultant or director of any Group Company. (b) The Company represents and covenants that it will not, directly or indirectly,
use any Proceeds, or lend, contribute or otherwise make available such Proceeds to any Subsidiary, joint venture partner or other person or entity: (i) to fund or facilitate any activities of or business with any Person that, at the time of such funding or facilitation, is the subject or
the target of any Sanctions, (ii) to fund or facilitate any activities of or any business in any Sanctioned Country, or (iii) in any other manner that will result in a violation by any Person of any Sanctions. 28
(c) The Group Companies have not conducted or agreed to conduct any business, or entered
into or agreed to enter into any dealings or transactions, and will not conduct or agree to conduct any business, or enter into or agree to enter into any dealings or transactions, with any Prohibited Person or Sanctioned Country, or in any country
or territory, that at the time of the dealing or transaction is or was the subject of Sanctions. 3.20 Compliance with Money Laundering
Laws. The operations of each Group Company are and have been conducted at all times in compliance with applicable financial
recordkeeping and reporting and other requirements of the money laundering Laws of all relevant jurisdictions (collectively, the Money Laundering Laws), and no Action by or before any Governmental Authority involving any Group
Company with respect to the Money Laundering Laws is pending or, to the best of the Warrantors Knowledge, threatened. 3.21 Titles
and Properties. (a) Except as s described in the Financial Statements, the Group Companies have good and valid title to, or a valid
leasehold interest in, all of their material assets they use or may need to use in the conduct of their respective Businesses, whether real, personal or mixed (including but not limited to all such assets reflected in the Financial Statements), free
and clear of any and all Liens or third party claims, including any creditors rights. The foregoing assets collectively represent all material assets, rights and properties necessary for the conduct of the Business of the Group Companies in
the manner conducted during the periods covered by the Financial Statements. All material leases of real or personal property to which a Group Company is a party are fully effective and afford the Group Company valid leasehold possession and
subletting rights of the real or personal property that is the subject of such lease. (b) All machinery, vehicles, equipment and other
tangible personal property owned or leased by a Group Company that are material to the Business of the Group Companies are (i) in good condition and repair (reasonable wear and tear excepted) and (ii) not obsolete or in need of renewal or
replacement, except for renewal or replacement in the ordinary course of business. 3.22 Permits. Each Group Company has all Approvals, except for absence of which would not be reasonably expected to have Material Adverse Effect to the Group
Companies, including any special approval or permits required under the Laws of the PRC (the Permits), necessary for its incorporation, existence and qualification for respective Business as now conducted. Each such Permit is
valid and in full force and effect; no Group Company is in default or violation in any respect of any such Permit; no Group Company has received any written notice from any Governmental Authority regarding any actual or possible default or violation
of any such Permit; and to the Knowledge of the Warrantors, no suspension, cancellation or termination of any such Permits is threatened or imminent. 29
3.23 Compliance with Other Instruments. No Group Company is in violation, breach or default of its Charter Documents. The execution, delivery and performance by each Group Company of
and compliance by each Group Company with each of the Transaction Documents to which it is a party, and the consummation by it of the transactions contemplated hereby and thereby, will not result in (a) any violation, breach or default, or be
in conflict with or constitute, with or without the passage of time or the giving of notice or both, a default under (i) the Charter Documents of any Group Company, (ii) any Material Contract, or (iii) any applicable Law in any
material respect, (b) the creation or imposition of any Lien upon, or with respect to, any of the properties, assets or rights of any Group Company, or (c) any termination, modification, cancellation, or suspension of any right of, or any
augmentation or acceleration of any obligation of, any Group Company (other than those contemplated or intended by the Restructuring Documents, the Warrants, and any other Transaction Documents). 3.24 Related Party Transactions. Except as set forth in Section 3.24 of the Disclosure Schedule, the Restructuring Documents to which the relevant
Group Companies are parties, the Reorganization Plan, the employment agreements, confidentiality agreements, non-compete agreements and other Contracts (each of which Contract, to the extent entered into by a
Founder or any Key Employee or any of his or her Affiliates, is disclosed in Section 3.24 of the Disclosure Schedule) in similar nature with any Group Company, and in any Contract between a Group Company and a
Subsidiary of the Controlling Shareholder that is not a Group Company (a) neither the Controlling Shareholder, nor any shareholder that beneficially owns five percent (5%) or more of the share capital of the Company or the Domestic Company, or
any director or Key Employee of any Group Company, or any Affiliate of any of them (other than another Group Company) (each of the foregoing, a Related Party), has any Contract (whether oral or written, each, a Related
Party Contract), understanding, proposed transaction with, or is indebted to, any Group Company, nor is there currently any proposed Related Party Contract and nor is any Group Company indebted (or committed to make loans or extend
or guarantee credit) to any of such Related Party (other than for accrued salaries, reimbursable expenses or other standard employee benefits). Except for the transactions under the Reorganization Plan and any Contract between a Group Company and a
Subsidiary of the Controlling Shareholder that is not a Group Company, (a) each Related Party Contract is on terms and conditions as favorable to the applicable Group Company as would have been obtainable by it at the time in a comparable arms-length transaction with an unrelated party; (b) no Related Party has any direct or indirect ownership interest in any Person (other than a Group Company) with which a Group Company is affiliated or
with which a Group Company has a business relationship, or any Person (other than a Group Company) that directly or indirectly competes with any Group Company (except that a Related Party may have a passive investment of less than 1% of the stock of
any publicly traded company that engages in the foregoing); and (c) no Related Party has any right, title or interest, either directly or indirectly, in (i) any Person which purchases from or sells, licenses, grants or furnishes to a Group
Company any goods, property, Intellectual Property or other property rights or services or (ii) any Contract to which a Group Company is a party or by which it may be bound or affected. 30
3.25 Intellectual Property Rights. (a) To the best Knowledge of the Warrantors, the Group Companies own or otherwise have the sufficient right or license to use all Intellectual
Property that is used in, held for use in, or necessary to conduct their Businesses, free and clear of any and all Liens. There is no pending or, to the best Knowledge of the Warrantors, threatened Action against any Group Company contesting the
ownership of, or right to use, such Intellectual Property, asserting the misuse, invalidity or unenforceability thereof, or asserting the infringement, misappropriation or other violation of any Intellectual Property of any third party (including
any demand or offer to license any Intellectual Property). All inventions, know-how and other Intellectual Property conceived, created or developed by employees or contractors of the Group Companies, to the
extent they are used in, held for use in, or necessary to the Businesses of the Group Companies, are works made for hire, and all right, title, and interest therein, including any applications therefor, have been transferred and assigned
to, and are currently exclusively owned by, the Group Companies. The Group Companies have complied with all remuneration and compensation requirements relating to such Intellectual Property under applicable Laws. Section 3.25
of the Disclosure Schedule contains a true, complete and accurate list of all Intellectual Property for which registrations or patents are owned by or held in the name of, or for which applications have been made in the name of, any Group
Company, including for each such registration, patent or application, the relevant name or description, registration or certification or application number, filing or registration or issue date. (b) No Actions in which any Group Company alleges that any Person is infringing, misappropriating, or otherwise violating, any Group
Companys Intellectual Property rights are pending, and none has been served, instituted or asserted by any Group Company. Neither the Business nor any Group Company has infringed, misappropriated or violated during the past four
(4) years, or is infringing, misappropriating or violating, any Intellectual Property rights of any Person. To the best Knowledge of the Warrantors, no Person has infringed, misappropriated or violated, or is infringing, misappropriating or
violating, any Intellectual Property rights of any Group Company. (c) To the best Knowledge of the Warrantors, none of the Key Employees
is obligated under any Contract, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with the use of his or her best efforts to promote the interests of the Group Companies or that would conflict
with the Business of any Group Company as presently conducted. It will not be necessary to utilize in the course of any Group Companys business operations any inventions of any of the respective Key Employees of the Group Companies made prior
to their employment by the Group Companies, except for inventions that have been validly and properly assigned or licensed to the Group Companies as of the date hereof. 31
(d) The Group Companies have each taken all reasonable security measures that are
commercially prudent in order to protect the secrecy, confidentiality and value of their respective Intellectual Property and the confidentiality, integrity and security of the Business IT Systems. The Business IT Systems (i) are sufficient for
the immediate and currently anticipated future needs of the Business, and (ii) are in sufficiently good working condition to effectively perform all information technology operations and include a sufficient number of licenses for all software
as necessary for the Business. (e) Except for those data that shall remain the sole property of users and thus are not permitted to be
disclosed or disposed of by the Group Companies pursuant to applicable Laws, each Group Company owns all right, title and interest in and to all data it collects from or discloses about users of its products and services. Its practices regarding the
collection and use of consumer personal information are and have been in accordance in all material respects with applicable Laws of all jurisdictions in which it operates and does not violate any Persons right, title or interest in any
material respect. The Group Companies (i) maintain policies and procedures regarding data security and privacy and maintain administrative, technical, and physical safeguards that are commercially reasonable and, in any event, in compliance in
all material respects with all applicable Laws and Contracts applicable to any Group Company, and (ii) are and have been in compliance with such policies and procedures in all material respects. To the Knowledge of the Warrantors, there have
been no security breaches relating to, or violations of any security policy regarding, any data or information of Group Companies customers or used by the Group Companies or any Business IT Systems. There has been no loss, unauthorized access
or alteration, misappropriation, or misuse of any data or information of Group Companies customers or used by the Group Companies to conduct the Business or any Business IT Systems. There is no pending or, to the best Knowledge of the
Warrantors, threatened Action against any Group Company relating to any of the foregoing or any non-compliance with any such Laws, policies or procedures. (f) No source code for any software owned by any Group Company has been disclosed, licensed, distributed or otherwise made available to any
Person, and no Group Company has any obligation (whether present, contingent or otherwise) to disclose, license, distribute or otherwise make available any such source code to any Person. No free or open source or similar software has been
incorporated in, bundled with, or used, distributed or made available in connection with, any software owned by any Group Company. 3.26
Labor and Employment Matters. (a) Each Key Employee is currently devoting substantially all of his or her business time to the
conduct of the business of the respective Group Company. No Key Employee has given any notice of an intention to resign, and, to the best Knowledge of the Warrantors, no Group Company has any intention of terminating the employment of any Key
Employee. No Group Company is a party to any collective bargaining agreements or other Contract with any union or guild, and none of the Group Companies has been informed by their employees regarding the establishment of any trade union, work
council or other organizations representing the employees of the Group Company. Each employee, officer and director (other than those appointed by the holders of Preferred Shares) of the Group Companies has duly executed the employment and
confidential information and invention assignment agreement in the form reasonably satisfactory to the Investors. To the best Knowledge of the Warrantors, no Key Employee is obligated under, or in violation of any term of, any Contract or any
Governmental Order relating to the right of any such Key Employee to be employed by, or to contract with, such Group Company. No Group Company has received any written notice alleging that any such violation has occurred. 32
(b) There is no pending or threatened claim or litigation against any Key Employee or PRC
Companies in respect of full commitment, non-competition, non-solicitation or confidentiality obligation of any Key Employee. (c) Except as set forth in Section 3.26(c) of the Disclosure Schedule, (i) there is no, and there has not been during
the previous three (3) years, any material Action relating to the violation or alleged violation of any Law by any Group Company pertaining to labor relations or employment matters, including any charge or complaint filed by an employee with
any Governmental Authority or any Group Company; (ii) each Group Company has complied with Laws in all material respects relating to employment, wages, hours, overtime, working conditions, benefits, retirement, termination, Taxes, and health
and safety; (iii) each Group Company has withheld and reported all amounts required by any applicable Law or any Contract to be withheld and reported with respect to wages, salaries and other payments to employees (including employees who have
been treated as consultants); (iv) other than the statutory social insurance plans and the housing fund plan (the Social Welfare) operated under the applicable PRC Laws, each Group Company has no Liability for any payment to any
trust or fund governed by or maintained by or on behalf of any Governmental Authority with respect to unemployment compensation benefits, social security or social insurance, housing or other benefits or obligations for employees; and (v) each Group
Company is in compliance with each applicable Law relating to its payment and provision of any form of Social Welfare operated under the applicable PRC Laws and has made all contributions to the statutory social insurance plans and housing fund plan
as required to be made under applicable PRC Laws, except any such non-compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. To the Knowledge of the
Warrantors, there has not been, and there is not now pending or, threatened, any strike, union organization activity, lockout, slowdown, picketing, or work stoppage with respect to the employees of any Group Company or any unfair labor practice
charge against any Group Company. (d) Except for statutory social insurance schemes and housing fund schemes, the Group Companies have not
adopted or implemented any Benefit Plan. There are no material actual, threatened or pending investigations by any Governmental Authority involving any Benefit Plan and no material actual, threatened or pending claims against any Benefit Plan. All
contributions to, and payments from, each Benefit Plan have been timely made. Each Group Company maintains, and has fully funded, in all material respects, any pension plan and any other labor-related plans that it is required by Law or by Contract
to maintain. 33
(e) Neither the execution and delivery of this Agreement nor the consummation of the
transaction contemplated by this Agreement, any other Transaction Documents or the Restructuring Documents will (i) entitle any current or former employee or director of any Group Company to severance pay, or any payment contingent upon a
change in control of any Group Company, (ii) increase or enhance any benefits payable under any Benefit Plan, or (iii) accelerate the time of payment or vesting, or increase the amount of any compensation due to any employee or former
employee. 3.27 Insurance. Each Group Company has obtained the insurance coverage of the types and at the coverage levels as would be reasonable and customary for other
similar situated companies. No Group Company has done or omitted to do or suffered anything to be done or not to be done other than any acts in the ordinary course of business which has or would render any policies of insurance taken out by it or by
any other Person in relation to any of such Group Companys assets void or voidable or which would result in an increase in the rate of premiums on the said policies. There is no claim pending, and no Group Company has made since its formation
any claim individually or in the aggregate in excess of RMB1,000,000, under the insurance policies and bonds maintained by each Group Company as to which, in each case, coverage has been questioned, denied or disputed. No Group Company has suffered
any uninsured loss individually or in the aggregate in excess of RMB1,000,000 or waived any rights or claims of material or substantial value with respect to any insurance policy or bond or allowed any insurance policy or bond to lapse since its
formation. All premiums due and payable under all such policies and bonds have been timely paid, and each Group Company is otherwise in compliance in all respects with the terms of such policies and bonds. All such policies and bonds are in full
force and effect and will not terminate or lapse by reason of the transactions contemplated by this Agreement or any other Transaction Documents. 3.28 No Brokers. None of
the Warrantors has any Contract with or retained any broker, finder or similar agent with respect to or in connection with the transactions contemplated by this Agreement, any other Transaction Documents or the Restructuring Documents, and none of
them has incurred any Liability for any brokerage fees, agents fees, commissions or finders fees in connection with any of the Transaction Documents or the Restructuring Documents, or the consummation of the transactions contemplated
therein. 34
3.29 Power of Attorney. Except as contemplated in the Transaction Documents, none of the Group Companies has granted any power of attorney or similar power or
authorization to any other Person (including any director or shareholder) in respect of its equity interest, voting rights or substantial assets, other than powers of attorney issued to their directors, officers, or employees for purpose of
executing contracts or agreements or conducting operations for and on behalf of the Group Companies, as the case may be, in the ordinary course of business. 3.30 No Winding-up; No Insolvency. None of the Group Companies has engaged in any discussion (i) with any Person or Persons or any representative thereof regarding the
consolidation or merger of such Group Company with or into any such Person or Persons; (ii) with any Person regarding the sale, conveyance, or disposition of all or substantially all of the assets of such Group Company, or a transaction or
series of related transactions in which more than fifty percent (50%) of the voting power of such Group Company is disposed of, or (iii) regarding any other form of liquidation, dissolution or winding up, of such Group Company. Each Group Company is
not bankrupt, insolvent or unable to pay its debts and there is no unfulfilled decree or court order outstanding against it. No Governmental Order has been made or petition presented or resolution passed for the bankruptcy, liquidation, dissolution
or winding up (as applicable) of such Group Company, and no process has been levied against such Group Company. 3.31 Disclosure.
Each Warrantor has provided the Investors with all the information regarding the Group Companies requested by the Investors for deciding
whether to purchase the Purchased Shares and/or the Warrants and all the information that such Warrantor believes is reasonably necessary to enable the Investors to make such decision. No representation or warranty of the Warrantors contained in
this Agreement or any certificate furnished or to be furnished to the Investors at the Closing under this Agreement, and no information set forth in the Disclosure Schedule, when taken as a whole, contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances under which they were made. Except as set forth in this Agreement or the Disclosure Schedule, there is
no fact that the Warrantors have not disclosed to the Investors in response to the Investors enquiry and of which any of its officers, directors or executive employees has Knowledge and that has had or would reasonably be expected to have a
Material Adverse Effect. 4. REPRESENTATIONS AND WARRANTIES OF THE FOUNDER AND THE CONTROLLING SHAREHOLDER In addition to those representations and warranties made in Section 3 above, the Founder and the Controlling Shareholder hereby jointly
and severally represents and warrants the following to the Investors from the date hereof to the Closing Date (or, if such representations and warranties are made with respect to a certain date, as of such date). 35
4.1 Conflicting Agreements. The Founder is not, as a result of the nature of the Business or for any other reason, in violation of (a) any fiduciary or confidential
relationship, (b) any term of any Contract or covenant (either with any Group Company or with another entity) relating to employment, Intellectual Property, confidentiality, proprietary information disclosure,
non-competition or non-solicitation, or (c) any material respect of any other Contract or Governmental Order binding on the Founder and relating to or affecting the
right of the Founder to be employed by or serve as a director or consultant to any Group Company. No such relationship, term, Contract, or Governmental Order conflicts with the Founders or Controlling Shareholders obligations to use its
best efforts to promote the interests of any Group Company nor does the execution and delivery of this Agreement and other Transaction Documents, nor the Founders carrying on any Group Companys Business as a director, officer, consultant
or Founder of any Group Company, conflict with any such relationship, term, Contract or Governmental Order. 4.2 Litigation. There is no material Action pending or, to the Founders Knowledge, threatened against the Founder, and there is no basis for any such
material Action. 4.3 Shareholders Agreement. Except as contemplated by or disclosed in the Transaction Documents or the Restructuring Documents, neither the Founder nor the Controlling
Shareholder is a party to or has Knowledge of any agreements, written or oral, relating to the acquisition, disposition, registration under the Securities Act or any equivalent Law in another jurisdiction, or voting, of the Equity Securities of any
Group Company. 4.4 Prior Legal Matters. The Founder has not been (a) subject to voluntary or involuntary petition under any bankruptcy or insolvency Law or the appointment of a
receiver, fiscal agent or similar officer by a court for his business or property; (b) convicted in a criminal proceeding or named as a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); (c)
subject to any order, judgment, or decree (not subsequently reversed, suspended, or vacated) of any court of competent jurisdiction permanently or temporarily enjoining him from engaging, or otherwise imposing limits or conditions on his engagement
in any securities, investment advisory, banking, insurance, or other type of business or acting as an officer or director of a public company; or (d) found by a court of competent jurisdiction in a civil action or by any governmental or
regulatory authority to have violated any securities, commodities or unfair trade practices Law, which such judgment or finding has not been subsequently reversed, suspended, or vacated. 4.5 Founders Intellectual Property Rights. The Founder has assigned to the Group Companies all Intellectual Property rights owned by the Founder that are related to the Group
Companies Business. 36
4.6 Non-Compete. Other than through the Group Companies, the Founder, either on his own account or through any of his Affiliates, or in conjunction with or on
behalf of any other Person, does not carry on or is engaged, concerned or interested directly or indirectly whether as shareholder, director, employee, partner, agent or otherwise carries on any business that competes with the Business of the Group
Companies. The Founder is not subject to any Contracts or any other obligations which prohibit, restrict or otherwise adversely affect the Founders investment or involvement in any Group Company. 4.7 No Liabilities and Claims. Except as otherwise contemplated under the Reorganization Plan, (i) there are no outstanding loans, amounts payable or any other
Liabilities between any Group Company, on the one hand, and the Founder or the Controlling Shareholder or any of its Affiliates, on the other hand, and (ii) none of the Founder, the Controlling Shareholder or its Affiliates has, may have or may
claim to have any claims, obligations or Liabilities against any Group Company, other than, in each case of clauses (i) and (ii), any salaries and other compensations, business expense advancements and reimbursements in the ordinary course of
business consistent with past practice. 4.8 Authorizations. Each of the Controlling Shareholder and the Founder has all requisite power and authority to execute and deliver the Transaction Documents to
which it is a party and to carry out and perform its obligations thereunder. All action on the part of the Controlling Shareholder necessary for the authorization, execution and delivery of the Transaction Documents to which it is a party, and the
performance of all obligations of it thereunder, has been taken or will be taken prior to the Closing. This Agreement has been duly executed and delivered by the Controlling Shareholder. This Agreement, each of the other Transaction Documents to
which the Controlling Shareholder is a party are, or when executed and delivered by it shall be, valid and legally binding obligations of it, enforceable against it in accordance with its terms, except (i) as limited by applicable Laws of
general application affecting enforcement of creditors rights generally, and (ii) as limited by Laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. 4.9 Holding for Own Account. Each of the Founder and the Controlling Shareholder holds and has been holding its Equity Securities in the Company solely for his or its own
account. He or it is not, nor has he or it been, holding the Equity Securities in the Company, as a nominee or agent, or with a view to the resale or distribution of any part thereof, and he or it does not have any present intention of selling,
granting any participation in, or otherwise distributing the same. 37
4.10 No Other Agreements. There is no Contract between or among the Founder, the Controlling Shareholder or any of their Affiliates, on the one hand, and any other
shareholder or other equity holder of any Group Company or any Affiliate of such shareholder or equity holder, on the other hand, in each case, with respect to the ownership or control of any Group Company or relating to such shareholder or equity
holders investment in such Group Company. 5. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS Each of the Investors hereby independently and separately, but not jointly, represents and warrants to the Company merely with respect to
itself (and not the other Investors), as follows as of the date hereof and the Closing Date: 5.1 Organization and Good Standing.
It is an entity duly organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or
formation. 5.2 Authorization. (a) It has all requisite power and authority to execute and deliver the Transaction Documents to which it is a party and to carry out and
perform its obligations thereunder. All action on the part of such Investor (and, as applicable, its officers, directors and shareholders) necessary for the authorization, execution and delivery of the Transaction Documents to which it is a party,
and the performance of all obligations of such Investor thereunder, has been taken or will be taken prior to the Closing. This Agreement has been duly executed and delivered by such Investor. Each of this Agreement and the other Transaction
Documents to which such Investor is a party is, or when executed and delivered by such Investor shall be, valid and legally binding obligations of such Investor, enforceable against such Investor in accordance with its terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other Laws of general application affecting enforcement of creditors rights generally, and (ii) as limited by Laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies. (b) The execution and delivery of this Agreement and other Transaction
Documents to which it is a party by such Investor do not, and the performance of this Agreement and other Transaction Documents to which it is a party by such Investor and the consummation by such Investor of the transactions as contemplated hereby
and thereby will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority except for the ODI Approvals (as defined in the Warrants) with respect to the exercise of the Warrants.
38
5.3 Purchase for Own Account The Purchased Shares and/or the Warrants purchased by such Investor will be acquired for investment purposes for such Investors own
account or the account of one or more of such Investors Affiliates, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof. 5.4 Status of Investor. If applicable to the Companys compliance with U.S. securities Law, such Investor is either (a) an accredited investor
within the meaning of Securities and Exchange Commission Rule 501 of Regulation D, as presently in effect, under the Securities Act, or (b) not a U.S. person as defined in Rule 902 of Regulation S of the Securities Act. Such
Investor is not with a view or any present intention toward effecting a distribution, or resale in violation of any applicable securities Laws. 5.5 Sufficiency of Funds. The Investor will have all funds necessary to consummate the transactions contemplated hereby and pay its portion of the Advanced Investment
Funds in accordance with Section 2.6. Such funds will be readily available in RMB for immediate payment without further approval required by any corporate body, third party or Governmental Authority on the date of payment of such Advanced
Investment Funds in accordance with Section 2.6. The Investor is not required to obtain debt financing in order to pay its portion of the Advanced Investment Funds or otherwise perform any of its obligation under this Agreement. 6. COVENANTS OF THE WARRANTORS The Warrantors jointly and severally covenant to each of the Investors as follows: 6.1 Use of Proceeds. The
Company shall use the Advanced Investment Funds and the proceeds received from the issuance, sale and exercise of the Warrants (collectively the Proceeds) to finance the research and development, business expansion, marketing,
working capital and for other general corporate purposes of the Group Companies and the Persons that will become Group Companies pursuant to the Reorganization Plan, and in accordance with the business plan or budget as approved by the Board. Unless otherwise agreed to in writing by the Investors, or otherwise contemplated in the preceding paragraph, no Proceeds shall be used
(i) in the purchase of Equity Securities of any Person other than any Group Companies except for the Persons that may be acquired pursuant to the Reorganization Plan, (ii) in the investment of any Person other than any Group Companies
except for investments that may be contemplated under the Reorganization Plan, (iii) in the repayment of any loan or debt of any Group Companies except as otherwise contemplated under the Reorganization Plan, (iv) in the repurchase,
redemption or cancellation of Equity Securities of any Group Company held by any shareholders of such Group Company, or (v) in the payments to shareholders, directors or officers of any Group Company outside the ordinary course of business of
the Group Companies. 39
6.2 No Solicitation or Negotiation. During the period between the date of this Agreement and the earlier of (a) the Closing and (b) the termination of this Agreement,
none of the Warrantors shall (and each Warrantor shall cause its representatives, advisors and agents and, as applicable to such Warrantor, its officers, directors and employees, not to) (i) solicit, initiate, consider, encourage or accept any
other proposals or offers from any Person (A) relating to any acquisition or purchase of all or any portion of the Equity Securities of any Group Company or assets of any Group Company, (B) to enter into any merger, consolidation or other
business combination with any Group Company or the business of any Group Company or (C) to enter into a recapitalization, reorganization or any other extraordinary business transaction involving or otherwise relating to any Group Company or
(ii) participate in any discussions, conversations, negotiations and other communications regarding, or furnish to any other Person any information with respect to, or otherwise cooperate in any way, assist or participate in, facilitate or
encourage any effort or attempt by any other Person to seek to do any of the forgoing. The Warrantors shall immediately cease and cause to be terminated all existing discussions, conversations, negotiations and such proposal or offer, or any inquiry
or other contact with any Person with respect thereto. The Warrantors shall notify the Investors promptly if any such proposal or offer, or any inquiry or other contact with any Person with respect thereto is made and shall, in any such notice to
the Investors, indicate in reasonable detail the identity of the Person making such proposal, offer, inquiry or contact and the terms and conditions of such proposal, offer, inquiry or other contact. Each of the Warrantors agrees not to, without the
prior written consent of the Investors, release any Person from, or waive any provision of, any confidentiality or standstill agreement to which such Warrantor is a party. 6.3 Conduct of Group Companies Pre-Closing. Unless otherwise expressly required by this Agreement, during the period between the date of this Agreement and the Closing Date, the Group
Companies shall, and the Warrantors shall use their respective reasonable best efforts to cause each of the Group Companies to, carry on their respective businesses in the ordinary course consistent with past practice (which includes implementing
the Reorganization Plan in accordance with its terms), and shall comply with its obligations set out in Exhibit I. 6.4
Satisfaction of Condition Precedent. The Warrantors shall use their respective reasonable best efforts to cause each of the
conditions precedent as set forth in Section 7 to be satisfied as soon as reasonably practicable. 40
6.5 Compliance with Applicable Law. Each of the Group Companies shall, and the Controlling Shareholder shall cause each of the Group Companies to, in all material respects, comply
with all applicable Laws, including applicable PRC Laws relating to retail of refined oil, third-party payment, telecommunication business, insurance intermediary business, medical services, publication, advertisement, culture, Intellectual Property
(including software), anti-monopoly, Taxes, employment, Social Welfare and benefits and foreign exchange (including Circular 37 and the foreign exchange procedures governing individuals participating in employee stock option plans as defined in
Circular 7 issued by the SAFE on February 15, 2012). Each of the Group Companies shall, and the Controlling Shareholder shall cause
each of the Group Companies to (i) conduct its operations in compliance with Sanctions, and Money Laundering Laws applicable to the Business and (ii) ensure that no officer, director, employee, or agent of the Group Companies is a
Prohibited Person. 6.6 Validity of Approvals. Each of the Group Companies shall, and the Controlling Shareholder shall cause each of the Group Companies to, in all material respects, at all
times maintain the validity of, and comply with the legal and regulatory requirements with respect to, the Approvals and Permits that it has obtained and shall be obtained after the Closing for its qualification for its then current or intended
Business (other than any portion of the Business that the Company will not maintain as approved pursuant to the Shareholders Agreement and the Amended M&AA). 6.7 ESOP. From time to
time, the Company may grant options to employees, advisors, officers, and directors of, and consultants to, the Company and other Group Companies pursuant to ESOP, provided that the total number of shares issued or issuable under any such ESOP shall
not exceed 6,818,182 Ordinary Shares as proportionally adjusted to reflect any share dividends, share splits, or similar transactions. 6.8
Additional Covenants. If at any time before the Closing, any of the Warrantors comes to know of any fact or event which
(i) shall have been in any way materially inconsistent with any of the representations and warranties given by any of the Warrantors, and/or (ii) shall have caused any material fact as warranted becoming untrue, or inaccurate in material
aspects, after the date of this Agreement, and such inconsistency or untruth is not curable, then the Warrantors shall give immediate written notice thereof to the Investors, in which event any Investor may within fifteen (15) Business Days of
receiving such notice terminate this Agreement by written notice without any penalty or future obligations whatsoever; provided, however, nothing herein shall relieve the Warrantors from liability for any breach of this Agreement. 41
6.9 Anti-corruption. The Company represents that it shall not and shall not permit any of its Subsidiaries or Affiliates or any of its or their respective
directors, officers, managers, employees, independent contractors, representatives or agents to promise, authorize, make or cause to be made any payment to, or otherwise contribute any item of value to, directly or indirectly, any Public Official,
in each case, in violation of the FCPA, the PRC Anti-Corruption Law or any other applicable Anti-Corruption Laws. The Company further represents that it shall and shall cause each of its Subsidiaries and Affiliates to cease all of its or their
respective activities, as well as remediate any actions taken by the Company, its Subsidiaries or Affiliates, or any of their respective directors, officers, managers, employees, independent contractors, representatives or agents in violation of the
FCPA, the PRC Anti-Corruption Law or any other applicable anti-bribery or anti-corruption Law. The Company further represents that it shall and shall cause each of its Subsidiaries and Affiliates to maintain systems of internal controls (including,
but not limited to, policies, training programs, accounting systems, purchasing systems and billing systems) sufficient to ensure compliance with the FCPA, the PRC Anti-Corruption Law or any other applicable Anti-Corruption Laws. The Company further
represents that it shall not permit any Public Official to (i) hold an ownership or other economic interest, direct or indirect, in any of the Group Companies, or (ii) serve as an officer, director or employee of any Group Company. 6.10 Filing of Amended M&AA. The Company shall file the Amended M&AA with the Registrar of Companies of the Cayman Islands within five (5) days after the Closing
and shall provide each Investor a copy of the duly registered Amended M&AA with the official seal affixed by the Registrar of Companies in the Cayman Islands within ten (10) days after the Closing. 6.11 Compliance with Overseas Investment Laws. The Founder shall comply with the SAFE Rules and Regulations applicable to him in all material respects, including completing all necessary
filings or registrations with the relevant local SAFE in connection with the Founders participation in the investment and operations of the Group Companies and the consummation of the transactions as contemplated by this Agreement and other
Transaction Documents, and applying for and complete all necessary filings or registrations (including filing the amendments to the previous registrations under Circular 37) as required by the SAFE Rules and Regulations. 42
6.12 Legal Compliance of Business. Following the Closing, each Warrantor shall use its respective reasonable best efforts to take, or cause to be taken, all actions and shall do,
or cause to be done, all things that are necessary, desirable or appropriate to develop the Business of the Group Companies in compliance with, in all material respects, legal requirements as may be promulgated by the PRC Governmental Authority from
time to time, including but not limited to, as soon as practicable after the Closing, and to the extent necessary, (i) any applicable Group Company shall complete requisite procedures (including making public announcements in electricity
exchange centres) with respect to the sales of electricity within the applicable territory in accordance with applicable Laws, and (ii) upon the request of any applicable Governmental Authority, the Group Companies shall, and the Warrantors
shall cause the applicable Group Company to, (x) apply for, or otherwise obtain Control over a company which holds, the Payment Business License
(支付业务许可证), (y) improve their business processes in connection with online payment
element in their businesses, and/or (z) cooperate with commercial banks or other qualified online payment service providers for the purposes of ensuring that any Group Company no longer holds, clears or transfers funds of its users, customers
or clients, and the operation of such business is in compliance with applicable Laws in the PRC relating to online payment. 6.13
Intellection Property Protection. The Group Companies shall establish and maintain appropriate system to protect the Intellectual
Property of the Group Companies, and file and prosecute applications for registration and patent and maintain registrations and patents with relevant authorities in respect of any Intellectual Property of the Group Companies, to the extent
applicable, in accordance with applicable Laws and regulations. The Group Companies shall, and the Controlling Shareholder shall cause the Group Companies to comply with the Laws in all material respects in respect of the protection of the
Intellectual Property and refrain from infringing, misappropriating or otherwise violating, in any manner, any Intellectual Property of other Persons. 6.14 Employee Matters. The Group Companies shall comply with, in all material respects, applicable Laws with respect to labour and employment, including Laws
pertaining to welfare funds, social benefits, medical benefits, insurance, retirement benefits and pensions in a manner appropriate to the business needs of the Group Companies. 6.15 Tax Matters. The
Group Companies shall comply with, in all material respects, applicable Laws with respect to tax, including Laws pertaining to income tax, value added tax and business tax. 43
6.16 Tax Basis in Relation to an Indirect Transfer. As of the date hereof, the WFOE has not yet paid its registered capital in full. The Company undertakes to inject all or substantially all of
the Proceeds into the registered capital of the WFOE (the Capital Injection Amount) following the Closing or the exercise of the Warrants (as the case may be), so that in the event of any subsequent sale of Equity Securities in
the Company by the Investors, to the extent permitted by the applicable Law, the Investors could be entitled to apply the entire Capital Injection Amount that corresponds to the Investors purchase price under this Agreement and the Warrant
holders exercise price payable upon exercise of the Warrants, to the Investors indirect basis in the equity of any Subsidiary of the Company in the PRC with respect to any Tax filing, Tax position and other communication with the
relevant PRC Tax Governmental Authorities for purposes of determining any income Tax, capital gains Tax or any other Tax calculated with reference to gains made through the subscription, purchase and sale of the Companys Equity Securities. The
Company further undertakes to use reasonable efforts to assist the Investors to communicate with the competent Tax Governmental Authorities and provide any and all information required by competent Tax Governmental Authorities in connection with the
filing and payment of any applicable Taxes (if any) with respect to any subsequent sale of Equity Securities in the Company by the Investors. 6.17 Reorganization Plan. The Warrantors shall use best efforts to implement the transactions under the Reorganization Plan that have not been completed as of the
Closing as soon as practicable after the Closing, but in no event later than the date of the submission of prospectus materials for a Qualified IPO. Notwithstanding the foregoing, no later than one (1) month after the Closing Date, the relevant Group Companies shall, and the Warrantors
shall procure such Group Companies to, duly establish Additional WFOEs pursuant to the Laws of PRC in accordance with the Reorganization Plan, and relevant Additional HK Companies shall have acquired and held all the equity interests in the
respective Additional WFOEs in accordance with the Reorganization Plan. 6.18 Other Issues in the Disclosure Schedule. As soon as practicable after the Closing and at any time upon the request of the Investors, the relevant Group Companies shall, to the
satisfaction of the Investors, resolve the issues in a practically reasonable manner, which are disclosed in the Disclosure Schedule but not expressly specified as a specific covenant under this Section 6 or a specific condition for any Closing
under Section 7. 6.19 Termination. The provisions under this Section 6 shall terminate upon the earlier of (a) the consummation of a Qualified IPO (as defined in the
Amended M&AA) or (b)
the date on which all Investors cease to hold any Equity Securities in the Company. 7. CONDITIONS TO
INVESTORS OBLIGATIONS AT THE CLOSING The obligation of each Investor to purchase the Warrants at the Closing is subject to
the fulfilment of each of the following conditions at or prior to the Closing, unless otherwise waived by such Investor: 44
7.1 Representations and Warranties. The representations and warranties made by each Warrantor in Section 3 and the representations and warranties made by the Controlling
Shareholder in Section 4 shall be true, correct and complete when made, and shall be true and correct and complete as of the Closing Date with the same force and effect as if they had been made on and as of such date, unless any representations
and warranties are made with respect to a specified date, in which case, as of such date. 7.2 Performance of Obligations. Each Warrantor shall have performed and complied with all covenants, agreements, obligations and conditions contained in the Transaction
Documents and the Restructuring Documents that are required to be performed or complied with by it on or before the Closing. 7.3
Proceedings and Documents. All corporate and other proceedings of the Warrantors in connection with the transactions contemplated
hereby at the Closing and all documents incidental to such proceedings shall have been completed or produced, and such Investor shall have received all such counterpart copies of the board and/or shareholders resolutions of each Warrantor. 7.4 Approvals, Consents and Waivers. Each Warrantor shall have obtained any and all Approvals, if any, necessary for consummation of the transactions contemplated by this Agreement
and other Transaction Documents, including the waiver from all existing shareholders or warrant holders of the Group Companies (if applicable) of any anti-dilution rights, rights of first refusal, pre-emptive
rights and all similar rights in connection with the issuance of the Warrants and the Reserved Preferred Shares and such waiver is irrevocable. 7.5 Compliance Certificate. Each Warrantor shall have delivered to such Investor a certificate (together with all potent supporting documents), dated the Closing Date,
certifying that the conditions specified in Section 7 have been fulfilled and stating that there shall have been no Material Adverse Effect since the Statement Date. 7.6 Constitutional Documents. The Amended M&AA shall have been duly adopted by the Company by all necessary corporate action of its shareholders and its Board, and shall
have become and remain effective under the Laws of the Cayman Islands, pursuant to which CICC shall be entitled to designate one person as observer to the Board. 7.7 Execution and Delivery of Transaction Documents. The Company shall have delivered to such Investor the Transaction Documents, other than the Amended M&AA, which shall be duly executed by
the Company and/or all the other Parties thereto. 45
7.8 Internal Approval. Such Investor shall have received internal approval and authorization for the transactions contemplated hereunder. 7.9 Legal Opinions. Such
Investor shall have received (i) from the Cayman Islands counsel for the Company, an opinion, dated as of the Closing, and (ii) from the PRC counsel for the Company, an opinion, dated as of the Closing, each in form and substance
satisfactory to such Investor. 7.10 Due Diligence. Such Investor shall have completed its legal, financial, commercial, technical and Intellectual Property due diligence investigation and other
investigations on the business of the Group Companies to its satisfaction. 7.11 Reorganization The following procedures and steps of the Reorganization Plan shall have been completed, (a) WFOE shall have acquired and held all the
equity interests of Beijing Chezhubang New Energy Technology Co., Ltd.(北京车主邦新能源科技有限公司), (b) WFOE shall have entered into the Restructuring Documents with the Domestic Company and other relevant parties thereto, and the Restructuring Documents shall have taken effect and been
binding upon and enforceable by the parties thereto, and (c) Additional HK Companies shall have been duly established and validly existing under the Laws of Hong Kong, and the Company shall have been the sole shareholder of the Additional HK
Companies. 7.12 No Material Adverse Effect. There shall not have been any Material Adverse Effect since the Statement Date. There shall not be on the Closing Date any Governmental Order
or any condition imposed under any applicable Law which would, (a) prohibit or restrict (i) the sale and issuance of the Warrants, or (ii) the consummation of the transactions contemplated by this Agreement, (b) subject such Investor
to any material penalty or onerous condition under or pursuant to any Law if the Warrants were to be sold and issued hereunder to such Investor or (c) restrict the operation of the Business of any Group Company in a manner that would have a
Material Adverse Effect. 8. CONDITIONS TO COMPANYS OBLIGATIONS AT THE CLOSING The obligations of the Company under this Agreement to consummate the Closing with respect to any Investor are subject to the fulfilment of
each of the following conditions by such Investor at or prior to the Closing, unless otherwise waived by the Company: 46
8.1 Representations and Warranties. The representations and warranties of such Investor contained in Section 5 shall be true, correct and complete when made, and shall be
true and correct and complete as of the Closing Date with the same force and effect as if they had been made on and as of such date, unless any representations and warranties are made with respect to a specified date, in which case, as of such date.
8.2 Performance of Obligations. Such Investor shall have performed and complied with all covenants, agreements, obligations and conditions contained in the Transaction
Documents that are required to be performed or complied with by it on or before the Closing. 8.3 Approvals. Such Investor shall have obtained any and all Approvals necessary for consummation of the transactions contemplated by this Agreement, except
the ODI Approvals with respect to the exercise of the Warrant, as applicable. 8.4 Execution of Transaction Documents. Such Investor shall have executed and delivered to the Company the Transaction Documents to which it is a party. 9. INDEMNIFICATION. 9.1 Each of the Warrantors hereby agrees to jointly and severally indemnify and hold harmless each Investor, and such Investors
Affiliates, shareholders, partners, directors, officers, agents and assigns, from and against any and all Indemnifiable Losses suffered by such Investor, or such Investors Affiliates, shareholders, partners, directors, officers, agents and
assigns (each, an Indemnified Person), directly or indirectly, as a result of, or based upon or arising from (i) any breach or violation of, or inaccuracy or misrepresentation in, any representation or warranty made by the
Warrantors contained herein or any other Transaction Documents or the Restructuring Documents, or (ii) any breach or violation of any covenant or agreement by the Warrantors contained herein or any other Transaction Documents or the
Restructuring Documents. The rights contained in this Section 9 shall not be deemed to preclude or otherwise limit in any way the exercise of any other rights or pursuit of other remedies for the breach of this Agreement or with respect to any
misrepresentation. This Section 9 shall survive any termination of this Agreement. 9.2 Without limiting generality of the foregoing,
each of the Group Companies hereby agrees to jointly and severally indemnify and hold harmless each Indemnified Person from and against any and all Indemnifiable Loss, directly or indirectly, as a result of, or based upon or arising from: 47
(a) any Tax Liability of any Group Company not reflected in the Financial Statements or
arising out of any failure, whether intentional or not, by any Warrantor to comply with any applicable Laws of the PRC or of any other applicable jurisdiction relating to Tax, (b) any Liability of any Group Company arising out of any failure, whether intentional or not, by any Warrantor to comply with any applicable
Laws of the PRC or of any other applicable jurisdiction relating to Social Welfare, (c) any business activities of any Group Company at
any time from its establishment including any non-compliance with any applicable Laws, and any failure to obtain, renew and keep effective of any requisite Approval or Permit for any Group Company to conduct
its Business, and (d) any Action against the Group Companies due to any event occurred or existed prior to the Closing. 9.3 The indemnification under Section 9.2 shall not be prejudiced by or be otherwise subject to any disclosure (in the Disclosure Schedule
or otherwise) and shall apply regardless of whether the Group Companies have any actual or constructive knowledge with respect thereto. 9.4 The representations and warranties made by the Warrantors herein shall survive the Closing for a period of five (5) years, or, if the
applicable statute of limitation for the relevant claims expires prior to the end of such five (5)-year period for such statutes of limitation. Such representations and warranties of the Warrantors shall in no way be affected by any investigation of
the subject matter thereof made by or on behalf of the Investors. All covenants or agreements shall survive the Closing Date and remain in full force and effect in accordance with their terms. 9.5 Any Indemnified Person seeking indemnification with respect to any Indemnifiable Loss shall give written notice to any of the Warrantors.
The Warrantors shall not be liable pursuant to this Section 9 for any Indemnifiable Loss that arise from any individual item, occurrence, circumstance, act or omission (or series of related items, occurrences, circumstances, acts or omissions)
unless and until the aggregate amount of Indemnifiable Losses resulting therefrom exceeds US$150,000, after which and in which case the Warrantors shall be liable for the total aggregated amounts of such Indemnifiable Loss back to the first dollar
and not for the excess amount only. To the extent permitted by applicable Law, upon and following receipt of the written notice above, the Company shall use best efforts to procure that the profits of each Subsidiary of the Company (including the
Major PRC Subsidiaries and other PRC Subsidiaries) for the time being available for distribution shall be paid to the Company by way of dividend if and to the extent that, but for such payment, the Company would not itself otherwise have sufficient
profits available to indemnify and hold harmless any Indemnified Person from and against any and all Indemnifiable Loss pursuant to this Section 9 and such written notice above. 48
9.6 Except for fraud, intentional breach, wilful misconduct and gross negligence, the
Founders accumulative liability to all Indemnified Persons for breaches of the representations and warranties under this Agreement but exclusive of the covenants and undertakings under this Agreement and the other Transaction Documents, shall
be limited to the fair market value of the Equity Securities owned or held directly or indirectly by the Founder, or by other parties for the benefit of the Founder (including those held by the Founders Immediate Family Members of the
Founder), in the Group Companies; provided that the fair market value of such Equity Securities shall be the higher of (a) such value determined by an independent appraiser mutually agreed upon by the claiming Investor and the Company; or
(b) such value calculated based on the post-money valuation of the latest round of financing of the Company. 9.7 For purpose of
clarity, in the event a breach or violation of representations, warranties or covenants made by the Warrantors contained herein or any other Transaction Documents or the Restructuring Documents also constitutes a breach or violation of other
agreements by and between the relevant Warrantors and the Indemnified Persons, or their respective Affiliates, the liabilities of the Warrantors should not be duplicated and the Indemnified Persons shall only enforce indemnification liability
against the Warrantors under either of these agreements (but not both) with respect to the same loss. 10. MISCELLANEOUS
10.1 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the Parties hereto whose rights or obligations hereunder are affected by such terms and conditions. This Agreement, and the rights and obligations hereunder, shall not be assigned without the mutual written
consent of the Controlling Shareholder, the Investors and the Company, provided that any Investor may assign its rights and obligations hereunder without the written consent of any other Parties to this Agreement (i) prior to or
after the Closing, to an Affiliate of such Investor or (ii) after the Closing, to any Person in connection with a transfer of the Warrants that is permitted under the terms of the Shareholders Agreement. Nothing in this Agreement, express
or implied, is intended to confer upon any Party other than the Parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this
Agreement. A Person who is not a party to this Agreement has no rights under the Contracts (Rights of Third Parties) Ordinance (Chapter 623 of the Laws of Hong Kong) to enforce any term of this Agreement, but this does not effect any right or remedy
of a third party which exists or is available apart from the said Ordinance. 10.2 Entire Agreement. This Agreement, Restructuring Documents, the other Transaction Documents and the schedules and exhibits hereto and thereto, which are hereby
expressly incorporated herein by this reference, constitute the entire agreement and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the Parties, with respect to the subject matter
hereof. 49
10.3 Notices. Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Agreement shall be in
writing and shall be conclusively deemed to have been duly given (a) when hand delivered to the other Parties; (b) when sent by facsimile at the number set forth in the Schedule of Notice attached hereto; (c) seven (7)
Business Days after deposit in the mail as air mail or certified mail, receipt requested, postage prepaid and addressed to the other party as set forth in Schedule of Notice; or (d) three (3) Business Days after deposit with an overnight
delivery service, postage prepaid, addressed to the Parties as set forth in the Schedule of Notice with next-Business-Day delivery guaranteed, provided that the sending Party receives a confirmation of
delivery from the delivery service provider. Each Person making a communication hereunder by facsimile shall promptly confirm by telephone
to the Person to whom such communication was addressed each communication made by it by facsimile pursuant hereto but the absence of such confirmation shall not affect the validity of any such communication. A Party may change or supplement the
addresses given above, or designate additional addresses, for purposes of this Section 10.3 by giving, the other Parties written notice of the new address in the manner set forth above. 10.4 Amendments and Waivers. Any term of this Agreement may be amended only with the written consent of all the Parties hereto. 10.5 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any Warrantor or any Investor, upon any breach or default of any Party
hereto under this Agreement, shall impair any such right, power or remedy of such Warrantor or Investor nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of any similar breach or default
thereafter occurring; nor shall any waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Warrantor or any Investor of any breach or default
under this Agreement or any waiver on the part of any Warrantor or any Investor of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies,
either under this Agreement, or by Law or otherwise afforded to the Warrantors and the Investors shall be cumulative and not alternative. 10.6 Finders Fees. Unless otherwise disclosed, each Party hereto (a) represents and warrants to each other Party hereto that it has retained no finder or
broker in connection with the transactions contemplated by this Agreement, and (b) hereby agrees to indemnify and to hold harmless the other Party hereto from and against any liability for any commission or compensation in the nature of a
finders fee of any broker or other Person or firm (and the costs and expenses of defending against such liability or asserted liability) for which the indemnifying party or any of its employees or representatives are responsible. 50
10.7 Interpretation; Titles and Subtitles. This Agreement shall be construed according to its fair language. The rule of construction to the effect that ambiguities are to be resolved
against the drafting party shall not be employed in interpreting this Agreement. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. 10.8 Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The counterparts of this Agreement may be executed and delivered by electronic
signature, signature image or digital signature (including but not limited to portable document format, facsimile or email) by any Party and the Parties consent to the receipt of such counterpart(s) so executed and delivered electronically as if the
original had been received. Any Party in executing this Agreement electronically acknowledges that having regard to all the relevant signature is reliable and appropriate for the purpose for which the information contained in this Agreement is
communicated. 10.9 Severability. If any provision of this Agreement is found to be invalid or unenforceable, then such provision shall be construed, to the extent feasible, so
as to render the provision enforceable and to provide for the consummation of the transactions contemplated hereby on substantially the same terms as originally set forth herein, and if no feasible interpretation would save such provision, it shall
be severed from the remainder of this Agreement, which shall remain in full force and effect unless the severed provision is essential to the rights or benefits intended by the Parties. In such event, the Parties shall use best efforts to negotiate,
in good faith, a substitute, valid and enforceable provision or agreement which most closely effectuates the Parties intent in entering into this Agreement. 10.10 Confidentiality and Non-Disclosure. (a) The terms and conditions of this Agreement, Restructuring Documents and the other Transaction Documents, any term sheet or memorandum of
understanding entered into in connection with the transactions contemplated hereby, all exhibits and schedules attached hereto and thereto, the transactions contemplated hereby and thereby, including their existence, and all information furnished by
any Party hereto and by representatives of such Party to any other Party hereof or any of the representatives of such Parties (collectively, the Confidential Information), shall be considered confidential information and shall not
be disclosed by any Party hereto to any third party except in accordance with the provisions set forth below. The obligations of each Party hereto under this Section 10.10 shall survive and continue to be binding upon such Party after the
termination of this Agreement. 51
(b) Notwithstanding the foregoing, the Company and the Investors may disclose (i) the
Confidential Information to its current or bona fide prospective investor, Affiliates of the Company and the Investors and their respective directors, officers, employees, bankers, lenders, accountants, legal counsels, business partners or
representatives or advisors who need to know such information, in each case only where such persons or entities are informed of the confidential nature of the Confidential Information and are under appropriate nondisclosure obligations substantially
similar to those set forth in this Section 10.10, (ii) such Confidential Information as is required to be disclosed pursuant to routine examination requests from Governmental Authorities with authority to regulate such Partys operations,
in each case as such Party deems appropriate in its sole discretion, and (iii) the Confidential Information to any Person to which disclosure is approved in writing by the other Parties hereto. Any Party hereto may also provide disclosure in
order to comply with applicable Laws, as set forth in Section 10.10(c) below. (c) Except as set forth in Section 10.10(b) above,
in the event that any Party is requested or becomes legally compelled (including pursuant to any applicable Tax, securities, or other Laws and regulations of any jurisdiction or the rules of any stock exchange) to disclose any Confidential
Information, such Party (the Disclosing Party) shall, to the extent legally permitted and reasonably possible, provide the other Parties hereto with prompt written notice of that fact and consult with the other Parties hereto
regarding such disclosure. At the request of the other Parties, the Disclosing Party shall, to the extent reasonably possible and with the cooperation and reasonable efforts of the other Parties, seek a protective order, confidential treatment or
other appropriate remedy. In any event, the Disclosing Party shall furnish only that portion of the information that is legally required and shall exercise reasonable efforts to obtain reliable assurance that confidential treatment will be accorded
to such information. (d) Notwithstanding any other provision of this Section 10.10, the confidentiality obligations of the Parties
shall not apply to: (i) information which a Party learns from a third party which the receiving Party reasonably believes to have the right to make the disclosure, provided the receiving Party complies with any restrictions imposed by the third
party; (ii) information which is rightfully in the receiving Partys possession prior to the time of disclosure by the Disclosing Party and not acquired by the receiving Party under a confidentiality obligation; or (iii) information
which enters the public domain without breach of confidentiality by the receiving Party. 10.11 Further Assurances. Each Party shall from time to time and at all times hereafter make, do, execute, or cause to be made, done and executed such further acts,
deeds, conveyances, consents and assurances without further consideration, which may reasonably be required to effect the transactions contemplated by this Agreement. 52
10.12 Use of Name or Logo of the Investors. Without the prior written consent of each Investor and whether or not such Investor is then a shareholder of the Company, none of the
Warrantors shall use, publish or reproduce the name of such Investor or its trademark or logo in any advertisement, press release, professional or trade publication, marketing or advertising or promotional materials, or in any other manner. Without prior written consent of CICC, under no circumstance shall any other Party hereto (i) publicly use 中国国际金融股份有限公司, 中金,CICC, China International Corporation Limited or any names, tradenames, trademarks, service
marks, symbols or any other short names, abbreviations or logos similar to those aforementioned that are owned or used by any Affiliate of CICC, or use the name of the partners or the employees of CICC or any of its Affiliates (but such name that is
duplicate and does not refer to the partners or the employees of CICC or any of its Affiliates based on the judgment of good faith, is not subject to this restriction) for advertising, promotion or other purposes; or (ii) directly or indirectly
declare that any product or service provided by it have been licensed and supported by CICC or its Affiliates. 10.13 Governing
Law. This Agreement shall be governed by and construed under the Laws of Hong Kong, without regard to principles of conflict of Laws
thereunder. Each of the Parties hereto irrevocably (i) agrees that any dispute or controversy arising out of, relating to, or
concerning any interpretation, construction, performance or breach of this Agreement, shall be settled by arbitration to be held in Hong Kong which shall be administered by the Hong Kong International Arbitration Centre (HKIAC) in
accordance with the Hong Kong International Arbitration Centre Administered Arbitration Rules in force at the time of the commencement of the arbitration (the Arbitration Rules), (ii) waives, to the fullest extent it may
effectively do so, any objection which it may now or hereafter have to the laying of venue of any such arbitration, and (iii) submits to the exclusive jurisdiction of Hong Kong in any such arbitration. There shall be three (3) arbitrators.
The claimant shall select one (1) arbitrator, and the respondent shall select one (1) arbitrator. The third arbitrator, who shall be the presiding arbitrator, shall be jointly appointed by the claimant and respondent. If either the
claimant or the respondent fails to select the third arbitrator or the parties fail to agree on the choice of the third arbitrator, HKIAC shall make the appointment on their behalf. The arbitration shall be conducted in English. The decision of the
arbitration tribunal shall be final, conclusive and binding on the Parties to the arbitration. Judgment may be entered on the arbitration tribunals decision in any court having jurisdiction. The Parties to the arbitration shall each pay an
equal share of the costs and expenses of such arbitration, and each Party shall separately pay for its respective counsel fees and expenses; provided, however, that the prevailing Party in any such arbitration shall be entitled to recover from the non-prevailing Party its reasonable costs and attorney fees. The Parties acknowledge and agree that, in addition to contract damages, the arbitrator may award provisional and final equitable relief, including
injunctions, specific performance, and lost profits. The validity, construction and interpretation of this dispute resolution clause shall be governed by the Laws of Hong Kong. 53
10.14 Expenses. The Group Companies shall pay all of their own costs and expenses incurred in connection with the negotiation, execution, delivery and
performance of this Agreement and any other Transaction Documents and the transactions contemplated hereby and thereby, including all legal fees incurred by the Group Companies. If the Closing does not occur due to the causes that cannot be attributable to the Investors, the Group Companies shall reimburse all
reasonable, out-of-pocket documented legal, professional and other third-party fees, costs and expenses incurred by the Investors in connection with the conduct of its
industry, legal and financial due diligence and its negotiation, preparation, execution and completion of this Agreement and any other Transaction Documents hereunder and thereunder, which, however, shall be capped at US$100,000. 10.15 Termination of this Agreement. This Agreement may be terminated at any time prior to the Closing as between the Company and the Investors: (a) by mutual written consent of the Parties; or (b) by any Investor (with respect to such Investor only) or the Company, after the ninetieth (90th) day following the execution of this
Agreement, by written notice to all the Parties hereto, if the Closing has not occurred on or prior to such date; provided that neither Investor may terminate this Agreement pursuant to this Section 10.15(b) if the reason
the Closing has not occurred on or prior to such date is due to a breach of this Agreement by such Investor, and the Company may not terminate this Agreement pursuant to this Section 10.15(b) if the reason the Closing has not occurred on or
prior to such date is due to a breach of this Agreement by any Warrantor. Such termination under this Section 10.15 shall be without prejudice to any claims for damages or other remedies that any Investor may have under this Agreement or
applicable Law. If this Agreement is terminated pursuant to this Section 10.15, then all provisions of this Agreement will thereupon
become void without any Liability on the part of any Party hereto to any other Party hereto except that (x) this Section 10.15, Section 9 and Section 10 will survive any such termination, and (y) nothing herein will relieve
any Party from any Liability for any breach hereof occurring prior to such termination nor prejudice the right of any Party to seek indemnification under Section 9 in respect of such breach. 54
10.16 Supremacy of this Agreement. If and to the extent that there are inconsistencies between the provisions of this Agreement and those of the Amended M&AA, the terms of
this Agreement shall prevail as between the Parties hereto only (with the exception of the Company), who hereby undertake to take all actions necessary or advisable, as promptly as practicable after the discovery of such inconsistency, to amend the
Amended M&AA so as to eliminate such inconsistency to the largest extent as permitted by the applicable Law. 10.17 Specific
Performance. Notwithstanding anything to the contrary set forth herein, the Parties acknowledge and agree that irreparable harm may
occur for which money damages would not be an adequate remedy in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or otherwise breached. It is accordingly agreed that the Parties shall
be entitled to enforce specifically the terms and provisions of this Agreement. 10.18 Cumulative Rights in Transaction Documents.
Except as expressly otherwise stated in the Transaction Documents, all remedies, privileges, rights and benefits of each Investor under
the Transaction Documents (or by law or otherwise afforded to such Investor) shall be cumulative and not alternative. Notwithstanding any provisions to the contrary, the execution, delivery and performance of this Agreement shall not prejudice any
remedy, privilege, right or benefit of such Investor under any other Transaction Documents or any other Contract or document, and vice versa. REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK 55
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
above written. /s/ WANG Yang /s/ DAI Zhen SIGNATURE PAGE TO SERIES A SHARE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
above written. /s/ WANG Yang /s/ ZHENG Linyi SIGNATURE PAGE TO SERIES A SHARE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
above written. /s/ DAI Zhen SIGNATURE PAGE TO SERIES A SHARE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
above written. /s/ DAI Zhen SIGNATURE PAGE TO SERIES A SHARE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
above written. /s/ DAI Zhen /s/ DAI Zhen SIGNATURE PAGE TO SERIES A SHARE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
above written. /s/ LI Shiwei SIGNATURE PAGE TO SERIES A SHARE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
above written. /s/ WANG Zeqi SIGNATURE PAGE TO SERIES A SHARE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
above written. /s/ LIU Bin SIGNATURE PAGE TO SERIES A SHARE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
above written. CICC (Changde) Emerging Industry Venture Capital Partnership L.P. /s/ SHEN Yuanjiang SIGNATURE PAGE TO SERIES A SHARE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
above written. /s/ PAN Xiaofeng SIGNATURE PAGE TO SERIES A SHARE PURCHASE AGREEMENT
SCHEDULE OF NOTICE
EXHIBIT A-1 LIST OF INVESTORS
EXHIBIT A-2 LIST OF PRC SUBSIDIARIES
EXHIBIT B LIST OF KEY EMPLOYEES
EXHIBIT C CAPITALIZATION TABLE
EXHIBIT D DISCLOSURE SCHEDULE
EXHIBIT E AMENDED M&AA
EXHIBIT F SHAREHOLDERS AGREEMENT
EXHIBIT G ONSHORE INVESTMENT AGREEMENTS
EXHIBIT H WARRANTS
EXHIBIT I CONDUCT OF GROUP COMPANIES PRE-CLOSING
EXHIBIT J REORGANIZATION PLAN
Section 3.20
Recital
Preamble
Section 3.22
Section 6.1
Section 3.19(a)
Section 3.24
Section 3.24
Section 3.18(d)
Section 3.2(c)
Section 3.19(a)(ii)
Section 3.19(a)(i)
Section 2.1
Section 3.26(c)
Section 2.2(a)
Section 3
Preamble
THE COMPANY:
Dada Auto Inc.
By:
Name:
WANG Yang
Title:
Director
HK COMPANY:
Fleetin HK Limited
By:
Name:
DAI Zhen
Title:
Director
WFOE:
Zhejiang Anji Intelligent Electronics Holding Co., Ltd.
(浙江安吉智电控股有限公司) (Seal)
By:
Name:
WANG Yang
Title:
Legal Representative
DOMESTIC COMPANY:
Kuaidian Power (Beijing) New Energy Technology Co., Ltd. (快电动力
(北京) 新能源科技有限公司) (Seal)
By:
Name:
ZHENG Linyi
Title:
Legal Representative
CONTROLLING SHAREHOLDER:
Newlinks Technology Limited
By:
Name:
DAI Zhen
Title:
Director
FOUNDER:
DAI Zhen (戴震)
By:
MAJOR PRC SUBSIDIARIES:
(北京车主邦新能源科技有限公司) (Seal)
By:
Name:
DAI Zhen
Title:
Legal Representative
智电优通科技有限公司 (Seal)
By:
Name:
DAI Zhen
Title:
Legal Representative
INVESTOR:
Shenzhen Haiju Xinneng Investment Partnership L.P.
(深圳市海聚新能投资合伙企业
(有限合伙) ) (Seal)
By:
Name:
LI Shiwei
Title:
Authorized Signatory
INVESTOR:
Anji Zhenwei Liangshan Venture Capital Partnership L.P.
(安吉真为两山创业投资合伙企业
(有限合伙) ) (Seal)
By:
Name:
WANG Zeqi
Title:
Authorized Signatory
INVESTOR:
Ningbo Zhenwei Qihang Equity Investment Partnership L.P.
(宁波真为起航股权投资合伙企业
(有限合伙) ) (Seal)
By:
Name:
LIU Bin
Title:
Authorized Signatory
INVESTOR:
(中金(常德)新兴产业创业投资合伙企业
(有限合伙) ) (Seal)
By:
Name:
SHEN Yuanjiang
Title:
Authorized Signatory
INVESTORS:
Jiaxing Haohe Equity Investment Partnership L.P.
(嘉兴浩和股权投资合伙企业
(有限合伙) ) (Seal)
By:
Name:
PAN Xiaofeng
Title:
Authorized Signatory
Exhibit 4.15
THE SYMBOL [Redacted] DENOTES PLACES WHERE CERTAIN
IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE
EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) IS
THE TYPE THAT THE COMPANY TREATS AS PRIVATE OR
CONFIDENTIAL
DADA AUTO INC.
SERIES A SHARE PURCHASE AGREEMENT
Date: January 26, 2022
TABLE OF CONTENTS
Page | ||||
1. DEFINITIONS |
2 | |||
2. SALE AND PURCHASE, CLOSING |
12 | |||
3. REPRESENTATIONS AND WARRANTIES OF THE WARRANTORS |
13 | |||
4. REPRESENTATIONS AND WARRANTIES OF THE FOUNDER AND THE CONTROLLING SHAREHOLDER |
34 | |||
5. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR |
37 | |||
6. COVENANTS OF THE WARRANTORS |
38 | |||
7. CONDITIONS TO INVESTORS OBLIGATIONS AT THE CLOSING |
43 | |||
8. CONDITIONS TO COMPANYS OBLIGATIONS AT THE CLOSING |
45 | |||
9. INDEMNIFICATION |
46 | |||
10. MISCELLANEOUS |
48 | |||
SCHEDULE OF NOTICE |
60 | |||
EXHIBIT A LIST OF PRC SUBSIDIARIES |
61 | |||
EXHIBIT B LIST OF KEY EMPLOYEES |
62 | |||
EXHIBIT C CAPITALIZATION TABLE |
63 | |||
EXHIBIT D DISCLOSURE SCHEDULE |
64 | |||
EXHIBIT E AMENDED M&AA |
66 | |||
EXHIBIT F SHAREHOLDERS AGREEMENT |
67 | |||
EXHIBIT G CONDUCT OF GROUP COMPANIES PRE-CLOSING |
68 | |||
EXHIBIT H REORGANIZATION PLAN |
69 |
THIS SERIES A SHARE PURCHASE AGREEMENT (the Agreement) is made and entered into as of January 26, 2022 by and among:
(1) Dada Auto Inc., an exempted company duly incorporated and validly existing under the Laws of the Cayman Islands with its registered address at Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands (the Company);
(2) Fleetin HK Limited, a company duly incorporated and validly existing under the Laws of Hong Kong with its registered address at Suite 3101, Everbright Centre 108, Gloucester Road, Wanchai, Hong Kong (the HK Company);
(3) Zhejiang Anji Intelligent Electronics Holding Co., Ltd. (浙江安吉智电控股有限公司), a limited liability company duly incorporated and validly existing under the Laws of the PRC (the WFOE);
(4) Each of the Major PRC Subsidiaries listed in Part I of Exhibit A;
(5) Kuaidian Power (Beijing) New Energy Technology Co., Ltd. (快电动力(北京)新能源科技有限公司 ), a limited liability company duly incorporated and validly existing under the Laws of the PRC (the Domestic Company);
(6) Newlinks Technology Limited, an exempted company duly incorporated and validly existing under the Laws of the Cayman Islands (the Controlling Shareholder);
(7) DAI Zhen (戴震), a Chinese citizen, ID number [Redacted] (the Founder); and
(8) BCPE Nutcracker Cayman, L.P. (the Investor).
The Company, the HK Company, the WFOE, the Domestic Company, the Major PRC Subsidiaries, the Controlling Shareholder and the Investor may hereinafter collectively be referred to as the Parties and respectively referred to as a Party.
Unless otherwise defined herein, capitalized terms used in this Agreement shall have the meanings ascribed to them in Section 1.
RECITALS
A. Subject to the terms and conditions set forth in this Agreement, the Company desires to issue and sell to the Investor certain number of series A preferred shares par value of US$0.0001 each of the Company (the Series A Preferred Shares), and the Investor intends to subscribe for and purchase such Series A Preferred Shares from the Company.
B. The Parties intend to enter into this Agreement and make the respective representations, warranties, covenants and agreements set forth herein.
1
1. DEFINITIONS.
1.1 Certain Defined Terms.
For purposes of this Agreement:
Action means any notice, charge, claim, action, demand, complaint, petition, investigation, suit or other proceeding, whether administrative, civil or criminal, whether at law or in equity, and whether or not before any mediator, arbitrator or Governmental Authority.
Additional HK Companies means the Hong Kong companies that shall have been established by the Company prior to the Closing Date in accordance with the Reorganization Plan and Section 7.11 of this Agreement.
Additional WFOEs means the wholly foreign owned enterprises that the relevant Additional HK Companies will establish under the Laws of PRC after the Closing Date in accordance with the Reorganization Plan and Section 6.17 of this Agreement.
Affiliate means, (a) with respect to a Person, any other Person that, directly or indirectly, Controls, is Controlled by or is under common Control with such Person; and (b) in the case of an individual, shall include immediate family members of such individual (including his spouse, child, brother, sister, parent, mother-in-law, father-in-law, brother-in-law, sister-in-law, collectively, his Immediate Family Members), and trustee of any trust in which such individual or any of his Immediate Family Members is a beneficiary or a discretionary object, or any entity or company Controlled by any of the aforesaid persons. In the case of an Investor, the term Affiliate also includes (v) any direct or indirect shareholder of such Investor, (w) any of such shareholders or such Investors general partners or limited partners, (x) the fund manager managing or advising such shareholder or such Investor (and general partners, limited partners and officers thereof) and other funds managed or advised by such fund manager, (y) trusts controlled by or for the benefit of any such Person referred to in (v), (w) or (x), and (z) any fund or holding company formed for investment purposes that is promoted, sponsored, managed, advised or serviced by such Investor. For the avoidance of doubt, the Investor shall not be deemed to be an Affiliate of any Group Company.
Approval means any approval, license, permit, authorization, release, order, consent or franchise required to be obtained from, or any registration, qualification, certificate, designation, declaration, filing, notice, statement or other communication required to be filed with or delivered to, any Governmental Authority or any other Person, or any waiver of any of the foregoing.
Benefit Plan means any deferred compensation agreement, bonus plan, incentive plan, profit sharing plan, retirement agreement or other employment compensation agreement or any other plan established or maintained by any Group Company (or any predecessor of a Group Company) which provides or provided benefits for any employee of any Group Company or with respect to which contributions are or have been made by any Group Company on account of an employee of any Group Company.
2
Business Day means any day that is not a Saturday, Sunday, legal holiday or other day on which commercial banks are required or authorized by Laws to be closed in the PRC or the Cayman Islands.
Business means the business any Group Company conducts or proposes to conduct from time to time.
Captive Structure means the structure under which the WFOE Controls Domestic Company through the Restructuring Documents and the financial statements of Domestic Company will be fully consolidated with those of the Company and the WFOE in accordance with the applicable accounting standards.
CFC means a controlled foreign corporation as defined in the Code.
Charter Documents means, as to a Person, such Persons certificate of incorporation, formation or registration (including, if relevant, certificates of change of name), memorandum of association, articles of association or incorporation, charter, by-laws, trust deed, trust instrument, joint venture or shareholders agreement or equivalent documents, and business license, in each case as amended; and means, as to PRC limited liability companies, the business license, articles of association, shareholders agreement or equivalent documents.
Circular 37 means the Circular 37, issued by SAFE on July 4, 2014, titled Circular on Issues concerning Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles (关于境内居民通过特殊目的公司境外投融资及返程投资外汇管理有关问题的通知 ), effective as of July 4, 2014, and any implementation successor rule or regulation under the PRC Law, and in each case, as amended.
CICC means CICC (Changde) Emerging Industry Venture Capital Partnership L.P. (中金(常德)新兴产业创业投资合伙企业(有限合伙)).
Code means the Internal Revenue Code of 1986, as amended.
Contract means, as to any Person, any contract, agreement, undertaking, understanding, indenture, note, bond, loan, instrument, lease, mortgage, deed of trust, franchise, or license to which such Person is a party or by which such Person or any of its property is bound, whether oral or written.
3
Control of a given Person means the power or authority, whether exercised or not, to direct the business, management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, which power or authority shall conclusively be presumed to exist upon possession of beneficial ownership or power to direct the vote of more than fifty percent (50%) of the votes entitled to be cast at a meeting of the members or shareholders of such Person or power to control the composition of more than fifty percent (50%) of the board of directors of such Person; the term Controlled and Controlling have the meaning correlative to the foregoing.
Contributed Assets means the Transferred Assets, the Transferred Contracts, and the Transferred Employees.
Disclosure Schedule means the Disclosure Schedule attached to this Agreement as Exhibit D, dated as of the date hereof delivered by the Warrantors to the Investor on the date hereof in connection with this Agreement. Notwithstanding anything to the contrary contained in the Disclosure Schedule or in this Agreement, the information and disclosures contained in any section of the Disclosure Schedule shall be deemed to be disclosed and incorporated by reference in any other section of the Disclosure Schedule as though fully set forth in such other section for which the applicability of such information and disclosure is reasonably apparent on the face of such information or disclosure.
Domestic Resident has the meaning set forth in Circular 37 and/or other Law related to Circular 37.
Equity Securities means, with respect to a Person, any shares, share capital, registered capital, ownership interest, equity interest, or other securities of such Person, and any option, warrant, or right to subscribe for, acquire or purchase any of the foregoing, or any other security or instrument convertible into or exercisable or exchangeable for any of the foregoing, or any equity appreciation, phantom equity, equity plans or similar rights with respect to such Person, or any Contract of any kind for the purchase or acquisition from such Person of any of the foregoing, either directly or indirectly.
Fully Diluted Basis means the calculation is to be made assuming the exercise of all options, warrants or other securities that are convertible, exercisable or exchangeable into Companys shares and the conversion of all outstanding Preferred Shares (or would be outstanding assuming full exercise of all options, warrants or other securities that are convertible, exercisable or exchangeable into Companys Preferred Shares) into Companys Ordinary Shares.
Governmental Authority means any nation or government, or any federation, province or state or any other political subdivision thereof; any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any government authority, agency, department, board, commission or instrumentality of the PRC, the Cayman Islands, Hong Kong or any other country, or any political subdivision thereof, any court, tribunal or arbitrator, and any self-regulatory organization.
4
Governmental Order means any applicable order, ruling, decision, verdict, decree, writ, subpoena, mandate, precept, command, directive, consent, approval, award, judgment, injunction or other similar determination or finding by, before or under the supervision of any Governmental Authority.
Group Companies means the Company and its Subsidiaries (including the HK Company, the WFOE, the Domestic Company, the PRC Subsidiaries, each Person (except individuals) Controlled by the Company and their respective Subsidiaries from time to time), and Group Company means any of them, unless otherwise specified in this Agreement. For the avoidance of doubt, Group Companies shall include the Additional WFOEs and the Additional HK Companies (upon their incorporation or establishment under the Laws of applicable jurisdictions).
Hong Kong means the Hong Kong Special Administrative Region of the Peoples Republic of China.
IFRS means the International Financial Reporting Standards promulgated by the International Accounting Standards Board (IASB) (which includes standards and interpretations approved by the IASB and International Accounting Principles issued under previous constitutions), together with its pronouncements thereon from time to time, and applied on a consistent basis.
Indemnifiable Loss means, with respect to any Person, any action, claim, cost, damage, diminution in value, disbursement, expense, liability, loss, obligation, penalty, settlement, or suit of any kind or nature, together with all interest, penalties, and reasonable and documented legal, accounting and other professional fees and expenses incurred in the investigation, collection, prosecution and defense of claims and amounts paid in settlement, that have been actually imposed on or otherwise actually incurred or suffered by such Person, whether directly or indirectly.
Intellectual Property means any and all intellectual property, industrial property and proprietary rights in any jurisdiction throughout the world, including: (a) patents, all patent rights and all applications therefor and all reissues, reexaminations, continuations, continuations-in-part, divisions, and patent term extensions thereof, (b) inventions (whether patentable or not), discoveries, improvements, concepts, innovations and industrial models, (c) registered and unregistered copyrights, copyright registrations and applications, authors rights, moral rights, mask works, copyrightable works, and works of authorship (including artwork of any kind and software of all types in whatever medium, inclusive of computer programs, and related documentation), (d) domain names and social media accounts, and any part thereof, (e) technical information, know-how, trade secrets, drawings, designs, design protocols, specifications for parts and devices, quality assurance and control procedures, design tools, manuals, research data concerning historic and current research and development efforts, and confidential information, including the results of successful and unsuccessful designs, databases and proprietary data, (f) proprietary processes, technology, engineering, formulae, algorithms and operational procedures, (g) trade names, corporate names, trade dress, trademarks, service marks, other indicia of source, origin or quality, and registrations and applications therefor, and (h) the goodwill of the business symbolized or represented by the foregoing, customer lists and other proprietary information and common-law rights.
5
Key Employees means the key employees of the Group Companies listed in Exhibit B, and each a Key Employee.
Knowledge including the phrase to the best Knowledge of the Warrantors or to the Knowledge of the Warrantor means, (i) with respect to a Warrantor that is an individual, the actual knowledge of such Warrantor, and that knowledge which should have been acquired by such individual after making such due inquiry and exercising such due diligence as a prudent business person would have made or exercised in the management of his or her business affairs, and (ii) with respect to a Warrantor that is an institution, the Warrantor will be deemed to have Knowledge of a particular fact or other matter if any of its officers at the department head level or above, directors, Key Employees, consultants and professional advisers (including attorneys, accountants and auditors and to the extent of such individuals who are principally responsible for handling current matters for the Group Companies) is actually aware of such fact or other matter or should have become aware of such fact or other matter after making such due inquiry and exercising such due diligence as a prudent business person would have made or exercised in the management of his or her business affairs, and where any statement in the representations and warranties hereunder is expressed to be given or made to a Persons Knowledge, or so far as a party is aware, or is qualified in some other manner having a similar effect, the statement shall be deemed to be supplemented by the additional statement that such party has made such due inquiry and due diligence.
Law or Laws means any constitutional provision, statute or other law, rule, regulation, official policy or interpretation of any Governmental Authority and any Governmental Order.
Liabilities means, with respect to any Person, all debts, obligations, liabilities owed by such Person of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become due.
Lien means any mortgage, pledge, claim, security interest, encumbrance, title defect, lien, charge, easement, adverse claim, restrictive covenant, or other restriction or limitation of any kind whatsoever, including any restriction on the use, voting, transfer, receipt of income, or exercise of any attributes of ownership.
Material Adverse Effect means any (a) event, occurrence, fact, condition, change or development that has had, has, or would reasonably be expected to have a material adverse effect on the business, properties, assets, results of operations, condition (financial or otherwise), prospects or liabilities of the Group Companies taken as a whole, (b) material impairment of the ability of any Warrantor to perform its obligations under any Transaction Document or the Restructuring Documents that are material to the transactions contemplated therein, or (c) material impairment on the validity or enforceability of the Transaction Documents or the Restructuring Documents against the Warrantors which are a party thereto; provided, however, that in no event shall any change or event generally affecting the economic, financial market or political conditions in which the Group Companies operate be deemed to constitute a Material Adverse Effect unless such event has had a disproportionate impact on the Group Companies compared to other companies that operate in the territories or industries in which the Group Companies operate.
6
MIIT mean the Ministry of Industry and Information Technology of the PRC, including its local counterparts.
MOFCOM means the Ministry of Commerce of the PRC, including its local counterparts.
NDRC means the National Development and Reform Commission of the PRC, including its local counterparts.
Ordinary Shares means the ordinary shares in the capital of the Company with a par value of US$0.0001 per share.
PBOC means the Peoples Bank of China or any of its local branches.
Person means any individual, corporation, partnership, limited partnership, proprietorship, association, limited liability company, firm, trust, estate or other enterprise or entity.
PFIC means a passive foreign investment company as defined in the Code.
PRC Anti-Corruption Law means any Laws, regulations, rules, provisions, implementation regulations, orders, notices, guidance and procedures issued by legislators and/or empowered Governmental Authorities of the PRC, that are effective and are amended from time to time, regulating corruption, governmental bribery, commercial and private bribery, bribery facilitation, unfair-competition, unlawful solicitation and any other related activity or conduct, which includes, but is not limited to, the Criminal Law of the Peoples Republic of China, the Anti-Unfair Competition Law of the Peoples Republic of China, the Interim Provisions on the Prohibition of Commercial Bribery, the Implementation Measures for the Code of Ethics for Officials of the Communist Party of China, the rules and procedures set by the Supreme Peoples Court of the Peoples Republic of China and the Supreme Peoples Procuratorate of the Peoples Republic of China, and the rules and procedures of the Commission for Discipline Inspection of the Central Committee of the Chinese Communist Party and its local counterparts.
PRC Companies means the WFOE, the Domestic Company, and the PRC Subsidiaries.
PRC Subsidiaries means the entities listed in Exhibit A.
PRC GAAP means the generally accepted accounting principles in the PRC in effect from time to time.
7
PRC means the Peoples Republic of China but solely for purposes of this Agreement, does not include Hong Kong, the Macau Special Administrative Region and Taiwan.
Preferred Shares means the Series A Preferred Shares.
Public Official means (a) any employee or official of any Governmental Authority, including any employee or official of any entity owned or controlled by a Governmental Authority, (b) any employee or official of a political party, (c) any candidate for political office or his employee or associate, (d) any employee or official of an international organization, or (e) any person who acts in an official capacity for or on behalf of any of the foregoing.
Reorganization Plan means the transactions for the transfer of the Contributed Assets to the Group Companies from third parties and from other Subsidiaries of the Controlling Shareholder.
Restructuring Documents means the restructuring documents executed by the WFOE, the Domestic Company, the shareholders of the Domestic Company and other relevant parties on January 5, 2022, which includes the Exclusive Business Cooperation Agreement, Equity Interest Pledge Agreement, Exclusive Option Agreement and Power of Attorney.
RMB means Renminbi, the lawful currency of the PRC.
SAFE means the State Administration of Foreign Exchange of the PRC, including its local counterparts.
SAMR means the State Administration for Market Regulation of the PRC, including its local counterparts.
Securities Act means the U.S. Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder.
Statement Date means July 31, 2021.
Subsidiary means, with respect to a specific entity, (i) any entity (x) more than fifty percent (50%) of whose shares or other interests entitled to vote or (y) more than fifty percent (50%) of whose interests in the profits or capital of such entity are owned or Controlled directly or indirectly by the subject entity or through one (1) or more Subsidiaries of the subject entity; (ii) any entity whose assets, or portions thereof, are consolidated with the net earnings of the subject entity and are recorded on the books of the subject entity for financial reporting purposes in accordance with PRC GAAP, U.S. GAAP or IFRS; or (iii) any entity with respect to which the subject entity has the power to otherwise direct the business and policies of that entity directly or indirectly. For the avoidance of doubt, the Subsidiaries of the Company shall include the HK Company, the WFOE, the Domestic Company, the PRC Subsidiaries, the Additional HK Companies and the Additional WFOEs (upon their incorporation or establishment under the Laws of applicable jurisdictions) and any other Subsidiary to be established by any of them from time to time.
8
Tax Return means any return, declaration, report, estimate, claim for refund, claim for extension, information return, or statement relating to any Tax, including any schedule or attachment thereto.
Tax means any national, provincial or local income, sales and use, excise, franchise, real and personal property, gross receipt, capital stock, production, business and occupation, disability, employment, payroll, severance or withholding tax or any other type of tax, levy, assessment, custom duty or charge imposed by any Governmental Authority, any interest and penalties (civil or criminal) related thereto or to the non-payment thereof, and any loss or tax Liability incurred in connection with the determination, settlement or litigation of any Liability arising therefrom.
Transaction Documents means this Agreement, the Amended M&AA, the Shareholders Agreement, the Restructuring Documents, the exhibits attached to any of the foregoing and each of the agreements and other documents otherwise required in connection with implementing the transactions contemplated by any of the foregoing.
Transferred Assets means all the assets (whether tangible and intangible, including without limitation the Intellectual Property), which are not currently owned by any Group Company that are wholly attributable to the Business and set forth with particularity in the Reorganization Plan.
Transferred Contracts means all the Contracts, which were not previously signed by any Group Company that are wholly attributable to the Business and set forth with particularity in the Reorganization Plan.
Transferred Employees means all the employees, who are not currently employed by a Group Company but who will be employed by a Group Company as set forth with particularity in the Reorganization Plan.
U.S. means the United States of America.
U.S. GAAP means the generally accepted accounting principles in the
U.S. in effect from time to time.
US$ or $ means the lawful currency of the U.S.
Warrants means certain warrants to be issued by the Company to certain investors, pursuant to which and under the conditions provided therein the investors are granted with warrants to acquire 9,354,953 Series A Preferred Shares.
9
1.2 Definitions.
The following terms have the meanings set forth in the Sections set forth below:
Agreement |
Preamble | |
Amended M&AA |
Section 2.1 | |
Anti-Corruption Laws |
Section 3.18(d) | |
Arbitration Rules |
Section 10.13 | |
Board |
Section 3.2(a) | |
Capital Injection Amount |
Section 6.16 | |
Closing |
Section 2.2 | |
Closing Date |
Section 2.2 | |
Company |
Preamble | |
Confidential Information |
Section 10.10(a) | |
Conversion Shares |
Section 3.2(c) | |
Disclosing Party |
Section 10.10(c) | |
Domestic Company |
Preamble | |
ESOP |
Section 3.2(a)(iii) | |
FCPA |
Section 3.18(d) | |
Financial Statements |
Section 3.13(a) | |
HK Company |
Preamble | |
HKIAC |
Section 10.13 | |
Immediate Family Members |
Section 1.1 | |
Indemnified Person |
Section 9.1 | |
Investor |
Preamble | |
Material Contracts |
Section 3.17(a) | |
Money Laundering Laws |
Section 3.20 | |
Party or Parties |
Preamble | |
Permits |
Section 3.22 | |
Per Share Purchase Price |
Section 2.1 | |
Purchase Price |
Section 2.1 | |
Purchased Shares |
Section 2.1 | |
Proceeds |
Section 6.1 | |
Prohibited Person |
Section 3.19(a) |
10
Related Party Related Party Contract Representatives Sanctioned Country Sanctions Shareholders Agreement Series A Preferred Shares Social Welfare Warrantor or Warrantors WFOE 1.3 Interpretation and Rules of Construction. In this Agreement, except to the extent otherwise provided or that the context otherwise requires: (a) when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or
an Exhibit or Schedule to, this Agreement unless otherwise indicated; (b) the table of contents and headings for this Agreement are for
reference purposes only and do not affect in any way the meaning or interpretation of this Agreement; (c) whenever the words
include, includes or including are used in this Agreement, they are deemed to be followed by the words without limitation; (d) the words hereof, herein and hereunder and words of similar import, when used in this Agreement, refer
to this Agreement as a whole and not to any particular provision of this Agreement; (e) all terms defined in this Agreement have the
defined meanings when used in any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein; (f)
the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms; (g) references to a
Person are also to its successors and permitted assigns; 11
(h) the use of or is not intended to be exclusive unless expressly indicated
otherwise; (i) any reference to a contract or document is to that contract or document as amended, novated, supplemented, restated or
replaced from time to time; and (j) if any rights or obligations under this Agreement fall on a day or date which is not a Business Day,
such rights or obligations shall instead fall on the next succeeding Business Day after such stated day or date. 2. SALE AND
PURCHASE, CLOSING 2.1 Subscription of Preferred Shares. As of the Closing, the Company shall issue and sell to the Investor, pursuant to the terms and conditions of this Agreement, a total of 568,182
Series A Preferred Shares (the Purchased Shares), for an aggregate purchase price of US$5,000,000 (the Purchase Price), at a per share purchase price of US$8.8000 (the Per Share Purchase
Price), each having the rights, preferences, privileges and restrictions set forth in the Third Amended and Restated Memorandum and Articles of Association of the Company attached hereto as Exhibit E (the Amended
M&AA) and the Amended and Restated Shareholders Agreement attached hereto as Exhibit F (the Shareholders Agreement). 2.2 Closing. The
consummation of the purchase and sale of the Purchased Shares shall be conducted remotely by exchange of documents and signatures, on a date no later than fifteen (15) Business Days after the fulfilment or waiver of the conditions to the
Closing as set forth in Section 7 and Section 8 respectively, or at such other place and time as the Company and the Investor may mutually agree upon (the Closing, and the date of the Closing, the Closing
Date). 2.3 Pre-Money Valuation. The Purchase Price and the Per Share Purchase Price payable by the Investor for purchasing the Purchased Shares represents a pre-money valuation of the Company equal to US$500,000,000, including 6,818,182 Ordinary Shares reserved under the ESOP but excluding the Series A Preferred Shares to be issued pursuant to the Warrants. 2.4 Deliverables by the Company at the Closing. Subject to Sections 7 and 8, prior to or at the Closing, the Company shall deliver the following items to the Investor: (a) the counterparts of each Transaction Document duly executed by each of the parties thereto (other than the Investor); 12
(b) the certified true copies of the board and/or shareholders resolutions of each Warrantor
approving, among other things, the transactions contemplated by this Agreement and any other Transaction Documents to which it is a party; (c) a copy of updated register of members of the Company dated as of the Closing Date, reflecting the issuance of the Purchased Shares to the
Investor; (d) scanned copies of duly executed share certificates representing the Purchased Shares subscribed for by the Investor at the
Closing, original copies of which shall be delivered to the Investor after the Closing; and (e) a compliance certificate dated as of the
Closing signed by each Warrantor or a duly authorized representative of each Warrantor, as applicable, certifying that all of the conditions set forth in Section 7 have been fulfilled. 2.5 Deliverables by the Investor at the Closing. Subject to the satisfaction or waiver of all the conditions set forth in Section 7 below and against the delivery of applicable items set
forth in Section 2.4 above, on the Closing Date, the Investor shall pay the Purchase Price by wire transfer of United States dollars in immediately available funds to the bank account as designated in writing by the Company. 3. REPRESENTATIONS AND WARRANTIES OF THE WARRANTORS Each of the Founder, the Controlling Shareholder, the Company, the HK Company, the WFOE, the Domestic Company and the Major PRC Subsidiaries
(collectively the Warrantors and each a Warrantor) hereby jointly and severally represents and warrants to the Investor that, except as set forth in the Disclosure Schedule, which exceptions shall be deemed to
be part of the representations and warranties made hereunder, each of the statements contained in this Section 3 is true, accurate and complete from the date hereof to the Closing Date (unless otherwise specified) hereunder (or, if such
representations and warranties are made with respect to a certain date, as of such date). 3.1 Organization, Good Standing and
Qualification. Each Group Company is duly organized, validly existing and in good standing (or equivalent status in the relevant
jurisdiction) under, or by virtue of, the Laws of the jurisdiction of its incorporation or establishment. Each Group Company has all requisite legal and corporate power and authority to own, lease and operate its properties and assets and to carry
on the Business, and is duly qualified to transact business in each jurisdiction in which the failure to so qualify would reasonably be expected to result in a Material Adverse Effect. Each of the Company and the HK Company was formed solely to
acquire and hold the equity interests in the other Group Companies and since its formation has not engaged in any other business and has not incurred any Liability. No order has been made or petition presented or resolution passed for the winding
up, liquidation or dissolution of any Group Company and no distress, execution or other process has been levied on any Group Companys assets. 13
3.2 Capitalization. Immediately prior to the Closing (but after giving effect to the adoption of the Amended M&AA, which will become effective on the Closing
Date), the authorized share capital of the Company consists of the following: (a) Ordinary Shares. 490,076,865 Ordinary Shares, par
value US$0.0001 per share, of which: (i) 50,000,000 shares are issued and outstanding; (ii) 9,923,135 shares are reserved for issuance upon conversion of the Series A Preferred Shares; and (iii) 6,818,182 shares are reserved for issuance to the selected employees and members of the Group Companies management team as
approved by the board of directors of the Company (the Board) pursuant to the Companys employee share option plan (or any equivalent equity incentive program or arrangement) (the ESOP) adopted by the
Company. (b) Series A Preferred Shares. 9,923,135 Series A Preferred Shares, par value US$0.0001 per share, none of which are
issued and outstanding. (c) Options, Warrants, Reserved Shares. The Company has reserved sufficient Ordinary Shares for issuance
(i) upon the conversion of the Preferred Shares, and (ii) pursuant to ESOP (collectively, the Conversion Shares). The Company has reserved sufficient Preferred Shares for issuance upon the exercise of the Warrants.
Except (i) as described above and (ii) as contemplated under the Transaction Documents, there are no options, warrants, conversion privileges or other rights, or agreements with respect to the issuance thereof, presently outstanding to
purchase any of the Equity Securities of the Group Companies. Apart from the exceptions noted in this Section 3.2 and the Transaction Documents, no shares (including the Ordinary Shares and Series A Preferred Shares) of the Companys
outstanding share capital, or shares issuable upon exercise or exchange of any outstanding options or other shares issuable by the Company, are subject to any pre-emptive rights, rights of first refusal or
other rights to purchase such shares (whether in favor of the Company or any other Person). (d) Section 3.2(d) of the Disclosure
Schedule completely and accurately lists, as of (i) immediately prior to the Closing; (ii) immediately after the Closing, the outstanding and authorized Equity Securities of each Group Company, and the record and beneficial holders
thereof. 14
(e) The registered capital of the Domestic Company has been timely paid in accordance with
the PRC Law and its articles of association as of the date hereof. (f) All presently outstanding Equity Securities of each of the Company
or the HK Company were duly and validly issued (or subscribed for) in compliance with all applicable Laws, pre-emptive rights of any Person, and applicable Contracts, and are fully paid and non-assessable. All share capital of each Group Company is and as of the Closing shall be free and clear of any and all Liens or other third-party rights, claims or interests (except as provided under the
Transaction Documents). Except as contemplated under the Transaction Documents, there are no (a) resolutions pending to increase the share
capital of any Group Company or cause the liquidation, winding up, or dissolution of any Group Company or (b) dividends which have accrued or been declared but are unpaid by any Group Company. (g) Other than the Transaction Documents, no Group Companys Contracts relating to its Equity Securities that are subject to any vesting
schedule provides for acceleration of vesting (or lapse of a repurchase right) or other changes in the vesting provisions or other terms of such agreement or understanding upon the occurrence of any event or combination of events. Other than those
contemplated in the Transaction Documents, no Group Company has ever adjusted or amended the exercise price of any share options previously awarded (if any), whether through amendment, cancellation, replacement grant, repricing, or any other means.
(h) After giving effect to the transactions contemplated in the Transaction Documents, except as provided in the Shareholders
Agreement, the Company has not granted or agreed to grant any person or entity any registration rights (including piggyback registration rights). 3.3 Subsidiaries. Section 3.3 of the Disclosure Schedule sets forth a complete structure chart showing the Group Companies, and
indicating the ownership and Control relationships among all Group Companies, the Controlling Shareholder and other shareholders (if any). The Company is the sole legal and beneficial owner of the HK Company free and clear of any and all Liens or
other third-party rights, claims or interests, and the HK Company is the sole legal and beneficial owner of the WFOE free and clear of any and all Liens or other third-party rights, claims or interests. Except for the Restructuring Documents, there
is no agreement among the Controlling Shareholder or any Group Company, on one hand, and any Group Company, any other shareholder of any Group Company and/or any other Person, on the other hand, with respect to the ownership or Control of any of the
Group Companies. No Group Company currently owns or Controls, directly or indirectly, any interest or share in any other Person (other than another Group Company) or is currently a participant in any joint venture, partnership or similar
arrangement. No Group Company is obligated to make any investment in or capital contribution in or on behalf of any other Person. Other than the Warrants, no Group Company has or is bound by any outstanding subscriptions, options, warrants, calls,
commitments, rights agreements or agreements of any character calling for it to issue, deliver or sell, or cause to be issued, delivered or sold, any of its Equity Securities. Other than the Transaction Documents, there are no outstanding
contractual obligations of any Group Company to repurchase, redeem or otherwise acquire any of its Equity Securities. 15
3.4 PRC Companies. Except as disclosed in Section 3.4 of the Disclosure Schedule: (a) The registered capital of the WFOE is fully paid as required under its articles of association and one hundred percent (100%) of the equity
interest of the WFOE is duly vested in the HK Company as the sole investor in and owner of the WFOE in accordance with applicable PRC Law. (b) One hundred percent (100%) of the equity interests of each PRC Company is duly vested in its shareholders as its sole investors and owners
in accordance with applicable PRC Law. (c) Except as provided under the Restructuring Documents, there are no outstanding rights, or
commitments made by each of the PRC Companies to issue or sell or any of its investors and owners, to purchase any equity interest in each of the PRC Companies. (d) Except as contemplated under the Transaction Documents, there are no bonds, debentures, notes or other indebtedness of any of the PRC
Companies having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of equity interests of each of the PRC Companies may vote. (e) Each of the WFOE and the Domestic Company has operations in its respective registered office. (f) The incorporation documents relating to each of the PRC Companies are valid and have been duly approved or issued (as applicable) by the
appropriate PRC authorities and are valid and in full force. (g) Except as disclosed in Section 3.4(g) of the
Disclosure Schedule, all material Approvals from Governmental Authorities required for the qualifications of each PRC Companies for its Businesses under PRC Laws as currently operated, or contemplated to be operated, have been duly obtained from
the appropriate PRC authorities and are in full force and effect. (h) All filings and registrations with the PRC Governmental Authorities
required in respect of each of the PRC Companies and its operations, including MOFCOM, SAMR, SAFE, MIIT, PBOC, the supervision and administration department of safety in production, tax bureau, customs authorities, product registration authorities
and health regulatory authorities, as applicable, have been duly completed, in all material respects, in accordance with the relevant Laws. 16
(i) None of the PRC Companies has received any letter or notice from any relevant
Governmental Authority notifying each of the PRC Companies of the revocation of any Approvals from Governmental Authorities issued to it for non-compliance or the need for compliance or remedial actions in respect of the activities carried out
directly or indirectly by each of the PRC Companies. (j) No Group Company has any reason to believe that any Approvals from Governmental
Authorities requisite for the conduct of any part of each of the PRC Companies Business which are subject to periodic renewal will not be granted or renewed by the relevant PRC Governmental Authorities. (k) With respect to any land use right, building, property and investment held or leased by each of the PRC Companies, it has exclusive, full
and unimpaired legal and beneficial ownership of its rights, leasehold interests, property and investments free from any mortgages or security interests of any nature, third party rights, conditions, orders or other restrictions and has obtained all
necessary Approvals and effected all necessary registrations with Government Authorities with respect thereto. (l) All applicable Laws
with respect to the opening and operation of foreign exchange accounts and foreign exchange activities of each of the PRC Companies have been fully complied with in all material respects, and all requisite Approvals from the SAFE in relation thereto
have been duly obtained. (m) With regard to employment and staff or labour management, each of the PRC Companies has complied in material
respects with all applicable PRC Laws, other than Laws pertaining to Social Welfare, with regard to which each of the PRC Companies has complied with all such Laws, except for any such failure to comply with Laws pertaining to Social Welfare that
would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect. (n) There are no outstanding
stock options with respect to each of the PRC Companies. 3.5 Restructuring Documents. (a) The execution, delivery and performance by each and all of the Warrantors of their respective obligations under each and all of the
Restructuring Documents, and the consummation of the transactions contemplated thereunder, do not and will not result in any violation of their respective Charter Documents or any applicable PRC Laws. (b) Each Restructuring Document is, and all the Restructuring Documents taken as a whole are, legal, valid, enforceable and admissible as
evidence under PRC Laws, and constitute the legal and binding obligations of the relevant parties. 17
(c) As of the Closing Date, the WFOE shall have effective control of the Domestic Company
and is the sole beneficiary of the Domestic Company, such that the financial statements of the Domestic Company can be consolidated with those of the other Group Companies in accordance with the applicable accounting principles. There have been no
disputes, disagreements, claims or any legal proceedings of any nature, raised by any Governmental Authority or any other party, pending or, to the Knowledge of the Warrantors, threatened against or affecting any of the Company, WFOE or the Domestic
Company that: (i) challenge the validity or enforceability of any part or all of the Restructuring Documents taken as whole; (ii) challenge the Captive Structure as set forth in the Restructuring Documents; (iii) claim any ownership,
share, equity or interest in WFOE or the Domestic Company, or claim any compensation for not being granted any ownership, share, equity or interest in WFOE or the Domestic Company; or (iv) claim any of the Restructuring Documents or the Captive
Structure thereof or any arrangements or performance of or in accordance with the Restructuring Documents was, is or will violate any PRC Laws. 3.6 Due Authorization. Each Warrantor has all requisite power and authority to execute and deliver the Transaction Documents to which it is a party and to carry out
and perform its obligations thereunder. All action on the part of each Warrantor (and, as applicable, its officers, directors and shareholders) necessary for the authorization, execution and delivery of the Transaction Documents to which it is a
party, the performance of all obligations of each Warrantor thereunder, and, in the case of the Company, the authorization, issuance (or reservation for issuance), sale, transfer and delivery of the Purchased Shares and the Conversion Shares
issuable upon conversion of the Series A Preferred Shares, will be taken at the Closing pursuant to Section 2.2. The Company has, prior to the date hereof, obtained irrevocable waivers from all existing shareholders or warrant holders of the
Company of their pre-emptive rights to subscribe for the Purchased Shares. This Agreement has been duly executed and delivered by each Warrantor. This Agreement and each of the other Transaction Documents are,
or when executed and delivered by such Warrantor shall be, valid and legally binding obligations of such Warrantor, enforceable against such Warrantor in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other Laws of general application affecting enforcement of creditors rights generally, and (ii) as limited by Laws relating to the availability of specific performance, injunctive relief, or other equitable
remedies. 3.7 Valid Issuance. (a) The Purchased Shares when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein,
will be duly and validly issued, fully paid and non-assessable, free and clear of any Liens (except as provided under applicable securities Laws and under the Transaction Documents). The Conversion Shares with
respect to the Purchased Shares have been duly and validly reserved for issuance and, upon issuance in accordance with the terms of the Amended M&AA, will be duly and validly issued, fully paid and
non-assessable (except as provided under the Transaction Documents and applicable Laws). 18
(b) All currently outstanding Equity Securities of the Company are duly and validly issued,
fully paid and non-assessable and free of any Liens, and in each case such Equity Securities have been issued in full compliance with the requirements of all applicable securities Laws and regulations,
including the Securities Act, and all other antifraud and other provisions of applicable securities Laws. 3.8 Governmental
Consents. No Approval from Governmental Authorities with respect to or on the part of any Group Company or the Controlling Shareholder
is required in connection with its valid execution, delivery, or performance of this Agreement, Restructuring Documents or the other Transaction Documents or the offer, sale, issuance, transfer or reservation for issuance of any Purchased Shares in
accordance with and as contemplated by this Agreement. 3.9 Exempt Offering. The offer, sale, transfer and issuance of the Purchased Shares as contemplated by the Transaction Documents, are exempt from the qualification,
registration and prospectus delivery requirements of the Securities Act and any other applicable securities Laws of any Governmental Authorities. 3.10 Regulatory Matters. (a) Without limiting any particular representations and warranties of the foregoing, (i) the Founder and the Group Companies have obtained
any and all material Approvals from applicable Governmental Authorities and have fulfilled any and all material filings and registration requirements with applicable Governmental Authorities necessary with respect to the Group Companies and their
operations; and (ii) all material filings and registrations with applicable Governmental Authorities required with respect to the Group Companies and the Founder have been duly completed in accordance with applicable Laws. No Group Company or
Founder has received any letter or notice from any applicable Governmental Authorities notifying it of the revocation of any Approval issued to it or the need for compliance or remedial actions with respect to the activities carried out directly or
indirectly by such Person. Each Group Company has been substantively conducting its Business activities within the permitted scope of business or is otherwise operating its Businesses in substantive compliance with all relevant Laws in all material
respects. There are no outstanding fines or penalties asserted against the Group Companies by any Governmental Authority, and none of the Founder and the Group Companies has reason to believe that any authorization of any Governmental Authority,
license or permit required for the conduct of any part of its Business which is subject to periodic renewal will not be granted or renewed by the relevant Governmental Authorities. 19
(b) The Founder has completed the reporting and registration requirements for the Founder
under Circular 37 or any other applicable SAFE rules and regulations (collectively, the SAFE Rules and Regulations) in order to effect his indirect holding of Ordinary Shares of the Company and believes that he can update the
Circular 37 Registration in connection with the transactions as contemplated under the Transaction Documents if required by applicable Laws (including the SAFE Rules and Regulations) or by SAFE. To the best Knowledge of the Warrantors, each holder
of any Equity Securities of the Company (for the avoidance of doubt, excluding the holders of the Preferred Shares and the holders of the preferred shares of the Controlling Shareholder) (each, a Company Security Holder), who is a
Domestic Resident (or has Domestic Resident(s) as its beneficial owner) and subject to any of the registration or reporting requirements of SAFE Rules and Regulations, will complete such reporting and registration requirements under the SAFE Rules
and Regulations in order to effect his or her direct or indirect holding of Ordinary Shares of the Company, prior to the recording to the name of such Company Security Holder on the register of members of the Company. Neither the Warrantors nor, to
the best Knowledge of the Warrantors, any of the Company Security Holders has received any oral or written inquiries, notifications, orders or any other forms of official correspondence from SAFE or any of its local branches with respect to any
actual or alleged non-compliance with the SAFE Rules and Regulations and the Company and, to the best Knowledge of the Warrantors, the Company Security Holders have made all written filings, registrations,
reporting or any other communications required by SAFE or any of its local branches. The Domestic Company has not conducted any foreign exchange transactions or other transactions subject to Approvals from SAFE. To the best Knowledge of the
Warrantors, there exists no grounds on which any of the Group Companies may be subject to liability or penalties for any Persons failure or defect of registration, misrepresentation or failure to disclose any material information to the
issuing SAFE authority. 3.11 Tax Matters. (a) Each Group Company (i) has timely filed (taking into account any extension of time within which to file) all Tax Returns that are
required to be filed by it with any Governmental Authority, (ii) has timely paid all Taxes owed by it which are due and payable (whether or not shown on any Tax Return) and withheld and remitted to the appropriate Governmental Authority all
Taxes which it is obligated to withhold and remit from amounts owing to any employee, creditor, customer or third party, and (iii) has not waived any statute of limitations with respect to Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency other than, in the case of clauses (i) and (ii), unpaid Taxes that are in contest with the Tax authority by any Group Company in good faith or are nonmaterial in amount. (b) Each Tax Return referred to in paragraph (a) above was properly prepared in compliance with applicable Laws and was (and will be)
true, correct and complete in all respects. None of such Tax Returns contains a statement that is false or misleading or omits any matter that is required to be included or without which the statement would be false or misleading. No reporting
position was taken on any such Tax Return which has not been disclosed to the appropriate Tax authority or in such Tax Return, as may be required by Law. All records relating to such Tax Returns or to the preparation thereof required by applicable
Law to be maintained by applicable Group Company have been duly maintained. No written claim has been made by a Governmental Authority in a jurisdiction where any Group Company does not file Tax Returns that such Group Company is or may be subject
to taxation by that jurisdiction. 20
(c) The assessment of any additional Taxes with respect to the applicable Group Company for
periods for which Tax Returns have been filed is not expected to exceed the recorded Liability therefor in the most recent balance sheet in the Financial Statements, and to the Knowledge of the Warrantors, there are no unresolved questions or claims
concerning any Tax Liability of any Group Company. Since the Statement Date, no Group Company has incurred any Liability for Taxes outside the ordinary course of business or otherwise inconsistent with past custom and practice. There is no pending
dispute with, or notice from, any Tax authority relating to any of the Tax Returns filed by any Group Company, and to the best Knowledge of the Warrantors, there is no proposed Liability for a deficiency in any Tax to be imposed upon the properties
or assets of any Group Company. (d) No Group Company has been the subject of any examination or investigation by any Tax authority
relating to the conduct of its Business or the payment or withholding of Taxes that has not been resolved or is currently the subject of any examination or investigation by any Tax authority relating to the conduct of its Business or the payment or
withholding of Taxes. No Group Company is responsible for the Taxes of any other Person by reason of contract, successor liability or otherwise. (e) No Group Company is or has ever been a PFIC or CFC. To the best Knowledge of the Warrantors, no Group Company anticipates that it will
become a PFIC or CFC for the current taxable year or any future taxable year. 3.12 Charter Documents; Books and Records. The Charter Documents of each Group Company are in the form provided to the Investor. Each Group Company has made available to the Investor or
its counsel a copy of its minute books. Such copy is true, correct and complete, and contains all amendments and all minutes of meetings and actions taken by its shareholders and directors since the time of formation through the date hereof and
reflects in all material respects all transactions referred to in such minutes accurately. Each Group Company maintains its books of accounts and records in the usual, regular and ordinary manner, on a basis consistent with prior practice. 21
3.13 Financial Statements and Internal Controls. (a) The Warrantors have provided the Investor with the financial statements of the Group Companies consisting of the unaudited balance sheet,
income statement and cash flow statement of the Group Companies for the period from January 1, 2019 to the Statement Date prepared by the respective Group Company in accordance with PRC GAAP applied on a consistent basis (the Financial
Statements). The Financial Statements (i) have been prepared in accordance with the books and records of the relevant Group Company, (ii) are true, correct and complete to the extent that they fairly present, in accordance with
PRC GAAP, the financial condition and position of the relevant Group Company as of the dates indicated therein and the results of operations and cash flows of the relevant Group Company for the periods indicated therein in all material respects, and
(iii) were prepared in accordance with PRC GAAP applied on a consistent basis throughout the periods involved, except for the omission of notes thereto and normal year-end audit adjustments. All of the
accounts receivable owing to any of the Group Companies, including all accounts receivable set forth on the Financial Statements, constitute valid and enforceable claims and are good and collectible in the ordinary course of business, net of any
reserves shown on the Financial Statements (which reserves are adequate and were calculated on a basis consistent with PRC GAAP), and no further goods or services are required to be provided in order to complete the sales and to entitle the
applicable Group Company to collect in full. To the best Knowledge of the Warrantors, there are no material contingent or asserted claims, refusals to pay, or other rights of set-off with respect to any
accounts receivable of the Group Companies. The Group Companies have good and marketable title to all assets set forth in the Financial Statements, except for such assets as have been spent, sold or transferred in the ordinary course of business
since the Statement Date. Each Group Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with generally accepted accounting principles as required in the jurisdiction where it is
incorporated. (b) Each Group Company has maintained its (x) books and records reflecting its assets and liabilities that are accurate
in all material respects, and (y) adequate and effective internal accounting controls which provide the assurance that (i) such system is in accordance with applicable Laws and applicable accounting principles, (ii) transactions by it are
executed in accordance with managements general or specific authorization, (iii) transactions by it are recorded as necessary to permit preparation of financial statements in conformity with the applicable accounting principles and to
maintain asset accountability, (iv) access to assets of it is permitted only in accordance with managements general or specific authorization, (v) the recorded inventory of assets is compared with the existing tangible assets at
reasonable intervals and appropriate action is taken with respect to any material differences, (vi) segregating duties for cash deposits, cash reconciliation, cash payment, proper approval is established, and (vii) no personal assets or
bank accounts of the employees, directors, officers are mingled with the corporate assets or corporate bank account, and no Group Company uses any personal bank accounts of any employees, directors, officers thereof during the operation of the
Business. 3.14 Activities since the Statement Date. Since the Statement Date and except as provided by or contemplated under the Transaction Documents or otherwise disclosed in
Section 3.14 of the Disclosure Schedule, the Group Companies have (i) operated the Business in the ordinary course of business consistent with past practice, (ii) used its reasonable best efforts to
preserve its Business, (iii) collected receivables and paid payables and similar obligations in the ordinary course of business consistent with past practice, and (iv) not engaged in any new line of business outside the Business or entered
into any material agreement, transaction or activity or made any commitment with respect to the following, except those in the ordinary course of business or pursuant to the Reorganization Plan, and there has not been any material adverse change in
the way the Group Companies conduct the Business, including that there has not been by or with respect to any Group Company, except any act taken or omission made in accordance with paragraph 2 of Exhibit G: 22
(a) any purchase, acquisition, sale, lease, disposal of or other transfer of any assets
(including any (i) license of, grant of other rights under, Intellectual Property rights to third parties, (ii) abandonment or permission to lapse of, or permission to be subject to any Lien with respect to, Intellectual Property rights,
or (iii) other than in the ordinary course of business consistent with past practice and under appropriate confidentiality agreements, disclosure of confidential information) that are individually or in the aggregate material to its Business,
whether tangible or intangible, other than the purchase or sale of inventory in the ordinary course of business consistent with past practice, and no acquisition (by merger, consolidation or other combination, or acquisition of stock or assets, or
otherwise) of any business or other Person or division thereof; (b) any waiver, termination, settlement or compromise of a right, debt or
claim exceeding RMB5,000,000; (c) any incurrence, creation, assumption, repayment, satisfaction, or discharge of (i) any Lien in an
amount exceeding RMB5,000,000 or (ii) any indebtedness or guarantee, or the making of any loan or advance (other than reasonable and normal advances to employees for bona fide expenses that are incurred in the ordinary course of business
consistent with past practice), or the making of any investment or capital contribution; (d) any amendment to any Material Contract, any
entering of any new Contract, or any termination of any Contract that would have been a Material Contract if in effect on the date hereof, or any amendment to any Charter Document, or any amendment to or waiver under any Charter Document; (e) any material change in any compensation arrangement or agreement with the Key Employee, or adoption of any new Benefit Plan, or any change
in any existing Benefit Plan; (f) any resignation or termination of any Key Employee; (g) any declaration, setting aside or payment or other distribution with respect to any Equity Securities, or any direct or indirect
redemption, purchase or other acquisition of any Equity Securities; (h) any damage, destruction or loss, whether or not covered by
insurance, that would have a Material Adverse Effect to any Group Company; (i) any material change in accounting methods or practices or
any revaluation of any of its assets other than those contemplated in the Financial Statements; 23
(j) except in the ordinary course of business consistent with past practice, entry into any
closing agreement with respect to Taxes, settlement of any claim or assessment with respect to any Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment with respect to any Taxes, entry or change
of any Tax election, change of any method of accounting resulting in any amount of additional Tax or filing of any amended Tax Return; (k)
any commencement or settlement of any Action; (l) except for the issuance of Equity Securities as contemplated in the Transaction
Documents, any action to authorize, create or issue new shares or new securities of any class or series of any Group Company; (m) to the
Knowledge of the Warrantors, any other event or condition of any character which is reasonably expected to have, individually or in the aggregate, a Material Adverse Effect; or (n) any agreement or commitment to do any of the things described above in this Section 3.14. 3.15 Action and Governmental Orders. There is no Governmental Order restraining, enjoining or otherwise prohibiting the operation of the Business or the consummation of the
transactions contemplated by this Agreement, Restructuring Documents or any other Transaction Documents. Except as set forth in Section 3.15 of the Disclosure Schedule, there is no Action pending or, to the best Knowledge
of the Warrantors, currently threatened against any Group Company or any of the directors or Key Employees of any Group Company with respect to the respective businesses or proposed business activities of each Group Company, nor is any Warrantor
aware of any basis for any of the foregoing, including with respect to any Action involving the prior employment of any employees of any Group Company, their use in connection with such Group Companys Business of any information or
technologies allegedly proprietary to any of their former employers or their obligations under any agreements with prior employers. 3.16
Liabilities. Except as set forth in Section 3.16 of the Disclosure Schedule, no Group Company has any
Liabilities except for (i) Liabilities set forth in the Financial Statements that have not been satisfied since the Statement Date, and (ii) current Liabilities incurred since the Statement Date in the ordinary course of business
consistent with past practice. None of the Group Companies is a guarantor or indemnitor of any Liabilities of any other Person that is not a Group Company. 24
3.17 Material Contracts. (a) Section 3.17 of the Disclosure Schedule contains the Contracts the term of which has not yet expired and to which a Group Company is
bound that (i) are material operating agreements, (ii) are material strategic cooperation agreements, (iii) are agreements in relation to the sale, issuance, purchase, repurchase or redemption of Series A Preferred Shares, (iv) are
preferred equity financing agreements or debt financing, (v) are material real property lease agreements and material service agreements, (vi) if any, are material agreements involving Intellectual Property that is material to a Group
Company (other than generally-available off-the-shelf shrink-wrap software licenses obtained by the Group Companies on
non-exclusive and non-negotiated terms), (vii) if any, restrict the ability of a Group Company to compete or to conduct or engage in any business or activity in any territory, (viii) if any, are with a
Related Party (as defined below), (ix) if any, involve the lease, license, sale, use, disposition or acquisition of a material amount of assets (including any Intellectual Property rights) or of a business, (x) if any, involve the
establishment, contribution to, or operation of a partnership, joint venture or involving a sharing of profits or losses, or any investment in, loan to or acquisition or sale of the securities, equity interests or assets of any Person, (xi) are
with any Governmental Authority, (xii) are with any state-owned enterprise and material to the Group Companies, (xiii) are with any commercial bank or any other financial institution, and (xiv) contain any performance metrics
provision (collectively, the Material Contracts). (b) A complete, accurate, true, and fully-executed copy of each
Material Contract has been delivered to the Investor. Each Material Contract is a valid and binding agreement of the Group Company that is a party thereto, the performance of which does not and will not violate any applicable Law in any material
respect, and is in full force and effect, and such Group Company has duly performed all of its material obligations under each Material Contract to the extent that such obligations to perform have accrued, and no material breach or default, alleged
material breach or default, or event which would (with the passage of time, notice or both) constitute a material breach or default thereunder by such Group Company or any other party or obligor with respect thereto, has occurred, or as a result of
the execution, delivery, and performance of the Restructuring Documents and the other Transaction Documents will occur. No Group Company has given notice (whether or not written) that it intends to terminate a Material Contract or that any other
party thereto has breached, violated or defaulted under any Material Contract. No Group Company has received any notice (whether written or not) that it has breached, violated or defaulted under any Material Contract or that any other party thereto
intends to terminate such Material Contract. 3.18 Compliance with Laws. (a) Each Group Company has been and is in compliance with all Laws in all material respects that are applicable to it or to the conduct or
operation of its Business or the ownership or use of any of its assets or properties. (b) To the Knowledge of the Warrantors, no event
has occurred and no circumstance exists that (with or without notice or lapse of time) (i) may constitute or result in a violation by any Group Company of, or a failure on the part of such Group Company to comply with, any Law, in any material
respect, or (ii) may give rise to any obligation on the part of a Group Company to undertake, or to bear all or any portion of the cost of, any remedial action of any nature in order to comply with applicable Laws in all material respects. 25
(c) No Group Company (i) has received any notice from any Governmental Authority
regarding any actual, alleged, possible or potential violation of, or failure to comply with, any Law or (ii) has received any notice from any Governmental Authority regarding any actual, alleged, possible or potential obligation on the part of
such Group Company to undertake, or to bear all or any portion of the cost of, any remedial action of any nature or (iii) is under investigation by any Governmental Authority with respect to a violation of any Law of which it has received
notice from such Governmental Authority. (d) Each Group Company, and each of its directors, officers, employees, agents and other persons
explicitly authorized to act on its behalf (collectively, the Representatives), are familiar with and are in compliance with and have complied with, in all material respects, all applicable anti-bribery, anti-corruption,
anti-money laundering, recordkeeping and internal controls Laws (collectively, the Anti-Corruption Laws) including the Foreign Corrupt Practices Act of the United States of America (the FCPA) as if it were a
U.S. Person, the UK Bribery Act of 2020, and the PRC Anti-Corruption Law. Without limiting the foregoing, neither any Group Company nor any Representative has, directly or indirectly, in any material respect, offered, authorized, promised, condoned,
participated in, or received notice of any allegation of the following: (i) the making of any gift or payment of anything of value to any Public Official by any Person to obtain any improper advantage, affect or influence any act or decision of
any such Public Official with respect to any Group Company or the Business of any Group Company, or assist any Group Company in obtaining or retaining business for, or with, or directing business to, any Person; (ii) the taking of any action by
any Person which would violate the PRC Anti-Corruption Law; (iii) the taking of any action by any Person which would violate the FCPA, as amended, if taken by an entity subject to the FCPA, or could reasonably be expected to constitute a violation
of any applicable Law; (iv) the making of any false or fictitious entries in the books or records of any Group Company by any Person; or (v) the using of any assets of any Group Company for the establishment of any unlawful or unrecorded
fund of monies or other assets, or the making of any unlawful or undisclosed payment. No Group Company or any of its Representatives has ever been found by a Governmental Authority to have violated any criminal or securities Laws or is subject to
any indictment or any government investigation for bribery. No Public Official (a) holds an ownership or other economic interest, direct or indirect, in any of the Group Companies or in the contractual relationship formed hereunder, or
(b) serves as an officer, director or employee of any Group Company. Neither the Company nor any of its Affiliates has violated the applicable anti-bribery Laws by offering or taking property or other interests to obtain improper benefits, such
as corruptly paying anything of value to business partners, including but not limited to Governmental Authorities, non-government customers, suppliers or distributors, owners, directors, managers or other
employees of the entities identified above (Business Partners), that would result in a violation of any applicable anti-bribery Laws, or receiving anything of value from Business Partners that constitutes commercial bribery in
violation of applicable anti-bribery Laws. 26
(e) The Business of each Group Company as now conducted is, in compliance with all Laws and
regulations that may be applicable, including all Laws of the PRC with respect to telecommunication, dangerous chemicals, mergers, acquisitions, foreign investment and foreign exchange transactions. 3.19 Compliance with OFAC. (a) No Group Company or, to the best Knowledge of the Warrantors, any of its directors, officers, employees, Affiliates, shareholders or any
other Person acting on behalf thereof is, or is Controlled or 50% or more owned in the aggregate by or is acting on behalf of, one or more individuals or entities (collectively, the Prohibited Person) that are: (i) the subject of any sanctions administered or enforced by the U.S. Department of Treasurys Office of Foreign Assets Control (OFAC),
the United Nations Security Council (UN), the European Union (EU), Her Majestys Treasury (UK HMT), the Swiss Secretariat of Economic Affairs (SECO), the Hong Kong Monetary Authority (HKMA), the Monetary Authority of Singapore (MAS), or other
relevant sanctions authority (collectively, Sanctions); nor (ii) located, organized or resident in a country or
territory that is the subject of Sanctions (including, without limitation, Crimea, Burma/Myanmar, Cuba, Iran, North Korea, Venezuela and Syria) (each a Sanctioned Country). and no one that to the Knowledge of the Warrantors is a
Prohibited Person has been given or will be given an offer to become an employee, officer, consultant or director of any Group Company. (b) The Company represents and covenants that it will not, directly or indirectly, use any Proceeds, or lend, contribute or otherwise make
available such Proceeds to any Subsidiary, joint venture partner or other person or entity: (i) to fund or facilitate any activities of
or business with any Person that, at the time of such funding or facilitation, is the subject or the target of any Sanctions, (ii) to
fund or facilitate any activities of or any business in any Sanctioned Country, or (iii) in any other manner that will result in a
violation by any Person of any Sanctions. (c) The Group Companies have not conducted or agreed to conduct any business, or entered into
or agreed to enter into any dealings or transactions, and will not conduct or agree to conduct any business, or enter into or agree to enter into any dealings or transactions, with any Prohibited Person or Sanctioned Country, or in any country or
territory, that at the time of the dealing or transaction is or was the subject of Sanctions. 27
3.20 Compliance with Money Laundering Laws. The operations of each Group Company are and have been conducted at all times in compliance with applicable financial recordkeeping and
reporting and other requirements of the money laundering Laws of all relevant jurisdictions (including but not limited to the PRC Anti-Money Laundering Law, applicable financial recordkeeping and reporting requirements of the U.S. Currency and
Foreign Transaction Reporting Act of 1970, as amended, the U.S. Money Laundering Control Act of 1986, as amended) (collectively, the Money Laundering Laws), and no Action by or before any Governmental Authority involving any Group
Company or the Founder with respect to the Money Laundering Laws is pending or, to the best of the Warrantors Knowledge, threatened. 3.21 Titles and Properties. (a) Except as described in the Financial Statements, the Group Companies have good and valid title to, or a valid leasehold interest in, all
of their material assets they use or may need to use in the conduct of their respective Businesses, whether real, personal or mixed (including but not limited to all such assets reflected in the Financial Statements), free and clear of any and all
Liens or third party claims, including any creditors rights. The foregoing assets collectively represent all material assets, rights and properties necessary for the conduct of the Business of the Group Companies in the manner conducted during
the periods covered by the Financial Statements. All material leases of real or personal property to which a Group Company is a party are fully effective and afford the Group Company valid leasehold possession and subletting rights of the real or
personal property that is the subject of such lease. (b) All machinery, vehicles, equipment and other tangible personal property owned or
leased by a Group Company that are material to the Business of the Group Companies are (i) in good condition and repair (reasonable wear and tear excepted) and (ii) not obsolete or in need of renewal or replacement, except for renewal or
replacement in the ordinary course of business. 3.22 Permits. Each Group Company has all Approvals, including any special approval or permits required under the Laws of the PRC (the
Permits), necessary for its incorporation, existence and qualification for respective Business as now conducted. Each such Permit is valid and in full force and effect; no Group Company is in default or violation in any respect of
any such Permit; no Group Company has received any written notice from any Governmental Authority regarding any actual or possible default or violation of any such Permit; and to the Knowledge of the Warrantors, no suspension, cancellation or
termination of any such Permits is threatened or imminent. 28
3.23 Compliance with Other Instruments. No Group Company is in violation, breach or default of its Charter Documents. The execution, delivery and performance by each Group Company of
and compliance by each Group Company with each of the Transaction Documents to which it is a party, and the consummation by it of the transactions contemplated hereby and thereby, will not result in (a) any violation, breach or default, or be
in conflict with or constitute, with or without the passage of time or the giving of notice or both, a default under (i) the Charter Documents of any Group Company, (ii) any Material Contract, or (iii) any applicable Law in any
material respect, (b) the creation or imposition of any Lien upon, or with respect to, any of the properties, assets or rights of any Group Company, or (c) any termination, modification, cancellation, or suspension of any right of, or any
augmentation or acceleration of any obligation of, any Group Company (other than those contemplated or intended by the Restructuring Documents, the Warrants and any other Transaction Documents). 3.24 Related Party Transactions. Except as set forth in Section 3.24 of the Disclosure Schedule, the Restructuring Documents to which the relevant
Group Companies are parties, the Reorganization Plan, the employment agreements, confidentiality agreements, non-compete agreements and other Contracts (each of which Contract, to the extent entered into by a
Founder or any Key Employee or any of his or her Affiliates, is disclosed in Section 3.24 of the Disclosure Schedule) in similar nature with any Group Company, and in any Contract between a Group Company and a
Subsidiary of the Controlling Shareholder that is not a Group Company (a) neither the Controlling Shareholder, nor any shareholder that beneficially owns five percent (5%) or more of the share capital of the Company or the Domestic Company, or
any director or Key Employee of any Group Company, or any Affiliate of any of them (other than another Group Company) (each of the foregoing, a Related Party), has any Contract (whether oral or written, each, a Related
Party Contract), understanding, proposed transaction with, or is indebted to, any Group Company, nor is there currently any proposed Related Party Contract and nor is any Group Company indebted (or committed to make loans or extend
or guarantee credit) to any of such Related Party (other than for accrued salaries, reimbursable expenses or other standard employee benefits). Except for the transactions under the Reorganization Plan and any Contract between a Group Company and a
Subsidiary of the Controlling Shareholder that is not a Group Company, (a) each Related Party Contract is on terms and conditions as favorable to the applicable Group Company as would have been obtainable by it at the time in a comparable arms-length transaction with an unrelated party; (b) no Related Party has any direct or indirect ownership interest in any Person (other than a Group Company) with which a Group Company is affiliated or
with which a Group Company has a business relationship, or any Person (other than a Group Company) that directly or indirectly competes with any Group Company (except that a Related Party may have a passive investment of less than 1% of the stock of
any publicly traded company that engages in the foregoing); and (c) no Related Party has any right, title or interest, either directly or indirectly, in (i) any Person which purchases from or sells, licenses, grants or furnishes to a Group
Company any goods, property, Intellectual Property or other property rights or services or (ii) any Contract to which a Group Company is a party or by which it may be bound or affected. 29
3.25 Intellectual Property Rights. (a) To the best Knowledge of the Warrantors, the Group Companies own or otherwise have the sufficient right or license to use all Intellectual
Property that is used in, held for use in, or necessary to conduct their Businesses, free and clear of any and all Liens. There is no pending or, to the best Knowledge of the Warrantors, threatened Action against any Group Company contesting the
ownership of, or right to use, such Intellectual Property, asserting the misuse, invalidity or unenforceability thereof, or asserting the infringement, misappropriation or other violation of any Intellectual Property of any third party (including
any demand or offer to license any Intellectual Property). All inventions, know-how and other Intellectual Property conceived, created or developed by employees or contractors of the Group Companies, to the
extent they are used in, held for use in, or necessary to the Businesses of the Group Companies, are works made for hire, and all right, title, and interest therein, including any applications therefor, have been transferred and assigned
to, and are currently exclusively owned by, the Group Companies. The Group Companies have complied with all remuneration and compensation requirements relating to such Intellectual Property under applicable Laws. Section 3.25
of the Disclosure Schedule contains a true, complete and accurate list of all Intellectual Property for which registrations or patents are owned by or held in the name of, or for which applications have been made in the name of, any Group
Company, including for each such registration, patent or application, the relevant name or description, registration or certification or application number, filing or registration or issue date. (b) No Actions in which any Group Company alleges that any Person is infringing, misappropriating, or otherwise violating, any Group
Companys Intellectual Property rights are pending, and none has been served, instituted or asserted by any Group Company. Neither the Business nor any Group Company has infringed, misappropriated or violated during the past four
(4) years, or is infringing, misappropriating or violating, any Intellectual Property rights of any Person. To the best Knowledge of the Warrantors, no Person has infringed, misappropriated or violated, or is infringing, misappropriating or
violating, any Intellectual Property rights of any Group Company. (c) To the best Knowledge of the Warrantors, none of the Key Employees
is obligated under any Contract, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with the use of his or her best efforts to promote the interests of the Group Companies or that would conflict
with the Business of any Group Company as presently conducted. It will not be necessary to utilize in the course of any Group Companys business operations any inventions of any of the respective Key Employees of the Group Companies made prior
to their employment by the Group Companies, except for inventions that have been validly and properly assigned or licensed to the Group Companies as of the date hereof. (d) The Group Companies have each taken all reasonable security measures that are commercially prudent in order to protect the secrecy,
confidentiality and value of their respective Intellectual Property and the confidentiality, integrity and security of the Business IT Systems. The Business IT Systems (i) are sufficient for the immediate and currently anticipated future needs
of the Business, and (ii) are in sufficiently good working condition to effectively perform all information technology operations and include a sufficient number of licenses for all software as necessary for the Business. 30
(e) Except for those data that shall remain the sole property of users and thus are not
permitted to be disclosed or disposed of by the Group Companies pursuant to applicable Laws, each Group Company owns all right, title and interest in and to all data it collects from or discloses about users of its products and services. Its
practices regarding the collection and use of consumer personal information are and have been in accordance in all material respects with applicable Laws of all jurisdictions in which it operates and does not violate any Persons right, title
or interest in any material respect. The Group Companies (i) maintain policies and procedures regarding data security and privacy and maintain administrative, technical, and physical safeguards that are commercially reasonable and, in any
event, in compliance in all material respects with all applicable Laws and Contracts applicable to any Group Company, and (ii) are and have been in compliance with such policies and procedures in all material respects. To the Knowledge of the
Warrantors, there have been no security breaches relating to, or violations of any security policy regarding, any data or information of Group Companies customers or used by the Group Companies or any Business IT Systems. There has been no
loss, unauthorized access or alteration, misappropriation, or misuse of any data or information of Group Companies customers or used by the Group Companies to conduct the Business or any Business IT Systems. There is no pending or, to the best
Knowledge of the Warrantors, threatened Action against any Group Company relating to any of the foregoing or any non-compliance with any such Laws, policies or procedures. (f) No source code for any software owned by any Group Company has been disclosed, licensed, distributed or otherwise made available to any
Person, and no Group Company has any obligation (whether present, contingent or otherwise) to disclose, license, distribute or otherwise make available any such source code to any Person. No free or open source or similar software has been
incorporated in, bundled with, or used, distributed or made available in connection with, any software owned by any Group Company. 3.26
Labor and Employment Matters. (a) Each Key Employee is currently devoting substantially all of his or her business time to the
conduct of the business of the respective Group Company. No Key Employee has given any notice of an intention to resign, and, to the best Knowledge of the Warrantors, no Group Company has any intention of terminating the employment of any Key
Employee. No Group Company is a party to any collective bargaining agreements or other Contract with any union or guild, and none of the Group Companies has been informed by their employees regarding the establishment of any trade union, work
council or other organizations representing the employees of the Group Company. Each employee, officer and director (other than those appointed by the holders of Preferred Shares) of the Group Companies has duly executed the employment and
confidential information and invention assignment agreement in the form reasonably satisfactory to the Investor. To the best Knowledge of the Warrantors, no Key Employee is obligated under, or in violation of any term of, any Contract or any
Governmental Order relating to the right of any such Key Employee to be employed by, or to contract with, such Group Company. No Group Company has received any written notice alleging that any such violation has occurred. 31
(b) There is no pending or threatened claim or litigation against any Key Employee or PRC
Companies in respect of full commitment, non-competition, non-solicitation or confidentiality obligation of any Key Employee. (c) Except as set forth in Section 3.26(c) of the Disclosure Schedule, (i) there is no, and there has not been
during the previous three (3) years, any material Action relating to the violation or alleged violation of any Law by any Group Company pertaining to labor relations or employment matters, including any charge or complaint filed by an employee
with any Governmental Authority or any Group Company; (ii) each Group Company has complied with Laws in all material respects relating to employment, wages, hours, overtime, working conditions, benefits, retirement, termination, Taxes, and
health and safety; (iii) each Group Company has withheld and reported all amounts required by any applicable Law or any Contract to be withheld and reported with respect to wages, salaries and other payments to employees (including employees
who have been treated as consultants); (iv) other than the statutory social insurance plans and the housing fund plan (the Social Welfare) operated under the applicable PRC Laws, each Group Company has no Liability for any payment
to any trust or fund governed by or maintained by or on behalf of any Governmental Authority with respect to unemployment compensation benefits, social security or social insurance, housing or other benefits or obligations for employees; and (v)
each Group Company is in compliance with each applicable Law relating to its payment and provision of any form of Social Welfare operated under the applicable PRC Laws and has made all contributions to the statutory social insurance plans and
housing fund plan as required to be made under applicable PRC Laws, except any such non-compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. To the
Knowledge of the Warrantors, there has not been, and there is not now pending or, threatened, any strike, union organization activity, lockout, slowdown, picketing, or work stoppage with respect to the employees of any Group Company or any unfair
labor practice charge against any Group Company. (d) Except for statutory social insurance schemes and housing fund schemes, the Group
Companies have not adopted or implemented any Benefit Plan. There are no material actual, threatened or pending investigations by any Governmental Authority involving any Benefit Plan and no material actual, threatened or pending claims against any
Benefit Plan. All contributions to, and payments from, each Benefit Plan have been timely made. Each Group Company maintains, and has fully funded, in all material respects, any pension plan and any other labor-related plans that it is required by
Law or by Contract to maintain. 32
(e) Neither the execution and delivery of this Agreement nor the consummation of the
transaction contemplated by this Agreement, any other Transaction Documents or the Restructuring Documents will (i) entitle any current or former employee or director of any Group Company to severance pay, or any payment contingent upon a
change in control of any Group Company, (ii) increase or enhance any benefits payable under any Benefit Plan, or (iii) accelerate the time of payment or vesting, or increase the amount of any compensation due to any employee or former
employee. 3.27 Insurance. Each Group Company has obtained the insurance coverage of the types and at the coverage levels as would be reasonable and customary for other
similar situated companies. No Group Company has done or omitted to do or suffered anything to be done or not to be done other than any acts in the ordinary course of business which has or would render any policies of insurance taken out by it or by
any other Person in relation to any of such Group Companys assets void or voidable or which would result in an increase in the rate of premiums on the said policies. There is no claim pending, and no Group Company has made since its formation
any claim individually or in the aggregate in excess of RMB1,000,000, under the insurance policies and bonds maintained by each Group Company as to which, in each case, coverage has been questioned, denied or disputed. No Group Company has suffered
any uninsured loss individually or in the aggregate in excess of RMB1,000,000 or waived any rights or claims of material or substantial value with respect to any insurance policy or bond or allowed any insurance policy or bond to lapse since its
formation. All premiums due and payable under all such policies and bonds have been timely paid, and each Group Company is otherwise in compliance in all respects with the terms of such policies and bonds. All such policies and bonds are in full
force and effect and will not terminate or lapse by reason of the transactions contemplated by this Agreement or any other Transaction Documents. 3.28 No Brokers. None
of the Warrantors has any Contract with or retained any broker, finder or similar agent with respect to or in connection with the transactions contemplated by this Agreement, any other Transaction Documents or the Restructuring Documents, and none
of them has incurred any Liability for any brokerage fees, agents fees, commissions or finders fees in connection with any of the Transaction Documents or the Restructuring Documents, or the consummation of the transactions contemplated
therein. 3.29 Power of Attorney. Except as contemplated in the Transaction Documents, none of the Group Companies has granted any power of attorney or similar power or
authorization to any other Person (including any director or shareholder) in respect of its equity interest, voting rights or substantial assets, other than powers of attorney issued to their directors, officers, or employees for purpose of
executing contracts or agreements or conducting operations for and on behalf of the Group Companies, as the case may be, in the ordinary course of business. 33
3.30 No Winding-up; No Insolvency. None of the Group Companies has engaged in any discussion (i) with any Person or Persons or any representative thereof regarding the
consolidation or merger of such Group Company with or into any such Person or Persons; (ii) with any Person regarding the sale, conveyance, or disposition of all or substantially all of the assets of such Group Company, or a transaction or
series of related transactions in which more than fifty percent (50%) of the voting power of such Group Company is disposed of, or (iii) regarding any other form of liquidation, dissolution or winding up, of such Group Company. Each Group Company is
not bankrupt, insolvent or unable to pay its debts and there is no unfulfilled decree or court order outstanding against it. No Governmental Order has been made or petition presented or resolution passed for the bankruptcy, liquidation, dissolution
or winding up (as applicable) of such Group Company, and no process has been levied against such Group Company. 3.31 Disclosure.
Each Warrantor has provided the Investor with all the information regarding the Group Companies requested by the Investor for deciding
whether to purchase the Purchased Shares and all the information that such Warrantor believes is reasonably necessary to enable the Investor to make such decision. No representation or warranty of the Warrantors contained in this Agreement or any
certificate furnished or to be furnished to the Investor at the Closing under this Agreement, and no information set forth in the Disclosure Schedule, when taken as a whole, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances under which they were made. Except as set forth in this Agreement or the Disclosure Schedule, there is no fact that the
Warrantors have not disclosed to the Investor in response to the Investors enquiry and of which any of its officers, directors or executive employees has Knowledge and that has had or would reasonably be expected to have a Material Adverse
Effect. 4. REPRESENTATIONS AND WARRANTIES OF THE FOUNDER AND THE CONTROLLING SHAREHOLDER In addition to those representations and warranties made in Section 3 above, the Founder and the Controlling Shareholder hereby jointly
and severally represent and warrant the following to the Investor from the date hereof to the Closing Date (or, if such representations and warranties are made with respect to a certain date, as of such date). 4.1 Conflicting Agreements. The Founder is not, as a result of the nature of the Business or for any other reason, in violation of (a) any fiduciary or confidential
relationship, (b) any term of any Contract or covenant (either with any Group Company or with another entity) relating to employment, Intellectual Property, confidentiality, proprietary information disclosure,
non-competition or non-solicitation, or (c) any material respect of any other Contract or Governmental Order binding on the Founder and relating to or affecting the
right of the Founder to be employed by or serve as a director or consultant to any Group Company. No such relationship, term, Contract, or Governmental Order conflicts with the Founders or Controlling Shareholders obligations to use its
best efforts to promote the interests of any Group Company nor does the execution and delivery of this Agreement and other Transaction Documents, nor the Founders carrying on any Group Companys Business as a director, officer, consultant
or Founder of any Group Company, conflict with any such relationship, term, Contract or Governmental Order. 34
4.2 Litigation. There is no material Action pending or, to the Founders Knowledge, threatened against the Founder, and there is no basis for any such
material Action. 4.3 Shareholders Agreement. Except as contemplated by or disclosed in the Transaction Documents or the Restructuring Documents, neither the Founder nor the Controlling
Shareholder is a party to or has Knowledge of any agreements, written or oral, relating to the acquisition, disposition, registration under the Securities Act or any equivalent Law in another jurisdiction, or voting, of the Equity Securities of any
Group Company. 4.4 Prior Legal Matters. The Founder has not been (a) subject to voluntary or involuntary petition under any bankruptcy or insolvency Law or the appointment of a
receiver, fiscal agent or similar officer by a court for his business or property; (b) convicted in a criminal proceeding or named as a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); (c)
subject to any order, judgment, or decree (not subsequently reversed, suspended, or vacated) of any court of competent jurisdiction permanently or temporarily enjoining him from engaging, or otherwise imposing limits or conditions on his engagement
in any securities, investment advisory, banking, insurance, or other type of business or acting as an officer or director of a public company; or (d) found by a court of competent jurisdiction in a civil action or by any governmental or
regulatory authority to have violated any securities, commodities or unfair trade practices Law, which such judgment or finding has not been subsequently reversed, suspended, or vacated. 4.5 Founders Intellectual Property Rights. The Founder has assigned to the Group Companies all Intellectual Property rights owned by the Founder that are related to the Group
Companies Business. 35
4.6 Non-Compete. Other than through the Group Companies, the Founder, either on his own account or through any of his Affiliates, or in conjunction with or on
behalf of any other Person, does not carry on or is engaged, concerned or interested directly or indirectly whether as shareholder, director, employee, partner, agent or otherwise carries on any business that competes with the Business of the Group
Companies. The Founder is not subject to any Contracts or any other obligations which prohibit, restrict or otherwise adversely affect the Founders investment or involvement in any Group Company. 4.7 No Liabilities and Claims. Except as otherwise contemplated under the Reorganization Plan, (i) there are no outstanding loans, amounts payable or any other
Liabilities between any Group Company, on the one hand, and the Founder or the Controlling Shareholder or any of its Affiliates, on the other hand, and (ii) none of the Founder, the Controlling Shareholder or its Affiliates has, may have or may
claim to have any claims, obligations or Liabilities against any Group Company, other than, in each case of clauses (i) and (ii), any salaries and other compensations, business expense advancements and reimbursements in the ordinary course of
business consistent with past practice. 4.8 Authorizations. Each of the Controlling Shareholder and the Founder has all requisite power and authority to execute and deliver the Transaction Documents to
which it is a party and to carry out and perform its obligations thereunder. All action on the part of the Controlling Shareholder necessary for the authorization, execution and delivery of the Transaction Documents to which it is a party, and the
performance of all obligations of it thereunder, has been taken or will be taken prior to the Closing. This Agreement has been duly executed and delivered by the Controlling Shareholder. This Agreement, each of the other Transaction Documents to
which the Controlling Shareholder is a party are, or when executed and delivered by it shall be, valid and legally binding obligations of it, enforceable against it in accordance with its terms, except (i) as limited by applicable Laws of
general application affecting enforcement of creditors rights generally, and (ii) as limited by Laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. 4.9 Holding for Own Account. Each of the Founder and the Controlling Shareholder holds and has been holding its Equity Securities in the Company solely for his or its own
account. He or it is not, nor has he or it been, holding the Equity Securities in the Company, as a nominee or agent, or with a view to the resale or distribution of any part thereof, and he or it does not have any present intention of selling,
granting any participation in, or otherwise distributing the same. 4.10 No Other Agreements. There is no Contract between or among the Founder, the Controlling Shareholder or any of their Affiliates, on the one hand, and any other
shareholder or other equity holder of any Group Company or any Affiliate of such shareholder or equity holder, on the other hand, in each case, with respect to the ownership or control of any Group Company or relating to such shareholder or equity
holders investment in such Group Company. 36
5. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR The Investor hereby represents and warrants to the Company as follows as of the date hereof and the Closing Date: 5.1 Organization and Good Standing. It is an entity duly organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or formation.
5.2 Authorization. (a) It has all requisite power and authority to execute and deliver the Transaction Documents to which it is a party and to carry out and
perform its obligations thereunder. All action on the part of the Investor (and, as applicable, its officers, directors and shareholders) necessary for the authorization, execution and delivery of the Transaction Documents to which it is a party,
and the performance of all obligations of the Investor thereunder, has been taken or will be taken prior to the Closing. This Agreement has been duly executed and delivered by the Investor. Each of this Agreement and the other Transaction Documents
to which the Investor is a party is, or when executed and delivered by the Investor shall be, valid and legally binding obligations of the Investor, enforceable against the Investor in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other Laws of general application affecting enforcement of creditors rights generally, and (ii) as limited by Laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies. (b) The execution and delivery of this Agreement and other Transaction Documents to which
it is a party by the Investor do not, and the performance of this Agreement and other Transaction Documents to which it is a party by the Investor and the consummation by the Investor of the transactions as contemplated hereby and thereby will not,
require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority. 5.3 Purchase
for Own Account. The Purchased Shares purchased by the Investor will be acquired for investment purposes for the Investors own
account or the account of one or more of the Investors Affiliates, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof. 5.4 Status of Investor. If applicable to the Companys compliance with U.S. securities Law, the Investor is either (a) an accredited investor
within the meaning of Securities and Exchange Commission Rule 501 of Regulation D, as presently in effect, under the Securities Act, or (b) not a U.S. person as defined in Rule 902 of Regulation S of the Securities Act. The Investor
is not with a view or any present intention toward effecting a distribution, or resale in violation of any applicable securities Laws. 37
5.5 Sufficiency of Funds. The Investor will have all funds necessary to consummate the transactions contemplated hereby and pay the Purchase Price in accordance with
Section 2.5. 6. COVENANTS OF THE WARRANTORS The Warrantors jointly and severally covenant to the Investor as follows: 6.1 Use of Proceeds. The Company shall use the proceeds received from the issuance and sale of the Purchased Shares (the Proceeds) to finance
the research and development, business expansion, marketing, working capital and for other general corporate purposes of the Group Companies and the Persons that will become Group Companies pursuant to the Reorganization Plan, and in accordance with
the business plan or budget as approved by the Board. Unless otherwise agreed to in writing by the Investor, or otherwise contemplated in
the preceding paragraph, no Proceeds shall be used (i) in the purchase of Equity Securities of any Person other than any Group Companies except for the Persons that may be acquired pursuant to the Reorganization Plan, (ii) in the
investment of any Person other than any Group Companies except for investments that may be contemplated under the Reorganization Plan, (iii) in the repayment of any loan or debt of any Group Companies except as otherwise contemplated under the
Reorganization Plan, (iv) in the repurchase, redemption or cancellation of Equity Securities of any Group Company held by any shareholders of such Group Company, or (v) in the payments to shareholders, directors or officers of any Group
Company outside the ordinary course of business of the Group Companies. 6.2 No Solicitation or Negotiation. During the period between the date of this Agreement and the earlier of (a) the Closing and (b) the termination of this Agreement,
none of the Warrantors shall (and each Warrantor shall cause its representatives, advisors and agents and, as applicable to such Warrantor, its officers, directors and employees, not to) (i) solicit, initiate, consider, encourage or accept any
other proposals or offers from any Person (A) relating to any acquisition or purchase of all or any portion of the Equity Securities of any Group Company or assets of any Group Company, (B) to enter into any merger, consolidation or other
business combination with any Group Company or the business of any Group Company or (C) to enter into a recapitalization, reorganization or any other extraordinary business transaction involving or otherwise relating to any Group Company or
(ii) participate in any discussions, conversations, negotiations and other communications regarding, or furnish to any other Person any information with respect to, or otherwise cooperate in any way, assist or participate in, facilitate or
encourage any effort or attempt by any other Person to seek to do any of the forgoing. The Warrantors shall immediately cease and cause to be terminated all existing discussions, conversations, negotiations and such proposal or offer, or any inquiry
or other contact with any Person with respect thereto. The Warrantors shall notify the Investor promptly if any such proposal or offer, or any inquiry or other contact with any Person with respect thereto is made and shall, in any such notice to the
Investor, indicate in reasonable detail the identity of the Person making such proposal, offer, inquiry or contact and the terms and conditions of such proposal, offer, inquiry or other contact. Each of the Warrantors agrees not to, without the
prior written consent of the Investor, release any Person from, or waive any provision of, any confidentiality or standstill agreement to which such Warrantor is a party. 38
6.3 Conduct of Group Companies Pre-Closing.
Unless otherwise expressly required by this Agreement, during the period between the date of this Agreement and the Closing Date, the
Group Companies shall, and the Warrantors shall use their respective reasonable best efforts to cause each of the Group Companies to, carry on their respective businesses in the ordinary course consistent with past practice (which includes
implementing the Reorganization Plan in accordance with its terms), and shall comply with its obligations set out in Exhibit G. 6.4 Satisfaction of Condition Precedent. The Warrantors shall use their respective reasonable best efforts to cause each of the conditions precedent as set forth in Section 7 to
be satisfied as soon as reasonably practicable. 6.5 Compliance with Applicable Law. Each of the Group Companies shall, and the Founder and the Controlling Shareholder shall cause each of the Group Companies to, in all material
respects, comply with all applicable Laws, including applicable PRC Laws relating to retail of refined oil, third-party payment, telecommunication business, insurance intermediary business, medical services, publication, advertisement, culture,
Intellectual Property (including software), anti-monopoly, Taxes, employment, Social Welfare and benefits and foreign exchange (including Circular 37 and the foreign exchange procedures governing individuals participating in employee stock option
plans as defined in Circular 7 issued by the SAFE on February 15, 2012). Each of the Group Companies shall, and the Founder and the
Controlling Shareholder shall cause each of the Group Companies to (i) conduct its operations in compliance with Sanctions, and Money Laundering Laws applicable to the Business and (ii) ensure that no officer, director, employee, or agent
of the Group Companies is a Prohibited Person. 39
6.6 Validity of Approvals. Each of the Group Companies shall, and the Founder and the Controlling Shareholder shall cause each of the Group Companies to, in all material
respects, at all times maintain the validity of, and comply with the legal and regulatory requirements with respect to, the Approvals and Permits that it has obtained and shall be obtained after the Closing for its qualification for its then current
or intended Business (other than any portion of the Business that the Company will not maintain as approved pursuant to the Shareholders Agreement and the Amended M&AA). 6.7 ESOP. From time to
time, the Company may grant options to employees, advisors, officers, and directors of, and consultants to, the Company and other Group Companies pursuant to ESOP, provided that the total number of shares issued or issuable under any such ESOP shall
not exceed 6,818,182 Ordinary Shares as proportionally adjusted to reflect any share dividends, share splits, or similar transactions. 6.8 Additional Covenants. If at any time before the Closing, any of the Warrantors comes to know of any fact or event which (i) shall have been in any way
materially inconsistent with any of the representations and warranties given by any of the Warrantors, and/or (ii) shall have caused any material fact as warranted becoming untrue, or inaccurate in material aspects, after the date of this
Agreement, and such inconsistency or untruth is not curable, then the Warrantors shall give immediate written notice thereof to the Investor, in which event the Investor may within fifteen (15) Business Days of receiving such notice terminate
this Agreement by written notice without any penalty or future obligations whatsoever; provided, however, nothing herein shall relieve the Warrantors from liability for any breach of this Agreement. 6.9 Anti-corruption. The Company represents that it shall not and shall not permit any of its Subsidiaries or Affiliates or any of its or their respective
directors, officers, managers, employees, independent contractors, representatives or agents to promise, authorize, make or cause to be made any payment to, or otherwise contribute any item of value to, directly or indirectly, any Public Official,
in each case, in violation of the FCPA, the PRC Anti-Corruption Law or any other applicable Anti-Corruption Laws. The Company further represents that it shall and shall cause each of its Subsidiaries and Affiliates to cease all of its or their
respective activities, as well as remediate any actions taken by the Company, its Subsidiaries or Affiliates, or any of their respective directors, officers, managers, employees, independent contractors, representatives or agents in violation of the
FCPA, the PRC Anti-Corruption Law or any other applicable anti-bribery or anti-corruption Law. The Company further represents that it shall and shall cause each of its Subsidiaries and Affiliates to maintain systems of internal controls (including,
but not limited to, policies, training programs, accounting systems, purchasing systems and billing systems) sufficient to ensure compliance with the FCPA, the PRC Anti-Corruption Law or any other applicable Anti-Corruption Laws. The Company further
represents that it shall not permit any Public Official to (i) hold an ownership or other economic interest, direct or indirect, in any of the Group Companies, or (ii) serve as an officer, director or employee of any Group Company. 40
6.10 Filing of Amended M&AA. The Company shall file the Amended M&AA with the Registrar of Companies of the Cayman Islands within five (5) days after the Closing
and shall provide the Investor a copy of the duly registered Amended M&AA with the official seal affixed by the Registrar of Companies in the Cayman Islands within ten (10) days after the Closing. 6.11 Compliance with Overseas Investment Laws. The Founder shall comply with the SAFE Rules and Regulations applicable to him in all material respects, including completing all necessary
filings or registrations with the relevant local SAFE in connection with the Founders participation in the investment and operations of the Group Companies and the consummation of the transactions as contemplated by this Agreement and other
Transaction Documents, and applying for and complete all necessary filings or registrations (including filing the amendments to the previous registrations under Circular 37) as required by the SAFE Rules and Regulations. 6.12 Legal Compliance of Business. Following the Closing, each Warrantor shall use its respective reasonable best efforts to take, or cause to be taken, all actions and shall
do, or cause to be done, all things that are necessary, desirable or appropriate to develop the Business of the Group Companies in compliance with, in all material respects, legal requirements as may be promulgated by the PRC Governmental Authority
from time to time, including but not limited to, as soon as practicable after the Closing, and to the extent necessary, (i) any applicable Group Company shall complete requisite procedures (including making public announcements in electricity
exchange centres) with respect to the sales of electricity within the applicable territory in accordance with applicable Laws, and (ii) upon the request of any applicable Governmental Authority, the Group Companies shall, and the Warrantors
shall cause the applicable Group Company to, (x) apply for, or otherwise obtain Control over a company which holds, the Payment Business License
(支付业务许可证), (y) improve their business processes in connection with online payment
element in their businesses, and/or (z) cooperate with commercial banks or other qualified online payment service providers for the purposes of ensuring that any Group Company no longer holds, clears or transfers funds of its users, customers
or clients, and the operation of such business is in compliance with applicable Laws in the PRC relating to online payment. 41
6.13 Intellectual Property Protection. The Group Companies shall establish and maintain appropriate system to protect the Intellectual Property of the Group Companies, and file and
prosecute applications for registration and patent and maintain registrations and patents with relevant authorities in respect of any Intellectual Property of the Group Companies, to the extent applicable, in accordance with applicable Laws and
regulations. The Group Companies shall, and the Founder and the Controlling Shareholder shall cause the Group Companies to comply with the Laws in all material respects in respect of the protection of the Intellectual Property and refrain from
infringing, misappropriating or otherwise violating, in any manner, any Intellectual Property of other Persons. 6.14 Employee
Matters. The Group Companies shall comply with, in all material respects, applicable Laws with respect to labour and employment,
including Laws pertaining to welfare funds, social benefits, medical benefits, insurance, retirement benefits and pensions in a manner appropriate to the business needs of the Group Companies. 6.15 Tax Matters. The
Group Companies shall comply with, in all material respects, applicable Laws with respect to tax, including Laws pertaining to income tax, value added tax and business tax. 6.16 Tax Basis in Relation to an Indirect Transfer. As of the date hereof, the WFOE has not yet paid its registered capital in full. The Company undertakes to inject all or substantially all of
the Proceeds into the registered capital of the WFOE (the Capital Injection Amount) following the Closing, so that in the event of any subsequent sale of Equity Securities in the Company by the Investor, to the extent permitted by
the applicable Law, the Investor could be entitled to apply the entire Capital Injection Amount that corresponds to the Investors purchase price under this Agreement, to the Investors indirect basis in the equity of any Subsidiary of the
Company in the PRC with respect to any Tax filing, Tax position and other communication with the relevant PRC Tax Governmental Authorities for purposes of determining any income Tax, capital gains Tax or any other Tax calculated with reference to
gains made through the subscription, purchase and sale of the Companys Equity Securities. The Company further undertakes to use reasonable efforts to assist the Investor to communicate with the competent Tax Governmental Authorities and
provide any and all information required by competent Tax Governmental Authorities in connection with the filing and payment of any applicable Taxes (if any) with respect to any subsequent sale of Equity Securities in the Company by the Investor.
6.17 Reorganization Plan. The Warrantors shall use best efforts to implement the transactions under the Reorganization Plan that have not been completed as of the
Closing as soon as practicable after the Closing, but in no event later than the date of the submission of prospectus materials for a Qualified IPO. 42
Notwithstanding the foregoing, no later than one (1) month after the Closing Date, the
relevant Group Companies shall, and the Warrantors shall procure such Group Companies to, duly establish Additional WFOEs pursuant to the Laws of PRC in accordance with the Reorganization Plan, and relevant Additional HK Companies shall have
acquired and held all the equity interests in the respective Additional WFOEs in accordance with the Reorganization Plan. 6.18 Other
Issues in the Disclosure Schedule. As soon as practicable after the Closing and at any time upon the request of the Investor, the
relevant Group Companies shall, to the satisfaction of the Investor, resolve the issues in a practically reasonable manner, which are disclosed in the Disclosure Schedule but not expressly specified as a specific covenant under this Section 6
or a specific condition for any Closing under Section 7. 6.19 Termination. The provisions under this Section 6 shall terminate upon the earlier of (a) the consummation of a Qualified IPO (as defined in the
Amended M&AA) or (b) the date on which the Investor ceases to hold any Equity Securities in the Company. 7. CONDITIONS TO
INVESTORS OBLIGATIONS AT THE CLOSING The obligation of the Investor to purchase the Purchased Shares at the Closing is
subject to the fulfilment of each of the following conditions at or prior to the Closing, unless otherwise waived by such Investor: 7.1
Representations and Warranties. The representations and warranties made by each Warrantor in Section 3 and the
representations and warranties made by the Founder and the Controlling Shareholder in Section 4 shall be true, correct and complete when made, and shall be true and correct and complete as of the Closing Date with the same force and effect as
if they had been made on and as of such date, unless any representations and warranties are made with respect to a specified date, in which case, as of such date. 7.2 Performance of Obligations. Each Warrantor shall have performed and complied with all covenants, agreements, obligations and conditions contained in the Transaction
Documents and the Restructuring Documents that are required to be performed or complied with by it on or before the Closing. 7.3
Proceedings and Documents. All corporate and other proceedings of the Warrantors in connection with the transactions contemplated
hereby at the Closing and all documents incidental to such proceedings shall have been completed or produced, and the Investor shall have received all such counterpart copies of the board and/or shareholders resolutions of each Warrantor. 43
7.4 Approvals, Consents and Waivers. Each Warrantor shall have obtained any and all Approvals, if any, necessary for consummation of the transactions contemplated by this
Agreement and other Transaction Documents, including the waiver from all existing shareholders or warrant holders of the Group Companies (if applicable) of any anti-dilution rights, rights of first refusal,
pre-emptive rights and all similar rights in connection with the issuance of the Purchased Shares and such waiver is irrevocable. 7.5 Compliance Certificate. Each Warrantor shall have delivered to the Investor a certificate (together with all potent supporting documents), dated the Closing Date,
certifying that the conditions specified in Section 7 have been fulfilled and stating that there shall have been no Material Adverse Effect since the Statement Date. 7.6 Constitutional Documents. The Amended M&AA shall have been duly adopted by the Company by all necessary corporate action of its shareholders and its Board, and
shall have become and remain effective under the Laws of the Cayman Islands, pursuant to which CICC shall be entitled to designate one person as observer to the Board. 7.7 Execution and Delivery of Transaction Documents. The Company shall have delivered to the Investor the Transaction Documents, other than the Amended M&AA, which shall be duly executed by
the Company and/or all the other Parties thereto. 7.8 Internal Approval. The Investor shall have received internal approval and authorization for the transactions contemplated hereunder. 7.9 Legal Opinions. The
Investor shall have received (i) from the Cayman Islands counsel for the Company, an opinion, dated as of the Closing, and (ii) from the PRC counsel for the Company, an opinion, dated as of the Closing, each in form and substance
satisfactory to the Investor. 7.10 Due Diligence. The Investor shall have completed its legal, financial, commercial, technical and Intellectual Property due diligence investigation and other
investigations on the business of the Group Companies to its satisfaction. 44
7.11 Reorganization. The following procedures and steps of the Reorganization Plan shall have been completed, (a) WFOE shall have acquired and held all the
equity interests of Beijing Chezhubang New Energy Technology Co., Ltd.(北京车主邦新能源科技有限公司), (b) WFOE shall have entered into the Restructuring Documents with the Domestic Company and other relevant parties thereto, and the Restructuring Documents shall have taken effect and been
binding upon and enforceable by the parties thereto, and (c) Additional HK Companies shall have been duly established and validly existing under the Laws of Hong Kong, and the Company shall have been the sole shareholder of the Additional HK
Companies. 7.12 No Material Adverse Effect. There shall not have been any Material Adverse Effect since the Statement Date. There shall not be on the Closing Date any Governmental Order
or any condition imposed under any applicable Law which would, (a) prohibit or restrict (i) the sale and issuance of the Purchased Shares, or (ii) the consummation of the transactions contemplated by this Agreement, (b) subject the
Investor to any material penalty or onerous condition under or pursuant to any Law if the Purchased Shares were to be sold and issued hereunder to the Investor or (c) restrict the operation of the Business of any Group Company in a manner that
would have a Material Adverse Effect. 8. CONDITIONS TO COMPANYS OBLIGATIONS AT THE CLOSING The obligations of the Company under this Agreement to consummate the Closing with respect to the Investor are subject to the fulfilment of
each of the following conditions by the Investor at or prior to the Closing, unless otherwise waived by the Company: 8.1
Representations and Warranties. The representations and warranties of the Investor contained in Section 5 shall be true,
correct and complete when made, and shall be true and correct and complete as of the Closing Date with the same force and effect as if they had been made on and as of such date, unless any representations and warranties are made with respect to a
specified date, in which case, as of such date. 8.2 Performance of Obligations. The Investor shall have performed and complied with all covenants, agreements, obligations and conditions contained in the Transaction
Documents that are required to be performed or complied with by it on or before the Closing. 45
8.3 Approvals. The Investor shall have obtained any and all Approvals necessary for consummation of the transactions contemplated by this Agreement. 8.4 Execution of Transaction Documents. The Investor shall have executed and delivered to the Company the Transaction Documents to which it is a party. 9. INDEMNIFICATION 9.1 Each of the Warrantors hereby agrees to jointly and severally indemnify and hold harmless the Investor, and the Investors
Affiliates, shareholders, partners, directors, officers, agents and assigns, from and against any and all Indemnifiable Losses suffered by the Investor, or the Investors Affiliates, shareholders, partners, directors, officers, agents and
assigns (each, an Indemnified Person), directly or indirectly, as a result of, or based upon or arising from (i) any breach or violation of, or inaccuracy or misrepresentation in, any representation or warranty made by the
Warrantors contained herein or any other Transaction Documents or the Restructuring Documents, or (ii) any breach or violation of any covenant or agreement by the Warrantors contained herein or any other Transaction Documents or the
Restructuring Documents. The rights contained in this Section 9 shall not be deemed to preclude or otherwise limit in any way the exercise of any other rights or pursuit of other remedies for the breach of this Agreement or with respect to any
misrepresentation. This Section 9 shall survive any termination of this Agreement. 9.2 Without limiting generality of the foregoing,
each of the Group Companies hereby agrees to jointly and severally indemnify and hold harmless each Indemnified Person from and against any and all Indemnifiable Loss, directly or indirectly, as a result of, or based upon or arising from: (a) any Tax Liability of any Group Company not reflected in the Financial Statements or arising out of any failure, whether intentional or not,
by any Warrantor to comply with any applicable Laws of the PRC or of any other applicable jurisdiction relating to Tax, (b) any Liability
of any Group Company arising out of any failure, whether intentional or not, by any Warrantor to comply with any applicable Laws of the PRC or of any other applicable jurisdiction relating to Social Welfare, (c) any business activities of any Group Company at any time from its establishment including any
non-compliance with any applicable Laws, and any failure to obtain, renew and keep effective of any requisite Approval or Permit for any Group Company to conduct its Business, and (d) any Action against the Group Companies due to any event occurred or existed prior to the Closing. 46
9.3 The indemnification under Section 9.2 shall not be prejudiced by or be otherwise
subject to any disclosure (in the Disclosure Schedule or otherwise) and shall apply regardless of whether the Group Companies have any actual or constructive knowledge with respect thereto. 9.4 The representations and warranties made by the Warrantors herein shall survive the Closing for a period of five (5) years, or, if the
applicable statute of limitation for the relevant claims expires prior to the end of such five (5)-year period for such statutes of limitation. Such representations and warranties of the Warrantors shall in no way be affected by any investigation of
the subject matter thereof made by or on behalf of the Investor. All covenants or agreements shall survive the Closing Date and remain in full force and effect in accordance with their terms. 9.5 Any Indemnified Person seeking indemnification with respect to any Indemnifiable Loss shall give written notice to any of the Warrantors.
The Warrantors shall not be liable pursuant to this Section 9 for any Indemnifiable Loss that arise from any individual item, occurrence, circumstance, act or omission (or series of related items, occurrences, circumstances, acts or omissions)
unless and until the aggregate amount of Indemnifiable Losses resulting therefrom exceeds US$150,000, after which and in which case the Warrantors shall be liable for the total aggregated amounts of such Indemnifiable Loss back to the first dollar
and not for the excess amount only. To the extent permitted by applicable Law, upon and following receipt of the written notice above, the Company shall use best efforts to procure that the profits of each Subsidiary of the Company (including the
Major PRC Subsidiaries and other PRC Subsidiaries) for the time being available for distribution shall be paid to the Company by way of dividend if and to the extent that, but for such payment, the Company would not itself otherwise have sufficient
profits available to indemnify and hold harmless any Indemnified Person from and against any and all Indemnifiable Loss pursuant to this Section 9 and such written notice above. 9.6 Except for fraud, intentional breach, wilful misconduct and gross negligence, the Founders accumulative liability to all Indemnified
Persons for breaches of the representations and warranties under this Agreement but exclusive of the covenants and undertakings under this Agreement and the other Transaction Documents, shall be limited to the fair market value of the Equity
Securities owned or held directly or indirectly by the Founder, or by other parties for the benefit of the Founder (including those held by the Founders Immediate Family Members of the Founder), in the Group Companies; provided that the fair
market value of such Equity Securities shall be the higher of (a) such value determined by an independent appraiser mutually agreed upon by the claiming Investor and the Company; or (b) such value calculated based on the post-money
valuation of the latest round of financing of the Company. 9.7 For purpose of clarity, in the event a breach or violation of
representations, warranties or covenants made by the Warrantors contained herein or any other Transaction Documents or the Restructuring Documents also constitutes a breach or violation of other agreements by and between the relevant Warrantors and
the Indemnified Persons, or their respective Affiliates, the liabilities of the Warrantors should not be duplicated and the Indemnified Persons shall only enforce indemnification liability against the Warrantors under either of these agreements (but
not both) with respect to the same loss. 47
10. MISCELLANEOUS 10.1 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the Parties hereto whose rights or obligations hereunder are affected by such terms and conditions. This Agreement, and the rights and obligations hereunder, shall not be assigned without the mutual written
consent of the Controlling Shareholder, the Investor and the Company, provided that the Investor may assign its rights and obligations hereunder without the written consent of any other Parties to this Agreement to an Affiliate
of the Investor. Nothing in this Agreement, express or implied, is intended to confer upon any Party other than the Parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement. A Person who is not a party to this Agreement has no rights under the Contracts (Rights of Third Parties) Ordinance (Chapter 623 of the Laws of Hong Kong) to enforce any term of this
Agreement, but this does not affect any right or remedy of a third party which exists or is available apart from the said Ordinance. 10.2
Entire Agreement. This Agreement, Restructuring Documents, the other Transaction Documents and the schedules and exhibits hereto
and thereto, which are hereby expressly incorporated herein by this reference, constitute the entire agreement and supersede all other prior agreements, understandings, representations and warranties, both written and oral, among the Parties, with
respect to the subject matter hereof. 10.3 Notices. Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Agreement shall be
in writing and shall be conclusively deemed to have been duly given (a) when hand delivered to the other Parties; (b) when sent by facsimile at the number set forth in the Schedule of Notice attached hereto; (c) seven
(7) Business Days after deposit in the mail as air mail or certified mail, receipt requested, postage prepaid and addressed to the other party as set forth in Schedule of Notice; or (d) three (3) Business Days after deposit with an
overnight delivery service, postage prepaid, addressed to the Parties as set forth in the Schedule of Notice with next-Business-Day delivery guaranteed, provided that the sending Party receives a
confirmation of delivery from the delivery service provider. Each Person making a communication hereunder by facsimile shall promptly
confirm by telephone to the Person to whom such communication was addressed each communication made by it by facsimile pursuant hereto but the absence of such confirmation shall not affect the validity of any such communication. A Party may change
or supplement the addresses given above, or designate additional addresses, for purposes of this Section 10.3 by giving, the other Parties written notice of the new address in the manner set forth above. 48
10.4 Amendments and Waivers. Any term of this Agreement may be amended only with the written consent of all the Parties hereto. 10.5 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any Warrantor or the Investor, upon any breach or default of any Party
hereto under this Agreement, shall impair any such right, power or remedy of such Warrantor or Investor nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of any similar breach or default
thereafter occurring; nor shall any waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Warrantor or the Investor of any breach or default
under this Agreement or any waiver on the part of any Warrantor or the Investor of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies,
either under this Agreement, or by Law or otherwise afforded to the Warrantors and the Investor shall be cumulative and not alternative. 10.6 Finders Fees. Unless otherwise disclosed, each Party hereto (a) represents and warrants to each other Party hereto that it has retained no finder or
broker in connection with the transactions contemplated by this Agreement, and (b) hereby agrees to indemnify and to hold harmless the other Party hereto from and against any liability for any commission or compensation in the nature of a
finders fee of any broker or other Person or firm (and the costs and expenses of defending against such liability or asserted liability) for which the indemnifying party or any of its employees or representatives are responsible. 10.7 Interpretation; Titles and Subtitles. This Agreement shall be construed according to its fair language. The rule of construction to the effect that ambiguities are to be resolved
against the drafting party shall not be employed in interpreting this Agreement. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. 49
10.8 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The counterparts of this Agreement may be executed and delivered by electronic signature, signature image or digital signature (including but not limited to portable document format, facsimile or email) by any Party and
the Parties consent to the receipt of such counterpart(s) so executed and delivered electronically as if the original had been received. Any Party in executing this Agreement electronically acknowledges that having regard to all the relevant
signature is reliable and appropriate for the purpose for which the information contained in this Agreement is communicated. 10.9
Severability. If any provision of this Agreement is found to be invalid or unenforceable, then such provision shall be construed,
to the extent feasible, so as to render the provision enforceable and to provide for the consummation of the transactions contemplated hereby on substantially the same terms as originally set forth herein, and if no feasible interpretation would
save such provision, it shall be severed from the remainder of this Agreement, which shall remain in full force and effect unless the severed provision is essential to the rights or benefits intended by the Parties. In such event, the Parties shall
use best efforts to negotiate, in good faith, a substitute, valid and enforceable provision or agreement which most closely effectuates the Parties intent in entering into this Agreement. 10.10 Confidentiality and Non-Disclosure. (a) The terms and conditions of this Agreement, Restructuring Documents and the other Transaction Documents, any term sheet or memorandum of
understanding entered into in connection with the transactions contemplated hereby, all exhibits and schedules attached hereto and thereto, the transactions contemplated hereby and thereby, including their existence, and all information furnished by
any Party hereto and by representatives of such Party to any other Party hereof or any of the representatives of such Parties (collectively, the Confidential Information), shall be considered confidential information and shall not
be disclosed by any Party hereto to any third party except in accordance with the provisions set forth below. The obligations of each Party hereto under this Section 10.10 shall survive and continue to be binding upon such Party after the
termination of this Agreement. (b) Notwithstanding the foregoing, the Company and the Investor may disclose (i) the Confidential
Information to its current or bona fide prospective investor, Affiliates of the Company and the Investor and their respective directors, officers, employees, bankers, lenders, accountants, legal counsels, business partners or representatives or
advisors who need to know such information, in each case only where such persons or entities are informed of the confidential nature of the Confidential Information and are under appropriate nondisclosure obligations substantially similar to those
set forth in this Section 10.10, (ii) such Confidential Information as is required to be disclosed pursuant to routine examination requests from Governmental Authorities with authority to regulate such Partys operations, in each case as
such Party deems appropriate in its sole discretion, and (iii) the Confidential Information to any Person to which disclosure is approved in writing by the other Parties hereto. Any Party hereto may also provide disclosure in order to comply
with applicable Laws, as set forth in Section 10.10(c) below. 50
(c) Except as set forth in Section 10.10(b) above, in the event that any Party is
requested or becomes legally compelled (including pursuant to any applicable Tax, securities, or other Laws and regulations of any jurisdiction or the rules of any stock exchange) to disclose any Confidential Information, such Party (the
Disclosing Party) shall, to the extent legally permitted and reasonably possible, provide the other Parties hereto with prompt written notice of that fact and consult with the other Parties hereto regarding such disclosure. At the
request of the other Parties, the Disclosing Party shall, to the extent reasonably possible and with the cooperation and reasonable efforts of the other Parties, seek a protective order, confidential treatment or other appropriate remedy. In any
event, the Disclosing Party shall furnish only that portion of the information that is legally required and shall exercise reasonable efforts to obtain reliable assurance that confidential treatment will be accorded to such information. (d) Notwithstanding any other provision of this Section 10.10, the confidentiality obligations of the Parties shall not apply to:
(i) information which a Party learns from a third party which the receiving Party reasonably believes to have the right to make the disclosure, provided the receiving Party complies with any restrictions imposed by the third party;
(ii) information which is rightfully in the receiving Partys possession prior to the time of disclosure by the Disclosing Party and not acquired by the receiving Party under a confidentiality obligation; or (iii) information which
enters the public domain without breach of confidentiality by the receiving Party. 10.11 Further Assurances. Each Party shall from time to time and at all times hereafter make, do, execute, or cause to be made, done and executed such further acts,
deeds, conveyances, consents and assurances without further consideration, which may reasonably be required to effect the transactions contemplated by this Agreement. 10.12 Use of Name or Logo of the Investor. Without the prior written consent of the Investor and whether or not the Investor is then a shareholder of the Company, none of the Warrantors
shall use, publish or reproduce the name of the Investor or its trademark or logo in any advertisement, press release, professional or trade publication, marketing or advertising or promotional materials, or in any other manner. 10.13 Governing Law. This Agreement shall be governed by and construed under the Laws of Hong Kong, without regard to principles of conflict of Laws thereunder.
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Each of the Parties hereto irrevocably (i) agrees that any dispute or controversy
arising out of, relating to, or concerning any interpretation, construction, performance or breach of this Agreement, shall be settled by arbitration to be held in Hong Kong which shall be administered by the Hong Kong International Arbitration
Centre (HKIAC) in accordance with the Hong Kong International Arbitration Centre Administered Arbitration Rules in force at the time of the commencement of the arbitration (the Arbitration Rules), (ii) waives,
to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the laying of venue of any such arbitration, and (iii) submits to the exclusive jurisdiction of Hong Kong in any such arbitration. There shall
be three (3) arbitrators. The claimant shall select one (1) arbitrator, and the respondent shall select one (1) arbitrator. The third arbitrator, who shall be the presiding arbitrator, shall be jointly appointed by the claimant and
respondent. If either the claimant or the respondent fails to select the third arbitrator or the parties fail to agree on the choice of the third arbitrator, HKIAC shall make the appointment on their behalf. The arbitration shall be conducted in
English. The decision of the arbitration tribunal shall be final, conclusive and binding on the Parties to the arbitration. Judgment may be entered on the arbitration tribunals decision in any court having jurisdiction. The Parties to the
arbitration shall each pay an equal share of the costs and expenses of such arbitration, and each Party shall separately pay for its respective counsel fees and expenses; provided, however, that the prevailing Party in any such arbitration shall be
entitled to recover from the non-prevailing Party its reasonable costs and attorney fees. The Parties acknowledge and agree that, in addition to contract damages, the arbitrator may award provisional and final
equitable relief, including injunctions, specific performance, and lost profits. The validity, construction and interpretation of this dispute resolution clause shall be governed by the Laws of Hong Kong. 10.14 Expenses. The
Group Companies shall pay all of their own costs and expenses incurred in connection with the negotiation, execution, delivery and performance of this Agreement and any other Transaction Documents and the transactions contemplated hereby and
thereby, including all legal fees incurred by the Group Companies. If the Closing does not occur due to the causes that cannot be
attributable to the Investor, the Group Companies shall reimburse all reasonable, out-of-pocket documented legal, professional and other third-party fees, costs and
expenses incurred by the Investor in connection with the conduct of its industry, legal and financial due diligence and its negotiation, preparation, execution and completion of this Agreement and any other Transaction Documents hereunder and
thereunder, which, however, shall be capped at US$100,000. 10.15 Termination of this
Agreement. This Agreement may be terminated at any time prior to the Closing as between the Company and the Investor: (a) by mutual written consent of the Parties; or 52
(b) by the Investor or the Company, after the ninetieth (90th) day following the execution
of this Agreement, by written notice to all the Parties hereto, if the Closing has not occurred on or prior to such date; provided that neither Investor may terminate this Agreement pursuant to this Section 10.15(b) if the reason
the Closing has not occurred on or prior to such date is due to a breach of this Agreement by the Investor, and the Company may not terminate this Agreement pursuant to this Section 10.15(b) if the reason the Closing has not occurred on or
prior to such date is due to a breach of this Agreement by any Warrantor. Such termination under this Section 10.15 shall be without prejudice to any claims for damages or other remedies that the Investor may have under this Agreement or
applicable Law. If this Agreement is terminated pursuant to this Section 10.15, then all provisions of this Agreement will thereupon
become void without any Liability on the part of any Party hereto to any other Party hereto except that (x) this Section 10.15, Section 9 and Section 10 will survive any such termination, and (y) nothing herein will relieve
any Party from any Liability for any breach hereof occurring prior to such termination nor prejudice the right of any Party to seek indemnification under Section 9 in respect of such breach. 10.16 Supremacy of this Agreement. If and to the extent that there are inconsistencies between the provisions of this Agreement and those of the Amended M&AA, the terms of
this Agreement shall prevail as between the Parties hereto only (with the exception of the Company), who hereby undertake to take all actions necessary or advisable, as promptly as practicable after the discovery of such inconsistency, to amend the
Amended M&AA so as to eliminate such inconsistency to the largest extent as permitted by the applicable Law. 10.17 Specific
Performance. Notwithstanding anything to the contrary set forth herein, the Parties acknowledge and agree that irreparable harm may
occur for which money damages would not be an adequate remedy in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or otherwise breached. It is accordingly agreed that the Parties shall
be entitled to enforce specifically the terms and provisions of this Agreement. 10.18 Cumulative Rights in Transaction Documents.
Except as expressly otherwise stated in the Transaction Documents, all remedies, privileges, rights and benefits of the Investor under
the Transaction Documents (or by law or otherwise afforded to the Investor) shall be cumulative and not alternative. Notwithstanding any provisions to the contrary, the execution, delivery and performance of this Agreement shall not prejudice any
remedy, privilege, right or benefit of the Investor under any other Transaction Documents or any other Contract or document, and vice versa. REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK 53
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
above written. /s/ WANG Yang /s/ DAI Zhen SIGNATURE PAGE TO SERIES A SHARE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
above written. WFOE: Zhejiang Anji Intelligent Electronics Holding Co., Ltd.
(浙江安吉智电控股有限公司) (Seal) /s/ WANG Yang DOMESTIC COMPANY: Kuaidian Power (Beijing) New Energy Technology Co., Ltd. (快电动力 (北京) 新能源科技有限公司) (Seal) /s/ ZHENG Linyi SIGNATURE PAGE TO SERIES A SHARE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
above written. /s/ DAI Zhen SIGNATURE PAGE TO SERIES A SHARE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
above written. /s/ DAI Zhen SIGNATURE PAGE TO SERIES A SHARE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
above written. MAJOR PRC SUBSIDIARIES: 北京车主邦新能源科技有限公司
(Seal) /s/ DAI Zhen (戴震) /s/ DAI Zhen (戴震) SIGNATURE PAGE TO SERIES A SHARE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
above written. By: BCPE Nutcracker GP, LLC its
general partner By: Bain Capital Asia Fund IV, L.P. its member By: Bain Capital Investors, LLC its
manager /s/ David Gross-Loh SIGNATURE PAGE TO SERIES A SHARE PURCHASE AGREEMENT
SCHEDULE OF NOTICE
EXHIBIT A LIST OF PRC SUBSIDIARIES
EXHIBIT B LIST OF KEY EMPLOYEES
EXHIBIT C CAPITALIZATION TABLE
EXHIBIT D DISCLOSURE SCHEDULE
EXHIBIT E AMENDED M&AA
EXHIBIT F SHAREHOLDERS AGREEMENT
EXHIBIT G CONDUCT OF GROUP COMPANIES PRE-CLOSING
EXHIBIT H REORGANIZATION PLAN
Section 3.24
Section 3.24
Section 3.18(d)
Section 3.19(a)(ii)
Section 3.19(a)(i)
Section 2.1
Recitals
Section 3.26(c)
Section 3
Preamble
THE COMPANY:
Dada Auto Inc.
By:
Name:
WANG Yang
Title:
Director
HK COMPANY:
Fleetin HK Limited
By:
Name:
DAI Zhen
Title:
Director
By:
Name: WANG Yang
Title: Legal Representative
By:
Name: ZHENG Linyi
Title: Legal Representative
CONTROLLING SHAREHOLDER:
Newlinks Technology Limited
By:
Name: DAI Zhen
Title: Director
FOUNDER:
DAI Zhen
By:
By:
Name: DAI Zhen (戴震)
Title: Legal Representative
智电优通科技有限公司 (Seal)
By:
Name: DAI Zhen (戴震)
Title: Legal Representative
INVESTOR:
BCPE Nutcracker Cayman, L.P.
By: Bain Capital Investors Asia IV, LLC
its general partner
By:
Name: David Gross-Loh
Title: Authorized Signatory
Exhibit 4.16
THE SYMBOL [Redacted] DENOTES PLACES WHERE CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH (I)NOT MATERIAL, AND (II)IS THE TYPE THAT THE COMPANY TREATS AS PRIVATE OR CONFIDENTIAL
DADA AUTO INC.
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
March 18, 2022
TABLE OF CONTENTS
Page | ||||||
1. |
DEFINITIONS | 3 | ||||
1A. |
INTERPRETATION AND RULES OF CONSTRUCTION | 11 | ||||
2. |
INFORMATION RIGHTS, INSPECTION RIGHTS AND BOARD REPRESENTATION | 12 | ||||
3. |
REGISTRATION RIGHTS | 14 | ||||
4. |
RIGHT OF PARTICIPATION | 31 | ||||
5. |
TRANSFER RESTRICTIONS | 34 | ||||
6. |
LIQUIDATION | 43 | ||||
7. |
REDEMPTION AND PURCHASE OF SHARES | 45 | ||||
8. |
PROTECTIVE PROVISIONS | 49 | ||||
9. |
CONFIDENTIALITY AND NON-DISCLOSURE | 51 | ||||
10. |
ASSIGNMENT AND AMENDMENT | 53 | ||||
11. |
OTHER UNDERTAKINGS OF THE COMPANY | 54 | ||||
12. |
GENERAL PROVISIONS | 59 | ||||
SCHEDULE OF NOTICE |
75 | |||||
EXHIBIT A LIST OF INVESTORS |
76 | |||||
Exhibit B LIST OF COMPETITORS OF THE GROUP COMPANIES |
77 | |||||
EXHIBIT C LIST OF PRC SUBSIDIARIES |
78 |
EXHIBITS
Schedule of Notice
Exhibit A | List of Investors | |
Exhibit B | List of Competitors of the Group Companies | |
Exhibit C | Schedule of PRC Subsidiaries |
THIS AMENDED AND RESTATED SHAREHOLDERS AGREEMENT (this Agreement) is made and entered into as of March 18, 2022 by and among:
(1) Dada Auto Inc., an exempted company duly incorporated and validly existing under the Laws of the Cayman Islands with its registered address at Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands (the Company);
(2) Fleetin HK Limited, a company duly incorporated and validly existing under the Laws of Hong Kong with its registered address at Suite 3101, Everbright Centre 108, Gloucester Road, Wanchai, Hong Kong (the HK Company);
(3) Zhejiang Anji Intelligent Electronics Holding Co., Ltd. (浙江安吉智电控股有限公司), a limited liability company duly incorporated and validly existing under the Laws of the PRC (the WFOE);
(4) Kuaidian Power (Beijing) New Energy Technology Co., Ltd. (快电动力( 北京)新能源科技有限公司), a limited liability company duly incorporated and validly existing under the Laws of the PRC (the Domestic Company);
(5) Each of the Major PRC Subsidiaries listed in Part I of Exhibit C;
(6) Newlinks Technology Limited, an exempted company duly incorporated and validly existing under the Laws of the Cayman Islands (the Controlling Shareholder);
(7) DAI Zhen (戴震), a Chinese citizen, ID number [Redacted] (the Founder); and
(8) Each of the entities listed in Exhibit A (collectively the Investors and each an Investor).
Each of the Controlling Shareholder, the Investors and any and all other persons and entities holding any shares of the Company from time to time shall be hereinafter referred to as a Shareholder and collectively, the Shareholders. The Company, the HK Company, the WFOE, the Domestic Company, the Major PRC Subsidiaries, the Controlling Shareholder, the Founder and the Investors may hereinafter collectively be referred to as the Parties and respectively referred to as a Party. Capitalized terms used in this Agreement shall have the meanings ascribed to them in Section 1, and capitalized terms used herein without definition shall have the meanings set forth in the Series A Purchase Agreements (as defined below).
RECITALS
A. On January 14, 2022, a Series A Purchase Agreement (the First Series A Purchase Agreement) was entered into by and among the Investors (except for Bain), the Company, the Controlling Shareholder, the HK Company, the Domestic Company and certain other parties, pursuant to which the Company agreed to sell to the Investors (except for Bain) certain Warrants (as defined below).
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B. On January 26, 2022, a Series A Purchase Agreement (the Bain Series A Purchase Agreement, together with the First Series A Purchase Agreement, the Series A Purchase Agreements) was entered into by and among Bain, the Company, the Controlling Shareholder, the HK Company, the Domestic Company and certain other parties, pursuant to which the Company agreed to sell to Bain certain Series A Preferred Shares.
C. The Company has issued certain warrants (the Warrants) to the Investors (except for Bain), pursuant to which and under the conditions provided therein the Investors (except for Bain) are granted with warrants to acquire 9,354,953 Series A Preferred Shares of the Company. The Parties hereby waive any and all of their rights of participation, pre-emptive rights, rights of the first offer or other similar rights with respect to the Shares to be issued pursuant to the Warrants.
D. The Company, Founder, the Investors (except for Bain) and certain other Parties entered into the shareholders agreement to record the respective information, registration and other rights and obligations of the shareholders of the Company on January 26, 2022 (as amended from time to time, the Prior Agreement).
E. It is a condition precedent of the closing under the Bain Series A Purchase Agreement that the parties hereto enter into this Agreement. The Parties desire to enter into this Agreement, which shall amend, replace and supersede the Prior Agreement in its entirety, make the respective representations, warranties, covenants and agreements and accept the rights, covenants and obligations set forth herein on the terms and conditions set forth herein.
F. For the purpose of this Agreement and the Amended M&AA (as defined below), subject to terms and conditions herein and therein and to the maximum extent legally permissible under applicable Laws, any series of Preferred Shares referred to in this Agreement shall include such series of Preferred Shares issuable under any Warrant, whether such Warrant has been exercised, and the Warrant Holders (as defined below) shall be deemed as the holders of the corresponding series of Preferred Shares of the Company and shall be entitled to all the rights and privileges the holders of the corresponding series of the Preferred Shares have under this Agreement and the Amended M&AA in each case as if all the Preferred Shares issuable to the relevant Investors upon exercise of the Warrants had been issued and such Investor had been registered as a Shareholder holding the corresponding number of Preferred Shares of the Company. To the maximum extent permitted by applicable Laws and without prejudice to the rights and privileges of the Shareholders under this Agreement and the Amended M&AA, any economic interest actually payable by the Company to any Investor that holds any Warrants pursuant to the foregoing may be paid by one or more Group Companies in the PRC to such Investor as long as the payment is agreed on and recorded as the consideration for the corresponding Advanced Investment Funds which are required to provide to the Domestic Company and the fees associated therewith under the Onshore Investment Agreements. If the full and effective exercise of any rights by any Warrant Holder under this Agreement and the Amended M&AA requires its prior exercise of the Warrant, all the Shareholders shall, subject to applicable Laws, use their voting and management power to allow the exercise of such Warrant or allow such rights of the Warrant Holders to be exercised to the maximum extent permitted under the applicable Laws, and to provide such commercially reasonable assistance (including the reasonable extension of any time constraint pertaining to the exercise of any rights of the Warrant Holders) as may be reasonably requested by such Warrant Holders.
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NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
AGREEMENT
1. | DEFINITIONS |
For purposes of this Agreement, the following terms shall have the following meanings:
Additional HK Companies has the meaning set forth in the Series A Purchase Agreements.
Additional Number has the meaning set forth in Section 4.3(b).
Additional WFOEs has the meaning set forth in the Series A Purchase Agreements.
Additional Offered Shares has the meaning set forth in Section 5.2(a)(iv).
Advanced Investment Funds has the meaning set forth in the First Series A Purchase Agreement.
Affiliate means, (a) with respect to a Person, any other Person that, directly or indirectly, Controls, is Controlled by or is under common Control with such Person; and (b) in the case of an individual, shall include immediate family members of such individual (including his spouse, child, brother, sister, parent, mother-in-law, father-in-law, brother-in-law, sister-in-law, collectively, his Immediate Family Members), and trustee of any trust in which such individual or any of his Immediate Family Members is a beneficiary or a discretionary object, or any entity or company Controlled by any of the aforesaid persons. In the case of an Investor, the term Affiliate also includes (v) any shareholder of such Investor, (w) any of such shareholders or such Investors general partners or limited partners, (x) the fund manager managing or advising such shareholder or such Investor (and general partners, limited partners and officers thereof) and other funds managed or advised by such fund manager, and (y) trusts controlled by or for the benefit of any such Person referred to in (v), (w) or (x), and (z) any fund or holding company formed for investment purposes that is promoted, sponsored, managed, advised or serviced by such Investor. For the avoidance of doubt, the Investors shall not be deemed to be an Affiliate of any Group Company.
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Agreement has the meaning set forth in the preamble.
Amended M&AA means the Third Amended and Restated Memorandum and Articles of Association of the Company.
As Adjusted means as appropriately adjusted for any subsequent bonus issue, share split, consolidation, subdivision, reclassification, recapitalization or similar arrangement.
Bain means BCPE Nutcracker Cayman, L.P..
Bain Series A Purchase Agreement has the meaning set forth in the recitals.
Board means the board of directors of the Company.
Business Days means any day that is not a Saturday, Sunday, legal holiday or other day on which commercial banks are required or authorized by Law to be closed in the PRC or the Cayman Islands.
Business means the business that any Group Company conducts or proposes to conduct from time to time.
Buyer or Buyers has the meaning set forth in Section 5.10(b).
CFC has the meaning set forth in Section 11.2(a).
CICC means CICC (Changde) Emerging Industry Venture Capital Partnership L.P. ( 中金( 常德) 新兴产业创业投资合伙企业( 有限合伙) ). Circular 37 means the Circular 37, issued by SAFE on July 4, 2014, titled Circular on Issues concerning Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles (关于境内居民通过特殊目的公司境外投融资及返程投资外汇管理有关问题的通知 ), effective as of July 4, 2014, and any implementation successor rule or regulation under the PRC Law.
Code has the meaning set forth in Section 11.2(a).
Combined Meeting has the meaning set forth in Section 8.2.
Company has the meaning set forth in the preamble.
Competitor has the meaning set forth in Section 5.10(b).
Confidential Information has the meaning set forth in Section 9.1.
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Control of a given Person means the power or authority, whether exercised or not, to direct the business, management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, which power or authority shall conclusively be presumed to exist upon possession of beneficial ownership or power to direct the vote of more than fifty percent (50%) of the votes entitled to be cast at a meeting of the members or shareholders of such Person or power to control the composition of more than fifty percent (50%) of the board of directors of such Person; the term Controlled has the meaning correlative to the foregoing.
Conversion Shares means the Ordinary Shares issued or issuable pursuant to conversion of the Preferred Shares.
Co-Sale Holder has the meaning set forth in Section 5.3.
Co-Sale Notice has the meaning set forth in Section 5.3.
Co-Sale Pro Rata Portion has the meaning set forth in Section 5.3(a).
Co-Sale Subscription Amount has the meaning set forth in Section 5.3(e).
Closing Date has the meaning set forth in the Bain Series A Purchase Agreement.
Disclosing Party has the meaning set forth in Section 9.4.
Directors or Director means members or a member of the Board.
Domestic Company has the meaning set forth in the preamble.
Effective Date has the meaning set forth in Section 12.15(a).
Equity Securities means, with respect to a Person, any shares, share capital, registered capital, ownership interest, equity interest, or other securities of such Person, and any option, warrant, or right to subscribe for, acquire or purchase any of the foregoing, or any other security or instrument convertible into or exercisable or exchangeable for any of the foregoing, or any equity appreciation, phantom equity, equity plans or similar rights with respect to such Person, or any Contract of any kind for the purchase or acquisition from such Person of any of the foregoing, either directly or indirectly.
Extension Period has the meaning set forth in Section 5.2(a)(iv).
Financing Terms has the meaning set forth in Section 9.1.
First Participation Notice has the meaning set forth in Section 4.3(a).
First Refusal Expiration Notice has the meaning set forth in Section 5.2(d).
First Refusal Period has the meaning set forth in Section 5.2(a)(i).
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First Series A Purchase Agreement has the meaning set forth in the recitals.
Fully Diluted Basis means assuming the exercise of all options, warrants or other securities that are convertible, exercisable or exchangeable into Companys Shares and the conversion of all outstanding Preferred Shares (or would be outstanding assuming full exercise of all options, warrants or other securities that are convertible, exercisable or exchangeable into Companys Preferred Shares) into Companys Ordinary Shares.
Fully Participating Investors has the meaning set forth in Section 4.3(b).
Governmental Authority means any nation or government or any province or state or any other political subdivision thereof, or any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any government authority, agency, department, board, commission or instrumentality or any political subdivision thereof, any court, tribunal or arbitrator, and any self-regulatory organization.
Governmental Order means any applicable order, ruling, decision, verdict, decree, writ, subpoena, mandate, precept, command, directive, consent, approval, award, judgment, injunction or other similar determination or finding by, before or under the supervision of any Governmental Authority.
Group Companies means the Company and its Subsidiaries (including the HK Company, the WFOE, the Domestic Company, the PRC Subsidiaries, each Person (except individuals) Controlled by the Company and their respective Subsidiaries from time to time), and Group Company means any of them, unless otherwise specified in this Agreement. For the avoidance of doubt, Group Companies shall include the Additional WFOEs and the Additional HK Companies (upon their incorporation or establishment under the Laws of applicable jurisdictions).
HK Company has the meaning set forth in the preamble.
HKIAC has the meaning set forth in Section 12.12.
Hong Kong means the Hong Kong Special Administrative Region of the PRC.
IFRS means the International Financial Reporting Standards promulgated by the International Accounting Standards Board (IASB) (which includes standards and interpretations approved by the IASB and International Accounting Principles issued under previous constitutions), together with its pronouncements thereon from time to time, and applied on a consistent basis.
Information Rights has the meaning set forth in Section 2.1(a)(v).
Initial Redemption Notice has the meaning specified in Section 7.1(a)(ii).
Initiating Holders has the meaning set forth in Section 3.3(c).
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Inspection Rights has the meaning set forth in Section 2.1(b).
Investor Notice has the meaning set forth in Section 5.10(b).
Investors has the meaning set forth in the preamble.
Law or Laws means any constitutional provision, statute or other law, rule, regulation, official policy or interpretation of any Governmental Authority and any Governmental Order.
Liquidation Event has the meaning specified in Section 6.2.
Majority Shareholders means the holders of more than fifty percent (50%) of the then outstanding Equity Securities of the Company (calculated on a Fully Diluted Basis), including the affirmative vote or prior written consent of the Preferred Majority.
New Securities has the meaning set forth in Section 4.2.
Non-Competition Period has the meaning set forth in Section 11.1(a).
Non-Selling Shareholders has the meaning set forth in Section 5.1.
Observers has the meaning set forth in Section 2.2(a).
Offered Shares has the meaning set forth in Section 5.1.
Onshore Investment Agreements has the meaning set forth in the First Series A Purchase Agreement.
Ordinary Director or Ordinary Directors has the meaning set forth in Section 2.2(a).
Ordinary Shares means the ordinary shares in the capital of the Company with par value of US$0.0001 per share.
Original Series A Preferred Issue Price means a price of US$8.80 per Series A Preferred Share.
Overallotment New Securities has the meaning set forth in Section 4.3(b).
Over-Purchasing Holder has the meaning set forth in Section 5.2(a)(iv).
Oversubscribing Fully Participating Investor has the meaning set forth in Section 4.3(b).
Participation Rights Holder has the meaning set forth in Section 4.
Party or Parties has the meaning set forth in the preamble.
Permitted Transfer has the meaning set forth in Section 5.5.
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Permitted Transferee has the meaning set forth in Section 5.5.
Person means any individual, sole proprietorship, partnership, limited partnership, limited liability company, firm, joint venture, estate, trust, unincorporated organization, association, corporation, institution, public benefit corporation, entity or governmental or regulatory authority or other enterprise or entity of any kind or nature.
PFIC has the meaning set forth in Section 11.1(b).
PRC Companies means the WFOE, the Domestic Company and the PRC Subsidiaries; and PRC Company means any of them.
PRC Subsidiaries means the entities listed in Exhibit C, which are referred to collectively as the PRC Subsidiaries and each a PRC Subsidiary.
PRC or China means the Peoples Republic of China but solely for the purposes of this Agreement, excluding Hong Kong, the Macau Special Administrative Region and Taiwan.
Preferred Majority means the holders of at least fifty percent (50%) of the Preferred Shares (calculated on a Fully Diluted Basis).
Preferred Shares means the Series A Preferred Shares.
Prohibited Transfer has the meaning set forth in 5.3(f).
Pro Rata Share has the meaning set forth in Section 4.1.
Purchase Period has the meaning set forth in Section 5.10(b).
Purchasing Holders has the meaning set forth in Section 5.2(a)(iv).
Put Right has the meaning set forth in 5.3(f).
Qualified IPO has the meaning given to such term in the Amended M&AA.
Re-allotment Notice has the meaning set forth in Section 5.2(a)(iv).
Redeeming Preferred Shares has the meaning specified in Section 7.1(a)(ii).
Redeeming Preferred Shareholder has the meaning specified in Section 7.1(a)(ii).
Redemption Date has the meaning specified in Section 7.1(a)(ii).
Redemption Event has the meaning specified in Section 7.1(a)(i).
Redemption Notice has the meaning specified in Section 7.1(a)(ii).
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Redemption Participation Notice has the meaning specified in Section 7.1(a)(ii).
Redemption Price has the meaning specified in Section 7.1(a)(iii).
Remaining Offered Shares has the meaning set forth in Section 5.2(a)(iv).
Request Notice has the meaning set forth in Section 3.3(a).
Respective Liquidation Amount has the meaning specified in Section 6.3.
Restructuring Documents means the restructuring documents executed by the WFOE, the Domestic Company, the shareholders of the Domestic Company and other relevant parties on January 5, 2022, which includes Exclusive Business Cooperation Agreement, Equity Interest Pledge Agreement, Exclusive Option Agreement and Power of Attorney.
Right of First Refusal Closing has the meaning set forth in Section 5.2(a)(vi).
Right of Participation has the meaning set forth in Section 4.
SAFE means the State Administration of Foreign Exchange of the PRC, including its local counterparts.
Second Participation Notice has the meaning set forth in Section 4.3(b).
Securities Act means the U.S. Securities Act of 1933, as amended and interpreted from time to time.
Selling Shareholder has the meaning set forth in Section 5.1.
Series A Liquidation Preference Amount has the meaning specified in Section 6.1(a).
Series A Original Issue Date means (i) January 26, 2022, with respect to the Investors other than Bain and Jiaxing Haohe Equity Investment Partnership L.P.; (ii) March 18, 2022, with respect to Bain and Jiaxing Haohe Equity Investment Partnership L.P..
Series A Preferred Shares means the series A preferred shares in the capital of the Company then outstanding and issued and Series A Preferred Shares to be issued pursuant to the Warrants, whether such Warrant has been exercised (calculated on a Fully Diluted Basis), par value US$0.0001 per share, having the rights and privileges in this Agreement and Amended M&AA.
Series A Purchase Agreements has the meaning set forth in the recitals.
Shareholder or Shareholders has the meaning set forth in the preamble.
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Shares means the Ordinary Shares, the Series A Preferred Shares, and shares of any other class or series in the share capital of the Company, and includes any fraction of a share.
Special Warrant has the meaning set forth in Section 4.3(c).
Statute means the Companies Law (as amended) of the Cayman Islands, as amended, and every statutory modification or re-enactment thereof for the time being in force.
Subsidiary means, with respect to a specific entity, (i) any entity (x) more than fifty percent (50%) of whose shares or other interests entitled to vote in the election of directors or (y) more than a fifty percent (50%) of whose interests in the profits or capital of such entity are owned or Controlled directly or indirectly by the subject entity or through one (1) or more Subsidiaries of the subject entity; (ii) any entity whose assets and financial results are consolidated with the net earnings of the subject entity and are recorded on the books of the subject entity for financial reporting purposes in accordance with U.S. GAAP or IFRS; or (iii) any entity with respect to which the subject entity has the power to otherwise direct the business and policies of that entity directly or indirectly through another subsidiary. For the avoidance of doubt, the Subsidiaries of the Company shall include the HK Company, the PRC Companies, the Additional HK Companies and the Additional WFOEs (upon their incorporation or establishment under the Laws of applicable jurisdictions) and any other Subsidiary to be established by any of them from time to time.
Trade Sale means (i) a merger, amalgamation, consolidation or other business combination of any Group Company with or into any Person, or any other transaction or series of transactions, as a result of which the Shareholders of the Company immediately prior to such transaction or series of transactions will cease to own a majority of the voting power of the surviving entity immediately after consummation of such transaction or series of transactions, (ii) the sale, lease, transfer, exclusive license to a third party or other disposition of all or substantially all of the assets of the Group Companies taken as a whole (including the Equity Securities and/or contractual arrangements by which any Group Company owns and/or Controls any other Group Company, the licenses and permits necessary to conduct the business of the Group Companies in the PRC and the intellectual property assets of the Group Companies taken as a whole) or (iii) the sale (whether by merger, reorganization or other transaction) of a majority of the issued and outstanding share capital of the Company or a majority of the voting power of the Company, provided, that in the case of each of (i) through (iii), a transaction that qualifies as a Qualified IPO shall not be deemed to be a Trade Sale.
Transaction Documents means this Agreement, the Series A Purchase Agreements, the Amended M&AA, the Warrants, the Onshore Investment Agreements, the Restructuring Documents, the exhibits attached to any of the foregoing and each of the agreements and other documents otherwise required in connection with implementing the transactions contemplated by any of the foregoing.
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Transfer has the meaning set forth in Section 5.6(a).
Transfer Notice has the meaning set forth in Section 5.1.
Transferred Preferred Shares has the meaning set forth in Section 5.10(b).
U.S. GAAP means the generally accepted accounting principles in the United States of America in effect from time to time.
Violation has the meaning set forth in Section 3.9(a).
Warrants has the meaning set forth in the recitals. After issuance of any Special Warrants, the reference to Warrants in this Agreement shall deem to include such Special Warrants as well.
Warrant Holders has the meaning set forth in Section 4.3(c).
WFOE has the meaning set forth in the preamble.
WH Shares has the meaning set forth in Section 5.2(a)(viii).
Zhenwei means Anji Zhenwei Liangshan Venture Capital Partnership L.P. (安吉真为两山创业投资合伙企业(有限合伙)) and Ningbo Zhenwei Qihang Equity Investment Partnership L.P. (宁波真为起航股权投资合伙企业(有限合伙)), collectively.
Zhenwei Director has the meaning set forth in Section 2.2(a).
1A. | INTERPRETATION AND RULES OF CONSTRUCTION. |
In this Agreement, except to the extent otherwise provided or that the context otherwise requires:
(a) | when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated; |
(b) | the table of contents and headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement; |
(c) | whenever the words include, includes or including are used in this Agreement, they are deemed to be followed by the words without limitation; |
(d) | the words hereof, herein and hereunder and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement; |
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(e) | all terms defined in this Agreement have the defined meanings when used in any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein; |
(f) | the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms; |
(g) | references to a Person are also to its successors and permitted assigns; |
(h) | the use of or is not intended to be exclusive unless expressly indicated otherwise; |
(i) | any reference to a contract or document is to that contract or document as amended, novated, supplemented, restated or replaced from time to time; and |
(j) | if any rights or obligations under this Agreement fall on a day or date which is not a Business Day, such rights or obligations shall instead fall on the next succeeding Business Day after such stated day or date. |
2. | INFORMATION RIGHTS, INSPECTION RIGHTS AND BOARD REPRESENTATION |
2.1 Information Rights and Inspection Rights.
(a) Information Rights.
The Company covenants and agrees that, commencing on the Effective Date, so long as any Investor holds any Preferred Share, Conversion Share and/or Warrant, the Company will deliver to such Investor:
(i) within ninety (90) days after the end of each fiscal year, audited annual consolidated financial statements of the Group Companies for such fiscal year, audited by an accounting firm approved by the Board in accordance with IFRS or U.S. GAAP;
(ii) within sixty (60) days after the end of the first six (6) months of each fiscal year, an unaudited semi-annual consolidated financial statements of the Group Companies for such six-month period;
(iii) within thirty (30) days after the end of each calendar quarter, unaudited quarterly consolidated financial statements and a quarterly operational report of the Group Companies;
(iv) prompt written notice of any material litigation, material judgment against any of the Group Companies, and any notice from any Governmental Authority of the material non-compliance with, or any regulation by any of the Group Companies; and
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(v) no later than thirty (30) days before the beginning of each fiscal year, an annual consolidated budget and business plan of the Group Companies for such fiscal year (the rights to have access to the information set out in (i) and (iv) collectively, the Information Rights).
All the financial statements to be provided to the Investors pursuant to this Section 2.1(a) shall be prepared in conformance with IFRS, U.S. GAAP or other accounting principles as approved by the Board and shall consolidate all of the financial results of the Group Companies. All the information (including the financial statements) provided by the Company to the Investors pursuant to clauses (i) and (ii) of this Section 2.1(a) shall be verified and certified as true, correct and not misleading by the Chief Executive Officer or the Chief Financial Officer of the Company.
(b) Inspection Rights.
Each of the Group Companies covenants and agrees that, commencing on the Effective Date, so long as any Investor holds any Preferred Share, Conversion Share and/or Warrant, such Investor and Persons appointed by such Investor shall have the right to (i) visit and inspect the facilities and properties of each of the Group Companies, and examine and copy records, accounting vouchers and books of each of the Group Companies at any time during regular working hours upon reasonable prior notice to the relevant Group Company without disrupting the normal business of the relevant Group Company; and (ii) discuss the business, operations and conditions of the Group Companies with their respective directors, officers, employees, accountants and legal counsel, during regular working hours upon reasonable prior notice to the relevant Group Company without disrupting the normal business of the relevant Group Company; provided that such Investor agrees to keep confidential any information so obtained in accordance with Section 9 (Confidentiality and Non-Disclosure) (the Inspection Rights).
(c) Termination of Rights.
The Information Rights and Inspection Rights shall terminate upon consummation of a Qualified IPO.
2.2 Board of Directors.
(a) Number of Directors.
The Companys Amended M&AA shall provide that the Board consists of up to four (4) members, and the maximum number of directors shall not be changed except pursuant to an amendment to the Amended M&AA. The holders of a majority of the Ordinary Shares, voting as a separate class, may appoint three (3) Directors (the Ordinary Directors and each an Ordinary Director) and may in like manner remove with or without cause any Ordinary Director so appointed and may in like manner appoint another person in his/her stead. Zhenwei may appoint one (1) Director (the Zhenwei Director) and may in like manner remove with or without cause the Zhenwei Director so appointed and may in like manner appoint another Person in his/her stead.
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Each of Bain and CICC shall be entitled to appoint one observer (the Observers) to the Board to attend board meetings of the Company in a non-voting observer capacity. The Company shall provide the Observers copies of all notices and materials at the same time and in the same manner as the same are provided to the Directors.
(b) Expenses.
The Company shall reimburse the Zhenwei Director and the Observers for all reasonable and documented out-of-pocket expenses incurred by such Zhenwei Director and Observers in attending Board meetings and for any other services as a Director or an Observer of the Company and/or any Subsidiary in accordance with the expenses reimbursement policy of the Company.
(c) Termination.
This Section 2.2 shall terminate upon consummation of a Qualified IPO and thereafter election and removal of the Directors shall be made pursuant to the Amended M&AA or other constitutional documents of the Company to be effective upon or after the consummation of the Qualified IPO, provided that, the Directors appointed before the consummation of a Qualified IPO shall have the right but not the obligation to resign or be removed from the Board.
3. | REGISTRATION RIGHTS |
3.1 Applicability of Rights.
The Investors shall be entitled to the following rights with respect to any potential public offering of the Companys Ordinary Shares in the United States and shall be entitled to reasonably analogous or equivalent rights with respect to any other offering of the Companys securities in any other jurisdiction in which the Company undertakes to publicly offer or list such securities for trading on a recognized securities exchange. These rights set forth in this Section 3 shall survive an IPO of the Company in the United States.
3.2 Definitions.
For purposes of this Section 3:
(a) Registration. The terms register, registered, and registration refer to a registration effected by filing a registration statement which is in a form which complies with, and is declared effective by the SEC (as defined below) in accordance with, the Securities Act.
(b) Excluded Registration means (i) a registration relating to the sale or grant of securities to employees of the Company or a Subsidiary pursuant to a stock option, stock purchase, equity incentive or similar plan; (ii) a registration relating to an SEC Rule 145 transaction or other acquisition, amalgamation, merger, arrangement, business combination or similar transaction by any Group Company of or with any other businesses; (iii) a registration in which the only Ordinary Shares being registered is Ordinary Shares issuable upon conversion of debt securities that are also being registered, or (iv) a registration on any registration form that does not permit secondary sales.
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(c) Registrable Securities. The term Registrable Securities means: (1) any Ordinary Shares of the Company issued or issuable pursuant to conversion of any of the Preferred Shares, and (2) any Ordinary Shares issued (or issuable upon the conversion or exercise of any warrant, right or other security which is issued) as a dividend or other distribution with respect to, or in exchange for or in replacement of, any Preferred Shares described in clause (1) of this subsection (c), and (3) Ordinary Shares issued or issuable in respect of the Ordinary Shares described in clauses (1) and (2) above upon any share split, share dividend, share combination or consolidation, recapitalization, reclassification or other similar event in relation to the Shares, and (4) any depositary receipts issued by an institutional depositary representing any of the foregoing. Notwithstanding the foregoing, Registrable Securities shall exclude any Registrable Securities sold by a Person in a transaction in which rights under this Section 3 are not assigned in accordance with this Agreement, and any Registrable Securities which are sold in a registered public offering under the Securities Act or analogous statute of another jurisdiction, or sold pursuant to Rule 144 promulgated under the Securities Act or analogous rule of another jurisdiction.
(d) Registrable Securities Then Outstanding. The number of shares of Registrable Securities Then Outstanding shall mean the number of Ordinary Shares of the Company that are Registrable Securities and are then issued and outstanding or would be outstanding assuming full conversion of all securities, warrants or other rights which are, directly or indirectly, convertible, exercisable or exchangeable into or for Registrable Securities.
(e) IPO. The term IPO means the firm-commitment underwritten initial public offering by the Company of its Ordinary Shares pursuant to a registration statement that is filed with and declared effective by either the SEC under the Securities Act or another Governmental Authority for a Registration in a jurisdiction other than the United States.
(f) Holder. For purposes of this Section 3, the term Holder means any person owning or having the rights to acquire Registrable Securities or any permitted assignee of record of such Registrable Securities to whom rights under this Section 3 have been duly assigned in accordance with this Agreement.
(g) Form F-3 or Form S-3. The term Form F-3 or Form S-3 means such respective form under the Securities Act (including Form S-3 or Form F-3, as appropriate) or any successor registration form under the Securities Act subsequently adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.
(h) SEC. The term SEC means the U.S. Securities and Exchange Commission.
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(i) Registration Expenses. The term Registration Expenses shall mean all expenses incurred by the Company in complying with Sections 3.3, 3.4 and 3.5 hereof, including all registration and filing fees, printing expenses, fees, disbursements of counsels for the Company, reasonable and documented fees and disbursements of one counsel for the Holders, fees and disbursements for any special legal opinions as requested by the Company, the underwriters or their counsels, blue sky fees and expenses and the expense of any special audits incidental to or required by any such registration (but excluding any Selling Expenses, fees and disbursement of other counsel for the Holders, and the compensation of regular employees of the Company which shall be paid in any event by the Company).
(j) Rule 144 Qualified Holder or Rule 144 Qualified Holders has the meaning set forth in Section 3.10 below.
(k) Selling Expenses. The term Selling Expenses shall mean all underwriting discounts and selling commissions applicable to the sale of Registrable Securities pursuant to Sections 3.3, 3.4 or 3.5 hereof.
(l) Exchange Act. The term Exchange Act shall mean the United States Securities Exchange Act of 1934, as amended, and any successor statute.
(m) Restricted Securities has the meaning set forth in SEC Rule 144(a)(3).
(n) SEC Rule 144 means Rule 144 promulgated by the SEC under the Securities Act.
(o) SEC Rule 145 means Rule 145 promulgated by the SEC under the Securities Act.
3.3 Demand Registration.
(a) Request by Holders. Subject to the terms of this Agreement, if the Company shall, at any time after the earlier of (i) the fifth (5th) anniversary of the Closing Date, or (ii) expiry of one hundred eighty (180) days following the effective date of a registration statement for an IPO, receive a written request from the Holders of at least fifty percent (50%) of the Registrable Securities Then Outstanding that the Company file a registration statement under the Securities Act (other than Form F-3 or Form S-3) covering the registration of a minimum twenty percent (20%) of the Registrable Securities of such requesting Holders (or any lesser percentage if the anticipated gross proceeds to the Company from the registration shall exceed US$5,000,000) pursuant to this Section 3.3, then the Company shall, within ten (10) Business Days of the receipt of such written request, give written notice of such request (Request Notice) to all the Holders, and use its best efforts to effect, as soon as practicable, the registration under the Securities Act of all the Registrable Securities that the Holders request to be registered and included in such registration by written notice given by such Holders to the Company within twenty (20) days after receipt of the Request Notice.
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(b) Limitations on Requested Registration. The Company shall not be obligated to effect, or to take any action to effect, any such registration pursuant to this Section 3.3:
(i) in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification, or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;
(ii) during the period starting with the date sixty (60) days prior to the Companys good faith estimate of the date of filing of, and ending on a date one hundred twenty (120) days after the effective date of, a Company-initiated registration; provided that the Company is actively employing in good faith reasonable best efforts to cause such registration statement to become effective; or
(iii) if the Initiating Holders (as defined below) propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 or F-3 pursuant to a request made pursuant to Section 3.5 below.
(c) Underwriting. If the Holders initiating the registration request under this Section 3.3 (the Initiating Holders) intend to distribute the Registrable Securities covered by their request by means of an underwriting, then they shall so advise the Company as a part of their request made pursuant to this Section 3.3 and the Company shall include such information in the Request Notice. In such event, the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holders participation in such underwriting and the inclusion of such Holders Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting by the Company and reasonably acceptable to the Holders of a majority of the Registrable Securities being registered. Notwithstanding any other provision of this Section 3.3, if the underwriter(s) advise(s) the Company in writing that marketing factors require a limitation of the number of securities to be underwritten, then the Company shall so advise all Holders of Registrable Securities which would otherwise be registered and underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be reduced as required by the underwriter(s) and allocated among the Holders of Registrable Securities on a pro rata basis according to the number of Registrable Securities Then Outstanding held by each Holder requesting registration (including the Initiating Holders); provided, however, that the number of shares of Registrable Securities to be included in such underwriting and registration shall not be reduced unless all other securities are first entirely excluded from the underwriting and registration including all shares that are not Registrable Securities and are held by any other Person, including any Person who is an employee, officer or director of the Company or any Subsidiary of the Company.
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(d) Maximum Number of Demand Registrations. The Company shall not be obligated to effect more than two (2) such demand registrations as requested by the Holders of the Registrable Securities pursuant to this Section 3.3 provided that if the sale of all of the Registrable Securities sought to be included pursuant to this Section 3.3 is not consummated for any reason other than due to the action or inaction of the Holders including Registrable Securities in such Registration, such Registration shall not be deemed to constitute one of the Registration rights granted pursuant to this Section 3.3.
(e) Deferral. Notwithstanding the foregoing, if the Company shall furnish to the Holders requesting registration pursuant to this Section 3.3, a certificate signed by the President or Chief Executive Officer of the Company stating that in the good faith judgment of the Board, it would be materially detrimental to the Company and its shareholders for such registration statement to be filed at such time, then the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders; provided, however, that the Company may not utilize this right more than once in any twelve (12) month period; provided further, that the Company shall not register any other of its Shares during such ninety (90) day period (other than an Excluded Registration). A demand right shall not be deemed to have been exercised until such deferred registration shall have been effected.
(f) Other Shares. For the avoidance of doubt, the registration statement filed pursuant to the request of the Initiating Holders may, subject to the provisions of Section 3.3(c), include securities of the Company being sold for the account of the Company.
3.4 Piggyback Registrations.
Subject to the terms of this Agreement, if the Company proposes to register for its own account any of its Ordinary Shares (or Ordinary Share equivalent) in connection with the public offering of such securities, or if any demand registration of Equity Securities is requested by investors making equity investment in the Company subsequent to the equity investment in the Company by the Holders, the Company shall notify all the Holders of the Registrable Securities in writing at least thirty (30) days (or such a shorter period of time reasonably determined by the Company (after consultation with counsel) in order to avoid selected disclosure of material non-public information in violation of, or other violation of, any applicable securities law) prior to the anticipated filing of any registration statement under the Securities Act for purposes of effecting a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities of the Company, but excluding registration statement for the IPO, registration statements relating to any registration under Section 3.3 or Section 3.5 of this Agreement, an Excluded Registration or any exchange offer of the Company for purposes of retiring or repurchasing any securities of any Group Company), and shall afford each such Holder an opportunity to include in such registration statement all or any part of the Registrable Securities then held by such Holder. Each Holder desiring to include in any such registration statement all or any part of the Registrable Securities held by it shall within twenty (20) days (or such a shorter period of time reasonably determined by the Company (after consultation with counsel) as specified in the Companys notice if the Companys notification period is less than thirty (30) days pursuant to this provision) after receipt of the above described notice from the Company, so notify the Company in writing, and in such notice shall inform the Company of the number of Registrable Securities such Holder wishes to include in such registration statement. If a Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company or any subsequent investors, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company or any subsequent investors with respect to offerings of its securities, all upon the terms and conditions set forth herein.
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(a) Underwriting. If a registration statement under which the Company gives notice under this Section 3.4 is for an underwritten offering, then the Company shall so advise the Holders of the Registrable Securities. In such event, the right of any such Holders Registrable Securities to be included in a registration pursuant to this Section 3.4 shall be conditioned upon such Holders participation in such underwriting and the inclusion of such Holders Registrable Securities in the underwriting to the extent provided herein. All the Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting. Notwithstanding any other provision of this Agreement but subject to Section 3.13, if the managing underwriter(s) determine(s) in good faith that marketing factors require a limitation of the number of shares to be underwritten, then the managing underwriter(s) may exclude shares from the registration and the underwriting, and the number of shares that may be included in the registration and the underwriting shall be allocated, first, to the Company, second, to each of the Holders requesting inclusion of their Registrable Securities in such registration statement on a pro rata basis based on the total number of shares of Registrable Securities then held by each such Holder, and third, to holders of other securities of the Company; provided, however, that the right of the underwriter(s) to exclude shares (including the Registrable Securities) from the registration and underwriting as described above shall be restricted so that (i) the number of the Registrable Securities included in any such registration is not reduced below thirty percent (30%) of the aggregate number of shares of the Registrable Securities, on a pro rata basis, for which inclusion has been requested; and (ii) all shares that are not Registrable Securities and are held by any other Person, including any Person who is an employee, officer or director of the Company (or any subsidiary of the Company) shall first be excluded from such registration and underwriting before any Registrable Securities are so excluded.
(b) Not Demand Registration. Registration pursuant to this Section 3.4 shall not be deemed to be a demand registration as described in Section 3.3 above. There shall be no limit on the number of times the Holders may request registration of Registrable Securities under this Section 3.4.
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(c) Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 3.4 before or after the effective date of such registration, whether or not any Holder has elected to include Registrable Securities in such registration.
3.5 Form F-3 or Form S-3 Registration.
If at any time when it is eligible to use a Form S-3 or Form F-3 registration statement, in case the Company shall receive from the Holders of at least fifty percent (50%) of the Registrable Securities Then Outstanding a written request or requests that the Company effect (i) a registration on Form F-3 or Form S-3 for which the reasonably anticipated aggregate offering price to the public would be no less than US$5,000,000 and (ii) any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, then the Company will:
(a) Notice. Promptly give written notice of the proposed registration and the Holders or Holders request therefor, and any related qualification or compliance, to all other Holders of the Registrable Securities; and
(b) Registration. As soon as practicable, effect such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holders or Holders Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within twenty (20) days after the Company provides the notice contemplated by Section 3.5(a); provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section 3.5:
(i) if Form F-3 or Form S-3 is not available for such offering by the Holders;
(ii) if the Company shall furnish to the Holders a certificate signed by the Chief Executive Officer of the Company stating that in the good faith judgment of the Board, it would be materially detrimental to the Company and its shareholders for such Form F-3 or Form S-3 registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form F- 3 or Form S-3 registration statement no more than once during any twelve (12) month period for a period of not more than sixty (60) days after receipt of the request of the Holder or Holders initiating such registration request pursuant to this Section 3.5; provided that the Company shall not register any of its other Shares during such sixty (60) day period (other than an Excluded Registration). A registration right under Section 3.5 shall not be deemed to have been exercised until such deferred registration shall have been effected;
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(iii) if the Company has, within the twelve (12) month period preceding the date of such request, already effected two Form F-3 or Form S-3 registrations pursuant to this Section 3.5;
(iv) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance; or
(v) during the period starting with the date thirty (30) days prior to the Companys good faith estimate of the date of filing of, and ending on a date ninety (90) days after the effective date of, a Company-initiated registration; provided that the Company is actively employing in good faith reasonable best efforts to cause such registration statement to become effective.
Subject to the foregoing, the Company shall file a Form F-3 or Form S-3 registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the Holders.
(c) Not Demand Registration. Form F-3 or Form S-3 registrations shall not be deemed to be demand registrations as described in Section 3.3 above.
(d) Maximum Number of Form F-3 or Form S-3 Registration. The Company shall not be obligated to effect more than two (2) such F-3 or Form S-3 registrations as requested by the Holders of the Registrable Securities within twelve (12) months and pursuant to this Section 3.5 provided that if the sale of all of the Registrable Securities sought to be included pursuant to this Section 3.5 is not consummated for any reason other than due to the action or inaction of the Holders including Registrable Securities in such Registration, such Registration shall not be deemed to constitute one of the Registration rights granted pursuant to this Section 3.5.
(e) Underwriting. If the Holders of Registrable Securities requesting registration under this Section 3.5 intend to distribute the Registrable Securities covered by their request by means of an underwriting, the provisions of Section 3.3(c) shall apply to such registration.
(f) Other Shares. For the avoidance of doubt, the registration statement filed pursuant to the request of the Initiating Holders may, subject to the provisions of Section 3.5(e), include securities of the Company being sold for the account of the Company.
3.6 Expenses.
All Registration Expenses incurred in connection with any registration pursuant to Sections 3.3, 3.4 or 3.5 (but excluding the Selling Expenses) shall be borne by the Company, provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding for demand registration or registration on Form S-3 or Form F-3 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one registration pursuant to provisions herein. Each Holder participating in a registration pursuant to Sections 3.3, 3.4 or 3.5 shall bear such Holders proportionate share (based on the total number of shares sold in such registration other than for the account of the Company) of all the Selling Expenses, in connection with such offering by the Holders.
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3.7 Obligations of the Company.
Whenever required to affect the registration of any Registrable Securities under this Agreement the Company shall, as expeditiously as reasonably possible:
(a) Registration Statement. Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to ninety (90) days or if earlier, until the distribution contemplated in the registration statement has been completed; provided, however, that (i) such ninety (90) day period shall be extended for a period of time equal to the period any Holder refrains from selling any securities included in such registration at the request of the underwriter(s), and (ii) in the case of any registration of the Registrable Securities on Form S-3 or Form F-3 which are intended to be offered on a continuous or delayed basis, in accordance with Rule 415 under the Securities Act or a successor rule, such ninety (90) day period shall be extended, if necessary, to keep the registration statement effective until all such Registrable Securities are sold.
(b) Amendments and Supplements. Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement.
(c) Prospectuses. Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of the Registrable Securities owned by them that are included in such registration.
(d) Blue Sky. Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as shall be reasonably requested by the Holders; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act.
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(e) Underwriting. In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement in usual and customary form, with the managing underwriter(s) of such offering.
(f) Notification. Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of (i) the issuance of any stop order by the SEC in respect of such registration statement, or (ii) the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.
(g) Opinion and Comfort Letter. Furnish, at the request of any Holder requesting registration of the Registrable Securities, on the date that such Registrable Securities are delivered to the underwriter(s) for sale, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering and reasonably satisfactory to Holders of at least fifty percent (50%) of the Registrable Securities being included in such sale, or in an underwritten offering, to the lead underwriter(s), addressed to the underwriters, and (ii) letters dated as of (x) the effective date of the registration statement covering such Registrable Securities, or the date of, or required in, the underwriting agreement, as the case may be. and (y) the closing date of the offering, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering and reasonably satisfactory to Holders of at least fifty percent (50%) of the Registrable Securities being included in such sale, or in an underwritten offering, to the lead underwriter(s), addressed to the underwriters, if any.
3.8 Furnish Information.
It shall be a condition precedent to the obligations of the Company to take any action pursuant to Sections 3.3, 3.4 or 3.5 that the selling Holders shall furnish to the Company such information regarding themselves, the Registrable Securities held by them and the intended method of disposition of such securities as shall be required to timely effect the registration of their Registrable Securities.
3.9 Indemnification.
In the event any Registrable Securities are included in a registration statement under Sections 3.3, 3.4 or 3.5:
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(a) By the Company. To the extent permitted by applicable Laws, the Company will indemnify and hold harmless each Holder, its partners, officers, directors, legal counsel, any underwriter (as defined in the Securities Act) for such Holder and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act, or other United States federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a Violation):
(i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto;
(ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or
(iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any United States federal or state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any United States federal or state securities law in connection with the offering covered by such registration statement;
and the Company will reimburse each such Holder, its partner, officer, director, legal counsel, underwriter or controlling Person for any legal or other expenses reasonably incurred by them and documented, as such expenses are incurred, in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this subsection (a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder, partner, officer, director, legal counsel, underwriter or controlling Person of such Holder.
(b) By Selling Holders. To the extent permitted by applicable Laws, each selling Holder will, if the Registrable Securities held by such Holder are included in the securities as to which such registration qualifications or compliance is being effected, indemnify and hold harmless the Company, each of its partners, officers, directors, legal counsel, each Person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holders partners, directors, officers, legal counsel or any Person who controls such Holder within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer, legal counsel, controlling Person, underwriter or such other Holder, partner or director, officer or controlling Person of such other Holder may become subject under the Securities Act, the Exchange Act or other United States federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will reimburse any legal or other expenses reasonably incurred (and documented) by the Company or any such director, officer, controlling Person, underwriter or other Holder, partner, officer, director or controlling Person of such other Holder in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this subsection (b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided, further, that in no event shall any indemnity under this subsection (b) exceed the net proceeds received by such Holder in the registered offering out of which the applicable Violation arises.
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(c) Notice. Promptly after receipt by an indemnified party under this Section 3.9 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 3.9, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential conflict of interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of liability to the indemnified party under this Section 3.9 to the extent the indemnifying party is prejudiced as a result thereof, but the omission to so deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 3.9.
(d) Contribution. In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any indemnified party makes a claim for indemnification pursuant to this Section 3.9 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 3.9 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any indemnified party in circumstances for which indemnification is provided under this Section 3.9; then, and in each such case, the indemnified party and the indemnifying party will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that a Holder (together with its related persons) is responsible for the portion represented by the percentage that the public offering price of its Registrable Securities offered by and sold under the registration statement bears to the public offering price of all securities offered by and sold under such registration statement, and the Company and other selling Holders are responsible for the remaining portion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case: (A) no Holder will be required to contribute any amount in excess of the net proceeds to such Holder from the sale of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, except in the case of willful misconduct or fraud by such Holder; and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.
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(e) Survival; Consents to Judgments and Settlements. Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Company and Holders under this Section 3.9 shall survive the completion of any offering of Registrable Securities in a registration statement, regardless of the expiration of any statutes of limitation or extensions of such statutes. No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.
3.10 Termination of the Companys Obligations.
The Companys obligations under Sections 3.3, 3.4 and 3.5 with respect to any Registrable Securities proposed to be sold by a Holder in a registration pursuant to Section 3.3, 3.4 or 3.5 shall terminate upon the earlier of (i) such time after consummation of the Companys first registered public offering of Ordinary Shares as Rule 144 or another similar exemption under the Securities Act is available for the sale of all of such Holders shares of Registrable Securities during a three-month period without registration (such a Holder, a Rule 144 Qualified Holder); and (ii) the fifth (5th) anniversary of the Qualified IPO; provided, however, that notwithstanding anything to the contrary in clause (i) of this Section 3.10, prior to the fifth (5th) anniversary of the Qualified IPO, in the event that any Rule 144 Qualified Holder holds Registrable Securities that represent more than five percent (5%) of the Ordinary Shares of the Company that are issued and outstanding or would be outstanding assuming full conversion of all securities, warrants or other rights which are, directly or indirectly, convertible, exercisable or exchangeable into or for the Ordinary Shares of the Company (with depositary receipts being calculated in the corresponding number of Ordinary Shares), at the proposed time of the registration of securities for an offering (or for the avoidance of doubt, if the offering is made under a shelf registration, at the proposed time of filing the prospectus supplement for such offering) as contemplated in Section 3.4, such Rule 144 Qualified Holder shall continue to be entitled to the piggyback right for such registration for such offering as set forth in Section 3.4; provided further that notwithstanding anything to the contrary in this Section 3 (Registration Rights), the aggregate number of all Registrable Securities that are so included in such registration for being part of such offering pursuant to requests of Rule 144 Qualified Holders shall not exceed twenty percent (20%) of the aggregate number of all securities included in such registration for being part of such offering (each measured in the number of corresponding Ordinary Shares).
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3.11 No Registration Rights to Third Parties.
Without the prior written consent of the Holders of a majority of the Registrable Securities Then Outstanding, the Company covenants and agrees that it shall not grant, or cause or permit to be created, for the benefit of any Person any registration rights of any kind (whether similar to the demand, piggyback or Form F- 3 or Form S-3 registration rights described in this Section 3, or otherwise) relating to any securities of the Company which are senior to, or on a parity with, those granted to the Holders of Registrable Securities. In any event, if the Company grants to any holder of the Companys security any registration right of any nature that are superior to the Holders, as determined in good faith by the Board, the Company shall grant such superior registration right to the Holders as well.
3.12 Assignment of Registration Rights.
Subject to prior written notification by the Holder to the Company, the right to cause the Company to register Registrable Securities pursuant to this Agreement may be assigned by a Holder provided that: (i) the Holder is transferring all its Registrable Securities; (ii) the Holder is transferring at least 100,000 Registrable Securities; (iii) the Holder is transferring its Registrable Securities to a constituent partner or shareholder who agrees to act through a single representative; or (iv) the Holder is transferring its Registrable Securities to an Affiliate of such Holder; provided that: (a) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; and (b) such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement. In the event of a transfer or assignment of Registrable Securities which does not satisfy the conditions set forth above, such securities shall no longer be deemed to constitute Registrable Securities for purposes of this Agreement.
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3.13 Market Stand-Off.
Each of the Controlling Shareholder, the Investors and other Shareholders hereby agrees that, if and to the extent requested by the Company or the underwriters managing the initial public offering of the Companys securities, it will not (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right, or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any securities of the Company (other than those permitted to be included in the registration and other transfers to Affiliates (which shall be subject to the same market stand-off provisions as the Investor/Shareholder transferor) permitted by law), or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Ordinary Shares or other securities, in cash, or otherwise (including to make any short sale of, or enter into any hedging or similar transaction with the same economic effect as a sale), without the prior written consent of the Company or such underwriters, as the case may be, for a period of time specified by the representative of the underwriters not to exceed one hundred and eighty (180) days from the effective date of the registration statement covering such initial public offering or the pricing date of such offering as may be requested by the underwriters. The foregoing provision of this Section 3.13 applies only to the IPO, but not to the Registrable Securities actually sold pursuant to such registration statement, and shall only be applicable to the Holders if all officers, directors and holders of five percent (5%) or more of the Companys outstanding share capital enter into similar agreements, and if the Company or any underwriter releases any officer, director or holder of five percent (5%) or more of the Companys outstanding share capital from his or her sale restrictions so undertaken, then each Holder shall be notified prior to such release and shall itself be simultaneously released to the same proportional extent (other than the release of any officer or director for bona fide tax or estate planning purposes). The Company shall require all future acquirers of the Companys securities holding at least five percent (5%) of the then outstanding share capital of the Company to execute prior to a Qualified IPO a market stand-off agreement containing substantially similar provisions as those contained in this Section 3.13. The underwriters in connection with such registration are intended third-party beneficiaries of this Section 3.13 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in connection with such registration that are consistent with this Section 3.13 or that are necessary to give further effect thereto.
3.14 Rule 144 Reporting.
With a view to making available to the Holders the benefits of certain rules and regulations of the SEC which may at any time permit the sale of the Registrable Securities to the public without registration or pursuant to a registration on Form F-3 or Form S-3, after such time as a public market exists for the Ordinary Shares, the Company agrees to:
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(a) make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times after the effective date of the first registration under the Securities Act filed by the Company for an offering of its securities to the general public;
(b) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); and
(c) so long as a Holder owns any Registrable Securities, to furnish to such Holder forthwith upon request (i) a written statement by the Company as to its compliance with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of the Companys initial public offering), the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), or its qualification as a registrant whose securities may be resold pursuant to Form F-3 or Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company, and (iii) such other reports and documents of the Company as a Holder may reasonably request in availing itself of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to Form F-3 or Form S-3.
3.15 Delay of Registration.
No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 3.
3.16 Restrictions on Transfer. The provisions of Section 3.16(a) will take effect only if and when the Company becomes a reporting company under the Exchange Act, or before the Company becomes a reporting company, if and when the proposed sale, assignment, transfer, pledge or other disposition may constitute a distribution or public offering within the meaning of the Securities Act or other similar Laws in other applicable jurisdictions.
(a) The Holder of each certificate representing Registrable Securities by acceptance thereof agrees to comply in all respects with the provisions of this Section 3.16. Each Holder agrees not to make any sale, assignment, transfer, pledge or other disposition of all or any portion of the Restricted Securities, or any beneficial interest therein, unless and until:
(i) There is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or
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(ii) Such Holder shall have given prior written notice to the Company of such Holders intention to make such disposition and shall have furnished the Company with a detailed description of the manner and circumstances of the proposed disposition, and, if reasonably requested by the Company, such Holder shall have furnished the Company, at its expense, with (A) an opinion of counsel, reasonably satisfactory to the Company, to the effect that such disposition will not require registration of such Restricted Securities under the Securities Act, (B) a no action letter from the SEC to the effect that the transfer of such securities without registration will not result in a recommendation by the staff of the SEC that action be taken with respect thereto, or (C) any other evidence reasonably satisfactory to counsel to the Company to the effect that the proposed sale, pledge, or transfer of the Restricted Securities may be effected without registration under the Securities Act, whereupon the Holder of such Restricted Securities shall be entitled to transfer such Restricted Securities in accordance with the terms of the notice delivered by the Holder to the Company.
(b) Each certificate representing Registrable Securities shall (unless otherwise permitted by the provisions of this Agreement) be stamped or otherwise imprinted with a legend substantially similar to the following (in addition to any legend required under applicable state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD OF UP TO 180 DAYS IN THE EVENT OF A PUBLIC OFFERING, AS SET FORTH IN A SHAREHOLDERS AGREEMENT, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY.
The Holders consent to the Company making a notation on its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer established in this Section 3.16.
(c) The first legend referring to federal and state securities laws identified in Section 3.16(b) hereof stamped on a certificate evidencing the Restricted Securities and the share transfer instructions and record notations with respect to such Restricted Securities shall be removed and the Company shall issue a certificate without such legend to the holder of such Restricted Securities if (i) such securities are registered under the Securities Act, or (ii) such holder provides the Company with an opinion of counsel reasonably acceptable to the Company to the effect that a public sale or transfer of such securities may be made without registration under the Securities Act.
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(d) A transferring Holder will cause any proposed purchaser, pledgee, or transferee of the Preferred Shares and/or the Registrable Securities held by such Holder to agree to take and hold such securities subject to the provisions and upon the conditions specified in this Agreement.
4. | RIGHT OF PARTICIPATION |
The Investors, any other holder of the Preferred Shares to which rights under this Section 4 have been duly assigned in accordance with Section 10.1 (each hereinafter referred to as a Participation Rights Holder, collectively the Participation Rights Holders) shall have the right of first refusal to purchase such Participation Rights Holders Pro Rata Share (as defined in Section 4.1), of all (or any part) of any New Securities (as defined in Section 4.2) that the Company may from time to time issue after the Effective Date (the Right of Participation). Each Participation Rights Holder may apportion, at its sole discretion, its Pro Rata Shares among its Affiliates in any proportion.
4.1 Pro Rata Share.
A Participation Rights Holders Pro Rata Share for purposes of the Right of Participation is the ratio of (a) the number of Ordinary Shares (calculated on a Fully Diluted Basis) held by such Participation Rights Holder, to (b) the total number of the Ordinary Shares (calculated on a Fully Diluted Basis) then outstanding immediately prior to the issuance of the New Securities giving rise to the Right of Participation.
4.2 New Securities.
New Securities shall mean any Preferred Shares, any other Shares of the Company designated as preferred shares, Ordinary Shares or other Shares of the Company, whether now authorized or not, or rights, options or warrants to purchase such Equity Securities, or securities of any class whatsoever that are, or may become, convertible or exchangeable into such Equity Securities, provided, however, that the term New Securities shall not include:
(a) any Ordinary Shares issued as a dividend or distribution on the Preferred Shares;
(b) any Ordinary Shares issued or issuable upon conversion or exercise of the Preferred Shares;
(c) up to 6,818,182 Ordinary Shares (or options, warrants or other Equity Securities therefor) issued or issuable to the Group Companies employees, officers, directors, contractors, advisors, consultants or any other Persons qualified pursuant to the equity incentive plans approved by the Board;
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(d) any Equity Securities issued or issuable under Series A Purchase Agreements, including such Equity Securities issued or issuable pursuant to the exercise of the Warrants;
(e) any Equity Securities issued or issuable in connection with any share split, share dividend, share combination, recapitalization or other similar transaction of the Company in which all the Participation Rights Holders are entitled to participate on a pro rata basis or which have an anti-dilution effect in accordance with the Amended M&AA;
(f) any Equity Securities issued in connection with a Qualified IPO; and
(g) any Equity Securities issued or issuable in connection with a Trade Sale or an acquisition of another corporation or a joint venture approved pursuant to Section 8.
4.3 Procedures.
(a) First Participation Notice. In the event that the Company proposes to undertake an issuance of any New Securities (in a single transaction or a series of related transactions), it shall give to each Participation Rights Holder written notice of its intention to issue such New Securities (the First Participation Notice), describing the amount and class of the New Securities, the price and the general terms upon which the Company proposes to issue such New Securities. Each Participation Rights Holder shall have thirty (30) days from the date of receipt of any such First Participation Notice to agree on behalf of itself or its Affiliates in writing to purchase such Participation Rights Holders Pro Rata Share of such New Securities for the price and upon the terms and conditions specified in the First Participation Notice by giving written notice to the Company and stating therein the quantity of the New Securities to be purchased (not to exceed such Participation Rights Holders Pro Rata Share). If any Participation Rights Holder fails to so agree in writing within such thirty (30) day period to purchase such Participation Rights Holders full Pro Rata Share of an offering of such New Securities, then such Participation Rights Holder shall forfeit the right hereunder to purchase that part of its Pro Rata Share of such New Securities that it did not agree to purchase.
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(b) Second Participation Notice; Oversubscription. If any Participating Rights Holder fails or declines to fully exercise its Right of Participation in accordance with subsection (a) above, the Company shall promptly give notice (the Second Participation Notice) to the other Participation Rights Holders who have fully exercised their Right of Participation (the Fully Participating Investors) in accordance with subsection (a) above, which notice shall set forth the number of the New Securities not purchased by the other Participating Rights Holders pursuant to subsection (a) above (such shares, the Overallotment New Securities). Each Fully Participating Investor shall have thirty (30) days from the date of receipt of the Second Participation Notice to notify the Company of its desire to purchase more than its Pro Rata Share of the New Securities, stating the number of the additional New Securities it proposes to buy (the Additional Number). Such notice may be made by telephone if confirmed in writing within two (2) Business Days. If, as a result thereof, the total number of additional New Securities the Fully Participating Investors propose to buy exceeds the total number of the Overallotment New Securities, each Fully Participating Investor who proposes to buy more than such number of additional New Securities equal to the product obtained by multiplying (i) the number of the Overallotment New Securities by (ii) a fraction, the numerator of which is the number of the Ordinary Shares (calculated on a Fully Diluted Basis) held by such Fully Participating Investor and the denominator of which is the total number of Ordinary Shares (calculated on a Fully Diluted Basis) held by all Fully Participating Investors (an Oversubscribing Fully Participating Investor) will be cut back by the Company with respect to its oversubscription to that number of the Overallotment New Securities equal to the lesser of (x) its Additional Number and (y) the product obtained by multiplying (i) the number of the Overallotment New Securities available for subscription by (ii) a fraction, the numerator of which is the number of the Ordinary Shares (calculated on a Fully Diluted Basis) held by such Oversubscribing Fully Participating Investor and the denominator of which is the total number of the Ordinary Shares (calculated on a Fully Diluted Basis) held by all the Oversubscribing Fully Participating Investors. Each Fully Participating Investor shall be obligated to buy such number of New Securities as determined by the Company pursuant to this Section 4.3 and the Company shall so notify the Fully Participating Investors within thirty (30) days following the date of the Second Participation Notice.
(c) Notwithstanding the foregoing, with respect to the Investors holding Warrants (the Warrant Holders), in the event any Warrant Holder exercises its Right of Participation (if such Warrant Holder is an entity incorporated in PRC) in accordance with this Section 4.3, at the election of the Warrant Holder, either (i) an offshore Affiliate of such Warrant Holder shall be entitled to purchase the Participation Rights Holders Pro Rata Share and the Additional Number of such New Securities, which such Warrant Holder is entitled to purchase, for the price and upon the terms and conditions specified in the First Participation Notice and the Second Participation Notice, or (ii) subject to Section 12.14, the Company shall issue a warrant (the Special Warrant) to such Warrant Holder, under which such Warrant Holder shall be entitled to exercise such Special Warrant in whole to purchase its Participation Rights Holders Pro Rata Share and the Additional Number of such New Securities for the price and upon the terms and conditions specified in the First Participation Notice and the Second Participation Notice and in accordance with the terms and conditions as provided in such Special Warrant, and the Warrant Holder, as the case may be, shall enter into an onshore loan agreement with the Domestic Company and disburse an amount equal to the price of the New Securities which the Warrant Holder is entitled to purchase to the Domestic Company simultaneously with other Participating Participation Rights Holders.
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4.4 Failure to Exercise.
If Participating Rights Holders fail or decline to exercise their rights or purchase all New Securities included in the First Participation Notice in accordance with Section 4.3, the Company shall have ninety (90) days following the expiration of the date of the First Participation Notice or the Second Participation Notice, as the case may be, to sell the New Securities described in the First Participation Notice (with respect to which the Right of Participation hereunder were not exercised) at the same or higher price and upon non-price terms no more favorable to the purchasers thereof than those specified in the First Participation Notice. In the event that the Company has not issued and sold such New Securities within such ninety (90)-day period, then the Company shall not thereafter issue or sell any New Securities without again first offering such New Securities to the Participation Rights Holders pursuant to this Section 4.
4.5 Termination.
The Right of Participation shall terminate upon consummation of a Qualified IPO.
5. | TRANSFER RESTRICTIONS |
5.1 Sale by Shareholder; Notice of Sale.
Subject to Sections 5.5 of this Agreement, if the Controlling Shareholder and any other holder of the Ordinary Shares (excluding any Ordinary Shares converted from the Preferred Shares held by any Investor pursuant to the Amended M&AA), any of his/her/its Affiliates and/or any of his/her/its permitted assignees to whom his/her/its rights under this Section 5 have been duly assigned in accordance with this Agreement and the Amended M&AA (the Selling Shareholder) proposes to sell or transfer or exchange all or any Shares or other securities of the Company held by it/him/her directly or indirectly, then the Selling Shareholder shall promptly give written notice (the Transfer Notice) to the Investors and other holders of the Preferred Shares (collectively, the Non-Selling Shareholders) and the Company prior to such sale or transfer or exchange. The Transfer Notice shall describe in reasonable detail the proposed sale or transfer or exchange including the number of Shares to be sold or transferred or exchanged (the Offered Shares), the nature of such sale or transfer or exchange, the consideration to be paid, and the name and address of each prospective purchaser or transferee or acquirer.
5.2 Right of First Refusal.
(a) Non-Selling Shareholders Right of First Refusal.
(i) Each Non-Selling Shareholder shall have the right for a period of thirty (30) days following the Non-Selling Shareholders receipt of the Transfer Notice (the First Refusal Period) to elect to purchase its respective pro rata share of the Offered Shares at the same price and subject to the same material terms and conditions as described in the Transfer Notice.
(ii) Each Non-Selling Shareholder may exercise such right of first refusal and, thereby, purchase all or any portion of its pro rata share of the Offered Shares, by notifying the Selling Shareholder and the Company in writing, before expiration of the thirty (30) day period as to the number of such Offered Shares that it wishes to purchase.
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(iii) Each Non-Selling Shareholders pro rata share of the Offered Shares shall be a fraction, the numerator of which shall be the total number of the Shares and other Equity Securities of the Company (calculated on a Fully Diluted Basis) owned by such Non-Selling Shareholder on the date of the Transfer Notice and the denominator of which shall be the total number of the Shares and other Equity Securities of the Company (calculated on a Fully Diluted Basis) held by all the Non- Selling Shareholders on such date.
(iv) If any Non-Selling Shareholder elects not to exercise or fully exercise or fails to fully exercise such right of first refusal pursuant to Section 5.2(a)(ii), the Selling Shareholder shall give notice of such election or failure to elect (the Re-allotment Notice) to each other Non-Selling Shareholder that elected to purchase its entire pro rata share of the Offered Shares (the Purchasing Holders), which notice shall set forth the number of the Offered Shares not purchased by the other Non-Selling Shareholders pursuant to Section 5.2(a)(ii) (such shares, the Remaining Offered Shares). Such Re-allotment Notice may be made by telephone if confirmed in writing within two (2) Business Days. The Purchasing Holders shall have a right of re-allotment such that they shall have thirty (30) days from the date such Re-allotment Notice was given (the Extension Period) to elect to increase the number of the Offered Shares they agreed to purchase under Section 5.2(a)(ii). Such right of re-allotment shall be subject to the following conditions: each Purchasing Holder shall first notify the Selling Shareholder of its desire to increase the number of the Offered Shares it agreed to purchase under Section 5.2(a)(ii), stating the number of the additional Offered Shares it proposes to buy (the Additional Offered Shares). Such notice may be made by telephone if confirmed in writing within two (2) Business Days. If, as a result thereof, the total number of Additional Offered Shares the Purchasing Holders propose to buy exceeds the total number of the Remaining Offered Shares, each Purchasing Holder who proposes to buy more than such number of additional Offered Shares equal to the product obtained by multiplying (i) the number of the Remaining Offered Shares by (ii) a fraction, the numerator of which is the number of the Ordinary Shares (calculated on a Fully Diluted Basis) held by such Purchasing Holder and the denominator of which is the total number of Ordinary Shares (calculated on a Fully Diluted Basis) held by all Purchasing Holders (an Over-Purchasing Holder) will be cut back by the Selling Shareholder with respect to its over-purchase to that number of the Remaining Offered Shares equal to the lesser of (x) its Additional Offered Shares and (y) the product obtained by multiplying (i) the number of the Remaining Offered Shares available for over-purchase by (ii) a fraction, the numerator of which is the number of the Ordinary Shares (calculated on a Fully Diluted Basis) held by such Over-Purchasing Holder and the denominator of which is the total number of the Ordinary Shares (calculated on a Fully Diluted Basis) held by all the Over- Purchasing Holders.
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(v) Subject to applicable securities Laws, the Investors and other holders of the Preferred Shares shall be entitled to apportion the Offered Shares to be purchased among its partners and Affiliates upon written notice to the Company and the Selling Shareholder.
(vi) If a Non-Selling Shareholder gives the Selling Shareholder notice that it desires to purchase the Offered Shares, then payment for the Offered Shares to be purchased shall be made by check or wire transfer in immediately available funds of the appropriate currency, against delivery of such Offered Shares to be purchased at a place agreed by the Selling Shareholder and all the participating Non- Selling Shareholders and at the time of the scheduled closing therefor (the Right of First Refusal Closing), which shall be no later than ninety (90) days after the Non- Selling Shareholders receipt of the Transfer Notice, unless such notice contemplated a later closing with the prospective third party transferee or unless the value of the purchase price has not yet been established pursuant to Section 5.2(b).
(vii) Calculation of Shares. The number of Shares shall be calculated on a Fully Diluted Basis.
(viii) Rights of Investor as a Warrant Holder. Notwithstanding the foregoing, with respect to any Warrant Holder, in the event it exercises its right of first refusal to purchase the Offered Shares in accordance with subsections (i) to (vi) above, at the election of the Warrant Holder, either (x) subject to Section 12.14, the Company shall issue a Special Warrant to such Warrant Holder, under which the Warrant Holder shall be entitled to purchase its initial pro rata share of the Offered Shares and re-allotment pro rata share of the Additional Offered Shares (as the case may be, the WH Shares) for the price and upon the terms and conditions specified in the Transfer Notice and in accordance with the terms and conditions as provided in such Special Warrant, and after the payment of the price of the WH Shares specified in the Transfer Notice by such Warrant Holder to the Domestic Company pursuant to an onshore loan agreement with the Domestic Company, the Company shall repurchase the WH Shares from the Selling Shareholder for the same price and reserve such number of shares for future issuance to such Warrant Holder upon exercise of the Special Warrant; or (y) an offshore Affiliate of such Warrant Holder shall be entitled to purchase the WH Shares for the price and upon the terms and conditions specified in the Transfer Notice.
(b) Purchase Price. The purchase price for the Offered Shares to be purchased by the Non-Selling Shareholders exercising their right of first refusal will be the price set forth in the Transfer Notice. If the purchase price in the Transfer Notice includes consideration other than cash, the cash equivalent value of the non-cash consideration will be as previously determined by the Board in good faith, which determination will be binding upon the Company and the Non-Selling Shareholder, absent fraud or error.
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(c) Rights of Selling Shareholder. If any Non-Selling Shareholder exercises its right of first refusal to purchase the Offered Shares, then, upon the Right of First Refusal Closing, the Selling Shareholder will have no further rights as a holder of such Offered Shares except the right to receive outstanding payment for such Offered Shares from the Non-Selling Shareholder in accordance with the terms of this Agreement, and the Selling Shareholder will forthwith cause all certificate(s) evidencing such Offered Shares to be surrendered to the Non-Selling Shareholder for transfer to the Non-Selling Shareholder.
(d) Application of Co-Sale Right. Within ten (10) days after expiration of the First Refusal Period or the Extension Period, as applicable, the Selling Shareholder shall give each Non-Selling Shareholder a written notice (the First Refusal Expiration Notice) specifying either (i) that all of the Offered Shares have been subscribed by the Non-Selling Shareholders exercising rights of first refusal, or (ii) that the Non-Selling Shareholders have not subscribed for all of the Offered Shares and that such Offered Shares that have not been subscribed by the Non-Selling Shareholders shall be subject to the co-sale right of the Co-Sale Holder (as defined in Section 5.3 below) described in Section 5.3 below, in which case the First Refusal Expiration Notice shall specify the Co-Sale Pro Rata Portion (as defined in Section 5.3 below) of the Offered Shares for the purpose of such co-sale right.
5.3 Co-Sale Right.
Each of the Non-Selling Shareholders that has not exercised its right of first refusal with respect to the Offered Shares proposed to be sold or transferred or exchanged by the Selling Shareholder (the Co-Sale Holder) shall have the right, exercisable upon written notice to the Selling Shareholder and the Company (the Co- Sale Notice) within thirty (30) days after receipt of the First Refusal Expiration Notice, to participate in the sale of the Offered Shares at the same price and subject to the same terms and conditions as set forth in the Transfer Notice. The Co-Sale Notice shall set forth the number of Shares (on a Fully Diluted Basis) that such Co-Sale Holder wishes to include in such sale or transfer or exchange, which amount shall not exceed the Co- Sale Pro Rata Portion (as defined below) of such Co-Sale Holder. To the extent the Co- Sale Holder exercises such right of co-sale in accordance with the terms and conditions set forth below, the number of the Offered Shares that the Selling Shareholder may sell in the transaction shall be correspondingly reduced. The co-sale right of each Co-Sale Holder shall be subject to the following terms and conditions:
(a) Co-Sale Pro Rata Portion. A Co-Sale Holder may sell all or any part of that number of Ordinary Shares held by it (on a Fully Diluted Basis) that is equal to the product obtained by multiplying (x) the aggregate number of the Offered Shares subject to the co-sale right hereunder by (y) a fraction, the numerator of which is the number of Ordinary Shares (on a Fully Diluted Basis) owned by such Co-Sale Holder at the time of the sale or transfer or exchange and the denominator of which is the combined number of Ordinary Shares (on a Fully Diluted Basis) at the time owned by all the Co-Sale Holders exercising the co-sale right hereunder and the Selling Shareholder (the Co-Sale Pro Rata Portion). The co-sale right under this Section 5.3 shall not apply with respect to any Shares sold or to be sold to the Non-Selling Shareholders under the right of first refusal under Section 5.2.
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(b) Transferred Shares. A Co-Sale Holder shall effect its participation in the sale by promptly delivering to the Selling Shareholder for transfer to the prospective purchaser one or more certificates, properly endorsed for transfer, which represent:
(i) the number of Ordinary Shares which such Co-Sale Holder elects to sell;
(ii) such number of Preferred Shares that are at such time convertible into the number of Ordinary Shares that the Co-Sale Holder elects to sell (on a Fully Diluted Basis); provided in such case that, if the prospective purchaser objects to the sale, transfer or exchange of the Preferred Shares in lieu of the Ordinary Shares, the Co-Sale Holder shall convert such Preferred Shares into Ordinary Shares and deliver certificates for Ordinary Shares as provided in subsection 5.3(b)(i) above. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the prospective purchaser; or
(iii) a combination of the above.
(c) Payment to Co-Sale Holders; Registration of Transfer. The share certificate or certificates that a Co-Sale Holder delivers to the Selling Shareholder pursuant to subsection (b) above shall be transferred to the prospective purchaser upon consummation of the sale of the Offered Shares pursuant to the terms and conditions specified in the Transfer Notice, and the Selling Shareholder shall concurrently therewith remit to the Co-Sale Holder exercising the co-sale right that portion of the sale proceeds to which the Co-Sale Holder is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibits such assignment or otherwise refuses to purchase shares or other securities from the Co-Sale Holders exercising the co-sale right hereunder, the Selling Shareholder shall not sell to such prospective purchaser or purchasers any Offered Shares unless and until, simultaneously with such sale, the Selling Shareholder shall purchase such shares or other securities from the Co-Sale Holders exercising the co-sale right. The Company shall, upon surrendering by the prospective purchaser or the Selling Shareholder of the certificates for the Preferred Shares or Ordinary Shares being transferred from the Co- Sale Holders as provided above, make proper entries in the register of members of the Company and cancel the surrendered certificates and issue any new certificates in the name of the prospective purchase or the Selling Shareholder, as the case may be, as necessary to consummate the transactions in connection with the exercise by the Co- Sale Holder of its co-sale rights under this Section 5.3.
(d) Calculation of Shares. The number of Shares shall be calculated on a Fully Diluted Basis.
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(e) Rights of Investor as a Warrant Holder. Notwithstanding the foregoing, in the event any Warrant Holder exercises its co-sale right in accordance with subsections (a) to (c) above, such Warrant Holder shall have the right to transfer such number of Shares issued or issuable upon exercise of its Warrant equal to its Co- Sale Pro Rata Portion (on a Fully Diluted Basis) at the same price and subject to commercially the same terms and conditions as set forth in the Transfer Notice to the prospective purchaser in accordance with the transfer mechanism as set forth in the Warrants. For the purposes of such transfer or assignment, upon the request of the relevant Warrant Holder, the Company and the Selling Shareholder shall procure the prospective purchaser to subscribe for the respective Co-Sale Pro Rata Portion of the Offered Shares from the Company, and upon receipt of the subscription price (the Co- Sale Subscription Amount of such Warrant Holder) for such Shares from the prospective purchaser by the Company, the Group Companies and the Selling Shareholder shall (i) pay its Co-Sale Subscription Amount to an offshore designee of the Warrant Holder, or (ii) use its commercially reasonable best efforts to assist such Warrant Holder to receive considerations, distributions or proceeds equal to its Co-Sale Subscription Amount in Renminbi within the PRC by the means permitted by applicable Laws (the exchange rate under this subsection (e) shall be the central parity rate of Renminbi against US dollars published by the Peoples Bank of China on the date such payment in Renminbi is made), and for the avoidance of doubt, in no event shall any Warrant Holder be entitled to any duplication of payments (in foreign exchange or in Renminbi) or any claim thereof for its Co-Sale Subscription Amount. Upon completion of the transfer or assignment, such Warrant Holders Warrant shall be amended so as to reflect the transfer or assignment.
(f) Prohibited Transfer. In the event the Selling Shareholder transfers any Equity Securities of the Company in contravention of the co-sale right of the Co-Sale Holders hereunder (a Prohibited Transfer), each of the Co-Sale Holders, in addition to such other remedies as may be available at Law, in equity or hereunder, shall have the right (the Put Right) to sell to the Selling Shareholder, at the same price and subject to commercially the same terms and conditions as set forth in the Transfer Notice, the number of Shares equal to the number of Shares such Co-Sale Holder would have been entitled to transfer to the prospective purchaser hereunder had the Prohibited Transfer been effected pursuant to and in compliance with the terms hereof.
5.4 Right to Transfer.
To the extent the Non-Selling Shareholders do not elect to purchase, and the Co-Sale Holders do not elect to participate in the sale of, the Offered Shares subject to the Transfer Notice, the Selling Shareholder may, not later than ninety (90) days following delivery to the Company and the Non-Selling Shareholders of the Transfer Notice, conclude a transfer of the Offered Shares covered by the Transfer Notice which shall have not been elected to be purchased by the Non-Selling Shareholders and the number of which shall have not been reduced pursuant to the co-sale right of the Co- Sale Holders hereunder, provided that, in each case, (i) such transfer shall be at the same or higher price and upon non-price terms no more favorable to the transferees thereof than those described in the Transfer Notice; and (ii) the third-party transferee of such Offered Shares shall have executed a deed of accession in form and substance approved by the Board (and such approval shall not be unreasonably delayed) and become a party to, and to be bound by, this Agreement (and each other relevant Transaction Documents), assuming all the rights and obligations of the Selling Shareholder under this Agreement (and each other relevant Transaction Documents) with respect to such Offered Shares. Any proposed transfer at lower price or upon non- price terms more favorable to the transferees thereof than or otherwise different from those described in the Transfer Notice, as well as any subsequent proposed transfer of any Offered Shares by the Selling Shareholder, shall again be subject to the right of first refusal of the Non-Selling Shareholders and the co-sale rights of the Co-Sale Holders and shall require compliance by the Selling Shareholder with the procedures described in Sections 5.2 and 5.3 of this Agreement.
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5.5 Permitted Transfers.
The right of first refusal of the Non-Selling Shareholders and the co-sale rights of the Co-Sale Holders hereunder and the restrictions under Section 5.6 shall not apply to (a) a repurchase of Shares from a Selling Shareholder by the Company or its Subsidiaries at a price no greater than that originally paid by such Selling Shareholder for such Shares and pursuant to an agreement containing vesting and/or repurchase provisions approved by the Board; (b) any sale or transfer of Shares to the Company or its Subsidiaries pursuant to any Transaction Document or the terms of the equity incentive plans approved by the Board, (c) if a Selling Shareholder is an entity, any sale or transfer of any Shares to any Affiliate wholly owned by such Selling Shareholder, (d) any bona fide gift or sale or transfer to an Affiliate or other affiliated Persons for tax or estate planning purposes, and (e) any sales or transfer, or acquisition by designated Persons, as permitted or contemplated in the Warrants and Restructuring Documents (each such transfer, a Permitted Transfer, collectively the Permitted Transfers and each foregoing transferee, a Permitted Transferee, collectively the Permitted Transferees), provided, that adequate documentation therefor shall be provided to the Company and each Non-Selling Shareholder and that any Permitted Transferee (other than the Company) shall agree in writing to be bound by this Agreement (and each other relevant Transaction Documents) in place of the relevant transferor and shall execute a deed of accession in form and substance approved by the Board (and such approval shall not be unreasonably delayed) and become a party to, and to be bound by, this Agreement (and each other relevant Transaction Documents) as was the Selling Shareholder and that the Permitted Transferee shall not transfer its Shares except to the Selling Shareholder or other Permitted Transferee(s) of the Selling Shareholder.
5.6 Restriction on Transfers of Shares of the Company.
(a) Notwithstanding anything to the contrary contained herein, without the prior written consent of the Preferred Majority, the Founder, the Controlling Shareholder, or any Shareholder who is manager of any Group Company (or an Affiliate of such manager), shall not, and shall cause his/her/its Permitted Transferees not to, directly or indirectly (a Transfer):
(i) sell, assign, exchange or transfer through one or a series of transactions any Shares or securities of the Company held directly or indirectly by such Person to any other Person before a Qualified IPO or Trade Sale of the Company; or
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(ii) pledge, hypothecate, mortgage, encumber or otherwise dispose of through one or a series of transactions any Shares or securities of the Company held directly or indirectly by such Person to any other Person before a Qualified IPO or Trade Sale of the Company.
(b) Following the Qualified IPO, the Founder, the Controlling Shareholder, or any Shareholder who is senior management of the Company shall comply with all applicable rules and requirements in connection with lock-up or disposal of shares imposed by the stock exchange where the Qualified IPO has occurred.
(c) Any attempt by any Selling Shareholder to transfer any Shares or securities of the Company in violation of this Section 5 shall be void and the Company hereby agrees it will not effect such a transfer nor will it treat any alleged transferee as the holder of such Shares or securities without the prior written approval of the Preferred Majority.
(d) Each of the Selling Shareholders shall not, and shall cause his/her/its Permitted Transferees not to, without the prior written consent of the Board, transfer or dispose of any of his/her/its Shares to any person or entity that at the time of the transfer such Selling Shareholder or Permitted Transferee knows, or has reasonable grounds to know, to be engaging in a business that is in direct competition with the Business of the Group Companies, or to any third party acting on behalf of such Person, unless such transfers or sales are on the open market after the date of a Qualified IPO.
(e) Notwithstanding anything to the contrary contained herein, without the prior written consent of the Preferred Majority:
(i) Except as provided in the Restructuring Documents, the Founder shall not, and shall not cause or permit any other Person to, directly or indirectly, sell, assign, transfer, pledge, mortgage, encumber or otherwise dispose through one or a series of transactions any equity interest held or controlled by him/her in any PRC Company to any Person. Any transfer in violation of this Section shall be void and each PRC Company hereby agrees it will not effect such a transfer nor will it treat any alleged transferee as the holder of such equity interest.
(ii) Except as provided in this Agreement, the Series A Purchase Agreements and the Restructuring Documents, each PRC Company shall not, and the Founders shall cause each PRC Company not to, issue to any Person any Equity Securities of such PRC Company or any options or warrants for, or any other securities exchangeable for or convertible into, such Equity Securities of each PRC Company.
(f) For the avoidance of doubt, any Transfer of Equity Securities of the Controlling Shareholder by the holders of the preferred shares of the Controlling Shareholder shall not deemed a Transfer of Shares of the Company, and shall not be subject to the restrictions under this Section 5.
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5.7 Term.
The provisions under this Section 5 shall terminate upon consummation of a Qualified IPO.
5.8 Legend.
Each certificate representing the Ordinary Shares (excluding the Ordinary Shares issued or issuable pursuant to conversion of the Preferred Shares) shall bear legends in the following form (in addition to any legend required under any other applicable securities laws):
THE ORDINARY SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH IN THE SHAREHOLDERS AGREEMENT, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SHARES.
5.9 Accession to this Agreement.
Each party agrees that, if any Shareholder transfers any Shares to any third party transferee, such Shareholder shall cause such third party transferee to execute a deed of accession in form and substance approved by the Board (and such approval shall not be unreasonably delayed) and become a party to, and to be bound by, this Agreement (and each other relevant Transaction Documents), assuming, subject to Sections 10.1 and 12.5, all the rights and obligations of such Shareholder under this Agreement (and each other relevant Transaction Documents) with respect to the Shares to be transferred.
5.10 Transfer by the Investors.
(a) For the avoidance of doubt, any Investor (including for the avoidance of doubt holders of Warrants) may assign and transfer any Shares of the Company held by it to any Person (other than the transactions restricted pursuant to Section 5.10(b)), provided that such Investor shall notify the Company of such proposed transfer and assignment in advance. The transfer restrictions and requirements provided in this Section 5 (except for Section 5.8 and Section 5.10(b)) shall not apply to any sale or transfer of any Shares by any Investor.
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(b) In the event that any Investor proposes to transfer any of its Preferred Shares, Conversion Shares and/or other Equity Securities of any Group Company (the Transferred Preferred Shares) to (x) any Competitor (as defined below), (y) any Person that is, directly or indirectly, Controlled by any Competitor, or (z) any limited partnership or fund with any Competitor (A) acting as its general partner or fund manager or (B) holding, directly or indirectly, two-thirds (2/3) or more limited partnership interest thereof and also controlling a majority of seats in a decision-making committee, such Investor shall give to the Controlling Shareholder a written notice of the transfer of its Transferred Preferred Shares (the Investor Notice), describing (I) the number of its Transferred Preferred Shares to be transferred, (II) the consideration and the general terms upon which such Investor proposes to transfer such Transferred Preferred Shares, (III) the name and address of the prospective transferee, (IV) to the best knowledge of such Investor, whether such prospective transferee constitutes as a Person that is, directly or indirectly, Controlled by any Competitor, and (V) to the best knowledge of such Investor, whether such prospective transferee constitutes as a limited partnership or fund with any Competitor acting as its general partner or fund manager or holding, directly or indirectly, two-thirds (2/3) or more limited partnership interest thereof and also controlling a majority of seats in a decision-making committee; provided that the foregoing shall not apply to any proposed transfer of Transferred Preferred Shares by any Investor to any of its Affiliates or to any other Person, which holds a passive minority investment in any Competitor, directly or indirectly, and does not possess the power or authority to direct, directly or indirectly, the business, management and policies of such Person other than certain protective rights for minority investors. Each of the holders of the Ordinary Shares, the Controlling Shareholder, the designated Persons of the Controlling Shareholder (collectively, the Buyers, and each a Buyer) shall have one (1) month (the Purchase Period) following receipt of the Investor Notice to elect to purchase all (but not part) the Transferred Preferred Shares at the same price and subject to the same material terms and conditions as described in the Investor Notice, by notifying such Investor in writing before expiration of the Purchase Period as to its decision. In the event the Buyers fail to notify their intention to exercise their right of first refusal within the Purchase Period in accordance with the terms hereof, the right of first refusal of the Buyers shall be terminated. To the extent the Buyers do not elect to purchase or fail to exercise such right of first refusal pursuant to this Section 5.10(b), the Transferred Preferred Shares subject to the Investor Notice, such Investor may conclude a transfer of the Transferred Preferred Shares covered by the Investor Notice which shall have not been elected to be purchased by the Buyers, provided that, in each case, (i) such transfer shall be at the same or higher price and upon non-price terms no more favorable to the transferee thereof than those described in the Investor Notice; and (ii) the transferee of such Transferred Preferred Shares shall have executed a deed of accession and become a party to, and to be bound by, this Agreement, assuming, subject to Sections 10.1 and 12.5, all the rights and obligations of such Investor under this Agreement with respect to such Transferred Preferred Shares. A Competitor shall mean such Persons whose business is in direct competition with the Business of the Group Companies, with the list of which attached as Exhibit B hereto. The list of Competitors may be updated by the Controlling Shareholder once every six (6) months, subject to the prior written consent of the Board, and provided that the total number of the Competitors under the updated list shall in no event exceed five (5).
6. | LIQUIDATION |
6.1 Liquidation Preferences. Upon the occurrence of any Liquidation Event, whether voluntary or involuntary, the assets of the Company legally available for distribution or the proceeds from a Trade Sale (as the case may be) shall be distributed among the holders of the outstanding Shares in the following order and manner:
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(a) In priority to any payment to the holders of Ordinary Shares and any other Shares, pay to each holder of Series A Preferred Shares, an amount per Series A Preferred Share equal to (w) 100% of the Original Series A Preferred Issue Price (As Adjusted), plus (x) annual interest calculated at an interest rate of eight percent (8%) per annum on Original Series A Preferred Issue Price (As Adjusted), compounded annually from the date of the Series A Original Issue Date and up to and including the date of receipt by the holder thereof of the full Series A Liquidation Preference Amount (as defined below), plus (y) all accrued declared but unpaid dividends (collectively, the Series A Liquidation Preference Amount). If the Company has insufficient assets to permit payment of the Series A Liquidation Preference Amount in full to all holders of Series A Preferred Shares, then the assets of the Company shall be distributed to the holders of the Series A Preferred Shares in proportion to the full Series A Liquidation Preference Amount each such holder of Series A Preferred Shares would otherwise be entitled to receive under this Section 6.
(b) After the payment of Series A Liquidation Preference Amount has been fully made in accordance with Section 6.1(a), pay and distribute all of the remaining assets and/or the remaining proceeds resulting from the Trade Sale (as the case may be) of the Company available for distribution ratably among all the Shareholders (including the holders of Series A Preferred Shares who has received its applicable Preference Amount) according to the relative number of Ordinary Shares held by such Shareholders (calculated on a Fully Diluted Basis).
6.2 Liquidation Event. Any of the following events shall be treated as a liquidation (each, a Liquidation Event) under this Section 6 unless waived in writing by the Preferred Majority (i) any voluntary or involuntary liquidation, winding-up, or dissolution of the Company and (ii) any Trade Sale.
6.3 Rights of Investor as a Warrant Holder. For the avoidance of doubt and notwithstanding any other provision of this Agreement and Amended M&AA to the contrary, upon the occurrence of any Liquidation Event, each Warrant Holder shall be entitled to exercise its Warrant (pursuant to its terms and conditions) immediately before the closing of such Liquidation Event, and thereafter enjoy the rights to receive its respective distributions as the holders of relevant Preferred Shares (as the case may be) pursuant to this Section 6 (the Respective Liquidation Amount), and each of the Group Companies and other shareholders shall, upon the request of the relevant Warrant Holder, use its commercially reasonable best efforts to assist such Warrant Holder to exercise its Warrant (pursuant to its terms and conditions) and provide commercially reasonable assistance. In the event that such Warrant Holder has not completed the requisite registrations and/or fillings and obtain relevant approvals from the competent Governmental Authority of the PRC with respect to its outbound direct investment to the Company or fails to exercise its Warrant (pursuant to its terms and conditions) due to other reasons, upon the request of the relevant Warrant Holder, the Group Companies shall (i) pay such amount of the Respective Liquidation Amount to an offshore designee of such Warrant Holder or (ii) use its commercially reasonable best efforts to assist such Warrant Holder to receive considerations, distributions or proceeds equal to its Respective Liquidation Amount in Renminbi within the PRC by the means permitted by applicable Laws (the exchange rate under this Section 6.3 shall be the central parity rate of Renminbi against US dollars published by the Peoples Bank of China on the date such payment in Renminbi is made), and for the avoidance of doubt, in no event shall any Warrant Holder be entitled to any duplication of payments (in foreign exchange or in Renminbi) for its Respective Liquidation Amount.
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7. | REDEMPTION AND PURCHASE OF SHARES |
7.1 The Preferred Shares shall be redeemable at the option of holders of such Preferred Shares in accordance with this Section 7.1:
(a) Optional Redemption
(i) At any time and from time to time,
(1) in the event that the Company has not achieved a Qualified IPO or a Trade Sale approved pursuant to the Amended M&AA and this Agreement on or before September 30, 2022;
(2) in the event that there is any material breach by any Warrantor (as defined in the Series A Purchase Agreements) of any of the Transaction Documents applicable to the Investors (including but not limited to that any Group Company fails to obtain or maintain any consent, license or permit from the competent Government Authority to the extent that (x) such consent, license or permit is necessary for the operation of the Business, (y) such Business has been or may be otherwise expected to be suspended or terminated without such consent, license or permit, at the time of delivery of the Initial Redemption Notice, and (z) such Group Company fails to obtain or maintain such consent, license or permit (or alternatively provide any alternative plan) satisfactory to the Investors within ninety (90) days (or such a longer period of time agreed by the Investors) of the receipt of such Investors written request);
(3) in the event that (A) there is any material breach of the Restructuring Documents by any of the parties thereto, or (B) there is any material adverse change in the regulatory environment, under which circumstance the Restructuring Documents have become or will become invalid, illegal or unenforceable, or (C) the validity and/or enforceability of the Restructuring Documents is being materially impaired, as a result of which impairment the assets and net earnings of the Domestic Company can no longer be consolidated with the assets and net earnings of the Company or can no longer be recorded on the books of the Company for financial reporting purposes in accordance with applicable accounting principles, and without limiting the application of other Redemption Events and in and only in the case of (B) and (C), the Company fails to provide any alternative restructuring plan in such form and substance satisfactory to the Investor, within nine (9) months of the receipt of such Investor written request;
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(4) in the event that there is any Warrantors conviction of breaches or violation of applicable Laws and/or regulations which is reasonably expected to have a Material Adverse Effect (as defined in the Series A Purchase Agreements) on the Group Companies (including but not limited to the violation by the Founder of any criminal Laws, misrepresentation or moral turpitude or violation of applicable securities Law, violation of any anti-corruption/anti-bribery Laws, regulations or policies or any conviction, in each case causing the Founder unable to perform his duties to the Group Companies); or
(5) in the event that any other Shareholder requests the Company to redeem its Shares pursuant to the terms and the conditions of this Agreement, the Amended M&AA or other instrument entitling them to such redemption right (together with the events set out in (1) through (4) collectively, the Redemption Events),
each Investor may require the Company to redeem or purchase, as applicable, up to all of the then outstanding Series A Preferred Shares held by such Investor subject to and in accordance with this Section 7.1.
(ii) Any Investor electing redemption pursuant to Section 7.1(a)(i) shall deliver a written notice (the Initial Redemption Notice) to the Company specifying the intended date of redemption and the number of its Series A Preferred Shares to be redeemed pursuant to this Section 7.1, in which case the Company shall (1) promptly thereafter provide all of the other Investors notice of the Initial Redemption Notice and of their right to participate in such redemption (Redemption Participation Notice), which right is exercisable by each such holder in their own discretion by delivering a written notice (each, a Redemption Notice) to the Company within fifteen (15) days of the giving of such notice by the Company, requesting and specifying redemption of all or part of their Series A Preferred Shares (together with the Series A Preferred Shares requested to be redeemed in the Initial Redemption Notice, the Redeeming Preferred Shares, each, a Redeeming Preferred Share), and (2) subject to Section 7.1(b), pay to each Investor (each, a Redeeming Preferred Shareholder) for which an Initial Redemption Notice or a Redemption Notice has been timely submitted in respect of such Redeeming Preferred Shares, the Redemption Price for each Redeeming Preferred Share, in any event within sixty (60) days of the date of the delivery of Initial Redemption Notice (such date of payment, the Redemption Date).
(iii) In the event of any redemption pursuant to this Section 7.1(a), the redemption price per Series A Preferred Share shall be the sum of (x) the Original Series A Preferred Issue Price (As Adjusted), and (y) interest calculated at an interest rate of eight percent (8%) per annum on Original Series A Preferred Issue Price (As Adjusted), compounded annually from the date of the Series A Original Issue Date and up to and including the date of receipt by the holder thereof of the full redemption amount (the Redemption Price).
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(iv) If the Companys assets and funds which are legally available on the date that any amount of aggregate Redemption Price for the Preferred Shares under this Section 7.1 is due are insufficient to pay in full such amount of aggregate Redemption Price to be paid on such due date, or if the Company is otherwise prohibited by applicable Law from making such redemption, the funds that are legally available shall nonetheless be paid and applied on the Redemption Date in a pro-rata manner against each Redeeming Preferred Share in accordance with the relative full amounts owed thereon, and the shortfall shall be paid and applied from time to time out of legally available funds immediately as and when such funds become legally available in a pro-rata manner against each Redeeming Preferred Share in accordance with the relative remaining amounts owed thereon. Notwithstanding any provision to the contrary in this Agreement and the Amended M&AA, none of any other class of Shares of the Company (except the Preferred Shares) shall be redeemed, and no redemption or repurchase payment for any such other class of Shares of the Company shall be paid, unless and until all of the Preferred Shares have been redeemed and the applicable aggregate Redemption Price for all Preferred Shares have been fully and irrevocably paid pursuant to this Section 7.1, if a Redemption Event occurs. Once the Company has received the Redemption Notice, it shall not, and shall procure that none of the Group Companies shall, take any action which might have the effect of delaying, undermining or restricting the redemption, and the Company shall in good faith use all best efforts to increase as expeditiously as possible the amount of legally available redemption funds including causing any other Group Companies to distribute any and all available funds to the Company for purposes of paying the applicable Redemption Price for all redeeming Preferred Shares on the Redemption Date. If the Company fails (for any reason other than the failure of any Redeeming Preferred Shareholder to take any action or do anything required by such Redeeming Preferred Shareholder in connection with the redemption of such Redeeming Preferred Shareholders shares) to redeem any Preferred Shares on its due date for redemption then, as from such date until the date on which the same are redeemed, the Company shall not declare or pay any dividend nor otherwise make any distribution of or otherwise decrease its profits available for distribution.
(b) For the avoidance of doubt, any Redeeming Preferred Shareholder shall have the right to elect in writing at any time prior to the Redemption Date to convert any or all of its Preferred Shares into Ordinary Shares at the then- effective Applicable Conversion Price (as defined in the Amended M&AA), in which case such Redeeming Preferred Shareholder shall not be entitled to or receive any Redemption Price in respect of any Redeeming Preferred Shares converted (or to be converted).
(c) Before any Redeeming Preferred Shareholder shall be entitled to receive the aggregate Redemption Price under this Section 7.1, such Redeeming Preferred Shareholder shall deliver a duly executed instrument of transfer in favor of the Company and shall surrender such Redeeming Preferred Shareholders certificate or certificates, in each case representing such Redeeming Preferred Shares, to the Company, and thereupon the applicable amount of the aggregate Redemption Price shall be payable to the order of the Person whose name appears on the Register of Members of the Company as the owner of such Shares and each such certificate shall be cancelled after all the Shares represented by such certificate are redeemed. In the event less than all the Shares represented by any such certificate are redeemed, a new certificate shall be promptly issued representing the unredeemed Shares. Unless there has been a default in payment of the applicable amount of the aggregate Redemption Price, upon cancellation of the certificate representing such Redeeming Preferred Shares, all dividends on such Preferred Shares designated for redemption on the Redemption Date shall cease to accrue and all rights of the Redeeming Preferred Shareholders thereof, except the right to receive the applicable amount of the aggregate Redemption Price thereof (including all declared and unpaid dividend up to the applicable Redemption Date), without interest, shall cease and terminate and such Redeeming Preferred Shares shall cease to be issued shares of the Company.
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(d) Without limiting any rights of the Redeeming Preferred Shareholders which are set forth in the Amended M&AA and this Agreement, or are otherwise available under applicable Laws, the balance of any Redeeming Preferred Shares subject to redemption hereunder with respect to which the Company has become obligated to pay the applicable amount of aggregate Redemption Price but which it has not paid in full shall not be redeemed until the Company has paid in full the Redemption Price required with respect to the redemption of such Redeeming Preferred Shares, and prior to such payment and redemption, such Redeeming Preferred Shares shall continue to have all the powers, designations, preferences and relative participating, optional, and other special rights (including rights to dividends) which such Shares had prior to such date. Nothing in this Section 7.1 shall be deemed to limit in any way the obligation of the Company to effect the redemption of any Redeeming Preferred Shares, or to make any payment required, pursuant to this Section 7.1.
(e) For the avoidance of doubt and notwithstanding any other provision of the Transaction Documents to the contrary, upon the occurrence of the Redemption Event, each Warrant Holder shall be entitled to exercise its Warrant (pursuant to its terms and conditions) immediately before the closing of such Redemption Event, and thereafter enjoy the rights to initiate or participate in the redemption by delivering the Initial Redemption Notice or the Redemption Notice to the Company as the holders of relevant Preferred Shares (as the case may be) pursuant to this Section 7.1, and each of the Group Companies and other Shareholders shall, upon the request of the relevant Warrant Holder, use its commercially reasonable best efforts to assist such Warrant Holder to exercise its Warrant (pursuant to its terms and conditions) and provide commercially reasonable assistance. In the event that such Warrant Holder has not completed the requisite registrations and/or fillings and obtain relevant approvals from the competent Governmental Authority of the PRC with respect to its outbound direct investment to the Company or fails to exercise its Warrant (pursuant to its terms and conditions) due to other reasons, upon the request of the relevant Warrant Holder, the Group Companies shall (i) pay the respective Redemption Price to an offshore designee of such Warrant Holder or (ii) use its commercially reasonable best efforts to assist such Warrant Holder to receive considerations, distributions or proceeds equal to its respective Redemption Price in Renminbi within the PRC by the means permitted by applicable Laws (the exchange rate under this subsection (e) shall be the central parity rate of Renminbi against US dollars published by the Peoples Bank of China on the date such payment in Renminbi is made), and for the avoidance of doubt, in no event shall any Warrant Holder be entitled to any duplication of payments (in foreign exchange or in Renminbi) for its respective Redemption Price.
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(f) The Controlling Shareholder hereby irrevocably and unconditionally guarantees to the Redeeming Preferred Shareholders the proper and punctual performance by the Company of the Companys obligations under this Section 7. The Controlling Shareholder further undertakes and covenants to the Redeeming Preferred Shareholders that, upon the occurrence of any event set forth in Section 7(a)(i), and if the Companys assets or funds legally available are insufficient to pay the Redemption Price of such Redeeming Preferred Shareholders in full, such Redeeming Preferred Shareholders shall have a put option to sell to the Controlling Shareholder or any party designated by the foregoing all or any portion of the Redeeming Preferred Shares which has not been redeemed by the Company at the per share price equal to the Redemption Price. The Founder further undertakes and covenants to the Redeeming Preferred Shareholders that, upon the occurrence of any event set forth in Section 7(a)(i), and if the Companys assets or funds legally available are insufficient to pay the Redemption Price of such Redeeming Preferred Shareholders in full and the Controlling Shareholder fails to pay all the outstanding Redemption Price, such Redeeming Preferred Shareholders shall have a put option to sell to the Founder or any party designated by the foregoing all or any portion of the Redeeming Preferred Shares which has not been redeemed by the Company and purchased by the Controlling Shareholder at the per share price equal to the Redemption Price. For the avoidance of doubt, the obligations of the Company, the Controlling Shareholder and the Founder under this Section 7 shall be on a joint and several basis. Notwithstanding the foregoing, the obligations of each of the Controlling Shareholder and the Founder hereunder shall be limited to the value of the Shares of the Company directly or indirectly owned by it/him and the proceeds received by the foregoing by selling such Shares of the Company.
8. | PROTECTIVE PROVISIONS |
8.1 Matters Requiring Consent of the Majority Shareholders.
In addition to any other vote or consent required elsewhere in this Agreement, the Amended M&AA or by any applicable statute, each Group Company shall not, and the Controlling Shareholder shall procure that each Group Company shall not, take any of the following actions without the affirmative vote or prior written consent of the Majority Shareholders:
(a) adoption, change or waiver of any provision of the memorandum and articles of association or other charter documents of any Group Company;
(b) any increase, decrease, cancellation, or alteration of authorized share capital of any Group Company;
(c) any Trade Sale, Liquidation Event, reorganization, split or any filing by or against any Group Company for the appointment of a receiver, administrator or other form of external manager, or the winding up, liquidation, bankruptcy or insolvency of any Group Company;
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(d) change the number or composition of the board of directors of any Group Company, or establishment of any committees of the board of directors of any Group Company;
(e) any amendment or change of the rights, preferences, privileges or powers of, or the restrictions provided for the benefit of the Preferred Shares;
(f) any authorization, creation or issuance by the Company of any class or series of securities, any instruments that are convertible into securities, or the reclassification of any outstanding securities into other securities (in each case excluding the issuance of Equity Securities described in any of subsections (a) to (e) of Section 4.2 and subsection (g) of Section 4.2);
(g) any repurchase, redemption or cancellation of any Equity Securities of the Company other than pursuant to (x) the respective redemption right of the holders of the Preferred Shares as provided in this Agreement and the Amended M&AA, (y) contractual rights to repurchase Ordinary Shares from the employees, officers, directors or consultants of the Group Companies upon termination of their employment or services pursuant to an agreement containing vesting and/or repurchase provisions approved pursuant to Section 8.1 of this Agreement, or (z) the Warrants; and
(h) adoption, termination or material amendment of any employee stock option plan and determination of terms and conditions thereof (including total number of shares to be granted, exercise price and vesting schedule), or any other agreement containing vesting and/or repurchase provisions to repurchase Ordinary Shares from the employees, officers, directors or consultants of the Group Companies upon termination of their employment or services,
provided that, where a special resolution or an ordinary resolution, as the case may be, is required by applicable statute to approve any of the matters listed above, and such matter has not received the affirmative vote or prior written consent of the Majority Shareholders, then the Shares held by the holders who voted against the special resolution or the ordinary resolution, as the case may be, shall together carry the number of votes equal to the votes of all members who voted for the resolution plus one.
8.2 Voting With Warrant Holders.
For the purpose of all shareholders meetings of the Company, and voting on corporate matters in accordance with the Amended M&AA and this Agreement in respect of the Company, all Parties hereto agree to convene a meeting of all holders of Equity Securities of the Company, including the Warrant Holders (such meeting, a Combined Meeting), prior to any shareholders meeting of the Company or action of the Shareholders of the Company by resolution in writing or written consent, in order to solicit the votes of all holders of Shares of the Company, including the Warrant Holders, calculated on a Fully Diluted Basis. The provisions of this Agreement and the Amended M&AA applicable to shareholders meetings of the Company shall apply to any such Combined Meeting, mutatis mutandis, unless otherwise agreed by such holders who are entitled to participate in the Combined Meeting. Each Party hereby agrees to exercise its respective voting rights: (i) at any shareholders meeting of the Company in the same proportion and manner as the votes of each class of Shares of the Company were cast (on a Fully Diluted Basis) at the Combined Meeting held to consider the same subject matter as such shareholders meeting; (ii) upon a resolution in writing or written consent of the shareholders of the Company, in such manner as to ensure such a resolution in writing or written consent is consistent with the decision of the applicable Combined Meeting; or (iii) to, subject to applicable Laws, procure the Board of the Company and the board of directors of the Domestic Company to adopt the same resolution on the same matters resolved by the Combined Meeting, so as to have the resolutions made by the Combined Meeting fully honored and executed.
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8.3 Qualified IPO.
Each Shareholder agrees that, notwithstanding anything set forth in Section 8.1, in the event that a Qualified IPO is to be consummated, such Shareholder will vote, and to the extent applicable cause any Director appointed by it to vote (i) in favor of such Qualified IPO and (ii) against any action, agreement or transaction that is intended to prevent, impede, or, in any material respect, interfere with, delay or adversely affect, such Qualified IPO.
8.4 Termination of Protective Provisions.
The provisions under Sections 8.1, 8.2 and 8.3 shall be terminated upon consummation of a Qualified IPO.
9. | CONFIDENTIALITY AND NON-DISCLOSURE |
9.1 Disclosure of Terms.
The terms and conditions of this Agreement and the other Transaction Documents, any term sheet or memorandum of understanding entered into pursuant to the transactions contemplated hereby and thereby, all exhibits and schedules attached hereto and thereto, the transactions contemplated hereby and thereby, the documents, materials, and other information obtained by the holders of the Preferred Shares upon exercising the Information Rights and Inspection Rights (collectively, the Financing Terms), including their existence and all information of a confidential nature furnished by any party hereto and by representatives of such party to any other party hereto or any of the representatives of such party shall be considered confidential information (the Confidential Information) and shall not be disclosed by any party hereto to any third party except in accordance with the provisions set forth below.
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9.2 Press Release.
No announcement regarding any of the Financing Terms in a press release, conference, advertisement, announcement, professional or trade publication, mass marketing materials or otherwise to the general public may be made without the prior consent of the Board.
Without prior written consent of CICC, under no circumstance shall any other Party hereto (i) publicly use 中国国际金融股份有限公司, 中金,CICC, China International Corporation Limited or any names, tradenames, trademarks, service marks, symbols or any other short names, abbreviations or logos similar to those aforementioned that are owned or used by any Affiliate of CICC, or use the name of the partners or the employees of CICC or any of its Affiliates (but such name that is duplicate and does not refer to the partners or the employees of CICC or any of its Affiliates based on the judgment of good faith, is not subject to this restriction) for advertising, promotion or other purposes; or (ii) directly or indirectly declare that any product or service provided by it have been licensed and supported by CICC or its Affiliates.
9.3 Permitted Disclosures.
Notwithstanding the foregoing, the Company and the Investors may disclose (i) the Confidential Information to its Affiliates, its or its Affiliates current or bona fide prospective investors, and their respective directors, officers, employees, bankers, lenders, accountants, legal counsels, business partners or representatives or advisors who need to know such information, in each case only where such Persons are informed of the confidential nature of the Confidential Information and are under appropriate nondisclosure obligations substantially similar to those set forth in this Section 9, provided, however, that the Company may not disclose any Financing Terms (including any terms of Sections 4 and 5 of this Agreement) to any of its prospective investors, Affiliates and their respective directors, officers, employees, bankers, lenders, accountants, legal counsels, business partners or representatives or advisors unless such prospective investors have executed a term sheet or similar instrument with the Company, (ii) such Confidential Information as is required to be disclosed pursuant to routine examination requests from governmental authorities with authority to regulate such partys operations, in each case as such party reasonably deems appropriate, and (iii) the Confidential Information to any Person to which disclosure is approved in writing by the other parties hereto. Any Party hereto may also provide disclosure in order to comply with applicable Laws, as set forth in Section 9.4 below.
9.4 Legally Compelled Disclosure.
Except as set forth in Section 9.2 above, in the event that any Party is requested or becomes legally compelled (including pursuant to any applicable tax, securities, or other Laws and regulations of any jurisdiction) to disclose any Confidential Information, such party (the Disclosing Party) shall, to the extent legally permitted and reasonably possible, provide the other parties hereto with prompt written notice of that fact and consult with the other parties hereto regarding such disclosure. At the request of the other parties, the Disclosing Party shall, to the extent reasonably possible and with the cooperation and reasonable efforts of the other parties, seek a protective order, confidential treatment or other appropriate remedy. In any event, the Disclosing Party shall furnish only that portion of the information that is legally required and shall exercise reasonable efforts to obtain reliable assurance that confidential treatment will be accorded to such information.
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9.5 Other Exceptions.
Notwithstanding any other provision of this 9 10, the confidentiality obligations of the parties shall not apply to: (i) information which a restricted party learns from a third party having the right to make the disclosure, provided the restricted party complies with any restrictions imposed by the third party; (ii) information which is rightfully in the restricted partys possession prior to the time of disclosure by the protected party and not acquired by the restricted party under a confidentiality obligation; or (iii) information which enters the public domain without breach of confidentiality by the restricted party.
9.6 Other Information.
The provisions of this Section 9 shall be in addition to, and not in substitution for, the provisions of any separate nondisclosure agreement executed by any of the parties with respect to the transactions contemplated hereby.
9.7 Survival.
The obligations of each Party hereto under this Section 9 shall survive and continue to be binding upon such Party regardless of the termination of this Agreement.
10. | ASSIGNMENT AND AMENDMENT |
10.1 Assignment.
Notwithstanding anything herein to the contrary:
(a) Information Rights, Inspection Rights. The rights of any Investor under Section 2.1 may be assigned to any holder of Preferred Shares in connection with such holders acquisition of Preferred Shares from such Investor to the extent that such acquisition is permitted under this Agreement; provided, however, that no party may be assigned any of the foregoing rights (except for assignment of any of the foregoing rights by any Investor to its Affiliate) unless the Company is given written notice by the assigning party stating the name and address of the assignee and identifying the securities of the Company as to which the rights in question are being assigned; and provided further, that any such assignee shall receive such assigned rights subject to all the terms and conditions of this Agreement, including the provisions of this Section 10.
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(b) Rights of Participation; Right of First Refusal; Co-Sale Rights; Protective Provisions; other Preference Rights. In connection with a transfer of any Shares by any Investor in accordance with Sections 5.9 and 5.10, (i) the rights of such Investor under Sections 4, 5, 6 and 7 with respect to such Shares are fully assignable to the transferee of such transfer, and (ii) the rights of such Investor under Sections 2.2 and 8 with respect to such Shares, (A) if the transfer is made to the Investors Affiliates, are fully assignable to such Affiliates, and (B) if the transfer is made to any Persons other than Investors Affiliates, shall not be assignable until the Investor obtains the Companys prior written consent; provided, however, that no party may be assigned any of the foregoing rights (except for any assignment of any of the foregoing rights by any Investor to its Affiliate) unless the Company is given written notice by such assigning party at the time of such assignment, stating the name and address of the assignee and identifying the securities of the Company as to which the rights in question are being assigned; and provided further, that any such assignee shall receive such assigned rights subject to all the terms and conditions of this Agreement, including the provisions of this Section 10.
10.2 Amendment of Rights.
Any provision in this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only by the written consent of
(i) as to the Company, only by the Company; (ii) as to the Investors, only by the Investors that would be affected by such amendment; and (iii) as to the Controlling Shareholder, only by the Controlling Shareholder; provided, however, that any of the Persons described in clauses (i) to (iii) of this Section 10.2 may waive any of its/his/her own rights hereunder without obtaining the consent of any other Shareholders. Any amendment or waiver effected in accordance with this Section 10 shall be binding upon the Company, the Investors, the Controlling Shareholder and each holder of the Shares and their respective Permitted Transferees.
11. | OTHER UNDERTAKINGS OF THE COMPANY |
11.1 Non-Competition.
(a) Each of the Founder and the Controlling Shareholder undertakes and covenants to the Investors that commencing from the Effective Date until twenty four (24) months after the date he/it ceases to beneficially own any shares or securities of any Group Company (the Non-Competition Period), the Neither the Founder nor the Controlling Shareholder will, without the prior written consent of the Investors, either on his/its own account or through any of his/its Affiliates (for the avoidance of doubt, other than through any Group Company) or in conjunction with or on behalf of any other Person: (i) carry out, be engaged, concerned or interested directly or indirectly whether as shareholder, director, employee, partner, agent in any business in direct competition with the principal business engaged by the Group Companies taken as a whole except for a passive investment of less than one percent (1%) of the stock of any publicly traded company that engages in the foregoing; and (ii) solicit or entice away or attempt to solicit or entice away from any Group Company, any Person, firm, company or organization who is an employee, customer, client, representative or agent of such Group Company.
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(b) During the Non-Competition Period, in the event any entity directly or indirectly established or managed by the Founder or Controlling Shareholder (other than any Group Company), engages or will engage in any business which is the same or similar to or otherwise directly competes with the principal business of the Group Companies, he/it shall transfer such lawful business to a third party that is not an Affiliate within three (3) months after the Closing Date.
11.2 Tax Matters.
(a) The Company shall not, without the written consent of the Majority Shareholders, issue or transfer securities in the Company to any investor if following such issuance or transfer the Company, in the determination of counsel or accountants for any Investor, would be a Controlled Foreign Corporation (CFC) as defined in the U.S. Internal Revenue Code of 1986, as amended (or any successor thereto) (the Code) with respect to the securities held by investor. No later than two (2) months following the end of each Company taxable year, the Company shall provide the following information to each Investor: (i) the Companys capitalization table as of the end of the last day of such taxable year and (ii) a report regarding the Companys status as a CFC. In addition, the Company shall provide each Investor with access to such other Company information as may be required by such Investor to determine the Companys status as a CFC to determine whether such Investor is required to report its pro rata portion of the Companys Subpart F income (as defined in Section 952 of the Code) on its United States federal income tax return, or to allow such Investor to otherwise comply with applicable United States federal income tax laws. The Company shall make due inquiry with its tax advisors on at least an annual basis regarding its status as a CFC and regarding whether any portion of the Companys income is Subpart F income. In the event that the Company is determined by the Companys tax advisors or by counsel or accountants for any Investor to be a CFC with respect to the securities held by such Investor, the Company agrees to use commercially reasonable efforts to avoid generating Subpart F income. In the event that the Company is reasonably determined by counsel or accountants for any Investor to be a CFC for any taxable year with respect to the securities held by such Investor, the Company agrees, to the extent permitted by applicable Laws, to make dividend distributions to such Investor in an amount equal to the reasonably estimated amount of income tax on any income deemed distributed to such Investor for such year pursuant to Section 951(a) of the Code (for the avoidance of doubt, after giving effect to any applicable reduction therein).
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(b) The Company will not be at any time during the calendar year in which the Closing (as defined in the Series A Purchase Agreements) occurs a passive foreign investment company within the meaning of Section 1297 of the Code (a PFIC). The Company shall use its best efforts to avoid being a PFIC. The Company shall make due inquiry with its tax advisors on at least an annual basis regarding its status as a PFIC, and if the Company is informed by its tax advisors that it has become a PFIC, or that there is a reasonable likelihood of the Company being classified as a PFIC for any taxable year, the Company shall promptly notify each Investor of such status or risk, as the case may be. In connection with a Qualified Electing Fund election made by any Investor pursuant to Section 1295 of the Code or a Protective Statement filed by such Investor pursuant to Treasury Regulation Section 1.1295-3, as amended (or any successor thereto), the Company shall provide annual financial information to any Investor in the form satisfactory to such Investor as soon as reasonably practicable following the end of each taxable year of such Investor (but in no event later than 90 days following the end of each such taxable year), and shall provide such Investor with access to such other Company information as may be required for purposes of filing U.S. federal income tax returns in connection with such Qualified Electing Fund election or Protective Statement. In the event that any Investor who has made a Qualified Electing Fund election must include in its gross income for a particular taxable year its pro rata share of the Companys earnings and profits pursuant to Section 1293 of the Code, the Company agrees, to the extent permitted by applicable Laws, to make a dividend distribution to such Investor (no later than 90 days following the end of such Investors taxable year or, if later, 90 days after the Company is informed by such Investor that such Investor has been required to recognize such an income inclusion) in an amount equal to the reasonably estimated amount of income tax on of the amount so included by the Investors.
(c) The Company shall take such actions, including making an election to be treated as a corporation or refraining from making an election to be treated as a partnership, as may be required to ensure that at all times the Company is treated as corporation for United States federal income tax purposes.
(d) Subject to Investors provision of information necessary for the Company to make such determination, the Company shall make due inquiry with its tax advisors on at least an annual basis regarding whether any Investors interest in the Company is subject to the reporting requirements of either or both of Sections 6038 and 6038B (and the Company shall duly inform such Investor of the results of such determination), and in the event that the Companys tax advisors or any Investors tax advisors determine that such Investors interest in the Company is subject to any such reporting requirements, the Company agrees, upon a request from such Investor, to provide such information to such Investor as may be necessary to fulfill such Investors obligations thereunder.
11.3 Control of Subsidiaries.
(a) All material aspects of the formation, maintenance and compliance of any direct or indirect Subsidiary or entity Controlled by the Company, whether now in existence or formed in the future, shall be subject to the review and approval by the Board and the Company shall promptly provide the Investors with copies of all material related documents and correspondence.
(b) The Company shall at any time institute and shall keep in place arrangements reasonably satisfactory to the Board such that the Company will be permitted to properly consolidate the financial results for any direct or indirect Subsidiary of the Company (including the PRC Companies) in consolidated financial statements for the Company prepared under IFRS or U.S. GAAP.
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(c) The Company shall take all necessary actions to maintain any direct or indirect Subsidiary or entity Controlled by it, whether now in existence or formed in the future, as is necessary to conduct the Business as conducted or as proposed to be conducted.
(d) The Company shall use its best efforts to cause any direct or indirect Subsidiary, whether now in existence or formed in the future, to comply in all material respects with all applicable Laws.
11.4 Restructuring Documents.
Each Group Company and the Controlling Shareholder, hereby jointly and severally represent, warrant and covenant the following to the Investors:
(a) As of the Effective Date, and during the term of the relevant Restructuring Documents, each of the statements contained in this Section 11.4(a) is true, accurate and complete:
(i) Each Group Company has the legal right, power and authority (corporate and other) to enter into and perform its obligations under each Restructuring Document to which it is a party and has taken all necessary corporate action to authorize the execution, delivery and performance of, and has authorized, executed and delivered, each Restructuring Document to which it is a party.
(ii) Each Restructuring Document constitutes a valid and legally binding obligation of the Group Companies that are a party thereto enforceable in accordance with its terms, except (x) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other Laws of general application relating to or affecting the enforcement of creditors rights generally, (y) as limited by Laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
(iii) The execution and delivery by any Group Company of each Restructuring Document to which it is a party, and the performance by such party of its obligations thereunder and the consummation by it of the transactions contemplated therein shall not (x) result in any violation of, be in conflict with, or constitute a default under, with or without the passage of time or the giving of notice, (A) any provision of its constitutional documents as in effect at the date hereof, or (B) any applicable Law in any material respect, or any Material Contract, (y) accelerate, or constitute an event entitling any Person to accelerate, the maturity of any indebtedness or other liability of any Group Company or to increase the rate of interest presently in effect with respect to any indebtedness of any Group Company (other than those contemplated or intended by the Transaction Documents) or (z) result in the creation of any lien, claim, charge or encumbrance upon any of the properties or assets of any Group Company.
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(iv) None of the Group Companies is in breach or default in the performance or observance of any of the terms or provisions of any Restructuring Document. None of the Group Companies has sent any communication regarding termination of or intention not to renew any Restructuring Document, and no such termination or non-renewal has been threatened by any of the Group Companies.
(b) As of the Effective Date, each of the statements contained in this Section 11.4(b) is true, accurate and complete:
(i) All permits and consents required to enter into the Restructuring Documents have been made or unconditionally obtained in writing, and no such permit or consent has been withdrawn or be subject to any condition precedent which has not been fulfilled or performed.
(ii) Each Restructuring Document is in full force and effect and no party to any Restructuring Document is in breach or default in the performance or observance of any of the terms or provisions of such Restructuring Document. To the knowledge of the Company after due inquiry, none of the parties to any Restructuring Document has sent or received any communication regarding termination of or intention not to renew any Restructuring Document, and no such termination or non-renewal has been threatened by any of the parties thereto.
11.5 Compliance with Law.
The Group Companies shall, and the Controlling Shareholder shall cause the Group Companies to, comply with in all material aspects (i) all applicable PRC Laws and regulations including but not limited to Circular 37 and other applicable SAFE rules and regulations, and (ii) the US Foreign Corrupt Practices Act and PRC Anti-Corruption Laws, as amended, on an ongoing basis.
11.6 Investor Favorable Terms.
In the event the Company grants or has granted as of the date hereof any other existing investors or shareholders any rights, privileges or protections more favorable than those granted to any Investor, such Investor shall, at its option, be entitled to the same rights, privileges or protections ranked pari passu with such other existing investors or shareholders.
11.7 IPO.
The Parties agree that a firm commitment underwritten public offering of the Controlling Shareholder does not obligate the Controlling Shareholder in any way to consolidate any or all of the Group Companies into the group structure of the Controlling Shareholder pursuant to such public offering. Any determination of such consolidation will be made by the Controlling Shareholder in accordance with the agreements binding on it in this regard.
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11.8 Termination.
The provisions under this Section 11 shall be terminated upon consummation of a Qualified IPO.
12. | GENERAL PROVISIONS |
12.1 Notices.
Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Agreement shall be in writing and shall be conclusively deemed to have been duly given (a) when hand delivered to the other party, upon delivery; (b) when sent by facsimile at the number set forth in Schedule of Notice hereto, upon receipt of confirmation of error-free transmission; (c) when sent by electronic mail at the email address set forth in Schedule of Notice hereto, on the same day that it was sent and it shall not be necessary for the receipt of the electronic mail to be acknowledged by the recipient, (d) seven (7) Business Days after deposit in the mail as air mail or certified mail, receipt requested, postage prepaid and addressed to the other party as set forth in Schedule of Notice; or (e) three (3) Business Days after deposit with an international overnight delivery service, postage prepaid, addressed to the parties as set forth in Schedule of Notice with next Business Day delivery guaranteed, provided that the sending party receives a confirmation of delivery from the delivery service provider.
Each person making a communication hereunder by facsimile shall promptly confirm by telephone to the person to whom such communication was addressed for each communication made by it by facsimile pursuant hereto but the absence of such confirmation shall not affect the validity of any such communication. A party may change or supplement the addresses given in Schedule of Notice, or designate additional addresses, for purposes of this Section 12.1 by giving the other party written notice of the new address in the manner set forth above.
12.2 Entire Agreement.
This Agreement, the Series A Purchase Agreements and any other Transaction Document, together with all the exhibits hereto and thereto, constitute and contain the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes any and all prior negotiations, correspondence, agreements, understandings, duties or obligations between the parties respecting the subject matter hereof. For the avoidance of doubt, the Parties agree that this Agreement shall supersede and replace the prior shareholders agreement(s) (and other legal documents of the same nature) of any Group Company, including the Prior Agreement.
12.3 Severability.
If any provision of this Agreement is found to be invalid or unenforceable, then such provision shall be construed, to the extent feasible, so as to render the provision enforceable and to provide for the consummation of the transactions contemplated hereby on substantially the same terms as originally set forth herein, and if no feasible interpretation would save such provision, it shall be severed from the remainder of this Agreement, which shall remain in full force and effect unless the severed provision is essential to the rights or benefits intended by the parties. In such event, the parties shall use best efforts to negotiate, in good faith, a substitute, valid and enforceable provision or agreement which most nearly effects the parties intent in entering into this Agreement.
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12.4 Third Parties.
Nothing in this Agreement, express or implied, is intended to confer upon any Person, other than the parties hereto and their permitted successors and assigns any rights or remedies under or by reason of this Agreement.
12.5 Successors and Assigns.
Subject to the provisions of Section 10.1, the provisions of this Agreement shall inure to the benefit of, and shall be binding upon, the successors and permitted assigns of the parties hereto. None of the Controlling Shareholder, the Investors or the Group Companies or other Parties hereto may assign its rights or delegate its obligations under this Agreement without the written consent of the other Parties except in connection with a transfer in compliance with Section 5 of this Agreement and in compliance with Section 10.1. For the avoidance of doubt, subject to Sections 5.10 and 10.1 of this Agreement, any Investor shall be entitled to assign all or part of its rights and/or obligations under this Agreement to any of its Affiliates without the written consent of any other Party, and the Company and other Parties hereto shall facilitate to effectuate such assignment upon such Investors request.
12.6 Interpretation; Captions.
This Agreement shall be construed according to its fair language. The rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in interpreting this Agreement. The captions to sections of this Agreement have been inserted for identification and reference purposes only and shall not be used to construe or interpret this Agreement. Unless otherwise expressly provided herein, all references to Sections and Exhibits herein are to Sections and Exhibits of this Agreement.
12.7 Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via electronic mail or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
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12.8 Adjustments for Share Splits, Etc.
Wherever in this Agreement there is a reference to a specific number of shares of the Preferred Shares, Ordinary Shares of the Company, then, upon the occurrence of any subdivision, combination or share dividend of the Preferred Shares, or Ordinary Shares, the specific number of shares so referenced in this Agreement shall automatically be proportionally adjusted to reflect the effect on the outstanding shares of such class or series of shares by such subdivision, combination or share dividend.
12.9 Aggregation of Shares.
All the Preferred Shares, or Ordinary Shares held or acquired by the affiliated entities or persons (as defined in Rule 144 under the Securities Act) shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.
12.10 Shareholders Agreement to Control.
If and to the extent that there are inconsistencies between the provisions of this Agreement and those of the Amended M&AA, the terms of this Agreement shall prevail as between the parties hereto only (with the exception of the Company), who hereby undertake to take all actions necessary or advisable, as promptly as practicable after the discovery of such inconsistency, to amend the Amended M&AA so as to eliminate such inconsistency to the fullest extent as permitted by the applicable Laws.
12.11 Governing Law.
This Agreement shall be governed by and construed under the Laws of Hong Kong, without regard to principles of conflict of laws thereunder.
12.12 Dispute Resolution.
Each of the parties hereto irrevocably (i) agrees that any dispute or controversy arising out of, relating to, or concerning any interpretation, construction, performance or breach of this Agreement, shall be settled by arbitration to be held in Hong Kong which shall be administered by the Hong Kong International Arbitration Centre (HKIAC) in accordance with the Hong Kong International Arbitration Centre Administered Arbitration Rules in force at the time of the commencement of the arbitration, (ii) waives, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the laying of venue of any such arbitration, and (iii) submits to the exclusive jurisdiction of Hong Kong in any such arbitration. There shall be three (3) arbitrators. The claimant shall select one (1) arbitrator, and the respondent shall select one (1) arbitrator. The third arbitrator, who shall be the presiding arbitrator, shall be jointly appointed by the claimant and respondent. If either the claimant or the respondent fails to select the third arbitrator or the parties fail to agree on the choice of the third arbitrator, HKIAC shall make the appointment on their behalf. The arbitration shall be conducted in English. The decision of the arbitration tribunal shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitration tribunals decision in any court having jurisdiction. The parties to the arbitration shall each pay an equal share of the costs and expenses of such arbitration, and each party shall separately pay for its respective counsel fees and expenses; provided, however, that the prevailing party in any such arbitration shall be entitled to recover from the non-prevailing party its reasonable costs and attorney fees. The parties acknowledge and agree that, in addition to contract damages, the arbitrator may award provisional and final equitable relief, including injunctions, specific performance, and lost profits. The validity, construction and interpretation of this dispute resolution clause shall be governed by the Laws of Hong Kong.
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12.13 Assistance of Group Companies.
Notwithstanding anything to the contrary contained in this Agreement, the Company and its Subsidiaries shall not be required to take any actions specified in this Agreement or otherwise assist any Warrant Holder to exercise its rights as a deemed holder of Shares to receive considerations, distributions or proceeds in Renminbi within the PRC if such action or assistance or any part or step of it is not permitted by, or could result in any breach or violation of, any applicable Law, or any charter documents of any Group Company which will incur liabilities of punishment or fines on any Group Company.
12.14 Warrant Holders.
Each Party hereto acknowledges and agrees to the arrangements and commitments set forth in paragraph D of the recital of this Agreement. Each Warrant Holder hereby acknowledges that it will not be registered as a holder of any Shares of the Company (including on any register of members) or receive any certificate evidencing any Shares until and unless it completes its exercise of the relevant Warrant. In the event that any Shares issued upon exercise of the Warrant are designated to be held by any Affiliate(s) of the Shareholder that is the Warrant Holder making such exercise or acquisition thereunder, as required or permitted under the relevant Warrant, (i) any reference in this Agreement to such Shareholder (including definitions covering such holder of the Ordinary Shares, and such Investor, as the case maybe) shall be read as referring to such new designated holder(s) as well; and (ii) such designated holders shall execute a deed of accession in form and substance approved by the Board (and such approval shall not be unreasonably delayed) and become a party to, and to be bound by, this Agreement (and as applicable, each other relevant Transaction Documents), assuming all the rights and obligations of such Investor under this Agreement (and as applicable, each other relevant Transaction Documents) with respect to such shares so designated to such holder; provided that such designated holder(s) shall not have any deemed shareholder rights associated with such Shareholder in its capacity of a Warrant Holder.
In the event (i) any Warrant Holder fails to obtain the relevant approvals from the competent Governmental Authority for its outbound investment in the Company to hold the shares issued or issuable upon exercise of its Warrant, or (ii) any Warrant remains unexercised, in each case of clauses (i) and (ii), before the date when the Company determines to initiate an initial public offering, the Company and such Warrant Holder, shall use their best efforts to negotiate and determine the alternative mechanism then suggested by the underwriters or sponsors of such initial public offering to deal with such Warrant.
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Except as otherwise provided in this Agreement or any other Transaction Documents and subject to Sections 6 and 7.1, the Warrant Holders shall have the right to participate in or receive payments from Group Companies in connection with any redemption, liquidation or distribution of the Company, or other economic rights that would otherwise entitle them to receive payments from the Company, in respect of any Warrant Shares (or the corresponding portion of Warrant) if and when (i) the exercise price for such Warrant Shares has been paid in full or deducted from payments pursuant to the terms and conditions of the relevant Warrant or (ii) the corresponding amount of the relevant Onshore Investment Agreements remains outstanding; and for the avoidance of doubt, in no event shall any Warrant Holder be entitled to any duplication of payments (in foreign exchange or in Renminbi) for such Respective Liquidation Amount, Redemption Price, distribution or other economic rights (for the avoidance of doubt, including duplication due to the payment as the consideration of the corresponding Advanced Investment Funds (and/or fees associated therewith) which are required to provide to the Domestic Company under the Onshore Investment Agreements, as applicable).
For the avoidance of doubt and notwithstanding any other provision of any Transaction Document or Warrant to the contrary, upon the consummation of a Qualified IPO, any outstanding Warrant with an exercise period surviving the Qualified IPO shall only be exercisable for Ordinary Shares instead of any Preferred Shares.
12.15 Effective and Termination.
(a) Notwithstanding anything to the contrary contained in any Transaction Document, this Agreement shall only become effective upon the occurrence of the closing under the Bain Series A Purchase Agreement (the Effective Date). In the event that the Bain Series A Purchase Agreement is terminated in accordance with its terms prior to such closing, this Agreement and all rights and obligations of the parties hereunder shall automatically terminate and be of no further force or effect, in which case the Prior Agreement shall remain in full force and effect.
(b) This Agreement may be terminated by written consent of each of the Parties hereto.
(c) With respect to any Party other than the Group Companies, it shall cease to be a party to this Agreement when it ceases to hold any Equity Securities of the Company (including any Warrants).
(d) In both cases of Section 12.15(b) and Section 12.15(c), the obligations of each Party under Section 9 (Confidentiality and Non-Disclosure) shall survive and continue to be binding.
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.
THE COMPANY: | ||
Dada Auto Inc. | ||
By: | /s/ WANG Yang | |
Name: WANG Yang | ||
Title: Director | ||
HK COMPANY: | ||
Fleetin HK Limited | ||
By: | /s/ DAI Zhen | |
Name: DAI Zhen | ||
Title: Director |
SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.
WFOE: | ||
Zhejiang Anji Intelligent Electronics Holding Co., Ltd. | ||
(浙江安吉智电控股有限公司)(Seal) | ||
By: | /s/ WANG Yang | |
Name: WANG Yang | ||
Title: Legal Representative | ||
DOMESTIC COMPANY | ||
Kuaidian Power (Beijing) New Energy Technology Co., Ltd. | ||
(快电动力 (北京) 新能源科技有限公司)(Seal) | ||
By: | ZHENG Linyi | |
Name: ZHENG Linyi | ||
Title: Legal Representative |
SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.
MAJOR PRC SUBSIDIARIES: | ||
北京车主邦新能源科技有限公司(Seal) | ||
By: | /s/ DAI Zhen | |
Name: DAI Zhen | ||
Title: Legal Representative | ||
智电优通科技有限公司(Seal) | ||
By: | /s/ DAI Zhen | |
Name: DAI Zhen | ||
Title: Legal Representative |
SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.
CONTROLLING SHAREHOLDER: | ||
Newlinks Technology Limited | ||
By: | /s/ DAI Zhen | |
Name: DAI Zhen | ||
Title: Director |
SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.
FOUNDER: | ||
DAI Zhen (戴震) | ||
By: | /s/ DAI Zhen |
SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.
INVESTORS: | ||
Shenzhen Haiju Xinneng Investment Partnership L.P. | ||
(深圳市海聚新能投资合伙企业 (有限合伙) )(Seal) | ||
By: | /s/ LI Shiwei | |
Name: LI Shiwei | ||
Title: Authorized Signatory |
SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.
INVESTORS: | ||
Anji Zhenwei Liangshan Venture Capital Partnership L.P. | ||
(安吉真为两山创业投资合伙企业 (有限合伙) ) (Seal) | ||
By: | /s/ WANG Zeqi | |
Name: WANG Zeqi | ||
Title: Authorized Signatory |
SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.
INVESTORS: | ||
Ningbo Zhenwei Qihang Equity Investment Partnership L.P. | ||
(宁波真为起航股权投资合伙企业 (有限合伙) )(Seal) | ||
By: | /s/ LIU Bin | |
Name: LIU Bin | ||
Title: Authorized Signatory |
SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.
INVESTORS: | ||
CICC (Changde) Emerging Industry Venture Capital Partnership L.P. | ||
(中金(常德)新兴产业创业投资合伙企业 (有限合伙) )(Seal) | ||
By: | /s/ SHEN Yuanjiang | |
Name: SHEN Yuanjiang | ||
Title: Authorized Signatory |
SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.
INVESTORS: | ||
Jiaxing Haohe Equity Investment Partnership L.P. | ||
(嘉兴浩和股权投资合伙企业 (有限合伙) )(Seal) | ||
By: | /s/ PAN Xiaofeng | |
Name: PAN Xiaofeng | ||
Title: Authorized Signatory |
SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.
INVESTORS: | ||
BCPE Nutcracker Cayman, L.P. | ||
By: BCPE Nutcracker GP, LLC its general partner | ||
By: Bain Capital Asia Fund IV, L.P. its member | ||
By: Bain Capital Investors Asia IV, LLC | ||
its general partner | ||
By: Bain Capital Investors, LLC | ||
Its manager | ||
By: | /s/ David Gross-Loh | |
Name: David Gross-Loh | ||
Title: Authorized Signatory |
SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
SCHEDULE OF NOTICE
EXHIBIT A
LIST OF INVESTORS
EXHIBIT B
LIST OF COMPETITORS OF THE GROUP COMPANIES
EXHIBIT C
LIST OF PRC SUBSIDIARIES
Exhibit 4.17
THE SYMBOL [Redacted] DENOTES PLACES WHERE CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) IS THE TYPE THAT THE COMPANY TREATS AS PRIVATE OR CONFIDENTIAL
Business Cooperation Agreement
Between
Zhejiang Anji Zhidian Holding Co., Ltd
And
Zhejiang Anji Jiayu Big Data Technology Service Co., Ltd
March 31, 2022
Table of Contents
Recital |
1 | |||||
Chapter 1 |
Cooperation | 2 | ||||
Chapter 2 |
Effectiveness and Term | 6 | ||||
Chapter 3 |
Breach | 6 | ||||
Chapter 4 |
Termination | 7 | ||||
Chapter 5 |
Confidentiality | 7 | ||||
Chapter 6 |
Governing Law and Dispute Resolution | 8 | ||||
Chapter 7 |
General Provisions | 8 |
I
This Business Cooperation Agreement (this Agreement) is made in Anji County, Zhejiang Province, China on March 31, 2022 (the Date of Signing) by and between:
A. | Zhejiang Anji Zhidian Holding Co., Ltd., a limited liability company duly established and validly existing under the laws of China, with its address at Room 101-27, Building 1, No. 236 Lingyan Road, Lingfeng Street, Anji County, Huzhou City, Zhejiang Province, China (Anji Zhidian or Party A); |
B. | Zhejiang Anji Jiayu Big Data Technology Service Co., Ltd., a limited liability company duly established and validly existing under the laws of China, with its address at Room 101-28, Building 1, No. 236 Lingyan Road, Lingfeng Street, Anji County, Huzhou City, Zhejiang Province, China (Jiayu Big Data or Party B); |
Party A and Party B are hereinafter individually referred to as a Party and collectively as the Parties.
Recital
WHEREAS,
1) | Party A provides business negotiation service and other services for the new energy vehicle charging facility operators to access the Kuaidian Platforms. Meanwhile, based on the actual situation of the new energy vehicle charging facility operators and their target power stations, Party A provides the new energy vehicle charging facility operators with value-added services such as marketing support, charging facility operation and maintenance, construction / filing / power installation / operation / maintenance of new charging stations, and peripheral supply in the charging stations (Value-Added Services); |
2) | Party B is a professional big data service company, which aims to provide data & information services and technical services for internet companies. At present, Party B or its controlled affiliate hold and operate the Kuaidian App mobile terminal, WeChat applet and other platforms (Kuaidian Platforms) and provide information release, technology docking and other services for charging station operators based on the platform, and online charging information services for users with new energy charging needs. |
3) | Both Parties intend to carry out exclusive cooperation on some businesses related to the Kuaidian Platforms in order to integrate relevant resources and give full play to their respective advantages. Both Parties understand and agree that the business cooperation stipulated herein is only a framework agreement, and both Parties can further discuss and determine the details based on this Agreement and sign relevant specific agreements as appropriate. |
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NOW THEREFORE, in accordance with the provisions of relevant laws and regulations of the Peoples Republic of China and following the principle of equality and mutual benefit, both Parties hereby enter into this Agreement on matters related to business cooperation through friendly negotiation.
Chapter 1 Cooperation
In this Chapter 1, any reference to Party A or Anji Zhidian shall refer to Anji Zhidian and its existing or future branches, subsidiaries and entities controlled by any of the foregoing, and any reference to Party B or Jiayu Big Data shall refer to Jiayu Big Data and its existing or future branches, subsidiaries and entities controlled by any of the foregoing. Each Party shall cause its affiliates to perform their respective obligations in accordance with this Agreement (if applicable); otherwise, the Party shall bear joint and several liabilities for breach of contract with its affiliates.
Both Parties agree that as of the date of this Agreement, they shall advance the following business cooperation in the following principles and under the following terms:
1.1 | Principle of Cooperation |
Subject to the laws and regulations and regulatory requirements of China, Party A and Party B will jointly explore a business cooperation model suitable for both Parties and fully carry out mutually beneficial cooperation, and are committed to jointly promoting the healthy development of the business areas in which both Parties cooperate and the efficient operation of the Kuaidian Platforms.
1.2 | Contents of Cooperation |
(a) | Agent Business |
Party B irrevocably authorizes Party A to be its exclusive partner in China to expand the business related to the Kuaidian Platforms on behalf of Party B. For the avoidance of doubt, Party A shall operate the Kuaidian Platforms as the exclusive agent of Party B, and Party B shall not enter into agency-based cooperation with any other person on the business related to the Kuaidian Platforms. However, for any other platforms held by Party B other than the Kuaidian Platforms, it is not subject to the said restriction on exclusive cooperation.
As the exclusive agent of Party B to operate the Kuaidian Platforms, Party A shall assist Party B in negotiating cooperation with charging station operators, promote more charging station operators to access the Kuaidian Platforms, and be responsible for providing business negotiation services and technical consulting services for the docking of charging station operators and Party Bs Kuaidian Platforms system, so as to further improve the product competitiveness and market share of the Kuaidian Platforms.
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As the operator of the Kuaidian Platforms, Party B shall be obligated to connect the charging facilities operated by the charging station operators developed by Party A to the Kuaidian Platforms, and carry out system docking in accordance with relevant specific cooperation agreement, so as to realize the interconnection between the data of the cooperative charging facilities and the data of the Kuaidian Platforms, and expand the users group of the charging operators as much as possible and improve the operation efficiency and business income level of the charging operators.
(b) | Data Service Business |
As a professional big data service company, Party B shall be responsible for the collection, storage, use, processing, transmission, provision, disclosure, deletion, etc. of all kinds of data and information under the businesses related to the Kuaidian Platforms (Data Service). That is, Party B can independently determine the purpose and method of processing users information or charging facility data collected by any Kuaidian Platforms, including but not limited to the users information on the App or applet of the Kuaidian Platforms, the data, the location of charging facilities, interface type, the number of charging piles, the type of charging piles, the electric charges and service charges in peak and valley times, promotional information, the real-time use status, fault information, parking space information of charging piles, etc. shared by the charging station operators to the Kuaidian Platforms.
Meanwhile, based on the above-mentioned data services and for the purpose of carrying out transaction reconciliation and expense settlement for the cooperating businesses related to the Kuaidian Platforms, Party B shall provide Party A with transaction reconciliation and information verification services, and ensure that the reconciliation and settlement results are fed back in a timely, efficient and accurate manner according to Party As business settlement needs (except for reasonable error). Party A agrees to unconditionally follow the reconciliation and settlement results fed back by Party B.
If Party A needs to provide relevant data or any other data related services to its customers or potential customers during business negotiations and other business activities, Party B shall make its commercial efforts to assist Party A and directly communicate with Party As customers or potential customers to provide data related services according to their requirements. As the agent of Party B to operate the Kuaidian Platforms, Party A does not involve or participate in any data collection, storage, use, processing, transmission, provision, disclosure, deletion and other treatment, and undertakes to store, use, process, transmit, delete or treat the data related to the Kuaidian Platforms to the extent permitted by law. Without the request and/or permission of Party A, Party B shall not provide any data & information related to Party As business to any other party.
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1.3 | Cooperation Expenses |
(a) | Agency Service Fee |
Party A shall operate the Kuaidian Platforms as an agent of Party B hereunder, and Party B shall pay Party A a consideration equivalent to the value of the services provided by Party A (Agency Service Fee) based on the quality and performance of Party As agency services.
Based on the current situation of the Kuaidian business, the service fee is closely related to the charging station operators. Both Parties agree to re-examine and re-negotiate the Agency Service Fee from time to time according to the cooperation status of the charging station operators, and sign a specific reconciliation statement.
After receiving the Agency Service Fee paid by Party B, Party A shall issue to Party B a valid VAT special invoice of the same amount (at the tax rate of [Redacted]%).
(b) | Technical Service Fee |
Party B shall provide Party A with the data service related to the Kuaidian Platforms hereunder, and based on the data service, Party B shall provide Party A with the transaction reconciliation and information verification services for the purpose of carrying out transaction reconciliation and expense settlement for the cooperating businesses related to the Kuaidian Platforms.
Party A will pay Party B the corresponding consideration (Technical Service Fee), and both Parties agree to re-examine and re-negotiate the Technical Service Fee from time to time according to the cooperation status, and sign a specific reconciliation statement.
After receiving the Technical Service Fee paid by Party A, Party B shall issue to Party B a valid special VAT invoice of the same amount (at the tax rate of [Redacted]%)
(c) | Both Parties agree that the fee paid by a Party to the other Party hereunder shall be a reasonable price determined for the content and nature of the services provided. In principle, the payment of the fee shall not cause any difficulty in the operation of either Party. For the said purpose and to the extent of realizing the said principle, the fee settlement arrangement can be adjusted by both Parties in writing after mutual consensus. |
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1.4 | Most Favorable Treatment |
(a) | Based on the strategic cooperation between both Parties, both Parties agree to offer the most preferential treatment to each other. Unless otherwise agreed by both Parties, each Party shall have the right to become the preferred partner of the other Party and enjoy the most preferential treatment offered by the other Party under the same conditions, and the cooperation treatment and benefits offered by one Party to the other Party shall not be inferior to those offered to any other partner by the other Party under the same conditions. For the avoidance of doubt, if Party B carries out new business or enters other fields, Party A shall have the right to take precedence over third parties to cooperate with Party B under the same conditions. |
(b) | If either Party has offered or will offer any rights, terms and conditions (including but not limited to the scope of content, time, period, cost, priority and other conditions of providing content, collectively More Favorable Terms) in any business cooperation with any third party which are more favorable to those offered to the other Party, such Party shall have the right to automatically enjoy such More Favorable Terms and apply such More Favorable Terms to the business cooperation hereunder. |
1.5 | Other Conventions |
(a) | Party A and Party B may authorize the signing of specific business cooperation agreements, letters of confirmation and other documents on the said contents, including but not limited to jointly signing a tripartite cooperation agreement with the charging station operators, and agreeing on the use methods, use fees, settlement method and other specific arrangements. |
(b) | Unless otherwise agreed, the intellectual properties or related interests contained in the data, information and items provided by either Party to the other Party in the process of business cooperation shall belong to the providing Party; |
(c) | Each Party shall guarantee and undertake to the other Party that: this Agreement, once signed, will constitute legal and valid obligations binding upon it; it has made or will make its best efforts to obtain all necessary licenses, consents and approvals required by relevant laws and regulations and government departments for its carrying out the business cooperation hereunder, and to ensure that the foregoing licenses, consents and approvals will remain valid during the term of this Agreement. For the avoidance of doubt, Party B guarantees and undertakes that any change in its equity structure, actual control, internal organizational structure, management personnel, etc., will not affect the validity of this Agreement and its binding force on Party B. |
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Chapter 2 Effectiveness and Term
This Agreement shall come into force after being duly executed by the Parties and shall be valid for five (5) years. Within six (6) months before the expiration of the term, both Parties may negotiate on the renewal of this Agreement; in case of no objection, this Agreement shall be renewed for one (1) year, and each renewed term can be further renewed in a similar fashion. If both Parties have concluded a specific cooperation agreement on any part of the cooperation, the content and duration of such part of cooperation shall be subject to the specific cooperation agreement actually signed. If no specific cooperation agreement is concluded or there is any matter not mentioned in the specific cooperation agreement, that part of cooperation or that matter shall be handled in accordance with this Agreement. After the termination of the cooperation period, the business already commenced during the cooperation period shall not automatically terminate; instead, both Parties shall continue to duly complete the businesses already commenced during the cooperation period.
Chapter 3 Breach
3.1 | Breach and Early Termination |
(a) | Either Party (the Breaching Party) who fails to perform its obligations hereunder shall constitute a breach of this Agreement (Breach); |
(b) | In case of serious Breach by the Breaching Party, the non-breaching Party (the Non-breaching Party) shall have the right to notify the Breaching Party in writing of its Breach, and the Breaching Party shall remedy its Breach within thirty (30) days from the date of the notice. If the Breaching Party fails to remedy the Breach at the expiration of such thirty (30) days, the Non-breaching Party shall have the right to terminate this Agreement. If either Party has already made it clear (orally, in writing or by act) before the expiration of the term hereof that it will not perform its major obligations hereunder, or the Breach of the Breaching Party (including a Breach caused by force majeure) has made both Parties unable to achieve the basic purpose of this Agreement, the Non-breaching Party shall have the right to terminate this Agreement. |
3.2 | Compensation for Breach |
The Breaching Party shall compensate the Non-breaching Party for all direct costs, liabilities, or losses incurred due to its Breach.
3.3 | Specific Performance |
In addition to other rights and remedies hereunder, the Non-breaching Party shall also have the right to require the Breaching Party to specifically and fully perform its obligations hereunder.
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Chapter 4 Termination
4.1 | Termination |
This Agreement shall be terminated under any of the following circumstances: (1) in case either Party goes bankrupt, becomes insolvent, goes into liquidation or dissolution procedures, suspends business or cannot pay off its due debts or cannot exist for other reasons during the cooperation period, the Party shall submit a written explanation to the other Party, and the other Party shall have the right to send a written notice to terminate this Agreement thirty (30) days in advance; (2) both Parties agree to rescind or terminate this Agreement through consultation in writing.
4.2 | Effect of Termination |
If this Agreement is terminated in accordance with the provisions of this Chapter 4, the rights and obligations hereunder shall be terminated as well, and this Agreement will no longer be binding upon either Party, provided that (1) the provisions of Chapter 3 (Breach), Chapter 4 (Termination), Chapter 5 (Confidentiality) and Chapter 6 (Governing Law and Dispute Resolution) shall survive; and (2) the termination of this Agreement shall not exempt either Partys liability for its Breach hereunder.
Chapter 5 Confidentiality
5.1 | Confidential Information |
Both Parties acknowledge that this Agreement, the contents of this Agreement, the transactions contemplated hereunder, as well as all data, information and materials related to the transactions shall be treated as confidential information.
5.2 | Confidentiality Obligations |
Both Parties agree that they shall, and shall ensure that their affiliates and their respective officers, directors, employees, agents, representatives, accountants and legal advisers to, keep all confidential information received or obtained by them confidential and shall not disclose to any third party or use it.
5.3 | Excluded Disclosure |
The confidentiality obligations under this Chapter shall not apply to: (i) any information permitted to be disclosed in accordance with the provisions hereof; (ii) any information that is publicly available at the time of disclosure and is not disclosed due to any breach of this Agreement by either Party or its affiliates, or its or its affiliates officers, employees, agents, representatives, accountants and legal advisers; (iii) any information obtained by either Party from a bona fide third party without confidentiality obligations; or (iv) any information disclosed to the extent mutually agreed by both Parties. In addition, each Party may disclose the said information to its affiliates and its or its affiliates investors, officers, directors, employees, partners, shareholders, agents, representatives, accountants and legal advisers to the extent necessary for the purpose of performing this Agreement, provided that it shall ensure that such persons undertake the same confidentiality obligations.
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Chapter 6 Governing Law and Dispute Resolution
6.1 | Governing Law |
The conclusion, validity, interpretation and performance of this Agreement and the resolution of any dispute arising therefrom shall be governed by the laws of China.
6.2 | Dispute Resolution |
(a) | Any dispute, controversy or claim arising from or in connection with this Agreement or its Breach, termination or invalidity (collectively, Disputes) shall be resolved by both Parties through friendly negotiation. If such negotiation fails, either Party may submit the dispute to the court with jurisdiction in Anji County, Zhejiang Province, China where this Agreement is signed for litigation; |
(b) | The above provisions of this Article 6.2 shall not prevent the Parties from applying for any pre-litigation preservation or injunctive relief available for any reason, including but not limited to the subsequent application for enforcement of the judgment of the litigation. |
Chapter 7 General Provisions
7.1 | Fees and Taxes |
Any costs, expenses and taxes incurred by each Party for the execution of this Agreement and the performance of the transactions contemplated hereunder shall be borne by each Party respectively in accordance with the applicable laws of China.
7.2 | Notice |
A notice or other communication sent by one Party to the other Party in connection with this Agreement (the Notice) shall be made in writing (including but not limited to letter or e-mail), and shall be deemed as to be served: (1) when it is received and signed by the notified person if it is delivered by hand, and it shall not be deemed to be effectively served if it is not received and signed by the notified person; (2) seven (7) days after posting if it is sent by registered mail or express mail; or (3) when the e-mail system shows that the e-mail is actually received by the notified person if it is sent by an e-mail. For the purpose of serving the notice, the contact information of both Parties is as follows:
(a) | If to Party A: |
Address:
Tel:
Attention:
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(b) | If to Party B: |
Address:
Tel:
Attention:
In case of any change in the mailing address or number of either Party (the Changing Party), the Changing Party shall notify the other Party within seven (7) days after the change. If the Changing Party fails to notify the change within the said period, and a notice is delivered to the Changing Partys contact information before the change in accordance with Article 7.2, such notice shall be deemed to have been effectively served to the Changing Party and the losses caused thereby, if any, shall be borne by the Changing Party itself.
7.3 | Assignment and Succession |
Unless otherwise expressly agreed herein or agreed by both Parties in writing, neither Party shall transfer this Agreement or any of its rights and obligations hereunder for any reason. Notwithstanding the foregoing, each Party may transfer its rights and obligations hereunder to its affiliates without the consent of the other Party, but the transferring Party shall notify the other Party in advance of the transfer and the information of its affiliate to which its rights and obligations are transferred, and such affiliate shall have the qualification and ability to conduct the cooperation as agreed in Chapter 1 hereof. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.
7.4 | Severability |
If any term or other provision of this Agreement is deemed invalid, illegal or unenforceable in accordance with any laws, regulations or public policies, all other terms and provisions of this Agreement shall remain in full force and effect as long as the economic or legal substance of the transactions contemplated hereunder has not been materially and adversely affected to either Party in any form. When any term or other provision of this Agreement is deemed invalid, illegal or unenforceable, both Parties shall negotiate in good faith to amend this Agreement to realize the original intention of both Parties as close as possible in an acceptable manner, so as to complete the transactions contemplated hereunder as far as possible according to the original plan.
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7.5 | Entire Agreement |
This Agreement contains all understandings and agreements between the Parties with respect to the transactions contemplated hereunder, and shall supersede all written and oral agreements and commitments between the Parties with respect to the transactions contemplated hereunder prior to the Date of Signing.
7.6 | Waiver |
Either Party may (a) extend the period for the other Party to perform any obligation or take any action, (b) waive the right to hold the other Party accountable for any inaccuracy of the representations and warranties made by it in this Agreement or any other transaction document, or (c) waive the right to request the other Partys compliance with any covenant or condition contained herein. Such extension or waiver shall be effective only after the Party bound has signed a written document expressly stating the extension or waiver. Either Partys waiver of any breach of the terms of this Agreement shall not be deemed or construed as a further waiver or continuing waiver of such breach, or a waiver of any other breach or subsequent breach. Except as otherwise provided herein, either Partys failure to exercise or delay in exercising any right, power or remedy under this Agreement or otherwise available in accordance with laws and regulations shall not be deemed as its waiver of such right, power or remedy, nor such Partys single or partial exercise of such right, power or remedy shall exclude any other or further exercise of such right, power or remedy, or the exercise of any other right, power or remedy.
7.7 | Amendment |
No modification or amendment to this Agreement shall take effect unless it is made and signed by both Parties in writing.
7.8 | Counterpart |
This Agreement is made in two (2) copies, one (1) for each Party respectively, all of which shall be deemed as an original and have the same legal effect.
(Followed by Signature Pages.)
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IN WITNESS WHEREOF, this Agreement has been executed by the Parties on the date first above written.
Zhejiang Anji Zhidian Holding Co., Ltd. (seal) | ||
Signature: | /s/ WANG Yang | |
Name: WANG Yang | ||
Title: Legal Representative |
Signature page to the Business Cooperation Agreement
IN WITNESS WHEREOF, this Agreement has been executed by the Parties on the date first above written.
Zhejiang Anji Jiayu Big Data Technology Service Co., Ltd. (seal) | ||
Signature: | /s/ YANG Tianyue | |
Name: YANG Tianyue | ||
Title: Legal Representative |
Signature page to the Business Cooperation Agreement
Exhibit 8.1
List of Principal Subsidiaries of the Registrant
Name |
Jurisdiction of Incorporation | |
Dada Auto Inc. | Cayman Islands | |
Cosmo Light HK Limited | Hong Kong | |
Fleetin HK Limited | Hong Kong | |
Hill Matrix HK Limited | Hong Kong | |
Shandong Cosmo Light Co., Ltd | PRC | |
Zhejiang Anji Intelligent Electronics Holding Co., Ltd. | PRC | |
Zhejiang Huzhou Hill Matrix Limited | PRC | |
Cosmo Light (Beijing) New Energy Technology Co., Ltd. | PRC | |
Kuaidian Power (Beijing) New Energy Technology Co., Ltd. | PRC | |
Beijing Chezhubang New Energy Technology Co., Ltd. | PRC | |
Zhidian Youtong Technology Co., Ltd. | PRC | |
Shaanxi Kuaidian Mobility Technology Co., Ltd. | PRC | |
Qingdao Hill Matrix New Energy Technology Co., Ltd. | PRC |
Exhibit 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Forms S-8 (No. 333-222775, and 333-248729) of RISE Education Cayman Ltd and its subsidiaries of our report dated May 13, 2022, relating to the consolidated financial statements of RISE Education Cayman Ltd and its subsidiaries, which appears in the Annual Report on Form 20-F for the year ended December 31, 2021.
/s/ BDO China Shu Lun Pan Certified Public Accountants LLP
BDO China Shu Lun Pan Certified Public Accountants LLP
Beijing, the Peoples Republic of China
June 16, 2022
Exhibit 15.2
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS CONSENT
We consent to the use in this Shell Company Report on Form 20-F of NaaS Technology Inc. of our report dated May 30, 2022 relating to the combined financial statements and schedules of Dada Auto Inc. as of December 31, 2021 and 2020, and for the years ended December 31, 2021 and 2020, which appears in such Shell Company Report on Form 20-F.
/s/ Centurion ZD CPA & Co. |
Centurion ZD CPA & Co.
Certified Public Accountants
Hong Kong, June 16, 2022
Exhibit 15.3
Harney Westwood & Riegels 3501 The Center 99 Queens Road Central Hong Kong Tel: +852 5806 7800 Fax: +852 5806 7810 |
16 June 2022 |
raymond.ng@harneys.com +852 5806 7883 057310-0002-RLN |
NaaS Technology Inc.
Newlink Center, Area G, Building 7, Huitong Times Square
No.1 Yaojiayuan South Road, Chaoyang District,
Beijing 100024
The Peoples Republic of China
Dear Sir or Madam
NaaS Technology Inc. (the Company) Shell Company Report on Form 20-F
We hereby consent to the filing of this letter as an exhibit to the Companys shell company report on Form 20-F with the U.S. Securities and Exchange Commission. We also consent to the reference to our firm under the heading 10.E. Taxation sub-heading Cayman Islands Taxation in the shell company report.
In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under the U.S. Securities Exchange Act of 1934, as amended, or the Rules and Regulations of the U.S. Securities and Exchange Commission thereunder.
Yours faithfully |
/s/ Harney Westwood & Riegels |
Harney Westwood & Riegels |
Exhibit 15.4
Jingtian & Gongcheng
34/F, Tower 3, China Central Place
77 Jianguo Road, Chaoyang District, Beijing China
To:
NaaS Technology Inc.
Newlink Center, Area G,
Building 7, Huitong Times Square,
No.1 Yaojiayuan South Road,
Chaoyang District,
Beijing, China
June 16, 2022
Dear Sir or Madam,
Re: | Consent to the filing of the Shell Company Report on Form 20-F (the Report) of NaaS Technology Inc. (the Company) in connection with the listing of American depositary shares on the Nasdaq Capital market ( the Listing). |
We, Jingtian & Gongcheng, refer to the Report of the Company in connection with the Listing which will be filed with the Securities and Exchange Commission (the SEC)
We, being the PRC legal advisor to the Company in connection with the Listing, hereby give our consent, and confirm that we have not withdrawn our consent, to the issue of the Report, with the inclusion therein our name, opinions, advice, confirmations and/or summaries of the same, and the references to our name, opinions, advice and/or confirmations in the form and context in which they respectively appear in the Report.
We also hereby consent to the filing of this consent letter with the SEC as an exhibit to the Report.
Yours faithfully, |
/s/ Jingtian & Gongcheng |
Jingtian & Gongcheng |