Document:

Exhibit 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is entered into effective May 22, 2019 (the “Effective Date”), by and between Richard D. Katz, M.D. (“Executive”) and Liquidia Technologies, Inc., a Delaware corporation (the “Company”).  Each of the Company and Executive is a “Party” and, collectively, they are the “Parties.”

 

The Company desires to employ Executive and, in connection with such employment, to compensate Executive for Executive’s personal services to the Company; and

 

Executive desires to provide personal services to the Company in return for certain compensation.

 

Accordingly, in consideration of the mutual promises and covenants contained herein, the Parties agree to the following:

 

1.                                      EMPLOYMENT BY THE COMPANY.

 

1.1                               At-Will Employment.  Executive shall be employed by the Company on an “at will” basis, meaning either the Company or Executive may terminate Executive’s employment at any time, with or without cause or advance notice. Any contrary representations that may have been made to Executive shall be superseded by this Agreement. This Agreement shall constitute the full and complete agreement between Executive and the Company on the “at will” nature of Executive’s employment with the Company, which may be changed only in an express written agreement signed by Executive and a duly authorized officer of the Company. Executive’s rights to any compensation following a termination shall be only as set forth in Section 6.

 

1.2                               Position.  Subject to the terms set forth herein, the Company agrees to employ Executive in the position of Chief Financial Officer, and Executive hereby accepts such employment.  Executive will report to the Chief Executive Officer (“CEO”) and/or such Company officers or directors designated by the CEO.

 

1.3                               Duties.  Executive shall faithfully perform all duties of the Company related to the position or positions held by Executive, including but not limited to all duties set forth in this Agreement and/or in the Bylaws of the Company related to the position or positions held by Executive and all additional duties that are reasonably prescribed from time to time by the CEO or other designated officers or directors of the Company. Executive shall devote Executive’s full business time and attention to the performance of Executive’s duties and responsibilities on behalf of the Company and in furtherance of its best interests.  Executive shall perform Executive’s duties under this Agreement principally out of the Company’s corporate headquarters in North Carolina.  In addition, Executive shall make such business trips at the Company’s expense to such places as may be necessary or advisable for the efficient operations of the Company.

 

1.4                               Company Policies.  Executive shall comply with all Company policies, standards, rules and regulations (a “Company Policy” or collectively, the “Company Policies”) and all applicable government laws, rules and regulations that are now or hereafter in effect. Executive acknowledges receipt of copies of all written Company Policies that are in effect as of the date of this Agreement. Notwithstanding the foregoing, in the event that the terms of this Agreement differ

 

 

from or are in conflict with the Company’s general employment policies or practices, this Agreement shall control.

 

2.                                      COMPENSATION.

 

2.1                               Salary.  Executive shall receive a base salary of $370,000 on an annualized basis, payable subject to standard federal and state payroll withholding requirements in accordance with the Company’s standard payroll practices (“Base Salary”).  Executive’s Base Salary may be increased from time to time by the Board of Directors of the Company (the “Board”). Notwithstanding anything to the contrary, the Base Salary may be reduced if the Board determines such reduction is necessary and justified by the financial condition of the Company and implements an equal percentage reduction in the base salaries of all of the Company’s executive officers, but in no event will such reduction be greater than ten percent (10%) of the Base Salary. A reduction in Executive’s Base Salary in accordance with the immediately preceding sentence shall not constitute a material diminution in Base Salary as described in Section 6.4(b) of this Agreement.

 

2.2                               Bonus. During the period Executive is employed with the Company, Executive shall be eligible to earn a discretionary annual cash bonus of up to 40% of Base Salary (“Target Award”), subject to review and adjustment by the Company in its sole discretion, pursuant to the terms of the Liquidia Technologies, Inc. Annual Cash Bonus Plan, as amended by the Company from time to time (the “Bonus Plan”), or its successor plan.  Any bonus, if earned, will be paid to Executive within the time period set forth in the Bonus Plan.

 

2.3                               LTIP.  Upon employment and subject to approval of the Compensation Committee of the Board, Executive will receive an incentive stock option entitling the purchase up to 155,000 shares (the “Option”) of common stock of the Company (“Common Stock”), with the exercise price per share of Common Stock underlying the Option equaling the Fair Market Value (as defined under the Liquidia Technologies, Inc. 2018 Long-Term Incentive Plan (the “Plan”)) of a share of Common Stock on the date of grant.  The Option shall (i) be granted under and subject to the terms of the Plan and the form of incentive stock option grant agreement, and (ii) be subject to the following vesting schedule: 25% of the grant will become vested and exercisable or settled, as applicable, on first anniversary of Executive’s start date and the balance will become vested and exercisable or settled, as applicable, in equal monthly installments over the following thirty-six (36) months, subject to Executive’s continuous employment with the Company on each such vesting date.

 

2.4                               Benefits.  Executive will be eligible to participate on the same basis as similarly situated employees in the Company’s benefit plans in effect from time to time during Executive’s employment.  All matters of eligibility for coverage or benefits under any benefit plan shall be determined in accordance with the provisions of such plan.  The Company reserves the right to change, alter, or terminate any benefit plan in its sole discretion.

 

2.5                               Expense Reimbursement.  The Company shall reimburse Executive for all customary and appropriate business-related expenses actually incurred and documented in accordance with Company Policy, as in effect from time to time.  For the avoidance of doubt, to the extent that any reimbursements payable to Executive are subject to the provisions of Section

 

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409A of the Internal Revenue Code of 1986, as amended (the “Code”): (a) any such reimbursements will be paid no later than December 31 of the year following the year in which the expense was incurred, (b) the amount of expenses reimbursed in one year will not affect the amount eligible for reimbursement in any subsequent year, and (c) the right to reimbursement under this Agreement will not be subject to liquidation or exchange for another benefit.

 

3.                                      PROPRIETARY INFORMATION, INVENTIONS, NON-COMPETITION AND NON-SOLICITATION OBLIGATIONS.  As a condition of employment with the Company, Executive agrees to execute and abide by a Confidentiality, Inventions and Non-Competition Agreement (the “Confidential Information Agreement”), which may be amended by the Parties from time to time without regard to this Agreement.  The Confidential Information Agreement contains provisions that are intended by the Parties to survive and do survive termination of this Agreement.

 

3.1                               Permissible Communications.  Notwithstanding anything to the contrary in the Confidential Information Agreement, Executive acknowledges that nothing in the Confidential Information Agreement shall be construed to prohibit Executive from (a) filing a charge or complaint with, or participating in any proceeding before, a government agency authorized to enforce and investigate suspected violations of federal anti-discrimination laws, labor relations laws, occupational health and safety laws, wage and hour laws, and such similar state or local laws; (b) reporting possible violations of federal securities laws to the appropriate government enforcing agency and make such other disclosures that are expressly protected under such laws, or (c) responding truthfully to inquiries from, or otherwise cooperating with, any governmental or regulatory investigation (the activities set forth in clauses (a) through (c) are collectively referred to as the “Protected Activities”).  Executive understands that in connection with such Protected Activity, Executive is permitted to disclose documents or other information as permitted by law, and without giving notice to, or receiving authorization from, the Company; provided, however, that Executive agrees to take all reasonable precautions to prevent any unauthorized use or disclosure of any information that may constitute Proprietary Information under the Confidential Information Agreement to any parties other than the appropriate government agencies. Executive further understands that “Protected Activity” does not include the disclosure of any Company attorney-client privileged communications, and that any such disclosure without the Company’s written consent shall constitute a material breach of this Agreement.

 

3.2                               Defend Trade Secrets Act.  Pursuant to the Defend Trade Secrets Act of 2016, Executive acknowledges that Executive will not have criminal or civil liability under any Federal or State trade secret law for the disclosure of a trade secret that (a) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, if Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney and may use the trade secret information in the court proceeding, if Executive (x) files any document containing the trade secret under seal and (y) does not disclose the trade secret, except pursuant to court order.

 

4.                                      OUTSIDE ACTIVITIES DURING EMPLOYMENT.  Except with the prior written consent of the Company, which shall not be unreasonably withheld, Executive will not, while employed by

 

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the Company, undertake or engage in any other employment, occupation or business enterprise that would interfere with Executive’s responsibilities and the performance of Executive’s duties hereunder, except for (i) reasonable time devoted to volunteer services for or on behalf of such religious, educational, non-profit and/or other charitable organization as Executive may wish to serve, (ii) reasonable time devoted to activities in the non-profit and business communities consistent with Executive’s duties, and (iii) such other activities as may be specifically approved by the Company. This restriction shall not, however, preclude Executive from owning less than one percent (1%) of the total outstanding shares of a publicly traded company, or employment or service in any capacity with Affiliates of the Company.  As used in this Agreement, “Affiliates” means an entity under common management or control with the Company.

 

5.                                      NO CONFLICT WITH EXISTING OBLIGATIONS.  Executive represents that Executive’s performance of all the terms of this Agreement and as an executive of the Company do not and will not breach any agreement or obligation of any kind made prior to Executive’s employment by the Company, including agreements or obligations Executive may have with prior employers or entities for which Executive has provided services.  Executive has not entered into, and Executive agrees that Executive will not enter into, any agreement or obligation, either written or oral, in conflict herewith.

 

6.                                      TERMINATION OF EMPLOYMENT.  The Parties acknowledge that Executive’s employment relationship with the Company is at-will.  The provisions in this Section govern the amount of compensation, if any, to be provided to Executive upon termination of employment and do not alter this at-will status.

 

6.1                               Termination by the Company Without Cause.

 

(a)                                 The Company shall have the right to terminate Executive’s employment with the Company pursuant to this Section 6.1 at any time without “Cause” (as defined in Section 6.2(b) below) by giving notice as described in Section 7.1 of this Agreement.  A termination pursuant to Sections 6.3 and 6.5 below is not a termination without “Cause” for purposes of receiving the benefits described in this Section 6.1.

 

(b)                                 If the Company terminates Executive’s employment at any time without Cause and provided that such termination constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h) a “Separation from Service”), then Executive shall be entitled to receive the Accrued Obligations (defined below) and, subject to Executive’s compliance with the obligations in Section 6.1(c) below, then Executive shall also be entitled to receive (collectively, the “Severance Benefits”):

 

(i)                                     an amount equal to Executive’s then current Base Salary for nine (9) months (the “Severance Period”), less all applicable withholdings and deductions, paid in equal installments beginning on the Company’s first regularly scheduled payroll date following the Release Effective Date (as defined in Section 6.1(c) below), with the remaining installments occurring on the Company’s regularly scheduled payroll dates thereafter;

 

(ii)                                  an amount equal to the unpaid bonus (if any) that Executive would have earned pursuant to the Bonus Plan with respect to any Performance Period (as defined in the

 

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Bonus Plan) completed prior to the termination date but for the employment requirement set forth in Section 6.3 of the Bonus Plan; and

 

(iii)                               payment of the employer portion of the premiums required to continue Executive’s group health care coverage under the applicable provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), provided that Executive timely elects to continue coverage under COBRA, until the earliest of (A) the close of the Severance Period, (B) the expiration of Executive’s eligibility for the continuation coverage under COBRA, or (C) the date when Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment (such period from the termination date through the earliest of (A), (B) or (C), the “COBRA Payment Period”).  Notwithstanding the foregoing, if at any time the Company determines in its sole discretion that the payment of the COBRA premiums would result in a violation of the nondiscrimination rules of Section 105(h)(2) of the Code, or any statute or regulation of similar effect (including but not limited to the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of providing the COBRA premiums, the Company will instead pay Executive on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA premiums for that month, subject to applicable tax withholdings for the remainder of the COBRA Payment Period, regardless of whether Executive elects COBRA coverage (the “Special Severance Payment”).  Executive may, but is not obligated to, use such Special Severance Payment toward the cost of COBRA premiums. If Executive becomes eligible for coverage under another employer’s group health plan or otherwise ceases to be eligible for COBRA during the COBRA Payment Period, Executive must immediately notify the Company of such event, and all payments and obligations under this clause will cease.

 

(c)                                  Executive will be paid all of the Accrued Obligations on the Company’s first payroll date after Executive’s date of termination from employment or earlier if required by law.  Executive shall receive the Severance Benefits pursuant to Section 6.1(b) of this Agreement if: (i) Executive signs and delivers to the Company an effective, general release of claims in favor of the Company and its affiliates and representatives, in a form acceptable to the Company (the “Release”), by the 60th day following the termination date or such earlier date as set forth in the Release, which cannot be revoked in whole or part (if applicable) by such date or such earlier date as set forth in the Release (the date that the Release can no longer be revoked is referred to as the “Release Effective Date”); (ii) if Executive holds any other positions with the Company, Executive resigns such position(s) to be effective no later than the date of Executive’s termination date (or such other date as requested by the Board);  (iii) Executive returns all Company property in proper order and condition, reasonable wear and tear excepted, (including, but not limited to, all books, documents, papers, materials and any other property or assets relating to the business or affairs of the Company which may be in Executive’s possession or under his control but excluding copies of records related to Executive’s compensation from the Company and any equity ownership in the Company); (iv) Executive complies with all post-termination obligations under this Agreement and the Confidential Information Agreement; and (v) Executive complies with the terms of the Release, including without limitation any non-disparagement and confidentiality provisions contained in the Release.  To the extent that any Severance Benefits are deferred compensation under Section 409A of the Code, and are not otherwise exempt from the application of Section 409A, then, if the period during which Executive may consider and sign the Release spans two

 

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calendar years, the payment of Severance Benefits will not be made or begin until the later calendar year.

 

(d)                                 For purposes of this Agreement, “Accrued Obligations” are (i) Executive’s accrued but unpaid salary through the date of termination, (ii) any unreimbursed business expenses incurred by Executive payable in accordance with the Company’s standard expense reimbursement policies, and (iii) benefits owed to Executive under any qualified retirement plan or health and welfare benefit plan in which Executive was a participant in accordance with applicable law and the provisions of such plan.

 

(e)                                  The Severance Benefits provided to Executive pursuant to this Section 6.1 is in lieu of, and not in addition to, any benefits to which Executive may otherwise be entitled under any Company severance plan, policy or program.

 

(f)                                   Any damages caused by the termination of Executive’s employment without Cause would be difficult to ascertain; therefore, the Severance Benefits for which Executive is eligible pursuant to Section 6.1(b) above in exchange for the Release is agreed to by the Parties as liquidated damages, to serve as full compensation, and not a penalty.

 

6.2                               Termination by the Company for Cause.

 

(a)                                 Subject to Section 6.2(c) below, the Company shall have the right to terminate Executive’s employment with the Company at any time for Cause by giving notice as described in Section 7.1 of this Agreement.

 

(b)                                 “Cause” for termination shall mean that the Company has determined in its sole discretion that Executive has engaged in any of the following: (i) any material breach of the terms of this Agreement by Executive, or the willful failure of Executive to diligently and properly perform Executive’s material duties for the Company; (ii) Executive’s misappropriation or unauthorized use of the Company’s tangible or intangible property that causes or is likely to cause material harm to the Company or its reputation, or material breach of the Confidential Information Agreement or any other similar agreement regarding confidentiality, intellectual property rights, non-competition or non-solicitation; (iii) any material failure to comply with the Company Policies or any other policies and/or directives of the Board; (iv) Executive’s use of illegal drugs or any illegal substance, or Executive’s use of alcohol in any manner that materially interferes with the performance of Executive’s duties under this Agreement; (v) any (A) dishonest or illegal action (including, without limitation, embezzlement) by Executive, or (B) other action, whether or not dishonest or illegal, by Executive, in either case which is materially detrimental to the interest and well-being of the Company, including, without limitation, harm to its reputation; (vi) Executive’s failure to fully disclose any material conflict of interest Executive may have with the Company in a transaction between the Company and any third party which is materially detrimental to the interest and well-being of the Company; (vii) any adverse action or omission by Executive which would be required to be disclosed pursuant to public securities laws or which would limit the ability of the Company or any entity affiliated with the Company to sell securities under any Federal or state law or which would disqualify the Company or any affiliated entity from any exemption otherwise available to it; or (viii) become prohibited by law or any order from any regulatory body or governmental body from being an employee or director of any company, firm or entity; provided,

 

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however, that prior to any termination of Executive for “Cause,” if the grounds for such Cause are reasonably capable of cure by Executive, the Company shall provide Executive with written notice of the grounds for Cause and provide Executive with ten (10) business days in which to cure such Cause.

 

(c)                                  In the event Executive’s employment is terminated at any time for Cause, Executive will not receive Severance Benefits or any other severance compensation or benefits, except that, pursuant to the Company’s standard payroll policies, the Company shall pay to Executive the Accrued Obligations.

 

6.3                               Resignation by Executive.

 

(a)                                 Executive may resign from Executive’s employment with the Company at any time by giving notice as described in Section 7.1.

 

(b)                                 In the event Executive resigns from Executive’s employment with the Company for any reason (other than a resignation for Good Reason as described in Section 6.4 below), Executive will not receive Severance Benefits or any other severance compensation or benefits, except that, pursuant to the Company’s standard payroll policies, the Company shall pay to Executive the Accrued Obligations.

 

6.4                               Resignation by Executive for Good Reason.

 

(a)                                 Provided Executive has not previously been notified of the Company’s intention to terminate Executive’s employment, Executive may resign from employment with the Company for Good Reason (as defined in Section 6.4(b) below).

 

(b)                                 “Good Reason” for resignation shall mean the occurrence of any of the following without Executive’s prior consent:  (i) a material diminution in Executive’s authority, duties or responsibilities; (ii) a material diminution in Executive’s Base Salary; (iii) a requirement that Executive report to an employee other than the CEO; (iv) Executive’s principal place of employment is relocated by more than fifty (50) miles from the Company’s present location in Research Triangle Park, North Carolina; or (v) the Company materially breaches its obligations under this Agreement.  In addition to any requirements set forth above, in order for any of the above events to constitute “Good Reason,” Executive must (X) inform the Company of the existence of the event within sixty (60) days of the initial existence of the event, after which date the Company shall have no less than thirty (30) days to cure the event which otherwise would constitute “Good Reason” hereunder and (Y) Executive must terminate his employment with the Company for such “Good Reason” no later than ninety (90) days after the initial existence of the event which prompted Executive’s termination. Any actions taken by the Company to accommodate a disability of Executive or pursuant to the Family and Medical Leave Act shall not be a Good Reason for purposes of this Agreement.

 

(c)                                  In the event Executive resigns from Executive’s employment for Good Reason, and provided that such termination constitutes a Separation from Service, then subject to Executive’s compliance with the obligations in Section 6.1(c) above, Executive shall be eligible to receive the same Severance Benefits as described in Section 6.1 and on the same terms and conditions set forth in Section 6.1(c) and Section 6.1(e) as if Executive had been terminated by the

 

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Company without Cause.

 

(d)                                 Any damages caused by the termination of Executive’s employment for Good Reason would be difficult to ascertain; therefore, the Severance Benefits for which Executive is eligible pursuant to Section 6.1(b) above in exchange for the Release is agreed to by the Parties as liquidated damages, to serve as full compensation, and not a penalty.

 

6.5                               Termination by Virtue of Death or Disability of Executive.

 

(a)                                 In the event of Executive’s death while employed pursuant to this Agreement, all obligations of the Parties hereunder shall terminate immediately, and the Company shall, pursuant to the Company’s standard payroll policies, pay to Executive’s legal representatives all Accrued Obligations.

 

(b)                                 Subject to applicable state and federal law, the Company shall at all times have the right, upon written notice to Executive, to terminate this Agreement based on Executive’s Disability.  Termination by the Company of Executive’s employment based on “Disability” shall mean termination because a qualified medical doctor mutually acceptable to the Company and Executive or Executive’s personal representative has certified in writing that: (A) Executive is unable, because of a medically determinable physical or mental disability, to perform the essential functions of Executive’s job, with or without a reasonable accommodation, for more than one hundred and eighty (180) calendar days measured from the last full day of work; or (B) by reason of mental or physical disability, it is unlikely that Executive will be able, within one hundred and eighty (180) calendar days, to resume the essential functions of Executive’s job, with or without a reasonable accommodation, and to otherwise discharge Executive’s duties under this Agreement.  This definition shall be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act, and other applicable law. In the event Executive’s employment is terminated based on Executive’s Disability, Executive will not receive Severance Benefits or any other severance compensation or benefit, except that, pursuant to the Company’s standard payroll policies, the Company shall pay to Executive the Accrued Obligations.

 

6.6                               Change in Control Benefits.  In the event the Company (or any surviving or acquiring corporation) terminates Executive’s employment without Cause or Executive resigns for Good Reason within twelve (12) months following the effective date of a Change in Control (as defined under the Plan), then Executive shall be entitled to the Accrued Obligations and, provided that Executive complies with the obligations in Section 6.1(c) of this Agreement (including the requirement to provide an effective Release), Executive shall be eligible to receive the same Severance Benefits as described in Section 6.1(b) and on the same conditions as if Executive had been terminated by the Company without Cause; provided, however, that (a) the Severance Period shall be increased to twelve (12) months; (b) the bonus set forth in Section 6.1(b)(ii) shall instead be payable at the Target Amount; and (c) in the event that Executive’s outstanding equity as of the closing of the Change in Control is assumed or continued (in accordance with its terms) by the surviving entity in a Change in Control, then 100% of the unvested portion of such equity shall become vested.

 

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6.7                               Cooperation With Company After Termination of Employment.  Following termination of Executive’s employment for any reason and for a period of one (1) year thereafter, Executive agrees to cooperate (a) with the Company in (i) the defense of any legal matter involving any matter that arose during Executive’s employment with the Company, and (ii) all matters relating to the winding up of Executive’s pending work and the orderly transfer of any such pending work to such other employees as may be designated by the Company; and (b) with all government authorities on matters pertaining to any investigation, litigation or administrative proceeding pertaining to the Company.  The Company will reimburse Executive for any reasonable travel and out of pocket expenses incurred by Executive in providing such cooperation.  The Company will also pay Executive a per diem amount equal to Executive’s Base Salary as of the date of termination divided by two hundred and thirty (230) for each day or partial day that Executive devotes to fulfilling his obligation to cooperate under this Section 6.7, unless Executive is then receiving continued payment of his Base Salary under 6.1(b)(ii), above.   Following termination of Executive’s employment for any reason, and in the event of a failure by Executive (following reasonable efforts by the Company to secure his voluntary cooperation) to resign from any position as officer or director of the Company, with such resignation to be effective no later than the date of Executive’s termination date (or such other date as requested by the Board), the Company is hereby irrevocably authorized to appoint its then-current Chief Executive Officer  to act in Executive’s name and on his behalf to execute any documents and to do all things reasonably necessary to effect such resignation.  Further, Executive shall not, at any time after termination of Executive’s employment for any reason, represent himself as being an agent or representative of the Company, unless expressly authorized in a written agreement executed by an authorized officer of the Company.

 

6.8                               Application of Section 409A.

 

(a)                                 It is intended that all of the severance payments payable under this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively, “Section 409A”) provided under Treasury Regulations Sections 1.409A-1(b)(4) and 1.409A-1(b)(9), and this Agreement will be construed in a manner that complies with Section 409A.  If not so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A, and incorporates by reference all required definitions and payment terms.

 

(b)                                 The preceding provisions shall not be construed as a guarantee by the Company of any particular tax effect to Executive under this Agreement. The Company shall not be liable to Executive for any payment made under this Agreement which is determined to result in an additional tax, penalty or interest under Section 409A, nor for reporting in good faith any payment as an amount includible in gross income under Section 409A.

 

(c)                                  No severance payments will be made under this Agreement unless Executive’s termination of employment constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h)).

 

(d)                                 For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulations Section 1.409A-2(b)(2)(iii)), Executive’s right to receive any installment

 

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payments under this Agreement (whether severance payments or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment.

 

(e)                                  If the Company determines that the severance benefits provided under this Agreement constitutes “deferred compensation” under Section 409A and if Executive is a “specified employee” of the Company, as such term is defined in Section 409A(a)(2)(B)(i) of the Code at the time of Executive’s Separation from Service, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the Severance Benefits will be delayed as follows: on the earlier to occur of (i) the date that is six months and one day after Executive’s Separation from Service, and (ii) the date of Executive’s death (such earlier date, the “Delayed Initial Payment Date”), the Company will (1) pay to Executive a lump sum amount equal to the sum of the Severance Benefits that Executive would otherwise have received through the Delayed Initial Payment Date if the commencement of the payment of the Severance Benefits had not been delayed pursuant to this Section 6.8, and (2) commence paying the balance of the Severance Benefits in accordance with the applicable payment schedule set forth in Section 6.1. No interest shall be due on any amounts deferred pursuant to this Section 6.8.

 

6.9                               Parachute Payments.

 

(a)                                 Notwithstanding any other provisions of this Agreement to the contrary, in the event that it shall be determined that any payment or distribution to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”) would be nondeductible by the Company for Federal income tax purposes because of Section 280G of the Code, the Company shall reduce the aggregate present value of the Payments under this Agreement to the Reduced Amount (as defined below) if, and only if, reducing the Payments under this Agreement will provide Executive with a greater net after-tax amount than would be the case if no such reduction was made, taking into account the applicable federal, state, local and foreign income, employment and other taxes, including the excise tax imposed by Section 4999 of the Code.  If a reduction in the Payments is necessary, such reduction shall occur in the following order: (1) reduction of cash payments; (2) cancellation of accelerated vesting of equity awards other than stock options; (3) cancellation of accelerated vesting of stock options; and (4) reduction of other benefits paid to Executive. Within any such category of payments and benefits (that is, clauses (1), (2), (3) or (4) of this Section 6.9(a)), a reduction shall occur first with respect to amounts that are not “deferred compensation” within the meaning of Section 409A of the Code and then with respect to amounts that are.  The “Reduced Amount” shall be an amount expressed in present value that maximizes the aggregate present value of Payments under this Agreement without causing any Payment to be nondeductible by the Company because of Section 280G of the Code.

 

(b)                                 All determinations to be made under this Section 6.9 shall be made at the Company’s expense by a firm of certified public accountants of national standing selected by the Company (the “Accounting Firm”) which may be the firm regularly auditing the financial statements of the Company.  The Company and Executive shall furnish to the Accounting Firm such information and documents as the Accounting Firm may reasonably require in order to make a determination under this Section.  To the extent requested by Executive, the Company shall

 

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cooperate with Executive in good faith in valuing, and the Accounting Firm shall value, services to be provided by Executive (including refraining from performing services pursuant to a covenant not to compete) before, on or after the date of the transaction which cause the application of Section 280G of the Code such that payments in respect of such services may be considered to be “reasonable compensation” within the meaning of the regulations under Section 280G of the Code.  In making its determinations hereunder, the Accounting Firm shall apply reasonable, good faith interpretations regarding the applicability of Section 280G and Section 4999, along with any other applicable portions of the Code or other tax laws.  The Accounting Firm shall make all determinations required to be made under this Section and shall provide detailed supporting calculations to the Company and Executive within 30 days after the Termination Date or such earlier time as is requested by the Company, and provide an opinion to Executive that he or she has substantial authority not to report any excise tax on his or her Federal income tax return with respect to any Payments.  Any such determination by the Accounting Firm shall be binding upon the Company and Executive.  Subject to Sections 6.1(c) and 6.9, within five business days thereafter, the Company shall pay to or distribute to or for the benefit of Executive such amounts as are then due to Executive under this Agreement.

 

(c)                                  As a result of the uncertainty in the application of Section 280G of the Code at the time of the initial determination by the Accounting Firm or the Company hereunder, it is possible that Payments, as the case may be, will have been made by the Company which should not have been made (“Overpayment”) or that additional Payments, as the case may be, which will not have been made by the Company could have been made (“Underpayment”), in each case, consistent with the calculations required to be made hereunder. In the event that the Accounting Firm, based upon the assertion of a deficiency by the Internal Revenue Service against Executive which the Accounting Firm believes has a high probability of success determines that an Overpayment has been made, promptly on notice and demand Executive shall repay to the Company any such Overpayment paid or distributed by the Company to or for the benefit of Executive together with interest at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code; provided, however, that no such amount shall be payable by Executive to the Company if and to the extent such payment would not either reduce the amount on which Executive is subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes. In the event that the Accounting Firm, based upon controlling precedent or other substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive together with interest at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code.

 

7.                                      GENERAL PROVISIONS.

 

7.1                               Notices.  Any notices required hereunder to be in writing shall be deemed effectively given: (a) upon personal delivery to the Party to be notified, (b) when sent by electronic mail or confirmed facsimile if sent during normal business hours of the recipient, and if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.  All communications shall be sent to the Company at its primary office location and to Executive at Executive’s address as listed on the Company payroll, or at such other address as the Company or Executive may designate by ten (10) days advance written notice to the other.

 

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7.2                               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 invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein.

 

7.3                               Survival.  Provisions of this Agreement which by their terms must survive the termination of this Agreement in order to effectuate the intent of the Parties will survive any such termination, whether by expiration of the term, termination of Executive’s employment, or otherwise, for such period as may be appropriate under the circumstances.

 

7.4                               Waiver.  If either Party should waive any breach of any provisions of this Agreement, it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

 

7.5                               Complete Agreement.  This Agreement constitutes the entire agreement between Executive and the Company with regard to the subject matter hereof.  This Agreement is the complete, final, and exclusive embodiment of their agreement with regard to this subject matter and supersedes any prior oral discussions or written communications and agreements.  This Agreement is entered into without reliance on any promise or representation other than those expressly contained herein, and it cannot be modified or amended except in writing signed by Executive and an authorized officer of the Company, subject to the approval of the Board, its compensation committee or (if necessary) the stockholders of the Company.  The Parties have entered into a separate Confidential Information Agreement and have entered or may enter into separate agreements related to equity.  These separate agreements govern other aspects of the relationship between the Parties, have or may have provisions that survive termination of Executive’s employment under this Agreement, may be amended or superseded by the Parties without regard to this Agreement and are enforceable according to their terms without regard to the enforcement provision of this Agreement.

 

7.6                               Headings.  The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.

 

7.7                               Successors and Assigns.  The Company shall assign this Agreement and its rights and obligations hereunder in whole, but not in part, to any company or other entity with or into which the Company may hereafter merge or consolidate or to which the Company may transfer all or substantially all of its assets, if in any such case said Company or other entity shall by operation of law or expressly in writing assume all obligations of the Company hereunder as fully as if it had been originally made a Party, but may not otherwise assign this Agreement or its rights and obligations hereunder.  Executive may not assign or transfer this Agreement or any rights or obligations hereunder, other than to Executive’s estate upon death.

 

7.8                               Withholding.  All amounts payable hereunder shall be subject to applicable tax withholding.

 

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7.9                               Choice of Law.  This Agreement in all respects shall be governed by and interpreted in accordance with the laws of the State of North Carolina, both procedural and substantive, without regard to conflicts of law, except to the extent that federal laws and regulations preempt otherwise applicable law.

 

7.10                        Mandatory Mediation.   Prior to and as a condition of either Party’s filing suit in state or federal court, the Parties shall engage in a mediated settlement conference in accordance with the North Carolina Superior Court Rules Implementing Statewide Mediation.  The Parties shall mediate in good faith until settlement is reached or an impasse is declared by the mediator.

 

7.11                        Jurisdiction.  Each Party hereby irrevocably submits to the exclusive jurisdiction of the United States District Court located in Wake County, North Carolina, or any state court located within such state, in respect of any claim relating to this Agreement or Executive’s employment with the Company, and hereby waives, and agrees not to assert, as a defense in any action, suit or proceeding in which any such claim is made that said Party is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in such courts or that the venue thereof may not be appropriate or that this Agreement may not be enforced in or by such courts.  Any appellate proceedings shall take place in the appropriate courts having appellate jurisdiction over the courts set forth in this Section.

 

7.12                        Counterparts.  This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one Party, but all of which taken together will constitute one and the same Agreement.  Facsimile signatures and signatures transmitted by PDF shall be equivalent to original signatures.

 

[SIGNATURES TO FOLLOW ON NEXT PAGE]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and year first written above.

 

	
 
    	
LIQUIDIA   TECHNOLOGIES, INC.
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Neal Fowler
    
	
 
    	
 
    	
Name: 
    	
Neal Fowler
    
	
 
    	
 
    	
Title: 
    	
Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
Executive:
    
	
 
    	
 
    
	
 
    	
/s/ Richard D. Katz, M.D.
    
	
 
    	
Richard D. Katz, M.D.
    

 

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Exhibit A

 

CONFIDENTIALITY, INVENTIONS AND NON-COMPETITION AGREEMENT

 

A-1Exhibit 10.4

 

Business Cooperation Agreement

 

amongst

 

Zhuhai Meizhilian Education Technology Co., Ltd.

Domestic Affiliates as shown in Annex I

 

and

 

Meten Education Shareholders as shown in Annex II

 

November 23, 2018

 

 

Table of Contents

 

	
I. Definition and   Interpretation
    	
5
    
	
2. Representations,   Warranties and Covenants
    	
7
    
	
3. Form of   Cooperation
    	
9
    
	
4. Financial Management   and Payment of Fees
    	
21
    
	
5. Liability for Breach   of Contract
    	
22
    
	
6. Governing Laws and   Dispute Resolution
    	
22
    
	
7. Confidentiality
    	
24
    
	
8. Severability
    	
24
    
	
9. Term
    	
25
    
	
10. Amendment
    	
25
    
	
11. Force Majeure
    	
26
    
	
12. Change of   Circumstances
    	
26
    
	
13. Miscellaneous
    	
27
    
	
Annex I: Domestic   Affiliates
    	
23
    
	
Annex II: Meten   Education Shareholders
    	
25
    

 

1

 

This Business Cooperation Agreement (hereinafter referred to as “this Agreement”) was signed by the following parties on November 23, 2018:

 

A.                Zhuhai Meizhilian Education Technology Co., Ltd., a wholly foreign-owned enterprise legally established and existing under the laws of PRC, with the unified social credit code of 91440400MA52A269XU. Its registered address is at Room 105 (59220 (concentrated office area)), No. 6, Baohua Road, Hengqin New District, Zhuhai (hereinafter referred to as “WFOE”);

 

B.                The Domestic Affiliates, which refer to Shenzhen Meten International Education Co., Ltd. and its affiliated subsidiaries and training centers and schools (as shown in Annex I of this Agreement, any or all of the aforementioned entities are referred to as “Domestic Affiliates”);

 

C.                Jishuang Zhao, a Chinese citizen whose ID number is [ ], and the residential address is at Room 16D, Building 1, Jinhaiwan Garden, Furong Road, Futian District, Shenzhen, Guangdong Province;

 

D.                Siguang Peng, a Chinese citizen whose ID number is [ ], and the residential address is at 17D, Building 1, Jinhaiwan Garden, Furong Road, Futian District, Shenzhen.

 

E.                 Yupeng Guo, a Chinese citizen whose ID number is [ ], and the residential address is at A-2, 3rd Floor, Times Fortune Building, No. 88 Fuhua Three Road, Futian District, Shenzhen, Guangdong Province;

 

F.                  Yun Feng, a Chinese citizen whose ID number is [ ], and the residential address is at Room 504, No. 29, Gexin Road, Baoshan District, Shanghai.

 

G.                Jun Yao, a Chinese citizen whose ID number is [ ], and the residential address is at 17P, Jinzhong Building, Nanshan District, Shenzhen, Guangdong Province;

 

H.               Tong Zeng, a Chinese citizen whose ID number is [ ], and the residential address is at 2-603, Building 3, No. 3110 Renmin North Road, Luohu District, Shenzhen;

 

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I.                    Yongchao Chen, a Chinese citizen whose ID number is 430702197801092017, and the residential address is at 6D, Building 27, Gang Zhong Lv Garden, No. 21 Nongyuan Road, Futian District, Shenzhen, Guangdong Province;

 

(The above items C to I, are hereinafter collectively referred to as “Meten Education Individual Shareholders”)

 

J.                    Xinyu Meilianzhong Investment Management Center (Limited Partnership), a partnership legally established and existing under the laws of PRC, with the unified social credit code of 913605033329529727. Its registered address is at Yangtiangang International Eco-City in Xiannvhu District, Xinyu City, Jiangxi Province;

 

K.                Shenzhen Daoge No.21 Investment Partnership (Limited Partnership), a partnership legally established and existing under the laws of PRC, with the unified social credit code of 91440300MA5EQ0XL2X. Its registered address is at Room 3401-3402, Zhongzhou Building, No. 3088 Jintian Road, Futian Street, Futian District, Shenzhen;

 

L.                 Zhihan (Shanghai) Investment Center (Limited Partnership), a partnership legally established and existing under the laws of PRC, with the unified social credit code of 91310115MA1K39UL09. Its registered address is at 26th Floor, No. 828-838 Zhangyang Road, PRC (Shanghai) Free Trade Pilot Zone;

 

M.             Xinyu Meilianxing Investment Management Center (Limited Partnership), a partnership legally established and existing under the laws of PRC, with the unified social credit code of 91360503332948949D and its registered address is Yangtiangang International Eco-City in Xiannvhu District, Xinyu City, Jiangxi Province;

 

N.                Xinyu Meilianchou Investment Management Center (Limited Partnership), a partnership legally established and existing under the laws of PRC, with the unified social credit code of 913605033329489060, and its registered address is at Yangtiangang International Eco-city in Xiannvhu District, Xinyu City, Jiangxi Province;

 

O.                Shenzhen Daoge No.11 Education Investment Partnership (Limited Partnership), a partnership legally established and existing under the laws of PRC, with the unified social credit code of 91440300MA5EDGNC8Y. Its registered address is at c/o Shenzhen Qianhai Commerce Secretariat Co., Ltd., Room 201, Building A, No. 1 Qianwan First Road, Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen ;

 

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P.                  Hangzhou Muhua Equity Investment Fund Partnership (Limited Partnership), a partnership legally established and existing under the laws of PRC, with the unified social credit code of 91330183MA28L6U93N. Its registered  address is at No. 2 Gongwang Road, Huanggongwang Village, Dongzhou Street, Fuyang District, Hangzhou, Zhejiang Province;

 

Q.                Shenzhen Daoge Growth No. 3 Investment Fund Partnership (Limited Partnership), a partnership legally established and existing under the laws of PRC, with the unified social credit code of 914403003594989844. Its registered address is at c/o Shenzhen Qianhai Commerce Secretariat Co., Ltd., Room 201, Building A, No. 1 Qianwan First Road, Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen;

 

R.                Shenzhen Daoge Growth No.6 Investment Fund Partnership (Limited Partnership), a partnership legally established and existing under the laws of PRC, with the unified social credit code of 91440300MA5DB1LN2W. Its registered address is at 49F, Fortune Building, Fuhua Three No. 88 Futian Street, Futian District, Shenzhen;

 

S.                  Shenzhen Daoge Growth No. 5 Investment Fund Partnership (Limited Partnership), a partnership legally established and existing under the laws of PRC, with the unified social credit code of 91440300MA5DAL4T2P. Its registered address is at Room 3401-3402, Zhongzhou Building, No. 3088 Jintian Road, Futian Street, Futian District, Shenzhen.

 

(The above items J to S are hereinafter collectively referred to as “Meten Education Institution Shareholders”)

 

(The above items C to S are hereinafter collectively referred to as “Meten Education Shareholders”)

 

In this Agreement, WFOE, Domestic Affiliates, and Meten Education Shareholders are collectively referred to as “Parties”, and each a “Party”.

 

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Whereas:

 

1.                  The Parties unanimously agreed that WFOE will cooperate closely with the Domestic Affiliates on management, consulting, technical services and other matters related to the offline English training business and tourism business. According to the unanimous consent of all Parties, WFOE will provide management, consulting, technical services and other related services related to the offline English training and tourism business to the Domestic Affiliates.

 

2.                  The Parties unanimously agreed that the Meten Education Shareholders, as the direct and/or indirect beneficial owner of the Domestic Affiliates, shall take all legal and necessary measures to promote the smooth development and implementation of the cooperation between the WFOE and the Domestic Affiliates.

 

3.                  The Parties unanimously agreed to sign this Agreement and prescribe the rights and obligations of the WFOE and other Parties and the specific content, method, operation and other major cooperation matters in the process of cooperation .

 

In order to clarify the rights and obligations of all Parties, this Agreement has been entered into by the Parties through friendly negotiations and shall be binding upon all Parties.

 

I. Definition and Interpretation

 

“Proposed Listed Company” means Meten International Education Group, a limited liability company incorporated under the laws of the Cayman Islands on July 10, 2018.

 

“Meten Education” means Shenzhen Meten International Education Co., Ltd., a limited liability company incorporated under the laws of PRC on April 3, 2006.

 

“Meten Education Individual Shareholders” means Jishuang Zhao, Siguang Peng, Yupeng Guo, Yun Feng, Jun Yao, Tong Zeng and Yongchao Chen.

 

“Meten Education Institution Shareholders” means Xinyu Meilianzhong Investment Management Center (Limited Partnership), Shenzhen Daoge No.21 Investment Partnership (Limited Partnership), Zhihan (Shanghai) Investment Center (Limited Partnership), Xinyu Meilianxing Investment Management Center (Limited Partnership), Xinyu Meilianchou Investment Management Center (Limited Partnership), Shenzhen Daoge No.11 Education Investment Partnership (Limited Partnership), Hangzhou Muhua Equity Investment Fund Partnership (Limited Partnership), Shenzhen Daoge Growth No. 3 Investment Fund Partnership (Limited Partnership), Shenzhen Daoge Growth No. 6 Investment Fund Partnership (Limited Partnership) and Shenzhen Daoge Growth No. 5 Investment Fund Partnership (Limited Partnership).

 

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“Meten Education Shareholders” means Jishuang Zhao, Siguang Peng, Yupeng Guo, Yun Feng, Jun Yao, Tong Zeng, Yongchao Chen, Xinyu Meilianzhong Investment Management Center (Limited Partnership), Shenzhen Daoge No.21 Investment Partnership (Limited Partnership, Zhihan (Shanghai) Investment Center (Limited Partnership), Xinyu Meilianxing Investment Management Center (Limited Partnership), Xinyu Meilianchou Investment Management Center (Limited Partnership), Shenzhen Daoge No.11 Education Investment Partnership (Limited Partnership), Hangzhou Muhua Equity Investment Fund Partnership (Limited Partnership), Shenzhen Daoge Growth No.3 Investment Fund Partnership (Limited Partnership), Shenzhen Daoge Growth No.6 Investment Fund Partnership (Limited Partnership) and Shenzhen Daoge Growth No.5 Investment Fund Partnership (Limited Partnership).

 

“Domestic Affiliates” means Meten Education and its controlled limited liability companies and private non-enterprise legal entities (as shown in Annex I of this Agreement, any or all of the aforementioned entities are referred to as “Domestic Affiliates”).

 

“Cooperation Agreements” means this Agreement, the Exclusive Technical Service and Management Consulting Agreement, the Exclusive Call Option Agreement, the Equity Pledge Agreement, the Shareholder Rights Entrustment Agreement and the Shareholders’ Power of Attorney signed by certain Parties of this Agreement, including the amendments to the above agreements, and other agreements, contracts or instruments signed or issued by one or more Parties from time to time to ensure the fulfillment of the above agreements and signed or recognized by the WFOE in writing.

 

“License” means all permits, licenses, registrations, approvals and authorizations required for the operation of a Domestic Affiliates.

 

“Business” means all services and businesses provided or operated by a Domestic Affiliates from time to time in accordance with the licenses it has obtained, including but not limited to offline English training business and tourism business.

 

“PRC” means the People’s Republic of China (for the purposes of this Agreement only, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan).

 

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“Asset” means the tangible assets and intangible assets directly or indirectly owned by the Domestic Affiliates, including but not limited to all fixed assets, current assets, capital interests of foreign investment, intellectual property rights, and all available benefits under all contracts and any other benefits that should be obtained by the Domestic Affiliates.

 

2. Representations, Warranties and Covenants

 

1.                  On the date of this Agreement, WFOE makes the following representations, warranties and covenants:

 

a)                 WFOE is a foreign-invested limited liability company legally established and validly existing in accordance with the laws of PRC and has independent legal personality;

 

b)                 WFOE has the right to sign and perform this Agreement, and it has obtained all necessary and appropriate approvals and authorizations for the signing and performance of this Agreement;

 

c)                  This Agreement constitutes the legally valid and enforceable obligations binding on the WFOE on the effective date of this Agreement;

 

d)                 WFOE guarantees that it will use its best effort to provide relevant services to the Domestic Affiliates in accordance with the relevant laws, regulations, regulatory documents and bylaws;

 

e)                  WFOE’s signing and performance of this Agreement does not violate the currently valid laws, regulations, rules applicable to it or its bylaws. Its signing and performance of this Agreement does not violate any court judgment or arbitral award, or any administrative decision, approval, license or any other agreement under which it is a party or that is binding on it, and will not result in the suspension, revocation, confiscation or expiration (with failure to renew) of any approval, license or qualification of the government department applicable to it.

 

2.                  Prior to the termination of this Agreement, each of the Domestic Affiliates shall makes the following representations, warranties and covenants:

 

a)                 It is a limited liability company and/or private non-enterprise unit legally established and validly existing in accordance with the laws of PRC and has independent legal personality;

 

b)                 It has the right to sign and perform this Agreement, and it has obtained all necessary and appropriate approvals and authorizations for the signing and performance of this Agreement;

 

7

 

c)                  This Agreement constitutes the legally valid and enforceable obligation binding on it on the effective date of this Agreement;

 

d)                 All documents, materials and information submitted by the Domestic Affiliates to WFOE before and after the signing of this Agreement are true, complete and accurate, and there are no falsehoods, omissions or serious misleading;

 

e)                  The debt situation of the Domestic Affiliates disclosed by the Domestic Affiliates to the WFOE is true, complete and accurate;

 

f)                   Except for the pledge set by the Domestic Affiliates due to the Cooperation Agreements, there are no other encumbrances or restrictions of rights on the assets and other rights held by the Domestic Affiliates;

 

g)                  The Domestic Affiliates will strictly abide by the provisions under this Agreement and will not conduct any acts/inactions that will affect the validity and enforceability of this Agreement;

 

h)                 The signing and performance of the Agreement by the Domestic Affiliates does not violate the existing valid laws, regulations, regulations applicable to it or its bylaws. Its signing and performance of this agreement does not violate any court judgment or arbitral award or any administrative decision, approval, license or any other agreement under which it is a party or that is binding on its equity interest or other assets, and will not result in the suspension, revocation, confiscation or expiration (with failure to renew) of any approval, license or qualification of the government department applicable to it.

 

3.                  On the  date of this Agreement, each of the Meten Education Shareholders makes the following representations, warranties and covenants, severally but not jointly:

 

a)                 It has full civil capacity and legal capacity to enter into this Agreement and enjoy rights and undertake obligations under this Agreement;

 

b)                 On the effective date of this Agreement, Meten Education Shareholders are the legal owner of the equities of Meten Education, and Meten Education Shareholders holds a total of 100% of the Meten Education’s equities;

 

c)                  In addition to the rights restrictions set on the equities due to the Cooperation Agreements, the equities held by Meten Education Shareholders in Meten Education is free from any other encumbrances or rights restrictions;

 

8

 

d)                 This Agreement is signed by them and constitutes legal, valid and binding obligations on them;

 

e)                  All documents, materials and information submitted by the Meten Education Shareholders to WFOE before and after the signing of this Agreement are true, complete and accurate, without any falsehood, omission or serious misleading;

 

f)                   Meten Education Shareholders will strictly abide by the terms of this Agreement and will not conduct any act/inaction that would affect the validity and enforceability of this Agreement;

 

g)                  Its performance of this agreement does not violate the currently valid laws, regulations or regulations applicable to it. Its signing and performance of this Agreement does not violate any court judgment, arbitral award any administrative decision or any other agreement under which it is a party or that is binding on its equity interest or other assets.

 

3. Form of Cooperation

 

1.                  In order to carry out comprehensive cooperation, in addition to this Agreement, at the same time as the execution of this agreement, certain Parties have signed a series of Cooperation Agreements, including but not limited to, the Exclusive Technical Service and Management Consulting Agreement, the Exclusive Call Option Agreement, the Equity Pledge Agreement, the Shareholders’ Rights Entrustment Agreement and the Shareholders’ Rights Power of Attorney.  The Parties confirmed that through the signing of the Cooperation Agreements, various business relationships have been established between WFOE and the Domestic Affiliates, and WFOE will provide Domestic Affiliates with technical services, management support services, consulting services and intellectual property licenses required for the conducting of offline English training business and tourism business activities, including but not limited to preparation, selection and/or recommendation of training centers/schools courses and textbooks, recruitment of teachers and other staff, training support, admissions support,, public relations maintenance, market research and development, management and marketing consulting and other related services, and the payment of various amounts that the Domestic Affiliates should pay to WFOE under such agreements. Therefore, the daily operating activities of the Domestic Affiliates will have a substantial impact on their ability to pay the corresponding amount to WFOE.

 

2.                  All Parties unanimously agree that the comprehensive cooperation established by the Parties through the signing of the Cooperation Agreements is exclusive. Unless the WFOE has agreed in writing in advance, during the valid period of the Cooperation Agreements, the Domestic Affiliates, Meten Education Shareholders are not allowed to negotiate with any third party or conduct any form of cooperation that competes or conflicts with or is similar to the above cooperation.

 

9

 

3.                  In order to ensure the performance of the Cooperation Agreements, the Domestic Affiliates shall abide by the following provisions, and if the Domestic Affiliates establish any subordinate enterprises and units in the future, the Domestic Affiliates shall prompt their subordinate enterprises and units to comply with the following provisions:

 

a)                 Cautiously and effectively conduct offline English training business and tourism business activities in accordance with good financial and business standards, and maintain the asset value of Domestic Affiliates and the quality and level of offline English training and teaching and tourism services;

 

b)                 Prepare its development plan and annual work plan in accordance with the instructions of the WFOE;

 

c)                  Engage in offline English training business, tourism business and other related businesses with the assistance of WFOE;

 

d)                 Conduct related business, manage day-to-day operations and conduct financial management in accordance with WFOE’ s advice, recommendations, guidelines and other business instructions;

 

e)                  Implement the WFOE’ s advice on the appointment and dismissal of senior management and staff;

 

f)                   Adopt WFOE’ s recommendations, guidelines and plans for its strategic development;

 

g)                  Based on the purpose of developing offline English training business and tourism business, continue to operate related businesses and maintain the timely updates and continuous effectiveness of the relevant licenses and permits owned by them;

 

h)                 At the request of the WFOE, provide related materials on the business operation management and financial status of the Domestic Affiliates, and promptly inform WFOE of any or potential significant adverse effects in its business and business operation processes, and use their best efforts to prevent the occurrence of such events and/or increase in loss;

 

10

 

i)                     At the request of the WFOE, purchase from the insurance company agreed by the WFOE and holds insurance for the assets and business of the Domestic Affiliates. The amount and type of the insurance shall be the same as those usually purchased by the companies and private non-enterprise units operating similar businesses or having similar assets or properties in the same region.

 

Meten Education Shareholders severally but not jointly covenant that they will procure and ensure that the above obligations are fulfilled.

 

4.                  Meten Education Shareholders agree that they will ensure the person designated by WFOE to be the director (council) of the Domestic Affiliates in accordance with the laws and regulations and the procedures stipulated in the bylaws of the Domestic Affiliates, and ensure that the person recommended by WFOE to be the chairman of directors (councils) (if any) of the Domestic Affiliates, and the person designated by the WFOE to be the manager, chief financial officer and other senior managements of the Domestic Affiliates.

 

5.                  If the director (council) or senior management designated by the WFOE in Section 4 above no longer has a labor or employment relationship with the WFOE, whether by voluntary resignation or dismissal by WFOE, it will lose the qualification to hold any position in the Domestic Affiliates. .  In such a case, other persons designated by the WFOE shall be appointed to the corresponding positions in accordance with the provisions of Section 4 above.

 

6.                  For the purposes of Sections 4 and 5 above, the Domestic Affiliates shall, in accordance with the law, the bylaws of the Domestic Affiliates and the provisions of this Agreement, take all necessary internal and external procedures to legally complete the above dismissal and appointment.

 

7.                  The Domestic Affiliates will provide the WFOE with all the information on the operation and financial status of the Domestic Affiliates in full compliance with the requirements of the WFOE.

 

8.                  If any investigation, litigation, arbitration, administrative proceedings or other legal proceedings involving the assets, business and income of a Domestic Affiliates occurs or may occur, the Domestic Affiliates undertake to immediately notify the WFOE of the above situations.

 

11

 

9.                  Meten Education Shareholders hereby confirmed that they have authorized WFOE or person designated by WFOE to exercise all voting rights as Meten Education Shareholders in the shareholding meeting of Meten Education by signing the Shareholders’ Rights Entrustment Agreement and the Shareholders’ Power of Attorney with the WFOE.  Meten Education Shareholders agree that they will provide all assistance to the WFOE in exercising such rights, including but not limited to, at any time, in accordance with the requirements of the WFOE, providing to or withdraw from the person designated by WFOE to the power of attorney related to the entrusted matters.

 

10.           The Domestic Affiliates agrees that, without the prior written consent of WFOE, the Domestic Affiliates shall not declare or actually distribute to the Meten Education Shareholder any teaching revenues or any other income or benefit (regardless of its specific form); Meten Education Shareholders agree, if it obtains any teaching revenues or any other income or benefits (regardless of its specific form) from its Domestic Affiliates, it shall, at the time of realization, transfer such proceeds or benefits to WFOE without any conditions and compensation.

 

11.           In the event that the WFOE is to be dissolved, liquidated, bankrupt or reorganized, Meten Education Shareholders and the Domestic Affiliates unconditionally agree that the other persons designated by the Proposed Listed Company will inherit the rights and obligations of the WFOE under the Cooperation Agreements and agree to sign any necessary documents, take all necessary measures to cooperate with the person designated by the Proposed Listed Company to realize the smooth inheritance of the aforementioned contractual rights and obligations; or Meten Education Shareholders agree, according to the instructions of the Proposed Listed Company, legally procure the sale or disposal in other means in accordance with the instructions of Proposed Listed Company of the direct and/or indirect equities held by the Meten Education Shareholders in the Domestic Affiliates, and procure the free transfer of the full price from the disposal in such means of the direct and / or indirect equities held by the Meten Education Shareholders in the Domestic Affiliates to the Proposed Listed Company or other persons designated by the Proposed Listed Company; or Meten Education Shareholders agree to, in accordance with the instructions of the Proposed Listed Company, legally procure the sale or disposal in other means in accordance with the instructions of Proposed Listed Company of part or all of the assets of the Domestic Affiliates, and procure the free transfer of the part of the price from the disposal in such legal means of the assets of the Domestic Affiliates that shall be attributed to the Meten Education Shareholders to the Proposed Listed Company or the persons designated by the Proposed Listed Company.

 

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12.           Meten Education Shareholders agree and not jointly covenant that, in the event of the dissolution or liquidation of the Domestic Affiliates, firstly, the WFOE and/or its authorized persons shall be entitled to exercise all shareholders ‘ and/or organizers ‘ rights on behalf of the shareholders and/or organizers of the Domestic Affiliates, including but not limited to the rights to decide on the dissolution or liquidation of Domestic Affiliates, designate and appoint members of the liquidation group of the Domestic Affiliates and/or their agents, approve the liquidation plan and liquidation report; secondly, the shareholders and/or organizers of the Domestic Affiliates agree to freely transfer to the WFOE or other persons designated by the Proposed Listed Company, all the properties obtained or entitled to it as the shareholders and/or organizers of the Domestic Affiliates due to the dissolution or liquidation of the Domestic Affiliates, and direct the liquidation group of the Domestic Affiliates to directly transfer the above property to the WFOE and/or other persons designated by the Proposed Listed Company; thirdly, if in accordance with the laws of PRC in force at that time, the foregoing alleged transfer shall not be free, except for the paid transfer and direct delivery according to the instructions, Meten Education Shareholders further agree to return the transfer consideration in full and appropriate method to the WFOE and/or other person designated by the Proposed Listed Company, and guarantee that WFOE and/or other persons designated by the Proposed Listed Company are not subject to any  loss.

 

13.           If Meten Education’ s capital will be increased by Meten Education Shareholders, Meten Education Shareholders agree and confirm that they shall pledge all the shares corresponding to the increase in the registered capital of the Meten Education to the WFOE as the guarantee for the performance of the obligations under the Cooperation Agreements and the debt repayment. The Parties agree that Meten Education Shareholders shall prepare the agreements related to the pledge of the corresponding part of the capital increase before the capital increase of Meten Education, and sign the equity pledge agreement on the date of completion of the industrial and commercial capital increase registration, and complete the equity pledge registration procedure as soon as possible.

 

14.           If the guarantee period specified in the Equity Pledge Agreement expires, or the guarantee period registered by the relevant pledge registration authority expires, and the agreements other than the Equity Pledge Agreement among the Cooperation Agreements are still valid, the relevant guarantor shall continue to provide guarantee for the performance of the obligations under the Cooperation Agreements and the debt repayment with the equity of the Meten Education that it holds, and the scope of the collateral provided shall not be less than the scope of the collateral under the original guarantee contract, and such guarantees continued to be provided shall be satisfactory to the WFOE and the Proposed Listed Company, and the relevant guarantors will do their best to register the pledges and other matters with the relevant registration authorities.

 

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15.           Meten Education Shareholders and Domestic Affiliates hereby confirm and agree that, unless they have obtained the prior written consent of WFOE or the person designated by WFOE, Meten Education Shareholders and Domestic Affiliates will not conduct or procure any activity or transaction that may materially affect the assets, business, personnel, obligations, rights or activities or transactions operated by the Domestic Affiliates, , nor will they engage in or procure any activity or transaction that has the potential material effect on the ability of the Meten Education Shareholders and Domestic Affiliates to perform their obligations under the Cooperation Agreements. including but not limited to:

 

a)                 The establishment of any subordinate enterprises and units of Domestic Affiliates, including subsidiaries, branches and private non-enterprise units;

 

b)                 Carrying out any activities beyond the normal business scope of the Domestic Affiliates or its subsidiaries or units, or change of the operation mode of the Domestic Affiliates or their subsidiaries or units;

 

c)                  The merge, division, change of organizational form, dissolution, and liquidation of Domestic Affiliates and/or their subordinate enterprises or units;

 

d)                 Any borrowing, loans incurred by, or the inheritance or acceptance of, or providing any guarantee for any debt by Meten Education Shareholders from or to the Domestic Affiliates or their subsidiaries or units;

 

e)                  Any borrowing, loans incurred by, or the inheritance or acceptance of, or providing any guarantee for any debt by the Domestic Affiliates or their affiliated enterprise, unless such debt incurs during the ordinary course of business of the Domestic Affiliates and the amount of each debt is less than RMB 500,000;

 

f)                   Alteration or dismissal of any directors (councils), supervisors of the Domestic Affiliates or their subsidiaries or units or the alteration of any senior management personnel of the Domestic Affiliates or their subsidiaries or units, including but not limited to managers, deputy managers, chief financial officers, technical directors, etc., or increase or decrease of the remuneration and benefits of the directors (councils), headmasters, supervisors, managers and other senior management personnel of the Domestic Affiliates or their subsidiaries or units, or alteration of the terms and conditions of employment of the directors (councils), headmasters, supervisors, managers and other senior management personnel of the Domestic Affiliates or their subsidiaries or units;

 

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g)                  Selling, transferring, lending to, or authorizing any third party other than the WFOE or its designee to use or otherwise dispose of the assets or rights of the Domestic Affiliates or their subsidiaries or units, including but not limited to the domain name, trademark, intellectual property, and proprietary technology registered by the Domestic Affiliates or their subsidiaries or units, or any assets or rights purchased by the Domestic Affiliates or its subsidiaries or units from the third party, other than assets for disposed or purchased by the Domestic Affiliates required for its daily operation, and the where the value of the assets involved in the transaction does not exceed RMB 500,000;

 

h)                 Sale of shares and/or organizer rights in Domestic Affiliates or their subsidiaries or units to any third party other than WFOE or its designee, or increase or decrease of the registered capital of Domestic Affiliates or their subsidiaries or units; or change of the structure of equities and/or organizer rights of the Domestic Affiliates or their subsidiaries or units in any method;

 

i)                     Providing guarantees with the equity and/or organizer rights, assets or rights of Domestic Affiliates or their subsidiaries or units to any third party other than WFOE or its designees or procuring the Domestic Affiliates or their subsidiaries or units to provide any other form of guarantee, or impose any other encumbrances on the equity and/or organizer rights of or the assets owned by the Domestic Affiliates or their subsidiaries or units;

 

j)                    Amendment, modification or revocation of the licenses of the Domestic Affiliates or their subsidiaries or units;

 

k)                 Modification of the bylaws of the Domestic Affiliates or their subsidiaries or units or change of the business scope of the Domestic Affiliates or their subsidiaries or units;

 

l)                     Change of the normal internal business procedures of the Domestic Affiliates or their subsidiaries or units or modification of any internal rules and regulations, including but not limited to the financial management system, the rules of the board of directors (councils) / shareholders meeting, the rules of work of managers / other administrative leaders;

 

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m)             Not in accordance with the planning or recommendations of the WFOE or the Proposed Listed Company, conducting any transaction or signing any business contract related to the Domestic Affiliates or its subsidiaries or units outside of the existing normal business of the Domestic Affiliates or its subsidiaries or units with any third party;

 

n)                 Allocating dividends, teaching revenues, other payments or loans to shareholders or organizers of Domestic Affiliates or their subsidiaries or units in any way;

 

o)                 Any activity that has or may adversely affect the ability of the Domestic Affiliates or its subsidiaries or units to pay the WFOE, to conduct daily operations, or the business, assets of the Domestic Affiliates or their subsidiaries or units;

 

p)                 Any transaction that has or may adversely affect the cooperation between the WFOE, the Meten Education Shareholders, and the Domestic Affiliates or their subsidiaries or units under the Cooperation Agreements; and

 

q)                 Transferring rights and obligations under this Agreement and other Cooperation Agreements to any third party other than the designated person of WFOE or WFOE, or the establishment or conducting of any cooperation or business relationship that is the same or similar to this cooperation by the Meten Education Shareholders, Domestic Affiliates or their subsidiaries or units with any third parties.

 

16.           Meten Education Individual Shareholders guarantee to WFOE that they had made all reasonable arrangements and signed all necessary documents to ensure when they died, were incapacitated, restricted in their ability to act, divorced, or otherwise their abilities to exercise their (direct and / or indirect) equities of Meten Education were affected, their successor, guardian, spouse, etc. who shall thereby be potentially able to obtain their equities or related rights of Meten Education, may not affect or hinder the performance of the Cooperation Agreements.  Related arrangements include but are not limited to:

 

a)                 Meten Education Individual Shareholders and their spouse unanimously agree that when the Meten Education Individual Shareholders’ capacity was limited or incapacitated, all of their (direct and indirect) equity interests in Meten Education will be transferred without compensation and without conditions to WFOE or other person designated by the Proposed Listed Company. Meten Education Individual Shareholders and their spouse further agree that in these circumstances, Meten Education Individual Shareholders and their spouse, and the guardians of Meten Education Individual Shareholders must be unconditionally and freely, at the request by the WFOE or other persons designated by the Proposed Listed Company, provide all necessary assistance and support to complete the legal procedures related to the transfer of the above equity rights;

 

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b)                 Meten Education Individual Shareholders and their spouse unanimously agreed that when any of Meten Education Individual Shareholders or their spouse dies, all of Meten Education Individual Shareholders’ (direct and indirect) equity interests in Meten Education shall be freely and unconditionally transferred to WFOE or other persons designated by the Proposed Listed Company  and shall not be included as the legal inheritance of the deceased party. Meten Education Individual Shareholders and their spouse unanimously agree that in these circumstances, Meten Education Individual Shareholders and his spouse, the estate administrator of the deceased party must unconditionally and freely, at the request of the WFOE or other person designated by the Proposed Listed Company, provide all necessary assistance and support to complete the legal procedures related to the transfer of equity interests; and

 

c)                  Meten Education Individual Shareholders and their spouses unanimously agree that when the Meten Education Individual Shareholders and their spouse divorced, all of Meten Education Individual Shareholders ‘s (direct and indirect) equity interests in Meten Education shall be transferred without compensation and without conditions to WFOE or other persons designated by the Proposed Listed Company and shall not be included into the scope of the property that needs to be divided and distributed due to divorce. Meten Education Individual Shareholders and their spouse unanimously agree that in these circumstances, Meten Education Individual Shareholders and their spouse must unconditionally and freely perform all necessary assistance and support at the request of the WFOE or other person designated by the Proposed Listed Company to complete the legal procedures related to the signing of the transfer of equity interests.

 

17.           Meten Education Institution Shareholders covenant to the WFOE that they had made all reasonable arrangements and signed all necessary documents to ensure that when the Meten Education Institution Shareholders dissolve, liquidate, or are revoked, ordered to close, applied for compulsory dissolution or for other reasons that need to dissolve or liquidate or otherwise their abilities to exercise their (direct and / or indirect) equities of Meten Education were affected,, its successors, administrators, liquidation groups, etc. who shall thereby be potentially able to obtain their equities or related rights of Meten Education, may not affect or hinder the performance of the Cooperation Agreements.  Related arrangements include but are not limited to:

 

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a)                 Meten Education Institution Shareholders unanimously agree to, when Meten Education Institution Shareholders are revoked, ordered to close, applied for forced dissolution or for other reasons need to be dissolved, liquidated or in other similar situations, Meten Education, Meten Education Institution Shareholders, and the liquidation group of the Meten Education Institution Shareholders shall provide all necessary assistance and support, at the request of the WFOE or other persons designated by the Proposed Listed Company, unconditionally and without compensation, in order to complete the aforementioned legal procedures related to the transfer of equities in Meten Education, and shall voluntarily and irrevocably waive the exercise of statutory and / or agreed revocation rights, and shall not carry out other acts and / or inactions that may hinder the WFOE or the person designated by the Proposed Listed Company to acquire and exercise the equity;

 

b)                 Meten Education Institution Shareholders unanimously agree to, when the equity of Meten Education was applied for enforcement or otherwise Meten Education Institution Shareholders’ abilities to hold their (direct and / or indirect) equities of Meten Education were materially restricted or similarly disposed, Meten Education, Meten Education Institution Shareholders, and the liquidation group of the Meten Education Institution Shareholders shall provide all necessary assistance and support, at the request of the WFOE or other persons designated by the Proposed Listed Company, unconditionally and without compensation, in order to complete the aforementioned legal procedures related to the transfer of equities in Meten Education, and shall voluntarily and irrevocably waive the exercise of statutory and / or agreed revocation rights, and shall not carry out other acts and / or inactions that may hinder the WFOE or the person designated by the Proposed Listed Company to acquire and exercise the equity.

 

18.           Meten Education Shareholders assure to the WFOE that, unless prior written consent of the WFOE was obtained, Meten Education Shareholders (whether individually or collectively) will not directly or indirectly engage, participate in or conduct business competitive or potentially competitive with the business of the Domestic Affiliates and its subsidiaries and units, and will not acquire or hold business competitive or potentially competitive with the business of Domestic Affiliates and their subsidiaries and units, and will not use information obtained from Domestic Affiliates and their subsidiaries and units to engage in or directly or indirectly participate in businesses competitive or potentially competitive with the business of the Domestic Affiliates and their affiliates and units, and will not benefit from any business competitive or potentially competitive with the business of Domestic Affiliates and their affiliates.  However, the investment by the Meten Education Institution Shareholders as a financial investor in a business competitive or potentially competitive with the business of Domestic Affiliates and its subsidiaries and units is not subject to the foregoing Section 18 and this Section 19.

 

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19.           Meten Education Shareholders confirm and agree, if Meten Education Shareholders (whether alone or collectively), directly or indirectly engage, participate in or conduct any business or activity that competes with or may compete with the business of the Domestic Affiliates and its subsidiaries and units, then WFOE and/or other entities designated by the Proposed Listed Company shall enjoy an option free of charge, requiring (i) a legal entity engaged in the competitive business to sign with the WFOE and/or other entities designated by the Proposed Listed Company in a timely manner full set of agreements arrangements similar to the Cooperation Agreements, the consideration must be negotiated and determined by the Parties based on the fair and reasonable principles and the valuation of third-party professional appraisers and the applicable laws and regulations (including the laws, regulations and relevant rules of securities regulation in the place of listing); or (ii) cease to engage in such competitive business.  The WFOE and/or the Proposed Listed Company has the right to decide whether to require a legal entity that is engaged in a competitive business to sign a full set of agreements similar to the Cooperation Agreements with the WFOE and/or other entities designated by the Proposed Listed Company within a reasonable time after obtaining written notice from the Meten Education Shareholders.  If the WFOE and/or other entities designated by the Proposed Listed Company choose to exercise rights under subsection (i), Meten Education Shareholders shall procure and ensure that the legal entity engaged in the competitive business signs a full set of agreement arrangements with the WFOE in a timely manner similar to the Cooperation Agreements; If the WFOE and/or other entities designated by the Proposed Listed Company choose to exercise rights under subsection (ii), then Meten Education Shareholders shall terminate such competitive business in an appropriate manner within a reasonable time to eliminate the inter-industry competition between Meten Education Shareholders, WFOE and the Proposed Listed Company.

 

20.           Meten Education Shareholders and Domestic Affiliates assure to the WFOE that they will not take any action or inaction that may be contrary to the purpose and intention of the Cooperation Agreements, which may lead to or may lead to the conflict of interest between WFOE and Meten Education Shareholders and Domestic Affiliates and their subsidiaries and units.  If the interest of Meten Education Shareholders, Domestic Affiliates and WFOE conflict in the implementation of the Cooperation Agreements, Meten Education Shareholders, Domestic Affiliates will safeguard the legitimate interests of WFOE in the Cooperation Agreements and obey the WFOE’ s instructions in accordance with the laws.

 

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21.           Meten Education Shareholders confirm to the WFOE, after the full investment of all capital contributions by the Meten Education Shareholders to Meten Education, such capital contribution shall be the assets of Meten Education, Meten Education Shareholders shall not, under any circumstances, require Meten Education to repay the capital contribution and will not require for WFOE’ s compensation for the capital contribution.

 

22.           Meten Education Shareholders unanimously agree that their rights and obligations under the Cooperation Agreements are an integral part of the equity of Meten Education, unless otherwise directed by WFOE, the obtaining and/or exercise of the equity of Meten Education by any means (including but not limited to acquisition, property division, inheritance, guardianship, agency) by any person is considered as the recognition and acceptance of the corresponding rights and obligations under the Cooperation Agreements, as if such person has signed the Cooperation Agreements.  If such person brings up any disapproval, objections or other reservations to the corresponding rights and obligations under the Cooperation Agreements, then any such acts or inaction that conflict with the Cooperation Agreements are invalid and, WFOE reserves the legal right to recover the losses thereby caused to the WFOE.

 

23.           Meten Education agrees that its rights and obligations under the Cooperation Agreements are an integral part of the  equity and/or organizer right held by it in its Domestic Affiliates, unless otherwise directed by WFOE, the obtaining and/or exercise of such equity and/or organizer right by any means (including but not limited to acquisition, merger, division, bankruptcy management, dissolution, liquidation, property escrow, agency) by any person is deemed as the recognition and acceptance of the corresponding rights and obligations under the Cooperation Agreements, as if such person has signed the Cooperation Agreements.  If such person brings up any disapproval, objections or other reservations to the corresponding rights and obligations under the Cooperation Agreements, then any such acts or inaction that conflict with the Cooperation Agreements are invalid and, WFOE reserves the legal right to recover the losses thereby caused to the WFOE.

 

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4. Financial Management and Payment of Fees

 

1.                  Service Fee

 

a)                 WFOE provides the Domestic Affiliates with exclusive technical services and exclusive management consulting services required for offline English training and tourism business, including but not limited to training centers/schools courses, professional design, preparation, selection and/or recommendation of textbooks, recruitment of teachers and other staff, training support, admissions support,, public relations maintenance, market research and development, management and marketing consulting, etc., in accordance with the provisions of this Agreement and the Exclusive Technical Services and Management Consulting Agreement. As a consideration, Domestic Affiliates shall pay technical services fees, management and consulting services fees to WFOE in accordance with relevant agreements. (The above fees are collectively referred to as “Service Fees”); and

 

b)                 For details of the accounting, confirmation and payment of Service Fees, please refer to the relevant provisions of “Section 5. Service Fees” of the Exclusive Technical Service and Management Consulting Agreement.

 

2.                  Financial Statements

 

The Domestic Affiliates shall adopt an accounting system established and implemented in accordance with sound business practices, and prepare financial statements of Domestic Affiliates and their subsidiaries and units that meet the requirements of WFOE and shall deliver them to WFOE within 3 business days from the date of completion of the preparation of these financial statements and other financial reports.

 

3.                  Audit

 

The Domestic Affiliates shall allow the WFOE, the Proposed Listed Company and/or its designated auditors, under reasonably notification, to audit the relevant accounting books and records of the Domestic Affiliates and their subsidiaries and units at the principal office of the Domestic Affiliates, and to copy the required parts of the accounting books and records to verify the income amount and the accuracy of the statements for any period. For this purpose, the Domestic Affiliates agree to provide relevant information and materials concerning the operations, business, customers, finances, employees, etc. of the Domestic Affiliates and their subsidiaries and units, and agree that the Proposed Listed Company shall disclose such information and materials in order to meet the requirements of securities  regulation of the place in which it intends to be listed.

 

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5. Liability for Breach of Contract

 

1.                  Any Party that violates the provisions of this Agreement and other Cooperation Agreements and make all or part of this Agreement or other Cooperation Agreements unenforceable, shall be liable for breach of contract, and for continuous actual performance and shall compensate the other Parties for the losses caused thereby (including litigation fees and attorney fees caused thereby).

 

2.                  The Parties agree that, subject to the applicable laws, WFOE has the right to immediately claim to the court or arbitration institution that has jurisdiction over the breach of contract by the Meten Education Shareholders and Domestic Affiliates under the Cooperation Agreements for statutory relief or other remedies related to the equity or land or other assets held by the defaulting party. , including but not limited to the transfer of equity and/or organizer right of Domestic Affiliates and their subsidiaries and units or the compulsory transfer of assets by Meten Education Shareholders, Domestic Affiliates and their subsidiaries and units, or the order to dissolve or liquidate the Domestic Affiliates and their subsidiaries and units to compensate for the loss of WFOE.

 

3.                  With respect to any loss, damage, obligation and expense caused by any litigation, claim or other request against WFOE arising out of or arising from the service provided by WFOE as required by the Meten Education Shareholders and the Domestic Affiliates under this Agreement, the Meten Education Shareholders and the Domestic Affiliates shall severally but not jointly compensate WFOE and protect the WFOE from loss.

 

6. Governing Laws and Dispute Resolution

 

1.                  Change of Law

 

At any time after the date of this Agreement, with respect to the enactment or revision of any Chinese laws, regulations or rules, or due to changes in the interpretation or application of such laws, regulations or rules, the following provisions shall apply:

 

a)                 If the above changes or new rules are more favorable to any Party than the relevant laws, regulations, decrees or regulations in effect on the date of signing this Agreement (and the other Parties are not seriously adversely affected), under the coordination of the WFOE, the Parties shall timely modify the Cooperation Agreements to obtain the benefits arising from such changes or new regulations; or the Parties shall apply in time for the benefits of such changes or new regulations, and the Parties shall use their best efforts to obtain the approval of the application; or

 

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b)                 If, due to the above changes or new regulations, the economic interests of either Party under this Agreement are directly or indirectly adversely affected, this Agreement shall continue to be executed in accordance with the original terms.  Each Party shall use all legal means to obtain an exemption from compliance with the change or regulations.  If the adverse effects on the economic interests of either Party cannot be resolved in accordance with the provisions of this Agreement, and the affected Party notifies the other Parties, the Parties shall promptly consult with the WFOE and make all necessary modifications to the Cooperation Agreements to maintain the economic interests of the affected Party under this Agreement.

 

2.                  The laws of PRC shall apply to the conclusion, validity, interpretation, performance, modification and termination of this Agreement and the resolution of disputes.

 

3.                  Any conflict, dispute or claim arising out of or in connection with the performance, interpretation, breach of contract, termination or validity of this Agreement or this Agreement shall be settled through friendly negotiation.  The consultation shall begin immediately after a written request for negotiation with specific statement of the dispute or claim has been sent to the other Parties.

 

4.                  If the dispute cannot be resolved within thirty (30) days after the delivery of the above notice, either Party has the right to submit the dispute to arbitration for settlement.  The Parties agree to submit the dispute to the Shenzhen International Court of Arbitration in Shenzhen for an arbitral award in accordance with the arbitration rules in force at that time. The arbitral award is final and is legally binding on all parties.

 

5.                  During the arbitration period, other than obligations related to the disputes submitted to the arbitration, the Parties to this Agreement shall continue to perform their other obligations under this Agreement.

 

6.                  Any rights, powers and remedies given to the Parties under any provision of this Agreement shall not exclude any other rights, powers or remedies that the Party may have in accordance with the law and other terms of this Agreement, and that the rights, powers and remedies and the exercising of such rights, powers and remedies by one Party does not exclude the exercise of other rights, powers and remedies available to such Party.

 

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7.                  A Party’s failure to exercise or delay of the exercise of any of its rights, powers and remedies (hereinafter referred to as “Rights of Such Party”) under this Agreement or the laws will not result in the waiver of the Rights of Such Party, and any single or partial waiver of the Rights of Such Party does not exclude the Party’s exercise of the Rights of Such Party in other ways and the exercise of other Rights of Such Party.

 

7. Confidentiality

 

1.                  The Parties acknowledge and determine that any oral or written information exchanged with respect to this Agreement is confidential.  All Parties shall keep all such information confidential and shall not disclose any relevant information to any third party without the prior written consent of the other Parties, except in the following cases:

 

a)                 The public is aware of or will be aware of such information (not due to the disclosure to the public by one of the recipients);

 

b)                 Information required to be disclosed in accordance with the laws and regulations or the rules or regulations of the stock exchange or the requirements of the regulatory authorities;

 

c)                  The information required to be disclosed by any Party to its legal or financial adviser for the transactions described in this Agreement and the legal or financial adviser is also subject to confidentiality obligations similar to those of this Section; or

 

2.                  The disclosure of the secrets of the staff of any Party or the institution a Party employs shall be deemed to be the disclosure by such Party, and the Party shall be liable for breach of contract in accordance with this Agreement.

 

3.                  The Parties agree that the confidentiality provisions of this Section 7 will continue to be valid irrespective of whether this Agreement is invalid, altered, discharged, terminated or not operational.

 

8. Severability

 

1.                  If any one or more of the provisions of this Agreement are held to be invalid, illegal or unenforceable in any way under any law or regulation, the validity, legality or enforceability of the other provisions of this Agreement shall not be thereby subject to any influence or damage.  All Parties shall, through good faith consultations, seek to replace those invalid, illegal or unenforceable provisions with valid provisions to the greatest extent expected by the Parties and within the permission of the law, and the economic effects such effective provisions produce shall be similar to those invalid, illegal or unenforceable regulations.

 

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9. Term

 

1.                  This Agreement shall become effective on the date on which the Parties sign this Agreement, and shall automatically terminate when WFOE and/or other civil entities designated by the Proposed Listed Company have fully exercised their options to purchase all the (direct and indirect) equities held by Meten Education Shareholders in Domestic Affiliates in accordance with the Exclusive Call Option Agreement entered into on the date of this Agreement with the Domestic Affiliates and Meten Education Shareholders. WFOE may terminate this Agreement unilaterally after notice in thirty (30) days advance. Unless otherwise required by law, in any case, the Domestic Affiliates and Meten Education Shareholder have no right to terminate or discharge this Agreement unilaterally.

 

2.                  For the avoidance of doubt, according to the Exclusive Call Option Agreement, if the Chinese laws and regulations permit the WFOE and/or other foreign or overseas entities designated by the Proposed Listed Company to directly hold part or all of the shares and/or organizer rights of the Domestic Affiliates, and conduct restricted/prohibited business such as offline English training business and tourism business through the Domestic Affiliates, WFOE shall issue a notice of equity purchase within the fastest possible time, and the equity purchaser shall purchase the amount of (direct and indirect) equity from the Meten Education Shareholders not lower than the maximum amount of equity permitted to be held by the WFOE and/or other foreign or overseas entities designated by the Proposed Listed Company in the Domestic Affiliates under the laws of PRC at that time. This Agreement shall automatically terminate when the equity purchasers have fully exercised their options to purchase all the (direct and indirect) equities held by Meten Education Shareholders in Domestic Affiliates in accordance with the Exclusive Call Option Agreement.

 

10. Amendment

 

1.                  By agreement between the Parties to the Agreement and approval by the shareholders of the WFOE, the Parties to the Agreement may modify or supplement this Agreement and take all necessary steps and actions, and bear the corresponding expenses, so that any modification or supplement can be legally valid. .

 

2.                  If [New York Stock Exchange] (hereinafter referred to as “[NYSE]”) or other regulatory authorities make any amendments to this Agreement, or any changes occur to any relevant rules, regulations or related requirements of [NYSE], related to this Agreement, this Agreement shall be revised by the Parties accordingly.

 

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11. Force Majeure

 

1.                  If the liability of the Parties under this Agreement shall not be fulfilled due to the event of force majeure, and the liability under this Agreement will be waived within the scope of force majeure.  For the purposes of this Agreement, force majeure events include only natural disasters, storms, tornadoes and other weather conditions, strikes, closures/shutdowns or other industry issues, wars, riots, conspiracy, enemy acts, terrorist acts or criminal organizations acts, blockades, serious illnesses or plagues, earthquakes or other crustal movements, floods and other natural disasters, bomb explosions or other explosions, fires, accidents, or government actions that result in failure to comply with this Agreement.

 

2.                  In the event of a force majeure event, the Party affected by the force majeure event shall endeavor to reduce and remove the effects of the force majeure event and assume the responsibility of performing the delayed and blocked obligations under the Agreement.  After the event of force majeure is resolved, the Parties agree to continue to perform this Agreement as far as possible.

 

3.                  In the event of a force majeure event that may result in delays, prevention or threats to delay or prevent the performance of this Agreement, the Parties shall immediately notify the other Parties in writing and provide all relevant information.

 

12. Change of Circumstances

 

1.                  If at any time, due to the enactment or revision of any Chinese laws, regulations or rules, or due to changes in the interpretation or application of such laws, regulations or rules, or due to changes in the registration procedures, which makes WFOE believe that the maintenance of this Agreement in effect and the performance of this Agreement becomes illegal or contrary to such laws, regulations or rules, Meten Education Shareholders and Domestic Affiliates shall immediately, following the written instructions of the WFOE and take any action and/or sign any agreement or other documents in accordance with the requirements of the WFOE. to:

 

(a)         keep this Agreement valid; and/or

 

(b)         fulfill the intent and purpose of this Agreement by ways prescribed under this Agreement or by other means.

 

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13. Miscellaneous

 

1.                  For the avoidance of doubt, each of the representations, warranties and covenants made by the Meten Education Shareholders under this Agreement shall be deemed to be made separately, and the above representations, warranties, covenants or any obligations under this Agreement will not constitute joint obligations between the Meten Education Shareholders.  Further, each obligations assumed by the Meten Education Shareholder to “procure”, “covenant”, “guarantee” or “agree” that Meten Education or other Domestic Affiliates shall act or shall not act under this Agreement only refer to the exercise of the rights by such shareholders according to the bylaws of Meten Education or other Domestic Affiliates or other agreements based on the respective shareholding ratios, or the exercise of voting rights at the shareholders’ meeting to support such acts or inaction, or the support of such acts or inaction by the designated or appointed directors or senior management personnel  in accordance with the provisions of bylaws or other agreements.  No shareholder shall assume any warranty or guarantee responsibility for the consequences of the act or inaction by Meten Education or other Domestic Affiliates beyond its rights as shareholders.

 

2.                  The Parties agree that, to the extent permitted by Chinese laws, WFOE may transfer its rights and obligations under this Agreement to other third parties as it may require.  WFOE is only required to give written notice to the other Parties at the time of the transfer and no further consent is required from such other Parties.

 

3.                  The Parties agree that, without WFOE ‘s prior written consent, the Domestic Affiliates and Meten Education Shareholders shall not transfer their rights and obligations under this Agreement to any other party.

 

4.                  In any case, if any equities of Meten Education are transferred to any third party other than the Meten Education Shareholders, Meten Education Shareholders are obliged to make the relevant transferee accept the rights and obligations under the Cooperation Agreements in writing and be bound by these rights and obligations.

 

5.                  In any case, if the shareholder and/or organizer rights of the Domestic Affiliates are transferred to any third party other than the existing shareholders and/or organizers of the Domestic Affiliates, Meten Education Shareholders and the existing shareholder and/or organizers of Domestic Affiliates are obliged to make the relevant transferee accept the rights and obligations under the Cooperation Agreements in writing and be bound by these rights and obligations.

 

27

 

6.                  This Agreement is drafted in Chinese and in eighty-three (83) counterparts, each of which shall be held by each Party to this agreement and has the same legal effect.

 

(Signature Pages Follow)

 

28

 

(Signature Page of the Business Cooperation Agreement)

 

	
Zhuhai   Meizhilian Education Technology Co., Ltd. (seal)
    	
 
    
	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Yupeng Guo
    	
 
    

 

 

(Signature Page of the Business Cooperation Agreement)

 

	
Shenzhen   Meten International Education Co., Ltd. (seal)
    	
 
    
	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    

 

 

(Signature Page of the Business Cooperation Agreement)

 

	
Jishuang   Zhao
    	
 
    
	
 
    	
 
    
	
 
    	
ID card number: []
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    

 

 

(Signature Page of the Business Cooperation Agreement)

 

	
Siguang   Peng
    	
 
    
	
 
    	
 
    
	
 
    	
ID card number: []
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Siguang Peng
    	
 
    

 

 

(Signature Page of the Business Cooperation Agreement)

 

	
Yupeng   Guo
    	
 
    
	
 
    	
 
    
	
 
    	
ID card number: []
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Yupeng Guo
    	
 
    

 

 

(Signature Page of the Business Cooperation Agreement)

 

	
Yun   Feng
    	
 
    
	
 
    	
 
    
	
 
    	
ID card number: []
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Yun Feng
    	
 
    

 

 

(Signature Page of the Business Cooperation Agreement)

 

	
Jun   Yao
    	
 
    
	
 
    	
 
    
	
 
    	
ID card number: []
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Jun Yao
    	
 
    

 

 

(Signature Page of the Business Cooperation Agreement)

 

	
Tong   Zeng
    	
 
    
	
 
    	
 
    
	
 
    	
ID card number: []
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Tong Zeng
    	
 
    

 

 

(Signature Page of the Business Cooperation Agreement)

 

	
Yongchao   Chen
    	
 
    
	
 
    	
 
    
	
 
    	
ID card number: []
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Yongchao Chen
    	
 
    

 

 

(Signature Page of the Business Cooperation Agreement)

 

	
Xinyu   Meilianzhong Investment Management Center (limited partnership) (seal)
    	
 
    
	
 
    	
 
    
	
 
    	
Signature of the   executing partner/authorized representative:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Siqi Huang
    	
 
    
	
 
    	
 
    
	
Xinyu   Meilianxing Investment Management Center (Limited Partnership) (seal)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Signature of the   executing partner/authorized representative:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Siqi Huang
    	
 
    
	
 
    	
 
    
	
Xinyu   Meilianchou Investment Management Center (Limited Partnership) (seal)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Signature of the executing   partner/authorized representative:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Siqi Huang
    	
 
    

 

 

(Signature Page of the Business Cooperation Agreement)

 

	
Shenzhen   Daoge No. 21 Investment Partnership (Limited Partnership) (seal)
    	
 
    
	
 
    	
 
    
	
 
    	
Signature of the   executing partner/authorized representative:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Chenyang Xu
    	
 
    
	
 
    	
 
    
	
Shenzhen   Daoge No. 11 Education Investment Partnership (Limited Partnership)   (seal)
    	
 
    
	
 
    	
 
    
	
 
    	
Signature of the   executing partner/authorized representative:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Chenyang Xu
    	
 
    
	
 
    	
 
    
	
Shenzhen   Daoge Growth No. 3 Investment Fund Partnership (Limited Partnership)   (seal)
    	
 
    
	
 
    	
 
    
	
 
    	
Signature of the   executing partner/authorized representative:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Chenyang Xu
    	
 
    
	
 
    	
 
    
	
Shenzhen   Daoge Growth No. 6 Investment Fund Partnership (Limited Partnership)   (seal)
    	
 
    
	
 
    	
 
    
	
 
    	
Signature of the   executing partner/authorized representative:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Chenyang Xu
    	
 
    
	
 
    	
 
    
	
Shenzhen   Daoge Growth No. 5 Investment Fund Partnership (Limited Partnership)   (seal)
    	
 
    
	
 
    	
 
    
	
 
    	
Signature of the   executing partner/authorized representative:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Chenyang Xu
    	
 
    

 

 

(Signature Page of the Business Cooperation Agreement)

 

	
Zhihan   (Shanghai) Investment Center (Limited Partnership) (seal)
    	
 
    
	
 
    	
 
    
	
 
    	
Signature of the   executing partner/authorized representative:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Junbao Shan
    	
 
    

 

 

(Signature Page of the Business Cooperation Agreement)

 

	
Hangzhou   Muhua Equity Investment Fund Partnership (Limited Partnership) (seal)
    	
 
    
	
 
    	
 
    
	
 
    	
Signature of the   executing partner/authorized representative:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Shu Zhang
    	
 
    

 

 

(Signature Page of the Business Cooperation Agreement)

 

	
Meten Education (Shenzhen)   Co., Ltd. (seal)
    	
 
    	
Shenzhen Meten Qiancheng   International Education Co., Ltd. (seal)
    
	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal representative/authorized   representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    
	
Shenzhen Yinglian Information   Consulting Co., Ltd. (seal)
    	
 
    	
Shenzhen Yingguo Information   Technology Co., Ltd. (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal representative/authorized   representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    
	
Lv Cheng Tian Xia International   Travel Service (Beijing) Co., Ltd. (seal)
    	
 
    	
Beijing Le Wen Xie Er Education   Consulting Co., Ltd. (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    
	
Beijing Meten Yingguo Education   Consulting Co., Ltd. (seal)
    	
 
    	
Beijing Meilianxing Education   Technology Co., Ltd. (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    

 

 

	
Beijing Meten Overseas   Technology Co., Ltd. (seal)
    	
 
    	
Chengdu Meten Education   Technology Co., Ltd. (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    
	
Chengdu Meten English Training   School Co., Ltd. (seal)
    	
 
    	
Meten Education (Dongguan)   Co., Ltd. (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal representative/authorized   representative:
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    
	
Dongguan Meten Education   Technology Co., Ltd. (seal)
    	
 
    	
Guangzhou Meten Education   Technology Co., Ltd. (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    

 

 

(Signature Page of the Business Cooperation Agreement)

 

	
Huizhou Meten Education   Technology Co., Ltd. (seal)
    	
 
    	
Nanjing Meten Foreign Language   Training Co., Ltd. (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ningbo Tangning Education   Information Consulting Co., Ltd. (seal)
    	
 
    	
Quanzhou Meten Education   Consulting Co., Ltd. (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Shaoxing Yuecheng Meten English   Training School Co., Ltd. (seal)
    	
 
    	
Suzhou Meten Education   Consulting Co., Ltd. (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal representative/authorized   representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Wuxi Meten Foreign Language   Training Co., Ltd. (seal)
    	
 
    	
Wuhan Meilianxing Teaching   Technology Co., Ltd. (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal representative/authorized   representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    

 

 

	
Chongqing Nan’an District   Xinlian English Training Co., Ltd. (seal)
    	
 
    	
Changzhou Meten Education   Technology Co., Ltd. (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Beijing Jingchengying Education   Network Technology Co., Ltd. (seal)
    	
 
    	
Beijing Jingchengying Education   and Culture Development Co., Ltd. (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Shenzhen Meten English Training   Center (seal)
    	
 
    	
Chengdu Wuhou District Meten   English Training School (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal representative/authorized   representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    

 

 

(Signature Page of the Business Cooperation Agreement)

 

	
Chengdu Qingyang District Meten   English Training School (seal)
    	
 
    	
Mianyang City Peicheng District   Meten English Training School (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Dongguan Dongcheng Meten   English Training Center (seal)
    	
 
    	
Dongguan Nancheng Meten English   Training Center (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Meten English Training School,   Chancheng District, Foshan (seal)
    	
 
    	
Meten English Training Center,   Nanhai District, Foshan (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Meten Wanda English Training   Center, Nanhai District, Foshan (seal)
    	
 
    	
Daliang Meten English Training   Center, Shunde District, Foshan (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Meten English Training Center,   Tianhe District, Guangzhou (seal)
    	
 
    	
Meten English Training Center,   Pengjiang District, Jiangmen (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    

 

 

	
Nanchang Honggutan Meten   English Training School (seal)
    	
 
    	
Nanjing Qinhuai Meten English   Training School (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ningbo Zhiyue Foreign Language   School (seal)
    	
 
    	
Zhiyue Education Training   School, Yinzhou District, Ningbo (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    

 

 

(Signature Page of the Business Cooperation Agreement)

 

	
Meten English Training Center,   Huli District, Xiamen (seal)
    	
 
    	
Meten English Training Center,   Fengze District, Quanzhou (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Shenyang Meten English Training   School (seal)
    	
 
    	
Meten English Training Center,   High-Tech Zone, Suzhou (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Suzhou Meten English Training   Center (seal)
    	
 
    	
Meten English Training   Center, Industrial Park Zone, Suzhou (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Meten English Training School,   Donghu New Technology Development Zone, Wuhan (seal)
    	
 
    	
Meten English Training School,   Jianghan District, Wuhan (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal representative/authorized   representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Meten English Training School,   Hanyang District, Wuhan (seal)
    	
 
    	
Xi’an Meten English Training   Center (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    

 

 

	
Meten English Training School,   Kaifu District, Changsha (seal)
    	
 
    	
Zhongshan Meten English   Training Center (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Meten English Training Center,   East District, Zhongshan (seal)
    	
 
    	
Chongqing Yuzhong Meten English   Training School (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    

 

 

(Signature Page of the Business Cooperation Agreement)

 

	
Meilian English Training   School, Jiulongpo District, Chongqing (seal)
    	
 
    	
Meten English Training School,   Jiangbei District, Chongqing (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Meten English Education   Training School, Shapingba District, Chongqing (seal)
    	
 
    	
ABC Foreign Language Training   School, Xicheng District, Beijing (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ABC Foreign Language Training   School, Fengtai District, Beijing (seal)
    	
 
    	
Harbin ABC Foreign Language   School (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal   representative/authorized representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ABC Foreign Language School,   Xiangfang District, Harbin (seal)
    	
 
    	
Harbin ABC Culture Training   School (seal)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature of legal   representative/authorized representative:
    	
 
    	
 
    	
Signature of legal representative/authorized   representative:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Jishuang Zhao
    	
 
    	
 
    	
/s/ Jishuang Zhao
    

 

 

(Signature Page of the Business Cooperation Agreement)

 

	
Changsha   Kaifu District Xinlian English Training Co., Ltd. (seal)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Signature of the executing   partner/authorized representative:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Yupeng Guo
    	
 
    

 

 

Annex I: Domestic Affiliates

 

1.                  Shenzhen Meten International Education Co., Ltd.

2.                  Meten Education (Shenzhen) Co., Ltd.

3.                  Shenzhen Meten Qiancheng International Education Co., Ltd.

4.                  Shenzhen Yinglian Information Consulting Co., Ltd.

5.                  Shenzhen Yingguo Information Technology Co., Ltd.

6.                  Lv Cheng Tian Xia International Travel Service (Beijing) Co., Ltd.

7.                  Beijing Le Wen Xie Er Education Consulting Co., Ltd.

8.                  Beijing Meten Yingguo Education Consulting Co., Ltd.

9.                  Beijing Meilianxing Education Technology Co., Ltd.

10.           Beijing Meten Overseas Technology Co., Ltd.

11.           Chengdu Meten Education Technology Co., Ltd.

12.           Chengdu Meten English Training School Co., Ltd.

13.           Dongguan Meten Education Technology Co., Ltd.

14.           Meten Education (Dongguan) Co., Ltd.

15.           Guangzhou Meten Education Technology Co., Ltd.

16.           Huizhou Meten Education Technology Co., Ltd.

17.           Ningbo Tangning Education Information Consulting Co., Ltd.

18.           Shaoxing Yuecheng Meten English Training School Co., Ltd.

19.           Wuxi Meten Foreign Language Training Co., Ltd.

20.           Chongqing Nan’an District Xinlian English Training Co., Ltd.

21.           Nanjing Meten Foreign Language Training Co., Ltd.

22.           Quanzhou Meten Education Consulting Co., Ltd.

23.           Suzhou Meten Education Consulting Co., Ltd.

24.           Wuhan Meilianxing Teaching Technology Co., Ltd.

25.           Changzhou Meten Education Technology Co., Ltd.

26.           Beijing Jingchengying Education Network Technology Co., Ltd.

27.           Shenzhen Meten English Training Center

28.           Beijing Jingchengying Education and Culture Development Co., Ltd.

29.           Chengdu Wuhou District Meten English Training School

30.           Chengdu Qingyang District Meten English Training School

31.           Dongguan Dongcheng Meten English Training Center

32.           Meten English Training School, Chancheng District, Foshan

33.           Meten Wanda English Training Center, Nanhai District, Foshan

34.           Meten English Training Center, Tianhe District, Guangzhou

35.           Nanchang Honggutan Meten English Training School

36.           Ningbo Zhiyue Foreign Language School

37.           Mianyang City Peicheng District Meten English Training School

38.           Dongguan Nancheng Meten English Training Center

39.           Meten English Training Center, Nanhai District, Foshan

40.           Daliang Meten English Training Center, Shunde District, Foshan

41.           Meten English Training Center, Pengjiang District, Jiangmen

 

 

42.           Nanjing Qinhuai Meten English Training School

43.           Zhiyue Education Training School, Yinzhou District, Ningbo

44.           Meten English Training Center, Huli District, Xiamen

45.           Shenyang Meten English Training School

46.           Suzhou Meten English Training Center

47.           Meten English Training School, Donghu New Technology Development Zone, Wuhan

48.           Meten English Training School, Hanyang District, Wuhan

49.           Meten English Training School, Kaifu District, Changsha

50.           Meten English Training Center, East District, Zhongshan

51.           Meten English Training Center, Fengze District, Quanzhou

52.           Meten English Training Center, High-Tech Zone, Suzhou

53.           Meten English Training Center, Industrial Park Zone, Suzhou

54.           Meten English Training School, Jianghan District, Wuhan

55.           Xi’an Meten English Training Center

56.           Zhongshan Meten English Training Center

57.           Chongqing Yuzhong Meten English Training School

58.           Meilian English Training School, Jiulongpo District, Chongqing

59.           Meten English Education Training School, Shapingba District, Chongqing

60.           ABC Foreign Language Training School, Fengtai District, Beijing

61.           ABC Foreign Language School, Xiangfang District, Harbin

62.           Meten English Training School, Jiangbei District, Chongqing

63.           ABC Foreign Language Training School, Xicheng District, Beijing

64.           Harbin ABC Foreign Language School

65.           Harbin ABC Culture Training School

66.           Changsha Kaifu District Xinlian English Training Co., Ltd.

 

 

Annex II: Meten Education Shareholders

 

1.                  Jishuang Zhao

2.                  Siguang Peng

3.                  Yupeng Guo

4.                  Yun Feng

5.                  Jun Yao

6.                  Tong Zeng

7.                  Yongchao Chen

8.                  Xinyu Meilianzhong Investment Management Center (Limited Partnership)

9.                  Xinyu Meilianxing Investment Management Center (Limited Partnership)

10.           Xinyu Meilianchou Investment Management Center (Limited Partnership)

11.           Shenzhen Daoge No.21 Investment Partnership (Limited Partnership)

12.           Shenzhen Daoge No.11 Education Investment Partnership (Limited Partnership)

13.           Shenzhen Daoge Growth No. 3 Investment Fund Partnership (Limited Partnership)

14.           Shenzhen Daoge Growth No. 6 Investment Fund Partnership (Limited Partnership)

15.           Shenzhen Daoge Growth No. 5 Investment Fund Partnership (Limited Partnership)

16.           Zhihan (Shanghai) Investment Center (Limited Partnership)

17.           Hangzhou Muhua Equity Investment Fund Partnership (Limited Partnership)

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