Document:

Exhibit 4.4

 

FOURTH AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

 

Dated September 20, 2018

 

by and among

 

9F Inc.,

 

Sinomap Investments Limited,

 

Treasure Knight Investments Limited,

 

Brilliant Code Investment Limited,

 

Cinda 9F Investment LP,

 

JAS Investment Group Limited,

 

Famous Voyage Group Limited,

 

Plentiful Bright International Limited,

 

SBI Hong Kong Holdings Co., Limited,

 

Mr. Lei Sun,

 

the Persons listed on Schedule A

 

and

 

the Persons listed on Schedule B

 

 

FOURTH AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

 

This Fourth Amended and Restated Shareholders Agreement (this “Agreement”) is and entered into as of September 20, 2018 by and among:

 

1.                                      9F Inc., an exempted company with limited liability incorporated under the Laws of the Cayman Islands (the “Company”);

 

2.                                      Sinomap Investments Limited, a business company incorporated under the Laws of the British Virgin Islands (the “Jacky Holdco”);

 

3.                                      Treasure Knight Investments Limited, a business company incorporated under the Laws of the British Virgin Islands (the “Ivan Holdco”);

 

4.                                      Brilliant Code Investment Limited, a business company incorporated under the Laws of the British Virgin Islands (the “Brilliant Code”, together with Jacky Holdco and Ivan Holdco, the “Series A Purchasers” and each a “Series A Purchaser”);

 

5.                                      Cinda 9F Investment LP, an exempted limited partnership formed under the Laws of the Cayman Islands (the “Series B Purchaser”);

 

6.                                      JAS Investment Group Limited, a company formed under the Laws of the British Virgin Islands (the “Series C Purchaser”);

 

7.                                      Famous Voyage Group Limited, a business company incorporated under the Laws of the British Virgin Islands (“Famous Voyage”);

 

8.                                      Plentiful Bright International Limited, a business company incorporated under the Laws of the British Virgin Islands (“Plentiful Bright”, together with Famous Voyage, the “Series D Purchasers” and each a “Series D Purchaser”);

 

9.                                      SBI Hong Kong Holdings Co., Limited, a business company incorporated under the Laws of Hong Kong (“SBI” or “Series E Purchaser”, together with the Series A Purchasers, the Series B Purchaser, the Series C Purchaser and the Series D Purchasers, the “Purchasers” and each a “Purchaser”);

 

10.                               Lei SUN, a Chinese citizen with passport number of ********* (the “Founder”);

 

11.                               each Subsidiary of the Company listed on Schedule A; and

 

12.                               each Ordinary Shareholder of the Company listed on Schedule B.

 

Each of the Persons listed above are hereinafter collectively referred to as the “Parties”, and each, a “Party”.

 

RECITALS

 

A.                                    The Company and SBI have entered into a share subscription agreement dated as of September 14, 2018 (the “Series E Share Subscription Agreement”), whereby the Company will issue, allot and sell to the Series E Purchaser, and the Series E Purchaser will subscribe for and purchase from the Company, certain number of Series E Preferred Shares (as defined below), each with a par value of US$0.0001 per share, pursuant to the terms thereof.

 

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B.                                    Section 7 of the Series E Share Subscription Agreement requires, as a condition to the obligations of SBI to complete the share subscription thereunder, among other things, the Shareholders shall enter into a shareholders agreement with respect to the Company.

 

C.                                    The Company, certain Ordinary Shareholders, the Series A Purchasers, the Series B Purchaser, the Series C Purchaser, the Series D Purchasers and certain other parties entered into a third amended and restated shareholders agreement (the “Prior Agreement”) on February 23, 2018.

 

D.                                    In connection with the issuance, allotment and sale of the Series E Preferred Shares pursuant to the Series E Share Subscription Agreement, the parties to the Prior Agreement desire to terminate the Prior Agreement so that the Prior Agreement shall be of no force and effect and the rights granted to the Parties shall supersede the rights granted to such parties under the Prior Agreement as at the date hereof.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree to enter into this Agreement which shall supersede all existing shareholder agreements in their entirety, as follows:

 

1.                                      DEFINITIONS

 

1.1                               For purposes of this Agreement the following terms have the following meanings:

 

“Additional Number” has the meaning set forth in Section 5.2(b).

 

“Additional Remaining Shares” has the meaning set forth in Section 6.3(b)(i).

 

“Affiliate” means, (i) with respect to a Person that is a natural person, such Person’s relatives, and (ii) with respect to a Person that is not a natural person, a Person that directly, or indirectly through one or more intermediaries, Controls, or is Controlled by, or is under common Control with, such Person. For the purposes of this definition, “relative” of a Person means such Person’s spouse, parent, grandparent, child, grandchild, sibling or the spouse of such Person’s child, grandchild or sibling.

 

“Arbitration Notice” has the meaning set forth in Section 9.13.

 

“Brilliant Code” has the meaning set forth in the Preamble.

 

“Board” means the board of directors of the Company.

 

“Business Day” means a day (other than a Saturday or a Sunday) that the banks in New York, Hong Kong, the PRC, or the Cayman Islands are generally open for business.

 

“Co-Sale Participant” has the meaning set forth in Section 6.3(c).

 

“Chairman” has the meaning set forth in Section 3.5(b).

 

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“Company” has the meaning set forth in the Preamble.

 

“Company Purchase Right Period” has the meaning set forth in Section 6.3(a)(i).

 

“Company Right of First Refusal” has the meaning set forth in Section 6.3(a)(i).

 

“Control” means the possession, direct or indirect, of the power to direct, or cause the direction of, the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Control Documents” means, with respect to Domestic Company I, a series of agreements and documents entered into by and among WFOE I, Domestic Company I and the shareholders of Domestic Company I, through which WFOE I has acquired the Control and is able to consolidate the financial results of Domestic Company I; and with respect to Domestic Company II, a series of agreements and documents entered into by and among WFOE I, Domestic Company II and the shareholders of Domestic Company II, through which the WFOE I has acquired the Control and is able to consolidate the financial results of Domestic Company II.

 

“Director” means a member of the Board elected pursuant to Section 3.2.

 

“Disclosing Party” has the meaning set forth in Section 9.11(d).

 

“Domestic Company I” means Jiufu Jinke Holding Group Co., Ltd. (玖富金科控股集团有限责任公司), a company incorporated under the Laws of the PRC.

 

“Domestic Company II” means Beijing Puhui Lianyin Infotech Co., Ltd. (北京普惠联银信息技术有限公司), a company incorporated under the Laws of the PRC.

 

“Domestic Companies” means, collectively, Domestic Company I and Domestic Company II, and “Domestic Company” means any of them.

 

“Dispute” has the meaning set forth in Section 9.13.

 

“Drag-Along Notice” has the meaning set forth in Section 7.3.

 

“Drag-Along Sale” has the meaning set forth in Section 7.1(a).

 

“Drag-Along Sale Date” has the meaning set forth in Section 7.3.

 

“Drag-Along Shareholder” has the meaning set forth in Section 7.1(a).

 

“Dragged Shareholders” has the meaning set forth in Section 7.1(b).

 

“Equity Securities” means, with respect to a given Person, any share, share capital, registered capital, ownership interest, partnership interest, equity interest, joint venture or other ownership interest of such Person, or any option, warrant, or right to subscribe for, acquire or purchase any of the foregoing, or any other security or instrument convertible into or exercisable or exchangeable for any of the foregoing, or any equity appreciation, phantom equity, equity plan or similar right with respect to such Person, or any Contract of any kind for the purchase or acquisition from such Person of any of the foregoing, either directly or indirectly.

 

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“ESOP” means the employee share incentive plan adopted by the Board.

 

“Exchange Act” has the meaning set forth in Section 4.2(i).

 

“Financing Terms” has the meaning set forth in Section 9.11(a).

 

“First Participation Notice” has the meaning set forth in Section 5.2.

 

“Form F-3” has the meaning set forth in Section 4.2(e).

 

“Governmental Authorities” means any nation, government, province, state, or any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any government authority, agency, department, board, commission or instrumentality of any government or any political subdivision thereof, court, tribunal, arbitrator, the governing body of any securities exchange, and self-regulatory organization, in each case having competent jurisdiction (with each of such Governmental Authorities being referred to as a “Governmental Authority”).

 

“Group Companies” means the Company and its Subsidiaries, including without limitation the HK Subsidiary, the WFOEs and the Domestic Companies.

 

“HKIAC” has the meaning set forth in Section 9.13.

 

“HKIAC Rules” has the meaning set forth in Section 9.13.

 

“HK Subsidiary” means JiuFu Financial Information Service Limited, a company incorporated under the Laws of Hong Kong.

 

“Holder” has the meaning set forth in Section 4.2(d).

 

“Information Rights” has the meaning set forth in Section 2.1(a).

 

“Initiating Holders” has the meaning set forth in Section 4.3(b).

 

“Inspection Rights” has the meaning set forth in Section 2.1(b).

 

“Investor Director” and “Investor Directors” has the meaning set forth in Section 3.2(c).

 

“Ivan Holdco” has the meaning set forth in the Preamble.

 

“Jacky Holdco” has the meaning set forth in the Preamble.

 

“Law” means any law, rule, constitution, code, ordinance, statute, treaty, decree, regulation, common law, order, official policy, circular, provision, administrative order, interpretation, injunction, judgment, ruling, assessment, writ or other legislative measure, in each case of any Governmental Authority.

 

“Material Subsidiary” shall mean a Subsidiary (i) whose total assets account for at least 70% of the consolidated assets of the Group Companies as of the balance sheet date (“Determination Date”) set forth in the latest annual or quarterly financial statements, audited or unaudited, delivered to the holders of the Preferred Shares pursuant to the Information Right of the holders of the Preferred Shares; or (ii) whose total net income in the latest two completed fiscal years and for the period starting the first day of the current fiscal year and ending the Determination Date represents at least 70% of the consolidated net income of the Group Companies of the same periods.

 

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“New Securities” shall mean any Equity Securities of the Company, including but not limited to the Preferred Shares, Ordinary Shares or other voting shares of the Company, whether now authorized or not, and rights, options or warrants to purchase such Preferred Shares, Ordinary Shares and securities of any type whatsoever that are, or may become, convertible or exchangeable into such Preferred Shares, Ordinary Shares or other voting shares, provided, however, that the term “New Securities” shall not include:

 

(a)                                 (i) any of the options, warrants or other securities arrangements to purchase any Ordinary Shares issued from time to time to the employees, officers, directors, contractors, advisors or consultants of the Group Companies pursuant to the Company’s employee share option plan having been approved pursuant to this Agreement and the Restated Articles; and (ii) any Ordinary Shares issuable upon exercise or conversion of the forgoing options, warrants or other securities arrangements;

 

(b)                                 any Preferred Shares issued under the Series A Share Subscription Agreement, the Series B Share Subscription Agreement, the Series C Share Subscription Agreement, the Series D Share Subscription Agreements, the Series E Share Subscription Agreement, and any Ordinary Shares issuable upon conversion of the Preferred Shares;

 

(c)                                  any securities issued in connection with any share reclassification, share dividend or any subdivision of Ordinary Shares or other similar event in which all the Participation Rights Holders are entitled to participate on a pro rata basis;

 

(d)                                 any securities issued as a dividend or distribution on the Preferred Shares; and

 

(e)                                  any securities issued pursuant to a Qualified IPO as approved by the Board and the Shareholders pursuant to this Agreement and the Restated Articles.

 

“Novel Lead” means Novel Lead Limited, a company incorporated under the Laws of the British Virgin Islands.

 

“Novel Lead Director” has the meaning set forth in Section3.2(d).

 

“Observer” has the meaning set forth in Section 3.7.

 

“Offered Shares” has the meaning set forth in Section 6.2.

 

“Ordinary Shareholder” means each of the Persons listed in Schedule B, which, for the avoidance of doubt, are the existing holders of the Ordinary Shares of the Company prior to issuance of the Series E Preferred Shares.

 

“Ordinary Shares” means the ordinary shares of the Company each with a par value of US$0.0001 per share.

 

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“Participation Rights Holder” has the meaning set forth in Section 5.1.

 

“Party” has the meaning set forth in the Preamble.

 

“Preferred Shares” means the Series A Preferred Shares, the Series B Preferred Shares, the Series C Preferred Shares, the Series D Preferred Shares and the Series E Preferred Shares.

 

“Preferred Shareholders” means holders of the Preferred Shares.

 

“Prior Agreement” has the meaning set forth in the Recitals.

 

“Purchase and Co-Sale Notice” has the meaning set forth in Section 6.3(b)(i).

 

“Purchase Period” has the meaning set forth in Section 6.3(b)(i).

 

“Purchasers” has the meaning set forth in the Preamble.

 

“Purchasing Holder” has the meaning set forth in Section 6.3(b)(i).

 

“Qualified IPO” has the meaning set forth in the Restated Articles.

 

“register,” “registered,” and “registration” has the meaning set forth in Section 4.2(a).

 

“Registrable Securities” has the meaning set forth in Section 4.2(b).

 

“Registrable Securities then outstanding” has the meaning set forth in Section 4.2(c).

 

“Remaining Shares” has the meaning set forth in Section 6.3(a)(ii).

 

“Request Notice” has the meaning set forth in Section 4.3(a).

 

“Residual Shares” has the meaning set forth in Section 6.3(c)(i).

 

“Restated Articles” means the fifth amended and restated memorandum and articles of association of the Company adopted on or prior to the date hereof.

 

“Registration Expenses” has the meaning set forth in Section 4.2(g).

 

“Right Participants” has the meaning set forth in Section 5.2(b).

 

“Right of Participation” has the meaning set forth in Section 5.1.

 

“SEC” has the meaning set forth in Section 4.2(f).

 

“Second Participation Notice” has the meaning set forth in Section 5.2(b).

 

“Second Participation Period” has the meaning set forth in Section 5.2(b).

 

“Secondary Transfer Notice” has the meaning set forth in Section 6.3(a)(ii).

 

“Securities Act” has the meaning set forth in Section 4.2(a).

 

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“Selling Expenses” has the meaning set forth in Section 4.2(h).

 

“Selling Shareholder” has the meaning set forth in Section 6.2.

 

“Series A Director” has the meaning set forth in Section 3.2(c).

 

“Series A Preferred Shares” means the Series A preferred shares of the Company each with a par value of US$0.0001 per share.

 

“Series A Share Subscription Agreement” means a share subscription agreement dated as of March 25, 2015 by and among certain Group Companies, the Series A Purchasers and certain other party.

 

“Series B Preferred Shares” means the Series B preferred shares of the Company each with a par value of US$0.0001 per share.

 

“Series B Share Subscription Agreement” means a share subscription agreement dated as of July 5, 2017 by and among certain Group Companies, the Series B Purchaser and certain other party.

 

“Series C Director” has the meaning set forth in Section 3.2(b).

 

“Series C Preferred Shares” means the Series C preferred shares of the Company each with a par value of US$0.0001 per share.

 

“Series C Share Subscription Agreement” means a share subscription agreement dated as of November 7, 2017 by and among certain Group Companies, the Series C Purchaser and certain other party.

 

“Series D Conversion Price” has the meaning set forth in the Restated Articles.

 

“Series D Director” has the meaning set forth in Section 3.2(a).

 

“Series D Preferred Shares” means the Series D preferred shares of the Company each with a par value of US$0.0001 per share.

 

“Series D Share Subscription Agreement I” means a share subscription agreement dated as of January 26, 2018 by and among certain Group Companies, Famous Voyage and certain other party.

 

“Series D Share Subscription Agreement II” means a share subscription agreement dated as of January 26, 2018 by and among certain Group Companies, Plentiful Bright and certain other party.

 

“Series D Share Subscription Agreements” means the Series D Share Subscription Agreement I and Series D Share Subscription Agreement II.

 

“Series E Preferred Shares” means the Series E preferred shares of the Company each with a par value of US$0.0001 per share.

 

“Series E Share Subscription Agreement” has the meaning set forth in Recitals.

 

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“Shareholders” means holders of the Shares.

 

“Shareholder Family” has the meaning set forth in Section 6.5.

 

“Shares” means shares in the capital of the Company, collectively, the Ordinary Shares, the Series A Preferred Shares, the Series B Preferred Shares, the Series C Preferred Shares, the Series D Preferred Shares and the Series E Preferred Shares.

 

“Subsidiary” means, with respect to any given Person, any Person of which the given Person, directly or indirectly, Controls, including but not limited through the ownership of more than 50% of the issued and outstanding share capital, voting interests or registered capital. For the avoidance of doubt, the Subsidiaries of the Company shall include the HK Subsidiary, the WFOEs and the Domestic Companies.

 

“Trade Sale” shall mean (a) a sale, lease, transfer or other disposition of all or substantially all of the assets of the Company or a Material Subsidiary, (b) a transfer or an exclusive licensing of all or substantially all of the intellectual property of the Group Companies, (c) a sale, transfer or other disposition of a majority of the issued and outstanding share capital or a majority of the voting power of the Company or a Material Subsidiary; or (d) a merger, consolidation or other business combination of the Company or a Material Subsidiary with or into any other business entity in which the shareholders of the Company or such Material Subsidiary immediately after such merger, consolidation or business combination hold shares representing less than a majority of the voting power of the outstanding share capital of the surviving business entity.

 

“Transfer” has the meaning set forth in Section 6.1.

 

“Transfer Notice” has the meaning set forth in Section 6.2.

 

“Violation” has the meaning set forth in Section 4.9(a).

 

“WFOE I” means Beijing Jiufu Lianyin Technology Co., Ltd. (北京玖富联银科技有限公司), a company established under the Laws of the PRC.

 

“WFOE II” means Shanghai Jiufu Network Technology Co., Ltd. (上海玖富网络科技有限公司), a company established under the Laws of the PRC.

 

“WFOEs” means, collectively, WFOE I and WFOE II and “WFOE” means either of them.

 

1.2                               Any term not otherwise defined herein shall have the meaning set forth under the Series E Share Subscription Agreement.

 

2.                                      INFORMATION RIGHTS

 

2.1                               Information and Inspection Rights.

 

(a)                                 Information Rights. The Company covenants and agrees that, commencing on the date of this Agreement, for so long as a Preferred Shareholder holds no less than 5% of the issued and outstanding Shares of Company on a fully-diluted and as-converted basis (excluding the Shares reserved for ESOP), the Company will deliver to such Preferred Shareholder:

 

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(i)                           audited annual consolidated financial statements of the Group Companies, within one hundred and twenty (120) days after the end of each fiscal year, as audited by an accounting firm approved by the Board;

 

(ii)                          unaudited quarterly consolidated financial statements of the Group Companies, within forty-five (45) days of the end of each fiscal quarter;

 

(iii)                           unaudited monthly consolidated management accounts of the Group Companies, within fifteen (15) days of the end of each month;

 

(iv)                          an annual business and financial plan (including the Company’s net profit and provision for loss reserves) and annual consolidated budget of the Group Companies for each fiscal year, no later than thirty (30) days before the beginning of such fiscal year;

 

(v)                         disclosure of periodic operating metrics of the Group Companies;

 

(vi)                          any information delivered by the Group Companies to any of the Shareholders other than such holder of the Preferred Shares; and

 

(vii)                           upon the written request by any holder of the Preferred Shares, such other information of the Group Companies as such holder of the Preferred Shares shall reasonably request (the above rights, collectively, the “Information Rights”).

 

All financial statements to be provided to the holder of the Preferred Shares pursuant to this Section 2.1, including not limitation, the income statement, balance sheet and cash flow statement, shall be prepared in accordance with US GAAP and shall consolidate the financial results of all of the Group Companies.

 

(b)                                 Inspection Rights. The Company further covenants and agrees that, commencing on the date of this Agreement, for so long as a Preferred Shareholder holds no less than 5% of the issued and outstanding Shares of Company on a fully-diluted and as-converted basis (excluding the Shares reserved for ESOP), such Preferred Shareholder shall have the right to reasonably inspect facilities, records and books of any Group Company at any time during regular working hours on reasonable prior notice to the Group Companies, and the right to discuss the business, operation and conditions of any Group Company with their respective directors, officers, employees, accounts, legal counsels and investment bankers (the “Inspection Rights”).

 

(c)                                  Termination of Rights. The Information Rights and Inspection Rights shall terminate upon consummation of a Qualified IPO.

 

3.                                      BOARD AND MANAGEMENT

 

3.1                               Board Size. Each Shareholder shall vote at the general meetings of the Company, or give written consents with respect to all its Shares, to ensure that the size of the Board shall be set and remain at nine (9) directors at all times.

 

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3.2                               Election of Directors. On all matters relating to the election of one or more directors of the Company, each Shareholder shall vote at the general meetings of the Company, or give written consents with respect to all their Shares, to elect directors to the Board in the following manner:

 

(a)                                 one (1) director shall be designated by Famous Voyage (the “Series D Director”) for so long as Famous Voyage (and its permitted transferees) holds at least 80% of the issued and outstanding Series D Preferred Shares purchased by Famous Voyage under the Series D Share Subscription Agreement I (or the Ordinary Shares issued upon conversion of such Series D Preferred Shares);

 

(b)                                 one (1) director shall be designated by the Series C Purchaser (the “Series C Director”) for so long as the Series C Purchaser (and its permitted transferees) holds at least 3.41% of the issued and outstanding Shares of the Company (calculated on a fully diluted and as-converted basis);

 

(c)                                  one (1) director shall be designated jointly by Jacky Holdco and Ivan Holdco (the “Series A Director”, together with the Series C Director and the Series D Director, the “Investor Directors” and each an “Investor Director”) for so long as Jacky Holdco and Ivan Holdco (and their permitted transferees) together hold at least 50% of the issued and outstanding Series A Preferred Shares purchased by Jacky Holdco and Ivan Holdco under the Series A Share Subscription Agreement (or the Ordinary Shares issued upon conversion of such Series A Preferred Shares);

 

(d)                                 one (1) director shall be designated by Novel Lead (the “Novel Lead Director”) for so long as Novel Lead (and its permitted transferees) holds at least 50% of the issued and outstanding Ordinary Shares purchased by Novel Lead under the subscription agreement dated as of August 25, 2014 by and between Novel Lead and the Company; and

 

(e)                                  five (5) directors shall be designated by the holders of a majority of the issued and outstanding Ordinary Shares.

 

3.3                               Removal and Replacement of Directors.

 

(a)                                 Each Shareholder shall have the absolute right to remove any director designated by it at any time at its sole discretion, and each of the Shareholders shall vote its Shares at any general meeting of the Company or in any written consent of Shareholders so as to effectuate such right.

 

(b)                                 If, as a result of death, resignation, removal or otherwise, there shall exist or occur any vacancy on the Board, the Shareholder entitled under Section 3.2 to nominate the Director whose death, resignation, removal or other departure resulted in such vacancy shall nominate another individual to serve in place of such Director and the Shareholders shall elect such individual to the Board as soon as practicable thereafter. If it is the Investor Director whose death, resignation, removal or other departure has resulted in the vacancy, neither the Shareholders nor the Board shall transact any business of the Company until the Shareholder entitled under Section 3.2 to nominate such Director has designated and the Shareholders have elected the replacement for such Director, unless the relevant Shareholder shall have failed to nominate a replacement Director within thirty (30) days after such death, resignation, removal or other departure.

 

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(c)                                  Except as provided in this Section 3.3, no Shareholder shall vote for the removal of the Investor Directors.

 

3.4                               Committees. The Board may establish such committees with such powers as may be permitted by applicable law and the Restated Articles; provided, that any such committees shall be subject to the direction of and any policies adopted by the Board.

 

3.5                               Board Meetings.

 

(a)                                 Frequency. Meetings of the Board shall take place at least once in every three months unless otherwise determined by the Board.

 

(b)                                 Notice. A meeting of the Board may be called by any Director by giving notice in writing to the chairman of the Board (the “Chairman”) specifying the date, time and agenda for such meeting. The Chairman shall, promptly following receipt of such notice, deliver a copy of such notice to each Director and each Shareholder, accompanied by a written agenda specifying the business of such meeting and copies of all documents and materials relevant for such meeting. Not less than fourteen (14) days prior written notice shall be given to all Directors; provided, that such notice period (i) shall not apply in the case of an adjourned meeting pursuant to Section 3.6(a) and (ii) may be reduced with the unanimous written consent of the Directors.

 

(c)                                  Telephone Participation. Directors may participate in Board meetings by telephone or video conferencing or any other means of contemporaneous communication; provided, that each Director taking part in the meeting is able to hear each other Director taking part and; provided, further, that each Director must acknowledge his or her presence for the purpose of the meeting and any Director not doing so shall not be entitled to speak or vote at the meeting. Such participation shall constitute presence for purposes of the quorum provisions of Section 3.6(a). A Director may not leave the meeting by disconnecting his or her telephone or other means of communication unless he or she has previously obtained the express consent of the chairman of the meeting and a Director shall conclusively be presumed to have been present and formed part of the quorum at all times during the meeting unless he or she has previously obtained the express consent of the chairman of the meeting to leave the meeting as aforesaid.

 

(d)                                 Written Resolutions. Any action that may be taken by the Directors at a Board meeting may alternatively be taken by a written resolution signed by all of the Directors (which may be signed in counterparts). The expressions “written” and “signed” include writings or signatures transmitted by facsimile or electronic mail.

 

3.6                               Action of the Board.

 

(a)                                 Quorum of the Board. All meetings of the Board shall require a quorum of at least a majority of the Directors which shall include all the Investor Directors and the Novel Lead Director. If such a quorum is not present within sixty minutes after the time appointed for the meeting, the meeting shall be adjourned to the same place and at the same day and time the following week (or if such day is not a Business Day, at the same time on the following Business Day), at which meeting the Directors present shall constitute a valid quorum whether or not any Investor Director and/or the Novel Lead Director is present; provided, that written notice of such adjourned meeting shall have been delivered to all Directors at least five (5) days prior to the date of such adjourned meeting.

 

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(b)                                 Ordinary Actions. At any Board meeting, each Director may exercise one vote. Any Director may, by written notice to the Chairman, (i) authorize another Director to attend and vote by proxy for such Director at any Board meeting or (ii) appoint an alternate Director to attend and vote for such Director at any Board meeting. Subject to Section 8.2, the adoption of any resolution of the Board shall require the affirmative vote of a majority of the Directors present at a duly convened meeting of the Board or unanimous written consent by all Directors. Any Director may put forth a resolution for vote at a Board meeting.

 

3.7                               Observer Rights. For so long as Series B Purchaser holds at least 50% of the Series B Preferred Shares purchased by Series B Purchaser under the Series B Share Subscription Agreement (or the Ordinary Shares issued upon conversion of such Series B Preferred Shares), Series B Purchaser may from time to time appoint an observer, and remove or replace such observer to the Board (the “Series B Observer”) on notice to the Company. For so long as SBI holds at least 50% of the Series E Preferred Shares purchased by SBI under the Share Subscription Agreement (or the Ordinary Shares issued upon conversion of such Series E Preferred Shares), SBI may from time to time appoint an observer, and remove or replace such observer to the Board (the “SBI Observer”, together with the Series B Observer, the “Observers” each an “Observer”) on notice to the Company. The Observer shall be entitled to (i) attend and speak at all meetings of the Board and any committees thereof in person or by teleconference and the board meetings of each Group Company from time to time, and (ii) receive all information and documents delivered to the directors of the Company at the same time such information and documents are required to be delivered to the directors of the Company. The Observer shall not be entitled to vote at any such meeting, nor shall the Observer be regarded as an officer of any member of Group Companies. The rights conferred by this Section 3.7 shall be without prejudice to, and in addition to, any rights which any Shareholder has as a matter of Law arising by virtue of its ownership of the Shares.

 

3.8                               Nomination Rights. The Series A Purchasers shall have the right to nominate candidates for any management position of the Company senior than Vice President.

 

3.9                               Termination of Rights. The Purchasers’ rights under Sections 3.1 to 3.8 shall terminate upon consummation of a Qualified IPO.

 

4.                                      REGISTRATION RIGHTS

 

4.1                               Applicability of Rights. The Company covenants and agrees that the Holders (as defined below) shall be entitled to the following rights with respect to any potential public offering of the Company’s Ordinary Shares in the United States and shall be entitled to reasonably analogous or equivalent rights with respect to any other offering of the Company’s securities in any other jurisdiction in which the Company undertakes to publicly offer or list such securities for trading on a recognized securities exchange.

 

4.2                               Definitions. For purposes of this Section 4 and to the extent applicable under this Agreement:

 

(a)                                 Registration. The terms “register,” “registered,” and “registration” refer to a registration effected by filing a registration statement which is in a form which complies with, and is declared effective by the SEC (as defined below) in accordance with, the Unities States Securities Act of 1933, as amended from time to time, including any successor statutes (the “Securities Act”).

 

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(b)                                 Registrable Securities. The term “Registrable Securities” shall mean: (i) any Ordinary Shares issued or issuable upon conversion of the Preferred Shares issued (A) under the Series A Share Subscription Agreement, the Series B Share Subscription Agreement, the Series C Share Subscription Agreement, the Series D Share Subscription Agreements or the Series E Share Subscription Agreement, or (B) pursuant to the Right of Participation, (ii) any Ordinary Shares of the Company issued (or issuable upon the conversion or exercise of any warrant, right or other security which is issued) as a dividend or other distribution with respect to, or in exchange for or in replacement of, any Preferred Shares or Ordinary Shares described in clause (i) of this subsection (b), and (iii) any other Ordinary Shares of the Company owned or hereafter acquired by a holder of Preferred Shares. Notwithstanding the foregoing, “Registrable Securities” shall exclude any Registrable Securities sold by a Person in a transaction in which rights under this Section 4 are not assigned in accordance with this Agreement, and any Registrable Securities which are sold in a registered public offering under the Securities Act or analogous statute of another jurisdiction, or sold pursuant to Rule 144 promulgated under the Securities Act or analogous rule of another jurisdiction.

 

(c)                                  Registrable Securities Then Outstanding. The number of shares of “Registrable Securities then outstanding” shall mean the number of Ordinary Shares of the Company that are Registrable Securities and are then issued and outstanding, issuable upon conversion of Preferred Shares then issued and outstanding or issuable upon conversion or exercise of any warrant, right or other security then outstanding.

 

(d)                                 Holder. For purposes of this Section 4, the term “Holder” shall mean any Person or Persons owning or having the rights to acquire Registrable Securities or any permitted assignee of record of such Registrable Securities to whom rights under this Section 4 have been duly assigned in accordance with this Agreement.

 

(e)                                  Form F-3. The term “Form F-3” shall mean such respective form under the Securities Act as is in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

 

(f)                                   SEC. The term “SEC” shall mean the U.S. Securities and Exchange Commission.

 

(g)                                  Registration Expenses. The term “Registration Expenses” shall mean all expenses incurred by the Company in complying with Sections 4.3, 4.4 and 4.5 hereof, including all registration and filing fees, printing expenses, fees, and disbursements of counsel for the Company, reasonable fees and disbursements of one counsel for the Holders, Blue Sky fees and expenses and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company which shall be paid in any event by the Company).

 

(h)                                 Selling Expenses. The term “Selling Expenses” shall mean all underwriting discounts and selling commissions and special counsel of the selling Holders applicable to the sale of Registrable Securities pursuant to Sections 4.3, 4.4 and 4.5 hereof.

 

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(i)                                     Exchange Act. The term “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and any successor statute.

 

(j)                                    For purposes of this Agreement, reference to registration of securities under the Securities Act and the Exchange Act shall also be deemed to mean the equivalent registration in a jurisdiction other than the United States as designated by such Holders, it being understood and agreed that in each such case all references in this Agreement to the Securities Act, the Exchange Act and rules, forms of registration statements and registration of securities thereunder, U.S. law and the SEC, shall be deemed to refer, to the equivalent statutes, rules, forms of registration statements, registration of securities and laws of and equivalent government authority in the applicable non-U.S. jurisdiction.

 

4.3                               Demand Registration.

 

(a)                                 Request by Holders. If the Company shall at any time after the consummation of an initial public offering, receive a written request from the Holders of at least thirty percent (30%) of the Registrable Securities file a registration statement under the Securities Act covering the registration of at least twenty percent (20%) of Registrable Securities held by such Holders (or any lesser percentage if the anticipated gross proceeds from such offering exceed US$5,000,000) pursuant to this Section 4.3, then the Company shall, within ten (10) Business Days of the receipt of such written request, give written notice of such request (the “Request Notice”) to all Holders, and use its best efforts to effect, as soon as practicable, the registration under the Securities Act of all Registrable Securities that the Holders request to be registered and included in such registration by written notice given by such Holders to the Company within twenty (20) days after receipt of the Request Notice, subject only to the limitations of this Section 4.3; provided that the Company shall not be obligated to effect any such registration if the Company has, within the twelve (12) month period preceding the date of such request, already effected a registration pursuant to this Section 4.3 in the jurisdiction in which the Initiating Holders (as defined below) have requested such registration be effected.

 

(b)                                 Underwriting. If the Holders initiating the registration request under this Section 4.3 (the “Initiating Holders”) intend to distribute the Registrable Securities covered by their request by means of an underwriting, then they shall so advise the Company as a part of their request made pursuant to this Section 4.3 and the Company shall include such information in the Request Notice. In such event, the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such Holder) to the extent provided herein. All Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting by the Holders of a majority of the Registrable Securities being registered and reasonably acceptable to the Company. Notwithstanding any other provision of this Section 4.3, if the underwriter(s) advise(s) the Company in writing that marketing factors require a limitation of the number of securities to be underwritten, then the Company shall so advise all Holders which would otherwise be registered and underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be reduced as required by the underwriter(s) and allocated among the Holders on a pro rata basis according to the number of Registrable Securities then outstanding held by each Holder requesting registration (including the Initiating Holders); provided, however, that the number of shares of Registrable Securities held by the Holders to be included in such underwriting and registration shall not be reduced unless all other securities are first entirely excluded from the underwriting and registration including all shares of Registrable Securities held by holder(s) of the all other shares that are not Registrable Securities and are held by any other Person, including any Person who is an employee, consultant, officer or director of the Company or any Subsidiary of the Company; provided further, that at least thirty percent (30%) of shares of Registrable Securities requested by the Holders to be included in such underwriting and registration shall be so included. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter(s), delivered at least ten (10) Business Days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration.

 

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(c)                                  Maximum Number of Demand Registrations. The Company shall not be obligated to effect more than three (3) such demand registrations pursuant to this Section 4.3.

 

(d)                                 Deferral. Notwithstanding the foregoing, if the Company shall furnish to Holders requesting registration pursuant to this Section 4.3, a certificate signed by the President or Chief Executive Officer of the Company stating that in the good faith judgment of the Board, it would be materially detrimental to the Company and the Shareholders for such registration statement to be filed at such time, then the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders; provided, however, that the Company may not utilize this right more than once in any twelve (12) month period; provided further, that the Company shall not register any other of its shares during such twelve (12) month period. A demand right shall not be deemed to have been exercised until such deferred registration shall have been effected.

 

4.4                               Piggyback Registrations.

 

(a)                                 The Company shall notify all Holders in writing at least thirty (30) days prior to filing any registration statement under the Securities Act for purposes of effecting a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities of the Company, but excluding registration statements relating to any registration under Section 4.3 or Section 4.5 of this Agreement or to any employee benefit plan or a corporate reorganization or other Rule 145 transaction, an offer and sale of debt securities, or a registration on any registration form that does not permit secondary sales), and shall afford each such Holder an opportunity to include in such registration statement all or any part of the Registrable Securities then held by such Holder. Each Holder desiring to include in any such registration statement all or any part of the Registrable Securities held by it shall within twenty (20) days after receipt of the above-described notice from the Company, so notify the Company in writing, and in such notice shall inform the Company of the number of Registrable Securities such Holder wishes to include in such registration statement. If a Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein. No Shareholder of the Company shall be granted the piggyback registration right under this Section 4.4 that is superior to those of the Holders without prior written consent of holders of a majority of the Preferred Shares calculated on an as-converted basis.

 

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(b)                                 Underwriting. If a registration statement under which the Company gives notice under this Section 4.4 is for an underwritten offering, then the Company shall so advise the Holders. In such event, the right of any such Holder’s Registrable Securities to be included in a registration pursuant to this Section 4.4 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting. Notwithstanding any other provision of this Agreement but subject to Section 4.12, if the managing underwriter(s) determine(s) in good faith that marketing factors require a limitation of the number of shares to be underwritten, then the managing underwriter(s) may exclude shares from the registration and the underwriting, and the number of shares that may be included in the registration and the underwriting shall be allocated, first, to the Company, second, to each of the Holders requesting inclusion of their Registrable Securities in such registration statement on a pro rata basis based on the total number of shares of Registrable Securities then held by each such Holder, and third, to holders of other securities of the Company; provided, however, that the right of the underwriter(s) to exclude shares (including Registrable Securities) from the registration and underwriting as described above shall be restricted so that (i) the number of Registrable Securities held by Holders included in any such registration is not reduced below thirty percent (30%) of the aggregate number of shares of Registrable Securities for which inclusion has been requested; and (ii) all shares of Registrable Securities held by holder(s) of all other shares that are not Registrable Securities and are held by any other Person, including any Person who is an employee, consultant, officer or director of the Company (or any Subsidiary of the Company) shall first be excluded from such registration and underwriting before any Registrable Securities held by the holders of the Preferred Shares are so excluded. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter(s), delivered at least ten (10) Business Days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration.

 

(c)                                  Not Demand Registration. Registration pursuant to this Section 4.4 shall not be deemed to be a demand registration as described in Section 4.3 above. There shall be no limit on the number of times the Holders may request registration of Registrable Securities under this Section 4.4.

 

4.5                               Form F-3 Registration. In case the Company shall receive from any Holder(s) a written request or requests that the Company effects a registration on Form F-3 (or an equivalent registration in a jurisdiction outside of the United States) and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, then the Company will:

 

(a)                                 Notice. Promptly give written notice of the proposed registration and the Holder’s or Holders’ request therefor, and any related qualification or compliance, to all other Holders; and

 

(b)                                 Registration. As soon as practicable, effect such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holder’s or Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within twenty (20) days after the Company provides the notice contemplated by Section 4.5(a); provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section 4.5:

 

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(i)                             if Form F-3 is not available for such offering by the Holders;

 

(ii)                              if the anticipated gross proceeds from such offering are less than US$500,000;

 

(iii)                               if the Company shall furnish to the Holders a certificate signed by the President or Chief Executive Officer of the Company stating that in the good faith judgment of the Board, it would be materially detrimental to the Company and its Shareholders for such Form F-3 registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form F-3 registration statement no more than once during any twelve (12) month period for a period of not more than sixty (60) days after receipt of the request of the Holder or Holders under this Section 4.5; provided that the Company shall not register any of its other shares during such sixty (60) day period. A registration right under Section 4.5 shall not be deemed to have been exercised until such deferred registration shall have been effected; or

 

(iv)                              if the Company has, within the twelve (12) month period preceding the date of such request, already effected two (2) Form F-3 registrations pursuant to this Section 4.5.

 

(c)                                  Not Demand Registration. Form F-3 registrations shall not be deemed to be demand registrations as described in Section 4.3 above. Except as otherwise provided herein, there shall be no limit on the number of times the Holders may request registration of Registrable Securities under this Section 4.5.

 

(d)                                 Underwriting. If the Holders requesting registration under this Section 4.5 intend to distribute the Registrable Securities covered by their request by means of an underwriting, the provisions of Section 4.3(b) shall apply to such registration.

 

4.6                               Expenses. All Registration Expenses incurred in connection with any registration pursuant to Sections 4.3, 4.4 or 4.5(but excluding Selling Expenses) shall be borne by the Company. Each Holder participating in a registration pursuant to Sections 4.3, 4.4 or 4.5 shall bear such Holder’s proportionate share (based on the total number of shares sold in such registration other than for the account of the Company) of all Selling Expenses or other amounts payable to underwriter(s) or brokers, in connection with such offering by the Holders. Notwithstanding the foregoing, the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 4.3 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered, unless the Holders of a majority of the Registrable Securities then outstanding agree that such registration constitutes the use by the Holders of one (1) demand registration pursuant to Section 4.3 (in which case such registration shall also constitute the use by all Holders of one (1) such demand registration); provided further, however, that if at the time of such withdrawal, the Holders have learned of a material adverse change in the condition, business, or prospects of the Company not known to the Holders at the time of their request for such registration and have withdrawn their request for registration with reasonable promptness after learning of such material adverse change, then the Holders shall not be required to pay any of such expenses and such registration shall not constitute the use of a demand registration pursuant to Section 4.3.

 

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4.7                               Obligations of the Company. Whenever required to effect the registration of any Registrable Securities under this Agreement the Company shall, as expeditiously as reasonably possible:

 

(a)                                 Registration Statement. Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to ninety (90) days; provided, however, that (i) such ninety (90) day period shall be extended for a period of time equal to the period any Holder refrains from selling any securities included in such registration at the request of the underwriter(s), and (ii) in the case of any registration of Registrable Securities on Form F-3 which are intended to be offered on a continuous or delayed basis, such ninety (90) day period shall be extended, if necessary, to keep the registration statement effective until all such Registrable Securities are sold.

 

(b)                                 Amendments and Supplements. Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement.

 

(c)                                  Prospectuses. Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of the Registrable Securities owned by them that are included in such registration.

 

(d)                                 Blue Sky. Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders.

 

(e)                                  Underwriting. In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement in usual and customary form, with the managing underwriter(s) of such offering.

 

(f)                                   Notification. Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of (i) the issuance of any stop order by the SEC in respect of such registration statement, or (ii) the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.

 

(g)                                  Opinion and Comfort Letter. Furnish, at the request of any Holder requesting registration of Registrable Securities, on the date that such Registrable Securities are delivered to the underwriter(s) for sale, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering and reasonably satisfactory to a majority in interest of the Holders requesting registration, addressed to the underwriters, if any, and to the Holders requesting registration of the Registrable Securities and (ii) letters dated as of (x) the effective date of the registration statement covering such Registrable Securities and (y) the closing date of the offering from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering and reasonably satisfactory to a majority in interest of the Holders requesting registration, addressed to the underwriters, if any, and to the Holders requesting registration of the Registrable Securities.

 

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4.8                               Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to Sections 4.3, 4.4 or 4.5 that the selling Holders shall furnish to the Company such information regarding themselves, the Registrable Securities held by them and the intended method of disposition of such securities as shall be required to timely effect the registration of their Registrable Securities.

 

4.9                               Indemnification. In the event any Registrable Securities are included in a registration statement under Sections 4.3, 4.4 or 4.5:

 

(a)                                 By the Company. To the extent permitted by law, the Company will indemnify and hold harmless each Holder, its partners, officers, directors, legal counsel, any underwriter (as defined in the Securities Act) for such Holder and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act, or other United States federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”):

 

(i)                              any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto;

 

(ii)                              the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or

 

(iii)                               any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any United States federal or state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any United States federal or state securities law in connection with the offering covered by such registration statement;

 

and the Company will reimburse each such Holder, its partner, officer, director, legal counsel, underwriter or controlling Person for any legal or other expenses reasonably incurred by them, as incurred, in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 4.9(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder, partner, officer, director, legal counsel, underwriter or controlling Person of such Holder.

 

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(b)                                 By Selling Holders. To the extent permitted by law, each selling Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration qualifications or compliance is being effected, indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, its legal counsel, each Person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holder’s partners, directors, officers, legal counsel or any Person who controls such Holder within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer, legal counsel, controlling Person, underwriter or other such Holder, partner, director, officer, legal counsel or controlling Person of such other Holder may become subject under the Securities Act, the Exchange Act or other United States federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, legal counsel, controlling Person, underwriter or other Holder, partner, officer, director, legal counsel or controlling Person of such other Holder in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 4.9(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of such Holder, which consent shall not be unreasonably withheld; and provided, further, that in no event shall any indemnity under this Section 4.9(b) exceed the net proceeds received by such Holder in the registered offering out of which the applicable Violation arises.

 

(c)                                  Notice. Promptly after receipt by an indemnified party under this Section 4.9 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 4.9, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential conflict of interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of liability to the indemnified party under this Section 4.9 to the extent the indemnifying party is prejudiced as a result thereof, but the omission to so deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 4.9.

 

 

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(d)                                 Contribution. In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any indemnified party makes a claim for indemnification pursuant to this Section 4.9 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 4.9 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any indemnified party in circumstances for which indemnification is provided under this Section 4.9; then, and in each such case, the indemnified party and the indemnifying party will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that a Holder (together with its related Persons) is responsible for the portion represented by the percentage that the public offering price of its Registrable Securities offered by and sold under the registration statement bears to the public offering price of all securities offered by and sold under such registration statement, and the Company and other selling Holders are responsible for the remaining portion. The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case: (A) no Holder will be required to contribute any amount in excess of the net proceeds to such Holder from the sale of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement; and (B) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

(e)                                  Survival; Consents to Judgments and Settlements. The obligations of the Company and Holders under this Section 4.9shall survive the completion of any offering of Registrable Securities in a registration statement, regardless of the expiration of any statutes of limitation or extensions of such statutes. No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

 

4.10                        Termination of the Company’s Obligations. The Company’s obligations under Sections 4.3, 4.4and 4.5with respect to any Registrable Securities proposed to be sold by a Holder in a registration pursuant to Sections 4.3, 4.4and 4.5shall terminate on the fifth (5th) anniversary of the closing of a Qualified IPO, or, if, in the opinion of counsel to the Company, all such Registrable Securities proposed to be sold by a Holder may then be sold without registration in any ninety (90) day period pursuant to Rule 144 promulgated under the Securities Act.

 

4.11                        No Registration Rights to Third Parties. Without the prior written consent of the Holders of a majority of the Registrable Securities then outstanding, the Company covenants and agrees that it shall not grant, or cause or permit to be created, for the benefit of any Person any registration rights of any kind (whether similar to the demand, “piggyback” or Form F-3 registration rights described in this Section 4, or otherwise) relating to any securities of the Company. In any event, if the Company grants to any holder of the Company’s security any registration right of any nature that are superior to the Holders, as determined in good faith by the Board, the Company shall grant such superior registration right to the Holders as well.

 

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4.12                        Market Stand-Off. Each holder of Ordinary Shares and each Holder agree that, so long as it holds any voting securities of the Company, upon request by the Company or the underwriters managing the initial public offering of the Company’s securities, it will not sell or otherwise transfer or dispose of any securities of the Company (other than those permitted to be included in the registration and other transfers to Affiliates permitted by law or to other Affiliates who agree to be similarly bound) without the prior written consent of the Company or such underwriters, as the case may be, for a period of time specified by the representative of the underwriters not to exceed one hundred and eighty (180) days from the effective date of the registration statement covering such initial public offering or the pricing date of such offering as may be requested by the underwriters (whichever is later). The foregoing provision of this Section 4.12 shall not apply to the sale of any securities of the Company to an underwriter pursuant to any underwriting agreement, and shall only be applicable to the Holders if all officers, directors and holders of one percent (1%) or more of the Company’s outstanding share capital enter into similar agreements with same terms and conditions as described in this Section 4.12, and if the Company or any underwriter releases any officer, director or holder of one percent (1%) or more of the Company’s outstanding share capital from his or her sale restrictions so undertaken, then each Holder shall be notified prior to such release and shall itself be simultaneously released to the same proportional extent. Each Shareholder of the Company shall take all steps consistent with the requirements of any applicable law to minimize lockup restrictions of the Preferred Shares (or the Conversion Shares). The Company shall require all future acquirers of the Company’s securities holding at least one percent (1%) of the then outstanding share capital of the Company to execute prior to a Qualified IPO a market stand-off agreement containing substantially similar provisions as those contained in this Section 4.12.

 

4.13                        Rule 144 Reporting. With a view to making available to the Holders the benefits of certain rules and regulations of the SEC which may at any time permit the sale of the Registrable Securities to the public without registration or pursuant to a registration on Form F-3, after such time as a public market exists for the Ordinary Shares, the Company agrees to:

 

(a)                                 Make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times after the effective date of the first registration under the Securities Act filed by the Company for an offering of its securities to the general public;

 

(b)                                 File with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); and

 

(c)                                  So long as a Holder owns any Registrable Securities, to furnish to such Holder forthwith upon request (i) a written statement by the Company as to its compliance with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of the Company’s initial public offering), the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), or its qualification as a registrant whose securities may be resold pursuant to Form F-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company, and (iii) such other reports and documents of the Company as a Holder may reasonably request in availing itself of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to Form F-3.

 

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5.                                      RIGHT OF PARTICIPATION

 

5.1                               General. Each Preferred Shareholder (each a “Participation Rights Holder”) shall have the right of first refusal to participate in the subscription of any New Securities that the Company may from time to time issue after the date of this Agreement (the “Right of Participation”) in accordance with this Section 5.

 

5.2                               Procedures.

 

(a)                                 First Participation Notice. In the event that the Company proposes to undertake an issuance of New Securities (in a single transaction or a series of related transactions), it shall give to each Participation Rights Holder written notice of its intention to issue New Securities (the “First Participation Notice”), describing the amount and type of New Securities, the price and the general terms upon which the Company proposes to issue such New Securities. Each Participation Rights Holder shall have ten (10) Business Days from the date of receipt of any such First Participation Notice to agree in writing to purchase such Participation Rights Holder’s pro rata share of such New Securities for the price and upon the terms and conditions specified in the First Participation Notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased (not exceeding such Participation Rights Holder’s pro rata share). If any Participation Rights Holder fails to so agree in writing within such ten (10) Business Day period, then such Participation Rights Holder shall be deemed to have forfeited the right hereunder to purchase that part of its pro rata share of such New Securities that it did not agree to purchase. For purposes of this Section 5, “pro rata share” of a Participation Rights Holder for purposes of the Right of Participation is the ratio of (a) the number of Ordinary Shares (calculated on a fully-diluted and as-converted basis) held by such Participation Rights Holder, to (b) the total number of Ordinary Shares (calculated on a fully-diluted and as-converted basis) held by all Participation Rights Holders immediately prior to the issuance of New Securities giving rise to the Right of Participation.

 

(b)                                 Second Participation Notice; Oversubscription. If any Participation Rights Holder fails or declines to exercise its Right of Participation in accordance with subsection (a) above, the Company shall promptly give notice (the “Second Participation Notice”) to other Participation Rights Holders who fully exercised their Right of Participation (the “Right Participants”) in accordance with subsection (a) above. Each Right Participant shall have five (5) Business Days from the date of the Second Participation Notice (the “Second Participation Period”) to notify the Company of its desire to purchase more than its pro rata share of the New Securities, stating the number of the additional New Securities it proposes to buy (the “Additional Number”). Such notice may be made by telephone if confirmed in writing within two (2) Business Days. If, as a result thereof, such oversubscription exceeds the total number of the remaining New Securities available for purchase, each oversubscribing Right Participant will be cut back by the Company with respect to its oversubscription to that number of remaining New Securities equal to the lesser of (x) the Additional Number and (y) the product obtained by multiplying (i) the number of the remaining New Securities available for subscription by (ii) a fraction, the numerator of which is the number of Ordinary Shares (calculated on a fully-diluted and as-converted basis) held by such oversubscribing Right Participant and the denominator of which is the total number of Ordinary Shares (calculated on a fully-diluted and as-converted basis) held by all the oversubscribing Right Participants. Each Right Participant shall be obligated to buy such number of New Securities as determined by the Company pursuant to this Section 5.2 and the Company shall so notify the Right Participants within fifteen (15) Business Days following the date of the Second Participation Notice.

 

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(c)                                  Failure to Exercise. Upon the expiration of the Second Participation Period and to the extent that not all New Securities have been subscribed for by the Participation Rights Holders, or in the event no Participation Rights Holder exercises the Right of Participation within ten (10) Business Days following the issuance of the First Participation Notice, the Company shall have one hundred and twenty (120) days thereafter to sell the New Securities described in the First Participation Notice (the portion to which the Right of Participation hereunder were not exercised) at the same or higher price and upon non-price terms not materially more favorable to the purchasers thereof than specified in the First Participation Notice; provided that each of the purchasers shall execute a joinder agreement in the form attached hereto as Exhibit A. In the event that the Company has not issued and sold such New Securities within such one hundred and twenty (120) day period, then the Company shall not thereafter issue or sell any New Securities without again first offering such New Securities to the Participation Rights Holders pursuant to this Section 5.

 

5.3                               Termination. The Right of Participation shall terminate upon the closing of a Qualified IPO.

 

6.                                      TRANSFER RESTRICTIONS

 

6.1                               Consent Required for Transfers. None of the holders of Ordinary Shares (other than Ordinary Shares issued or issuable upon conversion of the Preferred Shares) may, directly or indirectly, transfer, sell or pledge or otherwise dispose of or permit the transfer, sale, pledge, or other disposition of (each such disposition, a “Transfer”), any Equity Securities of the Company to one or more third parties prior to the closing of a Qualified IPO without the prior written consent of holders of at least two-thirds (2/3) of the issued and outstanding Series A Preferred Shares. For the avoidance of doubt, “third parties” for purposes of this Section 6 does not include the other Shareholders.

 

6.2                               Sale of Equity Securities; Notice of Sale. Subject to other provisions under this Section 6 (including Section 6.1), if any holder of Ordinary Shares (other than Ordinary Shares issued or issuable upon conversion of the Preferred Shares) proposes to Transfer any Equity Securities of the Company to one or more third parties, then such holder (the “Selling Shareholder”) shall promptly give written notice (the “Transfer Notice”) to each Preferred Shareholder and the Company prior to such Transfer. The Transfer Notice shall describe in reasonable detail the proposed Transfer including (i) the number of Equity Securities to be Transferred (the “Offered Shares”), (ii) the nature of such Transfer, (iii) the consideration to be paid, and (iv) the identity of the prospective transferee(s). The Transfer Notice shall certify that such Selling Shareholder has received a firm offer from the prospective transferee(s) and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer.

 

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6.3                               Right of First Refusal and Right of Co-Sale.

 

(a)                                 Company’s Option to Purchase.

 

(i)                                     The Company shall have the right, upon notice to the Selling Shareholder at any time within ten (10) Business Days after receipt of the Transfer Notice (the “Company Purchase Right Period”), to purchase all or any portion of the Offered Shares upon the same terms and conditions as set forth in the Transfer Notice (“Company Right of First Refusal”), and the Selling Shareholder shall, upon receipt of the notice of purchase from the Company, sell the Offered Shares to the Company pursuant to such terms. If the Company gives the Selling Shareholder notice that it desires to purchase such Offered Shares, then payment for the Offered Shares shall be by check or wire transfer, against allotment of the Offered Shares to be purchased, at a place agreed upon between the Company and the Selling Shareholder and at the time of the scheduled closing therefor, which shall be no later than thirty (30) Business Days after the Selling Shareholder’s receipt of the Company’s notice of purchase. Upon completion of the Transfer of the Offered Shares to the Company pursuant to this Section 6.3(a)(i), the Company shall procure that the Offered Shares are forthwith cancelled.

 

(ii)                                  If the Company has declined to purchase or failed to exercise its Company Right of First Refusal with respect to any portion of the Offered Shares in connection with a Transfer pursuant to the subsection (i) above, the Selling Shareholder shall, within five (5) Business Days after the expiration of the Company Purchase Right Period, deliver to each Preferred Shareholder a notice (the “Secondary Transfer Notice”) which shall include all of the information and certifications required in a Transfer Notice and shall in addition identify the Offered Shares with respect to which the Company has declined to purchase or failed to exercise its Company Right of First Refusal (the “Remaining Shares”).

 

(b)                                 Preferred Shareholders’ Option to Purchase.

 

(i)                             Each Preferred Shareholder who notifies such Selling Shareholder in writing within ten (10) Business Days (the “Purchase Period”) after receipt of the Secondary Transfer Notice (each such Preferred Shareholder, a “Purchasing Holder”) shall have the right, exercisable upon such written notice to the Selling Shareholder (the “Purchase and Co-Sale Notice”), to purchase up to its pro rata share of the Remaining Shares plus up to its pro rata share of any remaining Offered Shares not purchased by the Company and any other Preferred Shareholder (the “Additional Remaining Shares”) on the same terms and conditions as set forth in the Transfer Notice. For avoidance of doubt, any Preferred Shareholder who fails to so notify within ten (10) Business Days after receipt of the Secondary Transfer Notice should be deemed to have forfeited the right hereunder to purchase any Offered Shares. The Purchase and Co-Sale Notice shall state (A) whether the Preferred Shareholder desires to purchase up to its pro rata share of the Remaining Shares, (B) whether the Preferred Shareholder desires to purchase the maximum amount of its pro rata share of the Additional Remaining Shares, and (C) whether the Preferred Shareholder elects not to purchase any of the Offered Shares but wishes to sell a portion of the securities held by such Preferred Shareholder pursuant to Section 6.3(c) of this Agreement and the number of Equity Securities to be sold (subject to Section 6.3(c)(ii)). A Preferred Shareholder has the option either to purchase or to sell under this Section 6 and such right shall not be construed as an option to both purchase and sell with respect to the same Transfer.

 

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(ii)                              Each Purchasing Holder who sets forth in the Purchase and Co-Sale Notice a desire to purchase the maximum amount of Remaining Shares available shall be entitled to purchase its pro rata share of the Additional Remaining Shares.

 

(iii)                               For purposes of this Section 6.3(b), each Preferred Shareholder’s pro rata share shall be equal to a fraction, the numerator of which is the number of Ordinary Shares held by such Preferred Shareholder (on an as-converted basis) and the denominator of which is the total number of Ordinary Shares held by all Preferred Shareholders (on an as-converted basis) calculated immediately prior to the time of the purchase hereunder from the Selling Shareholder, provided, however, that with respect to the Additional Remaining Shares, the denominator shall be total number of Ordinary Shares held by all Purchasing Holders that are purchasing the Additional Remaining Shares (on an as-converted basis).

 

(iv)                             In the event the consideration for the Offered Shares specified in a Second Transfer Notice is payable in property other than cash and the Selling Shareholder and the Preferred Shareholders who wish to purchase the Offered Shares under Section 6.3(b) (acting together), cannot agree on the cash value of such property within ten (10) days after the receipt of the Second Transfer Notice, the value of such property shall be determined by an appraiser of recognized standing selected jointly by the Selling Shareholder and such Preferred Shareholders (acting together). If they cannot agree on an appraiser within twenty (20) days after receipt of the Second Transfer Notice by such Preferred Shareholders, within a further five-day period, the Selling Shareholder and such Preferred Shareholders (acting together), shall each select an appraiser of recognized standing and the two appraisers shall designate a third appraiser of recognized standing to determine the value of such property. The value of such property shall be determined by the appraiser selected pursuant to this Section 6.3(b)(iv) within one (1) month from its appointment, and such determination shall be final and binding on the Selling Shareholder and such Preferred Shareholders. The cost of such appraisal shall be shared equally by the Selling Shareholder, on the one hand, and such Preferred Shareholder, on the other hand (each Preferred Shareholder shall pay its pro rata portion of such costs based on the number of Offered Shares acquired by each such Preferred Shareholder). If the Purchase Period has expired but still no determination of the value of the consideration for the Offered Shares offered by the Selling Shareholder, then such Purchase Period shall be extended to the fifth (5th) Business Day after such valuation shall have been determined to be final and binding pursuant to this Section 6.3(b)(iv).

 

(c)                                  Right of Co-Sale.

 

(i)                             Following the expiration of the Purchase Period, each Preferred Shareholder who previously notified the Selling Shareholder in the Purchase and Co-Sale Notice of such Preferred Shareholder’s desire to sell a portion of its shares with the Selling Shareholder (such Preferred Shareholder, a “Co-Sale Participant”) shall have the right to participate in the sale of any Offered Shares that were not purchased by the Company and the Preferred Shareholders pursuant to Sections6.3(a) and (b) (the “Residual Shares”), on the same terms and conditions as specified in the Transfer Notice. To the extent one or more Preferred Shareholders exercise such right of co-sale in accordance with the terms and conditions set forth below, the number of Offered Shares that the Selling Shareholder may sell in the Transfer shall be correspondingly reduced. For avoidance of doubt, the total number of Offered Shares should remain the same as which is specified in the Transfer Notice even if any Co-Sale Participant elects to exercise its right hereunder to participate in the sale of any Offered Shares.

 

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(ii)                              Each Co-Sale Participant may sell all or any part of that number of Residual Shares equal to the product obtained by multiplying (A) the Residual Shares, by (B) a fraction, the numerator of which shall be the number of Ordinary Shares owned by such Co-Sale Participant (on an as-converted basis) and the denominator of which shall be the total number of Ordinary Shares held by all Co-Sale Participants and the Selling Shareholder (on an as-converted basis), calculated immediately prior to the time of the Transfer.

 

(d)                                 Transferred Shares. Each Co-Sale Participant shall effect its participation in the sale by promptly delivering to the Selling Shareholder for transfer to the prospective purchaser an instrument of transfer and one or more certificates, in both cases representing:

 

(i)                             the series and number of securities of the Company which such Co-Sale Participant elects to sell;

 

(ii)                              a number of Preferred Shares which are at such time convertible into the number of Ordinary Shares which such Co-Sale Participant elects to sell; provided, however, that if the prospective purchaser objects to the allotment of Preferred Shares in lieu of Ordinary Shares, such Co-Sale Participant shall first convert such Preferred Shares into Ordinary Shares and deliver Ordinary Shares as provided in this Section 6.3(d) and the Company shall make any such conversion concurrent with the actual transfer of such shares to the purchaser and contingent upon such Transfer; or

 

(iii)                               a combination of the above.

 

(e)                                  Payment. The instrument of transfer and share certificate(s) that the Co-Sale Participant delivers to such Selling Shareholder pursuant to Section 6.3(d) shall be transferred to the prospective purchaser in consummation of the sale of the Residual Shares pursuant to the terms and conditions specified in the Transfer Notice, and such Selling Shareholder shall concurrently therewith remit to such Co-Sale Participant that portion of the sale proceeds to which such Co-Sale Participant is entitled by reason of its participation in such sale. To the extent that any prospective purchaser or purchasers prohibit(s) such assignment or otherwise refuse(s) to purchase shares or other securities from a Co-Sale Participant exercising its rights of co-sale hereunder, such Selling Shareholder shall not sell to such prospective purchaser or purchasers any Equity Securities unless and until, simultaneously with such sale, such Selling Shareholder shall purchase such shares or other securities from such Co-Sale Participant for the same consideration and on the same terms and conditions as the proposed Transfer described in the Transfer Notice. The Company shall, upon surrendering of the instrument of transfer and share certificate(s) for the Preferred Shares or Ordinary Shares being transferred as provided above, make proper entries in the register of members of the Company and cancel the surrendered certificates and issue any new certificates in the name of the prospective purchaser or the Selling Shareholder, as the case may be, as necessary to consummate the transactions in connection with the exercise by the Co-Sale Participants of their co-sale rights under this Section 6.3.

 

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6.4                               Non-Exercise of Rights. To the extent that the Company and the Preferred Shareholder have not exercised their rights to purchase all of a Selling Shareholder’s Offered Shares, such Selling Shareholder together with any Co-Sale Participant shall have a period of sixty (60) days from the expiration of such rights in which to sell any remaining Offered Shares, upon terms and conditions (including the purchase price) no more favorable to the purchaser than those specified in the Transfer Notice, to the third party transferee(s) identified in the Transfer Notice. The third-party transferee(s) shall, as a condition to the effectiveness of Transfer of the Residual Shares, furnish the Company and the Preferred Shareholders with a joinder agreement in the form attached hereto as Exhibit A. In the event a Selling Shareholder does not consummate the sale or disposition of the Residual Shares within the sixty-day period from the expiration of these rights, the Preferred Shareholders’ rights under this Section 6 shall continue to be applicable to any subsequent disposition of the Equity Securities by such Selling Shareholder. Furthermore, the exercise or non-exercise by the Preferred Shareholders to purchase Offered Shares from such Selling Shareholder shall not adversely affect the Preferred Shareholders’ rights to make subsequent purchases from any Selling Shareholder of the Equity Securities to be transferred. Any proposed Transfer on terms and conditions different from those described in the Transfer Notice, as well as any subsequent proposed Transfer of any of the Selling Shareholders’ shares shall again be subject to the right of the Preferred Shareholders under this Section 6 and shall require compliance by the relevant Selling Shareholder with the procedures described in this Section 6.

 

6.5                               Exempt Transfers. Notwithstanding anything to the contrary contained herein, the right of first refusal of the Company, and the right of first refusal and co-sale rights of the Preferred Shareholders shall not apply to (a) any Transfer or Transfers made pursuant to Section 7 below, (b) any sale or Transfer of Ordinary Shares to the Company pursuant to a repurchase right in the event of a termination of employment or consulting relationship or pursuant to the terms of the ESOP; (c) any Transfer of Equity Securities by a holder of Ordinary Shares to his spouse, children or parents (the “Shareholder Family”), trustee of any trust in which the sole beneficiaries are members of the Shareholder Family, or an entity one hundred percent (100%) owned by members of the Shareholder Family; and (d) any Transfer of Equity Securities by a Preferred Shareholder (including any Ordinary Shares issued or issuable upon conversion of the Preferred Shares); provided however, each transferee shall execute a joinder agreement in the form attached hereto as Exhibit A and deliver a copy to the Company prior to or concurrently with such Transfer.

 

6.6                               No Circumvention.

 

(a)                                 Each Party agrees that it shall not avoid the transfer restrictions set forth in this Section 6 by Transfer of the Equity Securities of itself or its interest in any Person(s) through which it indirectly holds interests in the Company.

 

(b)                                 Any attempt by a Party to Transfer any Equity Securities in violation of this Section 6 shall be void and the Company shall not effect such a Transfer nor will it treat any alleged transferee as the holder of such Equity Securities.

 

6.7                               Legend.

 

(a)                                 Each certificate representing the Ordinary Shares shall be endorsed with the following legend:

 

THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN A SHAREHOLDERS AGREEMENT, A COPY OF WHICH MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.”

 

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(b)                                 Each Party agrees that the Company may instruct its transfer agent to impose transfer restrictions on the shares represented by certificates bearing the legend referred to in Section 6.7(a) above to enforce the provisions of this Agreement and the Company agrees to promptly do so. The legend shall be removed upon termination of the provisions of this Section 6.

 

6.8                               Term. The provisions under this Section 6 shall terminate upon the closing of a Qualified IPO.

 

7.                                      DRAG ALONG.

 

7.1                               Drag-Along Rights.

 

(a)                                 If holders of a majority of the Preferred Shares exercise their redemption right set forth in Article 8.4 of the Restated Articles, and the Redemption Closing does not occur within six (6) months from the date that the Company receives the redemption request due to no fault on the part of such holders exercising their redemption right, then such holders of a majority of the Preferred Shares (the “Drag-Along Shareholders”) shall have the right to effect a Trade Sale at a purchase price per Ordinary Share (on an as-converted basis) of no less than one hundred and twenty percent (120%) of the then effective Series D Conversion Price (a “Drag-Along Sale”) pursuant to the terms of this Section 7.

 

(b)                                 The Drag-Along Shareholders may, by requesting so in the Drag-Along Notice (as defined below), request the other Shareholders (the “Dragged Shareholders”) to, and the Dragged Shareholders, upon receiving the Drag-Along Notice, shall (i) vote, or give their written consent with respect to, all the Equity Securities held by them in favor of such proposed Drag-Along Sale and in opposition of any proposal that could reasonably be expected to delay or impair the consummation of any such proposed Drag-Along Sale; (ii) transfer all of their Equity Securities to such purchaser as required in the Drag-Along Notice; (iii) refrain from exercising any dissenters’ rights or rights of appraisal under applicable law at any time with respect to or in connection with such proposed Drag-Along Sale; (iv) take all actions reasonably necessary to consummate the proposed Drag-Along Sale, including amending the then existing memorandum and articles of association of the Company, and (v) pay their respective pro rata share of expenses incurred in connection with the Drag-Alone Sale; provided that the terms and conditions of the Drag-Along Sale with respect to the Dragged Shareholders shall be the same as those with respect to the Drag-Along Shareholders, including percentage of equity to be included in the Drag-Along Sale, if applicable.

 

7.2                               Representation and Undertaking.

 

(a)                                 Any such sale or disposition by the Dragged Shareholders shall be on the terms and conditions as set forth in the Drag-Along Notice. Such Dragged Shareholders shall be required to make customary and usual representations and warranties in connection with the Drag-Along Sale, including, as to their ownership and authority to sell, free of all liens, claims and encumbrances of any kind, the shares proposed to be transferred or sold by such Dragged Shareholders; and any violation or breach of or default under (with or without the giving of notice or the lapse of time or both) any law or regulation applicable to such Dragged Shareholders or any material contract to which such Dragged Shareholders is a party or by which they are bound.

 

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(b)                                 Each of the Dragged Shareholders undertakes to obtain all consents, permits, approvals, orders, authorizations or registrations, qualifications, designations, declarations or filings with any Governmental Authority or any third party, which are required to be obtained or made in connection with the Drag-Along Sale.

 

7.3                               Drag-Along Notice. Prior to making any Drag-Along Sale in which the Drag-Along Shareholders wish to exercise their rights under this Section 7, the Drag-Along Shareholders shall provide the Company and the Dragged Shareholders with written notice (the “Drag-Along Notice”) not less than thirty (30) days prior to the proposed date of the Drag-Along Sale (the “Drag-Along Sale Date”). The Drag-Along Notice shall set forth: (i) the name and address of the proposed purchasers; (ii) the proposed amount and form of consideration to be paid, and the terms and conditions of payment offered by each of the purchasers; (iii) the Drag-Along Sale Date; (iv) the number of shares held of record by the Drag-Along Shareholders on the date of the Drag-Along Notice which form the subject to be transferred, sold or otherwise disposed of by the Drag-Along Shareholders; (v) the nature and the structure of the Drag-Along Sale, and (vi) the number of shares of the Dragged Shareholders to be included in the Drag-Along Sale (if any).

 

7.4                               Transfer Certificate. On the Drag-Along Sale Date, to the extent the Drag-Along Sale is structured as an equity transfer transaction, each of Drag-Along Shareholders and the Dragged Shareholders shall each deliver or cause to be delivered an instrument of transfer and a certificate or certificates evidencing its Equity Securities to be included in the Drag-Along Sale, duly endorsed for transfer, to such third party purchasers in the manner and at the address indicated in the Drag-Along Notice.

 

7.5                               Payment. If the Drag-Along Shareholders or the Dragged Shareholders receive the purchase price for their shares or such purchase price is made available to them as part of a Drag-Along Sale, to the extent the Drag-Along Sale is structured as an equity transfer transaction, and, in either case they fail to deliver instrument of transfer and certificates evidencing their shares as described in this Section 7, they shall for all purposes be deemed no longer to be a Shareholder of the Company (with the register of members of the Company updated to reflect such status), shall have no voting rights, shall not be entitled to any dividends or other distributions with respect to any shares held by them, shall have no other rights or privileges as a Shareholder of the Company. In addition, the Company shall stop any subsequent transfer of any such shares held by such Shareholders.

 

7.6                               Term. The provisions under this Section 7 shall terminate upon the closing of a Qualified IPO.

 

8.                                      PROTECTIVE PROVISIONS

 

8.1                               Acts Requiring Approval of Preferred Shares. Subject to applicable Laws and the provisions in Section 8.2, in addition to such other limitations as may be provided in the Restated Articles, so long as any Series A Preferred Shares remain issued and outstanding, the Group Companies shall not, and each of the Ordinary Shareholders shall procure the Group Companies not to, either directly or by amendment of the Restated Articles, merger, consolidation, or otherwise, whether in a single transaction or a series of related transactions, take any of the following acts, without the prior written consent of (i) the Series A Director, if the approval from the Board is required, or (ii) holders of at least a majority of the issued and outstanding Series A Preferred Shares (the “Series A Majority”), voting as a single class on an as-converted basis, if the approval from the Shareholders is required:

 

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(a)                                 any action that authorizes, creates or issues any securities of any class or series, or other securities of whatever description, in the Company, other than the issuance of the Ordinary Shares upon conversion of the Preferred Shares, and the issuance of the Ordinary Shares (or options or warrants therefor) under the ESOP as approved by the Board;

 

(b)                                 any amendment, alteration, or repeal of any provision of the Restated Articles or other constitutional documents or any waiver given thereunder, and any amendment or change of the rights, preferences or privileges of, or the restrictions provided for the benefit of, any Preferred Shares;

 

(c)                                  any increase or decrease of the authorized share capital or the authorized number of any Equity Securities (including through altering, reorganizing, reclassifying or otherwise recapitalizing any existing Equity Securities) of the Company;

 

(d)                                 any repurchase, redemption or retirement of any Equity Securities of the Company other than pursuant to share restriction agreements approved by the Board to repurchase Ordinary Shares from the employees, officers, directors or consultants of the Group Company upon termination of their employment or services or pursuant to the redemption right of the Preferred Shares;

 

(e)                                  any merger, consolidation, share acquisition or other corporate reorganization, or any transaction or series of transactions in which excess of 50% of any Group Company’s voting power is transferred or in which all or substantially all the assets of any Group Company are sold;

 

(f)                                   any increase or decrease of the authorized size of the Board;

 

(g)                                  the approval of or consent to any reorganization, Liquidation Event (as defined in the Restated Articles) or any filing by or against any Group Company for the appointment of a receiver, administrator or other form of external manager, or the winding up, liquidation, bankruptcy or insolvency of any Group Company;

 

(h)                                 any initial public offering (including Qualified IPO) of any Group Company, including choice of the underwriters, the listing venue, timing, valuation and the securities exchange for the initial public offering;

 

(i)                                     the declaration, setting aside and/or payment of any dividends or other distributions on any securities of the Company, or the adoption of or any change to the dividend policy;

 

(j)                                    any transaction in excess of RMB40,000,000 involving any Group Company, on the one hand, and any Group Company’s officers, directors or shareholders or any Affiliate of such Persons, on the other hand;

 

(k)                                 any change in the equity ownership of any Domestic Company or termination of, or any amendment to, or waiver under the Control Documents; and

 

(l)                                     any agreement or commitment to do any of the foregoing.

 

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8.2                               Notwithstanding the provisions under Section 8.1, so long as any Series B Preferred Shares remain issued and outstanding, the Company shall not, and each of the Preferred Shareholders (other than the holders of Series B Preferred Shares) and the Ordinary Shareholders shall procure the Company not to, either directly or indirectly or by amendment of the Restated Articles or otherwise, (i) take any acts that will adversely affect the rights of the holders of the Series B Preferred Shares in a manner disproportionate to any adverse effect such acts would have on the rights of the holders of the other Preferred Shares, (ii) issue any additional Series B Preferred Shares, or (iii) incur any indebtedness or guarantees of indebtedness (except expenses that may be incurred during the ordinary course of business consistent with past practices), without the prior written consent of holders of at least a majority of the issued and outstanding Series B Preferred Shares, voting as a single class on an as-converted basis. For the avoidance of doubt, any act that authorizes, creates or issues any securities of any class or series, or other securities of whatever description (except any Series B Preferred Shares pursuant to (ii) above), in the Company shall not be deemed as an act that requires the prior written consent of holders of the Series B Preferred Shares.

 

8.3                               Notwithstanding the provisions under Section 8.1, so long as any Series C Preferred Shares remain issued and outstanding, the Company shall not, and each of the Preferred Shareholders (other than the holders of Series C Preferred Shares) and the Ordinary Shareholders shall procure the Company not to, either directly or indirectly or by amendment of the Restated Articles or otherwise, (i) take any acts that will adversely affect the rights of the holders of the Series C Preferred Shares in a manner disproportionate to any adverse effect such acts would have on the rights of the holders of the other Preferred Shares, (ii) issue any additional Series C Preferred Shares, or (iii) incur any indebtedness or guarantees of indebtedness (except expenses that may be incurred during the ordinary course of business consistent with past practices), without the prior written consent of holders of at least a majority of the issued and outstanding Series C Preferred Shares, voting as a single class on an as-converted basis. For the avoidance of doubt, any act that authorizes, creates or issues any securities of any class or series, or other securities of whatever description (except any Series C Preferred Shares pursuant to (ii) above), in the Company shall not be deemed as an act that requires the prior written consent of holders of the Series C Preferred Shares.

 

8.4                               Notwithstanding the provisions under Section 8.1, so long as any Series D Preferred Shares remain issued and outstanding, the Company shall not, and each of the Preferred Shareholders (other than the holders of Series D Preferred Shares) and the Ordinary Shareholders shall procure the Company not to, either directly or indirectly or by amendment of the Restated Articles or otherwise, (i) take any acts that will adversely affect the rights of the holders of the Series D Preferred Shares in a manner disproportionate to any adverse effect such acts would have on the rights of the holders of the other Preferred Shares, (ii) issue any additional Series D Preferred Shares, or (iii) incur any indebtedness or guarantees of indebtedness (except expenses that may be incurred during the ordinary course of business consistent with past practices), without the prior written consent of holders of at least a majority of the issued and outstanding Series D Preferred Shares, voting as a single class on an as-converted basis. For the avoidance of doubt, any act that authorizes, creates or issues any securities of any class or series, or other securities of whatever description (except any Series D Preferred Shares pursuant to (ii) above), in the Company shall not be deemed as an act that requires the prior written consent of holders of the Series D Preferred Shares.

 

32

 

8.5                               Notwithstanding the provisions under Section 8.1, so long as any Series E Preferred Shares remain issued and outstanding, the Company shall not, and each of the Preferred Shareholders (other than the holders of Series E Preferred Shares) and the Ordinary Shareholders shall procure the Company not to, either directly or indirectly or by amendment of the Restated Articles or otherwise, (i) take any acts that will adversely affect the rights of the holders of the Series E Preferred Shares in a manner disproportionate to any adverse effect such acts would have on the rights of the holders of the other Preferred Shares, (ii) issue any additional Series E Preferred Shares, or (iii) incur any indebtedness or guarantees of indebtedness (except expenses that may be incurred during the ordinary course of business consistent with past practices), without the prior written consent of holders of at least a majority of the issued and outstanding Series E Preferred Shares, voting as a single class on an as-converted basis. For the avoidance of doubt, any act that authorizes, creates or issues any securities of any class or series, or other securities of whatever description (except any Series E Preferred Shares pursuant to (ii) above), in the Company shall not be deemed as an act that requires the prior written consent of holders of the Series E Preferred Shares.

 

9.                                      GENERAL PROVISIONS

 

9.1                               Liquidation Event. The Shareholders agree and acknowledge that Article36.3 of the Restated Articles provides for the voluntary winding up of the Company on the occurrence of a Liquidation Event (as defined in the Restated Articles). On the occurrence of a Liquidation Event, the Shareholders undertake to vote their Shares to place the Company into voluntary liquidation.

 

9.2                               Governing Law. This Agreement shall be governed by and construed exclusively in accordance with the Laws of Hong Kong without giving effect to any choice of law rule that would cause the application of the Laws of any jurisdiction other than the Laws of Hong Kong to the rights and duties of the Parties hereunder.

 

9.3                               Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the Parties. This Agreement and the rights and obligations therein may not be assigned by any Party without the written consent of the other Parties, provided that the Purchasers may assign any or all of their rights and obligations hereunder to their respective Affiliates.

 

9.4                               Entire Agreement. This Agreement and the other Transaction Documents, including the schedules and exhibits hereto and thereto, which are hereby expressly incorporated herein by this reference, constitute the entire understanding and agreement among the Parties with regard to the subjects hereof and thereof.

 

9.5                               Notices. Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Agreement shall be in writing and shall be conclusively deemed to have been duly given (a) when hand delivered to the other Parties, upon delivery; (b) when sent by facsimile at the number set forth in Schedule D, upon receipt of confirmation of error-free transmission; (c) seven (7) Business Days after deposit in the mail as air mail or certified mail, receipt requested, postage prepaid and addressed to the other Parties as set forth in Schedule D; or (d) three (3) Business Days after deposit with an overnight delivery service, postage prepaid, addressed to the Parties as set forth in Schedule D with next business-day delivery guaranteed, provided that the sending Party receives a confirmation of delivery from the delivery service provider. Each Party making a communication hereunder by facsimile shall promptly confirm by telephone to the Party to whom such communication was addressed each communication made by it by facsimile pursuant hereto but the absence of such confirmation shall not affect the validity of any such communication. A Party may change or supplement the addresses given above, or designate additional addresses, for purposes of this Section 9.5 by giving, the other Parties written notice of the new address in the manner set forth above.

 

33

 

9.6                               Amendments. Any term of this Agreement may be amended only with the written consents of the Company and the holders of the issued and outstanding Preferred Shares pursuant to Sections 8.1 and 8.2 (where applicable). Any amendment effected in accordance with this Section 9.6 shall be binding upon each Party hereto and their respective successors; provided that Company shall promptly give written notice thereof to any Party hereto that has not consented to such amendment.

 

9.7                               Delays or Omissions; Waivers. No delay or omission to exercise any right, power or remedy accruing to any Party, upon any breach or default of any Party under this Agreement, shall impair any such right, power or remedy of such Party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of any similar breach of default thereafter occurring, or any waiver of any other breach or default theretofore or thereafter occurring. Any waiver by any Party of any condition or breach of default under this Agreement must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by Laws or otherwise afforded to any Party shall be cumulative and not alternative.

 

9.8                               Interpretation; Titles and Subtitles. This Agreement shall be construed according to its fair language. The rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not be employed in interpreting this Agreement. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. Unless otherwise expressly provided herein, all references to sections and schedules herein are to sections and schedules of this Agreement. Unless a provision hereof expressly provides otherwise: (a) the term “or” is not exclusive; (b) the terms “herein”, “hereof”, and other similar words refer to this Agreement as a whole and not to any particular section, subsection, paragraph, clause, or other subdivision; (c) the masculine, feminine, and neuter genders will each be deemed to include the others; and (d) whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”

 

9.9                               Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts (including by facsimile or PDF format), each of which shall be an original, but all of which together shall constitute one instrument. This Agreement shall become effective when each Party shall have signed a counterpart and delivered (including by telecopy or email) to the other Parties.

 

9.10                        Severability. If any provision of this Agreement is found to be invalid or unenforceable, then such provision shall be construed, to the extent feasible, so as to render the provision enforceable and to provide for the consummation of the transactions contemplated hereby on substantially the same terms as originally set forth herein, and if no feasible interpretation would save such provision, it shall be severed from the remainder of this Agreement, which shall remain in full force and effect unless the severed provision is essential to the rights or benefits intended by the Parties. In such event, the Parties shall use best efforts to negotiate, in good faith, a substitute, valid and enforceable provision or agreement which most nearly affects the Parties’ intent in entering into this Agreement.

 

34

 

9.11                        Confidentiality and Non-Disclosure.

 

(a)                                 The terms and conditions of the Transaction Documents (collectively, the “Financing Terms”), including their existence, shall be considered strictly confidential information and shall not be disclosed by any of the Parties to any other Person except in accordance with the provisions set forth below.

 

(b)                                 Notwithstanding the foregoing, each of the Group Companies and the Purchasers, as appropriate, may disclose any of the Financing Terms to their respective Affiliates, directors, employees, investment bankers, lenders, accountants and attorneys on an as-need-to-know basis, in each case only where such Persons are under appropriate nondisclosure obligations.

 

(c)                                  Each Party to this Agreement hereby acknowledges, affirms and agrees that it shall not and shall procure its Affiliates not to make any announcement or other publicity in connection with the Financing Terms without the consents of other Parties as to its content, form and manner of publication; provided that the Company may make announcement or other publicity in connection with the Financing Terms if such action is necessary for its performance of obligations under the Transaction Documents, in which case the Company shall promptly notify the other Parties hereof and the Parties shall use reasonable efforts to cause a mutually agreeable release or announcement to be issued.

 

(d)                                 In the event that any Party is requested or becomes legally compelled (including, pursuant to securities Laws) to disclose the existence or content of any of the Financing Terms hereof in contravention of the provisions of this Section 9.11, such Party (the “Disclosing Party”) shall promptly provide the other Parties with written notice of that fact so that such other Parties may seek a protective order, confidential treatment or other appropriate remedy. In such event, the Disclosing Party shall furnish only that portion of the information that is legally required and shall exercise reasonable efforts to obtain reliable assurance that confidential treatment will be given to such information to the extent reasonably requested by the other Parties.

 

(e)                                  Notwithstanding any other provision of this Section 9.11, the confidentiality obligations of the Parties shall not apply to: (i) information which a restricted Party learns from a third party having the right to make the disclosure, provided the restricted Party complies with any restrictions imposed by the third party; (ii) information which is in the restricted Party’s possession prior to the time of disclosure by the protected Party and not acquired by the restricted Party under a confidentiality obligation; (iii) information which enters the public domain without breach of confidentiality by the restricted Party; or (iv) disclosures to a Party’s accountants, attorneys or other professional advisors on an as-need-to-know basis so long as they agree to keep such disclosures confidential.

 

9.12                        Further Assurances. Each Party shall from time to time and at all times hereafter uses reasonable efforts to make, do, execute, or cause or procure to be made, done and executed such further acts, deeds, conveyances, consents and assurances without further consideration, which may reasonably be required to effect the transactions contemplated by this Agreement.

 

35

 

9.13                        Dispute Resolution. Any dispute, controversy or claim (each, a “Dispute”) arising out of or relating to this Agreement, or the interpretation, breach, termination, validity or invalidity thereof, shall be referred to arbitration upon the demand of either party to the dispute with notice (the “Arbitration Notice”) to the other. The Dispute shall be settled by arbitration in Hong Kong by the Hong Kong International Arbitration Centre (the “HKIAC”) in accordance with the Hong Kong International Arbitration Centre Administered Arbitration Rules (the “HKIAC Rules”) in force at the time when the Arbitration Notice is submitted. There shall be three (3) arbitrators. The complainant and the respondent to such dispute shall each select one arbitrator within thirty (30) days after giving or receiving the demand for arbitration (the “Selection Period”). Such arbitrators shall be freely selected, and the parties shall not be limited in their selection to any prescribed list. The chairman of the HKIAC shall select the third arbitrator. If either party to the arbitration fails to appoint an arbitrator with the Selection Period, the relevant appointment shall be made by the chairman of the HKIAC. The arbitral proceedings shall be conducted in English. To the extent that the HKIAC Rules are in conflict with the provisions of this Section 9.13, including the provisions concerning the appointment of the arbitrators, this Section 9.13 shall prevail. Each party to the arbitration shall cooperate with each other party to the arbitration in making full disclosure of and providing complete access to all information and documents requested by such other party in connection with such arbitral proceedings, subject only to any confidentiality obligations binding on such party. The award of the arbitral tribunal shall be final and binding upon the parties thereto, and the prevailing party may apply to a court of competent jurisdiction for enforcement of such award. Any party to the Dispute shall be entitled to seek preliminary injunctive relief, if possible, from any court of competent jurisdiction pending the constitution of the arbitral tribunal. During the course of the arbitral tribunal’s adjudication of the Dispute, this Agreement shall continue to be performed except with respect to the part in dispute and under adjudication.

 

9.14                        Prior Agreement. In consideration of the mutual covenants and promises contained herein, each of Parties that are parties to the Prior Agreement confirms and acknowledges that the Prior Agreement shall hereby be terminated in its entirety, and superseded and replaced by this Agreement.

 

9.15                        Prevail over the Restated Articles. If and to the extent that there are inconsistencies between the provisions of this Agreement and those of the Restated Articles, the terms of this Agreement shall prevail with respect to each of the Shareholders of the Company only. The Parties agree to take all actions necessary or advisable, as promptly as practicable after the discovery of such inconsistency, to amend the Restated Articles so as to eliminate such inconsistency to the fullest extent permissible by law.

 

9.16                        Aggregation of Shares. All Preferred Shares or Ordinary Shares held or acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

 

9.17                        Contracts (Rights of Third Parties) Ordinance. Unless expressly provided to the contrary in this Agreement, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Ordinance (Cap 623 of the laws of Hong Kong) to enforce or to enjoy the benefit of any term of this Agreement. Notwithstanding any term of this Agreement, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.

 

36

 

9.18                        Language. This Agreement is written in English. In case that this Agreement is also signed in any other language, the English version shall prevail.

 

— REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK —

 

37

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
9F
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Sun Lei
    	
 
    
	
 
    	
Name:
    	
Sun Lei
    	
 
    
	
 
    	
Title:
    	
Director
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Zhuhai Hengqin Jiufu Technology   Co., Ltd.
    	

    
	
 
    	
珠海横琴玖富科技有限公司   (seal)
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Sun Lei
    
	
 
    	
Name:
    	
Sun Lei
    
	
 
    	
Title:
    	
Director
    
	
 
    	
 
    	
 
    
	
 
    	
Xinjiang Jiufu Wanka   Information Technology Co., Ltd.
    	

    
	
 
    	
新疆玖富万卡信息技术有限公司   (seal)
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Sun Lei
    
	
 
    	
Name:
    	
Sun Lei
    
	
 
    	
Title:
    	
Director
    
	
 
    	
 
    	
 
    
	
 
    	
Beijing Jiufu Puhui   Information Technology Co., Ltd.
    	

    
	
 
    	
北京玖富普惠信息技术有限公司   (seal)
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Sun Lei
    
	
 
    	
Name:
    	
Sun Lei
    
	
 
    	
Title:
    	
Director
    
	
 
    	
 
    	
 
    
	
 
    	
Zhuhai Jiufu Consumer   Finance Technology Co., Ltd.
    	

    
	
 
    	
珠海玖富消金科技有限公司   (seal)
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Sun Lei
    
	
 
    	
Name:
    	
Sun Lei
    
	
 
    	
Title:
    	
Director
    
					

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
Sinomap   Investments Limited
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jacky Xu
    
	
 
    	
 
    	
Name:   Jacky Xu
    
	
 
    	
 
    	
Title:   Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	

    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
Brilliant Code Investment Limited
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jun Tian
    
	
 
    	
 
    	
Name: Jun Tian
    
	
 
    	
 
    	
Title:   Director
    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
Nine Fortune Limited
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ren Yifan
    
	
 
    	
 
    	
Name: Ren Yifan
    
	
 
    	
 
    	
Title:   Director
    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
DFM Capital Ltd.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Xiao Changxing
    
	
 
    	
 
    	
Name: Xiao Changxing
    
	
 
    	
 
    	
Title:   Director
    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
Nine F Capital   Limited
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Sun Lei
    
	
 
    	
 
    	
Name: Sun Lei
    
	
 
    	
 
    	
Title:   Director
    
	
 
    	
 
    	
 
    
	
 
    	
Lei SUN
    
	
 
    	
 
    
	
 
    	
/s/ Sun Lei
    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
Xing Technology Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Chen Lixing
    
	
 
    	
 
    	
Name: Chen Lixing
    
	
 
    	
 
    	
Title:   Director
    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
Stone Cube Capital Ltd.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Liu Lei
    
	
 
    	
 
    	
Name: Liu Lei
    
	
 
    	
 
    	
Title:   Director
    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
DC Consulting Co. Ltd.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Zhang Dongcheng
    
	
 
    	
 
    	
Name: Zhang Dongcheng
    
	
 
    	
 
    	
Title:   Director
    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
Pacific Venture   Partners LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Flynn Huang
    
	
 
    	
 
    	
Name: Flynn Huang
    
	
 
    	
 
    	
Title: LLC   Member/Manager
    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
Novel Lead Limited
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Flynn Huang
    
	
 
    	
 
    	
Name: Flynn Huang
    
	
 
    	
 
    	
Title: Director
    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	

    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
Union Fortune   Investment Limited
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Zhou Jian
    
	
 
    	
 
    	
Name:
    	
Zhou Jian
    
	
 
    	
 
    	
Title:
    	
Director
    
	
 
    	
 
    	
Date:
    	
11 June, 2018
    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
Titan Capital Holdings   Limited
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Elbert YE
    
	
 
    	
 
    	
Name:
    	
Elbert YE
    
	
 
    	
 
    	
Title:
    	
Authorized Signer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/ Seal of Titan   Capital Holdings Limited
    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
Eagle View Global   Limited
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ LIU HSIN-CHENG
    
	
 
    	
 
    	
Name:
    	
LIU HSIN-CHENG
    
	
 
    	
 
    	
Title:
    	
Director
    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
L Investment Holding   Limited
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Lin Yanjun
    
	
 
    	
 
    	
Name:
    	
Lin Yanjun
    
	
 
    	
 
    	
Title:
    	
Director
    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
Qin Technology Inc.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Li Zhijun
    
	
 
    	
 
    	
Name:
    	
Li Zhijun
    
	
 
    	
 
    	
Title:
    	
Director
    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	

    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
Cloud Water Capital   Limited as general partner for and on behalf of Cinda 9F Investment LP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	

    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
JAS Investment Group   Limited
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ JIANG NANCHUN
    
	
 
    	
 
    	
Name:
    	
JIANG NANCHUN
    
	
 
    	
 
    	
Title:
    	
Director
    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
Famous Voyage Group   Limited
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	

    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
Plentiful Bright   International Limited
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Yulan Ling
    
	
 
    	
 
    	
Name:
    	
Yulan Ling
    
	
 
    	
 
    	
Title:
    	
Director
    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
Blessedness Nirmrod   Limited
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Yang Xiaojun
    
	
 
    	
 
    	
Name:
    	
Yang Xiaojun
    
	
 
    	
 
    	
Title:
    	
Director
    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Fourth Amended and Restated Shareholders Agreement as of the date first above written.

 

	
 
    	
SBI Hong Kong Holdings   Co., Limited
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Makoto Miyazaki
    
	
 
    	
 
    	
Name:
    	
Makoto Miyazaki
    
	
 
    	
 
    	
Title:
    	
Director
    

 

[Signature Page to the Fourth Amended and Restated Shareholders Agreement]

 

 

SCHEDULE A

 

Key Subsidiaries of the Company

 

1.                                      Zhuhai Hengqin Jiufu Technology Co., Ltd. (珠海横琴玖富科技有限公司)

 

2.                                      Xinjiang Jiufu Wanka Information Technology Co., Ltd. (新疆玖富万卡信息技术有限公司)

 

3.                                      Beijing Jiufu Puhui Information Technology Co., Ltd. (北京玖富普惠信息技术有限公司)

 

4.                                      Zhuhai Jiufu Consumer Finance Technology Co., Ltd. (珠海玖富消金科技有限公司)

 

 

SCHEDULE B

 

Ordinary Shareholders of the Company

 

1.                                      Nine Fortune Limited, a company incorporated under the Laws of the British Virgin Islands

 

2.                                      DFM Capital Ltd., a company incorporated under the Laws of the British Virgin Islands

 

3.                                      Nine F Capital Limited, a company incorporated under the Laws of the British Virgin Islands

 

4.                                      Xing Technology Inc., a company incorporated under the Laws of the British Virgin Islands

 

5.                                      Stone Cube Capital Ltd., a company incorporated under the Laws of the British Virgin Islands

 

6.                                      DC Consulting Co., Ltd., a company incorporated under the Laws of the British Virgin Islands

 

7.                                      Novel Lead Limited, a company incorporated under the Laws of the British Virgin Islands

 

8.                                      Union Fortune Investment Limited, a company incorporated under the Laws of the British Virgin Islands

 

9.                                      Incorp Services International Limited, a company incorporated under the Laws of the British Virgin Islands

 

10.                               Brilliant Code Investment Limited, a company incorporated under the Laws of the British Virgin Islands

 

11.                               Pacific Venture Partners LLC, a company incorporated under the Laws of the the Washington State, US

 

12.                               Titan Capital Holdings Limited, a company incorporated under the Laws of the British Virgin Islands

 

13.                               Sinomap Investments Limited, a company incorporated under the Laws of the British Virgin Islands

 

14.                               Treasure Knight Investments Limited, a company incorporated under the Laws of the British Virgin Islands

 

15.                               Eagle View Global Limited, a company incorporated under the Laws of the Republic of Seychelles

 

 

16.                               L Investment Holding Limited, a company incorporated under the Laws of the British Virgin Islands

 

17.                               Qin Technology Inc., a company incorporated under the Laws of the British Virgin Islands

 

18.                               Eagle Capital (HongKong) Limited, a company incorporated under the Laws of the Hong Kong

 

19.                               JAS Investment Group Limited, a company formed under the Laws of the British Virgin Islands

 

20.                               Cinda 9F Investment LP, an exempted limited partnership formed under the Laws of the Cayman Islands

 

 

SCHEDULE C

 

Notice Address

 

IF TO SBI:

 

	
Address:
    	
Suites 1101 &   1115-1116, 11th Floor, Two International Finance Centre, No. 8  Finance Street, Hong Kong.
    
	
Attention:
    	
Alan Ho
    
	
Fax number:
    	
+852 2537 4088
    
	
Email:
    	
alanho@sbigroup.com.hk
    

 

IF TO FAMOUS VOYAGE:

 

	
Address:
    	
20th Floor, No.7   Building, Zhu Yu International, 9 ShouTi South Road, Haidian District,   Beijing, PRC
    
	
Attention:
    	
Zhang Junsheng
    
	
Fax number:
    	
010-68790926
    
	
Email:
    	
lovecar@qq.com, zhangchi@heheholdings.com
    

 

IF TO PLENTIFUL BRIGHT:

 

	
Address:
    	
Huabei Group, Tianjin   World Financial Center 29F, Dagubei Road 2, Heping District, Tianjin, PRC
    
	
Attention:
    	
Hongrui Zhou
    
	
Fax number:
    	
18526700265
    
	
Email:
    	
cw-zjh@huabeijituan.cn
    

 

IF TO SERIES C PURCHASER:

 

	
Address:
    	
Floor 28, No.369   Jiangsu Road, Changning District, Shanghai, P.R.C.
    
	
Attention:
    	
JIANG NANCHUN /CAIWEILI
    
	
Fax number:
    	
86-21-52400228
    
	
Email:
    	
jason@focusmedia.cn /   caiweili@focusmedia.cn
    

 

IF TO SERIES B PURCHASER:

 

	
Address:
    	
Maples Corporate   Services Limited, PO Box 309, UglandHouse, Grand Cayman KY1-1104, Cayman   Islands
    
	
Attention:
    	
William Li / Zhou Peng   / Luo Ye
    
	
Fax number:
    	
(852) 28042135
    
	
Email:
    	
william.li@cindahk.com   / zhoupeng@cindahk.com / luoye@cindahk.com
    

 

with a copy to:

 

China Cinda (HK) Asset Management Co., Ltd.

 

	
Address:
    	
12/F, AIA Central, 1   Connaught Road Central, Central, Hong Kong
    
	
Attention:
    	
William Li / Zhou Peng   / Luo Ye
    
	
Fax number:
    	
(852) 28042135
    
	
Email:
    	
william.li@cindahk.com   / zhoupeng@cindahk.com / luoye@cindahk.com
    

 

 

and another copy to: 

 

Morrison &Foerster

 

	
Address:
    	
33/F, Edinburgh Tower,   The Landmark,15 Queen’s Road Central, Hong Kong
    
	
Attention:
    	
Charles Chau / Donna Ko   / Victoria Yip
    
	
Fax number:
    	
852-2585 0800
    

 

 

IF TO JACKY HOLDCO:

 

	
Address:
    	
17/F, HNA Tower, No.8   Linhezhong Road, Tianhe District, Guangzhou, 510610, PRC
    
	
Attention:
    	
Jacky Xu
    
	
Fax number:
    	
+86 20 3815 5555 (5311)
    

 

 

IF TO IVAN HOLDCO:

 

	
Address:
    	
17/F, HNA Tower, No.8   Linhezhong Road, Tianhe District, Guangzhou, 510610, PRC
    
	
Attention:
    	
Ivan Xu
    
	
Fax number:
    	
+86 20 3815 5555 (5300)
    

 

IF TO BRILLIANT CODE:

 

	
Address:
    	
Room 1407, Block J,   Huiyuan Apartment, Yayuncun, Chaoyang District, Beijing, 100101, PRC
    
	
Attention:
    	
Jun Tian
    

 

IF TO NINE FORTUNE LIMITED:

 

	
Address:
    	
40th Floor, Block B,   Tower Three, WangjingSoho, 1 Futongdong Ave, Chaoyang District, Beijing, PRC
    

 

IF TO NOVEL LEAD LIMITED:

 

	
Address:
    	
Room 1903-6, 19/F.,   Hing Yip Commercial Centre, 272-284 Des Voeux Road Central, Hong Kong
    
	
E-mail:
    	
novellead4yanghk2010@gmail.com   / huang.flynn@gmail.com
    
	
Attention:
    	
Mr. Flynn Huang
    

 

IF TO UNION FORTUNE INVESTMENT LIMITED:

 

	
Address:
    	
Flat A,16/F.,No.2 Bowen   Road, Mid-Level,Hong Kong
    
	
Attention:
    	
Jian ZHOU
    
	
Fax number:
    	
Jeyzhou@yahoo.com
    

 

 

IF TO INCORP SERVICES INTERNATIONAL LIMITED:

 

	
Address:
    	
No.41 Lane 2000, Jian   He Road, Chang Ning District, Shanghai 200336, PRC
    
	
Attention:
    	
Ms. Zhao Yiting
    
	
Fax number:
    	
frankchen333@qq.com
    

 

 

IF TO THE GROUP COMPANIES, THE FOUNDER AND THE OTHER EXISTING SHAREHOLDERS:

 

	
Address:
    	
40th Floor, Block B,   Tower Three, Wangjing Soho, 1 Futongdong Ave, Chaoyang District, Beijing, PRC
    
	
Attention:
    	
Lei Sun
    

 

 

EXHIBIT A

 

Joinder Agreement

 

Reference is made to the Fourth amended and restated shareholders’ agreement, a copy of which is attached hereto (as amended from time to time, the “SHA”), among 9F Inc., an exempted company incorporated under the Laws of the Cayman Islands (the “Company”), and the other persons signatory thereto. Capitalized terms used herein and not otherwise defined shall have the meanings given in the SHA.

 

The undersigned,                                                                      , in order to purchase / subscribe for]                          [Ordinary/Series A Preferred/Series B Preferred/Series C Preferred/Series D Preferred/Series E Preferred] Shares and become a Shareholder of the Company, hereby agrees that by the undersigned’s execution hereof, the undersigned is a party to the SHA, subject to all of the restrictions, conditions, and obligations, and entitled to all the rights and privileges, applicable to a holder of [Ordinary Shares / Series A Preferred Shares/ Series B Preferred Shares/ Series C Preferred Shares/ Series D Preferred Shares/ Series E Preferred Shares] set forth in the SHA. This Joinder Agreement shall take effect and shall become a part of said SHA immediately upon execution.

 

	
Executed as of                                                 .
    	
 
    
	
 
    	
Address for Notices:
    
	
 
    	
 
    	
 
    
	
Signature
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Telephone:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Email:Exhibit 10.1

 

9F INC.

 

2015 SHARE INCENTIVE PLAN

 

ARTICLE 1

 

PURPOSE

 

The purpose of the 9F Inc. Share Incentive Plan (the “Plan”) is to promote the success and enhance the value of 9F Inc., a company formed under the laws of the Cayman Islands (the “Company”), by linking the personal interests of the members of the Board, Employees, Consultants and other individuals as the Committee may authorize and approve, to those of the Company’s shareholders and, by providing such individuals with an incentive for outstanding performance, to generate superior returns to the Company’s shareholders. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of recipients of share incentives hereunder upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent.

 

ARTICLE 2

 

DEFINITIONS AND CONSTRUCTION

 

Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates.

 

2.1                               “Applicable Laws” means the legal requirements relating to the Plan and the Awards under applicable provisions of the corporate, securities, tax and other laws, rules, regulations and government orders, and the rules of any applicable stock exchange or national market system, of any jurisdiction applicable to Awards granted to residents therein.

 

2.2                               “Award” means an Option, Restricted Share or Restricted Share Unit award granted to a Participant pursuant to the Plan.

 

2.3                               “Award Agreement” means any written agreement, contract, or other instrument or document evidencing an Award, including through electronic medium.

 

2.4                               “Award Pool” shall have the meaning set forth in Section 3.1(a).

 

2.5                               “Board” means the Board of Directors of the Company.

 

2.6                               “Cause” with respect to a Participant means (unless otherwise expressly provided in the applicable Award Agreement, or another applicable contract with the Participant that defines such term for purposes of determining the effect that a “for cause” termination has on the Participant’s Awards) a termination of employment or service based upon a finding by the Service Recipient, acting in good faith and based on its reasonable belief at the time, that the Participant:

 

 

(a)                                 has been negligent in the discharge of his or her duties to the Service Recipient, has refused to perform stated or assigned duties or is incompetent in or (other than by reason of a disability or analogous condition) incapable of performing those duties;

 

(b)                                 has been dishonest or committed or engaged in an act of theft, embezzlement or fraud, a breach of confidentiality, an unauthorized disclosure or use of inside information, customer lists, trade secrets or other confidential information;

 

(c)                                  has breached a fiduciary duty, or willfully and materially violated any other duty, law, rule, regulation or policy of the Service Recipient; or has been convicted of, or plead guilty or nolo contendere to, a felony or misdemeanor (other than minor traffic violations or similar offenses);

 

(d)                                 has materially breached any of the provisions of any agreement with the Service Recipient;

 

(e)                                  has engaged in unfair competition with, or otherwise acted intentionally in a manner injurious to the reputation, business or assets of, the Service Recipient; or

 

(f)                                   has improperly induced a vendor or customer to break or terminate any contract with the Service Recipient or induced a principal for whom the Service Recipient acts as agent to terminate such agency relationship.

 

A termination for Cause shall be deemed to occur (subject to reinstatement upon a contrary final determination by the Committee) on the date on which the Service Recipient first delivers written notice to the Participant of a finding of termination for Cause.

 

2.7                               “Code” means the Internal Revenue Code of 1986 of the United States, as amended.

 

2.8                               “Committee” means the Board or a committee of the Board described in Article 10.

 

2.9                               “Consultant” means any consultant or adviser if: (a) the consultant or adviser renders bona fide services to a Service Recipient; (b) the services rendered by the consultant or adviser are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities; and (c) the consultant or adviser is a natural person who has contracted directly with the Service Recipient to render such services.

 

2.10                        “Corporate Transaction”, unless otherwise defined in an Award Agreement, means any of the following transactions, provided, however, that the Committee shall determine under (d) and (e) whether multiple transactions are related, and its determination shall be final, binding and conclusive:

 

(a)                                 an amalgamation, arrangement or consolidation or scheme of arrangement (i) in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the jurisdiction in which the Company is incorporated or (ii) following which the holders of the voting securities of the Company do not continue to hold more than 50% of the combined voting power of the voting securities of the surviving entity;

 

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(b)                                 the sale, transfer or other disposition of all or substantially all of the assets of the Company;

 

(c)                                  the complete liquidation or dissolution of the Company;

 

(d)                                 any reverse takeover or series of related transactions culminating in a reverse takeover (including, but not limited to, a tender offer followed by a reverse takeover) in which the Company is the surviving entity but (A) the Company’s equity securities outstanding immediately prior to such takeover are converted or exchanged by virtue of the takeover into other property, whether in the form of securities, cash or otherwise, or (B) in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such takeover or the initial transaction culminating in such takeover;

 

(e)                                  acquisition in a single or series of related transactions by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities; or

 

(f)                                   the individuals who, as of the Effective Date, are members of the Board (the “Incumbent Board”), cease for any reason to constitute at least fifty percent (50%) of the Board; provided that if the election, or nomination for election by the Company’s shareholders, of any new member of the Board is approved by the Incumbent Board pursuant to the then effective Articles of Association of the Company, such new member of the Board shall be considered as a member of the Incumbent Board.

 

2.11                        “Disability”, unless otherwise defined in an Award Agreement, means that the Participant qualifies to receive long-term disability payments under the Service Recipient’s long-term disability insurance program, as it may be amended from time to time, to which the Participant provides services regardless of whether the Participant is covered by such policy. If the Service Recipient to which the Participant provides service does not have a long-term disability plan in place, “Disability” means that a Participant is unable to carry out the responsibilities and functions of the position held by the Participant by reason of any medically determinable physical or mental impairment for a period of not less than ninety (90) consecutive days. A Participant will not be considered to have incurred a Disability unless he or she furnishes proof of such impairment sufficient to satisfy the Committee in its discretion.

 

2.12                        “Effective Date” shall have the meaning set forth in Section 11.1.

 

2.13                        “Employee” means any person, including an officer or a member of the Board of the Company or any Parent or Subsidiary of the Company, who is in the employment of a Service Recipient, subject to the control and direction of the Service Recipient as to both the work to be performed and the manner and method of performance. The payment of a director’s fee by a Service Recipient shall not be sufficient to constitute “employment” by the Service Recipient.

 

2.14                        “Exchange Act” means the Securities Exchange Act of 1934 of the United States, as amended.

 

3

 

2.15                        “Fair Market Value” means, as of any date, the value of Shares determined as follows:

 

(a)                                 If the Shares are listed on one or more established stock exchanges or national market systems, including without limitation, The New York Stock Exchange, The Nasdaq Stock Market and the Hong Kong Stock Exchange, its Fair Market Value shall be the closing sales price for such shares (or the closing bid, if no sales were reported) as quoted on the principal exchange or system on which the Shares are listed (as determined by the Committee) on the date of determination (or, if no closing sales price or closing bid was reported on that date, as applicable, on the last trading date such closing sales price or closing bid was reported), as reported in The Wall Street Journal or such other source as the Committee deems reliable;

 

(b)                                 If the Shares are regularly quoted on an automated quotation system (including the OTC Bulletin Board) or by a recognized securities dealer, its Fair Market Value shall be the closing sales price for such shares as quoted on such system or by such securities dealer on the date of determination, but if selling prices are not reported, the Fair Market Value of a Share shall be the mean between the high bid and low asked prices for the Shares on the date of determination (or, if no such prices were reported on that date, on the last date such prices were reported), as reported in The Wall Street Journal or such other source as the Committee deems reliable; or

 

(c)                                  In the absence of an established market for the Shares of the type described in (a) and (b), above, the Fair Market Value thereof shall be determined by the Committee in good faith and in its discretion by reference to (i) the placing price of the latest private placement of the Shares and the development of the Company’s business operations and the general economic and market conditions since such latest private placement, (ii) other third party transactions involving the Shares and the development of the Company’s business operation and the general economic and market conditions since such sale, (iii) an independent valuation of the Shares, or (iv) such other methodologies or information as the Committee determines to be indicative of Fair Market Value and relevant.

 

2.16                        “Incentive Share Option” means an Option that is intended to meet the requirements of Section 422 of the Code or any successor provision thereto.

 

2.17                        “Independent Director” means (i) before the Shares or other securities representing the Shares are listed on a stock exchange, a member of the Board who is a Non-Employee Director; and (ii) after the Shares or other securities representing the Shares are listed on a stock exchange, a member of the Board who meets the independence standards under the applicable corporate governance rules of the stock exchange.

 

2.18                        “Non-Employee Director” means a member of the Board who qualifies as a “Non-Employee Director” as defined in Rule 16b-3(b)(3) of the Exchange Act, or any successor definition adopted by the Board.

 

2.19                        “Non-Qualified Share Option” means an Option that is not intended to be an Incentive Share Option.

 

2.20                        “Option” means a right granted to a Participant pursuant to Article 5 of the Plan to purchase a specified number of Shares at a specified price during specified time periods. An Option may be either an Incentive Share Option or a Non-Qualified Share Option.

 

4

 

2.21                        “Participant” means a person who, as a member of the Board, Consultant or Employee, or other individuals as the Committee may authorize and approve, has been granted an Award pursuant to the Plan.

 

2.22                        “Parent” means a parent corporation under Section 424(e) of the Code.

 

2.23                        “Plan” means this 9F Inc. 2015 Share Incentive Plan, as it may be amended from time to time.

 

2.24                        “Related Entity” means any business, corporation, partnership, limited liability company or other entity in which the Company, a Parent or Subsidiary of the Company holds a substantial ownership interest, directly or indirectly, but which is not a Subsidiary and which the Board designates as a Related Entity for purposes of the Plan.

 

2.25                        “Restricted Share” means a Share awarded to a Participant pursuant to Article 6 that is subject to certain restrictions and may be subject to risk of forfeiture.

 

2.26                        “Restricted Share Unit” means the right granted to a Participant pursuant to Article 7 to receive a Share at a future date.

 

2.27                        “Securities Act” means the Securities Act of 1933 of the United States, as amended.

 

2.28                        “Service Recipient” means the Company, any Parent or Subsidiary of the Company and any Related Entity to which a Participant provides services as an Employee, a Consultant, or a Director.

 

2.29                        “Share” means Class A ordinary shares of the Company, par value US$0.0001 per share, and such other securities of the Company that may be substituted for Shares pursuant to Article 9.

 

2.30                        “Subsidiary” means any corporation or other entity of which a majority of the outstanding voting shares or voting power is beneficially owned or controlled directly or indirectly by the Company.

 

2.31                        “Trading Date” means the closing of the first sale to the general public of the Shares pursuant to a registration statement filed with and declared effective by the U.S. Securities and Exchange Commission under the Securities Act.

 

ARTICLE 3

 

SHARES SUBJECT TO THE PLAN

 

3.1                               Number of Shares.

 

(a)                                 Subject to the provisions of Article 9 and Section 3.1(b), the maximum aggregate number of Shares which may be issued pursuant to all Awards (including Incentive Share Options) shall be 150,947 ordinary shares.

 

5

 

(b)                                 To the extent that an Award terminates, expires, or lapses for any reason, any Shares subject to the Award shall again be available for the grant of an Award pursuant to the Plan. To the extent permitted by Applicable Laws, Shares issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form or combination by the Company or any Parent or Subsidiary of the Company shall not be counted against Shares available for grant pursuant to the Plan. Shares delivered by the Participant or withheld by the Company upon the exercise of any Award under the Plan, in payment of the exercise price thereof or tax withholding thereon, may again be optioned, granted or awarded hereunder, subject to the limitations of Section 3.1(a). If any Restricted Shares are forfeited by the Participant or repurchased by the Company, such Shares may again be optioned, granted or awarded hereunder, subject to the limitations of Section 3.1(a). Notwithstanding the provisions of this Section 3.1(b), no Shares may again be optioned, granted or awarded if such action would cause an Incentive Share Option to fail to qualify as an Incentive Share Option under Section 422 of the Code.

 

3.2                               Shares Distributed. Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares, treasury shares (subject to Applicable Laws) or Shares purchased on the open market. Additionally, in the discretion of the Committee, American Depository Shares in an amount equal to the number of Shares which otherwise would be distributed pursuant to an Award may be distributed in lieu of Shares in settlement of any Award. If the number of Shares represented by an American Depository Share is other than on a one-to-one basis, the limitations of Section 3.1 shall be adjusted to reflect the distribution of American Depository Shares in lieu of Shares.

 

ARTICLE 4

 

ELIGIBILITY AND PARTICIPATION

 

4.1                               Eligibility. Those eligible to participate in this Plan include Employees, Consultants, and all members of the Board, and other individuals, as determined, authorized and approved by the Committee.

 

4.2                               Participation. Subject to the provisions of the Plan, the Committee may, from time to time, select from among all eligible individuals, those to whom Awards shall be granted and shall determine the nature and amount of each Award. No individual shall have any right to be granted an Award pursuant to this Plan.

 

4.3                               Jurisdictions. In order to assure the viability of Awards granted to Participants in various jurisdictions, the Committee may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, or custom applicable in the jurisdiction in which the Participant resides, is employed, operates or is incorporated. Moreover, the Committee may approve such supplements to, or amendments, restatements, or alternative versions of, the Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan as in effect for any other purpose; provided, however, that no such supplements, amendments, restatements, or alternative versions shall increase the share limitations contained in Section 3.1 of the Plan. Notwithstanding the foregoing, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate any Applicable Laws.

 

ARTICLE 5

 

OPTIONS

 

5.1                               General. The Committee is authorized to grant Options to Participants on the following terms and conditions:

 

6

 

(a)                                 Exercise Price. The exercise price per Share subject to an Option shall be determined by the Committee and set forth in the Award Agreement which may be a fixed or variable price related to the Fair Market Value of the Shares. The exercise price per Share subject to an Option may be amended or adjusted in the absolute discretion of the Committee, the determination of which shall be final, binding and conclusive. For the avoidance of doubt, to the extent not prohibited by Applicable Laws or any exchange rule, a downward adjustment of the exercise prices of Options mentioned in the preceding sentence shall be effective without the approval of the Company’s shareholders or the approval of the affected Participants.

 

(b)                                 Time and Conditions of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part, including exercise prior to vesting; provided that the term of any Option granted under the Plan shall not exceed ten years, except as provided in Section 12.1. The Committee shall also determine any conditions, if any, that must be satisfied before all or part of an Option may be exercised.

 

(c)                                  Payment. The Committee shall determine the methods by which the exercise price of an Option may be paid, the form of payment, including, without limitation (i) cash or check denominated in U.S. Dollars, (ii) to the extent permissible under the Applicable Laws, cash or check in Chinese Renminbi, (iii) cash or check denominated in any other local currency as approved by the Committee, (iv) Shares held for such period of time as may be required by the Committee in order to avoid adverse financial accounting consequences and having a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof, (v) after the Trading Date the delivery of a notice that the Participant has placed a market sell order with a broker with respect to Shares then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price; provided that payment of such proceeds is then made to the Company upon settlement of such sale, (vi) other property acceptable to the Committee with a Fair Market Value equal to the exercise price, or (vii) any combination of the foregoing. Notwithstanding any other provision of the Plan to the contrary, no Participant who is a member of the Board or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to pay the exercise price of an Option in any method which would violate Section 13(k) of the Exchange Act.

 

(d)                                 Evidence of Grant. All Options shall be evidenced by an Award Agreement between the Company and the Participant. The Award Agreement shall include such additional provisions as may be specified by the Committee.

 

(e)                                  Effects of Termination of Employment or Service on Options. Termination of employment or service shall have the following effects on Options granted to the Participants:

 

(i)                                     Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon termination of employment or service, Options that at that time have not vested shall be forfeited in accordance with the Award Agreement; provided, however, the Committee may (a) provide in any Option Award Agreement that forfeiture conditions relating to Options will be waived in whole or in part in the event of terminations resulting from specified causes, and (b) in other cases waive in whole or in part forfeiture conditions relating to Options.

 

7

 

(ii)                                  Dismissal for Cause. Unless otherwise provided in the Award Agreement, if a Participant’s employment by or service to the Service Recipient is terminated by the Service Recipient for Cause, the Participant’s Options will terminate upon such termination, whether or not the Option is then vested and/or exercisable;

 

(iii)                               Death or Disability. Unless otherwise provided in the Award Agreement, if a Participant’s employment by or service to the Service Recipient terminates as a result of the Participant’s death or Disability, the Participant (or his or her legal representative or beneficiary, in the case of the Participant’s Disability or death, respectively), will have the right to exercise the Participant’s Options (or portion thereof) to the extent that such Options were vested and exercisable on the date of the Participant’s termination of Employment on account of death or Disability.

 

5.2                               Incentive Share Options. Incentive Share Options may be granted to Employees of the Company, a Parent or Subsidiary of the Company. Incentive Share Options may not be granted to Employees of a Related Entity or to Independent Directors or Consultants. The terms of any Incentive Share Options granted pursuant to the Plan, in addition to the requirements of Section 5.1, must comply with the following additional provisions of this Section 5.2:

 

(a)                                 Individual Dollar Limitation. The aggregate Fair Market Value (determined as of the time the Option is granted) of all Shares with respect to which Incentive Share Options are first exercisable by a Participant in any calendar year may not exceed $100,000 or such other limitation as imposed by Section 422(d) of the Code, or any successor provision. To the extent that Incentive Share Options are first exercisable by a Participant in excess of such limitation, the excess shall be considered Non-Qualified Share Options.

 

(b)                                 Exercise Price. The exercise price of an Incentive Share Option shall be equal to the Fair Market Value on the date of grant. However, the exercise price of any Incentive Share Option granted to any individual who, at the date of grant, owns Shares possessing more than ten percent of the total combined voting power of all classes of shares of the Company may not be less than 110% of Fair Market Value on the date of grant and such Option may not be exercisable for more than five years from the date of grant.

 

(c)                                  Transfer Restriction. The Participant shall give the Company prompt notice of any disposition of Shares acquired by exercise of an Incentive Share Option within (i) two years from the date of grant of such Incentive Share Option or (ii) one year after the transfer of such Shares to the Participant.

 

(d)                                 Expiration of Incentive Share Options. No Award of an Incentive Share Option may be made pursuant to this Plan after the tenth anniversary of the Effective Date.

 

(e)                                  Right to Exercise. During a Participant’s lifetime, an Incentive Share Option may be exercised only by the Participant.

 

8

 

ARTICLE 6

 

RESTRICTED SHARES

 

6.1                               Grant of Restricted Shares. The Committee, at any time and from time to time, may grant Restricted Shares to Participants as the Committee, in its sole discretion, shall determine. The Committee, in its sole discretion, shall determine the number of Restricted Shares to be granted to each Participant.

 

6.2                               Restricted Shares Award Agreement. Each Award of Restricted Shares shall be evidenced by an Award Agreement that shall specify the period of restriction, the number of Restricted Shares granted, and such other terms and conditions as the Committee, in its sole discretion, shall determine. Unless the Committee determines otherwise, Restricted Shares shall be held by the Company as escrow agent until the restrictions on such Restricted Shares have lapsed.

 

6.3                               Issuance and Restrictions. Restricted Shares shall be subject to such restrictions on transferability and other restrictions as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Shares or the right to receive dividends on the Restricted Share). These restrictions may lapse separately or in combination at such times, pursuant to such circumstances, in such installments, or otherwise, as the Committee determines at the time of the grant of the Award or thereafter.

 

6.4                               Forfeiture/Repurchase. Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon termination of employment or service during the applicable restriction period, Restricted Shares that are at that time subject to restrictions shall be forfeited or repurchased in accordance with the Award Agreement; provided, however, the Committee may (a) provide in any Restricted Share Award Agreement that restrictions or forfeiture and repurchase conditions relating to Restricted Shares will be waived in whole or in part in the event of terminations resulting from specified causes, and (b) in other cases waive in whole or in part restrictions or forfeiture and repurchase conditions relating to Restricted Shares.

 

6.5                               Certificates for Restricted Shares. Restricted Shares granted pursuant to the Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted Shares are registered in the name of the Participant, certificates must bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Shares, and the Company may, at its discretion, retain physical possession of the certificate until such time as all applicable restrictions lapse.

 

6.6                               Removal of Restrictions. Except as otherwise provided in this Article 6, Restricted Shares granted under the Plan shall be released from escrow as soon as practicable after the last day of the period of restriction. The Committee, in its discretion, may accelerate the time at which any restrictions shall lapse or be removed. After the restrictions have lapsed, the Participant shall be entitled to have any legend or legends under Section 6.5 removed from his or her Share certificate, and the Shares shall be freely transferable by the Participant, subject to applicable legal restrictions. The Committee (in its discretion) may establish procedures regarding the release of Shares from escrow and the removal of legends, as necessary or appropriate to minimize administrative burdens on the Company.

 

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ARTICLE 7

 

RESTRICTED SHARE UNITS

 

7.1                               Grant of Restricted Share Units. The Committee, at any time and from time to time, may grant Restricted Share Units to Participants as the Committee, in its sole discretion, shall determine. The Committee, in its sole discretion, shall determine the number of Restricted Share Units to be granted to each Participant.

 

7.2                               Restricted Share Units Award Agreement. Each Award of Restricted Share Units shall be evidenced by an Award Agreement that shall specify any vesting conditions, the number of Restricted Share Units granted, and such other terms and conditions as the Committee, in its sole discretion, shall determine.

 

7.3                               Performance Objectives and Other Terms. The Committee, in its discretion, may set performance objectives or other vesting criteria which, depending on the extent to which they are met, will determine the number or value of Restricted Share Units that will be paid out to the Participants.

 

7.4                               Form and Timing of Payment of Restricted Share Units. At the time of grant, the Committee shall specify the date or dates on which the Restricted Share Units shall become fully vested and nonforfeitable. Upon vesting, the Committee, in its sole discretion, may pay Restricted Share Units in the form of cash, in Shares or in a combination thereof.

 

7.5                               Forfeiture/Repurchase. Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon termination of employment or service during the applicable restriction period, Restricted Share Units that are at that time unvested shall be forfeited or repurchased in accordance with the Award Agreement; provided, however, the Committee may (a) provide in any Restricted Share Unit Award Agreement that restrictions or forfeiture and repurchase conditions relating to Restricted Share Units will be waived in whole or in part in the event of terminations resulting from specified causes, and (b) in other cases waive in whole or in part restrictions or forfeiture and repurchase conditions relating to Restricted Share Units.

 

ARTICLE 8

 

PROVISIONS APPLICABLE TO AWARDS

 

8.1                               Award Agreement. Awards under the Plan shall be evidenced by Award Agreements that set forth the terms, conditions and limitations for each Award which may include the term of an Award, the provisions applicable in the event the Participant’s employment or service terminates, and the Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an Award.

 

8.2                               No Transferability; Limited Exception to Transfer Restrictions.

 

8.2.1                     Limits on Transfer. Unless otherwise expressly provided in (or pursuant to) this Section 8.2, by applicable law and by the Award Agreement, as the same may be amended:

 

(a)                                 all Awards are non-transferable and will not be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge;

 

(b)                                 Awards will be exercised only by the Participant; and

 

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(c)                                  amounts payable or shares issuable pursuant to an Award will be delivered only to (or for the account of), and, in the case of Shares, registered in the name of, the Participant.

 

In addition, the shares shall be subject to the restrictions set forth in the applicable Award Agreement.

 

8.2.2                     Further Exceptions to Limits on Transfer. The exercise and transfer restrictions in Section 8.2.1 will not apply to:

 

(a)                                 transfers to the Company or a Subsidiary;

 

(b)                                 transfers by gift to “immediate family” as that term is defined in SEC Rule 16a-1(e) promulgated under the Exchange Act;

 

(c)                                  the designation of a beneficiary to receive benefits if the Participant dies or, if the Participant has died, transfers to or exercises by the Participant’s beneficiary, or, in the absence of a validly designated beneficiary, transfers by will or the laws of descent and distribution; or

 

(d)                                 if the Participant has suffered a disability, permitted transfers or exercises on behalf of the Participant by the Participant’s duly authorized legal representative; or

 

(e)                                  transfer to one or more natural persons who are the Participant’s family members or entities owned and controlled by the Participant and/or the Participant’s family members, including but not limited to trusts or other entities whose beneficiaries or beneficial owners are the Participant and/or the Participant’s family members, or to such other persons or entities as may be expressly approved by the Committee, pursuant to such conditions and procedures as the Committee or may establish.

 

Notwithstanding anything else in this Section 8.2.2 to the contrary, but subject to compliance with all applicable laws, Incentive Share Options, Restricted Shares and Restricted Share Units will be subject to any and all transfer restrictions under the Code applicable to such Awards or necessary to maintain the intended tax consequences of such Awards.

 

8.3                               Beneficiaries. Notwithstanding Section 8.2, a Participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to the Participant, except to the extent the Plan and Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If the Participant is married and resides in a community property state, a designation of a person other than the Participant’s spouse as his or her beneficiary with respect to more than 50% of the Participant’s interest in the Award shall not be effective without the prior written consent of the Participant’s spouse. If no beneficiary has been designated or survives the Participant, payment shall be made to the person entitled thereto pursuant to the Participant’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation is filed with the Committee.

 

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8.4                               Share Certificates. Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing the Shares pursuant to the exercise of any Award, unless and until the Committee has determined, with advice of counsel, that the issuance and delivery of such certificates is in compliance with all Applicable Laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the Shares are listed or traded. All Share certificates delivered pursuant to the Plan are subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with all Applicable Laws, and the rules of any national securities exchange or automated quotation system on which the Shares are listed, quoted, or traded. The Committee may place legends on any Share certificate to reference restrictions applicable to the Shares. In addition to the terms and conditions provided herein, the Committee may require that a Participant make such reasonable covenants, agreements, and representations as the Committee, in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements. The Committee shall have the right to require any Participant to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation, as may be imposed in the discretion of the Committee.

 

8.5                               Paperless Administration. Subject to Applicable Laws, the Committee may make Awards, provide applicable disclosure and procedures for exercise of Awards by an internet website or interactive voice response system for the paperless administration of Awards.

 

8.6                               Foreign Currency. A Participant may be required to provide evidence that any currency used to pay the exercise price of any Award were acquired and taken out of the jurisdiction in which the Participant resides in accordance with Applicable Laws, including foreign exchange control laws and regulations. In the event the exercise price for an Award is paid in Chinese Renminbi or other foreign currency, as permitted by the Committee, the amount payable will be determined by conversion from U.S. dollars at the official rate promulgated by the People’s Bank of China for Chinese Renminbi, or for jurisdictions other than the Peoples Republic of China, the exchange rate as selected by the Committee on the date of exercise.

 

ARTICLE 9

 

CHANGES IN CAPITAL STRUCTURE

 

9.1                               Adjustments. In the event of any dividend, share split, combination or exchange of Shares, amalgamation, arrangement or consolidation, spin-off, recapitalization or other distribution (other than normal cash dividends) of Company assets to its shareholders, or any other change affecting the shares of Shares or the share price of a Share, the Committee, in order to prevent diminution or enlargement of the benefits intended to be made available under the Award, shall make such proportionate adjustments to reflect such change with respect to to (a) the aggregate number and type of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3.1); (b) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); and (c) the grant or exercise price per share for any outstanding Awards under the Plan.

 

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9.2                               Corporate Transactions. Except as may otherwise be provided in any Award Agreement or any other written agreement entered into by and between the Company and a Participant, if the Committee anticipates the occurrence, or upon the occurrence, of a Corporate Transaction, the Committee may, in its sole discretion, provide for (i) any and all Awards outstanding hereunder to terminate at a specific time in the future and shall give each Participant the right to exercise the vested portion of such Awards during a period of time as the Committee shall determine, or (ii) the purchase of any Award for an amount of cash equal to the amount that could have been attained upon the exercise of such Award (and, for the avoidance of doubt, if as of such date the Committee determines in good faith that no amount would have been attained upon the exercise of such Award, then such Award may be terminated by the Company without payment), or (iii) the replacement of such Award with other rights or property selected by the Committee in its sole discretion or the assumption of or substitution of such Award by the successor or surviving corporation, or a Parent or Subsidiary thereof, with appropriate adjustments as to the number and kind of Shares and prices, or (iv) payment of Award in cash based on the value of Shares on the date of the Corporate Transaction plus reasonable interest on the Award through the date when such Award would otherwise be vested or have been paid in accordance with its original terms, if necessary to comply with Section 409A of the Code.

 

9.3                               Outstanding Awards — Other Changes. In the event of any other change in the capitalization of the Company or corporate change other than those specifically referred to in this Article 9, the Committee may, in its absolute discretion, make such adjustments in the number and class of shares subject to Awards outstanding on the date on which such change occurs and in the per share grant or exercise price of each Award as the Committee may consider appropriate to prevent dilution or enlargement of rights.

 

9.4                               No Other Rights. Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of Shares of any class, the payment of any dividend, any increase or decrease in the number of shares of any class or any dissolution, liquidation, merger, or consolidation of the Company or any other corporation. Except as expressly provided in the Plan or pursuant to action of the Committee under the Plan, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of shares subject to an Award or the grant or exercise price of any Award.

 

ARTICLE 10

 

ADMINISTRATION

 

10.1                        Committee. The Plan shall be administered by the Board or a committee of one or more members of the Board to whom the Board shall delegate the authority to grant or amend Awards to Participants other than any of the Committee members. Any grant or amendment of Awards to any Committee member shall then require an affirmative vote of a majority of the Board members who are not on the Committee.

 

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10.2                        Action by the Committee. A majority of the Committee shall constitute a quorum. The acts of a majority of the members of the Committee present at any meeting at which a quorum is present, and acts approved in writing by a majority of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Subsidiary, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.

 

10.3                        Authority of the Committee. Subject to any specific designation in the Plan, the Committee has the exclusive power, authority and discretion to:

 

(a)                 designate Participants to receive Awards;

 

(b)                 determine the type or types of Awards to be granted to each Participant;

 

(c)                  determine the number of Awards to be granted and the number of Shares to which an Award will relate;

 

(d)                 determine the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, or purchase price, any restrictions or limitations on the Award, any vesting schedule, forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Committee in its sole discretion determines;

 

(e)                  determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in, cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;

 

(f)                   prescribe the form of each Award Agreement, which need not be identical for each Participant;

 

(g)                  decide all other matters that must be determined in connection with an Award;

 

(h)                 establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan;

 

(i)                     interpret the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; and

 

(j)                    make all other decisions and determinations that may be required pursuant to the Plan or as the Committee deems necessary or advisable to administer the Plan.

 

10.4                        Decisions Binding. The Committee’s interpretation of the Plan, any Awards granted pursuant to the Plan, any Award Agreement and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties.

 

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ARTICLE 11

 

EFFECTIVE AND EXPIRATION DATE

 

11.1                        Effective Date. The Plan is effective as of June, 2015 (the “Effective Date”). The Plan will be deemed to be approved by the shareholders if it receives the affirmative vote of the holders of a majority of the share capital of the Company present or represented and entitled to vote at a meeting duly held in accordance with the applicable provisions of the Company’s Memorandum of Association and Articles of Association or unanimous written approval by all the shareholders of the Company.

 

11.2                        Expiration Date. The Plan will expire on, and no Award may be granted pursuant to the Plan after, the tenth anniversary of the Effective Date. Any Awards that are outstanding on the tenth anniversary of the Effective Date shall remain in force according to the terms of the Plan and the applicable Award Agreement.

 

ARTICLE 12

 

AMENDMENT, MODIFICATION, AND TERMINATION

 

12.1                        Amendment, Modification, And Termination. With the approval of the Board, at any time and from time to time, the Committee may terminate, amend or modify the Plan; provided, however, that (a) to the extent necessary and desirable to comply with Applicable Laws, the Company shall obtain shareholder approval of any Plan amendment in such a manner and to such a degree as required, unless the Company decides to follow home country practice, and (b) unless the Company decides to follow home country practice, shareholder approval is required for any amendment to the Plan that (i) increases the number of Shares available under the Plan (other than any adjustment as provided by Article 9), or (ii) permits the Committee to extend the term of the Plan or the exercise period for an Option beyond ten years from the date of grant.

 

12.2                        Awards Previously Granted. Except with respect to amendments made pursuant to Section 12.1, no termination, amendment, or modification of the Plan shall adversely affect in any material way any Award previously granted pursuant to the Plan without the prior written consent of the Participant.

 

ARTICLE 13

 

GENERAL PROVISIONS

 

13.1                        No Rights to Awards. No Participant, employee, or other person shall have any claim to be granted any Award pursuant to the Plan, and neither the Company nor the Committee is obligated to treat Participants, employees, and other persons uniformly.

 

13.2                        No Shareholders Rights. No Award gives the Participant any of the rights of a Shareholder of the Company unless and until Shares are in fact issued to such person in connection with such Award.

 

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13.3                        Taxes. No Shares shall be delivered under the Plan to any Participant until such Participant has made arrangements acceptable to the Committee for the satisfaction of any income and employment tax withholding obligations under Applicable Laws. The Company or any Subsidiary shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy all applicable taxes (including the Participant’s payroll tax obligations) required or permitted by Applicable Laws to be withheld with respect to any taxable event concerning a Participant arising as a result of this Plan. The Committee may in its discretion and in satisfaction of the foregoing requirement allow a Participant to elect to have the Company withhold Shares otherwise issuable under an Award (or allow the return of Shares) having a Fair Market Value equal to the sums required to be withheld. Notwithstanding any other provision of the Plan, the number of Shares which may be withheld with respect to the issuance, vesting, exercise or payment of any Award (or which may be repurchased from the Participant of such Award after such Shares were acquired by the Participant from the Company) in order to satisfy any income and payroll tax liabilities applicable to the Participant with respect to the issuance, vesting, exercise or payment of the Award shall, unless specifically approved by the Committee, be limited to the number of Shares which have a Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for the applicable income and payroll tax purposes that are applicable to such supplemental taxable income.

 

13.4                        No Right to Employment or Services. Nothing in the Plan or any Award Agreement shall interfere with or limit in any way the right of the Service Recipient to terminate any Participant’s employment or services at any time, nor confer upon any Participant any right to continue in the employment or services of any Service Recipient.

 

13.5                        Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for incentive compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights that are greater than those of a general creditor of the Company or any Subsidiary.

 

13.6                        Indemnification. To the extent allowable pursuant to Applicable Laws, each member of the Committee or of the Board shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company’s Memorandum of Association and Articles of Association, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

 

13.7                        Relationship to other Benefits. No payment pursuant to the Plan shall be taken into account in determining any benefits pursuant to any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.

 

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13.8                        Expenses. The expenses of administering the Plan shall be borne by the Company and its Subsidiaries.

 

13.9                        Titles and Headings. The titles and headings of the Sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.

 

13.10                 Fractional Shares. No fractional Shares shall be issued and the Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding up or down as appropriate.

 

13.11                 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, the Plan, and any Award granted or awarded to any Participant who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by the Applicable Laws, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

 

13.12                 Government and Other Regulations. The obligation of the Company to make payment of awards in Shares or otherwise shall be subject to all Applicable Laws, and to such approvals by government agencies as may be required. The Company shall be under no obligation to register any of the Shares paid pursuant to the Plan under the Securities Act or any other similar law in any applicable jurisdiction. If the Shares paid pursuant to the Plan may in certain circumstances be exempt from registration pursuant to the Securities Act or other Applicable Laws, the Company may restrict the transfer of such Shares in such manner as it deems advisable to ensure the availability of any such exemption.

 

13.13                 Governing Law. The Plan and all Award Agreements shall be construed in accordance with and governed by the laws of the Cayman Islands.

 

13.14                 Section 409A. To the extent that the Committee determines that any Award granted under the Plan is or may become subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code. To the extent applicable, the Plan and the Award Agreements shall be interpreted in accordance with Section 409A of the Code and the U.S. Department of Treasury regulations and other interpretative guidance issued thereunder, including without limitation any such regulation or other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date the Committee determines that any Award may be subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the Effective Date), the Committee may adopt such amendments to the Plan and the applicable Award agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Committee determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and related U.S. Department of Treasury guidance.

 

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13.15                 Appendices. The Committee may approve such supplements, amendments or appendices to the Plan as it may consider necessary or appropriate for purposes of compliance with Applicable Laws or otherwise and such supplements, amendments or appendices shall be considered a part of the Plan; provided, however, that no such supplements shall increase the share limitation contained in Section 3.1 of the Plan without the approval of the Board.

 

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