Document:

Exhibit 4.4

 

SHAREHOLDERS AGREEMENT

 

BY AND BETWEEN

 

IHUMAN INC.

 

ACADEMY MANAGEMENT LTD.

 

HPF FUSION HOLDING LTD.

 

PERSONS LISTED ON SCHEDULE I

 

AND

 

TIANJIN SHARE XINGHAN ENTERPRISE MANAGEMENT CONSULTING
 PARTNERSHIP (LIMITED PARTNERSHIP)

 

Dated June 8, 2020

 

 

Table of Contents

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Article I
    
	
 
    	
 
    	
 
    
	
DEFINITIONS
    
	
 
    	
 
    	
 
    
	
Section 1.01
    	
Definitions
    	
1
    
	
Section 1.02
    	
Interpretation
    	
5
    
	
 
    	
 
    	
 
    
	
Article II
    
	
 
    	
 
    	
 
    
	
CORPORATE   GOVERNANCE
    
	
 
    	
 
    	
 
    
	
Section 2.01
    	
Actions   Requiring Consent of Investor Shareholder
    	
5
    
	
Section 2.02
    	
Termination
    	
6
    
	
 
    	
 
    	
 
    
	
Article III
    
	
 
    	
 
    	
 
    
	
GENERAL   PROVISIONS ON TRANSFER
    
	
 
    	
 
    	
 
    
	
Section 3.01
    	
General   Restrictions on Transfer
    	
6
    
	
Section 3.02
    	
Restrictions   on Investor Shareholder Transfer
    	
6
    
	
Section 3.03
    	
Termination
    	
6
    
	
 
    	
 
    	
 
    
	
Article IV
    
	
 
    	
 
    	
 
    
	
RIGHT   OF FIRST REFUSAL; CO-SALE RIGHT
    
	
 
    	
 
    	
 
    
	
Section 4.01
    	
Right of   First Refusal
    	
6
    
	
Section 4.02
    	
Co-Sale   Right
    	
7
    
	
 
    	
 
    	
 
    
	
Article V
    
	
 
    	
 
    	
 
    
	
PREEMPTIVE   RIGHTS
    
	
 
    	
 
    	
 
    
	
Section 5.01
    	
General
    	
8
    
	
Section 5.02
    	
New   Securities
    	
8
    
	
Section 5.03
    	
Procedures
    	
9
    
	
 
    	
 
    	
 
    
	
Article VI
    
	
 
    	
 
    	
 
    
	
REDEMPTION   RIGHTS
    
	
 
    	
 
    	
 
    
	
Section 6.01
    	
Redemption   Rights of Investor Shareholders
    	
9
    
	
Section 6.02
    	
Redemption   Notice
    	
9
    
	
Section 6.03
    	
Manner and   Mechanics of Redemption
    	
10
    
				

 

i

 

	
Article VII
    
	
 
    	
 
    	
 
    
	
Anti-dilution
    
	
 
    	
 
    	
 
    
	
Section 7.01
    	
Anti-dilution
    	
10
    
	
 
    	
 
    	
 
    
	
Article VIII
    
	
 
    	
 
    	
 
    
	
LIQUIDATION   PREFERENCE
    
	
 
    	
 
    	
 
    
	
Section 8.01
    	
Liquidation   Preference
    	
11
    
	
Section 8.02
    	
Non-Cash Distribution
    	
11
    
	
 
    	
 
    	
 
    
	
Article IX
    
	
 
    	
 
    	
 
    
	
WAIVER   OF RIGHTS; TERMINATION OF RIGHTS
    
	
 
    	
 
    	
 
    
	
Section 9.01
    	
Waiver of   Rights
    	
12
    
	
Section 9.02
    	
Termination   of Rights
    	
12
    
	
 
    	
 
    	
 
    
	
Article X
    
	
 
    	
 
    	
 
    
	
ADDITIONAL   COVENANTS AND AGREEMENTS
    
	
 
    	
 
    	
 
    
	
Section 10.01
    	
Confidentiality
    	
12
    
	
Section 10.02
    	
Information   Rights
    	
13
    
	
Section 10.03
    	
Inspection   Rights
    	
13
    
	
Section 10.04
    	
No   Conflicting Agreements
    	
13
    
	
Section 10.05
    	
Deed of   Adherence
    	
14
    
	
 
    	
 
    	
 
    
	
Article XI
    
	
 
    	
 
    	
 
    
	
MISCELLANEOUS
    
	
 
    	
 
    	
 
    
	
Section 11.01
    	
Binding   Effect; Assignability
    	
14
    
	
Section 11.02
    	
Notices
    	
14
    
	
Section 11.03
    	
Third-Party   Beneficiaries
    	
14
    
	
Section 11.04
    	
Amendment
    	
14
    
	
Section 11.05
    	
Waiver
    	
15
    
	
Section 11.06
    	
Effectiveness;   Termination
    	
15
    
	
Section 11.07
    	
Governing   Law
    	
15
    
	
Section 11.08
    	
Dispute   Resolution
    	
15
    
	
Section 11.09
    	
Entire   Agreement
    	
15
    
	
Section 11.10
    	
Severability
    	
15
    
	
Section 11.11
    	
Equitable   Remedies
    	
16
    
	
Section 11.12
    	
Aggregation   of Ordinary Shares
    	
16
    
	
Section 11.13
    	
Further   Assurances
    	
16
    
	
Section 11.14
    	
Counterparts
    	
16
    

 

ii

 

	
SCHEDULES   AND ANNEXES
    	
 
    
	
 
    	
 
    	
 
    
	
Schedule I Original Shareholders
    	
 
    
	
Schedule II Address for Notices
    	
 
    
	
Annex A Deed of Adherence
    	
 
    
			

 

iii

 

SHAREHOLDERS AGREEMENT

 

THIS SHAREHOLDERS AGREEMENT (this “Agreement”), dated June 8, 2020, is entered into by and between:

 

(i)            iHuman Inc., an exempted company with limited liability incorporated under the laws of the Cayman Islands (the “Company”);

 

(ii)           Academy Management Ltd., a business company incorporated under the laws of the British Virgin Islands (the “Founder”);

 

(iii)          HPF Fusion Holding Ltd., a business company incorporated under the laws of the British Virgin Islands (“Tian Liang”);

 

(iv)          Each Person listed on Schedule I (collectively, the “Original Shareholders,” each an “Original Shareholder”);

 

(v)           Tianjin Share Xinghan Enterprise Management Consulting Partnership (Limited Partnership), a business company organized and existing under the laws of China (the “Investor Shareholder”);

 

Each of the parties to this Agreement is referred to herein individually as a “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, pursuant to a Share Subscription Agreement, dated November 20, 2019 by and between the Company and the Investor Shareholder (the “Share Subscription Agreement”), the Company issued certain Ordinary Shares (as defined below) to the Investor Shareholder on the date hereof; and

 

WHEREAS, the Parties desire to agree on and memorialize certain rights, obligations and other terms in light of the transactions carried out pursuant to the Share Subscription Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01          Definitions.  (a) As used in this Agreement, the following terms have the following meanings:

 

“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by or under common Control with such Person. With respect to any natural person, each of the following Persons is such natural person’s Affiliate for purposes of this Agreement: (i) spouse; (ii) parents; (iii) children; (iv) siblings; (v) father-in-law and mother-in-law; (vi) son-in-law and daughter-in-law; (vii) brother-in-law and sister-in-law; (viii) any other person who is a lineal ascendant or descendant of such natural person, including adoptive relationships; and (ix) any other person who is a relative of such natural person and lives in the same household with such natural person (collectively, such natural person’s “Immediate Family Members”).

 

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“Applicable Law” means, with respect to any Person, any transnational, domestic or foreign federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person, as amended.

 

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

 

“Closing” means consummation of the purchase and sale of the Ordinary Shares to the Investor Shareholder in the Share Subscription Agreement via exchange of documents, subject to the fulfilment, or to the extent permissible, waiver of the conditions set forth in Section 1.3 of the Share Subscription Agreement.

 

“Closing Date” means the date that Closing occurs.

 

“Companies Law” means the Companies Law (2020 Revision), as amended, of the Cayman Islands.

 

“Company Securities” means the Equity Securities of the Company.

 

“Control” of a given Person means the power or authority, whether exercised or not, to direct the business, management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; provided, that such power or authority shall conclusively be presumed to exist upon possession of beneficial ownership or power to direct the vote of fifty percent (50%) or more of the votes entitled to be cast at a meeting of the members or shareholders of such Person or power to control the composition of a majority of the board of directors (or equivalent governing body) of such Person.  The terms “Controlled” and “Controlling” have meanings correlative to the foregoing.

 

“Equity Securities” means, with respect to any Person that is not a natural person, any and all shares of capital stock, membership interests, units, profits interests, ownership interests, equity interests, registered capital and other equity securities of such Person, and any right, warrant, option, call, commitment, conversion privilege, preemptive right or other right to acquire any of the foregoing, or security convertible into, exchangeable or exercisable for any of the foregoing.

 

“ESOP” means any employee share incentive plan of the Company that may be approved from time to time.

 

“Governmental Authority” means (i) any national, federal, state, county, municipal, local or foreign government or other political subdivision or instrumentality thereof, (ii) any entity, authority or body exercising executive, legislative, judicial, regulatory, taxing or administrative functions of or pertaining to government, (iii) any agency, division, bureau, department or other political subdivision of any government, entity, authority or body described in the foregoing clauses (i) and (ii) of this definition, (iv) any court, tribunal or arbitrator or (v) any self-regulatory organization. A Governmental Authority also includes public international organizations, i.e., organizations whose members are countries, or territories, governments of countries or territories, other public international organizations or any combination of the foregoing.

 

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“Group Company” means each of the Company and its current and future Subsidiaries and consolidated affiliated entities, and the “Group” refers to all the Group Companies collectively.

 

“Intellectual Property” means any and all intellectual property, industrial property and propriety rights in any jurisdiction in the world, including (i) patents, all patent rights and all applications therefor and all reissues, reexaminations, continuations, continuations-in-part, divisionals and patent term extensions thereof, (ii) inventions (whether patentable or not), discoveries, improvements, concepts, innovations and industrial models, (iii) registered and unregistered copyrights, copyright registrations and applications, author’s rights and works of authorship (including artwork of any kind), (iv) software of all types in whatever medium, inclusive of computer programs, applications, middleware, software development kits, libraries, software development tools, interfaces, firmware, compiled or interpreted programmable logic, objects, bytecode, machine code, videogames, software implementations of algorithms, models and methodologies, source code, object code and executable code, and documentation relating to any of the foregoing, (v) URLs, domain names, web sites, web pages and any part thereof, (vi) technical information, ideas, know-how, trade secrets, confidential information, drawings, designs, design protocols, specifications for parts and devices, quality assurance and control procedures, design tools, manuals, customer lists, databases, proprietary data, and other proprietary information, (vii) proprietary processes, technology, engineering, formulae, algorithms and operational procedures, and (viii) registered and unregistered trade names, trade dress, trademarks, service marks, logos, designs, symbols, slogans, taglines, brands, product names, corporate names, rights to social media accounts, and other indicia of source, origin or quality, and registrations and applications therefor, and the goodwill of the business symbolized or represented by any of the foregoing.

 

“Liquidation Event” means a liquidation, dissolution or winding up of the Company.

 

“Ordinary Shares” means the ordinary shares of US$0.0001 each in the share capital of the Company.

 

“Original Issue Date” means June 8, 2020.

 

“Original Issue Price” means the product of (i) the Original Issue Price Per Share, multiplied by (ii) the number of Ordinary Shares held by the Investor Shareholder on the Closing Date.

 

“Original Issue Price Per Share” means RMB14.136 or equivalent US$.

 

“Permitted Transferee” means with respect to any Shareholder, an Affiliate of that Shareholder.

 

“Person” means any individual, corporation, partnership, limited liability company, association (whether incorporated or unincorporated), trust, proprietorship, joint venture, joint-stock company, firm, estate, governmental entity or other entity or organization.

 

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“PRC” means the People’s Republic of China, but solely for the purposes of this Agreement, excluding Hong Kong, Macau and Taiwan.

 

“Qualified IPO” means a firm-commitment underwritten initial public offering of the Ordinary Shares and the listing of such shares (or securities representing such shares) for trading on an internationally recognized stock exchange, including the New York Stock Exchange, the Nasdaq Stock Market, The Stock Exchange of Hong Kong Limited, Shanghai Stock Exchange or Shenzhen Stock Exchange (each, a “Qualified Stock Exchange”), which has an offering price per share that results in a pre-money market capitalization of the Company at no less than RMB3.2 billion on a fully-diluted basis immediately upon the consummation of the initial public offering.

 

“Qualified Trade Sale” means (i) any transaction or series of transactions, whether by merger, consolidation, amalgamation, sale or issuance of equity, scheme of arrangement or otherwise, which results in a valuation of the Company at no less than RMB3.2 billion on a fully-diluted basis immediately upon the consummation of such transaction, and pursuant to or as a result of which the Shareholders of the Company immediately before such transaction own less than fifty percent (50%) of the direct or indirect voting power of the surviving company immediately after such transaction, (ii) a disposition of all or substantially all of the assets of the Group Companies as a whole for value no less than RMB3.2 billion, or (iii) a sale or exclusive licensing of all or substantially all of the Intellectual Property owned by the Group Companies as a whole for value no less than RMB3.2 billion.

 

“RMB” means Renminbi (人民币), the legal currency of the PRC.

 

“Shareholder” means any shareholder of the Company as recorded on the Company’s register of members.

 

“Subsidiary” means, with respect to any Person, any other Person that is Controlled directly or indirectly by such Person.

 

“Transfer” means, with respect to any securities of any Person, (i) when used as a verb, to sell, assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise transfer such securities or any participation or interest therein, whether directly or indirectly (including pursuant to a derivative transaction), or to agree or commit to do any of the foregoing, and, (ii) when used as a noun, a direct or indirect sale, assignment, disposition, exchange, pledge, encumbrance, hypothecation or other transfer of such securities or any participation or interest therein or any agreement or commitment to do any of the foregoing.

 

“U.S.” means the United States of America.

 

“US$” or “$” means the lawful currency of the United States of America.

 

4

 

Section 1.02          Interpretation.  The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  The captions of sections and sub-sections herein are included for convenience of reference only and shall be disregarded in the construction or interpretation hereof.  References to Articles, Sections, Exhibits, Schedules and Annexes are to Articles, Sections, Exhibits, Schedules and Annexes of this Agreement unless otherwise specified.  All Exhibits, Schedules and Annexes attached hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.  Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein shall have the meaning as defined in this Agreement.  Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular.  Whenever the word “include”, “includes” or “including” are used in this Agreement, it shall be deemed to be followed by the words “without limitation”, “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including email or other electronic media) in a visible form. The expression “signed” and comparable terms include signature transmitted via email or other electronic media. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; provided that, with respect to any agreement or contract listed on any schedules hereto, all such amendments, modifications or supplements must also be listed in the appropriate schedule.  References to any law include all rules and regulations promulgated thereunder.  References to any Person include the successors and permitted assigns of that Person.  A Person is a “wholly owned Subsidiary” of another Person if it has no shareholders other than such other Person and such other Person’s wholly owned Subsidiaries, or if it is Controlled by such other Person via variable interest entity arrangements so that its financial results are entirely consolidated with the financial results of such other Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.  In calculations of share numbers or percentages, references to “fully diluted and as-converted basis” mean that the calculation is to be made assuming that all outstanding options, warrants and other Equity Securities convertible into or exercisable or exchangeable for Ordinary Shares (whether or not by their terms then currently convertible, exercisable or exchangeable) have been so converted, exercised or exchanged.  Any share calculation shall be appropriately adjusted to take into account any share split, share consolidation, recapitalization, bonus issue, reclassification or similar event.

 

ARTICLE II

 

CORPORATE GOVERNANCE

 

Section 2.01          Actions Requiring Consent of Investor Shareholder.  The Company shall not, and the Company shall procure each Group Company not to, take, permit to occur, approve, authorize, or agree or commit to do any action with respect to any of the following matters, whether in a single transaction or a series of related transactions, directly  or indirectly, whether by amendment, merger, amalgamation, consolidation or otherwise, without the approval or written consent from the Investor Shareholder, provided that the Investor Shareholder shall not have Transferred any Ordinary Shares beneficially owned by the Investor Shareholder on or prior to the date hereof:

 

(a)        any material change to the business scope or nature of business, or cessation of any existing line of business of the Company or Group Company, except for any restructuring plans undertaken for the purpose of consummating a Qualified IPO as determined in the sole discretion of the Company;

 

(b)        any Transfer of Ordinary Shares, whether in a single transaction or a series of related transactions, by the Founder that would result in (together with its Affiliates)  the change of Control of the Company or any of its Subsidiaries, except for any Transfers to Permitted Transferees or Transfers of Ordinary Shares in connection with an ESOP of the Company; or

 

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(c)        any transaction or series of transactions, whether by merger, consolidation, amalgamation, sale or issuance of equity, scheme of arrangement or otherwise, pursuant to or as a result of which the Founder (together with its Affiliates) would result in the change of Control of the Company (or its surviving company).

 

Section 2.02          Termination. The provisions of this Article II shall terminate immediately upon the consummation of a Qualified IPO.

 

ARTICLE III

 

GENERAL PROVISIONS ON TRANSFER

 

Section 3.01          General Restrictions on Transfer.  Each Shareholder agrees that it shall not Transfer any Ordinary Shares except in compliance with all Applicable Laws and the terms and conditions of this Agreement. Any attempt to Transfer any Ordinary Shares not in compliance with this Agreement shall be null and void, and the Company shall not, and shall cause any transfer agent not to, give any effect in the Company’s share register or equivalent documents to such attempted Transfer.

 

Section 3.02          Restrictions on Investor Shareholder Transfer. Notwithstanding Section 3.02, the Investor Shareholder shall not, directly or indirectly, Transfer any Ordinary Shares of the Company now or hereafter beneficially owned by it to any third party without  the prior written consent of the Founder. The Investor Shareholder shall not Transfer any Ordinary Shares of the Company now or hereafter beneficially owned by it to any competitor of the Company without the prior written consent of the Founder, it being agreed that the list of competitors is to be determined by the Founder in its sole discretion. In the event that the Investor Shareholder intends to Transfer any Ordinary Shares of the Company to a third party for which the Founder does not consent to, the Founder shall be entitled to purchase such Ordinary Shares at the same price and subject to the same terms and conditions as agreed by the third party.

 

Section 3.03          Termination. The provisions of this Article III shall terminate immediately upon the consummation of a Qualified IPO.

 

ARTICLE IV

 

RIGHT OF FIRST REFUSAL; CO-SALE RIGHT

 

Section 4.01          Right of First Refusal.

 

(a)        Subject to Article III, if the Founder (the “Transferor”) proposes to Transfer any Ordinary Shares that represents more than 10% of the then total issued and outstanding share capital of the Company to one or more Persons other than the Investor Shareholder (excluding Transfers of Ordinary Shares in connection with an ESOP of the Company), with respect to the portion of the Ordinary Shares Transferred that exceeds 10% of the then total issued and outstanding share capital of the Company (the “Offered Securities”), the Transferor shall give the Investor Shareholder a written notice of the Transferor’s intention to effect the sale (the “Transfer Notice”), which shall include a description of the number of Offered Securities, the identity of the prospective transferee, the consideration and other material terms upon which the proposed sale is to be effected. For the avoidance of doubt, in the event that the Founder proposes to Transfer Ordinary Shares that represents no more than 10% of the then total issued and outstanding share capital of the Company to one or more Persons other than the Investor Shareholder, the Investor Shareholder shall have no right of first refusal.

 

6

 

(b)        The Investor Shareholder shall have an option within a period of ten (10) calendar days after the delivery of the Transfer Notice (the “Option Period”) to elect to purchase all or any portion of its Pro Rata Share of the Offered Securities at the same price and subject to the same terms and conditions as described in the Transfer Notice, by delivering a written notice (the “ROFR Exercise Notice”) to the Transferor and the Company before the expiration of the Option Period as to the number of such Offered Securities that the Investor Shareholder intends to purchase. Failure by the Investor Shareholder to give the “ROFR Exercise Notice” nor the “Co-Sale Exercise Notice” within the Option Period shall be deemed a consent to the Transfer and a waiver by the Investor Shareholder of its right of first refusal under this Section 4.01 and its right of co-sale Section 4.02 with respect to such Offered Securities. If the Investor Shareholder exercises its right under this Section 4.01, it shall be deemed the Investor Shareholder waived its rights of co-sale under Section 4.02. For the purpose of this Section 4.01, the “Pro Rata Share” of the Investor Shareholder of the applicable Offered Securities shall be equal to (i) the total number of such Offered Securities, multiplied by (ii) a fraction, the numerator of which shall be the aggregate number of Ordinary Shares held by the  Investor Shareholder on the date of the Transfer Notice and the denominator of which shall be the total number of Ordinary Shares held by the Investor Shareholder and the Transferor on such date.

 

(c)        If the Investor Shareholder gives the Transferor and the Company a ROFR Exercise Notice that it desires to exercise its right of first refusal, then payment for the Offered Securities to be purchased shall be made by wire transfer in immediately available funds of the appropriate currency, against transfer of such Offered Securities to be purchased and an executed instrument of transfer, at the principal executive offices of the Company within two (2) months after the date of the ROFR Exercise Notice. Failure to consummate such Transfer to the Investor Shareholder within the two (2) months prescribed period shall be deemed a waiver by the Investor Shareholder of its right of first refusal under this Section 4.01.

 

Section 4.02          Co-Sale Right.

 

(a)        Subject to Article III, if the Transferor proposes to Transfer any Ordinary Shares that represents more than 10% of the then total issued and outstanding share capital of the Company to one or more Persons other than the Investor Shareholder (excluding Transfers of Ordinary Shares in connection with an ESOP of the Company), with respect to the portion of the Ordinary Shares Transferred that exceeds 10% of the then total issued and outstanding share capital of the Company (the “Offered Securities”), the Investor Shareholder shall have the right to Transfer its Pro Rata Share of the Offered Securities, to the prospective transferee identified in the Transfer Notice on the same terms and conditions as specified in the Transfer Notice by notifying the Transferor and the Company in writing during the Option Period (the “Co-Sale Exercise Notice”). Failure by the Investor Shareholder to give the “ROFR Exercise Notice” nor the “Co-Sale Exercise Notice” within the Option Period shall be deemed a consent to the Transfer and a waiver by the Investor Shareholder of its right of first refusal under this Section 4.01 and its co-sale right under this Section 4.02 with respect to such Offered Securities. If the Investor Shareholder exercises its right under this Section 4.02, it shall be deemed the Investor Shareholder waived its right of first refusal under Section 4.01. For the avoidance of doubt, in the event that the Founder proposes to Transfer Ordinary Shares that represents no more than 10% of the then total issued and outstanding share capital of the Company to one or more Persons other than the Investor Shareholder, the Investor Shareholder shall have no co-sale right.

 

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(b)        The Investor Shareholder shall effect its participation in the sale by promptly delivering to the Transferor for Transfer to the prospective transferee, before the applicable closing, one or more share certificates, which represent the type and number of Company Securities that the Investor Shareholder elects to sell.

 

(c)        The share certificate or certificates that are delivered to the Transferor pursuant to Section 4.02(b) shall be submitted to the Company for cancellation and the Company shall, upon the consummation of the sale of the Company Securities pursuant to the terms and conditions specified in the Transfer Notice, issue a new share certificate to the Investor Shareholder for the remaining balance. The Company shall update its register of members upon consummation of such Transfer.

 

ARTICLE V

 

PREEMPTIVE RIGHTS

 

Section 5.01          General.  Each Investor Shareholder and Original Shareholder (each, a “Participation Rights Holder”) shall have the preemptive right to purchase such Participation Rights Holder’s Pro Rata Share of all (or any part) of any New Securities that the Company may from time to time issue after the date of this Agreement (the “Preemptive Right”).  “Pro Rata Share” of a Participation Rights Holder means, for purpose of this Article V, the ratio of (a) the number of the Ordinary Shares held by such Participation Rights Holder prior to the issuance of New Securities giving rise to the Preemptive Right, to (b) the total number of Ordinary Shares then issued and outstanding immediately prior to the issuance of New Securities giving rise to the Preemptive Right.

 

Section 5.02          New Securities.  “New Securities” means any Ordinary Shares or other Equity Securities of the Company; provided, however, that the term “New Securities” shall not include any of the following:

 

(a)        Equity Securities issued as a dividend or distribution on any Ordinary Shares;

 

(b)        Equity Securities issuable upon share split, share dividend or any subdivision of Ordinary Shares;

 

(c)        Equity Securities issued or issuable to officers, directors, employees and consultants of the Company pursuant to an ESOP;

 

(d)        Equity Securities issued pursuant to a Qualified IPO of the Company; or

 

(e)        Equity Securities issued to Affiliates of the Company.

 

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Section 5.03          Procedures.

 

(a)        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 a written notice of its intention to issue New Securities (the “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) calendar days from the date of receipt of the 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 Participation Notice, by giving a written notice to the Company and stating therein the quantity of New Securities to be purchased (not to exceed such Participation Rights Holder’s Pro Rata Share).  If any Participation Rights Holder fails to so agree in writing within such ten (10) calendar days to purchase such Participation Rights Holder’s full Pro Rata Share of an offering of New Securities, then such Participation Rights Holder shall be deemed to have forfeited its right hereunder to purchase that portion of its Pro Rata Share of such New Securities that it did not agree to purchase, without prejudice to participating in any future or other offerings of New Securities.

 

(b)        If the Participation Rights Holder gives the Company a Participation Notice that it desires to purchase the Pro Rata Share of all (or any part) of any New Securities, then payment for the New Securities shall be made by wire transfer in immediately available funds of the appropriate currency, against issuance of such New Securities to be purchased, at the principal executive offices of the Company within two (2) months after the date of the Participation Notice.

 

ARTICLE VI

 

REDEMPTION RIGHTS

 

Section 6.01          Redemption Rights of Investor Shareholders.  At any time after the earlier of (i) the fifth anniversary of the Closing Date (as defined in the Share Subscription Agreement) (if the Company has not consummated a Qualified IPO or a Qualified Trade Sale), or (ii) prior to the fifth anniversary of the Closing Date (as defined in the Share Subscription Agreement), the Company or the Founder notifies the Investor Shareholder that the Company has permanently terminated the preparation of a Qualified IPO, the Investor Shareholder may exercise its redemption right at the Redemption Price (as defined below) within one year after the fifth anniversary of the Closing Date (as defined in the Share Subscription Agreement) or other date agreed by both parties.

 

The Redemption Price shall equal to sum of (1) the Original Issue Price and (2) an amount that would give the Investor Shareholder a simple non-compounded interest of ten percent (10%) per annum on the Original Issue Price, calculated from the Original Issue Date up until the date of receipt by the Investor Shareholder of the full redemption amount thereof, minus all declared and paid dividends thereon up to the date of redemption, proportionally adjusted for share subdivisions, share dividends, reorganizations, reclassifications, consolidations or mergers (the “Redemption Price”).

 

Section 6.02          Redemption Notice. Subject to Section 6.01, the Investor Shareholder may cause either the Company or the Founder, severally but not jointly, to redeem any or all of the Ordinary Shares held by the Investor Shareholder by delivering a notice of redemption (the “Redemption Notice”) to the Company and the Founder on or after the date on which such Ordinary Shares become redeemable pursuant to Section 6.01, stating the number of Ordinary Shares to be redeemed (the Ordinary Shares to be redeemed, the “Redemption Shares”, the delivery date of the Redemption Notice, the “Redemption Notice Date”).  The Company or the Founder shall then complete the redemption within sixty (60) days after the Redemption Notice Date (the actual completion date of the redemption, the “Redemption Date”).

 

9

 

Section 6.03            Manner and Mechanics of Redemption. On the Redemption Date, the Investor Shareholder shall surrender to the Company its share certificate or certificates representing such Ordinary Shares to be redeemed, and each such share certificate shall be cancelled.  In the event that less than all the Ordinary Shares represented by any such share certificate are redeemed, a new share certificate shall be issued representing the unredeemed Ordinary Shares.

 

ARTICLE VII

 

ANTI-DILUTION

 

Section 7.01          Anti-dilution.  If the Company issues New Securities or the Founder proposes to Transfer any Ordinary Shares (excluding any Transfers to Permitted Transferees or Transfers of Ordinary Shares in connection with an ESOP of the Company), and the actual final per share price is lower than the Original Issue Price Per Share (which shall be adjusted accordingly if the Company converts capital reserve into share capital, declares and pays a stock bonus, divides shares, reduces the number of shares, allots shares, pays dividends, and privately places new shares with existing shareholders), the Investor Shareholder has the right to request an adjustment of Original Issue Price Per Share, and to re-determine the number of Ordinary Shares to which the Investor Shareholder is entitled (the “Adjusted Registered Capital Amount”). The Adjusted Registered Capital Amount is calculated as follows:

 

P2=P1*(A+B)/(A+C)

 

For the purpose of the above formula, the meaning of each letter is as follows;

 

(a)        P2 is the adjusted issue price per Ordinary Share after the issuance of New Securities;

 

(b)        P1 is the Original Issue Price Per Share;

 

(c)        A is the total amount of issued and outstanding Ordinary Shares prior to the issuance of the New Securities;

 

(d)        B is the amount of New Securities that would have been issued at the Original Issue Price Per Share;

 

(e)        C is the amount of New Securities issued.

 

Section 7.02          Investor Shareholder’s Rights. If the Company issues New Securities to a third party investor for a new round of financing or the Founder proposes to Transfer any Ordinary Shares (excluding any Transfers to Permitted Transferees or Transfers of Ordinary Shares in connection with an ESOP of the Company), and the consideration for the transaction reflects the valuation of the Company prior to such transaction to be less than RMB3.2 billion, the Investor Shareholder shall enjoy (i) rights no less favorable than the new third party investor; and (ii) representations and warranties made by the Company and Founder no less favorable than to the new third party investor. The Investor Shareholder shall enjoy rights no less favorable than the rights in this agreement.

 

10

 

Section 7.03          Share Incentive Platform. In the event that the Company establishes any share incentive platform prior to a Qualified IPO, it shall not dilute the equity interest held by the Investor Shareholder in the Company prior to a Qualified IPO.

 

ARTICLE VIII

 

LIQUIDATION PREFERENCE

 

Section 8.01          Liquidation Preference.  In the event of a Liquidation Event and after satisfaction of all creditors’ claims and claims that may be mandated by Applicable Laws, distributions to the Shareholders shall be made in the following manner (and the Investor Shareholder and the Founder shall procure that distributions to the Shareholders be made in the following manner):

 

(a)        The Investor Shareholder shall be entitled to receive for each Ordinary Share it holds, prior and in preference to any distribution of any of the assets or surplus funds of the Company to the Original Shareholders, the amount equal to the sum of (i) the Original Issue Price Per Share (as may be adjusted according to Article VII) and (ii) any dividends declared and unpaid with respect to an Ordinary Share (the “Investor Shareholder Liquidation Preference”).

 

(b)        After setting aside or paying in full the Investor Shareholder Liquidation Preference due pursuant to Section 8.01(a) above, each Original Shareholder that is still a Shareholder of the Company shall be entitled to receive for each Ordinary Share it holds, the amount equal to the sum of (i) the Issue Price Per Share applicable to the Original Shareholder and (ii) any dividends declared and unpaid with respect to an Ordinary Share (the “Original Shareholder Liquidation Preference”).

 

(c)        After setting aside or paying in full the Investor Shareholder Liquidation Preference and the Original Shareholder Liquidation Preference due pursuant to Section 8.01(a) and (b) above, the remaining assets of the Company available for distribution, if any, shall be distributed to holders of Ordinary Shares on a pro rata basis, based on the number of Ordinary Shares then held by each such holder.

 

Section 8.02          Non-Cash Distribution.  In the event that the Company proposes to distribute assets other than cash in connection with a Liquidation Event, the value of the assets to be distributed to the Shareholders in accordance with Section 8.01 shall be determined in good faith by the Board.

 

11

 

ARTICLE IX

 

WAIVER OF RIGHTS; TERMINATION OF RIGHTS

 

Section 9.01          Waiver of Rights.  The Investor Shareholder consents to waive its rights under Article IV, Article V, and Article VII and other rights which may impede or have negative impact on the process of the Qualified IPO between the Waiver Commencement Date (as defined below) and the consummation of a Qualified IPO (the “Waiver of Rights Period”). The commencement date of the Waiver of Rights Period (the “Waiver Commencement Date”) shall be 180 days prior to the proposed filing date of the Company’s registration statement for a Qualified IPO as approved by resolutions by the board of directors of the Company. In the event that (i) the Company fails to file its registration statement (or, for a listing on the New York Stock Exchange or the Nasdaq Stock Market, to confidentially submit a draft registration statement) within 180 days of Waiver Commencement Date, (ii) the Company withdraws its registration statement from a Qualified Stock Exchange, or (iii) the Company’s proposed initial public offering is rejected by the relevant Governmental Authority, the Waiver of Rights Period shall end.

 

Section 9.02          Termination of Rights. The provisions of Article IV, Article V, Article VI, Article VII and Article VIII shall terminate immediately upon the consummation of a Qualified IPO.

 

ARTICLE X

 

ADDITIONAL COVENANTS AND AGREEMENTS

 

Section 10.01       Confidentiality.

 

(a)        Each Party agrees that Confidential Information furnished and to be furnished to it has been and may in the future be made available in connection with the transactions contemplated by this Agreement.  Each Party agrees that it shall use, and that it shall cause any Person to whom Confidential Information is disclosed pursuant to clause (i) below to use, the Confidential Information only in connection with its investment in the Company and not for any other purpose.  Each Party acknowledges and agrees that it shall not disclose any Confidential Information to any Person, except that Confidential Information may be disclosed (i) to such Party and its Affiliates and their respective Representatives on a need-to-know basis in the normal course of the performance of their duties; provided that such Persons are advised of the confidential nature of such information and are under appropriate nondisclosure obligations similar to and not inconsistent with those set forth herein; (ii) to the extent required by any Applicable Law (including without limitation complying with any oral or written questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process to which a Party is subject); or (iii) to any Governmental Authority to which any Party or any of its Affiliates is subject.  Nothing contained herein shall prevent the use of Confidential Information in connection with the assertion or defense of any claim by or against the Company or any Shareholder.

 

(b)        “Confidential Information” means any information concerning any Party or the financial condition, business, operations or prospects of such Party, or any such Persons in the possession of, or furnished to any Party (including by virtue of its present or former right to designate a director of the Company); provided that the term “Confidential Information” does not include information that (i) is or becomes generally available to the public other than as a result of a disclosure by a Shareholder or its current or bona fide prospective investors, directors, officers, employees, stockholders, members, partners, counsel, advisers or other representatives (all such persons being collectively referred to as “Representatives”) in violation of this Agreement; (ii) was available to such Shareholder on a non-confidential basis prior to its disclosure to such Shareholder or its Representatives by the Company; (iii) becomes available to such Shareholder on a non-confidential basis from a source other than the Company after the disclosure of such information to such Shareholder or its Representatives by the Company, which source is (at the time of receipt of the relevant information) not, to the best of such Shareholder’s knowledge, bound by a confidentiality obligation to the Company or another Person; or (iv) is independently developed by such Shareholder without violating any confidentiality agreement with, or other obligation of secrecy to, the Company.

 

12

 

(c)        Except as required by Applicable Law, by any Governmental Authority (including any relevant stock exchange on which the shares in a Party or any of its parent companies are listed), no press release or public announcement that references any Party shall be made concerning this Agreement without such Party’s prior written consent.

 

Section 10.02       Information Rights.  The Company agrees to furnish to each Shareholder: (a) annual financial statements of the Company, within 120 days after the end of each fiscal year; (b) audit report of the Company, within 120 days after the end of each fiscal year (c) unaudited quarterly consolidated financial statements of the Company, within sixty (60) days after the end of each fiscal quarter; and (d) annual financial budget of each fiscal year, no later than 180 days after the first day of that fiscal year. The provisions in this Section 10.02 shall terminate immediately upon the kick-off meeting of a Qualified IPO.

 

Section 10.03       Inspection Rights.  The Company covenants and agrees that the Investor Shareholder and the Original Shareholders, or authorized representative of any such Shareholder, shall have the right to access and inspect the facilities, records and books of each Group Company during regular working hours upon reasonable prior notice (which shall be no less than ten (10) calendar days prior to the proposed date of inspection) to the Company or such Group Company, as applicable; provided that such access, inspection and discussion shall not affect the ordinary operation of such Group Company; provided that none of the Group Companies shall be obligated to provide access to any information that the Board or the senior management reasonably and in good faith determines to be a trade secret of the Group, or the disclosure of which would adversely affect the attorney-client privilege between any Group Company and its counsel. The provisions in this Section 10.03 shall terminate immediately upon the kick-off meeting of a Qualified IPO.

 

Section 10.04       No Conflicting Agreements.  Each of the Company and the Shareholders represents and agrees that it shall not (a) enter into any agreement or arrangement of any kind with any Person with respect to any Company Securities inconsistent with the provisions of this Agreement or for the purpose or with the effect of denying or reducing the rights of any other Shareholder under this Agreement, including agreements or arrangements with respect to the Transfer or voting of its Company Securities, or (b) act, for any reason, as a member of a group or in concert with any other Person in connection with the Transfer or voting of its Company Securities in any manner that is inconsistent with the provisions of this Agreement. Any proxy, voting trust or agreement or other arrangement granted to or entered into in breach of the foregoing sentence shall be void.

 

13

 

Section 10.05       Deed of Adherence.  Notwithstanding any other provision of this Agreement, no Ordinary Shares shall be allotted and issued to any Person who is not already a party to this Agreement unless such Person has agreed in writing to be bound by the terms and conditions of this Agreement by way of executing and delivering a Deed of Adherence substantially in the form of Annex A prior to or upon the allotment and issuance of Ordinary Shares to such Person.

 

ARTICLE XI

 

MISCELLANEOUS

 

Section 11.01       Binding Effect; Assignability.  This Agreement shall inure to the benefit of and be binding upon the Parties and their respective heirs, successors, legal representatives and permitted assigns. Unless otherwise expressly provided in this Agreement, neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by any Party pursuant to any Transfer of Company Securities or otherwise, except that any Person acquiring the Company Securities from any Shareholder in a Transfer in compliance with this Agreement (but excluding any such Transfer made in an initial public offering) or any Person acquiring the Company Securities as required or permitted by this Agreement shall, unless already bound hereby, execute and deliver to the Company an agreement to be bound by this Agreement in the form of Annex A hereto and shall thenceforth be a “Shareholder”.

 

Section 11.02       Notices.  Any notice required or permitted pursuant to this Agreement shall be given in writing and shall be given either personally or by sending it by next-day or second-day courier service, facsimile, electronic mail or similar means to the address of the relevant Party as shown on Schedule II (or at such other address as such Party may designate by ten (10) business days’ advance written notice to the other parties to this Agreement given in accordance with this Section 11.02).  Where a notice is sent by next-day or second-day courier service, service of the notice shall be deemed to be effected by properly addressing, pre-paying and sending by next-day or second-day service through an internationally-recognized courier a letter containing the notice, with a written confirmation of delivery, and to have been effected at the earlier of (a) delivery (or when delivery is refused) and (b) expiration of two (2) business days after the letter containing the same is sent as aforesaid.  Where a notice is sent by facsimile or electronic mail, service of the notice shall be deemed to be effected by properly addressing, and sending such notice through a transmitting organization, with a written confirmation of delivery, and to have been effected on the day the same is sent as aforesaid, if such day is a business day and if sent during normal business hours of the recipient, otherwise the next business day.  Any Person that becomes a Shareholder shall provide its address and facsimile number to the Company, which shall promptly provide such information to each other Shareholder.

 

Section 11.03       Third-Party Beneficiaries.  Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Parties, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

 

Section 11.04       Amendment.  This Agreement may only be amended or otherwise modified by an instrument in writing executed by all parties hereto.

 

14

 

Section 11.05       Waiver.  Unless otherwise provided in this Agreement, no waiver of any provision of this Agreement by a Party, and no consent or approval of a Party, shall be effective unless set forth in a written instrument signed by such Party waiving such provision or granting such consent or approval. No failure or delay by a Party in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of the same preclude any further exercise thereof or the exercise of any other right, power or remedy. Without limiting the foregoing, no waiver by a Party of any breach by any other Party of any provision hereof shall be deemed to be a waiver of any subsequent breach of that or any other provision hereof.

 

Section 11.06       Effectiveness; Termination.  This Agreement shall become effective on the date hereof.  Unless otherwise provided in this Agreement, this Agreement shall terminate and be of no further force and effect upon the earlier to occur of (i) with respect to any Party that is a Shareholder, the date upon which such Party ceases to hold any Company Securities, and (ii) any date agreed upon in writing by the Parties.

 

Section 11.07       Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

Section 11.08       Dispute Resolution.  Any dispute arising out of or relating to this Agreement, including any question regarding its existence, construction, interpretation, validity, termination or implementation, shall be referred to and finally resolved by arbitration at the Hong Kong International Arbitration Centre in accordance with the Hong Kong International Arbitration Centre Administered Arbitration Rules then in force.  There shall be three (3) arbitrators. The claiming party or parties shall have the right to appoint one (1) arbitrator, the responding party or parties shall have the right to appoint one (1) arbitrator, and the third arbitrator shall be appointed by the Hong Kong International Arbitration Centre.  The seat of arbitration shall be in Hong Kong.  The arbitration proceedings shall be conducted in English.  Each of the Parties irrevocably waives any immunity to jurisdiction to which it may be entitled or become entitled (including without limitation sovereign immunity, immunity to pre-award attachment, post-award attachment or otherwise) in any arbitration proceedings and/or enforcement proceedings against it arising out of or based on this Agreement or the transactions contemplated hereby. Notwithstanding the foregoing, either Party may seek immediate injunctive relief or other interim relief from any court of competent jurisdiction as necessary to enforce the provisions of this Agreement.

 

Section 11.09       Entire Agreement.  This Agreement, together with all schedules and annexes hereto, constitute the full and entire understanding and agreement among the Parties with respect to the subjects hereof and thereof, and supersede all other agreements between or among any of the Parties with respect to the subject matters hereof and thereof.

 

Section 11.10       Severability.  Each provision of this Agreement shall be considered separable. 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 negotiate in good faith a substitute, valid and enforceable provision or agreement which most closely effects the Parties’ intent in entering into this Agreement.

 

15

 

Section 11.11       Equitable Remedies.  The Parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof, and that the Parties shall be entitled to an injunction or injunctions or other equitable relief to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof. Each Party hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief. The existence of this right will not preclude a Party from pursuing any other rights or remedies that it may have at law or in equity.  The rights of each Party under this Agreement are cumulative and in addition to all other rights or remedies that any Party may otherwise have at law or in equity.

 

Section 11.12       Aggregation of Ordinary Shares.  All Ordinary Shares held or acquired by any Affiliates of a Shareholder shall be aggregated for the purpose of determining the availability of any rights of that Shareholder under this Agreement, including with respect to the preemptive rights, rights of first refusal and co-sale right of under Article IV and Article V.

 

Section 11.13       Further Assurances.  Each Party shall vote their Ordinary Shares and otherwise act within its power in a manner consistent with and not impede the transactions contemplated by this Agreement. Each Party shall from time to time and at all times hereafter make, do, execute or cause to be made, done and executed such further acts, deeds, conveyances, consents and assurances, without further consideration, which may reasonably be required to give full effect to the terms of this Agreement or to vest in any other Party such other Party’s full rights and entitlements hereunder.

 

Section 11.14       Counterparts.  This Agreement may be executed in several counterparts and as so executed shall constitute one agreement binding on all Parties, notwithstanding that all of the Parties have not signed the same counterpart.

 

[Signature pages follow]

 

16

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their respective authorized officers on the date and year first above written.

 

	
 
    	
iHuman Inc.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Hanfeng Chi
    
	
 
    	
 
    	
Name: Hanfeng Chi
    
	
 
    	
 
    	
Title: Director
    

 

[Signature Page to Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their respective authorized officers on the date and year first above written.

 

	
 
    	
Academy Management Ltd.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Yufeng Chi
    
	
 
    	
 
    	
Name: Yufeng Chi
    
	
 
    	
 
    	
Title: Director
    

 

[Signature Page to Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their respective authorized officers on the date and year first above written.

 

	
 
    	
HPF Fusion Holding Ltd.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Tian Liang
    
	
 
    	
 
    	
Name: Tian Liang
    
	
 
    	
 
    	
Title: Director
    

 

[Signature Page to Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their respective authorized officers on the date and year first above written.

 

	
 
    	
Ren Chang Holding Ltd.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Xiaoyi Zhang
    
	
 
    	
 
    	
Name: Xiaoyi Zhang
    
	
 
    	
 
    	
Title: Director
    

 

[Signature Page to Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their respective authorized officers on the date and year first above written.

 

	
 
    	
Hong Lei Holding Ltd.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Peng Dai
    
	
 
    	
 
    	
Name: Peng Dai
    
	
 
    	
 
    	
Title: Director
    

 

[Signature Page to Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their respective authorized officers on the date and year first above written.

 

	
 
    	
Yu Hui Holding Ltd.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Wenbin Lu
    
	
 
    	
 
    	
Name: Wenbin Lu
    
	
 
    	
 
    	
Title: Director
    

 

[Signature Page to Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their respective authorized officers on the date and year first above written.

 

	
 
    	
Shun Ying Holding Ltd.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Xingyi Zhang
    
	
 
    	
 
    	
Name: Xingyi Zhang
    
	
 
    	
 
    	
Title: Director
    

 

[Signature Page to Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their respective authorized officers on the date and year first above written.

 

	
 
    	
Ju Shengyi Holding Ltd.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Zhiming Feng
    
	
 
    	
 
    	
Name: Zhiming Feng
    
	
 
    	
 
    	
Title: Director
    

 

[Signature Page to Shareholders Agreement]

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their respective authorized officers on the date and year first above written.

 

	
 
    	
Tianjin Share Xinghan   Enterprise  Management Consulting   Partnership (Limited Partnership)
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Wentao Bai
    
	
 
    	
 
    	
Name: Wentao Bai
    
	
 
    	
 
    	
Title: Authorized Signatory
    

 

[Signature Page to Shareholders Agreement]

 

 

SCHEDULE I

 

ORIGINAL SHAREHOLDERS

 

 

SCHEDULE II

 

ADDRESS FOR NOTICES

 

 

ANNEX A
 DEED OF ADHERENCE

 

This Deed of Adherence (this “Deed”) is made as of the date written below by and between the undersigned (the “Joining Party”) and iHuman Inc., an exempted company with limited liability incorporated under the laws of the Cayman Islands (the “Company”), in accordance with the Shareholders Agreement dated [·] (as amended, the “Shareholders Agreement”) by and between the Company and certain other parties thereto. The Company enters this Deed on behalf of itself and as agent for all the existing Shareholders of the Company. Capitalized terms used but not defined in this Deed shall have the meaning ascribed to such terms in the Shareholders Agreement.

 

The Joining Party hereby acknowledges, agrees and undertakes that, by its execution of this Deed, the Joining Party shall be deemed to be a party to the Shareholders Agreement and to perform the obligations imposed by the Shareholders Agreement in all respects as if it had executed the Shareholders Agreement.  The Joining Party hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Shareholders Agreement.  This Deed is made for the benefit of (a) the original parties to the Shareholders Agreement and (b) any other Person or Persons who after the date of the Shareholders Agreement (whether or not prior to or after the date of this Deed) adheres to the Shareholders Agreement. Each existing Shareholder and the Company shall be entitled to enforce the Shareholders Agreement against the Joining Party.

 

The address for notice of the Joining Party shall be as follows:

 

	
Address:
    	
[·]
    
	
Attention:
    	
[·]
    
	
E-mail:
    	
[·]
    
	
Facsimile:
    	
[·]
    

 

This Deed of Adherence shall be governed by and construed in accordance with the laws of the State of New York.

 

Annex A-1

 

IN WITNESS WHEREOF, the undersigned has executed this Deed of Adherence on the date written below.

 

	
Date:                          
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signed, Sealed and Delivered
    	
)
    	
 
    
	
as a deed by
    	
)
    	
 
    
	
[name of   Joining Party]
    	
)
    	
Director
    
	
acting by [a director and its   secretary/two directors]
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Director/Secretary
    

 

	
Date:                         
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signed, Sealed and Delivered
    	
)
    	
 
    
	
as a deed by
    	
)
    	
 
    
	
iHuman Inc.
    	
)
    	
Director
    
	
acting by a director
    	
)
    	
 
    

 

Annex A-2

 

	
 OR
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
The common seal of
    	
)
    	
[Common seal to be affixed   here]
    
	
[name of   Joining Party]
    	
)
    	
 
    
	
was affixed in the presence of:
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Director
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Director/Secretary/Person authorized   by the board of directors
    	
 
    	
 
    

 

	
Date:                         
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signed, Sealed and Delivered
    	
)
    	
 
    
	
as a deed by
    	
)
    	
 
    
	
iHuman Inc.
    	
)
    	
Director
    
	
acting by a director
    	
)
    	
 
    

 

Annex A-3Exhibit 10.1

 

iHuman Inc.

 

Share Incentive Plan

 

ARTICLE 1

 

PURPOSE

 

The purpose of the Plan is to promote the success and enhance the value of iHuman Inc., an exempted company incorporated under the laws of the Cayman Islands (the “Company”), by linking the personal interests of the Directors, Employees, and Consultants 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.

 

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, Restricted Share Unit or other types of award approved by the Committee 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          “Board” means the board of directors of the Company.

 

2.5          “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.

 

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

 

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

 

2.8          “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 has contracted directly with the Service Recipient to render such services.

 

2.9          “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;

 

(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, but excluding any such transaction or series of related transactions that the Committee determines shall not be a Corporate Transaction; or

 

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(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 but excluding any such transaction or series of related transactions that the Committee determines shall not be a Corporate Transaction.

 

2.10        “Director” means a member of the Board or a member of the board of directors of any Subsidiary of the Company.

 

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 Director, who is in the employment of a Service Recipient, subject to the control and direction of the Service Recipient as to both the work to be performed and the manner and method of performance. The payment of a 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.

 

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 or the NASDAQ Stock Market, 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 on the website maintained by such exchange or market system or such other source as the Committee deems reliable; or

 

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(b)           In the absence of an established market for the Shares of the type described in (a) above, the Fair Market Value thereof shall be determined by the 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 transaction, (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.

 

2.16        “Group Entity” means any of the Company and Subsidiaries of the Company.

 

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

 

2.18        “Independent Director” means (i) if the Shares or other securities representing the Shares are not listed on a stock exchange, a Director of the Company who is a Non-Employee Director; and (ii) if the Shares or other securities representing the Shares are listed on one or more stock exchange, a Director of the Company who meets the independence standards under the applicable corporate governance rules of the stock exchange(s).

 

2.19        “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.

 

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

 

2.21        “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.

 

2.22        “Participant” means a person who, as a Director, Consultant or Employee, has been granted an Award pursuant to the Plan.

 

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

 

2.24        “Plan” means this Share Incentive Plan of iHuman Inc., as amended and/or restated from time to time.

 

2.25        “Related Entity” means any business, corporation, partnership, limited liability company or other entity in which the Company, a Parent or Subsidiary of the Company holds a substantial ownership interest, directly or indirectly, or controls through contractual arrangements and consolidates the financial results according to applicable accounting standards, but which is not a Subsidiary and which the Board designates as a Related Entity for purposes of the Plan.

 

2.26        “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 repurchase.

 

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

 

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

 

2.29        “Service Recipient” means the Company or Subsidiary of the Company to which a Participant provides services as an Employee, a Consultant or a Director.

 

2.30        “Share” means the 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.

 

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

 

2.32        “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 19,684,555 Shares (to be equitably adjusted in the event of any share dividend, subdivision, reclassification, recapitalization, split, reverse split, combination, consolidation or similar transactions) plus an annual increase on the first day of each fiscal year of the Company during the term of this Plan commencing with the fiscal year beginning January 1, 2021, by an amount equal to 2.0% of the total number of issued and outstanding Shares on the last day of the immediately preceding fiscal year.

 

(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 a Group Entity 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 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.

 

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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, at the discretion of the Committee, any Shares distributed pursuant to an Award may be represented by American Depository Shares.  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. Persons eligible to participate in this Plan include Employees, Consultants, and Directors, as determined 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.

 

ARTICLE 5

 

OPTIONS

 

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

 

(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 price or a 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.  Notwithstanding anything in the foregoing, the exercise price shall in no circumstances be less than the par value of the Shares.

 

(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.

 

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(d)           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)            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;

 

(ii)           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:

 

(a)                                 the Participant (or his or her legal representative or beneficiary, in the case of the Participant’s Disability or death, respectively), will have until the date that is 12 months after the Participant’s termination of Employment 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;

 

(b)                                 the Options, to the extent not vested and exercisable on the date of the Participant’s termination of Employment or service, shall terminate upon the Participant’s termination of Employment or service on account of death or Disability; and

 

(c)                                  the Options, to the extent exercisable for the 12-month period following the Participant’s termination of Employment or service and not exercised during such period, shall terminate at the close of business on the last day of the 12-month period.

 

(iii)          Other Terminations of Employment or Service. Unless otherwise provided in the Award Agreement, if a Participant’s employment by or service to the Service Recipient terminates for any reason other than a termination by the Service Recipient for Cause or because of the Participant’s death or Disability:

 

(a)                                 the Participant will have until the date that is 90 days after the Participant’s termination of Employment or service to exercise his or her Options (or portion thereof) to the extent that such Options were vested and exercisable on the date of the Participant’s termination of Employment or service;

 

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(b)                                 the Options, to the extent not vested and exercisable on the date of the Participant’s termination of Employment or service, shall terminate upon the Participant’s termination of Employment or service; and

 

(c)                                  the Options, to the extent exercisable for the 90-day period following the Participant’s termination of Employment or service and not exercised during such period, shall terminate at the close of business on the last day of the 90-day period.

 

5.2                               Incentive Share Options.  Incentive Share Options may be granted to Employees of the Company or a 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 or any Parent or Subsidiary 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. Notwithstanding anything in the foregoing, the exercise price per Share shall in no circumstances be less than the par value of such Share.

 

(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.

 

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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 Shares).  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                               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, subject to Applicable Laws, be repurchased in accordance with the Award Agreement; provided, however, the Committee may (a) provide in any Restricted Share Award Agreement that restrictions or 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 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          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, Shares or a combination thereof.

 

7.4          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 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)           subject to the prior approval of the Committee or an executive officer or director of the Company authorized by the Committee, 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. Any permitted transfer shall be subject to the condition that the Committee receives evidence satisfactory to it that the transfer is being made for estate and/or tax planning purposes and on a basis consistent with the Company’s lawful issue of securities.

 

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.  Notwithstanding clause (b) above but subject to compliance with all Applicable Laws, any contemplated transfer by gift to “immediate family” as referenced in clause (b) above is subject to the condition precedent that the transfer be approved by the Administrator in order for it to be effective.

 

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

 

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 or the share price of a Share, the Committee shall make such proportionate adjustments, if any, as the Committee in its discretion may deem appropriate to reflect such change with respect to (a) the aggregate number and type of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3.1); (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 provided that the exercise price per Share shall in no circumstances fall below the par value of such Share.

 

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 such 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 as determined by the Committee 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 (provided that the exercise price per Share shall in no circumstances fall below the par value of such Share).

 

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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, and 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 (the “Committee”) to whom the Board shall delegate the authority to grant or amend Awards to Participants other than any of the Committee members, Independent Directors and executive officers of the Company. Reference to the Committee shall refer to the Board in absence of the Committee. Notwithstanding the foregoing, the full Board, acting by majority of its members in office, shall conduct the general administration of the Plan if required by Applicable Laws, and with respect to Awards granted to the Committee members, Independent Directors and executive officers of the Company and for purposes of such Awards the term “Committee” as used in the Plan shall be deemed to refer to the Board.

 

10.2                        Action by the Committee.  A majority of the Committee shall constitute a quorum. The acts of a majority of the members present at any meeting at which a quorum is present, and acts approved unanimously in writing all members 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 a Group Entity, 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;

 

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(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 schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, and any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the 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;

 

(j)            amend terms and conditions of Award Agreements; and

 

(k)           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, including design and adopt from time to time new types of Awards that are in compliance with Applicable Laws.

 

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.

 

ARTICLE 11

 

EFFECTIVE AND EXPIRATION DATE

 

11.1                        Effective Date.  The Plan shall become effective as of the date on which the Board adopts the Plan or as otherwise specified by the Board when adopting the Plan (the “Effective Date”).

 

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

 

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ARTICLE 12

 

AMENDMENT, MODIFICATION, AND TERMINATION

 

12.1                        Amendment, Modification, and Termination.  At any time and from time to time, the Board may terminate, amend or modify the Plan; provided, however, that (a) to the extent necessary and desirable to comply with Applicable Laws or stock exchange rules, 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 Section 3.1(a)), 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.

 

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.

 

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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 relevant Group Entity.

 

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                        Expenses.  The expenses of administering the Plan shall be borne by the Group Entities.

 

13.8                        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.

 

13.9                        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.

 

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

 

13.11                 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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