Document:

Exhibit 4.59

 

Share Purchase Agreement

 

on

 

PARTICLE INC.

 

Between

 

PHOENIX NEW MEDIA LIMITED

 

and

 

Run Liang Tai Management Limited

 

March 22, 2019

 

 

Share Purchase Agreement

 

This Share Purchase Agreement (this “Agreement”) is executed on March 22, 2019 (the “Signing Date”) by and between:

 

(A)          PHOENIX NEW MEDIA LIMITED (the “Transferor”), an exempted company duly incorporated and validly existing in accordance with the law of Cayman Islands, having its registered address at the offices of Codan Trust Company (Cayman) Limited, Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands; and

 

(B)          Run Liang Tai Management Limited (the “Transferee”), a company duly incorporated and validly existing in accordance with the law of Hong Kong, having its registered address at Room D 10/F Tower A, Billion Centre, 1 Wang Kwong Road, Kowloon Bay, KL, HK.

 

Party A and Party B are collectively hereinafter referred to as both “Parties”, and individually as a “Party”.

 

Whereas,

 

(A)          Particle Inc. is an exempted company duly incorporated and validly existing in accordance with the law of Cayman Islands (the “Company”). As of the Signing Date of this Agreement, the authorized capital of the Company is US$ 200,000 divided into 2,000,000,000 shares with the par value of US$ 0.0001 per share, and its shareholding structure is set forth in Exhibit 1 hereto “I Company’s Shareholding Structure as of the Signing Date of this Agreement”. 37.63% shares of the Company are owned by the Transferor (calculated on a fully-diluted, as-if converted basis, including all share subscripion options and other convertible securities (if any), as well as the shares under the ESOP).

 

(B)          (i)The Transferor  intends to sell to the Transferee part of its shares of the Company (i.e. 32% shares in the Company, corresponding to 199,866,509 preferred shares in the Company, including 27,639,580 Series B preferred shares and 172,226,929 Series C preferred shares, hereinafter referred to as “Offshore Target Shares”), and (ii) the Domestic Transferor  (as defined below) designated by the Transferor  intends to sell to the Transferee’s designated party 37.169% equity in Yidian Technology (representing RMB 3,719,167 of the registered capital, hereinafter referred to as “Domestic Target Shares”, together with the Offshore Target Shares, the “Target Shares”). The Transferee intends to buy the Offshore Target Shares from the Transferor (“Offshore Shares Transfer”) pursuant to this Agreement, and the Transferee’s designated party intends to buy the Domestic Target Shares from the Domestic Transferor (“Domestic Equity Transfer”, together with the “Offshore Shares Tranfer”, the “Transaction”).

 

(C)        As of the Signing Date, the Transferor has received from the Transferee or its designated party the deposit of US$ 100,000,000 in full paid for the Transaction (the “Deposit”).

 

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Agreement

 

NOW THEREFORE, in consideration of the above premises, the mutual covenants and promises and other good and valuable considerations (the receipt and adequacy of which are hereby acknowledged) as agreed hereinafter, both Parties hereby reach this Agreement as below:

 

Clause 1        Definition and Interpretation

 

1.1        Definition. Except as otherwise specified in this Agreement, (I) the following capitalized terms and expressions shall have the meanings ascribed to them below:

 

This “Agreement” shall have the meaning defined in the preamble, including any amendment and supplementary agreements thereto (if any).

 

“Laws” shall mean any constitutions, statutes or other laws, rules, codes, regulations, statutory laws, treaties, decrees, ordinances, common laws or practice laws, orders, official policies, notices, provisions, administrative orders, interpretations, injunctions, judgments, rulings, writs or other legislative means, or other legally binding requirements of any governmental authorities, and any governmental orders.

 

“Business Day” shall mean any date other than Saturday and Sunday, and other dates on which commercial banks are permitted to close their businesses in accordance with applicable laws in China, Hong Kong or Cayman Islands.

 

“Affiliate” shall mean (1) in respect of any person (including corporate body, unincorporated entity or natural person), any other corporate bodies, unincorporated entities or natural persons directly or indirectly controlled by such person or controlling such person, or under common control with such person; for the avoidance of doubt, (2) in respect of a natural person, his/her spouse, children,  sibling, parents, or the parents of his/her spouse, and the trustee of any trust in favor of such natural person or his/her immediate family members as the beneficiary or target in full discretionary trust, or any entities or companies controlled by the aforegoing persons. The said “control” (or “controlled”) shall mean the power to directly or indirectly direct or procure others to direct the management or policy of a person, through voting rights, contract or otherwise, or other relationship constituting actual control in fact.

 

“Shareholders’ Agreement” shall mean the 8th Amended and Restated Shareholders’ Agreement executed by the Company, its all shareholders and other relevant parties on August 8, 2018.

 

“Group Companies” shall mean the Company and all entities directly or indirectly (including by means of agreement) invested or participated by it, including those entities as listed in Exhibit 1 “III Member List of Group Companies”.

 

“Domestic Transferor” shall mean Chen Ming, a natural person holding resident ID card of China (No. xxxx), and holding 43.75% equity in Yidian Technology (accounting for the registered capital of RMB 4,378,000) as the Signing Date of this Agreement.

 

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“USA” shall mean the United States of America.

 

“US$” shall mean the official currency of the United States of America.

 

“Common Shares” shall mean the common shares in the share capital of the Company with a par value of US$ 0.0001 each and with the rights, privileges and restrictions as specified in the Existing Articles of Association.

 

“RMB” shall mean the official currency of China.

 

“Tax” or “Taxation” shall mean (i) in the territory of China: (a) any national, provincial, municipal or local taxes, levies, surcharges, fees or assessments, including all net income taxes (including enterprise income tax and individual income tax withholding), turnover taxes (including VAT, business taxes and consumption taxes), withholdings, resource taxes (including urban land use taxes and education surcharges), real estate taxes (including urban real estate taxes and land use fees), filing taxes (including stamp duty and deed tax), recording fees, registration fees, social security contribution, customs duties (including import duties and import VAT), and any other estimated and temporary taxes, levies, surtaxes, fees or other assessments, (b) all interests or penalties (including administrative, civil or criminal penalties) charged from either party or additional amounts imposed by any governmental authorities in respect of any items as described in paragraph (a), and (c) any liability of the Transferee in any way imposed by any governmental authorities in respect of any items as described in paragraph (a) or (b); and (ii) in any other jurisdictions: any liabilities similar to those in paragraph (i).

 

“VIE Structure” shall mean the group structure by which the Group Companies incorporate Yidian Technology into the consolidated financial statements of the Group Companies, through the control agreements executed by Yidian Information with Yidian Technology (as defined below) and the shareholders of Yidian Technology.

 

“Existing Articles of Association” shall mean the 9th Amended and Restated Articles of Association adopted at the shareholders’ meeting of the Company on August 8, 2018.

 

“Yidian Technology” shall mean Beijing Yidian Wangju Technology Co., Ltd. Prior to Domestic Equity Transfer, the shareholding structure of Yidian Technology is set forth in Exhibit 2 hereto “I Shareholding Structure of Yidian Technology as of the Signing Date”.

 

“Yidian Information” shall mean Beijing Yidian Wangju Information Technology Co., Ltd.

 

“ESOP” shall mean the current Employee Stock Ownership Plan of the Company as defined in the Shareholders’ Agreement.

 

“Governmental Authorities” shall mean any governmental, legislative, administrative or regulatory authorities, judicial organs, arbitration institutions, mediation commissions, stock exchanges, securities registration and clearing companies, other  entities exercising the above powers and functions and relevant entities having jurisdiction over the Transaction (including any branches, departments or committees thereof), at the level of nation, region, province, state, county, city or otherwise.

 

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“Material Adverse Events” shall mean the following circumstances occurring or caused due to any reason existing prior to the date when the person recommended by the Transferee holds the position of CEO of Yidian Technology: (1) the telecommunication and information service business operation license (ICP license), internet news information service license, radio and TV program production and business operation license or internet culture operation license (among other licenses and permits) relating to the major business of the Group Companies fails to remain in full force and effect (for avoidance of doubt, its failure to be timely renewed or changed due to any reason attributable to the governmental authorities shall not constitute a Material Adverse Event) or is revoked by the competent governmental authority; (2) the Group Companies are investigated or punished by any competent governmental authorities, so that their major business has been suspended for more than one month or they are ordered to stop their business operation; or (3) any acts of the Group Companies in violation of laws or regulations are subject to administrative punishments by any competent governmental authorities, and in accordance with applicable laws and regulations or the requirements for examination and approval of securities offering or audit by governmental regulatory authorities (such requirements shall be based on the documents of governmental regulatory authorities), the said administrative punishments constitute substantial obstacles to IPO and listing of Yidian Technology (except for those circumstances in respect of the above Items (1), (2) or (3) already disclosed in writing by the Transferor to the Transferee prior to March 21, 2019.)

 

“China” shall mean the People’s Republic of China (for the purpose of this Agreement, excluding Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan).

 

“Assets” shall mean all tangible and intangible assets owned or used by the Company.

 

(II) The following terms and expressions shall have the meanings ascribed to them in the relevant clauses:

 

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Terms or expressions
    	
 
    	
Clauses
    
	
“Signing Date”
    	
 
    	
Preamble
    
	
“Agreement”
    	
 
    	
Preamble
    
	
“Transferor “
    	
 
    	
Preamble
    
	
“Transferee”
    	
 
    	
Preamble
    
	
“A Party” or “Both Parties”
    	
 
    	
Preamble
    
	
“Company”
    	
 
    	
Preamble
    
	
“Target Shares”
    	
 
    	
Preamble
    
	
“Offshore Target Shares”
    	
 
    	
Preamble
    
	
“Domestic Target Equity”
    	
 
    	
Preamble
    
	
“Offshore Shares Transfer”
    	
 
    	
Preamble
    
	
“Domestic Equity Transfer”
    	
 
    	
Preamble
    
	
“Transaction”
    	
 
    	
Preamble
    
	
“Deposit”
    	
 
    	
Preamble
    
	
“Transfer of Shares”
    	
 
    	
Clause 2.1
    
	
“Purchase Price of Offshore Target Shares”
    	
 
    	
Clause 2.2
    
	
“Purchase Price of Domestic Target Equity”
    	
 
    	
Clause 2.2
    
	
“Completion”
    	
 
    	
Clause 2.3
    
	
“Completion Date”
    	
 
    	
Clause 2.3
    
	
“Transferor’s Account”
    	
 
    	
Clause 2.3(1)
    
	
“Interests Accrued in Transferor’s Account”
    	
 
    	
Clause 2.3(1)
    
	
“Price Payable”
    	
 
    	
Clause 2.3(1)
    
	
“Phoenix TV”
    	
 
    	
Clause 2.4(1)
    
	
“SEHK”
    	
 
    	
Clause 2.4(1)
    
	
“Authorization Documents”
    	
 
    	
Clause 5.1
    
	
“Transitional Period”
    	
 
    	
Clause 5.2
    
	
“Basket Amount”
    	
 
    	
Clause 7.2
    
	
“Transferor’s Material Event of Default”
    	
 
    	
Clause 7.3
    
	
“Circular No. 7”
    	
 
    	
Clause 9
    

 

1.2               Interpretation.

 

For all purposes of this Agreement, except as otherwise specified, the following rules of interpretations shall apply:

 

(I)            Calculation of period. if any acts or measures must be done or taken before or after a certain period pursuant to this Agreement, the base date for calculation of such period shall not be included into such period. If the last date of such period is not a Business Day, such period shall end on the next Business Day.

 

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(II)       Exhibits. Any schedule, exhibit, appendix or attachment to this Agreement shall be incorporated into this Agreement, and constitute integral part of this Agreement.

 

(III)  Headings. This Agreement consist of several clauses, and the headings in this Agreement are inserted only for reference, and shall not be used to clarify or interpret the provisions of this Agreement. Except as otherwise specified, any clause referred to herein shall mean the clause to this Agreement.

 

(IV)   In this Agreement, except as otherwise specified, this “Agreement”, “herein”, “hereunder”, “hereinafter”, “hereof” or similar terms shall mean this Agreement as a whole, instead of the certain clause where such terms appear.

 

Clause 2. Purchase and Sale

 

2.1               Purchase and Sale of Target Shares.

 

Pursuant to the terms and conditions of this Agreement, the Transferor hereby sells to the Transferee the Offshore Target Shares and all rights and obligations pertaining thereto, and procure the Domestic Transferor to sell to the Transferee’s designated party the Domestic Target Equity and all rights and obligations pertaining thereto, and the Transferee hereby agrees to purchase from the Transferor the Offshore Target Shares and all rights and obligations pertaining thereto, and procure the Transferee’s designated party to purchase from the Domestic Transferor the Domestic Target Equity and all rights and obligations pertaining thereto (“Transfer of Shares”). After the Transfer of Shares, the shareholding structure of the Company is set forth in Exhibit 1 “II Shareholding Structure of the Company after Completion”, and the shareholding structure of Yidian Technology is set forth in Exhibit 2 “II Shareholding Structure of Yidian Technology after Transfer of Domestic Equity”.

 

2.2        Purchase Price. The purchase price of the Offshore Target Shares payable by the Transferee to the Transferor shall be US$ 448,000,000 (“Purchase Price of Offshore Target Shares”), and the purchase price of Domestic Target Equity shall be RMB 3,719,167 (“Purchase Price of Domestic Target Equity”).

 

2.3        Completion of Offshore Target Shares. Within 15 Business Days after all Completion conditions as specified in Clause 2.4 are satisfied or otherwise waived, both Parties shall, by e-mail document exchange and signature, remotely complete the sale and purchase of Offshore Target Shares, or complete the Completion at another time and in other ways as mutually agreed by the Transferor and the Transferee (“Completion”, and the date of Completion hereinafter referred to as the “Completion Date”). At the Completion:

 

(I)            The Transferee shall, by telegraphic transfer, pay to the bank account designated by the Transferor (“the Transferor’s Account”) an amount in US$ equal to the Purchase Price of Offshore Target Shares less the amount of Deposit and the interests thereon (i.e., the interests on the Deposit collected by the Transferor from the date of its receipt of such Deposit until the Completion date, as calculated pursuant to Clause 10.4, hereinafter referred to as “Interests Accrued in Transferor’s Account”) (“Price Payable”), and the Transferor  shall provide the said designated bank account to the Transferee no later than 3 Business Days prior to the Completion Date; upon the Transferor’s receipt of the full Price Payable, the Deposit and the Interests Accrued in Transferor ‘s Account shall be converted to a part of the Purchase Price.

 

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(II)       The Transferor shall procure that the Company, within 3 Business Days after receipt by the Transferor of the full Price Payable, provides the Transferee with the share certificate specifying the Offshore Target Shares purchased by the Transferee and the updated shareholder register of the Company (original or scanned copy).

 

In case the Transferee fails to pay the Price Payable pursuant to the preceding paragraph, it shall pay to the Transferor the liquidated damages calculated based on the Price Payable due but unpaid at the annual single rate of 15%, for each overdue day, until the actual payment of the Price Payable. If the Transferee fails to fully pay the Price Payable within a time limit separately agreed by both Parties through consultation, or both Parties fail to reach agreement upon extension of the time limit for payment of the Price Payable, without prejudice to other obligations of the Transferee under this Agreement and in accordance with applicable laws, the Transferor may immediately terminate this Agreement and the Transaction, and upon such termination, the Transferee shall immediately take all measures to assist the Company for deregistering and returning the relevant Offshore Target Shares registered in its name (if appropriate), including canceling the share certificates obtained by it and filing updated shareholder register of the Company, and registering the relevant Offshore Target Shares under the name of the Transferor.

 

2.4               Completion Conditions of Offshore Target Shares.

 

(I)            except as otherwise waived by the Transferee in writing, the Transferee’s obligation to pay the Purchase Price of Offshore Target Shares shall be subject to satisfaction of all of the following prerequisites:

 

(a)          The general meeting of shareholders of Phoenix Media Investment (Holdings) Limited (“Phoenix TV”) has reviewed and approved the Transaction;

 

(b)          Phoenix TV’s board of directors and the Transferor’s board of directors have reviewed and approved the Transaction;

 

(c)           Stock Exchange of Hong Kong Limited (“SEHK”) and other regulatory authorities relating to the Transaction (if appropriate) have reviewed and approved the public announcements and shareholders circulars relating to the Transaction issued by Phoenix TV;

 

(d)          Any approval, authorization or consent required for the Transfer of Offshore Shares as specified under the Existing Articles of Association, Shareholders’ Agreement and documents binding the Transferor and the Company have been obtained, including but not limited to consent and/or waiver of any rights restricting the Transfer of Offshore Shares, such as veto or co-sale right, issued by other shareholders of Group Companies in respect of transfer of Offshore Target Shares to the Transferee or its designated parties;

 

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(e)           In respect of accession by the Transferee or its designated parties to the Shareholders’ Agreement of the Company, the Company has, pursuant to Clause 15.6 of the Shareholders’ Agreement, executed the Deed of Adherence as Schedule H to the Shareholders’ Agreement, and delivered it to the Transferee or its designated party;

 

(f)            The arrangements for the Transitional Period as specified in Clause 5 hereof have been satisfied (for avoidance of doubt, this Clause 2.4(I)(f) shall constitute one prerequisite for the Transferee’s obligation to pay the Purchase Price, only if the Transferee has not breached the provisions of Clauses 5.1 and 5.2(I));

 

(g)           The Transferor has obtained the Fairness Opinion regarding the Transaction rendered by the independent appriaser engaged by it;

 

(h)          The persons recommended by the Transferee act as the CEO of Yidian Technology and the sole director of Particle (HK) Limited;

 

(i)              As of the Completion Date, the Group Companies continue to carry on their general businesses in all material respects, and there are no Material Adverse Events as proved by evidences in respect of their businesses, operation, licenses, assets and financial standing (for avoidance of doubt, “Material Adverse Events” as referred to in this Paragraph shall only mean those Material Adverse Events caused due to any reason occurring before the person recommended by the Transferee acts as the CEO of Yidian Technology); and

 

(j)             The Transferor has issued to the Transferee the Completion Confirmation (refer to Exhibit 4 hereto. For avoidance of doubt, the Transferee has no obligation to complete the Transaction if it is proved by evidences that any matters listed in the Completion Confirmation have not be satisfied).

 

(II)       Except as otherwise waived by the Transferor in writing, the Transferor ‘s obligation to transfer the Target Shares shall be subject to satisfaction of all of the following prerequisites:

 

(a)          The Completion conditions as described in Items (a) to (d) in Clause 2.4(I) have been satisfied (for avoidance of doubt, if any Completion conditions as described in Items (a) to (d) in Clause 2.4(I) fail to be satisfied, the Transferor  shall have no obligation to complete the Transaction, provided that it has performed its obligations pursuant this Agreement and failure of the said Completion conditions to be satisfied is not caused by any act or omission of the Transferor  or its affiliates.

 

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(b)          Each representations and warranties made by the Transferee under this Agreement are true, accurate and non-misleading, as if they were made on the Completion Date.

 

2.5        Domestic Equity Transfer. After Completion of Offshore Target Shares, the Transferor  shall procure that, the Domestic Transferor executes relevant agreement upon Domestic Equity Transfer pursuant to this Agreement within a reasonable time period as notified by the Transferee, so as to transfer the Domestic Target Equity to the Transferee’s designated party, and provides assistance for handling the relevant equity transfer or the procedures for registraion in equity transfer with the administration for industry and commerce in other ways mutually agreed by both Parties, so that the Domestic Transferor withdraws from Yidian Technology. After the procedures for registration in Domestic Equity Transfer with the administration for industry and commerce are completed, the Transferee’s designated party shall, pursuant to the provisions of relevant agreement, pay the Purchase Price of Domestic Target Equity to the Domestic Transferor or other parties mutually designated by both Parties in writing. After Domestic Equity Transfer, the shareholding structure of Yidian Technology is set forth in Exhibit 2 “II Shareholding Structure of Yidian Technology after Domestic Equity Transfer” hereto.

 

Clause 3. Representations and Warranties of the Transferor

 

The Transferor hereby makes the following representations and warranties to the Transferee, and ensure each representations and guarantees are true, accurate and non-misleading on the Signing Date and the Completion Date:

 

3.1          Incorporation and valid existence. The Transferor is a company duly incorporated and validly existing in accordance with the law of the jurisdiction where it was incorporated or established, and has full rights, powers and capacity to execute and perform its obligations and responsibilities under this Agreement.

 

3.2          Authorization. Except for the matters as specified in Items (a) to (d) of Clause 2.4(I), the execution, delivery and performance of this Agreement and consummation of the Transaction by the Transferor fall in the scope of its powers, authorization and capacity, and have been approved through all required corporate actions. This Agreement, after duly and validly executed and delivered by the Transferor, shall constitute its lawful, valid and binding obligations, and may be enforced against it pursuant to the provisions of this Agreement (subject to the applicable laws regarding bankruptcy, liquidation, malicious transfer of assets, reorganization or moratorium, or generally affecting creditors’ rights, and the equitable rules).

 

3.3          No violation. The execution, delivery and performance of this Agreement by the Transferor will not: (i) violate its articles of association, any resolutions of board of directors/shareholders or other constitutional documents; (ii) violate any provisions of laws applicable to the Transferor; (iii) require any consent or other actions by other entities under any contract to which the Transferor  is a party or any document by which it is bound, or constitute an event of default thereunder or grant the counterparty thereto any right to terminate; or (iv) violate any judgment, ruling, order or decision made by any courts, arbitration organs, governmental authorities or other institutions that have jurisdiction over the Transferor or its assets.

 

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3.4          Information disclosure. All information and materials relating to the transaction provided by the Transferor to the Transferee are true, accurate and non-misleading, and contain no false statements, major omission or misleading statements, and, to the knowledge of the Transferor, contain no facts that, once disclosed, would constitute material adverse effect upon execution or performance of this Agreement or materially change the original meanings of any provisions contained herein.

 

3.5          No injunction. (i) There are no interim directive, preliminary or permanent injunction or other judgments, orders or rulings rendered by any competent courts or any laws, orders, directives or decisions formulated, implemented, promulgated, put into force or applied by any governmental authorities, restricting or prohibiting the Transaction; (ii) except as specifically disclosed by the Transferor prior to March 21, 2019, to the knowledge of the Transferor, there are no injunctions, judgments, directives, rulings, laws, orders or decisions hindering or restricting the Group Companies carrying on their major business, before the person recommended by the Transferee acts as the CEO of Yidian Technology.

 

3.6          Ownership of the Target Shares.

 

(I)              Offshore Target Shares. Except for the arrangement in Clause 5 hereunder, until the date when the Offshore Target Shares are registered in the name of the Transferee, the Transferor is the registered owner of the Offshore Target Shares, and has full right, power and authorization required for sale of the Offshore Target Shares pursuant to this Agreement. In accordance with applicable laws, the Transferor has good, absolute and lawful ownership of the Offshore Target Shares, and the Offshore Target Shares are not subject to any valid pledge, charge, trust, custody, judicial seizure or any other encumbrance.

 

(II)         Domestic Target Equity. Except for the arrangement in Clause 5 and relevant VIE Structure agreements, until the date when the Domestic Transferor is no longer registered as Yidian Technology’s shareholder holding the Domestic Target Equity, the Domestic Transferor is the owner of the Domestic Target Equity, and has full right, power and authorization required for sale of the Domestic Target Equity pursuant to this Agreement. Except for in the circumstances as already disclosed by the Transferor to the Transferee prior to March 21, 2019 that the Domestic Transferor  pledges the Domestic Target Equity to Yidian Information pursuant to the relevant VIE Structure agreements, in accordance with applicable laws, the Domestic Transferor  has good, absolute and lawful ownership of the Domestic Target Equity, and the Domestic Target Equity is not subject to any valid pledge, charge, trust, custody, judicial seizure or any other encumbrances.

 

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3.7          Group Companies. The representations and warranties relating to Group Companies made by the Transferor are set forth in Exhibit 3.

 

Clause 4. Representations and Warranties of the Transferee

 

The Transferee hereby makes the following representations and warranties to the Transferor, and ensure each representations and warranties are true, accurate and non-misleading on the Signing Date and the Completion Date:

 

4.1          Incorporation and valid existence. The Transferee is a company duly incorporated and validly existing in accordance with the law of the jurisdiction where it was incorporated or established, and has full rights, powers and capacity to execute and perform its obligations and responsibilities under this Agreement.

 

4.2          Authorization. The execution, delivery and performance of this Agreement and consummation of the Transaction by the Transferee fall in the scope of its powers, authorization and capacity, and have been approved through all required corporate actions. After being duly and validly executed and delivered by the Transferee, this Agreement shall constitute its lawful, valid and binding obligations, and may be enforced against it pursuant to the provisions of this Agreement.

 

4.3          No violation. The execution, delivery and performance of this Agreement by the Transferee will not: (i) violate its articles of association, any resolutions of board of directors/shareholders or other constitutional documents; (ii) violate any provisions of laws applicable to the Transferee; (iii) require any consent or other actions by other entities under any contract to which the Transferee is a party or any document binding upon it, or constitute an event of default thereunder or grant the counterparty thereto any right to terminate; or (iv) violate any judgment, ruling, order or decision made by any courts, arbitration organs, governmental authorities or other institutions that have jurisdiction over the Transferee or its assets.

 

4.4          Adequate funds. The Transferee has adequate and lawful cash available to pay the Purchase Price payable pursuant to the terms and conditions of this Agreement.

 

Clause 5        Arrangements for Transitional Period

 

5.1          Authorization. On condition that the Transferee satisfies and maintains the undertakings in Clause 5.2 hereof, it is agreed and undertaken by the Transferor to, as from the Signing Date, authorize the Transferee to exercise the relevant rights and deliver formal authorization documents (“Authorization Documents”) to the Transferee within 2 Business Days after the Signing Date, so as to grant the Transferee the following rights within the Transitional Period (for avoidance of doubt, the Transferee shall not delegate such rights to any third party without consent from the Transferor ):

 

(I)              The Transferor, as the Company’s shareholder, and its designated party the Domestic Transferor , as Yidian Technology’s shareholder, authorize the Transferee to exercise all rights in the capacity of shareholder on their behalf in accordance with laws, the articles of association of the Company and Yidian Technology (if appropriate) and the Shareholders’ Agreement (if appropriate), among other legal documents; for avoidance of doubt, the said shareholder’s rights shall exclude: (a) financial rights, and (b) the Transferor’s rights under Section 14 of the Shareholders’ Agreement “Certain Adjustments to This Agreement” and Section 135 of the Existing Articles of Association “Certain Adjustments to These Articles”. Notwithstanding the foregoing, the Transferee shall notify the Transferor  in writing, before it exercises any rights of the Transferor under or relating to Section 8 of the Shareholders’ Agreement  “Protective Provisions” and Article 18 of the Existing Articles of Association “Protective Provisions” (other than the matters specified in Exhibit 5 “Authorization within the Transitional Period in Respect of Protective Provisions”),  and if the Transferor brings forward any objection thereto within 3 Business Days with reasonable cause, the Transferee shall not exercise the said rights unilaterally until both Parties reach agreement thereupon.

 

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(II)         The directors of the Group Companies appointed by the Transferor authorize the Transferee or its designated persons to act on their behalf to exercise all rights in the capacity of directors in accordance with laws, articles of association of the Company and the Shareholders’ Agreement, among other applicable legal documents.

 

In order to implement the said authorization, the Transferor shall exert its reasonable commercial efforts to take reasonable measures for cooperation and assistance, so that the Transferee may successfully exercise the said rights in the capacity of shareholder and director. For avoidance of doubt, within the Transitional Period, the Transferor  shall not exercise the abovementioned rights granted to the Transferee by itself, in particular the rights under or relating to Article 18 of the Existing Articles of Association “Protective Provisions”.

 

5.2          Undertakings within Transitional Period.

 

(I)              Within the period from the Signing Date to the Completion Date or the termination date of this Agreement (whichever is earlier) (“the Transitional Period”), the Transferee undertakes that:

 

(a)            It will exercise the rights in the capacity of shareholder and director to the extent necessary to complete the Transaction and/or ensure normal operation and development of the Group Companies;

 

(b)            It will not dispose or liquidate all or substantial equity or assets of the Group Companies without consent of the Transferor ; and

 

(c)             It will not do any acts that might prevent or adversely affect the timely and successful consummation of the Transaction.

 

(II)         Undertakings of the Transferor . Within the Transitional Period, upon request by the Transferee in writing, the Transferor shall exert reasonable commercial efforts to assist the relevant communication and preparatory work for dismantling VIE Structure of the Group Companies, and shall not interrupt or otherwise hinder the same. For avoidance of doubt, except as agreed by the Transferor in writing, neither Party may enter into any relevant transaction documents regarding dismantling VIE Structure of Group Companies within the Transitional Period.

 

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5.3          Notwithstanding the abovementioned undertakings of the Transferor , if: (i) the Transferee breaches its obligations under Clause 5.2 (I), or (ii) the Transferee fails to fully pay the Price Payable pursuant to Clause 2.3 hereof or within the time limit separately agreed by both Parties through consultation (if any), or both Parties fail to reach an agreement upon extension of the time limit for payment thereof, the consent, undertakings and authorization under Clauses 5.1 and 5.2 (II) and the Authorization Documents shall automatically terminate, in which case the Transferor  will not bear any liability for breach of contract therefor.

 

Clause 6.     Undertakings

 

6.1          Further assurances. To consummate or implement the Transaction, each Party shall, according to the reasonable requirements of the other Parties, exert its commercially reasonable efforts to take or do (or cause to be taken or done) further measures, and execute and deliver all other agreements, deeds, documents and instruments. The Transferor shall complete the matters under Clause 2.4 (I) that shall be performed by it, and undertakes to exert its commercially reasonable efforts to cause all Completion conditions as described in Clause 2.4 (I) to be satisfied as soon as possible after the Signing Date. Each Party shall, after the prerequisites for Completion for which it is responsible are satisfied, timely notify the other party and provide the other party with the relevant certificate proving such satisfaction of the prerequisites.

 

6.2          Revision. The Transferor agrees to, after the Completion Date, exert its commercially reasonable efforts to procure that the amended and restated Shareholders’ Agreement and the Company’s articles of association, to which the Transferee is a shareholder, are adopted at the shareholders’ meeting of the Company.

 

6.3          Appointment of directors. As of the payment in full by the Transferee to the Transferor of the Purchase Price of Offshore Target Shares and the Completion Date, the Transferee may appoint two new directors in place of two directors of the Company appointed by the Transferor, and may be entitled to three votes in total in accordance with the Company’s articles of association and Shareholders’ Agreement then in force. At the request of the Transferee, the Transferor shall provide assistance for the Transferee’s appointment of directors, including sending relevant notice of resignation/replacement of directors to the Company, and procuring the directors appointed by it to provide assistance for the Transferee’s appointment of directors (including submission of resignation report (if applicable)).

 

6.4          Domestic loan. It is agreed by the Transferor that, after the Completion Date and before the procedures for registration in Domestic Equity Transfer with the administration for industry and commerce are properly handled, the Transferor shall, within a reasonable time period confirmed by the Transferee or its designated party, procure Yidian Information to enter into a loan agreement with the Transferee’s designated party, whereby Yidian Information shall provide the loan of RMB 3,719,167 to the Transferee’s designated party, and shall procure Yidian Information to issue to the Transferee’s designated party relevant written document waiving the debts arising from such loan.  If Yidian Information fails to issue the said written document, which causes the Transferee or its designated party to bear the the relevant obligation of repayment, the Transferor shall indemnify the Transferee or its designated party from and against all losses suffered by the Transferee thereby (provided that the amount of such indemnity shall not exceed the loan of RMB 3,719,167 repayable by the Transferee or its designated party to Yidian Information.)

 

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Clause 7. Liability for Breach of Contract

 

7.1          Each Party shall properly perform its obligations pursuant to the provisions hereof. In case either Party breaches this Agreement, it shall bear the liability for breach of contract and indemnify the non-breaching party for all losses suffered by the non-breaching party.

 

7.2          Limitation on the Transferor ‘s liability. Notwithstanding the forgoing Clause 7.1 and subject to Clause 7.3, in respect of the Transferor’s liability for breach of contract to indemnify the Transferee for actual losses in connection with the Transaction pursuant to this Agreement, the Transferor shall not be held liable unless the total amount of damages exceed US$ 1,000,000 (“Basket Amount”). In case the damages exceed the Basket Amount, the Transferor shall fully indemnify the Transferee for relevant losses. For avoidance of doubt, the indemnity payable by the Transferor as specifically agreed in Clauses 6.4 and 8.2 (II) hereof shall not be subject to the Basket Amount as specified in this Clause 7.2.

 

7.3          Transferor ‘s indemnity for breach of contract. Notwithstanding the provisions of Clause 7.2, if the Transferor  and/or the Domestic Transferor is under any of the following circumstances: (i) the Transferor and/or the Domestic Transferor fails to execute the equity transfer agreement pursuant to Clause 2.5 or provide assistance for handling the procedures for registration in Domestic Equity Transfer with the administration for industry and commerce, so that the Transferee has not completed the registration in Domestic Equity Transfer with the administration for industry and commerce with 2 months after it has made the written request; (ii) on condition that the Transferee has performed the undertakings within the Transitional Period as agreed in Clause 5.2, the Transferor fails to perform the provisions on authorization under Clause 5.1, unless otherwise waived by the Transferee; (iii) any Completion conditions under Items (a), (b), (c) or (g) of Clause 2.4 (I) have not been satisfied due to the fault of the Transferor  or its affiliates, within 4 months after the Signing Date or the time period extended by both Parties in writing; (iv) the Transferor  fails to, pursuant to Clause 6.3 hereof, give to the Company the relevant notices of resignation/replacement of directors and cause the directors appointed by it to provide assistance for the Transferee’s appointment of directors, or (v) the Transferor materially breaches Clause 3 hereof (other than Clause 3.5 (i)) (each a “Transferor’s Material Event of  Default”), then, without prejudice to any other rights and remedies available to the Transferee pursuant to this Agreement, the Transferor shall pay to the Transferee the liquidated damages equal to 40% of the Deposit already paid by the Transferee or its designated party, and, if such liquidated damages cannot cover the losses suffered by the Transferee, the Transferor shall fully indemnify the Transferee, and in such case, the Transferee may terminate this Agreement pursuant to Clause 8.1 (V). Furthermore, without prejudice to any other rights and remedies available to the Transferee pursuant to this Agreement,  in case the Transferor fails to, pursuant to the provisions hereof, pay to the Transferee any amounts payable by it (i.e., the Deposit and interests thereon refundable, and any indemnity and liquidated damages payable by it pursuant to the provisions contained herein),  it shall pay to the Transferee the penalty interests on such amount payable but unpaid at the annual single rate of 15%, for each overdue day, until the actual payment of such amount, provided that the payment of such penalty interests shall be awarded by the competent arbitration tribunal.

 

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For avoidance of doubt, without prejudice to any other rights and remedies available to the Transferee pursuant to this Agreement, in respect of the Completion conditions agreed in Items (a) to (c) of Clause 2.4 (I) hereof, the Transferee may require the Transferor to take commercially reasonable remedial measures or implement relevant practicable procedures, subject to the rules of competent governmental authorities or the stock exchange.

 

Clause 8. Termination

 

8.1          Termination of this Agreement. This Agreement and the Transaction may be terminated under any of the following circumstances:

 

(I)              Both Parties agree in writing to terminate this Agreement;

 

(II)         If the Transferee fails to fully pay the Price Payable pursuant to Clause 2.3 hereof (that is, the Transferee fails to fully pay the Price Payable by the Completion Date or within a time limit (if any) separately agreed by both Parties through consultation, or both Parties fail to reach agreement upon extension of the time limit for payment of the Price Payable) or breaches the undertakings within the Transitional Period in Clause 5.2 hereof, the Transferor may terminate this Agreement by giving a written notice to the Transferee;

 

(III)    If any prerequisite for Completion under Clause 2.4 (I) has not been properly satisfied or waived by the Transferee in writing, within 4 months after the Signing Date or an extended time period as agreed by both Parties in writing (if the prerequisite for Completion under Item (c) of Clause 2.4 (I) has not been properly satisfied within 4 months after the Signing Date due to the procedures for examination and approval by SEHK, both Parties agree to extend it by a reasonable time period of not less than 10 Business Days), the Transferee may terminate this Agreement and the Transaction by giving a written notice to the Transferor ;

 

(IV)     If any prerequisite for Completion under Clause 2.4 (II) has not been properly satisfied or waived by the Transferor in writing, within 4 months after the Signing Date or an extended time period as agreed by both Parties in writing, the Transferor may terminate this Agreement and the Transaction by giving a written notice to the Transferee, except any prerequisite for Completion under Clause 2.4 (II) has not been properly satisfied due to any act or omission of the Transferor  or its affiliates; or

 

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(V)          The Transferee may terminate this Agreement by giving a written notice to the Transferor, in case of occurrence of any Transferor ‘s Material Event of Default that is not rectified within a reasonable time period designated by the Transferee in writing.

 

8.2          Treatment of Deposit upon Termination.

 

(I)              Other than the circumstances as described in Clause 8.2 (II), if the Transferee elects to terminate this Agreement pursuant to Clause 8.1 (III), the Transferor  shall, within 5 Business Days after its receipt of the written notice given by the Transferee, refund the Deposit already paid by the Transferee or its designated party and the interests thereon (calculated from the date of the Transferee’s payment of the Deposit until the date of the Transferor’s refund thereof, pursuant to Clause 10.4);

 

(II)         (A) If any Completion conditions under Items (a), (b) or (g) of Clause 2.4 (I) have not been satisfied within 4 months after the Signing Date or the time period extended by both Parties in writing, the Transferee elects to terminate this Agreement pursuant to Clause 8.1 (III); or (B) if any Completion conditions under Items (a) and (b) of Clause 2.4 (I), as agreed in Item (a) of Clause 2.4 (II), have not been satisfied within 4 months after the Signing Date or the time period extended by both Parties in writing, the Transferor elects to terminate this Agreement pursuant to Clause 8.1 (IV), then upon termination of this Agreement, the Transferor shall, within 5 Business Days according to the demand of the Transferee, refund the Deposit already paid by the Transferee or its designated party and the interests thereon (calculated from the date of the Transferee’s payment of the Deposit until the date of the Transferor ‘s refund thereof, pursuant to Clause 10.4), and additionally pay to the Transferee an amount of indemnity.  The said indemnity under this Clause 8.2 (II) shall be calculated as below:

 

Amount of indemnity = amount of Deposit already paid by the Transferee to the Transferor * [6%/365]* (the number of days elapsed from the date of the Transferee’s payment of the Deposit until the date of the Transferor’s refund of the Deposit and payment of the indemnity).

 

For avoidance of doubt, termination of this Agreement due to the Transferor’s Material Event of Default shall be governed by Clause 8.2 (III), instead of Clause 8.2 (II).

 

(III)    If the Transferee elects to terminate this Agreement pursuant to Clause 8.1 (V), in case of occurrence of the Transferor’s Material Event of Default, the Transferor  shall, within 5 Business Days after its receipt of the written notice given by the Transferee, refund the Deposit already paid by the Transferee or its designated party and the interests thereon (calculated from the date of the Transferee’s payment of the Deposit until the date of the Transferor ‘s refund thereof, pursuant to Clause 10.4), and additionally pay to the Transferee the liquidated damages pursuant to Clause 7.3;

 

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(IV)     Other than the circumstances as described in Clause 8.2 (III), if the Transferor  unilaterally elects to terminate this Agreement and the Transaction (for avoidance of doubt, other than termination by the Transferor pursuant to Clause 8.1 (II) or 8.1 (IV)), the Transferor shall, within 5 Business Days according to the demand of the Transferee, refund the Deposit already paid by the Transferee or its designated party and the interests thereon (calculated from the date of the Transferee’s payment of the Deposit until the date of the Transferor ‘s refund thereof, pursuant to Clause 10.4), and additionally pay to the Transferee the liquidated damages equal to 40% of the said Deposit paid.

 

It is acknowledged by both Parties, except for the above circumstances in this Clause, the Transferor will not refund any Deposit already paid by the Transferee or its designated party and any Interests Accrued in Transferor’s Account, and, if the Deposit cannot cover the losses suffered by the Transferor due to default of the Transferee, the Transferee shall further fully indemnify the Transferor.

 

8.3          Effect of Termination. In case of termination of this Agreement pursuant to Clause 8, this Agreement shall become null and void, provided that: (i) Clause 8.3 and Clause 10 shall continue in full force and effect upon termination of this Agreement for any reason; and (ii) both Parties shall immediately take and implement (or cause to be taken and implemented) all further measures, and execute and deliver all other agreements and documents, so as to cancel the part of the Transaction that already occurred, including but not limited to cancellation of the share certificate specifying the Target Shares held by the Transferee (if appropriate) and change to the shareholder register. In addition, both Parties shall cooperate with each other in good faith, to apply to the competent taxation authorities for refund of the taxes already paid in connection with the cancelled part of the Transaction, provided that, the Transferee only exerts its commercially reasonable efforts to perform its obligation of such cooperation (if applicable). For avoidance of doubt, no liabilities of either Party arising out of its breach of this Agreement or any misrepresentation hereunder prior to termination of this Agreement (including the liabilities under Clauses 2.3, 7.3 and 8.2) may be released or exempted.

 

Clause 9.     Tax

 

It is acknowledged by both Parties that each Party shall respectively bear any taxes and fees payable by it in connection with the Transaction, and perform relevant statutory obligations in accordance with applicable laws, including the taxes payable under of the Announcement on Several Issues concerning the Enterprise Income Tax on Income from the Indirect Transfer of Assets by Non-Resident Enterprises (“Circular No. 7”). It is further acknowledged and agreed by both Parties, in respect of any taxes payable under Circular No.  7, the Transferor shall perform the obligation of filing the tax return. Except as specifically stipulated by law, the Transferee shall not withhold and pay any taxes for the account of the Transferor, without the prior written consent of the Transferor.

 

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Clause 10.                          Miscellaneous

 

10.1   Binding force. This Agreement shall be formed and become effective on the date of its execution by both Parties, and shall be binding upon each party and its successors and assigns; provided that, without consent by the other party, neither party may assign, delegate or otherwise transfer its rights and obligations hereunder. For avoidance of doubt, notwithstanding the forgoing, the Transferee may, by giving a prior written notice to the Transferor, transfer to its designated partys its rights and obligations hereunder (provided that such designated party shall meet the requirements for the representations and warranties of the Transferee under Clause 4, and shall not be competitors of connected persons (as defined under listing rules of Hong Kong) of the Transferor or Phoenix TV or the group companies, and the Transferee shall exert its commercially reasonable efforts to cause its designated party to meet the requirements for the transferee of Target Shares under the documents binding the Transferor and the Company), and the said designated partys shall agree to succeed to the rights and obligations of the Transferee hereunder, by executing written documents.

 

10.2   Confidentiality. Unless required to be disclosed in accordance with compulsory requirements of applicable laws and regulations or SEHK or its listing rules, each Party shall (and procure it affiliates) exert its best efforts to procure that its officers, directors, employees, auditors, attorneys, consultants and agents keep confidential any confidential documents and information relating to the transaction, other than the following information that:(i) is obtained without the obligation of confidentiality; (ii) becomes public, on condition that the disclosing party has no fault; (iii) is disclosed to its affiliates, consultants or investors (including the fund manager, limited partner and consultants of the investors); and (iv) is required to be disclosed according to the compulsory requirements of governmental departments or other authorities having jurisdiction over either party. Before either party is required to disclose any confidential information abovementioned in accordance with compulsory requirements of laws and/or governmental departments or other authorities having jurisdiction over it, both Parties shall reasonably discuss the scope and method of such disclosure.

 

10.3   Expenses. Unless agreed otherwise in this Agreement, each Party shall pay its all costs and expenses arising out of negotiation and preparation of this Agreement, any other proposed agreements in this Agreement, performance of such agreements or compliance with various conditions of such agreements, including various fees, costs and expenses for engaging any attorneys and/or accountants.

 

10.4   Interests. Unless otherwise specifically agreed in this Agreement, the interests agreed hereunder shall be calculated at the following rate:

 

(I)              If the Transferor has arranged the Deposit received by it as a time deposit and provided the certificate of time deposit to the Transferee on the Completion Date, at the rate specified in such certificate of time deposit; or

 

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(II)         If the Transferor fails to provide the certificate of time deposit, or has not arranged the Deposit received by it as a time deposit, or the certificate provided by it does not specify the interest rate of time deposit, at the rate of 3-month time deposit for corresponding period issued by the People’s Bank of China.

 

10.5   Applicable Law. This Agreement shall be governed by and interpreted in accordance with the law of Hong Kong, without regard to its conflict of law rules.

 

10.6   Dispute Resolution. Any dispute, controversy or claim arising out of or in connection with this Agreement, including validity, invalidity, breach or termination, shall be submitted to Hong Kong International Arbitration Centre for arbitration in Hong Kong in according with the arbitration rules of Hong Kong International Arbitration Centre in effect at the time of applying for arbitration. The arbitration tribunal shall be composed of three arbitrators, among whom, one is appointed by the Transferee, another is appointed by the Transferor, and the third one is jointly selected by the said two arbitrators. The arbitration proceedings shall be conducted in Chinese. Any arbitration award shall be final, and may be enforced by any competent courts having jurisdiction. The arbitral award shall allocate the arbitration fees and expenses. Both Parties shall continue to duly and timely perform their respective obligations hereunder, until the arbitration award is rendered. Notwithstanding anything to the contrary in this Agreement, this Clause 10.6 shall not preclude the rights of either Party to seek specific performance, injunction and/or interim remedies from competent courts, to facilitate the arbitration, or before the arbitration tribunal is formed or the arbitration tribunal has not rendered a decision on the dispute, controversy or claim concerned.

 

10.7   Language. This Agreement shall be made and executed in Chinese.

 

10.8   Revision. Except as otherwise agreed in this Agreement, this Agreement shall not be revised, supplemented, changed, waived, cancelled, modified or terminated, unless a written document is executed by both Parties.

 

10.9   Waiver. waiver by either Party of any of its rights under any provisions hereof shall be made in writing and become effective after being signed by such Party. No waiver by either Party of any breach of any provisions contained herein shall operate as waiver of any previous or subsequent breach; no failure by either Party to exercise its any rights or privileges hereunder shall constitute waiver of rights or privileges hereunder, or waiver of exercise of such rights or privileges at any time subsequently.

 

10.10 Notice. Any notices, claims, certificates, demands, requests and other communications sent hereunder shall be made in writing, and given by e-mail, personal delivery, fax or prepaid and recognized overnight courier service to the following addresses. Any notice shall be deemed to have been duly given at the time of transmission or personal delivery, if by e-mail or personal delivery, or upon receipt of the confirmation of successful transmission if by fax, or 2 Business Days after posting or delivery to the courier if by overnight courier service.

 

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Transferor:

 

Contact person: Liu Shuang

 

Address: Floor 16, Zhongqing Mansion, No.4 Qiyang Road, Wangjing, Chaoyang District, Beijing

 

Email: xxxxxx@ifeng.com

 

Telephone: 010-6067xxxx

 

Transferee:

 

Contact person: Wang Lan

 

Address: Room 1006, floor 10, building A, No. 868 Yinghua Road, Pudong New Area, Shanghai

 

E-mail: xxxx@chinafusioncapital.com

 

Telephone: 021-8031xxxx

 

10.11 Severability. In case any provisions contained herein are invalid, illegal or unenforceable in accordance with applicable laws or public policies, if the financial or legal substance of the proposed Transaction hereunder is not affected in an way and it is not materially adverse to either party, the remaining provisions of this Agreement shall remain in full force and effect. After any provisions hereof are held invalid, illegal or enforceable, both Parties shall, in good faith, revise this Agreement through consultation, so as to, as practicable as possible, realize the original intent of both Parties in an acceptable way and consummate the Transaction according to the original intent.

 

10.12 Entire Agreement. This Agreement shall constitute the entire and sole agreement between both Parties in respect of the subject matter as contemplated hereby, and shall supersede all oral or written agreements, contracts, understandings and communications regarding this Agreement, the Transaction and Target Shares in any respect between both Parties, and such agreements, contracts, understandings and communications shall be void ab initio, and not legally binding.

 

10.13 Counterparts. This Agreement may be executed in one or several counterparts, each of which shall be deemed as original, but all of which shall together constitute the same document.

 

[The remainder of this page is intentionally left blank, and the page for execution follows]

 

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IN WITNESS WHEREOF, both Parties have caused this Agreement to be executed by their duly authorized representatives on the date first above written.

 

 

	
 
    	
Transferor :
    
	
 
    	
 
    
	
 
    	
PHOENIX   NEW MEDIA LIMITED
    
	
 
    	
 
    
	
 
    	
By:
    
	
 
    	
 
    
	
 
    	
Name: Betty Yip Ho
    
	
 
    	
 
    
	
 
    	
Title:
    

 

SPA-Signature Page

 

 

IN WITNESS WHEREOF, both Parties have caused this Agreement to be executed by their duly authorized representatives on the date first above written.

 

 

	
 
    	
Transferee:
    
	
 
    	
 
    
	
 
    	
Run   Liang Tai Management Limited
    
	
 
    	
 
    
	
 
    	
By:
    
	
 
    	
 
    
	
 
    	
Name: Yang Yuxiang
    
	
 
    	
 
    
	
 
    	
Title:
    

 

SPA-Signature Page

 

 

Exhibit 1 Shareholding Strucutre of the Company

 

Exhibit 2 Shareholding Structure of Yidian Technology

 

SPA-Exhibit

 

 

Exhibit 3 Representations and Warranties Relating to Group Companies

 

1.              To the knowledge of the Transferor, the information on the shareholding in the Group Companies (other than Particle Media Inc.) as disclosed in Exhibits 1 and 2 are true, accurate and non-misleading. To the knowledge of the Transferor, except for the information specified in Exhibits 1 and 2 and the special arrangement for management equity in Yidian Technology, the Group Companies (other than Particle Media Inc.) have no options or other rights outstanding (including but not limited preemptive right, right to participate and right of conversion), or any outstanding interests, securities, circumstances or arrangement enabling any person to subscribe for, purchase or otherwise obtain from the Group Companies any equity, interests of equity nature or any interests convertible or exchangeable to equity.

 

2.              To the knowledge of the Transferor and except as already specifically disclosed by the Transferor in writing prior to March 21, 2019, the registered capital of the Group Companies (other than Particle Media Inc.) have been duly issued, approved by internal corporate power bodies and governmental authorities, and been filed or registered with all governmental authorities if required, and all payments of registered capital of the Group Companies comply with applicable laws and articles of association.

 

3.              The Group Companies continue to carry on operation in ordinary course of business, from the deadline date of the Transferee’s due diligence (September 2, 2018) until the date when the persons recommended by the Transferee become as the CEO of Yidian Technology and sole director of Particle (HK) Limited.

 

4.              As of the date when the person recommended by the Transferee becomes the CEO of Yidian Technology, (a) other than the license of audio-visual programs transmitted over information network and license of network publishing services, the Group Companies have obtained all major qualification, licenses, permits, registration, filing, consent, authorization or other approvals required for major business in accordance with applicable laws, regulations and industry policies; (b) there do not exist: (i) circumstances that would cause such qualifications, licenses, permits, registrations, filings, consents, authorizations or other approvals to become invalid, be cancelled or unable to be maintained in full force; and (ii) Material Adverse Events other than those specifically disclosed by the Transferor in writing prior to March 21, 2019, or events, conditions or circumstances that would cause occurrence of Material Adverse Events.

 

SPA-Exhibit

 

 

Exhibit 4 Completion Confirmation

 

[The remainder of this page is intentionally left blank, and the execution page follows]

 

SPA-Exhibit

 

 

IN WITNESS WHEREOF, PHOENIX NEW MEDIA LIMITED has caused this Confirmation to be executed by its duly authorized representatives on the date first above written.

 

 

	
 
    	
Transferor :
    
	
 
    	
 
    
	
 
    	
PHOENIX   NEW MEDIA LIMITED
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

SPA-Exhibit

 

 

Exhibit 5 Authorization within the Transitional Period in Respect of Protective Provisions

 

SPA-ExhibitExhibit 4.60

 

EFFECTIVE DATE: March 15, 2018

 

FREAD LIMITED

 

 

RULES OF THE 

RESTRICTED SHARE UNIT SCHEME

 

 

 

FREAD LIMITED

 

RULES OF THE RESTRICTED SHARE UNIT SCHEME

 

1                      PURPOSE OF THE SCHEME

 

The purpose of the Scheme is to recognize the contribution or potential contribution of executives, employees and directors of the Company and/or any Affiliate (as defined below) by granting Awards (as defined below) to them as incentives or rewards.

 

The Administrative Committee (as defined below) may grant Restricted Share Units (as defined below) in such amounts and subject to such terms and conditions as the Administrative Committee may determine. An Award of Restricted Share Unit(s) shall consist of a promise of the Company to issue or deliver one or more Share(s) on a specified date for the provision of services (subject to such minimum payment as may be required by applicable law unless such is paid by the Company) or for such other consideration as the Administrative Committee may specify in connection with the grant subject to the terms of this Scheme and of the Award (if any), provided that no share of the Company underlying any Restricted Share Unit(s) may be issued below the par value of such shares of the Company.

 

2                      DEFINITIONS AND INTERPRETATION

 

2.1                In these rules, unless the context otherwise requires, the following words and expressions shall have the respective meanings set out opposite them:

 

	
“Administrative   Committee”
    	
 
    	
The committee authorized by the board of Directors   of the Phoenix New Media Limited to administer the operation of the Scheme;
    
	
 
    	
 
    	
 
    
	
“Affiliate”
    	
 
    	
any company which is (a) a holding company of   the Company; or (b) a subsidiary of a holding company of the Company; or   (c) a subsidiary of the Company; or (d) a controlling shareholder   of the Company; or (e) a company controlled by a controlling shareholder   of the Company; or (f) a company controlled by the Company;
    
	
 
    	
 
    	
 
    
	
“Award”
    	
 
    	
Restricted Share Units granted pursuant to the terms   of the Scheme to an Eligible Person;
    
	
 
    	
 
    	
 
    
	
“Award Holder”
    	
 
    	
a person holding an Award;
    
	
 
    	
 
    	
 
    
	
“Board”
    	
 
    	
the board of Directors for the time being or a duly   authorized committee thereof;
    
	
 
    	
 
    	
 
    
	
“business day”
    	
 
    	
a day on which business is generally open in the   PRC;
    

 

1

 

	
“Common Share(s)”
    	
 
    	
means ordinary share(s) of US$0.01 each (or   such other amount as such ordinary share(s) may be divided or   consolidated or converted into) of the Company;
    
	
 
    	
 
    	
 
    
	
“Companies Law”
    	
 
    	
the Companies Law, Cap 22 (Law 3 of 1961, as   consolidated and revised) of the Cayman Islands;
    
	
 
    	
 
    	
 
    
	
“Company”
    	
 
    	
Fread Limited, a company incorporated in the Cayman   Islands;
    
	
 
    	
 
    	
 
    
	
“Directors”
    	
 
    	
the directors of the Company from time to time;
    
	
 
    	
 
    	
 
    
	
“Effective Date”
    	
 
    	
the date on which the Scheme is adopted by an   ordinary resolution;
    
	
 
    	
 
    	
 
    
	
“Eligible Person”
    	
 
    	
any executive, employee or director of the Company   or any Affiliate;
    
	
 
    	
 
    	
 
    
	
“Group”
    	
 
    	
Phoenix and its subsidiaries;
    
	
 
    	
 
    	
 
    
	
“Hong Kong”
    	
 
    	
the Hong Kong Special Administrative Region of the   PRC;
    
	
 
    	
 
    	
 
    
	
“Offer”
    	
 
    	
an offer to grant an Award made in accordance with   Rule 3.1;
    
	
 
    	
 
    	
 
    
	
“Period of Restriction”
    	
 
    	
shall have the meaning ascribed to it in   Rule 3.6;
    
	
 
    	
 
    	
 
    
	
“Phoenix”
    	
 
    	
Phoenix New Media Limited, an exempted company   incorporated in the Cayman Islands;
    
	
 
    	
 
    	
 
    
	
“PRC”
    	
 
    	
the People’s Republic of China, which shall exclude   Hong Kong, the Macau Special Administrative Region and Taiwan;
    
	
 
    	
 
    	
 
    
	
“Relevant Event”
    	
 
    	
any variation in the share capital of the Company   arising from any reduction, sub-division or consolidation of shares, any   rights issue or the issue of any shares (including any securities convertible   into shares or warrants or options to subscribe for any shares but excluding   any share option, restrictive share unit granted pursuant to any share   option or restricted share unit scheme of the Company) by way of   capitalization of profits or reserves or in connection with an offer   made pro rata to the Shareholders except where shares are issued as   consideration or part consideration in a transaction;
    

 

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“Restricted Share Unit”
    	
 
    	
an unsecured promise of the Company to issue and   deliver a Common Share on a specified date, which unit is subject to   applicable vesting, transfer, forfeiture and such other restrictions as   provided hereunder and, if applicable, in the letter of grant of such unit;
    
	
 
    	
 
    	
 
    
	
“Scheme”
    	
 
    	
means this equity incentive scheme, as amended from   time to time;
    
	
 
    	
 
    	
 
    
	
“Scheme Period”
    	
 
    	
the period commencing on the Effective Date and   expiring at the close of business on the business day immediately preceding   the tenth anniversary thereof;
    
	
 
    	
 
    	
 
    
	
“Shareholder”
    	
 
    	
the registered holder of issued Common Share(s) from   time to time;
    
	
 
    	
 
    	
 
    
	
“US$”
    	
 
    	
United States dollars.
    

 

2.2                       References to the singular include the plural, references to any one gender include every gender, references to persons include bodies corporate and unincorporated; and (in each case) vice versa.

 

2.3                       References to these rules are to the rules constituting the Scheme.

 

2.4                       Headings used in these rules are for convenience only and shall not affect their interpretation.

 

3                      OFFER OR GRANT OF AWARDS

 

3.1                     Subject to these rules, the Administrative Committee may during the Scheme Period at its absolute discretion (subject to any terms and conditions as it may think fit) make an Offer (in such form as the Administrative Committee may from time to time determine but which shall in any event be in writing) or grant of Awards to an Eligible Person. The eligibility of the Eligible Persons is determined by the Administrative Committee with reference to the Eligible Persons’ past and expected commitment and contribution to the Company and/or the Affiliates.

 

3.2                     Any proposed Offer or grant of Awards to a director (including an independent non-executive director), chief executive or substantial shareholder of Phoenix or any subsidiary thereof, for so long as the Company remains a subsidiary of Phoenix, must be approved by all independent non-executive directors of Phoenix (excluding any independent non-executive director of Phoenix who is proposed to be a grantee of such Awards).

 

3.3                     Unless the shareholders of the Company shall otherwise approve, the sum of the total number of Common Shares which may be issued upon vesting of all Restricted Share Units which may be issued under the Scheme shall not in aggregate exceed 2,000,000 Common Shares (the “Limit”) . Provided that all Awards that have lapsed or been cancelled (including those having lapsed by way of forfeiture) shall be added back to the Awards that are pending to be granted.

 

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3.4                     Notwithstanding any provisions provided in this Scheme and subject to compliance with the Companies Law and the Articles of Association of the Company, the Board may resolve to capitalize any sum for the time being standing to the credit of any of the reserve accounts, share premium account or to the credit of the retained earnings or profit and loss account or funds legally available by applying such sum in paying up unissued Common Shares to be awarded to Eligible Persons.

 

4                      ACCEPTANCE OF OFFERS OF AWARDS

 

4.1                     An Offer may be accepted in whole or in part by an Eligible Person returning to the secretary of the Company, by 5:00 p.m. on the date specified in the Offer as the latest date for acceptance, the duplicate of the Offer document or other instrument in writing, duly signed by the Eligible Person.  Once accepted, an Award for Restricted Shares Units shall be deemed to have been granted from the date on which it was accepted by the relevant Eligible Person. The Administrative Committee may (but shall not be obliged to) issue Award certificates to Award Holders in such form as they may determine from time to time.

 

4.2                     All Offers and Awards shall be personal to the person to whom it was made or granted and shall not be transferable or assignable and no Eligible Person to whom an Offer was made or Award Holder shall sell, transfer, charge, mortgage, encumber or create any interest whatsoever in favor of any third party over or in relation to any Offer or Award or enter into any agreement so to do; provided, however, that the Administrative Committee may, in its discretion and subject to such terms and conditions as it shall specify, permit the transfer of an Award for no consideration to an Eligible Person’s family members or to one or more trusts or partnerships established in whole or in part for the benefit of one or more of such family members (collectively, “Permitted Transferees”). Any Award transferred to a Permitted Transferee shall be further transferable only by will or the laws of descent and distribution or, for no consideration, to another Permitted Transferee of the Eligible Person. The Company will be deemed to have withdrawn any Offer made to an Eligible Person upon any breach of the foregoing.  All outstanding unvested Awards granted to an Award Holder or vested Awards granted to an Award Holder but pursuant to which Common Shares have not yet been issued shall lapse upon any breach by him of the foregoing.

 

4.3                     Offers not accepted within the period for acceptance specified in the Offer shall lapse.

 

5                      VESTING OF AWARDS

 

5.1                     Awards granted under the Scheme shall be subject to the following vesting schedule, unless otherwise provided in the terms of the Awards granted: in respect of new grants, the starting date shall be determined by the Administrative Committee based on the employment starting date of the grantee. The Period of Restriction of Restricted Share Units is four years, and Restricted Share Units shall vest 25% after the first year, and vest 12.5% upon every six-month anniversary thereafter.

 

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5.2                     Within a reasonable time after the vesting criteria and conditions have been fulfilled, satisfied or waived, the Administrative Committee shall send a vesting notice to the relevant Award Holder. Such notice will confirm the extent to which the vesting criteria and conditions have been fulfilled, satisfied or waived, and the number of Common Shares the relevant Award Holder will receive.

 

Unless otherwise agreed between the Company and the Award Holder, Common Shares in respect of a vested Restricted Share Unit shall be allotted and issued and credited as fully paid by the Company using reasonable efforts but in any event within 30 days of the date upon which a Restricted Share Unit has vested.

 

5.3                      The Award Holder shall be solely liable to pay all taxes and other levies which may be assessed or assessable on any payments made by the Company hereunder and/or relating to the vesting of an Award and the issuance or repurchase of Common Shares hereunder.  All payments required to be made hereunder by the Company shall be subject to the deduction or withholding of such amounts as the Administrative Committee may reasonably determine is necessary or desirable by reason of any liability to tax or obligation to account for tax or loss of any relief from tax which may fall on the Group in respect of, or by reason of such payment or the vesting, issuing or repurchase of the relevant Award or Common Shares hereunder, and the Award Holder agrees to indemnify and keep the Company (for itself and as trustee for other companies within the Group) indemnified in respect of any such liability, obligation or loss and accepts that any claim in respect of such indemnity may be satisfied by set-off against any sums due from the Group to such Award Holder from time to time.

 

5.4                     For the avoidance of doubt, no Award Holder will be entitled to any voting rights in respect of Common Shares issued upon the vesting of a Restricted Share Unit until the Award Holder’s name is entered in the register of members of the Company as holder of such Common Shares.

 

5.5                     The Common Shares to be allotted and issued upon the vesting of a Restricted Share Unit will rank pari passu with the fully paid Common Shares in issue and, subject as aforesaid, accordingly will entitle the relevant Award Holder to participate in all dividends or other distributions paid or made on or after the date when such Award Holder’s name is entered in the register of members of the Company as holder of such Common Shares. For the avoidance of doubt, such entitlement to participate in all dividends or other distributions paid or made shall not include the entitlement to participate in any dividend or other distributions previously declared or recommended or resolved to be paid or made if the record date therefor shall be before the date when such Award Holder’s name is entered in the register of members of the Company as holder of such Common Shares.

 

5.6                     If an Award Holder ceases to be an Eligible Person:

 

(a)                                 by reason of ill-health, injury, disability or death (all evidenced to the satisfaction of the Administrative Committee), then in the case of Restricted Share Units, any outstanding and unvested Offer and Restricted Share Unit granted to him shall lapse and all his Restricted Share Units (to the extent vested but Common Shares under which have not already been issued) up to his entitlement at the date of such ill health, injury, disability, death or cessation shall be issued to him or (as the case may be) his personal representative(s) pursuant to the Rules hereunder;

 

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(b)                                 by reason of retirement in accordance with his contract of employment or upon expiration of his term of directorship, then in the case of Restricted Share Units, any outstanding and unvested Offer and Restricted Share Unit granted to him shall lapse and all his Awards (to the extent vested but Common Shares under which have not already been issued) up to his entitlement at the date of such retirement or expiration shall be issued to him pursuant to the Rules hereunder;

 

(c)                                  by reason of voluntary resignation other than by reason of the circumstances set out in Rules 5.6(a) and 5.6(b), in the case of Restricted Share Units, any outstanding and unvested Offer and Restricted Share Unit granted to him shall lapse and all the Common Shares to which his Restricted Share Units relate (to the extent vested but Common Shares under which have not already been issued) shall be issued to him or (as the case may be) his personal representative(s) pursuant to the Rules hereunder;

 

(d)                                 by reason of termination of his employment for serious misconduct or in accordance with the termination provisions of his contract of employment by his employing company otherwise than by reason of redundancy, then in the case of Restricted Share Units, any outstanding and unvested Offer and Restricted Share Unit granted to him shall lapse and all his Restricted Share Units (to the extent vested but Common Shares under which have not been issued) shall lapse and determine on the date of such termination;

 

(e)                                  by reason of termination of such other contract or agreement constituting him an Eligible Person for the Award Holder’s breach of the terms thereof or in accordance with the termination provisions of such contract or agreement by any contracting party, then in the case of Restricted Share Units, any outstanding and unvested Offer and Restricted Share Unit granted to him shall lapse and all his Restricted Share Units (to the extent vested but Common Shares under which have not been issued) shall lapse and determine on the date of such termination; and

 

(f)                                   for any reason other than as described in Rules 5.6(a), 5.6(b), 5.6(c), 5.6(d) and 5.6(e), then in the case of Restricted Share Units, relevant Common Shares under any vested Restricted Share Units at the date he ceases to be an Eligible Person shall be issued to him and any outstanding and unvested Offer and Restricted Share Unit to him shall lapse and determine on the date of such cessation,

 

provided always that in each case the Administrative Committee at its absolute discretion may decide that such Awards shall not so lapse (or be repurchased) or determine subject to such conditions or limitations as the Administrative Committee may decide.

 

In this connection, the Administrative Committee may require an Award Holder to supply such documents and/or information as the Administrative Committee may at its absolute discretion consider necessary for ascertaining as to whether and when such Award Holder has ceased to be an Eligible Person.  The Company shall only use all such documents and/or information for the above purpose but not otherwise.  For the avoidance of doubt, the Company shall be entitled to withhold from proceeding with the vesting or the issuing of any Award or the issue of Common Shares (if applicable) thereunder unless and until he has provided the requested documents and/or information to the satisfaction of the Administrative Committee.

 

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5.7                     Any Award granted may be cancelled if the Company and the Award Holder agree in writing.  Issuance of new Awards may only be made if there are unissued Awards available under the Scheme and in compliance with the terms of the Scheme.

 

6                      TAKEOVER OFFERS, LIQUIDATION AND RECONSTRUCTION

 

6.1                     If a general offer (other than by way of scheme of arrangement pursuant to Rule 6.2) is made to all Shareholders, the Company shall forthwith give notice thereof (the “Notice of General Offer”) to all Award Holders that, immediately after such offer becomes or is declared unconditional, all Awards (to the extent not already vested) shall vest to its full extent regardless of any vesting period requirements (if any) or to the extent notified by the Company (if applicable). All outstanding Offers and Awards shall lapse upon the close of such offer (or any revised offer) unless the Company has specified in the Notice of General Offer that all outstanding Offers and Awards shall remain valid notwithstanding the general offer. Any outstanding Offer or Award surviving such general offer (or revised offer) shall continue to be bound by the terms of the relevant Offer and the Scheme.

 

6.2                     If a general offer by way of scheme of arrangement is made to all Shareholders, and has been approved by the necessary number of Shareholders at the requisite meetings, the Company shall forthwith give notice thereof (the “Notice of Scheme of Arrangement”) to all Award Holders that their Awards shall vest immediately to its full extent regardless of any vesting period requirements (if any) or to the extent notified by the Company (if applicable). All outstanding Offers and Awards shall lapse upon expiry of the period specified by the Company in the Notice of Scheme of Arrangement unless the Company has specified in such notice that all outstanding Offers and Awards shall remain valid notwithstanding the scheme of arrangement. Any outstanding Offer or Award surviving such scheme of arrangement shall continue to be bound by the terms of the relevant Offer and the Scheme.

 

6.3                     If notice is duly given by the Company to its members to convene a general meeting at which a resolution will be proposed to voluntarily wind up the Company, the Company shall give notice thereof to all Award Holders on the same date (containing an extract of the provisions of this Rule) as it dispatches such notice to each member of the Company, and all of his Awards shall be treated to have vested immediately or at such time as the Administrative Committee may determine which shall be at least 2 business days before the passing of such resolution to its full extent regardless of any vesting period requirements (if any) or to the extent notified by the Company (if applicable).

 

6.4                     If under the Companies Law a compromise or arrangement between the Company and the Shareholders or between the Company and its creditors is proposed for the purposes of or in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company or companies, the Company shall give notice thereof to all Award Holders on the same date as it dispatches the notice which is sent to each Shareholder or creditor of the Company summoning the meeting to consider the compromise or arrangement, and all unvested Awards shall be treated to have vested immediately before any compromise or arrangement has become effective either to its full extent regardless of any vesting period requirements (if any) or to the extent notified by the Company (if applicable).  All outstanding Offers and Awards shall lapse upon the compromise or arrangement becoming effective unless the Company has specified in such notice that all outstanding Offers and Awards shall remain valid notwithstanding the compromise or arrangement. Any outstanding Offer or Award surviving such compromise or arrangement shall continue to be bound by the terms of the relevant Offer and the Scheme.

 

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6.5                     Subject to Rules 6.1 to 6.4 above, all outstanding and unvested Offers and Awards and vested Awards where Common Shares thereupon have not yet been issued shall lapse on the date of commencement of winding up of the Company.

 

6.6                     In no circumstances shall the lapse, cancellation or repurchase of Offers or Awards under the terms of the Scheme entitle an Eligible Person or an Award Holder to any compensation for or in respect of any consequent diminution or extinction of his rights or benefits (actual or prospective) under any Awards then held by him or any Offer or otherwise in connection with the Scheme.

 

7                      ADJUSTMENTS

 

7.1                     Upon the occurrence of any Relevant Event, the number or nominal value of Common Shares comprised in each Restricted Share Unit thereunder and/or the Limit may be adjusted in any manner as the Board may deem appropriate provided always that:

 

(a)                                 any adjustment should give an Award Holder of Restricted Share Units the same proportion of the share capital of the Company as that to which he was previously entitled prior to such adjustments;

 

(b)                                 no adjustments shall be made which will enable a Common Share to be issued at less than its nominal value;

 

(c)                                  where the Relevant Event arises from an issue of Common Shares, reference herein to Restricted Share Units shall include references to Restricted Share Units that have vested but Common Shares have not yet been issued thereunder prior to the date of the adjustment in respect of Common Shares which pursuant to Rule 5.5 do not rank and are not entitled to participate in this issue.

 

7.2                     Notice of any adjustments shall be given to the Award Holders of Restricted Share Units by the Company, which may, but need not, call in Restricted Share Unit certificates for endorsement or replacement (if applicable).

 

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8                      ADMINISTRATION

 

8.1                     The Scheme shall be administered by the Administrative Committee whose decision on all matters arising in relation to the Scheme, these Rules or their interpretation or effect shall (save as otherwise provided herein) be final and binding on all persons who may be affected thereby.  The Administrative Committee may delegate some or all of its authority under the Scheme to an individual or individuals who may either be one or more of the members of the Administrative Committee or one or more of the officers of the Company or its subsidiaries.

 

8.2                     The Administrative Committee shall have power from time to time to make or vary regulations for the administration and operation of the Scheme.

 

8.3                     The costs of introducing and administering the Scheme shall be borne by the Company.

 

8.4                     Notices or other communications required to be given to an Eligible Person or to an Award Holder shall either be delivered to him personally or sent to him by pre-paid post at his correspondence address according to the records of the Company or sent to him by facsimile transmission at his place of work or to such facsimile number as provided from time to time.  Notices or other communications to be given by any Eligible Person or Award Holder to the Company shall be delivered personally, or sent by pre-paid post or by facsimile transmission to its office in Beijing or as notified by the Company from time to time.  Such notices or communications shall be deemed to have been received:

 

(a)                                 if by delivery in person, when delivered to the addressee;

 

(b)                                 if by post in the case of a letter, on the second business day following posting if the address is in Hong Kong and on the seventh business day following posting if the address is outside Hong Kong; and

 

(c)                                  if by facsimile transmission, on production of a transmission report by the machine from which the facsimile transmission was sent which indicates that the facsimile transmission was sent in its entirety to the facsimile number of the recipient notified for the purpose of this Rule.

 

8.5                     Award Holders shall be entitled to receive copies of all notices and documents sent by the Company to the Shareholders generally.

 

8.6                     The Company shall at all times keep available for allotment enough unissued Common Shares to satisfy all Awards for the time being vested and Common Shares under which have not yet been issued and Offers and Awards which are outstanding and unvested.

 

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9                      VARIATIONS AND TERMINATION

 

9.1                     Subject to Rule 9.3, the Administrative Committee may from time to time at its absolute discretion waive or amend any of the Rules as they deem desirable, provided that, except with the prior approval of the Shareholders in general meetings:

 

(a)                                 no alteration to the definition of “Eligible Person”; and

 

(b)                                 no alteration to the terms and conditions of the Scheme which are of a material nature or any change to the terms of Awards granted may be made, except where the alterations take effect automatically under the existing terms of the Scheme.

 

9.2                     No amendments to the Scheme shall be made which would have the effect of abrogating or altering adversely any of the subsisting rights of Award Holders except with any consent on their part as would be required under the provisions of the Company’s constitutional documents as if the Awards constituted a separate class of share capital and as if the relevant provisions are applied mutatis mutandis.

 

9.3                     Any change to the authority of the Administrative Committee in relation to any alteration to the terms of the Scheme must be approved by the Shareholders in general meetings.

 

9.4                     The Company by an ordinary resolution of the Shareholders in general meetings may at any time terminate the operation of the Scheme and in such event no further Offers will be made but in all other respects the provisions of the Scheme shall remain in full force and effect to the extent necessary to give effect to the vesting of any Awards granted prior thereto or otherwise as may be required in accordance with the provisions of the Scheme and Awards granted prior to such termination shall continue to be valid and exercisable in accordance with these Rules.

 

10               GOVERNING LAW AND JURISDICTION

 

The Scheme and all Awards granted hereunder shall be governed by and construed in accordance with the laws of Hong Kong.

 

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