Common use of Protective Provision Clause in Contracts

Protective Provision. (i) In addition to any requirements set forth in the Memorandum and Articles or by the laws of Hong Kong, the Company and the PRC Companies shall not, and the Company and the Founder shall cause any Subsidiary not to (by way of shareholders resolutions, board resolutions or other means), take any of the following actions without the prior approval of the holder(s) of at least sixty-seven percent (67%) of the outstanding Series A Preferred Shares (for the purpose of this Section, the term Company below shall also include the members of the Company Group): (a) Any action that authorizes, creates or issues any class of the Company securities having preferences superior to or on a parity with the Series A Preferred Shares or any other securities of the Company; (b) Any action that reclassifies any outstanding shares into shares having preferences or priority as to dividends or assets senior to or on a parity with the preference of the Series A Preferred Shares; (c) Consolidation or merger with or into any other business entity, or the disposition of assets in excess of US$1,000,000 (individually or in the aggregate), or the sale of the license out of all or substantially all of the Company’s intellectual property rights; (d) Any amendment to the Memorandum and Articles of Association of the Company; (e) Any amendment or change of the rights, preferences, privileges or powers of, or the restrictions provided for the benefit of, the Series A Preferred Shares; (f) Any action that repurchases, redeems or retires any of the Company’s voting securities; (g) The liquidation or dissolution of the Company; and (h) Issuance of debt over US$2,000,000 in a single transaction or series of related transactions. (ii) In addition to any requirements set forth in the Memorandum and Articles or by the laws of Hong Kong, the Company and the PRC Companies shall not, and the Company and the Founder shall cause any Subsidiary not to (by way of shareholders resolutions, board resolutions or other means), take any of the following actions without the prior approval by all Directors of the Board of the Company, which shall include the affirmative vote of a Series A Director (for the purpose of this Section, the term Company below shall also include the members of the Company Group): (a) Making any loans by the Company to any Director, officer or employee outside the ordinary course of business; (b) Declaration of dividends or other distributions and any changes in the dividend policy of the Company; (c) Adoption and implementation of the annual operating budget or strategic plans, which, once approved, shall not deviate from such operating budget or strategic plans; (d) Approval, adoption, amendment or administration of the ESOP; (e) Initiation and settlement of any material litigation where the amount claimed or in dispute exceeds US$250,000; (f) Any issuance of equity or debt securities of the Company (in a single transaction or a series related transactions); (g) Selection of the listing exchange, any financial advisors, underwriters, or approval of the valuation and terms and conditions for a Qualified IPO or any form of merger or consolidation; (h) Sale, mortgage, pledge, lease, transfer or otherwise disposition of any of the assets of the Company which are (i) outside the ordinary course of business, or (ii) in excess of US$250,000 in the aggregate over any twelve (12) months; (i) Approval or amendment of any quarterly and annual budget, business plan and operating plan (including any capital expenditure budget, operating budget and financing plan) of the Company; (j) Engaging in any business materially different from that described in the then current business plan, change of the name of the Company or ceasing any business undertaking of the Company; (k) Incurrence of any indebtedness or assumption of any financial obligation, or assumption, guarantee or creation of any liability for borrowed money in excess of US$250,000 in the aggregate at any time outstanding unless such liability is incurred pursuant to the then current business plan; (l) Any expenditure or other purchase of tangible or intangible assets in excess of US$500,000 in the aggregate over any twelve (12) months unless such expenditure or purchase is made pursuant to the then current business plan; (m) Entering into any material agreement or contract with any party or group of related parties under which the Company’s aggregate commitments, pledge or obligations to such party or group of related parties; (n) Any material change in the accounting methods or policies or appointment or change of the auditors of the Company; (o) Disposition of or dilution of the Company’s interest, directly or indirectly, in any of its subsidiaries; (p) Appointment, removal, and determination of the remuneration of the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Vice President or General Manager of the Company and any material subsidiaries of the Company; and (q) All accounts holding cash of the Company shall be established such that any expenditure exceeding RMB1,000,000, not relating to the core business or not included in the annual business plan of the Company, shall require the signature of a Series A Director . Such threshold may be adjusted at the discretion of the Investor holding at least 70% of the Series A Preferred Shares then outstanding (at an as converted basis), with written notice to the Company and such other documents as may be required by the applicable financial institutions.

Protective Provision. (i) In addition to any requirements set forth in the Memorandum and Articles or by the laws of Hong Kongthe Cayman Islands, the Company Company, Eastern Well and the PRC Companies shall not, and the Company and the Founder shall cause any Subsidiary not to (by way of shareholders resolutions, board resolutions or other means), take any of the following actions without the prior approval of the holder(s) of at least sixty-seven percent (67%) of the outstanding Series A Preferred Shares (for the purpose of this Section, the term Company below shall also include the members of the Company Group): (a) Any action that authorizes, creates or issues any class of the Company securities having preferences superior to or on a parity with the Series A Preferred Shares or any other securities of the Company; (b) Any action that reclassifies any outstanding shares into shares having preferences or priority as to dividends or assets senior to or on a parity with the preference of the Series A Preferred Shares; (c) Consolidation or merger with or into any other business entity, or the disposition of assets in excess of US$1,000,000 (individually or in the aggregate), or the sale of the license out of all or substantially all of the Company’s intellectual property rights; (d) Any amendment to the Memorandum and Articles of Association of the Company; (e) Any amendment or change of the rights, preferences, privileges or powers of, or the restrictions provided for the benefit of, the Series A Preferred Shares; (f) Any action that repurchases, redeems or retires any of the Company’s voting securities; (g) The liquidation or dissolution of the Company; and (h) Issuance of debt over US$2,000,000 in a single transaction or series of related transactions. (ii) In addition to any requirements set forth in the Memorandum and Articles or by the laws of Hong Kongthe Cayman Islands, the Company Company, Eastern Well and the PRC Companies shall not, and the Company and the Founder shall cause any Subsidiary not to (by way of shareholders resolutions, board resolutions or other means), take any of the following actions without the prior approval by all Directors of the Board of the Company, which shall include the affirmative vote of a Series A Director (for the purpose of this Section, the term Company below shall also include the members of the Company Group): (a) Making any loans by the Company to any Director, officer or employee outside the ordinary course of business; (b) Declaration of dividends or other distributions and any changes in the dividend policy of the Company; (c) Adoption and implementation of the annual operating budget or strategic plans, which, once approved, shall not deviate from such operating budget or strategic plans; (d) Approval, adoption, amendment or administration of the ESOP; (e) Initiation and settlement of any material litigation where the amount claimed or in dispute exceeds US$250,000; (f) Any issuance of equity or debt securities of the Company (in a single transaction or a series related transactions); (g) Selection of the listing exchange, any financial advisors, underwriters, or approval of the valuation and terms and conditions for a Qualified IPO or any form of merger or consolidation; (h) Sale, mortgage, pledge, lease, transfer or otherwise disposition of any of the assets of the Company which are (i) outside the ordinary course of business, or (ii) in excess of US$250,000 in the aggregate over any twelve (12) months; (i) Approval or amendment of any quarterly and annual budget, business plan and operating plan (including any capital expenditure budget, operating budget and financing plan) of the Company; (j) Engaging in any business materially different from that described in the then current business plan, change of the name of the Company or ceasing any business undertaking of the Company; (k) Incurrence of any indebtedness or assumption of any financial obligation, or assumption, guarantee or creation of any liability for borrowed money in excess of US$250,000 in the aggregate at any time outstanding unless such liability is incurred pursuant to the then current business plan; (l1) Any expenditure or other purchase of tangible or intangible assets in excess of US$500,000 in the aggregate over any twelve (12) months unless such expenditure or purchase is made pursuant to the then current business plan; (m) Entering into any material agreement or contract with any party or group of related parties under which the Company’s aggregate commitments, pledge or obligations to such party or group of related parties; (n) Any material change in the accounting methods or policies or appointment or change of the auditors of the Company; (o) Disposition of or dilution of the Company’s interest, directly or indirectly, in any of its subsidiaries; (p) Appointment, removal, and determination of the remuneration of the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Vice President or General Manager of the Company and any material subsidiaries of the Company; and (q) All accounts holding cash of the Company shall be established such that any expenditure exceeding RMB1,000,000RMB 1,000,000, not relating to the core business or not included in the annual business plan of the Company, shall require the signature of a Series A Director . Such threshold may be adjusted at the discretion of the Investor holding at least 70% of the Series A Preferred Shares then outstanding (at an as converted basis), with written notice to the Company and such other documents as may be required by the applicable financial institutions.

Protective Provision. (i) In For so long as Flagship holds Series A Preferred Shares or any Series B Shareholder holds Series B Preferred Shares, in addition to any requirements set forth in the Memorandum and Articles or by the laws of Hong Kongapplicable laws, the Company and the PRC Companies shall not, and the Company and the Founder Founders shall cause any Subsidiary not to (by way of shareholders resolutions, board resolutions or other means), take any of the following actions without the prior approval of the holder(s) of at least sixty-seven percent (67%) of the outstanding Flagship and Series A Preferred Shares B Shareholders, take any action that would (for the purpose of this SectionSection 14.7, the term Company below shall also include the members of the Company Group):), except as provided or contemplated in the Share Subscription Agreement or this Agreement: (ai) Any action alter or change the rights, preferences or privileges of the Series A Preferred Shares or Series B Preferred Shares, including any amendment or waiver of any provisions of the Memorandum and Articles that authorizes, creates adversely affects the rights of the Series A Preferred Shares or issues Series B Preferred Shares; (ii) declaration or payment of dividend or other distribution of any class of the Company securities having preferences superior Group; (iii) making any increase or decrease of the number of authorized or issued shares in capital or any capital redemption revenue fund, or any purchase or redemption of any shares of the Company Group; increase the share capital by such sum to be divided into shares of such amount or without nominal or par value as the resolution shall prescribe and with such rights, priorities and privileges annexed thereto, as the resolution shall prescribe; authorize or issue any equity security senior to or on a parity with the Series A Preferred Shares and the Series B Preferred Shares as to dividend rights or redemption rights or liquidation preferences; issuing or paying any other securities of the CompanyCompany by way of capitalization of profits or revenues; or by subdivision of its existing shares or any of them divide the whole or any part of its share capital into shares of smaller amount than is fixed by the amended and restated memorandum of association of the Company or into shares without nominal or par value; (biv) Any any action that reclassifies to reclassify any outstanding shares into shares having preferences or priority as to dividends or assets senior to or on a parity with the preference of the Series A Shares and the Series B Preferred Shares; consolidate and divide all or any of its share capital into shares of larger amount than its existing shares; (cv) Consolidation adoption or merger with amendment of any employee equity incentive plan, including without limitation any increase of the number of Ordinary Shares reserved under any employee equity incentive plan; provided that the Parties agree to adopt an employee equity incentive plan as expeditiously as reasonably possible; (vi) cancel any shares which at the date of the passing of the resolution have not been taken or into agreed to be taken by any other business entity, or the disposition of assets person (vii) making any investment in excess of US$1,000,000 3,000,000, or incurring any debt, or capital expenditure in excess of eight percent (individually 8%) of the net asset value of the Company, or enter into any transaction or series of related transactions for which the aggregate value of the transaction or series of related transactions exceeds eight percent (8%) of the net asset value of the Company, unless such investment or transaction is conducted in the aggregate)ordinary course of business or included in its annual budget; (viii) approving the entering into, any amendment to the agreements among the members of the Company Group, or the sale any transaction involving both a member of the license out Company Group and a shareholder or any Company Group’s employees, officers, directors or shareholders or any affiliate of a shareholder or any of its officers, directors or shareholders or other Related Parties, each with an amount exceeding US$150,000; (ix) adoption of annual budget, or any material change in the annual budget, or engaging in any new line of business of the Company Group; (x) amendment of the accounting policies previously adopted or change the Auditor of the Company Group; (xi) granting or creating by the Company Group of any indemnity or guarantee or any charge, lien or debenture or other security over all or any part of the assets or rights of the Company Group, or provision of loans by any Company Group member to any other person other than a member of the Company Group, or dispose of substantial assets or any intellectual property owned by the Company Group, in an aggregate amount of US$300,000; (xii) granting or creating by the Company Group of any indemnity or guarantee or any charge, lien or debenture or other security over all any part of the assets or rights of the Company Group, or provision of loans by any Company Group member to any member of the Company Group, or dispose of substantial assets or any intellectual property owned by the Company Group, in an aggregate amount exceeding eight percent (8%) of the net asset value of the Company; (xiii) adoption of, and amendment of any terms of, any of the Company Group’s employee stock option plans or profit sharing scheme; (xiv) formation of subsidiary (except Paker and Jinko) or affiliate, or effecting any merger, joint venture, spin-off, liquidation, dissolution, consolidation, scheme of arrangement, reorganization or sale of all or substantially all of the Company’s intellectual property rightsassets of the Company Group; (dxv) Any amendment to other customary protective rights mutually agreed upon by the Memorandum and Articles of Association of the CompanyParties in accordance with Section 15.7 hereof; (exvi) Any amendment increase or change of decrease the rights, preferences, privileges or powers of, or the restrictions provided for the benefit of, the Series A Preferred Shares; (f) Any action that repurchases, redeems or retires any authorized size of the Company’s voting securities; (g) The liquidation or dissolution Board of the CompanyDirectors; and (hxvii) Issuance any increase in compensation of debt over US$2,000,000 in a single transaction or series of related transactions. (ii) In addition to any requirements set forth in the Memorandum and Articles or by the laws of Hong Kong, the Company and the PRC Companies shall not, and the Company and the Founder shall cause any Subsidiary not to (by way of shareholders resolutions, board resolutions or other means), take any of the following actions without the prior approval by all Directors of the Board of the Company, which shall include the affirmative vote of a Series A Director (for the purpose of this Section, the term Company below shall also include the members senior executive employee of the Company Group): by more than twenty percent (a20%) Making any loans by the Company to any Director, officer or employee outside the ordinary course of business; (b) Declaration of dividends or other distributions and any changes in the dividend policy of the Company; (c) Adoption and implementation of the annual operating budget or strategic plans, which, once approved, shall not deviate from such operating budget or strategic plans; (d) Approval, adoption, amendment or administration of the ESOP; (e) Initiation and settlement of any material litigation where the amount claimed or in dispute exceeds US$250,000; (f) Any issuance of equity or debt securities of the Company (in a single transaction or a series related transactions); (g) Selection of the listing exchange, any financial advisors, underwriters, or approval of the valuation and terms and conditions for a Qualified IPO or any form of merger or consolidation; (h) Sale, mortgage, pledge, lease, transfer or otherwise disposition of any of the assets of the Company which are (i) outside the ordinary course of business, or (ii) in excess of US$250,000 in the aggregate over any twelve (12) months; (i) Approval or amendment of any quarterly and annual budget, business plan and operating plan (including any capital expenditure budget, operating budget and financing plan) of the Company; (j) Engaging in any business materially different from that described in the then current business plan, change of the name of the Company or ceasing any business undertaking of the Company; (k) Incurrence of any indebtedness or assumption of any financial obligation, or assumption, guarantee or creation of any liability for borrowed money in excess of US$250,000 in the aggregate at any time outstanding unless such liability is incurred pursuant to the then current business plan; (l) Any expenditure or other purchase of tangible or intangible assets in excess of US$500,000 in the aggregate over any twelve (12) months unless such expenditure or purchase is made pursuant to the then current business plan; (m) Entering into any material agreement or contract with any party or group of related parties under which the Company’s aggregate commitments, pledge or obligations to such party or group of related parties; (n) Any material change in the accounting methods or policies or appointment or change of the auditors of the Company; (o) Disposition of or dilution of the Company’s interest, directly or indirectly, in any of its subsidiaries; (p) Appointment, removal, and determination of the remuneration of the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Vice President or General Manager of the Company and any material subsidiaries of the Company; and (q) All accounts holding cash of the Company shall be established such that any expenditure exceeding RMB1,000,000, not relating to the core business or not included in the annual business plan of the Company, shall require the signature of a Series A Director . Such threshold may be adjusted at the discretion of the Investor holding at least 70% of the Series A Preferred Shares then outstanding (at an as converted basis), with written notice to the Company and such other documents as may be required by the applicable financial institutionsmonth period.

Protective Provision. (i) In For so long as Flagship holds Series A Preferred Shares or any Series B Investor holds Series B Preferred Shares, in addition to any requirements set forth in the Memorandum and Articles or by the laws of Hong Kong, the Company and the PRC Companies Kinko shall not, and the Company and the Founder Founders shall cause any Subsidiary not to (by way of shareholders resolutions, board resolutions or other means), take any of the following actions without the prior approval of the holder(s) of at least sixty-seven percent (67%) of the outstanding Flagship and Series A Preferred Shares B Investors, take any action that would (for the purpose of this SectionSection 14.8, the term Company below shall also include the members of the Company Group):), except as provided or contemplated in the Flagship Share Purchase Agreement, Series B Share Purchase Agreement or this Agreement: (ai) Any action alter or change the rights, preferences or privileges of the Series A Preferred Shares or Series B Preferred Shares, including any amendment or waiver of any provisions of the Memorandum and Articles that authorizes, creates adversely affects the rights of the Series A Preferred Shares or issues Series B Preferred Shares; (ii) declaration or payment of dividend or other distribution of any class of the Company securities having preferences superior Group; (iii) making any increase or decrease of the number of authorized or issued shares in capital, or any purchase or redemption of any shares of the Company Group; authorize or issue any equity security senior to or on a parity with the Series A Preferred Shares and the Series B Preferred Shares as to dividend rights or any other securities of the Companyredemption rights or liquidation preferences; (biv) Any any action that reclassifies to reclassify any outstanding shares into shares having preferences or priority as to dividends or assets senior to or on a parity with the preference of the Series A Shares and the Series B Preferred Shares; (cv) Consolidation adoption or merger with or into amendment of any other business entityemployee equity incentive plan, or including without limitation any increase of the disposition number of assets Ordinary Shares reserved under any employee equity incentive plan; provided that the Parties agree to adopt an employee equity incentive plan as expeditiously as reasonably possible after the Closing; (vi) making any investment in excess of US$1,000,000 3,000,000, or incurring any debt, or capital expenditure in excess of eight percent (individually 8%) of the net asset value of the Company, or enter into any transaction or series of related transactions for which the aggregate value of the transaction or series of related transactions exceeds eight percent (8%) of the net asset value of the Company, unless such investment or transaction is conducted in the aggregate)ordinary course of business or included in its annual budget; (vii) approving the entering into, any amendment to the agreements among the members of the Company Group, or the sale any transaction involving both a member of the license out Company Group and a shareholder or any Company Group’s employees, officers, directors or shareholders or any affiliate of a shareholder or any of its officers, directors or shareholders or other Related Parties, each with an amount exceeding US$150,000; (viii) adoption of annual budget, or any material change in the annual budget, or engaging in any new line of business of the Company Group; (ix) amendment of the accounting policies previously adopted or change the Auditor of the Company Group; (x) granting or creating by the Company Group of any indemnity or guarantee or any charge, lien or debenture or other security over all or any part of the assets or rights of the Company Group, or provision of loans by any Company Group member to any other person other than a member of the Company Group, or dispose of substantial assets or any intellectual property owned by the Company Group, in an aggregate amount of US$300,000; (xi) granting or creating by the Company Group of any indemnity or guarantee or any charge, lien or debenture or other security over all any part of the assets or rights of the Company Group, or provision of loans by any Company Group member to any member of the Company Group, or dispose of substantial assets or any intellectual property owned by the Company Group, in an aggregate amount exceeding eight percent (8%) of the net asset value of the Company; (xii) adoption of, and amendment of any terms of, any of the Company Group’s employee stock option plans or profit sharing scheme; (xiii) formation of subsidiary (except Kinko) or affiliate, or effecting any merger, joint venture, spin-off, liquidation, dissolution, consolidation, scheme of arrangement, reorganization or sale of all or substantially all of the Company’s intellectual property rightsassets of the Company Group; (dxiv) Any amendment to other customary protective rights mutually agreed upon by the Memorandum and Articles of Association of the CompanyParties in accordance with Section 15.7 hereof; (exv) Any amendment increase or change of decrease the rights, preferences, privileges or powers of, or the restrictions provided for the benefit of, the Series A Preferred Shares; (f) Any action that repurchases, redeems or retires any authorized size of the Company’s voting securities; (g) The liquidation or dissolution Board of the CompanyDirectors; and (hxvi) Issuance any increase in compensation of debt over US$2,000,000 in a single transaction or series of related transactions. (ii) In addition to any requirements set forth in the Memorandum and Articles or by the laws of Hong Kong, the Company and the PRC Companies shall not, and the Company and the Founder shall cause any Subsidiary not to (by way of shareholders resolutions, board resolutions or other means), take any of the following actions without the prior approval by all Directors of the Board of the Company, which shall include the affirmative vote of a Series A Director (for the purpose of this Section, the term Company below shall also include the members senior executive employee of the Company Group): by more than twenty percent (a20%) Making any loans by the Company to any Director, officer or employee outside the ordinary course of business; (b) Declaration of dividends or other distributions and any changes in the dividend policy of the Company; (c) Adoption and implementation of the annual operating budget or strategic plans, which, once approved, shall not deviate from such operating budget or strategic plans; (d) Approval, adoption, amendment or administration of the ESOP; (e) Initiation and settlement of any material litigation where the amount claimed or in dispute exceeds US$250,000; (f) Any issuance of equity or debt securities of the Company (in a single transaction or a series related transactions); (g) Selection of the listing exchange, any financial advisors, underwriters, or approval of the valuation and terms and conditions for a Qualified IPO or any form of merger or consolidation; (h) Sale, mortgage, pledge, lease, transfer or otherwise disposition of any of the assets of the Company which are (i) outside the ordinary course of business, or (ii) in excess of US$250,000 in the aggregate over any twelve (12) months; (i) Approval or amendment of any quarterly and annual budget, business plan and operating plan (including any capital expenditure budget, operating budget and financing plan) of the Company; (j) Engaging in any business materially different from that described in the then current business plan, change of the name of the Company or ceasing any business undertaking of the Company; (k) Incurrence of any indebtedness or assumption of any financial obligation, or assumption, guarantee or creation of any liability for borrowed money in excess of US$250,000 in the aggregate at any time outstanding unless such liability is incurred pursuant to the then current business plan; (l) Any expenditure or other purchase of tangible or intangible assets in excess of US$500,000 in the aggregate over any twelve (12) months unless such expenditure or purchase is made pursuant to the then current business plan; (m) Entering into any material agreement or contract with any party or group of related parties under which the Company’s aggregate commitments, pledge or obligations to such party or group of related parties; (n) Any material change in the accounting methods or policies or appointment or change of the auditors of the Company; (o) Disposition of or dilution of the Company’s interest, directly or indirectly, in any of its subsidiaries; (p) Appointment, removal, and determination of the remuneration of the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Vice President or General Manager of the Company and any material subsidiaries of the Company; and (q) All accounts holding cash of the Company shall be established such that any expenditure exceeding RMB1,000,000, not relating to the core business or not included in the annual business plan of the Company, shall require the signature of a Series A Director . Such threshold may be adjusted at the discretion of the Investor holding at least 70% of the Series A Preferred Shares then outstanding (at an as converted basis), with written notice to the Company and such other documents as may be required by the applicable financial institutionsmonth period.

Protective Provision. (i) In For so long as any of the Series A Preferred Shares remains outstanding, in addition to any requirements set forth in the Memorandum and Articles or by the laws of Hong Kongthe Cayman Islands, the Company, the WFOE and each Domestic Company and the PRC Companies shall not, and the Company and the Founder Founders shall cause any Subsidiary not to (by way of shareholders resolutions, board resolutions or other means), take any of the following actions without the prior approval of the holder(s) of at least sixty-seven percent (67%) 50.1% of the outstanding Series A Preferred Shares (AND for the purpose of this Section 10.10, where any of the following acts requires the special approval of the shareholders of the Company in accordance with the statue of the Cayman Islands and such approval has not been obtained, the holder of a majority of the Series A Preferred Shares shall have the voting rights equal to all shareholders who voted in favour of the resolution plus one) (for the purpose of this Section, the term Company below shall also include the members of the Company Group): (a) Any action that authorizesalter or change the rights, creates preferences or issues any class privileges of the Company securities having preferences superior Series A Preferred Shares; (b) authorize or issue any equity security senior to or on a parity with the Series A Preferred Shares as to dividend rights or redemption rights or liquidation preferences; (c) any other securities new issuance of any Equity Securities of the Company; , excluding (ba) Any action that reclassifies any outstanding shares into shares having preferences or priority as to dividends or assets senior to or on a parity with the preference issuance of Common Shares upon conversion of the Series A Preferred Shares; , and (cb) Consolidation the issuance of Common Shares (or merger with options or into any other business entity, or warrants therefore) under employee equity incentive plans approved by the disposition of assets in excess of US$1,000,000 (individually or in the aggregate), or the sale of the license out of all or substantially all of the Company’s intellectual property rightsBoard; (d) Any any amendment to to, or waive of any provision of, the Memorandum and Articles Articles, the articles of Association of the Companyassociation, or other corporate documents; (e) Any amendment increase or change decrease the authorized number of the rights, preferences, privileges Common Shares or powers of, or the restrictions provided for the benefit of, the Series A Preferred Shares; (f) Any action that repurchasesthe redemption or repurchase of any shares of Common Shares; (g) any merger, redeems consolidation, or retires other corporate reorganization, or any transaction or series of transactions in which in excess of 50% of the Company’s voting securities; (g) The liquidation or dissolution of the Company; and (h) Issuance of debt over US$2,000,000 in a single transaction or series of related transactions. (ii) In addition to any requirements set forth in the Memorandum and Articles or by the laws of Hong Kong, the Company and the PRC Companies shall not, and the Company and the Founder shall cause any Subsidiary not to (by way of shareholders resolutions, board resolutions or other means), take any of the following actions without the prior approval by all Directors of the Board of the Company, which shall include the affirmative vote of a Series A Director (for the purpose of this Section, the term Company below shall also include the members of the Company Group): (a) Making any loans by the Company to any Director, officer or employee outside the ordinary course of business; (b) Declaration of dividends or other distributions and any changes in the dividend policy of the Company; (c) Adoption and implementation of the annual operating budget or strategic plans, which, once approved, shall not deviate from such operating budget or strategic plans; (d) Approval, adoption, amendment or administration of the ESOP; (e) Initiation and settlement of any material litigation where the amount claimed power is transferred or in dispute exceeds US$250,000; (f) Any issuance of equity which all or debt securities of the Company (in a single transaction or a series related transactions); (g) Selection of the listing exchange, any financial advisors, underwriters, or approval of the valuation and terms and conditions for a Qualified IPO or any form of merger or consolidation; (h) Sale, mortgage, pledge, lease, transfer or otherwise disposition of any substantially all of the assets of the Company which are sold; (ih) outside increase or decrease the ordinary course authorized size of business, or (ii) in excess of US$250,000 in the aggregate over any twelve (12) monthsCompany’s Board; (i) Approval the liquidation, dissolution or amendment of any quarterly and annual budget, business plan and operating plan (including any capital expenditure budget, operating budget and financing plan) winding up of the Company; (j) Engaging in the payment or declaration of any business materially different from that described in the then current business plan, change of the name of the Company dividend on any Common Share or ceasing any business undertaking of the CompanyPreferred Share; (k) Incurrence the extension by the Company of any loan or guarantee for indebtedness or assumption of to any financial obligation, or assumption, guarantee or creation of any liability for borrowed money in excess of US$250,000 in the aggregate at any time outstanding unless such liability is incurred pursuant to the then current business planthird party; (l) Any expenditure or other purchase issuance of tangible or intangible debt in excess of US$10,000 in a single transaction; (m) acquisition of business/assets in excess of US$500,000 in the aggregate over any twelve (12) months unless such expenditure or purchase is made pursuant to the then current business plan; (m) Entering into any material agreement or contract with any party or group of related parties under which the Company’s aggregate commitments, pledge or obligations to such party or group of related parties50,000; (n) Any material change in the accounting methods or policies or appointment or change appointment/replacement of the auditors CEO, CFO and COO of the Company; (o) Disposition other than in the ordinary course of business, any transaction involving both the Company and a shareholder or dilution any of the Company’s interestemployees, directly officers, directors or indirectly, in shareholders or any affiliate of a shareholder or any of its subsidiariesofficers, directors or shareholders; (p) Appointment, removal, appointment and determination removal of the remuneration of the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Vice President or General Manager auditors of the Company and or any material subsidiaries change in the accounting and financial policies of the Company; and; (q) All accounts holding cash any increase in compensation of any employee of the Company shall be established such that any expenditure exceeding RMB1,000,000, not relating to the core business or not included in the annual business plan with monthly salary of the Company, shall require the signature of a Series A Director . Such threshold may be adjusted at the discretion of the Investor holding at least 70RMB20,000 by more than fifty percent 50% of the Series A Preferred Shares then outstanding in a twelve 12 month period, (at an as converted basis), with written notice r) any lending to the Company and such other documents as may be required by the applicable financial institutionsprinciple capital.