EX-4.4 3 a2236354zex-4_4.htm EX-4.4 TENTH AMENDED AND RESTATED SHAREHOLDERS AGREEMENT by and among 111, INC. GANG YU JUNLING LIU SUNNY BAY GLOBAL LIMITED IVY CAPITAL 2011 HOLDCO LTD. GOLD STAND GOAL LIMITED CLEARVUE YW HOLDINGS, LTD. VERLINVEST ASIA...
Exhibit 4.4
TENTH AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
by and among
111, INC.
XXXX XX XXXXXXX XXX SUNNY BAY GLOBAL LIMITED
IVY CAPITAL 2011 HOLDCO LTD. GOLD STAND GOAL LIMITED
CLEARVUE YW HOLDINGS, LTD. VERLINVEST ASIA (HK) LIMITED FIRST PHARMACIA INTERNATIONAL RICH CHANCE GLOBAL LIMITED
XXXX CAPITAL LIMITED VERLINVEST ASIA (HK) LIMITED ALLIED CHINA INVESTMENT LIMITED TONGYI INVESTMENT HOLDINGS LIMITED XXX XXX 6 DIMENSIONS CAPITAL, L.P. 6 DIMENSIONS AFFILIATES FUND, L.P. LI CHILDREN’S 2006 IRREVOCABLE TRUST
dated as of June 19, 2018
TABLE OF CONTENTS
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Page No. |
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1. |
INFORMATION RIGHTS; BOARD REPRESENTATION |
2 |
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1A |
VOTING AND PROTECTIVE PROVISIONS |
5 |
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2. |
REGISTRATION RIGHTS |
8 |
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3. |
RIGHT OF PARTICIPATION |
21 |
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4. |
TRANSFER RESTRICTIONS |
23 |
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5. |
REDEMPTION |
29 |
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6. |
LIQUIDATION, DISSOLUTION OR WINDING UP |
32 |
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7. |
ASSIGNMENT AND AMENDMENT |
35 |
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8. |
FOUNDERS’ UNDERTAKINGS |
36 |
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9. |
CONFIDENTIALITY AND XXX-XXXXXXXXXX |
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00. |
GENERAL PROVISIONS |
38 |
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EXHIBIT A |
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TENTH AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
THIS TENTH AMENDED AND RESTATED SHAREHOLDERS AGREEMENT (this “Agreement”) is made and entered into as of June 19, 2018 by and among 111, Inc., an exempted company incorporated, organized and existing under the laws of the Cayman Islands with limited liability (company registration no. 278041) (the “Company”); Xxxx Xx, a U.S. citizen (passport number: ********); Xxxxxxx Xxx, an Australian citizen (passport number: ********), the beneficial owner of 100% equity interest of Sunny Bay Global Limited (together with Xxxx Xx, collectively, the “Founders”, and each a “Founder”); Sunny Bay Global Limited, a company organized and existing under the laws of the British Virgin Islands (company registration no.1758809) (“Sunny Bay”); Ivy Capital 2011 Holdco Ltd., a company organized and existing under the laws of the British Virgin Islands (“Ivy Capital”); Gold Stand Goal Limited, a company organized and existing under the laws of the British Virgin Islands (“Gold Stand”, together with Ivy Capital, collectively, the “Series A Investors” and each a “Series A Investor”); ClearVue YW Holdings, Ltd., a company organized and existing under the laws of the Cayman Islands (“CVP”, together with Ivy Capital 2011 Holdco Ltd., collectively, the “Series B Investors,” and each, a “Series B Investor”; Verlinvest Asia (HK) Limited, a company organized and existing under the laws of Hong Kong (“Verlinvest”); First Pharmacia International, a company organized and existing under the laws of the Cayman Islands (“BVCF”); Rich Chance Global Limited, a company organized and existing under the laws of the British Virgin Islands (“Greenwoods”, together with CVP, Verlinvest and BVCF, collectively, the “Series C Investors,” and each, a “Series C Investor”); Xxxx Capital Limited, a company organized and existing under the laws of the British Virgin Islands (“Xxxx”); ALLIED CHINA INVESTMENT LIMITED, a company organized and existing under the laws of Hong Kong (“ALLIED”); Tongyi Investment Holdings Limited, a company organized and existing under the laws of the Cayman Islands (“Tongyi”); Xxx Xxx, a Hong Kong citizen (passport number: ********); 6 Dimensions Capital, L.P., a limited liability partnership organized and existing under the laws of the Cayman Islands (“6D”); 6 Dimensions Affiliates Fund, L.P., a limited liability partnership organized and existing under the laws of the Cayman Islands (“6 D Affiliates”); and LI CHILDREN’S 2006 IRREVOCABLE TRUST, a trust organized and existing under the laws of United States of America (“2006 Trust”, together with Xxxx, Verlinvest, ALLIED, Tongyi, Xxx Xxx, 6D and 6D Affiliates collectively, the “Series D Investors,” and each, a “Series D Investor”, and together with the Series A Investors, Series B Investors and Series C Investors, the “Investors”).
Convertible redeemable participating Series A preferred shares of par value US$0.00005 each of the Company (the “Series A Preferred Shares”), convertible redeemable participating series B preferred shares of par value US$0.00005 each of the Company (the “Series B Preferred Shares”), convertible redeemable participating series C preferred shares of par value US$0.00005 each of the Company (the “Series C Preferred Shares”), and convertible redeemable participating series D preferred shares of par value US$0.00005 each of the Company (the “Series D Preferred Shares”) are hereby collectively referred as the “Preferred Shares”.
A. The parties hereto (other than Sunny Bay) entered into a shareholders agreement dated as of April 24, 2018 (the “Original Agreement”) and some of the parties hereto entered into a Series D Prefered Shares Subscription Agreement dated as of November 16, 2015 (the “Series D Subscription Agreement”).
B. On the date of this Agreement, Xxxxxxx Xxx, the beneficial owner of 100% equity interest of Sunny Bay, has transferred all the Class A Ordinary Shares (as defined below) held by him to Sunny Bay.
C. On the date of this Agreement, the Company has received a written notice from Gold Prized Investment Limited (“Gold Prized”) relating to the surrender by Gold Prized, for no consideration, of 1,607,901 Class C Ordinary Shares (as defined below) in the Company registered in the name of Gold Prized (“Surrendered Shares”), and the Company has accepted the irrevocable surrender of the Surrendered Shares, for no consideration.
D. The parties hereto wish to, upon the consummation of the transactions contemplated under Sections B and C above: (i) add Sunny Bay as a party to the Original Agreement, (ii) remove Gold Prized from the Original Agreement, and (iii) further amend and restate the Original Agreement in certain other respects.
(Capitalized terms used and not defined herein shall have the same meaning as ascribed to them in the Series D Subscription Agreement and the Memorandum and Articles.)
1. INFORMATION RIGHTS; BOARD REPRESENTATION
1.1 Information and Inspection Rights.
(i) audited annual consolidated financial statements, within ninety (90) days after the end of each fiscal year, prepared in accordance with the International Financial Reporting Standards promulgated by the International Accounting Standards Board (IASB) (which includes standards and interpretations approved by the IASB and International Accounting Principles issued under previous constitutions) (“IFRS”) and audited by a qualified accounting firm approved by the Board of Directors of the Company (the “Board”);
(ii) unaudited quarterly consolidated financial statements, within forty-five (45) days after the end of each quarter, prepared in accordance with IFRS by a qualified accounting firm approved by the Board, which shall indicate variances from the annual budget of the Company with respect to key line items;
(iii) an annual consolidated budget and strategic plan for the following fiscal year, within thirty (30) days prior to the end of each fiscal year;
(iv) copies of any reports or filings made with any stock exchange or securities regulatory authority; and
(v) upon the written request by any Investor, such other information as such Investor shall reasonably request (the above rights, collectively, the “Information Rights”). All financial statements to be provided to the Investors pursuant to this Section 1.1(a) shall include an income statement, a balance sheet and a cash flow statement for the relevant period and shall be prepared in conformance with IFRS.
(d) As-converted basis. As used through this Agreement, the phrase “as-converted basis” shall mean assuming the conversion, exercise and exchange of all Preferred Shares (including without limitation, the Series A Preferred Shares, the Series B Preferred Shares, the Series C Preferred Shares and the Series D Preferred Shares), directly or indirectly, convertible, exercisable or exchangeable into or for Ordinary Shares.
(a) So long as CVP and its affiliates hold fifteen percent (15%) or more of the total number of the Ordinary Shares calculated on an as-converted basis, it shall have the right at a general meeting of the Company or pursuant to a resolution of the shareholders of the Company (“Shareholders”) in writing (in one or more counterparts) signed by all Shareholders for the time being entitled to receive notice of and to attend and vote at general meetings to appoint and remove one (1) director (the “CVP Director”).
(b) So long as Verlinvest and its affiliates hold fifteen percent (15%) or more of the total number of the Ordinary Shares calculated on an as-converted basis, it shall have the right at a general meeting of the Company or pursuant to a resolution of Shareholders in writing (in one or more counterparts) signed by all Shareholders for the time being entitled to receive notice of and to attend and vote at general meetings to appoint and remove one (1) director (the “Verlinvest Director”).
(c) So long as BVCF and its affiliates hold fifteen percent (15%) or more of the total number of the Ordinary Shares calculated on an as-converted basis, it shall have the right at a general meeting of the Company or pursuant to a resolution of Shareholders in writing (in one or more counterparts) signed by all Shareholders for the time being entitled to receive notice of and to attend and vote at general meetings to appoint and remove one (1) director (the “BVCF Director”).
(d) Holders of Class A Ordinary Shares shall be entitled to appoint and remove all the remaining directors of the Company, in any event no less than four (4) directors (the “Class A Directors”).
Each CVP Director, Verlinvest Director and BVCF Director shall have one (1) vote. The Class A Directors shall in total have four (4) votes, and if the holders of Class A Ordinary Shares appoint less than four (4) Class A Directors, each such appointed Class A Director shall have one (1) vote; provided, however, that in the case of the holders of Class A Ordinary Shares being the Class A Directors, the holders of Class A Ordinary Shares shall have a number of votes that is equal to (i) four (4) minus (ii) the number of the other Class A Directors (if any) that are actually appointed by the holders of the Class A Ordinary Shares.
1.6 Strategic and Advisory Committee. Verlinvest shall be entitled to appoint and remove one member of the Company’s Strategic and Advisory Committee as and when such Committee (which shall be an internal committee without authority to take any decisions binding on the Company) may be established.
1A VOTING AND PROTECTIVE PROVISIONS
1A.1 Holders of Class A Ordinary Shares, Class B Ordinary Shares and Class C Ordinary Shares shall at all times vote together as one class on all resolutions submitted to a vote by the Shareholders. Each Class A Ordinary Share shall be entitled to twenty (20) votes on all matters subject to vote at general meetings of the Company, whether on a show of hands or on a poll, and each Class B Ordinary Share, Class C Ordinary Share, Series A Preferred Share, Series B Preferred Share, Series C Preferred Share and Series D Preferred Share shall be entitled to one (1) vote on all matters subject to vote at general meetings of the Company, whether on a show of hands or on a poll.
1A.2 Notwithstanding other provisions of this Agreement, the Series D Subscription Agreement, the memorandum of association, and the articles of association (or equivalent) of any Group Company, none of the Group Companies shall (and the Founders and Sunny Bay shall procure that none of the Group Companies shall) take any of the following actions, directly or indirectly (whether in a single transaction or a series of related transactions, whether directly or indirectly, and whether or not by amendment, merger, consolidation, scheme of arrangement, amalgamation, or otherwise) (the “Reserved Matters”) without the prior written consent of CVP, which may be withheld in its sole discretion:
(a) unless consented to by a majority of votes of the Series C Preferred Shares, any amendment of the memorandum and articles of association or other constitutional documents of any Group Company, any of which will result in (i) any change of the rights, preferences, number, privileges or powers of, or the restrictions provided for the benefit of, Series C Preferred Shares (including any change in the number of Ordinary Shares issuable upon the conversion of the Preferred Shares), or (ii) the rights or privileges of any series of Preferred Shares or Ordinary Shares becoming more favorable than the rights and privileges of any Series C Preferred Shares;
(b) unless consented to by a majority of votes of the Series D Preferred Shares, any amendment of the memorandum and articles of association or other constitutional documents of any Group Company, any of which will result in (i) any change of the rights, preferences, number, privileges or powers of, or the restrictions provided for the benefit of, Series D Preferred Shares (including any change in the number of Ordinary Shares issuable upon the conversion of the Preferred Shares), or (ii) the rights or privileges of any series of Preferred Shares or Ordinary Shares becoming more favorable than the rights and privileges of any Series D Preferred Shares;
(c) unless consented to by a majority of votes of the Series C Preferred Shares, (i) any action to issue, allot, purchase, buyback or redeem any shares or securities of any class or series or options of any Group Company (excluding any arrangement related to the ordinary shares that have been reserved as of the date of this Agreement for ESOP), (ii) any action to increase, decrease or cancel the issued share capital or registered capital of any of the Group Companies, and (iii) any action to reclassify any shares of any Group Company, any of which has the effect of diluting or reducing the effective shareholding of any of Series C Investors on a fully-diluted basis in the Company or its effective interest in any Group Company or having preferences superior to or on a parity with the Series C Preferred Shares;
(d) unless consented to by a majority of votes of the Series D Preferred Shares, (i) any action to issue, allot, purchase, buyback or redeem any shares or securities of any class or series or options of any Group Company (excluding any arrangement related to the ordinary shares that have been reserved as of the date of this Agreement for ESOP), (ii) any action to increase, decrease or cancel the issued share capital or registered capital of any of the Group Companies, and (iii) any action to reclassify any shares of any Group Company, any of which has the effect of diluting or reducing the effective shareholding of any of the Series D Investors on a fully-diluted basis in the Company or its effective interest in any Group Company or having preferences superior to or on a parity with Series D Preferred Shares;
(e) transfer of any equity interest in any of the Domcos to any other person other than shareholders of the Domcos as of the date of this Agreement;
(f) consolidate with, merge with or into another person, or permit any person to merge with or into it, any of which (i) is in excess of US$70,000,000, or (ii) results in a dilution to any shareholders of the Company of 20% or more, in each case, as determined on a cumulative basis taking into account the current transaction and all prior transactions since the Closing (as defined under the Series C Subscription Agreement), unless consented by a simple majority of votes of Preferred Shares;
(g) any Trade Sale (as defined in Section 2.2(j)) or any event of indirect transfer (as described in Section 4.8), or the sale, lease, transfer or other disposition of all or substantially all of the assets, property or undertaking of any nature, of any of Domcos;
(h) declare, pay or make any dividends or other distributions on any securities of any Group Company;
(i) adopt and issue any new ESOP, equity-linked bonus or profit sharing scheme or any employee share option or share participation scheme that will result in a dilution of the shareholding of any of Series C Investors on a fully-diluted basis in the Company;
(j) cause or permit any Group Company to (1) commence any case, proceeding or other action (A) under any bankruptcy, insolvency or similar law seeking to have an order of relief entered with respect to it or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution, composition or other relief with respect to it or its debts or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or all or substantial part of its property, (2) make a general assignment for the benefit of its creditors, or (3) admit in writing its inability to pay its debts when they become due;
(k) incur financial indebtedness by the Company or HK Subsidiary in excess of RMB200,000,000 in aggregate in any calendar year or in excess of RMB100,000,000 in any single transaction or a series of related transactions;
(l) directly or indirectly, create, incur, assume or permit to exist any Lien (as defined in the Series C Subscription Agreement) with respect to, any of the assets, property or undertaking of any nature of any Group Company (including but not limited to the equity interest in any other person), whether now owned or hereafter acquired, with a value in excess of RMB160,000,000 in aggregate in any calendar year or in excess of RMB80,000,000 in any single transaction or a series of related transactions, or any income or profits therefrom, or file or permit the filing of, or permit to remain in effect, any financing statement or other similar notice of any such Lien (as defined in the Series C Subscription Agreement) with respect to any such assets, property or undertaking of any nature, income or profits under any law;
(m) enter into any transactions with (including any loan to) any of the Related Parties except any Related-Party transactions in the ordinary course of business consistent with past practices and on arm’s length basis; “Related Party” means (i) each of the Founders, (ii) each of the Group Companies, (iii) any Affiliates of any of the persons set out under the foregoing (i) or (ii), (iv) any shareholder, director or manager of any Group Company or any of their Affiliates, or (v) any immediate family member of any of the persons set out under the foregoing (i), (ii), (iii) or (iv);
(n) change the VIE structure, amend or revise any terms of the Control Documents (as defined in the Series C Subscription Agreement), or change the status or shareholding structure of any Domco under the VIE structure; and
(o) enter into any agreement or undertaking to do any of the items set out in subsections (a) to (n) above.
1A.3 Subject to the Statute and Sections 1A.2 and 2.1A (for which Sections the following proxy shall not, for the avoidance of doubt, apply), but otherwise notwithstanding anything to the contrary herein, if the VIE structure is removed in order to allow a listing of the shares of any Group Company on a recognised stock exchange in China, and the provision of Section 1A.1 above is not then permitted in China to allow the holders of Class A Ordinary Shares to have twenty (20) votes per share, each Preferred Shareholder irrevocably grants to, and appoints, holders of the Class A Oridinary Shares (the “Class A Ordinary Holders”, as such holder’s exclusive proxy and attorney-in-fact, for and in the name, place and stead of such holder, to vote all of its Preferred Shares at any general meetings of the Company, or at any adjournment thereof, or in any other circumstances under which a vote, agreement, consent (including written consents or resolutions of Shareholders, unanimous or otherwise) or other approval is sought from such holder provided that such grant and appointment is conditional upon (i) the Class A Ordinary Holders notifying each Preferred Shareholder in advance of each exercise of these rights granted to the Class A Ordinary Holders, (ii) the actions of the Class A Ordinary Holders being lawful, (iii) the use of the proxy not giving rise to a claim being brought against a Preferred Shareholder as a result of or in connection with the exercise of these rights which would not have arisen but for the use of the proxy by the Class A Ordinary Holders, and (iv) the proxy not being used in a way that results in any Shareholder being disproportionately disadvantaged.
2.2 Definitions. For purposes of this Section 2:
(e) Form F-3 and Form S-3. The terms “Form F-3” and “Form S-3” shall mean such respective form under the Securities Act as is in effect on the date hereof or any successor registration or comparable registration form under the Securities Act subsequently adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.
(f) SEC. The term “SEC” or “Commission” shall mean the U.S. Securities and Exchange Commission.
(k) For purposes of this Agreement, reference to registration of securities under the Securities Act and the Exchange Act shall be deemed to mean the equivalent registration in a jurisdiction other than the United States as designated by such Holders, it being understood and agreed that in each such case all references in this Agreement to the Securities Act, the Exchange Act and rules, forms of registration statements and registration of securities thereunder, U.S. law and the SEC, shall be deemed to refer to the equivalent statutes, rules, forms of registration statements, registration of securities and laws of and equivalent government authority in the applicable non-U.S. jurisdiction.
(a) Request by Holders. If the Company shall, at any time after six (6) months following a Qualified Public Offering receive a written request from the Holders of at least twenty-five percent (25%) of the Registrable Securities then outstanding that the Company file a registration statement under the Securities Act covering the registration of such Holders’ Registrable Securities, then the Company shall, within ten (10) business days of the receipt of such written request, give written notice of such request (“Request Notice”) to all Holders, and use its best efforts to effect, as soon as practicable, the registration under the Securities Act of all Registrable Securities that the Holders request to be registered and included in such registration by written notice given by such Holders to the Company within twenty (20) days after receipt of the Request Notice, subject only to the limitations of this Section 2.3.
(b) Underwriting. If the Holders initiating the registration request under this Section 2.3 (the “Initiating Holders”) intend to distribute the Registrable Securities covered by their request by means of an underwriting, then they shall so advise the Company as a part of their request made pursuant to this Section 2.3 and the Company shall include such information in the Request Notice. In such event, the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such Holder) to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting by the Holders of a majority of the Registrable Securities being registered and reasonably acceptable to the Company. Notwithstanding any other provision of this Section 2.3, if the underwriter(s) advise(s) the Company in writing that marketing factors require a limitation of the number of securities to be underwritten, then the Company shall so advise all Holders of Registrable Securities which would otherwise be registered and underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be reduced as required by the underwriter(s) and allocated among the Holders of Registrable Securities on a pro rata basis according to the number of Registrable Securities then outstanding held by each Holder requesting registration (including the Initiating Holders); provided, however, that the number of shares of Registrable Securities to be included in such underwriting and registration shall not be reduced unless all other securities are first entirely excluded from the underwriting and registration including, without limitation, all shares that are not Registrable Securities and are held by any other person, including, without limitation, any person who is an employee, officer or director of the Company or any subsidiary of the Company; provided further, that at least twenty-five percent (25%) of shares of Registrable Securities requested by the Holders to be included in such underwriting and registration shall be so included. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter(s), delivered at least ten (10) business days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration.
(c) Maximum Number of Demand Registrations. The Company shall not be obligated to effect more than two (2) such demand registrations pursuant to this Section 2.3.
(d) Deferral. Notwithstanding the foregoing, if the Company shall furnish to Holders requesting registration pursuant to this Section 2.3, a certificate signed by the President or Chief Executive Officer of the Company stating that in the good faith judgment of the Board, it would be materially detrimental to the Company and its shareholders for such registration statement to be filed at such time, then the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders; provided, however, that the Company may not utilize this right more than once in any twelve (12) month period; provided further, that the Company shall not register any other of its shares during such twelve (12) month period. A demand right shall not be deemed to have been exercised until such deferred registration shall have been effected.
(e) Other Securities Laws in Demand Registration. In the event of any registration pursuant to this Section 2.3, the Company shall register and qualify the securities covered by the registration statement under the securities laws of any other jurisdictions outside of the United States or in Hong Kong or elsewhere as shall be appropriate for the distribution of the securities; provided, however, that (i) the Company shall not be required to do business or to file a general consent to service of process in any such state or jurisdiction, and (ii) notwithstanding anything in this Agreement to the contrary, in the event any jurisdiction in which the securities shall be qualified imposes a non-waivable requirement that expenses incurred in connection with the qualification of the securities be borne by selling shareholders, the expenses shall be payable pro rata by the selling shareholders.
(a) The Company shall notify all Holders of Registrable Securities in writing at least thirty (30) days prior to filing any registration statement under the Securities Act for purposes of effecting a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities of the Company, but excluding registration statements relating to any employee benefit plan or a corporate reorganization or other Rule 145 transaction, an offer and sale of debt securities, or a registration on any registration form that does not permit secondary sales), and shall afford each such Holder an opportunity to include in such registration statement all or any part of the Registrable Securities then held by such Holder. Each Holder desiring to include in any such registration statement all or any part of the Registrable Securities held by it shall, within twenty (20) days after receipt of the above-described notice from the Company, so notify the Company in writing, and in such notice shall inform the Company of the number of Registrable Securities such Holder wishes to include in such registration statement. If a Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein. No Holder of Registrable Securities shall be granted piggyback registration rights superior to those of the Holders of the Preferred Shares without the consent in writing of the Holders of at least fifty percent (50%) of the Ordinary Shares held by the Holders (calculated on a fully-diluted and as-converted basis).
(b) Underwriting. If a registration statement under which the Company gives notice under this Section 2.4 is for an underwritten offering, then the Company shall so advise the Holders of Registrable Securities. In such event, the right of any such Holder’s Registrable Securities to be included in a registration pursuant to this Section 2.4 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting. Notwithstanding any other provision of this Agreement but subject to Section 2.12, if the managing underwriter(s) determine(s) in good faith that marketing factors require a limitation of the number of shares to be underwritten, then the managing underwriter(s) may exclude shares from the registration and the underwriting, and the number of shares that may be included in the registration and the underwriting shall be allocated, first, to the Company, second, to each of the Holders requesting inclusion of their Registrable Securities in such registration statement on a pro rata basis based on the total number of shares of Registrable Securities then held by each such Holder, and third, to holders of other securities of the Company; provided, however, that the right of the underwriter(s) to exclude shares (including Registrable Securities) from the registration and underwriting as described above shall be restricted so that (i) the number of Registrable Securities included in any such registration is not reduced below twenty-five percent (25%) of the aggregate number of shares of Registrable Securities for which inclusion has been requested; and (ii) all shares that are not Registrable Securities and are held by any other person, including, without limitation, any person who is an employee, officer or director of the Company (or any subsidiary of the Company), shall first be excluded from such registration and underwriting before any Registrable Securities are so excluded unless otherwise approved by the Holders of the majority of the Registrable Securities in writing. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter(s), delivered at least ten (10) business days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration.
(c) Not Demand Registration. Registration pursuant to this Section 2.4 shall not be deemed to be a demand registration as described in Section 2.3 above. There shall be no limit on the number of times the Holders may request registration of Registrable Securities under this Section 2.4.
2.5 Form F-3 or Form S-3 Registration. In case the Company shall receive from any Holder or Holders of ten percent (10%) or more of all Registrable Securities then outstanding a written request or requests that the Company effect a registration on Form F-3 or Form S-3 (or an equivalent registration in a jurisdiction outside of the United States) and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, then the Company will:
(a) Notice. Promptly give written notice of the proposed registration and th Holder’s or Holders’ request therefor, and any related qualification or compliance, to all other Holders of Registrable Securities; and
(b) Registration. As soon as practicable, effect such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holder’s or Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within twenty (20) days after the Company provides the notice contemplated by Section 2.5(a); provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section 2.5:
(i) if Form F-3 or Form S-3 is not available for such offering by the Holders;
(ii) if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less than US$500,000;
(iii) if the Company shall furnish to the Holders a certificate signed by the President or Chief Executive Officer of the Company stating that, in the good faith judgment of the Board of the Company, it would be materially detrimental to the Company and its shareholders for such Form F-3 or Form S-3 registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form F-3 or Form S-3 registration statement no more than once during any twelve (12) month period for a period of not more than sixty (60) days after receipt of the request of the Holder or Holders under this Section 2.5; provided that the Company shall not register any of its other shares during such sixty (60) day period;
(iv) if the Company has, within the six (6) month period preceding the date of such request, already effected a registration under the Securities Act other than a registration from which the Registrable Securities of Holders have been excluded (with respect to all or any portion of the Registrable Securities the Holders requested be included in such registration) pursuant to the provisions of Sections 2.3(b) and 2.4(b); or
(v) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance.
(c) Not Demand Registration. Form F-3 or Form S-3 registrations shall not be deemed to be demand registrations as described in Section 2.3 above. Except as otherwise provided herein, there shall be no limit on the number of times the Holders may request registration of Registrable Securities under this Section 2.5; provided that the Company shall not be required to file more than two (2) Form F-3 or Form S-3 registration statements in any twelve (12) month period.
(d) Underwriting. If the Holders of Registrable Securities requesting registration under this Section 2.5 intend to distribute the Registrable Securities covered by their request by means of an underwriting, the provisions of Section 2.3(b) shall apply to such registration.
2.7 Obligations of the Company. Whenever required to effect the registration of any Registrable Securities under this Agreement the Company shall, as expeditiously as reasonably possible:
(a) Registration Statement. Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to ninety (90) days or, in the case of Registrable Securities registered under Form F-3 or Form S-3 in accordance with Rule 415 under the Securities Act or a successor rule, for a period of up to sixty (60) days; provided, however, that (i) such ninety (90) day period shall be extended for a period of time equal to the period any Holder refrains from selling any securities included in such registration at the request of the underwriter(s), and (ii) in the case of any registration of Registrable Securities on Form F-3 or Form S-3 which are intended to be offered on a continuous or delayed basis, such sixty (60) day period shall be extended, if necessary, to keep the registration statement effective until all such Registrable Securities are sold.
(b) Amendments and Supplements. Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement.
(c) Prospectuses. Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of the Registrable Securities owned by them that are included in such registration.
(d) Blue Sky. Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act.
(e) Underwriting. In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement in usual and customary form, with the managing underwriter(s) of such offering.
(f) Notification. Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of (i) the issuance of any stop order by the SEC in respect of such registration statement, or (ii) the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.
(g) Opinion and Comfort Letter. Furnish, at the request of any Holder requesting registration of Registrable Securities, on the date that such Registrable Securities are delivered to the underwriter(s) for sale, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering and reasonably satisfactory to a majority in interest of the Holders requesting registration, addressed to the underwriters, if any, and (ii) letters dated as of (x) the effective date of the registration statement covering such Registrable Securities and (y) the closing date of the offering from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering and reasonably satisfactory to a majority in interest of the Holders requesting registration, addressed to the underwriters, if any.
(a) By the Company. To the extent permitted by law, the Company will indemnify and hold harmless each Holder, its partners, officers, directors, legal counsel, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act, or other United States federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”):
(i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto;
(ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or
(iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any United States federal or state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any United States federal or state securities law in connection with the offering covered by such registration statement;
and the Company will reimburse each such Holder, its partner, officer, director, legal counsel, underwriter or controlling person for any legal or other expenses reasonably incurred by them, as incurred, in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this subsection 2.9(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder, or any partner, officer, director, legal counsel, underwriter or controlling person of such Holder.
(b) By Selling Holders. To the extent permitted by law, each selling Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration qualifications or compliance is being effected, indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holder’s partners, directors, officers, legal counsel or any person who controls such Holder within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer, legal counsel, controlling person, underwriter or other such Holder, partner or director, officer or controlling person of such other Holder may become subject under the Securities Act, the Exchange Act or other United States federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter or other Holder, partner, officer, director or controlling person of such other Holder in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 2.9(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided, further, that in no event shall any indemnity under this Section 2.9(b) exceed the net proceeds received by such Holder in the registered offering out of which the applicable Violation arises.
(c) Notice. Promptly after receipt by an indemnified party under this Section 2.9 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.9, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential conflict of interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of liability to the indemnified party under this Section 2.9 to the extent the indemnifying party is prejudiced as a result thereof, but the omission to so deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.9.
(d) Contribution. In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any indemnified party makes a claim for indemnification pursuant to this Section 2.9 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 2.9 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any indemnified party in circumstances for which indemnification is provided under this Section 2.9; then, and in each such case, the indemnified party and the indemnifying party will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that a Holder (together with its related persons) is responsible for the portion represented by the percentage that the public offering price of its Registrable Securities offered by and sold under the registration statement bears to the public offering price of all securities offered by and sold under such registration statement, and the Company and other selling Holders are responsible for the remaining portion. The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case: (A) no Holder will be required to contribute any amount in excess of the net proceeds to such Holder from the sale of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement; and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.
(e) Survival; Consents to Judgments and Settlements. The obligations of the Company and Holders under this Section 2.9 shall survive the completion of any offering of Registrable Securities in a registration statement, regardless of the expiration of any statutes of limitation or extensions of such statutes. No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.
(a) Make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times after the effective date of the first registration under the Securities Act filed by the Company for an offering of its securities to the general public;
(b) File with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); and
(c) So long as a Holder owns any Registrable Securities, to furnish to such Holder forthwith upon request (i) a written statement by the Company as to its compliance with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of the Company’s initial public offering), the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), or its qualification as a registrant whose securities may be resold pursuant to Form F-3 or Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company, and (iii) such other reports and documents of the Company as a Holder may reasonably request in availing itself of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to Form F-3 or Form S-3.
(a) Class C Ordinary Shares (and/or options or warrants to subscribe for Class C Ordinary Shares) issued to employees, officers, directors, contractors, advisors or consultants of any one of the Group Companies pursuant to the Group Companies’ employee share option plans, schemes or programs or otherwise for the primary purpose of soliciting or retaining their employment or services approved by the Board;
(b) any Ordinary Shares issued for the conversion of the Preferred Shares;
(c) any securities issued in connection with any share split, combination, recapitalization, share dividend or other similar event in which all Participation Rights Holders are entitled to participate on a pro rata basis;
(d) any securities issued as a dividend or distribution on Ordinary Shares or Preferred Shares as approved pursuant to this Agreement and the Memorandum and Articles;
(e) any securities issued upon the exercise, conversion or exchange of any outstanding options, warrants, notes or other rights to acquire securities of the Company as of the date hereof; or
(f) any securities issued pursuant to a Qualified Public Offering.
(a) First Participation Notice. In the event that the Company proposes to undertake an issuance of New Securities (in a single transaction or a series of related transactions), it shall give to each Participation Rights Holder written notice of its intention to issue New Securities (the “First Participation Notice”), describing the amount and type of New Securities, the price and the general terms upon which the Company proposes to issue such New Securities. Each Participation Rights Holder shall have thirty (30) days from the date of receipt of any such First Participation Notice to agree in writing to purchase such Participation Rights Holder’s Pro Rata Share of such New Securities for the price and upon the terms and conditions specified in the First Participation Notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased (not to exceed such Participation Rights Holder’s Pro Rata Share). If any Participation Rights Holder fails to so agree in writing within such thirty (30) day period to purchase such Participation Rights Holder’s full Pro Rata Share of an offering of New Securities, then such Participation Rights Holder shall forfeit the right hereunder to purchase that part of its Pro Rata Share of such New Securities that it did not agree to purchase.
(a) The Company’s Option. Subject to the Statute, the Company shall have the right, exercisable upon written notice to the Selling Shareholder and each Preferred Holder, within thirty (30) days after receipt of the Transfer Notice (the “Company First Refusal Period”), to elect to purchase for cancellation all or any part of the Offered Shares at the same price and subject to the same material terms and conditions as described in the Transfer Notice, provided that the Company may by Ordinary Resolution specifically waive its rights under this Section 4.3 in writing, and provided that each Preferred Holder may specifically waive his, her or its rights under this Section 4.3 in writing; provided further that the Company’s right to exercise its rights under this Section 4.3(a) to purchase all or any part of the Offered Shares from any Selling Shareholder shall be subject to the prior written consent of a majority of the Series C Preferred Shares.
(a) Co-Sale Pro Rata Portion. Each Preferred Holder which has not exercised its right of first refusal with respect to the Offered Shares may sell all or any part of that number of Ordinary Shares held by it that is equal to the product obtained by multiplying (x) the aggregate number of the remaining Offered Shares subject to the co-sale right hereunder by (y) a fraction, the numerator of which is the number of Ordinary Shares (on an as-converted basis) owned by such Preferred Holder at the time of the sale or transfer and the denominator of which is the total combined number of Ordinary Shares (on an as-converted basis) at the time owned by all Preferred Holders which has not exercised their right of first refusal with respect to the Offered Shares and the Selling Shareholder (“Co-Sale Pro Rata Portion”). To the extent that any Preferred Holder does not participate in the sale to the full extent of its Co-Sale Pro Rata Portion, the Selling Shareholder and the participating Preferred Holders shall, within five (5) days after the end of such Co-Sale Right Period, make such adjustments to the Co-Sale Pro Rata Portion of each participating Preferred Holder so that any remaining Co-Sale Shares may be allocated to other participating Preferred Holders on a pro rata basis.
(i) the number of Ordinary Shares which such Preferred Holder elects to sell;
(ii) that number of Preferred Shares which is at such time convertible into the number of Ordinary Shares that such Preferred Holder elects to sell; provided in such case that, if the prospective purchaser objects to the delivery of Preferred Shares in lieu of Ordinary Shares, such Preferred Holder shall convert such Preferred Shares into Ordinary Shares and deliver Ordinary Shares as provided in subsection 4.4(b)(i) above. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the purchaser; or
(iii) a combination of the above.
(a) Except for transfers by the Class A Ordinary Holders to Permitted Transferees as provided in Section 4.5 above, none of the Founders, the Class A Ordinary Holders or the Permitted Transferees shall, without the prior written consent of holders of a majority of the Ordinary Shares held by the Investors and their permitted transferees (on an as-converted basis), directly or indirectly, transfer any of the Company’s securities now held by him/her/it to any person in violation of this Section 4.
(b) Any attempt by a party to transfer Ordinary Shares in violation of this Section 4 shall be void and the Company hereby agrees that it will not effect such a transfer nor will it treat any alleged transferee as the holder of such shares without the written consent of holders of a majority of the Ordinary Shares held by the Investors and their permitted transferees (on an as-converted basis).
(c) Subject to the Statute, and subject to Sections 2 and 4.5 above and Section 5 below, but otherwise notwithstanding anything to the contrary herein, none of the Preferred Holders shall, without the prior written consent of Class A Ordinary Holders holding a majority of the Class A Ordinary Shares, transfer any of the Company’s securities now held by it to any person other than its subsidiaries or to any other person controlling, or under common control with, that Shareholder within three (3) years after November 16, 2015.
(a) Each certificate representing the Restricted Shares shall be endorsed with the following legend:
“THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN A SHAREHOLDERS AGREEMENT, A COPY OF WHICH MAY BE OBTAINED UPON WRITTEN REQUEST TO THE COMPANY.”
(b) Each party agrees that the Company may instruct its transfer agent to impose transfer restrictions on the shares represented by certificates bearing the legend referred to in subsection 4.7(a) above to enforce the provisions of this Agreement and the Company agrees to promptly do so. The legend shall be removed upon termination of the provisions of this Section 4.
(a) Each of the Founders and Class A Ordinary Holders shall not, and shall not cause or permit any other person to, directly or indirectly, sell, assign, transfer, pledge, hypothecate, mortgage, encumber or otherwise dispose through one or a series of transactions any equity interest held or controlled by them in the Domcos, as the case may be, to any person. Any transfer in violation of this subsection 4.8(a) shall be void and the Founders and the Class A Ordinary Holders shall procure that each of the Domcos will not effect such transfer nor will it treat any alleged transferee as the holder of such equity interest without the prior written approval of the holders of at least a majority of the Preferred Shares.
(b) Each of the Founders and the Class A Ordinary Holders shall procure that the Domcos shall not issue to any person any equity securities of the Domcos, as the case may be, or any options or warrants for, or any other securities exchangeable for or convertible into, such equity securities of the Domcos, as the case may be, without the prior written approval of the majority in interest of the Preferred Holders.
(c) Each of the Founders and the Class A Ordinary Holders shall also procure that restrictions set forth in this Section 4 shall not be avoided by the direct or indirect transfer of any shares (or other interest) in such Class A Ordinary Holder or of any other entity having control over such Class A Ordinary Holder.
5. REDEMPTION AND CANCELLATION
5.4 Availability. If on the Redemption Date, the number of Preferred Shares that may then be legally redeemed by the Company is less than the number of all Preferred Shares to be redeemed, then (i) the number of Preferred Shares then redeemed shall be based ratably on the aggregate Redemption Price of all Preferred Shares to be redeemed, and (ii) the remaining Preferred Shares to be redeemed shall be carried forward and redeemed as soon as the Company has legally available funds to do so.
6. LIQUIDATION, DISSOLUTION OR WINDING UP
(a) to the holders of the Series D Preferred Shares, an amount equal to the Series D Preference Amount that would be payable to such holders pursuant to Section 6.1 (the “Series D Compulsory Payment Preference”). If the value of the Compulsory Payment is less than the Series D Compulsory Payment Preference, then the Compulsory Payment shall be distributed pro rata among the holders of all issued and outstanding Series D Preferred Shares;
(b) the remainder (after payment in accordance with subsection 6.2(a) above), if any, to the holders of the Series C Preferred Shares, an amount equal to the Series C Preference Amount that would be payable to such holders pursuant to Section 6.1 (the “Series C Compulsory Payment Preference”). If the remainder is less than the Series C Compulsory Payment Preference, then the remainder shall be distributed pro rata among the holders of all issued and outstanding Series C Preferred Shares;
(c) the remainder (after payment in accordance with subsection 6.2(a) and subsection 6.2(b) above), if any, to the holders of the Series B Preferred Shares, an amount equal to the Series B Preference Amount that would be payable to such holders pursuant to Section 6.1 (the “Series B Compulsory Payment Preference”). If the remainder is less than the Series B Compulsory Payment Preference, then the remainder shall be distributed pro rata among the holders of all issued and outstanding Series B Preferred Shares;
(d) the remainder (after payment in accordance with subsection 6.2(a), subsection 6.2(b) and subsection 6.2(c) above), if any, to the holders of the Series A Preferred Shares, an amount equal to the Series A Preference Amount that would be payable to such holders pursuant to Section 6.1 (the “Series A Compulsory Payment Preference”). If the remainder is less than the Series A Compulsory Payment Preference, then the remainder shall be distributed pro rata among the holders of all issued and outstanding Series A Preferred Shares; and
(e) the remainder (after payment in accordance with subsection 6.2(a), subsection 6.2(b), subsection 6.2(c) and subsection 6.2(d) above), if any, to the holders of Series D Preferred Shares, Series C Preferred Shares, Series B Preferred Shares, Series A Preferred Shares and Ordinary Shares on a pro rata basis, based on the number of Ordinary Shares then held by each holder on an as-converted basis.
(a) If traded on a securities exchange, the value shall be deemed to be the average of the security’s closing prices on such exchange over the thirty (30) day period ending one (1) day prior to the distribution;
(b) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid prices over the thirty (30) day period ending three (3) days prior to the distribution; and
(c) If there is no active public market, the value shall be the fair market value thereof as determined in good faith by the liquidator (or, in the case of any proposed distribution in connection with a transaction which is a deemed liquidation hereunder, by the Board).
7.1 Assignment. Notwithstanding anything herein to the contrary:
Each of the Founders, jointly and severally, warrants, undertakes and covenants to each Investor as set forth below. Each of the Founders acknowledges that each Investor entered or is entering into the Series A Basic Documents, the Series B Basic Documents, the Series C Basic Documents, the Series D Basic Documents, and the ZJ Basic Documents in reliance on each of the warrants, undertakings and covenants given herein and that each of the warrants, undertakings and covenants has been given with the intention of inducing such Investor to enter into the Series A Basic Documents, the Series B Basic Documents, the Series C Basic Documents, the Series D Basic Documents, and the ZJ Basic Documents.
(a) to take all steps promptly to obtain and maintain all necessary patent, trademark, copyright and software registrations, in the Company’s reasonable commercial judgment with advice of counsel, in all relevant jurisdictions, for the protection of the intellectual property rights of the Group;
(b) to: (i) keep proper books of record and account, in which full and correct entries shall be made of all transactions, the assets and properties and businesses of the Group in accordance with IFRS or U.S. GAAP, and (ii) establish, maintain and administer an effective system of financial and accounting controls satisfactory to the Investors; and
(c) to institute and keep in place such arrangements as are reasonably satisfactory to the Investors such that the Company (i) will at all times control the operations of the PRC Subsidiary and the Domcos, and (ii) will at all times be permitted to properly consolidate the financial results for the PRC Subsidiary and the Domcos in the consolidated financial statements for the Company prepared under IFRS or U.S. GAAP.
(a) employ or recruit or entice away any present, former or future employee of or from any Group Company to serve in a Competitive Position;
(b) own any equity interest (other than as the holder of not more than five percent (5%) of total outstanding shares of a publicly-held and traded company) in, manage, operate, join, control, lend money or render financial assistance to, provide services to, or otherwise be connected with, as a director, officer, employee, partner, shareholder, consultant or otherwise, any other person that engages in the business that is the same as, similar to or in competition with the Principal Business (as defined in the Series C Subscription Agreement) of the Group anywhere in the PRC, Hong Kong, the Macau Special Administrative Region of the PRC or Taiwan;
(c) disclose or misuse any confidential information; or
(d) participate in a hostile takeover attempt of any Group Company.
For the purpose of this Agreement, “Competitive Position” shall mean serving in a senior management capacity, as an employee, consultant, advisor or otherwise, for any person that engages in the business that is the same as, similar to or in competition with the Principal Business of any Group Company in the PRC, Hong Kong, the Macau Special Administrative Region of the PRC or Taiwan.
In the event any of the Founders or any of his/her Associates violates any prohibition contained in the foregoing sentence, the Company and/or the Investors shall be entitled to an injunction prohibiting such Founder from engaging in (or, as the case may be, requiring such Founder to procure that his/her Associates do not engage in) such activities, as such Founder agrees that the Group would be irreparably harmed by any such actual or threatened conduct. In addition, the Company and/or the Investors may apply for such other relief as may be available for breach of this provision at law or in equity.
9. CONFIDENTIALITY AND NON-DISCLOSURE
Each person making a communication hereunder by facsimile shall promptly confirm by telephone to the person to whom such communication was addressed each communication made by it by facsimile pursuant hereto but the absence of such confirmation shall not affect the validity of any such communication. A party may change or supplement the addresses given above, or designate additional addresses, for purposes of this Section 10.1 by giving the other party written notice of the new address in the manner set forth above.
10.3 Governing Law. This Agreement shall be governed by and construed exclusively in accordance with the laws of Hong Kong without regard to the principles of conflict of law of any jurisdiction.
(b) Arbitration. In the event the parties are unable to settle a dispute between them regarding this Agreement in accordance with subsection (a) above, such dispute shall be referred to and finally settled by arbitration at Hong Kong International Arbitration Centre in accordance with the UNCITRAL Arbitration Rules (the “UNCITRAL Rules”) in effect, which rules are deemed to be incorporated by reference into this subsection (b). The arbitration tribunal shall consist of three (3) arbitrators to be appointed according to the UNCITRAL Rules. The language of the arbitration shall be English.
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SUNNY BAY GLOBAL LIMITED |
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[SIGNATURE PAGE TO TENTH AMENDED AND RESTATED SHAREHOLDERS AGREEMENT]
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IVY CAPITAL 2011 HOLDCO LTD. |
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GOLD STAND GOAL LIMITED |
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/s/ Xxxxxx Xxx |
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Name: Xxxxxx Xxx |
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Title: Director |
[SIGNATURE PAGE TO TENTH AMENDED AND RESTATED SHAREHOLDERS AGREEMENT]
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CLEARVUE YW HOLDINGS, LTD. |
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/s/ Xxxxx Xxx Hui |
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Name: Xxxxx Xxx Hui |
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Title: Director |
[SIGNATURE PAGE TO TENTH AMENDED AND RESTATED SHAREHOLDERS AGREEMENT]
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VERLINVEST ASIA (HK) LIMITED. |
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/s/ Xxxxxx Xxxxxxx |
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Name: Xxxxxx Xxxxxxx |
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Title: Joint Proxy-holder |
[SIGNATURE PAGE TO TENTH AMENDED AND RESTATED SHAREHOLDERS AGREEMENT]
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FIRST PHARMACIA INTERNATIONAL |
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/s/ Xxxx Xxx |
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Name: Xxxx Xxx |
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Title: Director |
[SIGNATURE PAGE TO TENTH AMENDED AND RESTATED SHAREHOLDERS AGREEMENT]
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RICH CHANCE GLOBAL LIMITED |
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/s/ Xx Xxxxxx |
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/s/ Xxxx Xx |
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Name: Xx Xxxxxx and Xxxx Xx |
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Title: Director |
[SIGNATURE PAGE TO TENTH AMENDED AND RESTATED SHAREHOLDERS AGREEMENT]
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XXXX CAPITAL LIMITED |
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/s/ Xxx Xxx |
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Name: Xxx Xxx |
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Title: Director |
[SIGNATURE PAGE TO TENTH AMENDED AND RESTATED SHAREHOLDERS AGREEMENT]
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6 DIMENSIONS CAPITAL, L.P. |
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/s/ Xxxxxxxxx Xxxxx |
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By: 6 Dimensions Capital GP, LLC |
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Its: General Partner |
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Authorized Signatory: Xxxxxxxxx Xxxxx |
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Title: Chief Financial Officer |
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6 DIMENSIONS AFFILIATES FUND, L.P. |
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/s/ Xxxxxxxxx Xxxxx |
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By: 6 Dimensions Capital GP, LLC |
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Its: General Partner |
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Authorized Signatory: Xxxxxxxxx Xxxxx |
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Title: Chief Financial Officer |
[SIGNATURE PAGE TO TENTH AMENDED AND RESTATED SHAREHOLDERS AGREEMENT]
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LI CHILDREN’S 2006 IRREVOCABLE TRUST |
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/s/ Xxxxx Xxxxxxx |
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Xxxxx Xxxxxxx |
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Vice President |
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Name of Authorized Signatory: X.X. XXXXXX TRUST |
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COMPANY OF DELAWARE AS TRUSTEE |
[SIGNATURE PAGE TO TENTH AMENDED AND RESTATED SHAREHOLDERS AGREEMENT]
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ALLIED CHINA INVESTMENT LIMITED |
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/s/ Xxxx Xxx |
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Name: Xxxx Xxx |
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Title: Director |
[SIGNATURE PAGE TO TENTH AMENDED AND RESTATED SHAREHOLDERS AGREEMENT]
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TONGYI INVESTMENT HOLDINGS LIMITED |
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/s/ Xxx Xxxxxxx |
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Name: Xxx Xxxxxxx |
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Title: Director |
[SIGNATURE PAGE TO TENTH AMENDED AND RESTATED SHAREHOLDERS AGREEMENT]
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XXX XXX |
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/s/ Jia Xxx |
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Xxx Zhu |
[SIGNATURE PAGE TO TENTH AMENDED AND RESTATED SHAREHOLDERS AGREEMENT]
EXHIBIT A
If to any Group Company, the Founders or Sunny Bay:
Attention: Yu Gang/Xxxxxxx Xxx
Address: Xx.000 Xxxxxxxxxx Xxxx, Xxxxxx Xxx Xxxx, Xxxxxxxx, X.X. Xxxxx 000000
Telephone: x00 00 00000000
Fax:
If to Ivy Capital and Gold Stand:
c/o Ivy Capital Investment Advisor Ltd
Attention: Ms. Xxxxx Xxxx
Address: Xxxx 000, Xxxxx 0, Xxxxxxx Xxxxxxxx, 0-0 Xxxxxx Xxxxxx, Xxxxxxx, Xxxx Xxxx
Telephone: 000-0000 0000
Fax: 000-0000 0000
If to CVP:
Attention: Xxxxx Xxx
Address: x/x Xxxx 00X, Xxxxxxxx 0, XxxXxx Xxxxxxx Plaza, 000 Xxxxx Xxxxxxx Xxxx, Xxxxxx, Xxxxxxxx, Xxxxx 000000
Telephone: (00) 00 0000 0000
Fax: (00) 00 0000 0000
If to Verlinvest:
Attention: Xxxxxxxx Xxxxx
Address: Verlinvest Asia (HK) Limited, c/o Verlinvest Asia Pte. Ltd., 000 Xxxxxx Xxxx #00-00 Xxxxxxxx House II, Xxxxxxxxx 000000, Xxxxxxxxx
Telephone : x00 0000 0000
Mobile x00000000000
Fax: x00 0000 0000
If to BVCF:
Attention: Xxx Xxxx
Address: Xxxxx 0000, Xxxxx 0, Xxx Xxxxxxxx Xxxxxx, 763 Mengzi Road, Xxxxxxx Xxxxxxxx, Xxxxxxxx 000000, Xxxxx
Telephone: (00) 00 0000 0000
Fax: (00) 00 0000 0000
If to Greenwoods:
Attention: Di Pan
Address: 27 F, XXXXX PARKSIDE, 0000 Xxxxxxxx Xxxx, Xxxxxx Xxx Xxxxxxxx, Xxxxxxxx, XXX 000000
Telephone: (00) 00 0000 0000
Fax: (00) 00 0000 0000
If to Xxxx:
Attention: Xxxxx Xxx
Address: 0000, Xxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxx Xxxx
Telephone: x000 0000 0000
Mob: x000 0000 0000
Fax: x000 0000 0000
If to 6D and 6D Affiliates
Attention:
Address: 0xx Xxxxx, 00 Xxxxxxxxx Xxxxxxx, Xxxxxxxxx, XX 00000, XXX
Telephone:
Fax:
If to 2006 Trust
Attention:
Address: XX XXXXXX Trust Co of Delaware,500 Xxxxxxx Xxxxxxxxxx Xx Xxxxxx XX 00000, XXX
Telephone:
Fax:
If to ALLIED:
Attention: Xxxx Xxx
Address: Xxxxx 00-00, Xxxxx 00, Xxxxx X, Xxxxxx Xxxx, 10 Jintong West Road, Xxxxxxxx Xxxxxxxx, Xxxxxxx, 000000, Xxxxx
Telephone: x00 00 00000000
Fax: x00 00 00000000
If to Tongyi:
Attention: Xxx Xxxxx
Address: No. 9 office building, Xxxx Xx Xxx Xxxx, Xx Xxxx Xxxxxxxx, Xxxxxxx, X.X. Xxxxx
Telephone: + 00 00000000000
Fax: x00 00 00000000
If to Xxx Xxx:
Attention: Xxx Xxx
Address: Xx. 0000, Xxxxxxxx 00, Xxxx Xxxx Xxxxxxxx, 88 Xxx Xxx Reservoir Road, Hong Kong (香港大潭水塘道88号阳明山庄10座1663号)
Telephone: x000 0000 0000
Fax: x000 0000 0000
