Exhibit 3.1

 

THE COMPANIES ACT (AS AMENDED)

 

OF THE CAYMAN ISLANDS

 

COMPANY LIMITED BY SHARES

 

EIGHTH AMENDED AND RESTATED

 

MEMORANDUM AND ARTICLES

 

OF

 

ASSOCIATION

 

OF

 

 

PONY AI INC.

 

 

(As adopted by a special resolution passed on September 3, 2024,

and effective on September 3, 2024)

 

 

THE COMPANIES ACT (AS AMENDED)

 

OF THE CAYMAN ISLANDS

 

COMPANY LIMITED BY SHARES

 

EIGHTH AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION

 

OF

 

Pony ai inc.

 

(As adopted by a special resolution passed on September 3, 2024,

and effective on September 3, 2024)

 

1.

The name of the Company is Pony AI Inc.

 

2.

The Registered Office of the Company shall be at the offices of Osiris International Cayman Limited, Suite #4-210, Governors Square, 23 Lime Tree Bay Avenue, PO Box 32311, Grand Cayman KY1-1209, Cayman Islands, or at such other place in the Cayman Islands as the Directors may from time to time decide.

 

3.

The objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by the Companies Act (As Amended) or as the same may be revised from time to time, or any other Law of the Cayman Islands.

 

4.

The Company has unrestricted corporate capacity. Without limitation to the foregoing, as provided by Section 27(2) of the Companies Act (As Amended), the Company has and is capable of exercising all of the functions of a natural Person of full capacity irrespective of any question of corporate benefit.

 

5.

The liability of each Member is limited to the amount from time to time unpaid on such Member’s Shares.

 

6.

The authorized share capital of the Company is US$300,000.00 divided into (a) 307,505,707 Class A Ordinary Shares of par value US$0.0005 each (the “Class A Ordinary Shares”), (b) 81,088,770 Class B Ordinary Shares of par value US$0.0005 each (the “Class B Ordinary Shares,” collectively with the Class A Ordinary Shares, the “Ordinary Shares”), (c) 34,717,760 Series A Preferred Shares of par value US$0.0005 each (the “Series A Preferred Shares”), (d) 44,758,365 Series B Preferred Shares of par value US$0.0005 each (the “Series B Preferred Shares”), (e) 27,428,047 Series B+ Preferred Shares of par value US$0.0005 each (the “Series B+ Preferred Shares”), (f) 10,478,885 Series B2 Preferred Shares of par value US$0.0005 each (the “Series B2 Preferred Shares”), (g) 57,896,414 Series C Preferred Shares of par value US$0.0005 each (the “Series C Preferred Shares”), (h) 16,161,668 Series C+ Preferred Shares of par value US$0.0005 each (the “Series C+ Preferred Shares”), and (i) 19,964,384 Series D Preferred Shares of par value US$0.0005 each (the “Series D Preferred Shares,” collectively with the Series A Preferred Shares, the Series B Preferred Shares, the Series B+ Preferred Shares, the Series B2 Preferred Shares, the Series C Preferred Shares and the Series C+ Preferred Shares, the “Preferred Shares”).

 

7.

If the Company is registered as exempted, its operations will be carried on subject to the provisions of Section 174 of the Companies Act (As Amended) and, subject to the provisions of the Companies Act (As Amended) and the Articles of Association of the Company, it shall have the power to register by way of continuation as a body corporate limited by shares under the Laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands.

 

8.

Capitalised terms that are not defined in this Eighth Amended and Restated Memorandum of Association bear the same meaning as those given in the Eighth Amended and Restated Articles of Association of the Company.

 

 

THE COMPANIES ACT (AS AMENDED)

 

OF THE CAYMAN ISLANDS

 

COMPANY LIMITED BY SHARES

 

EIGHTH AMENDED AND RESTATED ARTICLES OF ASSOCIATION

 

OF

 

Pony ai inc.

 

(As adopted by a special resolution passed on September 3, 2024,

and effective on September 3, 2024)

 

INTERPRETATION

 

1.	In these Articles Table A in the First Schedule to the Statute does not apply and, unless there is something in the subject or context inconsistent therewith:

 

	“Accounting Standards”	means generally accepted accounting principles in the United States, applied on a consistent basis.
	“Additional Number”	shall have the meaning set forth in Section 1.4.2 of Schedule A hereof.

 

 

“Affiliate”

means, with respect to a Person, any other Person that, directly or indirectly, Controls, is Controlled by or is under common Control with such Person. In the case of a holder of Preferred Shares, the term “Affiliate” also includes (v) any direct or indirect shareholder of such holder, (w) any of such shareholder’s or such holder’s general partners or limited partners, (x) the fund manager managing or advising such shareholder or such holder (and general partners, limited partners and officers thereof) and other funds managed or advised by such fund manager, and (y) trusts Controlled by or for the benefit of any such Person referred to in (v), (w) or (x), and (z) any fund or holding company formed for investment purposes that is promoted, sponsored, managed, advised or serviced by such holder or any of its Affiliates, but excludes, for the avoidance of doubt, any portfolio companies of such holder and portfolio companies of any affiliated investment fund or investment vehicle of such holder. For the avoidance of doubt, unless the context requires otherwise, Affiliates of a Group Company shall not include any holder of Preferred Shares and vice versa. Notwithstanding the foregoing and anything to the contrary in any Transaction Document, (a) the name “Sequoia Capital” is commonly used to describe a variety of entities (collectively, the “Sequoia Entities”) that are affiliated by ownership or operational relationship and engaged in a broad range of activities related to investing and securities trading and (b) notwithstanding any other provision of these Articles and the other Transaction Documents to the contrary, these Articles and the other Transaction Documents shall not be binding on, or restrict the activities of, (i) any Sequoia Entity outside of the Sequoia China Sector Group, (ii) any entity primarily engaged in investment and trading in the secondary securities market, (iii) the ultimate beneficial owner of an Sequoia Entity (or its general partner or ultimate general partner) who is a natural Person, and such Person’s relatives (including but without limitation, such Person’s spouse, parents, children, siblings, mother-in-law and father-in-law and brothers and sisters-in-law), (iv) any officer, director or employee of a Sequoia Entity (or its general partner or ultimate general partner) and such Person’s relatives, and (v) for the avoidance of doubt, any portfolio companies of any Sequoia Entity and portfolio companies of any affiliated investment fund or investment vehicle of any Sequoia Entity. For purposes of the foregoing, the “Sequoia China Sector Group” means all Sequoia Entities (whether currently existing or formed in the future) that are principally focused on companies located in, or with connections to, the PRC that are exclusively managed by Sequoia Capital. For the avoidance of doubt, Eight Roads and ClearVue shall be deemed Affiliates to each other. In addition, an Eight Roads Person (as defined below) is also an affiliate of Eight Roads. Eight Roads Person(s) means (1) FIL Limited (“FIL”), a company incorporated in Bermuda, and any subsidiary undertaking of FIL from time to time (FIL and its subsidiary undertakings being the “FIL Group”); (2) FMR LLC (“FMR”), a Delaware corporation, and any subsidiary undertaking of FMR from time to time (FMR and its subsidiary undertakings being the “FMR Group”); (3) any director, officer, employee or shareholder of the FIL Group and/or the FMR Group or members of his family and any company, trust, partnership or other entity (“Entities”) formed for his or any of their benefit from time to time (any or all of such individuals and Entities being the “Closely Related Shareholders”); (4) any Entity controlled by Closely Related Shareholders where “control” shall mean the power to direct the management and policies or appoint or remove members of the board of directors or other governing body of the Entity, directly or indirectly, whether through the ownership of voting securities, contract or otherwise, and “controlled” shall be construed accordingly; (5) any affiliate of any member of the FIL Group and/or the FMR Group (where “affiliate” means any Entity controlled by any combination of any Closely Related Shareholders and any member of the FIL Group and/or the FMR Group, and includes the officers, partners and directors of any affiliate); and (6) any charitable organizations.

 

 

	“Applicable Conversion Price”	means, with respect to the Series A Preferred Shares, the then-effective Series A Conversion Price; with respect to the Series B Preferred Shares, the then-effective Series B Conversion Price; with respect to the Series B+ Preferred Shares, the then-effective Series B+ Conversion Price; with respect to the Series B2 Preferred Shares, the then-effective Series B2 Conversion Price; with respect to the Series C Preferred Shares, the then-effective Series C Conversion Price; with respect to the Series C+ Preferred Shares, the then-effective Series C+ Conversion Price; and with respect to the Series D Preferred Shares, the then-effective Series D Conversion Price.
	“Approval of the Preferred Directors”	means the approval of no less than two-thirds (2/3) of the votes of all incumbent Preferred Directors.
	“Approval of the Majority Preferred Holders”	means in relation to the same matter, the approval, in the form of written consent, by the Majority Preferred Holders.

 

 

	“Approved Sale”	shall have the meaning set forth in Article 121 hereof.
	“Articles”	means these articles of association of the Company (including the Schedule A hereto) as originally formed or as from time to time altered by Special Resolution.
	“Auditor”	means the Person for the time being performing the duties of auditor of the Company (if any).
	“Automatic Conversion”	shall have the meaning set forth in Article 8.3(C) hereof.
	“Board” or “Board of Directors”	means the board of directors of the Company.
	“Business Day”	means any day that is not a Saturday, Sunday, legal holiday or other day on which commercial banks are required or authorized by Law to be closed in the Cayman Islands, British Virgin Islands, the United States, Japan, Hong Kong, Toronto or the PRC.
	“CEO”	means Chief Executive Officer.
	“CEO Director”	shall have the meaning set forth in Article 63.
	“Change of Control Event”	means any event, action or transaction (either in a single transaction or a series of related transactions) that would result in a Person (other than the Principals and their respective Affiliates), together with its Affiliates, acquiring Control of the Company or otherwise acquiring the power to consolidate the financials of the Group Companies.
	“Charter Documents”	means, with respect to a particular legal entity, the articles of incorporation, certificate of incorporation, formation or registration (including, if applicable, certificates of change of name), memorandum of association, articles of association, bylaws, articles of organization, limited liability company agreement, trust deed, trust instrument, operating agreement, joint venture agreement, business license, or similar or other constitutive, governing, or charter documents, or equivalent documents, of such entity.

 

 

	“China-UAE”	means China-UAE Investment Cooperation Fund, L.P. and its successors, transferees and permitted assigns.
	“Class A Ordinary Shares”	shall have the meaning set forth in the Memorandum.
	“Class B Ordinary Shares”	shall have the meaning set forth in the Memorandum.
	“Collaboration Agreement”	has the meaning given to such term in the TMC Purchase Agreement.
	“Company”	means the above named company.
	“Company Option Period”	shall have the meaning set forth in Section 2.2.2 of Schedule A hereof.
	“Competitor”	shall have the meaning set forth in the Right of First Refusal and Co-Sale Agreement.
	“Competitor ROFR Notice”	shall have the meaning set forth in Section 2.1.3 of Schedule A hereof.
	“Competitor Transfer Notice”	shall have the meaning set forth in Section 2.1.3 of Schedule A hereof.
	“Contract”	means a contract, agreement, understanding, indenture, note, bond, loan, instrument, lease, mortgage, franchise, license, commitment, purchase order, or other legally binding arrangement, whether written or oral.
	“Control”	of a given Person means the power or authority, whether exercised or not, to direct the business, management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by Contract or otherwise; provided, that such power or authority shall conclusively be presumed to exist upon possession of beneficial ownership or power to direct the vote of more than fifty percent (50%) of the votes entitled to be cast at a meeting of the members or shareholders of such Person or power to control the composition of a majority of the board of directors of such Person. The terms “Controlled” and “Controlling” have meanings correlative to the foregoing.
	“Control Documents”	has the meaning given to such term in the Series D Purchase Agreement.

 

 

	“Conversion Shares”	means Class A Ordinary Shares issuable upon conversion of the Preferred Shares.
	“Convertible Securities”	shall have the meaning set forth in Article 8.3(E)(5)(a)(ii) hereof.
	“CPE Purchase Agreement”	means a Preferred Shares Purchase Agreement dated January 13, 2021, by and among the Company, CPE Investment (Hong Kong) 2018 Limited, Raumier Limited and the other parties thereto.
	“CTO”	means Chief Technology Officer.
	“CVP”	means ClearVue Pony Holdings, Ltd. and its successors, transferees and permitted assigns.

 

“Deemed Liquidation Event”

means any of the following events:

 

	(a)	any consolidation, amalgamation, scheme of arrangement or merger of any Group Company with or into any other Person or other reorganization in which the Members or shareholders of such Group Company immediately prior to such consolidation, amalgamation, merger, scheme of arrangement or reorganization own less than fifty percent (50%) of such Group Company’s voting power or equity securities in the aggregate immediately after such consolidation, merger, amalgamation, scheme of arrangement or reorganization, or any transaction or series of related transactions in which in excess of fifty percent (50%) of such Group Company’s voting power or equity securities is transferred;
	(b)	a sale, transfer, lease or other disposition of all or substantially all of the assets (including, for the avoidance of doubt, intellectual property) of the Group Companies, taken together as a whole (or any series of related transactions resulting in such sale, transfer, lease or other disposition of all or substantially all of the assets of the Group Companies, taken together as a whole);

 

 

	(c)	the exclusive licensing of all or substantially all of the intellectual property of the Group Companies, taken together as a whole, to a third party;
	(d)	any Share Sale; or
	(e)	any event that results in the Company losing Control over the Domestic Companies.

 

	“Director”	means a director serving on the Board for the time being of the Company and shall include an alternate Director appointed in accordance with these Articles.
	“Divestment Rights”	shall have the meaning set forth in Article 124 hereof.
	“Domestic Companies”	means Beijing Pony AI Technology Co., Ltd. (北京小马智行科技有限公司), a limited liability company incorporated under the Laws of the PRC, Guangzhou Pony AI Technology Co., Ltd. (广州小马智行科技有限公司), a limited liability company incorporated under the Laws of the PRC, Jiangsu Heimai Data Technology Co., Ltd. (江苏黑麦数据科技有限公司), a limited liability company incorporated under the Laws of the PRC, Guangzhou Bibi Technology Co., Ltd. (广州哔哔出行科技服务有限公司), a limited liability company incorporated under the Laws of the PRC.
	“Drag Holders”	shall have the meaning set forth in Article 121 hereof.
	“Each Series Majority Preferred Holders”	means each and every Majority Series A Holders, Majority Series B Holders, Majority Series B+ Holders, Majority Series B2 Holders, Majority Series C Holders, Majority Series C+ Holders, and Majority Series D Holders.
	“Eight Roads”	means ERVC Technology IV LP and its successors, transferees and permitted assigns.
	“Eight Roads Purchase Agreement”	means the Series C Preferred Shares Purchase Agreement, dated February 5, 2020, by and among the Company, Eight Roads and certain other parties named therein, as amended from time to time.

 

 

	“Electronic Record”	has the same meaning as given in the Electronic Transactions Law (2003 Revision), as may be amended from time to time.
	“Equity Securities”	means, with respect to any Person that is a legal entity, (a) any and all shares of capital stock, membership interests, units, profits interests, ownership interests, equity interests, registered capital, and other equity securities of such Person; (b) any equity appreciation, phantom equity, equity plans or similar rights with respect to such Person; (c) any security convertible into, exchangeable or exercisable for, or any right, warrant, option, call, commitment, conversion privilege, preemptive right or other right to acquire, subscribe for or purchase any of the Equity Securities referred to in (a) and (b); or (d) any Contract providing for the acquisition of any of the foregoing, either directly or indirectly.
	“Exempted Distribution”	means (a) a dividend payable solely in Ordinary Shares made to the holders of the Preferred Shares and Ordinary Shares on a pro rata basis, based on the number of Ordinary Shares then held by each such holder on an as-converted basis, (b) the purchase, repurchase or redemption of Ordinary Shares by the Company at no more than cost from terminated employees, officers or consultants in accordance with the ESOP, or pursuant to the exercise of a contractual right of first refusal held by the Company under the Right of First Refusal and Co-Sale Agreement, or pursuant to written contractual arrangements with the Company approved by the Board (so long as such approval includes the Approval of the Preferred Directors), or (c) the purchase, repurchase or redemption of the Preferred Shares pursuant to these Articles (including in connection with the conversion of such Preferred Shares into Ordinary Shares).
	“ESOP”	has the meaning given to such term in the Series D Purchase Agreement.
	“Exercising Shareholder”	shall have the meaning set forth in Section 2.2.3.3 of Schedule A hereof.
	“Fidelity Purchase Agreement”	means the Series C Preferred Shares Purchase Agreement, dated February 5, 2020, by and among the Company, Fidelity China Special Situations PLC and certain other parties named therein, as amended from time to time.

 

 

	“First IPO Application Date”	shall have the meaning set forth in Article 124 hereof.
	“First Participation Notice”	shall have the meaning set forth in Section 1.4.1 of Schedule A hereof.
	“Governmental Authority”	means any government of any nation or any federation, province or state or any other political subdivision thereof, any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any government authority, agency, department, board, commission or instrumentality of the PRC, Hong Kong or any other country, or any political subdivision thereof, any court, tribunal or arbitrator, and any self-regulatory organization.
	“Governmental Body”	means (a) any government or political subdivision thereof, (b) any department, agency or instrumentality of any government or political subdivision thereof or (c) any sovereign wealth fund, state-owned enterprise or other entity or enterprise directly or indirectly Controlled by any Person referred to in (a) or (b) above (excluding car manufacturers and investment funds managed by managers not Controlled by any Person referred to in (a) or (b)).
	“Governmental Order”	means any applicable order, ruling, decision, verdict, decree, writ, subpoena, mandate, precept, command, directive, consent, approval, award, judgment, injunction or other similar determination or finding by, before or under the supervision of any Governmental Authority.
	“Group Companies” or “Group”	means, collectively, the Company, Pony DE, Pony HK, the WFOEs and the Domestic Companies, together with each Subsidiary of any of the foregoing, and “Group Company” refers to any of the Group Companies.
	“HK Listing Authorities”	shall have the meaning set forth in Article 124 hereof.

 

 

	“Indebtedness”	of any Person means, without duplication, each of the following of such Person: (a) all indebtedness for borrowed money, (b) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (other than trade payables entered into in the ordinary course of business), (c) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (d) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced that are incurred in connection with the acquisition of properties, assets or businesses, (e) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (f) all obligations that are capitalized in accordance with Accounting Standards or any other applicable accounting standards, (g) all obligations under banker’s acceptance, letter of credit or similar facilities, (h) all obligations to purchase, redeem, retire, defease or otherwise acquire for value any Equity Securities of such Person, (i) all obligations in respect of any interest rate swap, hedge or cap agreement, and (j) all guarantees issued in respect of the Indebtedness referred to in clauses (a) through (i) above of any other Person, but only to the extent of the Indebtedness guaranteed.
	“Individual Holder”	shall have the meaning set forth in the Right of First Refusal and Co-Sale Agreement.
	“Interested Transaction”	shall have the meaning set forth in Article 84 hereof.
	“Investor”	shall have the meaning set forth in Section 1.1 of Schedule A hereof, including for the avoidance of doubt the holders of the Series D Warrants.
	“Investor Co-Sale Notice”	shall have the meaning set forth in Section 2.3.1 of Schedule A hereof.

 

 

	“Law” or “Laws”	means any and all provisions of any applicable constitution, treaty, statute, law, regulation, ordinance, code, rule, or rule of common law, any governmental approval, concession, grant, franchise, license, agreement, directive, requirement, or other governmental restriction or any similar form of decision of, or determination by, or any interpretation or administration of any of the foregoing by, any Governmental Authority, in each case as amended, and any and all applicable Governmental Orders.
	“Legend Capital”	means LC Fund VII, L.P. and LC Parallel Fund VII, L.P., and their respective successors, transferees and permitted assigns. For the sole purpose of determining Legend Capital’s eligibility to appoint an Observer to the Board, all of the Preferred Shares held by Legend Capital, Vantage Estate Limited, Legendstar Fund II, L.P., and Dimension Vantage Limited shall be aggregated for the purpose of calculating the number of the Preferred Shares held by Legend Capital.
	“Liquidation Proceeds”	shall have the meaning set forth in Article 8.2(A) hereof.
	“Major Investor”	shall have the meaning set forth in the Right of First Refusal and Co-Sale Agreement.
	“Majority Series A Holders”	means the holders of fifty-one percent (51%) or more of the voting power of the then outstanding Series A Preferred Shares (voting together as a single class and on an as converted basis).
	“Majority Series B Holders”	means the holders of fifty-one percent (51%) or more of the voting power of the then outstanding Series B Preferred Shares (voting together as a single class and on an as converted basis).
	“Majority Series B+ Holders”	means the holders of fifty-one percent (51%) or more of the voting power of the then outstanding Series B+ Preferred Shares (voting together as a single class and on an as converted basis).
	“Majority Series B2 Holders”	means the holders of fifty-one percent (51%) or more of the voting power of the then outstanding Series B2 Preferred Shares (voting together as a single class and on an as converted basis).

 

 

	“Majority Series C Holders”	means the holders of fifty-one percent (51%) or more of the voting power of the then outstanding Series C Preferred Shares (voting together as a single class and on an as converted basis).
	“Majority Series C+ Holders”	means the holders of fifty-one percent (51%) or more of the voting power of the then outstanding Series C+ Preferred Shares (voting together as a single class and on an as converted basis).
	“Majority Series D Holders”	means, at any time, the following holders of the Series D Preferred Shares of the Company collectively: (i) the holders of fifty percent (50%) or more of the voting power of the then outstanding Series D Preferred Shares held by all of the Shareholders (assuming the full exercise of the Series D Warrants to the extent that any Series D Warrant remains outstanding, and voting together as a single class and on an as converted basis); provided, that, the voting power of the outstanding Series D Preferred Shares held by China-UAE and its Affiliates among all of Shareholders shall be automatically reduced to 49%, if at any time after the date hereof the voting power of the outstanding Series D Preferred Shares held by China-UAE and its Affiliates is equal to or exceeds 50% of the voting power of the outstanding Series D Preferred Shares held by all of the Shareholders (assuming the full exercise of the Series D Warrants to the extent that any Series D Warrant remains outstanding); and (ii) holders of fifty percent (50%) or more of the voting power of the then outstanding Series D Preferred Shares held by Shareholders who are not the Shareholders of the Company immediately prior to the Closing (as defined in the Series D Purchase Agreement) (the “New Series D Shareholders”) (assuming the full exercise of the Series D Warrants to the extent that any Series D Warrant remains outstanding, and voting together as a single class and on an as converted basis); provided, that, the voting power of the outstanding Series D Preferred Shares held by China-UAE and its Affiliates among the New Series D Shareholders shall be automatically reduced to 49%, if at any time after the date hereof the voting power of the outstanding Series D Preferred Shares held by China-UAE and its Affiliates is equal to or exceeds 50% of the voting power of the outstanding Series D Preferred Shares held by all of the New Series D Shareholders (assuming the full exercise of the Series D Warrants to the extent that any Series D Warrant remains outstanding).

 

 

	“Majority Preferred Holders”	the holders of fifty-one percent (51%) or more of the voting power of the outstanding Preferred Shares (assuming the full exercise of the Series D Warrants to the extent that any Series D Warrant remains outstanding, and voting together as a single class and on an as converted basis).
	“Member”	has the same meaning as in the Statute, and including for the purpose hereof, the holders of the Series D Warrants.
	“Memorandum”	means the memorandum of association of the Company, as amended from time to time.
	“New Securities”	shall have the meaning set forth in Article 8.3(E)(5)(a)(iii) hereof.
	“Nio”	means Miracle Mission Limited and its successors, transferees and permitted assigns.
	“Observer”	shall have the meaning set forth in the Shareholders Agreement.
	“Offeror”	shall have the meaning set forth in Article 121 hereof.
	“Options”	shall have the meaning set forth in Article 8.3(E)(5)(a)(i) hereof.
	“Options Period”	shall have the meaning set forth in Section 2.2.3.1 of Schedule A hereof.
	“Ordinary Director”	shall have the meaning set forth in Article 63.
	“Ordinary Resolution”	means a resolution of a duly constituted general meeting of the Company passed by a simple majority of the votes cast by, or on behalf of, the Members entitled to vote present in person or by proxy and voting at the meeting, or a unanimous written resolution.
	“Ordinary Shares”	shall have the meaning set forth in the Memorandum.
	“OTPP”	means 2774719 Ontario Limited and its successors, transferees and permitted assigns.

 

 

	“OTPP Purchase Agreement”	means a Preferred Shares Purchase Agreement dated November 5, 2020, by and among the Company, OTPP, Morningside China TMT Fund IV Co-Investment, L.P., Morningside China TMT Special Opportunity Fund II, L.P., City Ace Investment Corporation, ERVC Technology IV LP and the other parties thereto.
	“Other Restriction Agreements”	shall have the meaning set forth in Section 2.1.6 of Schedule A hereof.
	“Oversubscription Participants”	shall have the meaning set forth in Section 1.4.2 of Schedule A hereof.
	“Permitted Transferee”	shall have the meaning set forth in Section 2.5 of Schedule A hereof.
	“Person”	means any individual, corporation, partnership, limited partnership, proprietorship, association, limited liability company, firm, trust, estate or other enterprise or entity.
	“Pony DE”	means Pony.AI, Inc., a company incorporated under the Laws of Delaware, the United States.
	“Pony HK”	means Hongkong Pony AI Limited, an entity formed under the Laws of Hong Kong.
	“PRC”	means the People’s Republic of China, but solely for the purposes hereof, excluding the Hong Kong Special Administrative Region, the Macau Special Administrative Region and the islands of Taiwan.
	“Preferred Directors”	shall have the meaning set forth in Article 63.
	“Preferred Shares”	shall have the meaning set forth in the Memorandum, including for the avoidance of doubt, the Series D Preferred Shares issuable upon the exercise of the Series D Warrants.
	“Preemptive Right”	shall have the meaning set forth in Section 1.1 of Schedule A hereof.
	“Principals”	shall have the meaning set forth in the Shareholders Agreement.

 

 

	“Principal Holding Company”	shall have the meaning set forth in the Shareholders Agreement.
	“Proposed Sale”	shall have the meaning set forth in Article 122 hereof.
	“Pro Rata Share”	shall have the meaning set forth in Section 1.2 of Schedule A hereof.
	“Prohibited Transfer”	shall have the meaning set forth in Section 2.6 of Schedule A hereof.
	“Qualified IPO”	means (a) a firm commitment underwritten public offering or a listing of the Ordinary Shares of the Company (or depositary receipts or depositary shares therefor) in the United States on NASDAQ, the New York Stock Exchange or any other recognized international securities exchange approved by the Board (so long as such approval includes the Approval of the Preferred Directors) pursuant to an effective registration statement under the United States Securities Act of 1933, as amended, at an offering or listing price per share (prior to underwriting commissions and expenses) that values the Company at no less than US$4,000,000,000 (the “QIPO Valuation”), and that results in gross proceeds to the Company (including concurrent private placement, if any, and prior to any deduction of underwriting discounts and registration expenses) of at least US$200,000,000, (b) a firm commitment underwritten public offering or a listing of the Ordinary Shares of the Company (or depositary receipts or depositary shares therefor) on the Main Board of the Hong Kong Stock Exchange or any other recognized international securities exchange approved by the Board (so long as such approval includes the Approval of the Preferred Directors) at an offering or listing price per share (prior to underwriting commissions and expenses) that values the Company at the QIPO Valuation or more, and that results in gross proceeds to the Company (including concurrent private placement, if any, prior to deduction of underwriting discounts and registration expenses) of at least US$200,000,000, or (c) a SPAC Transaction that values the Company at the QIPO Valuation or more and following the consummation of which the common stock or share capital of the SPAC or its successor entity is listed in the United States on NASDAQ, the New York Stock Exchange, or the Main Board of the Hong Kong Stock Exchange, or any other recognized international securities exchange approved by the Board (so long as such approval includes the Approval of the Preferred Directors).

 

 

	“Redeeming Preferred Shares”	shall have the meaning set forth in Article 8.5(C) hereof.
	“Redeeming Shareholder”	shall have the meaning set forth in Article 8.5(A)(1) hereof.
	“Redemption Date”	shall have the meaning set forth in Article 8.5(D) hereof.
	“Redemption Notice”	shall have the meaning set forth in Article 8.5(D) hereof.
	“Redemption Price”	shall have the meaning set forth in Article 8.5(A)(1) hereof.
	“Redemption Request”	shall have the meaning set forth in Article 8.5(A)(1) hereof.
	“Registered Office”	means the registered office for the time being of the Company.
	“Register of Directors”	means the register of directors of the Company maintained in accordance with the Statute and includes (except where otherwise stated) any duplicate Register of Directors.
	“Register of Members”	means the register of members of the Company maintained in accordance with the Statute and includes (except where otherwise stated) any duplicate Register of Members.
	“Remaining Shares”	shall have the meaning set forth in Section 2.3.1 of Schedule A hereof.
	“Right of First Refusal and Co-Sale Agreement”	means the Sixth Amended and Restated Right of First Refusal and Co-Sale Agreement, dated March 4, 2022, by and among the Company and certain other parties named therein, as amended from time to time.
	“Second Notice”	shall have the meaning set forth in Section 2.2.3.1 of Schedule A hereof.

 

 

	“Second Participation Notice”	shall have the meaning set forth in Section 1.4.2 of Schedule A hereof.
	“Second Participation Period”	shall have the meaning set forth in Section 1.4.2 of Schedule A hereof.
	“SEHK”	means The Stock Exchange of Hong Kong Limited.
	“Selling Investor”	shall have the meaning set forth in Section 2.3.1 of Schedule A hereof.
	“Sequoia”	means SCC Venture VI Holdco, Ltd. and SCC Venture VII Holdco, Ltd., and their respective successors, transferees and permitted assigns.
	“Series A Conversion Price”	shall have the meaning set forth in Article 8.3(A) hereof.
	“Series A Issue Date”	means the date of the first issuance of a Series A Preferred Share.
	“Series A Issue Price”	means US$ 0.4323 per share, as appropriately adjusted for share splits, share dividends, combinations, recapitalizations and similar events affecting the Series A Preferred Shares.
	“Series A Preference Amount”	shall have the meaning set forth in Article 8.2(A)(7).
	“Series A Preferred Shares”	shall have the meaning set forth in the Memorandum.
	“Series B Conversion Price”	shall have the meaning set forth in Article 8.3(A) hereof.
	“Series B Issue Date”	means the date of the first issuance of a Series B Preferred Share.
	“Series B Issue Price”	means US$1.7319 per share, as appropriately adjusted for share splits, share dividends, combinations, recapitalizations and similar events affecting the Series B Preferred Shares, except that the Series B Issue Price for the 297,715 Series B Preferred Shares held by Silicon Valley Future Capital LLC shall be US$0.9489, as appropriately adjusted for share splits, share dividends, combinations, recapitalizations and similar events affecting such shares.

 

 

	“Series B Preference Amount”	shall have the meaning set forth in Article 8.2(A)(6).
	“Series B Preferred Shares”	shall have the meaning set forth in the Memorandum.
	“Series B Purchase Agreement”	means the Series B Preferred Shares Purchase Agreement, dated December 26, 2017, by and among the Company and certain other parties named therein, as amended from time to time.
	“Series B+ Conversion Price”	shall have the meaning set forth in Article 8.3(A) hereof.
	“Series B+ Issue Date”	means the date of the first issuance of a Series B+ Preferred Share.
	“Series B+ Issue Price”	means US$3.6673 per share, as appropriately adjusted for share splits, share dividends, combinations, recapitalizations and similar events affecting the Series B+ Preferred Shares.
	“Series B+ Preferred Shares”	shall have the meaning set forth in the Memorandum.
	“Series B+ Preference Amount”	shall have the meaning set forth in Article 8.2(A)(5).
	“Series B2 Conversion Price”	shall have the meaning set forth in Article 8.3(A) hereof.
	“Series B2 Issue Date”	means the date of the first issuance of a Series B2 Preferred Share.
	“Series B2 Issue Price”	means US$6.5196 per share, as appropriately adjusted for share splits, share dividends, combinations, recapitalizations and similar events affecting the Series B2 Preferred Shares.
	“Series B2 Preference Amount”	shall have the meaning set forth in Article 8.2(A)(4).
	“Series B2 Preferred Shares”	shall have the meaning set forth in the Memorandum.
	“Series C Conversion Price”	shall have the meaning set forth in Article 8.3(A) hereof.
	“Series C Issue Date”	means the date of the first issuance of a Series C Preferred Share.

 

 

	“Series C Issue Price”	means US$9.4220 per share, as appropriately adjusted for share splits, share dividends, combinations, recapitalizations and similar events affecting the Series C Preferred Shares.
	“Series C Preference Amount”	shall have the meaning set forth in Article 8.2(A)(3).
	“Series C Preferred Shares”	shall have the meaning set forth in the Memorandum.
	“Series C Purchase Agreements”	means TMC Purchase Agreement, Fidelity Purchase Agreement, Eight Roads Purchase Agreement and 5Y Capital Purchase Agreement.
	“Series C+ Conversion Price”	shall have the meaning set forth in Article 8.3(A) hereof.
	“Series C+ Issue Date”	means the date of the first issuance of a Series C+ Preferred Share.
	“Series C+ Issue Price”	means US$15.4687 per share, as appropriately adjusted for share splits, share dividends, combinations, recapitalizations and similar events affecting the Series C+ Preferred Shares.
	“Series C+ Preference Amount”	shall have the meaning set forth in Article 8.2(A)(2).
	“Series C+ Preferred Shares”	shall have the meaning set forth in the Memorandum.
	“Series D Conversion Price”	shall have the meaning set forth in Article 8.3(A) hereof.
	“Series D Issue Date”	means the date of the first issuance of a Series D Preferred Share.
	“Series D Issue Price”	means US$25.0446 per share, as appropriately adjusted for share splits, share dividends, combinations, recapitalizations and similar events affecting the Series D Preferred Shares.
	“Series D Preference Amount”	shall have the meaning set forth in Article 8.2(A)(1).
	“Series D Preferred Shares”	shall have the meaning set forth in the Memorandum.

 

 

	“Series D Purchase Agreement”	means the Series D Preferred Shares Purchase Agreement, dated December 23, 2021, by and among the Company, China-UAE, the other investors named therein and certain other parties named therein, as amended from time to time.
	“Series D Additional Purchase Agreements”	means one or more additional purchase agreements may be entered into by and among the Company, the investors named therein and certain other parties named therein with respect to the purchase of additional Series D Preferred Shares or the Series D Warrants by the relevant investors, as amended from time to time.
	“Series D Warrant”	shall have the meaning set forth in the Series D Additional Purchase Agreements.
	“Seal”	means the common seal of the Company and includes every duplicate seal.
	“Share” and “Shares”	means a share or shares in the capital of the Company (including the Ordinary Shares and the Preferred Shares) and includes a fraction of a share.
	“Shareholders”	means holders of any Shares, and “Shareholder” refers to any of the Shareholders, and including for the avoidance of doubt, the holders of the Series D Warrants to the extent that any Series D Warrant remains outstanding.
	“Shareholders Agreement”	means the Sixth Amended and Restated Shareholders Agreement, dated March 4, 2022, by and among the Company and certain other parties named therein, as amended from time to time.
	“Share Issue Price”	with respect to each Series A Preferred Share means Series A Issue Price, while with respect to each Series B Preferred Share means Series B Issue Price, while with respect to each Series B+ Preferred Share means Series B+ Issue Price, while with respect to each Series B2 Preferred Share means Series B2 Issue Price, while with respect to each Series C Preferred Share means Series C Issue Price, while with respect to each Series C+ Preferred Share means Series C+ Issue Price, and while with respect to each Series D Preferred Share means Series D Issue Price.

 

 

	“Share Sale”	means a transaction or series of related transactions in which a Person, or a group of related Persons, acquires any Equity Securities of the Company such that, immediately after such transaction or series of related transactions, such Person or group of related Persons holds Equity Securities of the Company representing more than fifty percent (50%) of the issued and outstanding voting power of the Company.
	“SPAC Transaction”	means a transaction or series of related transactions by merger, consolidation, share exchange or otherwise of the Company with a publicly-traded “special purpose acquisition company” or its subsidiary (a “SPAC”), immediately following the consummation of which the common stock or share capital of the SPAC or its successor entity is listed on an internationally recognized securities exchange.
	“Special Resolution”	means, a Members’ resolution expressed to be a special resolution (a) passed by a majority of not less than two-thirds (2/3) of votes cast by such Members as, being entitled to do so, vote in person or, in the case of any Member being a corporation, by its duly authorised representative or, where proxies are allowed, by proxy at a general meeting of which notice specifying the intention to propose the resolution as a special resolution has been duly given; or (b) approved in writing by all of the Members entitled to receive notice of and to attend and vote at a general meeting of the Company in one or more instruments each signed by one or more of the Members, and the effective date of the special resolution so adopted shall be the date on which the instrument or the last of such instruments, if more than one, is executed. In computing the majority regard shall be had to the number of votes to which each Member is entitled by these Articles.
	“Statute”	means the Companies Act (as amended) of the Cayman Islands as amended and every statutory modification or re-enactment thereof for the time being in effect.
	“Subsidiary”	means, with respect to any given Person, any other Person that is Controlled directly or indirectly by such given Person.

 

 

	“Third Notice”	shall have the meaning set forth in Section 2.2.3.3 of Schedule A hereof.
	“TMC”	means Toyota Motor Corporation, and its successors, transferees and permitted assigns.
	“TMC Purchase Agreement”	means the Series C Preferred Shares Purchase Agreement, dated February 5, 2020, by and among the Company, TMC and certain other parties named therein, as amended from time to time.
	“TMC Proceeds”	has the meaning given to such term in the TMC Purchase Agreement.
	“Transaction Documents”	shall have the meaning set forth in the Shareholders Agreement, each such document as may be amended from time to time.
	“Transfer Notice”	shall have the meaning set forth in Section 2.2.1 of Schedule A hereof.
	“Transfer”	shall have the meaning set forth in Section 2.1.1 of Schedule A hereof.
	“Transferor”	shall have the meaning set forth in Section 2.2.1 of Schedule A hereof.
	“VIE Companies”	means Beijing Pony AI Technology Co., Ltd. (北京小马智行科技有限公司) and Guangzhou Pony AI Technology Co., Ltd. (广州小马智行科技有限公司).
	“Warrant”	shall have the meaning set forth in the Series D Purchase Agreement.
	“WFOEs”	means Beijing Pony Huixing Technology Co., Ltd. (北京小马慧行科技有限公司), a limited liability company incorporated under the Laws of the PRC and wholly owned by the Pony HK, Guangzhou Pony Huixing Technology Co., Ltd. (广州小马慧行科技有限公司), a limited liability company incorporated under the Laws of the PRC and wholly owned by the Pony HK, Beijing Pony Yixing Technology Co., Ltd. (北京小马易行科技有限公司), a limited liability company incorporated under the Laws of the PRC and wholly owned by the Pony HK, and Shenzhen Pony Yixing Technology Co., Ltd. (深圳小马易行科技有限公司), a limited liability company incorporated under the Laws of the PRC and wholly owned by the Pony HK.

 

 

	“5Y Capital”	means Morningside China TMT Fund IV, L.P., Morningside China TMT Fund IV Co-Investment, L.P. and Morningside China TMT Special Opportunity Fund II, L.P. and their respective successors, transferees and permitted assigns.
	“5Y Capital Purchase Agreement”	means the Series C Preferred Shares Purchase Agreement, dated February 5, 2020, by and among the Company, Morningside China TMT Fund IV Co-Investment, L.P., Morningside China TMT Special Opportunity Fund II, L.P. and certain other parties named therein, as amended from time to time.

 

2.	In these Articles:

 

2.1

words importing the singular number include the plural number and vice-versa;

 

2.2

words importing the masculine gender include the feminine gender;

 

2.3

“written” and “in writing” include all modes of representing or reproducing words in visible form, including in the form of an Electronic Record;

 

2.4

references to provisions of any Law or regulation shall be construed as references to those provisions as amended, modified, re-enacted or replaced from time to time;

 

2.5

any phrase introduced by the terms “including,” “include,” “in particular” or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms;

 

2.6

the term “voting power” refers to the number of votes attributable to the Shares (assuming the full exercise of the Series D Warrants to the extent that any Series D Warrant remains outstanding and on an as converted basis) in accordance with the terms of these Articles;

 

2.7

the term “or” is not exclusive;

 

2.8

the term “including” will be deemed to be followed by, “but not limited to”;

 

 

2.9

the terms “shall,” “will,” and “agrees” are mandatory, and the term “may” is permissive;

 

2.10

the term “day” means “calendar day” (unless the term “Business Day” is used), and “month” means calendar month;

 

2.11

the phrase “directly or indirectly” means directly, or indirectly through one or more intermediate Persons or through contractual or other arrangements, and “direct or indirect” has the correlative meaning;

 

2.12

references to any documents shall be construed as references to such document as the same may be amended, supplemented, superseded, replaced or novated from time to time;

 

2.13

all references to dollars or to “US$” are to currency of the United States of America and all references to RMB are to currency of the PRC (and each shall be deemed to include reference to the equivalent amount in other currencies);

 

2.14

headings are inserted for reference only and shall be ignored in construing these Articles; and

 

2.15

unless the context requires otherwise, all references in these Articles to designated “Sections” are to the designated Sections of Schedule A.

 

3.

For the avoidance of doubt, each other Article herein is subject to the provisions of Articles 8, 9, 63, 121 through 123 and Schedule A, and, subject to the requirements of the Statute, in the event of any conflict, the provisions of Articles 8, 9, 63, 121 through 123 and Schedule A shall prevail over any other Article herein.

 

3A.

Subject to the terms and conditions set forth in the Series D Warrants, the rights, privileges and obligations pertaining to holders of the Series D Preferred Shares set forth herein shall be also applicable to such Series D Preferred Shares issuable under the Series D Warrants as if such Series D Warrants have been exercised to the extent that any Series D Warrant remains outstanding. Subject to the terms and conditions set forth in such Series D Warrants, each Investor holding the Series D Warrant shall be deemed as having duly exercised such Series D Warrant in full such that it shall be deemed as a holder of the corresponding Series D Preferred Shares of the Company under such Series D Warrants to the extent that such relevant Series D Warrant remains outstanding.

 

COMMENCEMENT OF BUSINESS

 

4.	The business of the Company may be commenced as soon after incorporation as the Directors shall see fit notwithstanding that any part of the Shares may not have been allotted. The Company shall have perpetual existence until wound up or struck off in accordance with the Statute and these Articles.

 

 

5.	The Directors may pay, out of the capital or any other monies of the Company, all expenses incurred in or about the formation and establishment of the Company, including the expenses of registration.

 

ISSUE OF SHARES

 

6.

Subject to the provisions, if any, in the Memorandum (and to any direction that may be given by the Company in a general meeting), the provisions of these Articles (including Articles 8 and 9 and Schedule A hereto) and without prejudice to any rights, preferences and privileges attached to any existing Shares, (a) the Directors may allot, issue, grant options or warrants over or otherwise dispose of two classes of Shares to be designated, respectively, as Ordinary Shares and Preferred Shares; (b) the Preferred Shares may be allotted and issued from time to time in one or more series; and (c) the series of Preferred Shares shall be designated prior to their allotment and issue. In the event that any Preferred Shares shall be converted pursuant to Article 8.3 hereof, the Preferred Shares so converted shall be cancelled and shall not be re-issuable by the Company. Further, any Preferred Share acquired by the Company by reason of redemption, repurchase, conversion or otherwise shall be cancelled and shall not be re-issuable by the Company.

 

7.	The Company shall not issue Shares to bearer.

 

PREFERRED SHARES

 

8.	Certain rights, preferences and privileges of the Preferred Shares of the Company are as follows:

 

8.1

Dividends Rights.

 

A.

Preference.

 

(1)

Each holder of a Series D Preferred Share shall be entitled to receive dividends at a simple rate of eight percent (8%) of the Series D Issue Price per annum, for each Series D Preferred Share held by such holder, payable out of funds or assets when and as such funds or assets become legally available therefor on parity with each other holder of Series D Preferred Shares, prior and in preference to, and satisfied before, any dividend on the Series C+ Preferred Shares, the Series C Preferred Shares, the Series B2 Preferred Shares, the Series B+ Preferred Shares, the Series B Preferred Shares, the Series A Preferred Shares and the Ordinary Shares (except for applicable Exempted Distributions).

 

After the holders of Series D Preferred Shares have received the dividends referred to above in full, each holder of a Series C+ Preferred Share shall be entitled to receive dividends at a simple rate of eight percent (8%) of the Series C+ Issue Price per annum, for each Series C+ Preferred Share held by such holder, payable out of funds or assets when and as such funds or assets become legally available therefor on parity with each other holder of Series C+ Preferred Shares, prior and in preference to, and satisfied before, any dividend on the Series C Preferred Shares, the Series B2 Preferred Shares, the Series B+ Preferred Shares, the Series B Preferred Shares, the Series A Preferred Shares and the Ordinary Shares (except for applicable Exempted Distributions).

 

 

After the holders of Series D Preferred Shares and the holders of Series C+ Preferred Shares have received the dividends referred to above in full, each holder of a Series C Preferred Share shall be entitled to receive dividends at a simple rate of eight percent (8%) of the Series C Issue Price per annum, for each Series C Preferred Share held by such holder, payable out of funds or assets when and as such funds or assets become legally available therefor on parity with each other holder of Series C Preferred Shares, prior and in preference to, and satisfied before, any dividend on the Series B2 Preferred Shares, the Series B+ Preferred Shares, the Series B Preferred Shares, the Series A Preferred Shares and the Ordinary Shares (except for applicable Exempted Distributions).

 

After the holders of Series D Preferred Shares, the holders of Series C+ Preferred Shares and the holders of Series C Preferred Shares have received the applicable dividends referred to above in full, each holder of a Series B2 Preferred Share shall be entitled to receive dividends at a simple rate of eight percent (8%) of the Series B2 Issue Price per annum, for each Series B2 Preferred Share held by such holder, payable out of funds or assets when and as such funds or assets become legally available therefor on parity with each other holder of Series B2 Preferred Shares, prior and in preference to, and satisfied before, any dividend on the Series B+ Preferred Shares, the Series B Preferred Shares, the Series A Preferred Shares and the Ordinary Shares (except for applicable Exempted Distributions).

 

After the holders of Series D Preferred Shares, the holders of Series C+ Preferred Shares, the holders of Series C Preferred Shares and the holders of Series B2 Preferred Shares have received the applicable dividends referred to above in full, each holder of a Series B+ Preferred Share shall be entitled to receive dividends at a simple rate of eight percent (8%) of the Series B+ Issue Price per annum, for each Series B+ Preferred Share held by such holder, payable out of funds or assets when and as such funds or assets become legally available therefor on parity with each other holder of Series B+ Preferred Shares, prior and in preference to, and satisfied before, any dividend on the Series B Preferred Shares, the Series A Preferred Shares and the Ordinary Shares (except for applicable Exempted Distributions).

 

After the holders of Series D Preferred Shares, the holders of Series C+ Preferred Shares, the holders of Series C Preferred Shares, the holders of Series B2 Preferred Shares and the holders of Series B+ Preferred Shares have received the applicable dividends referred to above in full, each holder of a Series B Preferred Share shall be entitled to receive dividends at a simple rate of eight percent (8%) of the Series B Issue Price per annum, for each Series B Preferred Share held by such holder, payable out of funds or assets when and as such funds or assets become legally available therefor on parity with each other holder of Series B Preferred Shares, prior and in preference to, and satisfied before, any dividend on the Series A Preferred Shares and the Ordinary Shares (except for applicable Exempted Distributions).

 

 

After the holders of Series D Preferred Shares, the holders of Series C+ Preferred Shares, the holders of Series C Preferred Shares, the holders of Series B2 Preferred Shares, the holders of Series B+ Preferred Shares and the holders of Series B Preferred Shares have received the applicable dividends referred to above in full, each holder of a Series A Preferred Share shall be entitled to receive dividends at a simple rate of eight percent (8%) of the Series A Issue Price per annum, for each Series A Preferred Share held by such holder, payable out of funds or assets when and as such funds or assets become legally available therefor on parity with each other holder of Series A Preferred Shares, prior and in preference to, and satisfied before, any dividend on the Ordinary Shares (except for applicable Exempted Distributions).

 

After the aforementioned dividends have been paid in full to the holders of Preferred Shares, the holders of the Preferred Shares and the holders of the Ordinary Shares shall be entitled to receive on a pro rata, as-converted basis any additional dividends that the Board of Directors may declare, set aside or pay at such time. Without prejudice to Section 8.4(B), any such dividends shall be payable only when, as, and if declared by the Board of Directors and shall be noncumulative.

 

(2)

In the event the Company shall declare or make any distribution other than in cash (except for a distribution described in Article 8.2), each holder of Preferred Shares shall be entitled to a proportionate share of any such distribution in sequence set forth in Article 8.1(A)(1) above as though such holder of Preferred Shares were the holder of the number of Ordinary Shares into which its Preferred Shares are convertible as of the record date fixed for the determination of the holders of Ordinary Shares entitled to receive such distribution.

 

 

B.

Restrictions; Participation.

 

Except for an Exempted Distribution, no dividend or distribution, whether in cash, in property, or in any other shares of the Company, shall be declared, paid, set aside or made with respect to the Ordinary Shares at any time unless (a) all declared but unpaid dividends on the Preferred Shares set forth in Article 8.1(A) have been paid in full, and (b) a dividend or distribution is likewise declared, paid, set aside or made, respectively, at the same time with respect to each outstanding Preferred Share such that the dividend or distribution declared, paid, set aside or made to the holder thereof shall be equal to the dividend or distribution that such holder would have received if such Preferred Share had been converted into Ordinary Shares immediately prior to the record date for such dividend or distribution, or if no such record date is established, the date such dividend or distribution is made.

 

8.2

Liquidation Rights.

 

A.

Liquidation Preferences. In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, all assets and funds of the Company legally available for distribution to the Members (after satisfaction of all creditors’ claims and claims that may be preferred by Law, the “Liquidation Proceeds”) shall be distributed to the Members of the Company as follows:

 

(1)            First, the holders of the Series D Preferred Shares shall be entitled to receive for each Series D Preferred Share held by such holder, on parity with each other and prior and in preference to any distribution of any of the assets or funds of the Company to the holders of the Series C+ Preferred Shares, the Series C Preferred Shares, the Series B2 Preferred Shares, the Series B+ Preferred Shares, the Series B Preferred Shares, Series A Preferred Shares and Ordinary Shares by reason of their ownership of such shares, the greater of (i) the amount equal to one hundred and fifty percent (150%) of the Series D Issue Price, plus all declared but unpaid dividends on such Series D Preferred Share, and (ii) the pro rata share of all the Liquidation Proceeds to which such holder of Series D Preferred Shares would be entitled with respect to such Series D Preferred Share, calculated based on the respective shareholdings of all of the Members of the Company on an as-converted basis as if all of the Preferred Shares are converted into Ordinary Shares immediately prior to such liquidation, dissolution or winding up (collectively, the “Series D Preference Amount”). If the assets and funds thus distributed among the holders of the Series D Preferred Shares shall be insufficient to permit the payment to such holders of the full Series D Preference Amount, then the entire assets and funds of the Company legally available for distribution shall be distributed rateably among the holders of the Series D Preferred Shares in proportion to the aggregate Series D Preference Amount each such holder is otherwise entitled to receive pursuant to this clause (1).

 

 

(2)            Second, after distribution or payment in full of the amount distributable or payable on the Series D Preferred Shares pursuant to Article 8.2A(1), the holders of the Series C+ Preferred Shares shall be entitled to receive for each Series C+ Preferred Share held by such holder, on parity with each other and prior and in preference to any distribution of any of the assets or funds of the Company to the holders of the Series C Preferred Shares, the Series B2 Preferred Shares, the Series B+ Preferred Shares, the Series B Preferred Shares, Series A Preferred Shares and Ordinary Shares by reason of their ownership of such shares, the greater of (i) the amount equal to one hundred and fifty percent (150%) of the Series C+ Issue Price, plus all declared but unpaid dividends on such Series C+ Preferred Share, and (ii) the pro rata share of all the Liquidation Proceeds to which such holder of Series C+ Preferred Shares would be entitled with respect to such Series C+ Preferred Share, calculated based on the respective shareholdings of all of the Members of the Company on an as-converted basis as if all of the Preferred Shares are converted into Ordinary Shares immediately prior to such liquidation, dissolution or winding up (collectively, the “Series C+ Preference Amount”). If the remaining assets and funds thus distributed among the holders of the Series C+ Preferred Shares shall be insufficient to permit the payment to such holders of the full Series C+ Preference Amount, then the entire remaining assets and funds of the Company legally available for distribution shall be distributed rateably among the holders of the Series C+ Preferred Shares in proportion to the aggregate Series C+ Preference Amount each such holder is otherwise entitled to receive pursuant to this clause (2).

 

(3)            Third, after distribution or payment in full of the amount distributable or payable on the Series D Preferred Shares pursuant to Article 8.2A(1) and the amount distributable or payable on the Series C+ Preferred Shares pursuant to Article 8.2A(2), the holders of the Series C Preferred Shares shall be entitled to receive for each Series C Preferred Share held by such holder, on parity with each other and prior and in preference to any distribution of any of the assets or funds of the Company to the holders of the Series B2 Preferred Shares, the Series B+ Preferred Shares, the Series B Preferred Shares, Series A Preferred Shares and Ordinary Shares by reason of their ownership of such shares, the greater of (i) the amount equal to one hundred and fifty percent (150%) of the Series C Issue Price, plus all declared but unpaid dividends on such Series C Preferred Share, and (ii) the pro rata share of all the Liquidation Proceeds to which such holder of Series C Preferred Shares would be entitled with respect to such Series C Preferred Share, calculated based on the respective shareholdings of all of the Members of the Company on an as-converted basis as if all of the Preferred Shares are converted into Ordinary Shares immediately prior to such liquidation, dissolution or winding up (collectively, the “Series C Preference Amount”). If the remaining assets and funds thus distributed among the holders of the Series C Preferred Shares shall be insufficient to permit the payment to such holders of the full Series C Preference Amount, then the entire remaining assets and funds of the Company legally available for distribution shall be distributed rateably among the holders of the Series C Preferred Shares in proportion to the aggregate Series C Preference Amount each such holder is otherwise entitled to receive pursuant to this clause (3).

 

 

(4)            Fourth, after distribution or payment in full of the amount distributable or payable on the Series D Preferred Shares pursuant to Article 8.2A(1), the amount distributable or payable on the Series C+ Preferred Shares pursuant to Article 8.2A(2) and the amount distributable or payable on the Series C Preferred Shares pursuant to Article 8.2A(3), the holders of the Series B2 Preferred Shares shall be entitled to receive for each Series B2 Preferred Share held by such holder, on parity with each other and prior and in preference to any distribution of any of the assets or funds of the Company to the holders of the Series B+ Preferred Shares, the Series B Preferred Shares, Series A Preferred Shares and Ordinary Shares by reason of their ownership of such shares, the greater of (i) the amount equal to one hundred and fifty percent (150%) of the Series B2 Issue Price, plus all declared but unpaid dividends on such Series B2 Preferred Share, and (ii) the pro rata share of all the Liquidation Proceeds to which such holder of Series B2 Preferred Shares would be entitled with respect to such Series B2 Preferred Share, calculated based on the respective shareholdings of all of the Members of the Company on an as-converted basis as if all of the Preferred Shares are converted into Ordinary Shares immediately prior to such liquidation, dissolution or winding up (collectively, the “Series B2 Preference Amount”). If the remaining assets and funds thus distributed among the holders of the Series B2 Preferred Shares shall be insufficient to permit the payment to such holders of the full Series B2 Preference Amount, then the entire remaining assets and funds of the Company legally available for distribution shall be distributed rateably among the holders of the Series B2 Preferred Shares in proportion to the aggregate Series B2 Preference Amount each such holder is otherwise entitled to receive pursuant to this clause (4).

 

(5)            Fifth, after distribution or payment in full of the amount distributable or payable on the Series D Preferred Shares pursuant to Article 8.2A(1), the amount distributable or payable on the Series C+ Preferred Shares pursuant to Article 8.2A(2), the amount distributable or payable on the Series C Preferred Shares pursuant to Article 8.2A(3) and the amount distributable or payable on the Series B2 Preferred Shares pursuant to Article 8.2A(4), the holders of the Series B+ Preferred Shares shall be entitled to receive for each Series B+ Preferred Share held by such holder, on parity with each other and prior and in preference to any distribution of any of the assets or funds of the Company to the holders of the Series B Preferred Shares, Series A Preferred Shares and Ordinary Shares by reason of their ownership of such shares, the greater of (i) the amount equal to one hundred and fifty percent (150%) of the Series B+ Issue Price, plus all declared but unpaid dividends on such Series B+ Preferred Share, and (ii) the pro rata share of all the Liquidation Proceeds to which such holder of Series B+ Preferred Shares would be entitled with respect to such Series B+ Preferred Share, calculated based on the respective shareholdings of all of the Members of the Company on an as-converted basis as if all of the Preferred Shares are converted into Ordinary Shares immediately prior to such liquidation, dissolution or winding up (collectively, the “Series B+ Preference Amount”). If the remaining assets and funds thus distributed among the holders of the Series B+ Preferred Shares shall be insufficient to permit the payment to such holders of the full Series B+ Preference Amount, then the entire remaining assets and funds of the Company legally available for distribution shall be distributed rateably among the holders of the Series B+ Preferred Shares in proportion to the aggregate Series B+ Preference Amount each such holder is otherwise entitled to receive pursuant to this clause (5).

 

 

(6)            Sixth, after distribution or payment in full of the amount distributable or payable on the Series D Preferred Shares pursuant to Article 8.2A(1), the amount distributable or payable on the Series C+ Preferred Shares pursuant to Article 8.2A(2), the amount distributable or payable on the Series C Preferred Shares pursuant to Article 8.2A(3), the amount distributable or payable on the Series B2 Preferred Shares pursuant to Article 8.2A(4) and the amount distributable or payable on the Series B+ Preferred Shares pursuant to Article 8.2A(5), the holders of the Series B Preferred Shares shall be entitled to receive for each Series B Preferred Share held by such holder, on parity with each other and prior and in preference to any distribution of any of the assets or funds of the Company to the holders of the Series A Preferred Shares and Ordinary Shares by reason of their ownership of such shares, the greater of (i) the amount equal to one hundred and fifty percent (150%) of the Series B Issue Price, plus all declared but unpaid dividends on such Series B Preferred Share, and (ii) the pro rata share of all the Liquidation Proceeds to which such holder of Series B Preferred Shares would be entitled with respect to such Series B Preferred Share, calculated based on the respective shareholdings of all of the Members of the Company on an as-converted basis as if all of the Preferred Shares are converted into Ordinary Shares immediately prior to such liquidation, dissolution or winding up (collectively, the “Series B Preference Amount”). If the remaining assets and funds thus distributed among the holders of the Series B Preferred Shares shall be insufficient to permit the payment to such holders of the full Series B Preference Amount, then the entire remaining assets and funds of the Company legally available for distribution shall be distributed rateably among the holders of the Series B Preferred Shares in proportion to the aggregate Series B Preference Amount each such holder is otherwise entitled to receive pursuant to this clause (6).

 

 

(7)            Seventh, after distribution or payment in full of the amount distributable or payable on the Series D Preferred Shares pursuant to Article 8.2A(1), the amount distributable or payable on the Series C+ Preferred Shares pursuant to Article 8.2A(2), the amount distributable or payable on the Series C Preferred Shares pursuant to Article 8.2A(3), the amount distributable or payable on the Series B2 Preferred Shares pursuant to Article 8.2A(4), the amount distributable or payable on the Series B+ Preferred Shares pursuant to Article 8.2A(5) and the amount distributable or payable on the Series B Preferred Shares pursuant to Article 8.2A(6), the holders of the Series A Preferred Shares shall be entitled to receive for each Series A Preferred Share held by such holder, on parity with each other and prior and in preference to any distribution of any of the assets or funds of the Company to the holders of the Ordinary Shares by reason of their ownership of such shares, the greater of (i) the amount equal to one hundred and fifty percent (150%) of the Series A Issue Price, plus all declared but unpaid dividends on such Series A Preferred Share, and (ii) the pro rata share of all the Liquidation Proceeds to which such holder of Series A Preferred Shares would be entitled with respect to such Series A Preferred Share, calculated based on the respective shareholdings of all of the Members of the Company on an as-converted basis as if all of the Preferred Shares are converted into Ordinary Shares immediately prior to such liquidation, dissolution or winding up (collectively, the “Series A Preference Amount”). If the remaining assets and funds thus distributed among the holders of the Series A Preferred Shares shall be insufficient to permit the payment to such holders of the full Series A Preference Amount, then the entire remaining assets and funds of the Company legally available for distribution shall be distributed rateably among the holders of the Series A Preferred Shares in proportion to the aggregate Series A Preference Amount each such holder is otherwise entitled to receive pursuant to this clause (7).

 

(8)            If there are any assets or funds remaining after the aggregate Series D Preference Amount, Series C+ Preference Amount, Series C Preference Amount, Series B2 Preference Amount, Series B+ Preference Amount, Series B Preference Amount and Series A Preference Amount have been distributed or paid in full to the applicable holders of Preferred Shares pursuant to clause (1) to clause (7) above, the remaining assets and funds of the Company available for distribution to the Members shall be distributed rateably among holders of Ordinary Shares.

 

B.

Deemed Liquidation Event. Unless waived in writing by Each Series Majority Preferred Holders, a Deemed Liquidation Event shall be deemed to be a liquidation, dissolution or winding up of the Company for purposes of Article 8.2(A), and any proceeds, whether in cash or properties, resulting from a Deemed Liquidation Event shall be distributed in accordance with the terms of Article 8.2(A).

 

 

C.

Valuation of Properties. In the event the Company proposes to distribute assets other than cash in connection with any liquidation, dissolution or winding up of the Company pursuant to Article 8.2(A) or pursuant to a Deemed Liquidation Event of the Company pursuant to Article 8.2(B), the value of the assets to be distributed to the Members shall be determined in good faith by the Board (including the Approval of the Preferred Directors); provided, that any securities not subject to investment letter or similar restrictions on free marketability shall be valued as follows:

 

(1)            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;

 

(2)            If 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

 

(3)            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 Deemed Liquidation Event, by the Board (including the Approval of the Preferred Directors);

 

provided, further, that the method of valuation of securities subject to investment letter or similar restrictions on free marketability shall be adjusted to make an appropriate discount from the market value determined as above in clauses (1), (2) or (3) to reflect 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 Deemed Liquidation Event, by the Board (including the Approval of the Preferred Directors).

 

D.

Notices. In the event that, subject to any necessary approval required in the Statute and these Articles (including Article 8), the Company shall propose at any time to consummate a liquidation, dissolution or winding up of the Company or a Deemed Liquidation Event, then, in connection with each such event, the Company shall send to the holders of Preferred Shares at least thirty (30) days prior written notice of the date when the same shall take place; provided, however, that the foregoing notice periods may be shortened or waived with the Approval of the Majority Preferred Holders.

 

E.

Enforcement. In the event the requirements of this Article 8.2 are not complied with, the Company shall forthwith either (i) cause the closing of the applicable transaction to be postponed until such time as the requirements of this Article 8.2 have been complied with, or (ii) cancel such transaction.

 

 

8.3

Conversion Rights

 

The holders of the Preferred Shares shall have the rights described below with respect to the conversion of the Preferred Shares into Class A Ordinary Shares:

 

A.

Conversion Ratio. The number of Class A Ordinary Shares to which a holder of Preferred Shares shall be entitled upon conversion of each Preferred Share held by it shall be the quotient of (i) with respect to any holder of the Series A Preferred Shares, the Series A Issue Price divided by the then effective Series A Conversion Price (the “Series A Conversion Price”), which shall initially be the Series A Issue Price, (ii) with respect to any holder of the Series B Preferred Shares, the Series B Issue Price divided by the then effective Series B Conversion Price (the “Series B Conversion Price”), which shall initially be the Series B Issue Price, (iii) with respect to any holder of the Series B+ Preferred Shares, the Series B+ Issue Price divided by the then effective Series B+ Conversion Price (the “Series B+ Conversion Price”), which shall initially be the Series B+ Issue Price, (iv) with respect to any holder of the Series B2 Preferred Shares, the Series B2 Issue Price divided by the then effective Series B2 Conversion Price (the “Series B2 Conversion Price”), which shall initially be the Series B2 Issue Price, (v) with respect to any holder of the Series C Preferred Shares, the Series C Issue Price divided by the then effective Series C Conversion Price (the “Series C Conversion Price”), which shall initially be the Series C Issue Price, (vi) with respect to any holder of the Series C+ Preferred Shares, the Series C+ Issue Price divided by the then effective Series C+ Conversion Price (the “Series C+ Conversion Price”), which shall initially be US$10.7134, and (vii) with respect to any holder of the Series D Preferred Shares, the Series D Issue Price divided by the then effective Series D Conversion Price (the “Series D Conversion Price”), which shall initially be US$10.7134, in each case (i) to (v) above, resulting in an initial conversion ratio for each of the Preferred Shares of 1:1, and in cases (vi) and (vii), resulting in an initial conversion ratio for each of the Series C+ Preferred Shares of 1:1.4439 and each of the Series D Preferred Shares of 1:2.3377, and each shall be subject to adjustment and readjustment from time to time as hereinafter provided.

 

B.

Optional Conversion. Subject to the Statute and these Articles (including this Article 8.3), any Preferred Share may, at the option of the holder thereof, be converted at any time after the date of issuance of such shares, without the payment of any additional consideration, into fully-paid and non-assessable Class A Ordinary Shares based on the then-effective Applicable Conversion Price.

 

C.

Automatic Conversion. Each Preferred Share shall automatically be converted, based on the then-effective Applicable Conversion Price, without the payment of any additional consideration, into fully-paid and non-assessable Class A Ordinary Shares upon the earlier of (i) the closing of a Qualified IPO, and (ii) (v) with respect to Series A Preferred Shares, the date specified by written consent or agreement of Majority Series A Holders; (w) with respect to Series B Preferred Shares, the date specified by written consent or agreement of the holders of such Series B Preferred Shares; (x) with respect to Series B+ Preferred Shares, the date specified by written consent or agreement of the Majority Series B+ Holders; (y) with respect to Series B2 Preferred Shares, the date specified by written consent or agreement of the Majority Series B2 Holders; (z) with respect to Series C Preferred Shares, the date specified by written consent or agreement of the holders of such Series C Preferred Shares; (aa) with respect to Series C+ Preferred Shares, the date specified by written consent or agreement of the Majority Series C+ Holders; and (bb) with respect to Series D Preferred Shares, the date specified by written consent or agreement of the Majority Series D Holders. Any conversion pursuant to this Article 8.3(C) shall be referred to as an “Automatic Conversion.”

 

 

D.

Conversion Mechanism. The conversion hereunder of any Preferred Share shall be effected in the following manner:

 

(1)            Except as provided in Articles 8.3(D)(2) and 8.3(D)(3) below, before any holder of the Preferred Shares shall be entitled to convert the same into Class A Ordinary Shares, such holder shall surrender the certificate or certificates therefor (or in lieu thereof shall deliver an affidavit of lost certificate and indemnity therefor) (if any) at the office of the Company or of any transfer agent for such share to be converted and shall give notice to the Company at its principal corporate office of the election to convert the same and shall state therein the name or names in which the certificate or certificates for such Class A Ordinary Shares are to be issued. The Company shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Preferred Shares, or to the nominee or nominees of such holder, a certificate or certificates for the number of Class A Ordinary Shares to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such notice and such surrender of the Preferred Shares to be converted, the Register of Members of the Company shall be updated accordingly to reflect the same, and the Person or Persons entitled to receive the Class A Ordinary Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Class A Ordinary Shares as of such date.

 

(2)            If the conversion is in connection with an underwritten public offering of securities, the conversion will be conditioned upon the closing with the underwriter(s) of the sale of securities pursuant to such offering and the holders of such Preferred Shares to be converted shall not be deemed to have converted such Preferred Shares until immediately prior to the closing of such sale of securities.

 

 

(3)            Upon the occurrence of an event of Automatic Conversion, the Company shall give the holders of Preferred Shares pursuant to Article 8.3(C) to be automatically converted at least ten (10) days’ prior written notice of the date fixed (which date shall be, in the case of a Qualified IPO, the latest practicable date immediately prior to the closing of a Qualified IPO) and the place designated for Automatic Conversion of all such Preferred Shares pursuant to this Article 8.3(D). Such notice shall be given pursuant to Articles 110 through 114 to each record holder of such Preferred Shares at such holder’s address appearing on the Register of Members. On or before the date fixed for conversion, each holder of such Preferred Shares shall surrender the applicable certificate or certificates duly endorsed (or in lieu thereof shall deliver an affidavit of lost certificate and indemnity therefor) (if any) for all such shares to the Company at the place designated in such notice. On the date fixed for conversion, the Company shall effect such conversion and update its Register of Members to reflect such conversion, and upon surrender of the certificate or certificates representing the shares to be converted duly endorsed (or in lieu thereof upon delivery of an affidavit of lost certificate and indemnity therefor) (if any), the holder thereof shall be entitled to receive certificates (if applicable) for the number of Class A Ordinary Shares into which such Preferred Shares have been converted. All certificates evidencing such Preferred Shares shall, from and after the date of conversion, be deemed to have been retired and cancelled and the Preferred Shares represented thereby converted into Class A Ordinary Shares for all purposes, notwithstanding the failure of the holder or holders thereof to surrender such certificates on or prior to such date.

 

(4)            The Company may effect the conversion of Preferred Shares in any manner available under applicable Law, including redeeming or repurchasing the relevant Preferred Shares and applying the proceeds thereof towards payment for the new Class A Ordinary Shares. For purposes of the repurchase or redemption, the Company may, subject to the Company being able to pay its debts in the ordinary course of business, make payments out of its capital.

 

(5)            No fractional Class A Ordinary Shares shall be issued upon conversion of any Preferred Shares. In lieu of any fractional shares to which a holder of Preferred Shares would otherwise be entitled, the Company shall at the discretion of the Board of Directors either (i) pay cash equal to such fraction multiplied by the fair market value of the Class A Ordinary Share as determined and approved by the Board of Directors in good faith, or (ii) issue one whole Class A Ordinary Share for each fractional share to which the holder would otherwise be entitled.

 

 

(6)            Upon conversion, all declared but unpaid share dividends on the Preferred Shares shall be paid in shares and all declared but unpaid cash dividends on the Preferred Shares shall be paid either in cash or by the issuance of such number of further Class A Ordinary Shares equal to the value of such cash amount, at the option of the holders of the applicable Preferred Shares.

 

E.

Adjustment of the Conversion Price. Each Applicable Conversion Price shall be adjusted and readjusted from time to time as provided below, save that no adjustment shall have the effect that the relevant Applicable Conversion Price would be less than the par value of the Class A Ordinary Shares into which the applicable Preferred Shares are to be converted:

 

(1)            Adjustment for Share Splits and Combinations. If the Company shall at any time, or from time to time, effect a subdivision of the outstanding Ordinary Shares, the Applicable Conversion Price in effect immediately prior to such subdivision with respect to each Preferred Share shall be proportionately decreased. Conversely, if the Company shall at any time, or from time to time, combine the outstanding Ordinary Shares into a smaller number of shares, the Applicable Conversion Price in effect immediately prior to such combination with respect to each Preferred Share shall be proportionately increased. Any adjustment under this paragraph shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

(2)            Adjustment for Ordinary Share Dividends and Distributions. If the Company makes (or fixes a record date for the determination of holders of Ordinary Shares entitled to receive) a dividend or other distribution to the holders of Ordinary Shares payable in additional Ordinary Shares, the Applicable Conversion Price then in effect with respect to each Preferred Share shall be decreased as of the time of such issuance (or in the event such record date is fixed, as of the close of business on such record date) by multiplying such conversion price by a fraction (i) the numerator of which is the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and (ii) the denominator of which is the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of Ordinary Shares issuable in payment of such dividend or distribution.

 

Notwithstanding the foregoing, (a) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Applicable Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter the Applicable Conversion Price shall be adjusted pursuant to this subsection as of the time of actual payment of such dividends or distributions; and (b) no such adjustment shall be made if the holders of the Preferred Shares each simultaneously receive a dividend or other distribution of Ordinary Shares in a number equal to the number of Ordinary Shares as it would have received if all outstanding Preferred Shares held by it had been converted into Ordinary Shares immediately before the date of such event or immediately before the record date for such event.

 

 

(3)            Adjustments for Other Distributions. In the event the Company at any time or from time to time makes, or files a record date for the determination of holders of Ordinary Shares entitled to receive, any distribution payable in securities or assets of the Company other than Ordinary Shares, then and in each such event provision shall be made so that the holders of Preferred Shares shall each receive upon conversion of the Preferred Shares held by it, in addition to the number of Ordinary Shares receivable thereupon, the amount of securities or assets of the Company which it would have received had its Preferred Shares been converted into Ordinary Shares immediately before the date of such event or immediately before the record date for such event and had it thereafter, during the period from the date of such event to and including the date of conversion, retained such securities or assets receivable by them as aforesaid, subject to all other adjustments called for during such period under this Article 8.3(E) with respect to the rights of the holders of the Preferred Shares.

 

(4)            Adjustments for Reorganizations, Mergers, Consolidations, Reclassifications, Exchanges, Substitutions. If at any time, or from time to time, any capital reorganization or reclassification of the Ordinary Shares (other than as a result of a share dividend, subdivision, split or combination otherwise treated above) occurs or the Company is consolidated, merged or amalgamated with or into another Person (other than a consolidation, merger or amalgamation treated as a liquidation in Article 8.2(B)), then in any such event, provision shall be made so that, upon conversion of any Preferred Share thereafter, the holder thereof shall receive the kind and amount of shares and other securities and property which the holder of such shares would have received in connection with such event had the relevant Preferred Shares been converted into Class A Ordinary Shares immediately prior to such event.

 

(5)            Adjustments to Applicable Conversion Price for Dilutive Issuance.

 

(a)            Special Definition. For purpose of this Article 8.3(E)(5), the following definitions shall apply:

 

(i)            “Options” mean rights, options or warrants to subscribe for, purchase or otherwise acquire either Ordinary Shares or Convertible Securities.

 

 

(ii)            “Convertible Securities” shall mean any indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Ordinary Shares.

 

(iii)            “New Securities” shall mean all Equity Securities issued (or, pursuant to Article 8.3(E)(5)(c), deemed to be issued) by the Company after the date on which these Articles are adopted, other than the following issuances:

 

a).

19,964,384 Series D Preferred Shares issuable at the Closing (as defined in the Series D Purchase Agreement) and the Additional Closing(s) (as defined in the Series D Purchase Agreement);

 

b).

any Equity Securities of the Company issued pursuant to the Series D Warrants or the Warrant;

 

c).

up to 56,230,176 Class A Ordinary Shares (or Options exercisable for such Class A Ordinary Shares) (as appropriately adjusted for share splits, share dividends, combinations, recapitalizations and similar events) issued (or issuable pursuant to such Options) to the Group Companies’ employees, officers, directors, consultants and other service providers for the primary purpose of soliciting or retaining their services pursuant to plans or agreements approved by the Board of Directors in accordance with these Articles and the Shareholders Agreement;

 

d).

Ordinary Shares issued or issuable pursuant to a share split or sub-division, share dividend, combination, recapitalization or other similar transaction of the Company, as described in Article 8.3(E)(1) through Article 8.3(E)(4);

 

e).

Class A Ordinary Shares issued or issuable upon the conversion of Preferred Shares;

 

f).

any Equity Securities of the Company issued pursuant to the firmly underwritten public offering of the Ordinary Shares duly approved in accordance with the Shareholders Agreement and these Articles;

 

 

g).

any Equity Securities of the Company issued in connection with the bona fide acquisition of another corporation or entity by the Company by consolidation, merger, purchase of assets, or other reorganization in which the Company acquires, in a single transaction or series of related transactions, all or substantially all assets of such other corporation or entity, or fifty percent (50%) or more of the equity ownership or voting power of such other corporation or entity, in any case, as duly approved in accordance with the Shareholders Agreement and these Articles; and

 

h).

any Equity Securities of the Company, the issuance of which is approved (i) unanimously by the members of the Board and the Board specifically states in such approval that such Equity Securities shall not be “New Securities” and (ii) by the Majority Series D Holders.

 

(b)            No Adjustment of Applicable Conversion Price. No adjustment in the Applicable Conversion Price with respect to any Preferred Share shall be made in respect of the issuance of New Securities unless the consideration per Ordinary Share (determined pursuant to Article 8.3(E)(5)(e) hereof) for the New Securities issued or deemed to be issued by the Company is less than such Applicable Conversion Price in effect immediately prior to such issuance, as provided for by Article 8.3(E)(5)(d). No adjustment or readjustment in the Applicable Conversion Price with respect to any Preferred Share otherwise required by this Article 8.3 shall affect any Class A Ordinary Shares issued upon conversion of any Preferred Share prior to such adjustment or readjustment, as the case may be.

 

(c)            Deemed Issuance of New Securities. In the event the Company at any time or from time to time after the Series D Issue Date, as applicable, shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any series or class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of Ordinary Shares (as set forth in the instrument relating thereto without regard to any provisions contained therein for a subsequent adjustment of such number for anti-dilution adjustments) issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities or the exercise of such Options, shall be deemed to be New Securities issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date; provided, that in any such case in which New Securities are deemed to be issued:

 

 

(i)            no further adjustment in the Applicable Conversion Price shall be made upon the subsequent issue of Convertible Securities or Ordinary Shares upon the exercise of such Options or conversion or exchange of such Convertible Securities or upon the subsequent issue of Options or Convertible Securities or Ordinary Shares;

 

(ii)            if such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any change in the consideration payable to the Company, or change in the number of Ordinary Shares issuable, upon the exercise, conversion or exchange thereof, the then effective Applicable Conversion Price computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon any such change becoming effective, be recomputed to reflect such change insofar as it affects such Options or the rights of conversion or exchange under such Convertible Securities;

 

(iii)            no readjustment pursuant to Article 8.3(E)(5)(c)(ii) shall have the effect of increasing the then effective Applicable Conversion Price to an amount which exceeds the Applicable Conversion Price that would have been in effect had no adjustments in relation to the issuance of the Options or Convertible Securities as referenced in Article 8.3(E)(5)(c)(ii) been made;

 

(iv)            upon the expiration of any such Options or any rights of conversion or exchange under such Convertible Securities that have not been exercised, the then effective Applicable Conversion Price computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto) and any subsequent adjustments based thereon shall, upon such expiration, be recomputed as if:

 

(x)

in the case of Convertible Securities or Options for Ordinary Shares, the only New Securities issued were the Ordinary Shares, if any, actually issued upon the exercise of such Options or the conversion or exchange of such Convertible Securities and the consideration received therefor was the consideration actually received by the Company for the issue of such exercised Options plus the consideration actually received by the Company upon such exercise or for the issue of all such Convertible Securities that were actually converted or exchanged, plus the additional consideration, if any, actually received by the Company upon such conversion or exchange (in each case, determined pursuant to Article 8.3(E)(5)(e)), and

 

 

(y)

in the case of Options for Convertible Securities, only the Convertible Securities, if any, actually issued upon the exercise thereof were issued at the time of issue of such Options, and the consideration received by the Company for the New Securities deemed to have been then issued was the consideration actually received by the Company for the issue of such exercised Options, plus the consideration deemed to have been received by the Company upon the issue of the Convertible Securities with respect to which such Options were actually exercised (in each case, determined pursuant to Article 8.3(E)(5)(e)); and

 

(v)

if such record date shall have been fixed and such Options or Convertible Securities are not issued on the date fixed therefor, the adjustment previously made in the Applicable Conversion Price which became effective on such record date shall be cancelled as of the close of business on such record date, and thereafter the Applicable Conversion Price with respect to such Preferred Share shall be adjusted pursuant to this Article 8.3(E)(5)(c) as of the actual date of their issuance.

 

(d)            Adjustment of the Applicable Conversion Price upon Issuance of New Securities. In the event of an issuance of New Securities, at any time after the Series D Issue Date, for a consideration per Ordinary Share received by the Company (net of any selling concessions, discounts or commissions and calculated on an as-converted basis) less than the Applicable Conversion Price with respect to any Preferred Share in effect immediately prior to such issue, then and in such event, the Applicable Conversion Price with respect to such Preferred Share shall be reduced, concurrently with such issue, to a price determined as set forth below:

 

NCP = OCP * (OS + (NP/OCP))/(OS + NS)

 

 

WHERE:

 

NCP = the new Applicable Conversion Price with respect to such Preferred Share,

 

OCP = the Applicable Conversion Price with respect to such Preferred Share in effect immediately before the issuance of the New Securities,

 

OS = the total outstanding Ordinary Shares immediately before the issuance of the New Securities plus the total Ordinary Shares issuable upon conversion or exchange of all the outstanding Preferred Shares and Convertible Securities and exercise of outstanding Options,

 

NP = the total consideration received for the issuance or sale of the New Securities, and

 

NS = the number of Ordinary Shares represented by the New Securities issued or sold.

 

(e)            Determination of Consideration. For purposes of this Article 8.3(E)(5), the consideration received by the Company for the issuance of any New Securities shall be computed as follows:

 

(i)            Cash and Property. Such consideration shall:

 

(1)            insofar as it consists of cash, be computed at the aggregate amount of cash received by the Company excluding amounts paid or payable for accrued interest or accrued dividends and excluding any discounts, commissions or placement fees payable by the Company to any underwriter or placement agent in connection with the issuance of any New Securities;

 

(2)            insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined and approved in good faith by the Board of Directors (including the Approval of the Preferred Directors); provided, however, that no value shall be attributed to any services performed by any employee, officer or director of any Group Company;

 

(3)            in the event New Securities are issued together with other Shares or securities or other assets of the Company for consideration which covers both, be the proportion of such consideration so received which relates to such New Securities, computed as provided in clauses (1) and (2) above, as reasonably determined in good faith by the Board of Directors (including the Approval of the Preferred Directors).

 

 

(ii)            Options and Convertible Securities. The consideration per Ordinary Share received by the Company for New Securities deemed to have been issued pursuant to Article 8.3(E)(5)(c) hereof relating to Options and Convertible Securities shall be determined by dividing (x) the total amount, if any, received or receivable by the Company as consideration for the issue of such Options or Convertible Securities (determined in the manner described in paragraph (i) above), plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by (y) the maximum number of Ordinary Shares (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities.

 

(6)            Other Dilutive Events. In case any event shall occur as to which the other provisions of this Article 8.3(E) are not strictly applicable, but the failure to make any adjustment to the Applicable Conversion Price with respect to any Preferred Shares would not fairly protect the conversion rights of the holders of such Preferred Shares in accordance with the essential intent and principles hereof, then, in each such case, the Board, in good faith, shall, subject to the Approval of the Preferred Directors, determine the appropriate adjustment to be made, on a basis consistent with the essential intent and principles established in this Article 8.3(E), necessary to preserve, without dilution, the conversion rights of the holders of such Preferred Shares.

 

(7)            No Impairment. The Company will not, by amendment of these Articles or through any reorganization, recapitalization, transfer of assets, consolidation, merger, amalgamation, scheme of arrangement, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Article 8.3 and in the taking of all such action as may be necessary or appropriate to protect the conversion rights of the holders of Preferred Shares against impairment.

 

 

(8)            Certificate of Adjustment. In the case of any adjustment or readjustment of the Applicable Conversion Price, the Company, at its sole expense, shall compute such adjustment or readjustment in accordance with the provisions hereof and prepare a certificate showing such adjustment or readjustment, and shall deliver such certificate by notice to each registered holder of such Preferred Shares at the holder’s address as shown in the Company’s books. The certificate shall set forth such adjustment or readjustment, showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (i) the consideration received or deemed to be received by the Company for any New Securities issued or sold or deemed to have been issued or sold, (ii) the number of New Securities issued or sold or deemed to be issued or sold, (iii) the Applicable Conversion Price, in effect before and after such adjustment or readjustment, and (iv) the type and number of Equity Securities of the Company, and the type and amount, if any, of other property which would be received upon conversion of such Preferred Shares after such adjustment or readjustment.

 

(9)            Notice of Record Date. In the event the Company shall propose to take any action of the type or types requiring an adjustment set forth in this Article 8.3(E), the Company shall give notice to the holders of the relevant Preferred Shares, which notice shall specify the record date, if any, with respect to any such action and the date on which such action is to take place. Such notice shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action (to the extent such effect may be known at the date of such notice) on the Applicable Conversion Price, and the number and kind or class of shares or other securities or property which shall be deliverable upon the occurrence of such action or deliverable upon the conversion of the relevant Preferred Shares. In the case of any action which would require the fixing of a record date, such notice shall be given at least twenty (20) days prior to the date so fixed, and in the case of all other actions, such notice shall be given at least thirty (30) days prior to the taking of such proposed action.

 

(10)            Reservation of Shares Issuable Upon Conversion. The Company shall at all times reserve and keep available out of its authorized but unissued Class A Ordinary Shares, solely for the purpose of effecting the conversion of the Preferred Shares, such number of its Class A Ordinary Shares as shall from time to time be sufficient to effect the conversion of all issued and outstanding Preferred Shares. If at any time the number of authorized but unissued Class A Ordinary Shares shall not be sufficient to effect the conversion of all then issued and outstanding Preferred Shares, in addition to such other remedies as shall be available to the holders of Preferred Shares, the Company and its Members will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued Class A Ordinary Shares to such number of shares as shall be sufficient for such purpose.

 

 

(11)            Notices. Any notice required or permitted pursuant to this Article 8.3 shall be given in writing and shall be given in accordance with Articles 110 through 114.

 

(12)            Payment of Taxes. The Company will pay all taxes (other than taxes based upon income) and other governmental charges that may be imposed with respect to the issue or delivery of Class A Ordinary Shares upon conversion of the Preferred Shares, excluding any tax or other charge imposed in connection with any transfer involved in the issue and delivery of Class A Ordinary Shares in a name other than that in which such Preferred Shares so converted were registered.

 

8.4

Voting Rights.

 

A.

General Rights. Subject to Article 8.4(B), at all general meetings of the Company: (a) the holder of each Class A Ordinary Share issued and outstanding shall have one (1) vote in respect of each Class A Ordinary Share held by it, (b) the holder of each Class B Ordinary Share issued and outstanding shall have ten (10) votes in respect of each Class B Ordinary Share held by it and (c) the holder of a Preferred Share shall be entitled to such number of votes as equals the whole number of Class A Ordinary Shares into which such holder’s collective Preferred Shares are convertible (x) immediately after the close of business on the record date of the determination of the Company’s Members entitled to vote or (y) if no such record date is established, at the date such vote is taken or any written consent of the Company’s Members is first solicited. Fractional votes shall not, however, be permitted and any fractional voting rights available on an as converted basis (after aggregating all the Preferred Shares held by each holder) shall be rounded to the nearest whole number (with one-half being rounded upward). To the extent that the Statute or these Articles allow the Preferred Shares to vote separately as one or more class or series with respect to any matters, such Preferred Shares shall have the right to vote separately as one or more class or series with respect to such matters.

 

 

B.

Protective Provisions.

 

1.

Approval by the Preferred Holders. Regardless of anything else contained herein or in the Shareholders Agreement or the Charter Documents of any other Group Company, the Company shall not take, permit to occur, approve, authorize, or agree or commit to do any of the following, and each Member (other than holders of the Preferred Shares) shall procure the Company not to take, permit to occur, approve, authorize, or agree or commit to do any of the following, and the Company shall procure each other Group Company not to take, permit to occur, approve, authorize, or agree or commit to do any of the following, 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, unless the written approval of the holders of seventy percent (70%) or more of the voting power of the then outstanding Preferred Shares (assuming the full exercise of the Series D Warrants to the extent that any Series D Warrant remains outstanding, and voting together as a single class and on an as-converted basis) has been obtained:

 

(1)

any amendment or modification to or waiver under any of the Charter Documents of any Group Company, except such amendment, modification or waiver that is primarily in relation to the ordinary business of such Group Company and would not adversely affect the rights or preferences of the Preferred Shares;

 

(2)

any change of the authorized size or composition of the board of directors of any Group Company, other than any change to the composition of such board of directors in compliance with Article 63, or the manner in which any Group Company’s directors are appointed;

 

(3)

any declaration, setting aside or payment of a dividend or other distribution on any Ordinary Share or Preferred Share;

 

(4)

any transaction outside the ordinary course of business involving any Group Company and any of such Group Company’s employees, officers, directors or shareholders or any Affiliate of any of such employees, officers, directors or shareholders;

 

(5)

any change to the number of Shares reserved for issuance under the ESOP;

 

(6)

effect any of the foregoing with respect to any Group Company, as applicable; or

 

 

(7)

agree or commit to do any of the foregoing.

 

Notwithstanding anything to the contrary contained herein or in the Shareholders Agreement or the Charter Documents of any other Group Company, where any act listed in clauses (1) through (7) above may be approved by a Special Resolution pursuant to the Statute, and if the Members vote in favor of such act but the approval of the holders of seventy percent (70%) or more of the voting power of the then outstanding Preferred Shares (assuming the full exercise of the Series D Warrants to the extent that any Series D Warrant remains outstanding, and voting together as a single class and on an as-converted basis) has not yet been obtained, then each holder of the Preferred Shares who voted against such act shall, in such vote, have the voting rights equal to the aggregate voting power of all the Members who voted in favor of such act plus one (1).

  

2.

Approval by Each Series Majority Preferred Holders. Regardless of anything else contained herein or in the Shareholders Agreement or the Charter Documents of any other Group Company, the Company shall not take, permit to occur, approve, authorize, or agree or commit to do any of the following, and each Member (other than holders of the Preferred Shares) shall procure the Company not to take, permit to occur, approve, authorize, or agree or commit to do any of the following, and the Company shall procure each other Group Company not to take, permit to occur, approve, authorize, or agree or commit to do any of the following, 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, unless approved in writing by Each Series Majority Preferred Holders; provided, further, that (x) for the matters set out in subsections (1) and (2) below, to the extent that such action would not reasonably be expected to change the rights, preferences, privileges or powers of any series of Preferred Shares, then the approval of the holders of fifty-one percent (51%) or more of the voting power of the then outstanding Preferred Shares of such series (assuming the full exercise of the Series D Warrants to the extent that any Series D Warrant remains outstanding, and voting together as a single class and on an as converted basis) would not be required and (y) the approval of the Majority Series C+ Holders shall not be required for any matter referred to in subsection (7) unless such matter also constitutes a matter referred to in subsection (8):

 

(1)

any amendment or change of the rights, preferences, privileges, powers, limitations or restrictions of or concerning, or the limitations or restrictions provided for the benefit of, the Preferred Shares;

 

(2)

any action that reclassifies any outstanding shares into shares having rights, preferences, privileges, powers, limitations or restrictions senior to or on a parity with any series of Preferred Shares in issue, whether as to liquidation, conversion, dividend, voting, redemption or otherwise;

 

 

(3)

any action that creates, authorizes or issues (A) any class or series of Equity Securities having rights, preferences, privileges or powers superior to or on a parity with any Preferred Shares, whether as to liquidation, conversion, dividend, voting, redemption, or otherwise, or any Equity Securities convertible into, exchangeable for, or exercisable into any Equity Securities having rights, preferences, privileges or powers superior to or on a parity with any Preferred Shares, whether as to liquidation, conversion, dividend, voting, redemption or otherwise, (B) any additional Preferred Shares, (C) any other Equity Securities of the Company except for the Conversion Shares, or (D) any Equity Securities of any other Group Company; provided, however, that this restriction shall not apply to: (i) the creation, authorization or issuance of Class A Ordinary Shares issuable upon conversion of the Preferred Shares, or (ii) the issuance of options or other equity-based awards and the Shares underlying such awards to any Group Company’s employees, directors and consultants pursuant to the ESOP, (iii) issuance of any Equity Securities of the Company pursuant to the Warrant, or (iv) the issuance of Equity Securities in connection with any equity fundraising of the Company that does not otherwise require the approval of Each Series Majority Preferred Holders pursuant to subsection (9) or the approval of the Majority Series C+ Holders pursuant to subsection (11);

 

(4)

any purchase, repurchase, redemption or retirements of any Equity Security of any Group Company other than (a) the purchase, repurchase or redemption of Equity Securities from employees, officers, directors, consultants or other persons performing services for the Company or any of its Subsidiaries pursuant to agreements approved by the Board (including the Approval of the Preferred Directors) under which the Company has the option to purchase, repurchase or redeem such Equity Securities upon the occurrence of certain events, such as the termination of employment or service, or pursuant to a right of first refusal or (b) the conversion or redemption of Preferred Shares pursuant to these Articles (including any purchase or repurchase of Shares to effect the conversion of the Preferred Shares into Class A Ordinary Shares); provided, however, that this restriction shall not apply to the issuance of Equity Securities in connection with any equity fundraising of the Company that does not otherwise require the approval of Each Series Majority Preferred Holders pursuant to subsection (9) or the approval of the Majority Series C+ Holders pursuant to subsection (11);

 

 

(5)

any liquidation, dissolution or winding up of any Group Company, Share Sale, Change of Control Event, Deemed Liquidation Event or any merger, amalgamation, scheme of arrangement or consolidation of any Group Company with any Person, the division of any Group Company, the purchase or other acquisition by any Group Company of all or substantially all of the assets, equity or business of another Person, or the reduction of share capital of any Group Company;

 

(6)

any IPO other than Qualified IPO concerning any of the Group Companies;

 

(7)

any appointment, change or replacement of the Company’s CEO or CTO;

 

(8)

with respect to the vote or consent of the Majority Series C+ Holders only, any appointment, change or replacement outside of the ordinary course of business of the Company’s CEO or CTO within two years from the Series C+ Issue Date;

 

(9)

any equity or equity-linked fundraising of the Company with a pre-money valuation of the Company for such fundraising of lower than US$ 2,960,500,000 (or, with respect to the vote or consent of the Majority Series C+ Holders only, lower than US$4,000,000,000, or, with respect to the veto or consent of the Majority Series D Holders only, not more than US$8,500,000,000), and the proposed proceeds from such fundraising of more than US$50,000,000;

 

(10)

cease to conduct or carry on the business of any Group Company substantially as now conducted; or

 

(11)

with respect to the vote or consent of the Majority Series C+ Holders only, any equity or equity-linked fundraising of the Company which would result in OTPP ceasing to constitute the Majority Series C+ Holders.

 

Notwithstanding anything to the contrary contained herein or in the Shareholders Agreement or the Charter Documents of any other Group Company, where any act listed in clauses (1) through (11) above may be approved by a Special Resolution pursuant to the Statute, and if the Members vote in favor of such act but the approval of Each Series Majority Preferred Holders and/or the Majority Series C+ Holders (as applicable) has not yet been obtained, then each holder of the Preferred Shares who voted against such act shall, in such vote, have the voting rights equal to the aggregate voting power of all the Members who voted in favor of such act plus one (1).

 

 

3.

Approval by the Preferred Directors. Regardless of anything else contained herein or in the Shareholders Agreement or the Charter Documents of any other Group Company, the Company shall not take, permit to occur, approve, authorize, or agree or commit to do any of the following, and each Member (other than holders of the Preferred Shares) shall procure the Company not to take, permit to occur, approve, authorize, or agree or commit to do any of the following, and the Company shall procure each other Group Company not to take, permit to occur, approve, authorize, or agree or commit to do any of the following, 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, unless approved by the Board (in the case of clauses (1) to (7) below, which approval shall also include the Approval of the Preferred Directors; in the case of clause (8) below, which approval shall also include the approval of more than one half (1/2) of the Preferred Directors; in the case of clause (9) below, which approval shall also include the approval of more than one half (1/2) of the Preferred Directors who do not have any conflict of interest with respect to such matter; in the case of clauses (10) and (11) below, which approval shall also include the Approval of the Preferred Directors, the approval of more than one half (1/2) of the Preferred Directors or the approval of more than one half (1/2) of the Preferred Directors who do not have any conflict of interest with respect to such matter (as applicable); and, in the case of adoption or amendment of annual budget in clause (2) below, to the extent the use of the TMC Proceeds is involved in the annual budget, includes the approval of the Director appointed by TMC, which approval shall not be unreasonably withheld to the extent that the use of the TMC Proceeds in such annual budget is consistent with the provisions of Schedule H to the TMC Purchase Agreement):

 

(1)

the adoption or termination of the ESOP, or equivalent, for the benefit of the Company’s employees, directors and consultants and the amendment to any terms and conditions thereof;

 

(2)

adopt or amend any Group Company’s annual budget or business plan;

 

(3)

enter into any of the following transactions (in a single transaction or a series of related transactions): (i) the incurrence of any Indebtedness exceeding US$20,000,000 in the aggregate; (ii) the purchase or disposal of any Group Company’s business or assets exceeding US$20,000,000 in the aggregate; (iii) the extension by any Group Company of any loan or guarantee for Indebtedness to any third-party in an amount exceeding US$20,000,000 in the aggregate; (iv) an equity or equity-linked investment in any third-party other than the Group Companies in an amount exceeding US$20,000,000; or (v) any transaction that is outside the ordinary course of business in an amount exceeding US$20,000,000 or involves an exclusive relationship;

 

 

(4)

increase the compensation of any of the five (5) most highly compensated employees of any Group Company by more than fifty percent (50%) within any twelve (12) month period, or increase the compensation of any Principals by more than fifty percent (50%) within any twelve (12) month period;

 

(5)

appoint or remove the auditors of any Group Company, or make any material change in any Group Company’s Accounting Standards, accounting and financial policies and procedures;

 

(6)

change any material part of any Group Company’s business or enter into any new businesses substantially outside of its business as currently conducted;

 

(7)

initiate or settle any material litigation or arbitration;

 

(8)

any material amendment or modification to, or waiver under, any Control Document which would result in the Company losing Control of any Domestic Company, or termination of any Control Document;

 

(9)

any equity or equity-linked fundraising of the Company from any Governmental Body of the PRC;

 

(10)

effect any of the foregoing, as applicable, with respect to any Group Company, or any Subsidiary or Affiliate of the Company; or

 

(11)

agree or commit to do any of the foregoing.

 

Notwithstanding anything to the contrary contained herein or in the Shareholders Agreement or the Charter Documents of any other Group Company, where any act listed in clauses (1) through (11) above may be approved by a Special Resolution pursuant to the Statute, and if the Approval of the Preferred Directors, the approval of more than one half (1/2) of the Preferred Directors who do not have any conflict of interest with respect to such act and/or the approval of the Director appointed by TMC (as applicable) has not yet been obtained, and where a meeting of shareholders is convened to consider such matters, the holders of the then outstanding Shares voting against the resolution shall have, in such vote, the same number of votes as all Shareholders of the Company who vote in favor of the resolution plus one (1).

 

 

4.

Consultation with the Majority Series C+ Holders. Regardless of anything else contained herein or in the Shareholders Agreement or the Charter Documents of any other Group Company, the Company shall not take, permit to occur, approve, authorize, or agree or commit to do any of the following, and each Member (other than holders of the Preferred Shares) shall procure the Company not to take, permit to occur, approve, authorize, or agree or commit to do any of the following, 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, unless the Company has consulted with the Majority Series C+ Holders in good faith:

 

(1)

any appointment, change or replacement within the ordinary course of business of the Company’s CEO or CTO within two years from the Series C+ Issue Date; or

 

(2)

any appointment, change or replacement of the Company’s CEO or CTO after the expiry of two years from the Series C+ Issue Date.

 

5.

Approval by Majority Series D Holders. Regardless of anything else contained herein or in the Shareholders Agreement or the Charter Documents of any other Group Company, the Company shall not take, permit to occur, approve, authorize, or agree or commit to do any of the following, and each Member (other than holders of the Preferred Shares) shall procure the Company not to take, permit to occur, approve, authorize, or agree or commit to do any of the following, and the Company shall procure each other Group Company not to take, permit to occur, approve, authorize, or agree or commit to do any of the following, 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, unless approved in writing by the Majority Series D Holders:

 

(1)

any action by any Group Company in violation of applicable Law or requirement or order of competent Government Authorities, which is reasonably expected to cause a material adverse change in the prospects, condition or business of the Group, taken as a whole; or

 

(2)

any decision by the Company to pursue an IPO (as defined in the Shareholders Agreement) in the U.S. which (i) is in violation of applicable PRC Laws or (ii) will or could reasonably be expected to result in investigation on the Group by any PRC Governmental Authority.

 

 

8.5

Redemption Rights.

 

A.

Request for Redemption.

 

(1)

At any time after the earliest to occur of the following: (a) a Qualified IPO has not occurred prior to December 28, 2027, (b) the unilateral termination by either Mr. Jun Peng or Mr. Tiancheng Lou of his employment relationship with the Group Companies before the earlier of December 28, 2027 and occurrence of a Qualified IPO, (c) a material breach by any Group Company of Section 3.2 of the Collaboration Agreement, which has not been remedied within 90 days (which period may be extended for another 90 days if the breach is curable and has not been completely cured) following delivery of written notice of such breach by TMC, (d) a breach of the Control Documents by any of the WFOEs, the VIE Companies, or nominee shareholders of VIE Companies who are employees of any Group Company, which has not been remedied within 45 days (which period may be extended for another 45 days if the breach is curable and has not been completely cured) following delivery of written notice of such breach by TMC, (e) a breach by any Group Company of its respective representations and warranties set forth in the Series C Purchase Agreements which would cause a material adverse change in the condition, business or prospects of the Company, (f) a breach by any of the Group Companies, Principals or Principal Holding Companies of its respective covenants set forth in Section 12 of the Shareholders Agreement, which has not been remedied within 90 days (which period may be extended for another 90 days if the breach is curable and has not been completely cured) following delivery of written notice of such breach by TMC, (g) a breach by any Group Company of its respective representations and warranties set forth in the OTPP Purchase Agreement or the CPE Purchase Agreement which would cause a material adverse change in the condition, business or prospects of the Company, or (h) a breach by any Group Company of its respective representations and warranties set forth in the Series D Purchase Agreement or the Series D Additional Purchase Agreements (as the case may be with respect to a holder of the Series D Preferred Shares (including the Series D Preferred Shares issuable upon the exercise of the Series D Warrants to the extent that any Series D Warrant remains outstanding)) which would cause a material adverse change in the condition, business or prospects of the Company, upon receipt of a written request from any holder of the then outstanding Preferred Shares (the “Redemption Request”) (provided, however, it being understood that (A) only TMC may deliver a Redemption Request and become a Redeeming Shareholder before any other holder of Preferred Shares in case of the events described in the foregoing subparagraphs (c), (d) and (f), (B) the holders of the then outstanding Preferred Shares other than TMC may deliver a Redemption Request and become a Redeeming Shareholder in case of the event described in the foregoing subparagraphs (c) and (f) only if TMC has delivered a Redemption Request and become a Redeeming Shareholder, (C) only the holders of Series C Preferred Shares may deliver a Redemption Request and become a Redeeming Shareholder in case of the events described in the foregoing subparagraph (e) to request the redemption of only the Series C Preferred Shares it holds but not any other series of Preferred Shares it holds, (D) only the holders of Series C Preferred Shares and the holders of Series C+ Preferred Shares and their respective transferees may deliver a Redemption Request and become a Redeeming Shareholder in case of the events described in the foregoing subparagraph (g) to request the redemption of only the Series C Preferred Shares and/or the Series C+ Preferred Shares it holds pursuant to the OTPP Purchase Agreement or the CPE Purchase Agreement, but not any other Preferred Shares it holds, and (E) only the holders of Series D Preferred Shares (including the Series D Preferred Shares issuable upon the exercise of the Series D Warrants to the extent that any Series D Warrant remains outstanding) and their respective transferees may deliver a Redemption Request and become a Redeeming Shareholder in case of the events described in the foregoing subparagraph (h) to request the redemption of only the Series D Preferred Shares it holds pursuant to the Series D Purchase Agreement, the Series D Additional Purchase Agreements and/or the Series D Warrants (as the case may be) but not any other Preferred Shares it holds), the Company shall redeem all the outstanding Preferred Shares (but for the avoidance of doubt: (x) only the Series C Preferred Shares in case of the events described in the foregoing subparagraph (e), (y) only the Series C Preferred Shares and the Series C+ Preferred Shares acquired pursuant to the OTPP Purchase Agreement or the CPE Purchase Agreement in case of the events described in the foregoing subparagraph (g), and (z) only the Series D Preferred Shares (including the Series D Preferred Shares issuable upon the exercise of the Series D Warrants to the extent that any Series D Warrant remains outstanding) acquired pursuant to the Series D Purchase Agreement, the Series D Additional Purchase Agreements and/or the Series D Warrants (as the case may be) in case of the events described in the foregoing paragraph (h)) owned and requested to be redeemed by such holder (the “Redeeming Shareholder”) by paying in cash therefor a sum per share equal to the applicable Share Issue Price (as adjusted for any share splits, share dividends, combinations, subdivisions, recapitalizations or the like) plus (i) with respect to each Series D Preferred Share (including the Series D Preferred Shares issuable upon the exercise of the Series D Warrants to the extent that any Series D Warrant remains outstanding) an amount equal to the applicable Series D Issue Price with a simple rate of eight percent (8%) per annum return calculated from the Series D Issue Date to the Redemption Date (as defined below); (ii) with respect to each Series C+ Preferred Share an amount equal to the applicable Series C+ Issue Price with a simple rate of eight percent (8%) per annum return calculated from the Series C+ Issue Date to the Redemption Date; (iii) with respect to each Series C Preferred Share an amount equal to the applicable Series C Issue Price with a simple rate of eight percent (8%) per annum return calculated from the Series C Issue Date to the Redemption Date; (iv) with respect to each Series B2 Preferred Share an amount equal to the applicable Series B2 Issue Price with a simple rate of eight percent (8%) per annum return calculated from the Series B2 Issue Date to the Redemption Date; (v) with respect to each Series B+ Preferred Share an amount equal to the applicable Series B+ Issue Price with a simple rate of eight percent (8%) per annum return calculated from the Series B+ Issue Date to the Redemption Date; (vi) with respect to each Series B Preferred Share an amount equal to the applicable Series B Issue Price with a simple rate of eight percent (8%) per annum return calculated from the Series B Issue Date to the Redemption Date; (vii) with respect to each Series A Preferred Share an amount equal to the applicable Series A Issue Price with a compound rate of five percent (5%) per annum return calculated from the Series A Issue Date to the Redemption Date; and (viii) with respect to all Preferred Shares all declared but unpaid dividends on such shares (such sum, the “Redemption Price”) in any event within sixty (60) days of the date of the Redemption Request.

 

 

(2)

At Redemption Date, subject to applicable Laws, the Company shall, from any source of assets or funds legally available therefor, redeem each Preferred Share requested to be redeemed in the relevant Redemption Request by paying in cash the Redemption Price (as defined above), against surrender by such Redeeming Shareholder at the Company’s principal office of the certificate representing such share (or in lieu thereof shall deliver an affidavit of lost certificate and indemnity therefor) (if any), in accordance with the following: (a) the Redemption Price with respect to the Preferred Shares in the same class or series to be redeemed on the Redemption Date shall be paid on pari passu basis; (b) no Redemption Price with respect to any Series C+ Preferred Shares, Series C Preferred Shares, Series B2 Preferred Shares, Series B+ Preferred Shares, Series B Preferred Shares or Series A Preferred Shares shall be paid prior to the full payment of the Redemption Price with respect to all the Series D Preferred Shares requested to be redeemed at the Redemption Date; (c) no Redemption Price with respect to any Series C Preferred Shares, Series B2 Preferred Shares, Series B+ Preferred Shares, Series B Preferred Shares or Series A Preferred Shares shall be paid prior to the full payment of the Redemption Price with respect to all the Series C+ Preferred Shares requested to be redeemed at the Redemption Date; (d) no Redemption Price with respect to any Series B2 Preferred Shares, Series B+ Preferred Shares, Series B Preferred Shares or Series A Preferred Shares shall be paid prior to the full payment of the Redemption Price with respect to all the Series C Preferred Shares requested to be redeemed at the Redemption Date; (e) no Redemption Price with respect to any Series B+ Preferred Shares, Series B Preferred Shares or Series A Preferred Shares shall be paid prior to the full payment of the Redemption Price with respect to all the Series B2 Preferred Shares requested to be redeemed at the Redemption Date; (f) no Redemption Price with respect to any Series B Preferred Shares or Series A Preferred Shares shall be paid prior to the full payment of the Redemption Price with respect to all the Series B+ Preferred Shares requested to be redeemed at the Redemption Date; and (g) no Redemption Price with respect to any Series A Preferred Shares shall be paid prior to the full payment of the Redemption Price with respect to all the Series B Preferred Shares requested to be redeemed at the Redemption Date.

 

 

B.

General Rights. A Redemption Request may be withdrawn or terminated upon the request of the related Redeeming Shareholder on the date of the request for withdrawal or termination, but only with respect to Preferred Shares that had not been redeemed in full in cash as of the date such request for withdrawal or termination is made. After any such withdrawn or terminated Redemption Request, the Preferred Shares subject thereto which have not been redeemed in full in cash as of the date such request for withdrawal or termination is made shall again be subject to redemption pursuant to this Article 8.5 upon the request of the holder thereof as provided above.

 

C.

Insufficient Legally Available Funds. Notwithstanding any other provision set forth in this Article 8.5, if the funds of the Company legally available to redeem such shares shall be insufficient to redeem all Preferred Shares then to be redeemed, then any unredeemed shares shall continue to remain outstanding and shall be redeemed to the full extent of legally available funds of the Company afterwards. Any such unredeemed shares shall continue to remain outstanding until redeemed in full. The Preferred Shares that are subject to redemption hereunder but have not been redeemed in full (the “Redeeming Preferred Shares”) due to insufficient legally available funds of the Company shall continue to be outstanding and entitled to all dividend, liquidation, conversion and other rights, powers and preferences of the Preferred Shares respectively until such shares have been redeemed in full (except that the conversion rights of such Redeeming Preferred Shares shall terminate three (3) days prior to the date on which such shares are redeemed in full). Any portion of the Redemption Price not paid by the Company in respect of any Redeeming Preferred Share on the related Redemption Date shall continue to be owed to the holder thereof and such outstanding portion of the Redemption Price shall accrue interest at a simple interest rate of eight percent (8%) per annum from the Redemption Date.

 

D.

Redemption Notice. Within thirty (30) days after the receipt of a Redemption Request, written notice shall be mailed by the Company to the related holder of record (at the close of business on the Business Day next preceding the day on which notice is given) of the Preferred Shares to be redeemed, (a) notifying such holder of the redemption to be effected, (b) specifying the Redemption Price, the date on which the Redemption Price shall be payable (the “Redemption Date”), the number of such holder’s Preferred Shares to be redeemed as requested in such Redemption Request, the place at which payment may be obtained and the date on which such holder’s conversion rights as to such shares terminate (which date shall be three (3) days prior to the Redemption Date), and (c) calling upon such holder to surrender to the Company, in the manner and at the place designated, the certificate or certificates representing the shares to be redeemed (if any) (the “Redemption Notice”). The Company shall notify in writing all the other holders of Preferred Shares promptly after receipt of a Redemption Request.

 

 

E.

Surrender of Certificates. On or before each designated Redemption Date, each holder of Preferred Shares to be redeemed shall (unless such holder has previously exercised such holder’s right to convert such Preferred Shares into Class A Ordinary Shares) surrender the certificate(s) representing such Preferred Shares to be redeemed to the Company (or, if such holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Company to indemnify the Company against any claim that may be made against the Company on account of the alleged loss, theft or destruction of such certificate), in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Price for such shares shall be payable to the order of the person whose name appears on such certificate(s) as the owner thereof, and each surrendered certificate shall be cancelled and retired. If less than all of the shares represented by such certificate are redeemed, then the Company shall promptly issue a new certificate representing the unredeemed shares.

 

F.

Effect of Redemption. If the Redemption Notice shall have been duly given, and if on the Redemption Date the Redemption Price with respect to all of the Preferred Shares to be redeemed on the Redemption Date is paid to the relevant holders of Preferred Shares in full, then notwithstanding that the certificates evidencing any of the Preferred Shares so called for redemption on such Redemption Date shall not have been surrendered, the redemption of such shares shall be deemed to be effected at close of business on the Redemption Date at which time any such shares which are redeemed shall forthwith be cancelled and the rights of all of the holders of such shares with respect to such shares shall terminate, except only the right of the holders to receive the Redemption Price from the Company or the payment agent, without interest, upon surrender of their certificate(s) therefor (or a lost certificate affidavit or agreement as specified above).

 

G.

Deposit of Redemption Price. On or prior to the Redemption Date, the Company may, at its option, deposit with an independent payment agent, a sum equal to the aggregate Redemption Price for all Preferred Shares called for redemption on the Redemption Date and not yet redeemed, with irrevocable instructions and authority to the payment agent to pay, on or after the Redemption Date, the Redemption Price to the respective holders upon the surrender of their respective share certificates (or a lost certificate affidavit or agreement as specified above). The deposit shall constitute full payment of the shares to their respective holders, and from and after the such Redemption Date, the shares called for redemption on that Redemption Date shall be deemed to be redeemed and no longer outstanding.

 

 

ORDINARY SHARES

 

9.

Certain rights, preferences, privileges and limitations of the Ordinary Shares of the Company are as follows:

 

9.1

Dividend Provision. Subject to Article 8.4(B) and the preferential rights of holders of all series and classes of Shares in the Company at the time outstanding having preferential rights as to dividends (including those set out in Article 8.1), the holders of the Ordinary Shares shall, subject to the Statute and these Articles, be entitled to receive, when, as and if declared by the Directors, out of any assets of the Company legally available therefor, such dividends as may be declared from time to time by the Directors (including the Approval of the Preferred Directors).

 

9.2

Liquidation. Upon the liquidation, dissolution or winding up of the Company, the assets of the Company shall be distributed as provided in Article 8.2.

 

9.3

Voting Rights. Holders of Class A Ordinary Shares and holders of Class B Ordinary Shares shall, at all times, vote together as one class on all matters submitted to a vote by the holders of Ordinary Shares. Subject to Article 8.4(B), the holder of each Class A Ordinary Share shall have the right to one (1) vote with respect to such Class A Ordinary Share, the holder of each Class B Ordinary Share shall have the right to ten (10) votes with respect to such Class B Ordinary Share, and each holder of Ordinary Shares shall be entitled to notice of any Members’ meeting in accordance with these Articles, and shall be entitled to vote upon such matters and in such manner as may be provided for in these Articles.

 

9.4

Conversion. Each Class B Ordinary Share is convertible into one (1) Class A Ordinary Share at any time by the holder thereof. The right to convert shall be exercisable by the holder of the Class B Ordinary Share delivering a written notice to the Company that such holder elects to convert a specified number of Class B Ordinary Shares into Class A Ordinary Shares. In no event shall Class A Ordinary Shares be convertible into Class B Ordinary Shares.

 

9.5

Automatic Conversion. With respect to any Class B Ordinary Share, upon (a) the death of the shareholder (or its ultimate Controlling beneficial owner that is a natural Person or any beneficial owner that is a Principal) of such Class B Ordinary Share, (b) any sale, transfer, assignment or disposition of such Class B Ordinary Share by a shareholder (or its Affiliate) to any Person who is not an Affiliate of such shareholder, (c) a change of ultimate beneficial ownership of such Class B Ordinary Share to any Person who is not an Affiliate of the registered shareholder of such Class B Ordinary Share, or (d) termination of employment of any Principal who is the ultimate beneficial owner holding such Class B Ordinary Share with the Company, such Class B Ordinary Share shall be automatically and immediately converted into one (1) Class A Ordinary Share.

 

 

REGISTER OF MEMBERS

 

10.

The Company shall maintain or cause to be maintained the Register of Members in accordance with the Statute. The Register of Members shall be the only evidence as to who are the Members entitled to examine the Register of Members, or to vote in person or by proxy at any meeting of Members.

 

FIXING RECORD DATE

 

11.

The Directors may fix in advance a date as the record date for any determination of Members entitled to notice of or to vote at a meeting of the Members, or any adjournment thereof, and for the purpose of determining the Members entitled to receive payment of any dividend the Directors may, at or within ninety (90) days prior to the date of declaration of such dividend, fix a subsequent date as the record date for such determination.

 

12.

If no record date is fixed for the determination of Members entitled to notice of, or to vote at, a meeting of Members or Members entitled to receive payment of a dividend, the date on which notice of the meeting is sent or the date on which the resolution of the Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of Members. When a determination of Members entitled to vote at any meeting of Members has been made as provided in this Article, such determination shall apply to any adjournment thereof.

 

CERTIFICATES FOR SHARES

 

13.

Share certificates representing Shares, if any, shall be in such form as the Directors may determine. Share certificates shall be signed by one or more Directors or other Person authorised by the Directors. The Directors may authorise certificates to be issued with the authorised signature(s) affixed by mechanical process. All certificates for Shares shall be consecutively numbered or otherwise identified and shall specify the Shares to which they relate. All certificates surrendered to the Company for transfer shall be cancelled and, subject to these Articles (including Article 8), no new certificate shall be issued until the former certificate representing a like number of relevant Shares shall have been surrendered and cancelled.

 

14.

The Company shall not be bound to issue more than one certificate for Shares held jointly by more than one Person and delivery of a certificate to one joint holder shall be a sufficient delivery to all of them.

 

15.

If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms (if any) as to evidence and indemnity and on the payment of such expenses reasonably incurred by the Company in investigating evidence, as the Directors may prescribe, and (in the case of defacement or wearing out) upon delivery of the old certificate.

 

 

TRANSFER OF SHARES

 

16.

The Shares of the Company are subject to transfer restrictions as set forth in these Articles (including Schedule A hereto) and the Transaction Documents, by and among the Company and certain of its Members and such other parties named therein. The Company will register transfers of Shares that are made in accordance with such agreements and will not register transfers of Shares that are made in violation of such agreements. The instrument of transfer of any Share shall be in writing and shall be executed by or on behalf of the transferor (and, if the Directors so require, signed by the transferee). The transferor shall be deemed to remain the holder of a Share until the name of the transferee is entered in the Register of Members.

 

REDEMPTION AND REPURCHASE OF SHARES

 

17.

The Company is permitted to redeem, purchase or otherwise acquire any of the Company’s Shares, so long as such redemption, purchase or acquisition (i) is pursuant to any redemption provisions set forth in the Memorandum and these Articles, (ii) is pursuant to the ESOP, or (iii) is as otherwise agreed by the holder of such Share and the Company, subject in the case of clause (ii) or (iii) to compliance with any applicable restrictions set forth in the Shareholders Agreement, the Right of First Refusal and Co-Sale Agreement, the Memorandum and these Articles (including Article 8.4(B)) (in each case, as applicable).

 

18.

Subject to the provisions of the Statute and these Articles (including Article 8.4(B)), the Company may issue Shares that are to be redeemed or are liable to be redeemed at the option of the Member or the Company. Subject to the provisions of the Statute and these Articles (including Article 8.4(B)), the Directors may authorize the redemption or purchase by the Company of its own Shares in such manner and on such terms as they think fit and may make a payment in respect of the redemption or purchase of its own Shares in any manner permitted by the Statute, including out of capital.

 

 

VARIATION OF RIGHTS OF SHARES

 

19.

Subject to these Articles (including Article 8.4(B)), if at any time the share capital of the Company is divided into different classes of Shares, the rights attached to any class (unless otherwise provided by the terms of issue of the Shares of that class) may only be varied with the consent in writing of Members holding not less than a majority of the votes entitled to be cast by holders (in person or by proxy) of Shares of such class affected by the proposed variation of rights on a poll at a general meeting of such class or with the sanction of a resolution of such Members holding not less than a majority of the votes which could be cast by holders (in person or by proxy) of Shares of such class on a poll at a general meeting but not otherwise. For purposes of this Article 19, all Series A Preferred Shares shall be deemed to be a single class and the rights attached to the Series A Preferred Shares may be varied with the consent in writing of Members holding fifty-one percent (51%) or more of the votes entitled to be cast by holders (in person or by proxy) of the Series A Preferred Shares, all Series B Preferred Shares shall be deemed to be a single class and the rights attached to the Series B Preferred Shares may be varied with the consent in writing of Members holding fifty-one percent (51%) or more of the votes entitled to be cast by holders (in person or by proxy) of the Series B Preferred Shares, all Series B+ Preferred Shares shall be deemed to be a single class and the rights attached to the Series B+ Preferred Shares may be varied with the consent in writing of Members holding fifty-one percent (51%) or more of the votes entitled to be cast by holders (in person or by proxy) of the Series B+ Preferred Shares, all Series B2 Preferred Shares shall be deemed to be a single class and the rights attached to the Series B2 Preferred Shares may be varied with the consent in writing of Members holding fifty-one percent (51%) or more of the votes entitled to be cast by holders (in person or by proxy) of the Series B2 Preferred Shares, all Series C Preferred Shares shall be deemed to be a single class and the rights attached to the Series C Preferred Shares may be varied with the consent in writing of Members holding fifty-one percent (51%) or more of the votes entitled to be cast by holders (in person or by proxy) of the Series C Preferred Shares, all Series C+ Preferred Shares shall be deemed to be a single class and the rights attached to the Series C+ Preferred Shares may be varied with the consent in writing of Members holding fifty-one percent (51%) or more of the votes entitled to be cast by holders (in person or by proxy) of the Series C+ Preferred Shares, and all Series D Preferred Shares shall be deemed to be a single class and the rights attached to the Series D Preferred Shares may be varied with the consent in writing of Members holding fifty-one percent (51%) or more of the votes entitled to be cast by holders (in person or by proxy) of the Series D Preferred Shares (assuming the full exercise of the Series D Warrants to the extent that any Series D Warrant remains outstanding). No amendment shall be effective or enforceable in respect of the rights, preferences and privileges of any particular Member without the prior written consent of such particular Member, if such amendment (x) affects any of the rights, preferences or privileges of such particular Member disproportionally and adversely differently from the other Members in the same class of Shares, or (y) affects any provision that specifically and expressly gives any right, preference, privilege or power to, or restriction for the benefit of, such particular Member.

 

20.

For the purpose of the immediately preceding Article, all of the provisions of these Articles relating to general meetings shall apply, to the extent applicable, mutatis mutandis, to every such separate meeting of a class of Shares, except that the necessary quorum shall be one or more Persons holding or representing by proxy at least two thirds of the issued Shares of such class (as if all the Series D Warrants were fully exercised to the extent any Series D Warrant remains outstanding) and that any matter put to the vote of such meeting shall be decided by poll and not on a show of hands.

 

21.

Subject to these Articles (including Article 8.4(B)), the rights conferred upon the holders of Shares or any class of Shares shall not, unless otherwise expressly provided by the terms of issue of such Shares, be deemed to be varied by the mere creation, redesignation, or issue of Shares ranking pari passu therewith.

 

 

COMMISSION ON SALE OF SHARES

 

22.

The Company may, with the approval of the Board (so long as such approval includes the Approval of the Preferred Directors), so far as the Statute permits, pay a commission to any Person in consideration of his or her subscribing or agreeing to subscribe whether absolutely or conditionally for any Shares of the Company. Such commissions may be satisfied by the payment of cash and/or the issue of fully or partly paid-up Shares. The Company may also on any issue of Shares pay such brokerage as may be lawful.

 

NON-RECOGNITION OF INTERESTS

 

23.

The Company shall not be bound by or compelled to recognise in any way (even when having notice thereof) any equitable, contingent, future or partial interest in any Share, or (except only as is otherwise provided by these Articles or the Statute) any other rights in respect of any Share other than an absolute right to the entirety thereof in the registered holder.

 

TRANSMISSION OF SHARES

 

24.

If a Member dies, the survivor or survivors where such Member was a joint holder, and his or her legal personal representatives where such Member was a sole holder, shall be the only Persons recognised by the Company as having any title to such Member’s interest. The estate of a deceased Member is not thereby released from any liability in respect of any Share that had been jointly held by such Member.

 

25.

Any Person becoming entitled to a Share in consequence of the death or bankruptcy or liquidation or dissolution of a Member (or in any other way than by transfer) may, upon such evidence being produced as may from time to time be required by the Directors, elect either to become the holder of the Share or to have some Person nominated by him or her as the transferee, but the Directors shall, in any case, have the same right to decline or suspend registration as they would have had in the case of a transfer by that Member before his death or bankruptcy pursuant to Article 16. If he or she elects to become the holder, he or she shall give written notice to the Company to that effect.

 

26.

If the Person so becoming entitled shall elect to be registered as the holder, such Person shall deliver or send to the Company a notice in writing signed by such Person stating that he or she so elects.

 

 

AMENDMENTS OF MEMORANDUM AND ARTICLES OF ASSOCIATION AND ALTERATION OF CAPITAL

 

27.

Subject to these Articles (including Article 8.4(B)), the Company may by Ordinary Resolution:

 

27.1

increase the share capital by such sum as the resolution shall prescribe and with such rights, priorities and privileges annexed thereto, as the Company in general meeting may determine;

 

27.2

consolidate and divide all or any of its share capital into Shares of larger amount than its existing Shares;

 

27.3

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 Memorandum or into Shares without par value;

 

27.4

cancel any Shares that at the date of the passing of the resolution have not been taken or agreed to be taken by any Person; and

 

27.5

perform any action not required to be performed by Special Resolution.

 

28.

Subject to the provisions of the Statute and the provisions of these Articles (including Articles 8.4(B) and 19) as regards the matters to be dealt with by Ordinary Resolution, the Company may by Special Resolution:

 

28.1

change its name;

 

28.2

alter or add to these Articles;

 

28.3

alter or add to the Memorandum with respect to any objects, powers or other matters specified therein; and

 

28.4

reduce its share capital and any capital redemption reserve fund.

 

REGISTERED OFFICE

 

29.

Subject to the provisions of the Statute, the Company may by resolution of the Directors change the location of its Registered Office.

 

GENERAL MEETINGS

 

30.

All general meetings other than annual general meetings shall be called extraordinary general meetings.

 

31.

The Company shall, if required by the Statute, in each year hold a general meeting as its annual general meeting, and shall specify the meeting as such in the notices calling it. The annual general meeting shall be held at such time and place as the Directors shall appoint. At these meetings, the report of the Directors (if any) shall be presented.

 

32.

The Directors may call general meetings, and they shall on a Members requisition forthwith proceed to convene an extraordinary general meeting of the Company.

 

 

33.

A Members requisition is a requisition of Members of the Company holding, on the date of deposit of the requisition, not less than either (i) a majority of the voting power of all of the Ordinary Shares, or (ii) twenty percent (20%) or more of the voting power of the Preferred Shares (on an as-converted and as-exercised basis) of the Company entitled to attend and vote at general meetings of the Company.

 

34.

The requisition must state the objects of the meeting and must be signed by the requisitionists and deposited at the Registered Office, and may consist of several documents in like form each signed by one or more requisitionists.

 

35.

If the Directors do not within twenty-one (21) days from the date of the deposit of the requisition duly proceed to convene a general meeting to be held within a further twenty-one (21) days, the requisitionists, or any of them representing more than one-half of the total voting rights of all of them, may themselves convene a general meeting, but any meeting so convened shall not be held after the expiration of three (3) months after the expiration of the said twenty-one (21) days.

 

36.

A general meeting convened as aforesaid by requisitionists shall be convened in the same manner as nearly as possible as that in which general meetings are to be convened by Directors.

 

NOTICE OF GENERAL MEETINGS

 

37.

At least ten (10) Business Days’ notice shall be given of any general meeting unless such notice is waived either before, at or after such meeting both (i) by the Members (or their respective proxies) holding a majority of the aggregate voting power of all of the Ordinary Shares entitled to attend and vote thereat (including the Preferred Shares on an as converted basis), and (ii) by the Majority Preferred Holders (or their respective proxies). Every notice shall be exclusive of the day on which it is given or deemed to be given and shall specify the place, the day and the hour of the meeting and the general nature of the business and shall be given in the manner hereinafter mentioned or in such other manner, if any, as may be prescribed by the Company; provided, that a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether or not the provisions of these Articles regarding general meetings have been complied with, be deemed to have been duly convened if it is so agreed both (i) by the Members (or their respective proxies) holding a majority of the aggregate voting power of all of the Ordinary Shares entitled to attend and vote thereat (including the Preferred Shares on an as converted basis), and (ii) by the Majority Preferred Holders (or their respective proxies).

 

38.

The officer of the Company who has charge of the Register of Members of the Company shall prepare and make, at least two (2) Business Days before every general meeting, a complete list of the Members entitled to vote at the general meeting, arranged in alphabetical order, and showing the address of each Member and the number of shares registered in the name of each Member. Such list shall be open to examination by any Member for any purpose germane to the meeting, during ordinary business hours, for a period of at least two (2) Business Days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any Member of the Company who is present.

 

 

PROCEEDINGS AT GENERAL MEETINGS

 

39.

The holders of a majority of the aggregate voting power of all of the Ordinary Shares entitled to notice of and to attend and vote at such general meeting (including the Preferred Shares on an as converted basis, including the Majority Preferred Holders) present in person or by proxy or if a company or other non-natural Person by its duly authorised representative shall be a quorum. Subject to Article 42, no business shall be transacted at any general meeting unless a quorum is present at the time when the meeting proceeds to business.

 

40.

A Person may participate at a general meeting by conference telephone or other communications equipment by means of which all the Persons participating in the meeting can communicate with each other. Participation by a Person in a general meeting in this manner is treated as presence in person at that meeting.

 

41.

A unanimous resolution in writing (in one or more counterparts) signed by all the Members entitled to vote on the resolution shall be as valid and effective as if the resolution had been passed at a duly convened and held general meeting of the Company.

 

42.

A quorum, once established, shall not be broken by the withdrawal of enough votes to leave less than a quorum and the votes present may continue to transact business until adjournment. If, however, such quorum shall not be present or represented at any general meeting, the Members (or their respective proxies) holding a majority of the aggregate voting power of all of the Shares of the Company represented at the meeting may adjourn the meeting from time to time, until a quorum shall be present or represented; provided, that, if notice of such meeting has been duly delivered to all Members at least ten (10) Business Days prior to the scheduled meeting in accordance with the notice procedures hereunder, and the quorum is not present within three hours from the time appointed for the meeting because of the absence of any Member, the meeting shall be adjourned to the seventh (7th) following Business Day at the same time and place (or to such other time or such other place as the Directors may determine) with notice delivered to all Members 48 hours prior to the adjourned meeting in accordance with the notice procedures under Articles 110 through 114 and, if at the adjourned meeting, the quorum is not present within three (3) hours from the time appointed for the meeting solely because of the absence of any specific Member as may be required by Article 39 above, then the presence of such Member shall not be required at such adjourned meeting for purposes of establishing a quorum, and the holders of a majority of the aggregate voting power of all the Shares entitled to notice of and vote at a general meeting (calculated on an as-converted basis) shall be a quorum for such adjourned meeting. At such adjourned meeting, no business shall be transacted other than the business that might have been transacted at the meeting as originally notified.

 

 

43.

The chairman, if any, of the Board of Directors shall preside as chairman at every general meeting of the Company, or if there is no such chairman, or if he or she shall not be present within thirty (30) minutes after the time appointed for the holding of the meeting, or is unwilling or unable to act, the Directors present shall elect one of their number, or shall designate a Member, to be chairman of the meeting.

 

44.

With the consent of a general meeting at which a quorum is present, the chairman may (and shall if so directed by the meeting), adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a general meeting is adjourned, notice of the adjourned meeting shall be given as in the case of an original meeting.

 

45.

A resolution put to the vote of the meeting shall be decided by poll and not on a show of hands.

 

46.

On a poll a Member shall have one vote for each Ordinary Share he holds on an as converted basis.

 

47.

Except on a poll on a question of adjournment, a poll shall be taken as the chairman directs, and the result of the poll shall be deemed to be the resolution of the general meeting at which the poll was demanded.

 

48.

A poll on a question of adjournment shall be taken forthwith.

 

49.

A poll on any other question shall be taken at such time as the chairman of the general meeting directs, and any business other than that upon which a poll has been demanded or is contingent thereon may proceed pending the taking of the poll.

 

VOTES OF MEMBERS

 

50.

Except as otherwise required by Law or these Articles, the Ordinary Shares and the Preferred Shares shall vote together on an as converted basis on all matters submitted to a vote of Members.

 

51.

In the case of joint holders of record, the vote of the senior holder who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and seniority shall be determined by the order in which the names of the holders stand in the Register of Members.

 

52.

A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction in lunacy, may vote by his or her committee, receiver, or other Person on such Member’s behalf appointed by that court, and any such committee, receiver, or other Person may vote by proxy.

 

 

53.

No Person shall be entitled to vote at any general meeting or at any separate meeting of the holders of a class or series of Shares unless he or she is registered as a Member on the record date for such meeting and unless all calls or other monies then payable by such Member in respect of Shares have been paid.

 

54.

No objection shall be raised to the qualification of any voter except at the general meeting or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at the meeting shall be valid. Any objection made in due time shall be referred to the chairman whose decision shall be final and conclusive.

 

55.

Votes may be cast either personally or by proxy. A Member may appoint more than one proxy or the same proxy under one or more instruments to attend and vote at a meeting.

 

56.

A Member holding more than one Share need not cast the votes in respect of his or her Shares in the same way on any resolution and therefore may vote a Share or some or all such Shares either for or against a resolution and/or abstain from voting a Share or some or all of the Shares and, subject to the terms of the instrument appointing him or her, a proxy appointed under one or more instruments may vote a Share or some or all of the Shares in respect of which he or she is appointed either for or against a resolution and/or abstain from voting.

 

PROXIES

 

57.

The instrument appointing a proxy shall be in writing, be executed under the hand of the appointor or of his or her attorney duly authorised in writing, or, if the appointor is a corporation, under the hand of an officer or attorney duly authorised for that purpose. A proxy need not be a Member of the Company.

 

58.

The instrument appointing a proxy shall be deposited at the Registered Office or at such other place as is specified for that purpose in the notice convening the meeting, no later than the time for holding the meeting or adjourned meeting.

 

59.

The instrument appointing a proxy may be in any usual or common form and may be expressed to be for a particular meeting or any adjournment thereof or generally until revoked. An instrument appointing a proxy shall be deemed to include the power to demand or join or concur in demanding a poll.

 

60.

Votes given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the Share in respect of which the proxy is given unless notice in writing of such death, insanity, revocation or transfer was received by the Company at the Registered Office before the commencement of the general meeting or adjourned meeting at which it is sought to use the proxy.

 

 

CORPORATE MEMBERS

 

61.

Any corporation or other non-natural Person that is a Member may in accordance with its constitutional documents, or in the absence of such provision by resolution of its directors or other governing body, authorise such Person as it thinks fit to act as its representative at any meeting of the Company or any class of Members, and the Person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he or she represents as the corporation could exercise if it were an individual Member.

 

SHARES THAT MAY NOT BE VOTED

 

62.

Shares in the Company that are beneficially owned by the Company or held by it in a fiduciary capacity shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding Shares at any given time.

 

APPOINTMENT OF DIRECTORS AND OBSERVER

 

63.

The authorized number of directors on the Board shall be no more than twelve (12) directors, with the composition of the Board determined as follows: (a) the holders of a majority of the Ordinary Shares (voting together as a single class and not including Class A Ordinary Shares issued upon conversion of Preferred Shares) shall be exclusively entitled to designate, appoint, remove, replace and reappoint at any time or from time to time six (6) directors on the Board (each an “Ordinary Director”), one of whom shall be the then CEO of the Company (the “CEO Director”) and shall initially have two (2) votes for any matters to be resolved by the Board and the other five (5) Ordinary Directors shall each have one (1) vote for any matters to be resolved by the Board; provided, however, if less than five (5) such other Ordinary Directors are actually appointed, then the CEO Director shall be entitled to such number of votes exceeding two (2) votes as would result in the Ordinary Directors having a total of seven (7) votes; (b) (i) the Majority Series A Holders, so long as the Majority Series A Holders hold Preferred Shares constituting no less than 4% of all issued and outstanding shares of the Company (calculated on a fully-diluted and an as-converted basis and including Conversion Shares converted therefrom), shall be exclusively entitled to designate, appoint, remove, replace and reappoint at any time or from time to time one (1) director on the Board; (ii) the holders of fifty-one percent (51%) or more of the voting power of outstanding Ordinary Shares and Series A Preferred Shares (voting together as a single class and on an as-converted basis) shall be exclusively entitled to designate, appoint, remove, replace and reappoint at any time or from time to time one (1) director on the Board; (iii) 5Y Capital, so long as it holds Preferred Shares constituting no less than 4% of all issued and outstanding shares of the Company (calculated on a fully-diluted and as-converted basis and including Conversion Shares converted therefrom), shall be exclusively entitled to designate, appoint, remove, replace and reappoint at any time or from time to time one (1) director on the Board; (iv) CVP, so long as it holds Preferred Shares constituting no less than 4% of all issued and outstanding shares of the Company (calculated on an as-converted basis and including Conversion Shares converted therefrom), shall be exclusively entitled to designate, appoint, remove, replace and reappoint at any time or from time to time one (1) director on the Board; (v) TMC, so long as it holds Preferred Shares constituting no less than 4% of all issued and outstanding shares of the Company (calculated on an as-converted basis and including Conversion Shares converted therefrom), shall be exclusively entitled to designate, appoint, remove, replace and reappoint at any time or from time to time one (1) director on the Board; and (vi) OTPP, so long as it holds Preferred Shares constituting no less than 4% of all issued and outstanding shares of the Company (calculated on an as-converted basis and including Conversion Shares converted therefrom), shall be exclusively entitled to designate, appoint, remove, replace and reappoint at any time or from time to time one (1) director on the Board (each such director appointed pursuant to (i), (ii), (iii), (iv), (v) and (vi) above, a “Preferred Director” and together, the “Preferred Directors”). Each Preferred Director shall have one (1) vote for any matters to be resolved by the Board. So long as OTPP does not, directly or indirectly, Transfer (as defined in the Right of First Refusal and Co-Sale Agreement) any of the Preferred Shares it now or thereafter directly or indirectly owns or holds, OTPP shall be entitled to designate, appoint, remove, replace and reappoint at any time or from time to time one (1) director on the Board during the period commencing from November 16, 2020 and ending on November 16, 2022 notwithstanding the shareholding requirement as set forth in this Article 63.

 

 

64.

Each of the Majority Series A Holders, 5Y Capital, Nio, Legend Capital, CVP, TMC and OTPP, so long as it ceases to be entitled to designate, appoint, remove, replace and reappoint any director on the Board pursuant to Article 63 (if applicable) and so long as it holds Preferred Shares constituting no less than 2% of all issued and outstanding shares of the Company (calculated on a fully-diluted and as-converted basis and including Conversion Shares converted therefrom), shall be entitled to designate, appoint, remove, replace and reappoint one (1) Observer.

 

POWERS OF DIRECTORS AND OBSERVER

 

65.

Subject to the provisions of the Statute, the Memorandum and these Articles and to any directions given by Special Resolution, the business of the Company shall be managed by or under the direction of the Directors who may exercise all the powers of the Company; provided, however, that the Company shall not carry out any action inconsistent with Articles 8 (including Article 8.4(B)) and 9. No alteration of the Memorandum or these Articles and no such direction shall invalidate any prior act of the Directors that would have been valid if that alteration had not been made or that direction had not been given. A duly convened meeting of Directors at which a quorum is present may exercise all powers exercisable by the Directors.

 

66.

All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed as the case may be in such manner as the Directors shall determine.

 

 

67.

Subject to Article 8.4(B), the Directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any Director who has held any other salaried office or place of profit with the Company or to his or her spouse or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

 

68.

Subject to Article 8.4(B), the Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital or any part thereof and to issue debentures, debenture shares, mortgages, bonds and other such securities whether outright or as security for any debt, liability or obligation of the Company or of any third party.

 

69.

The Observers shall be entitled to receive notices, minutes, and all other materials in relation to the meetings of the Board and of each committee thereof at the same time as such notices, minutes and other materials are provided to the other members of the Board or such committee. The Observers may participate in a meeting of the Board by means of conference telephone or other communications equipment by means of which all Persons participating in the meeting can communicate with each other at the same time. An Observer may be represented at any meetings of the Board of Directors by a proxy appointed in writing by him. The Observers have the right to give advice and suggestions to the Board but have no right in any way to vote on any matters determined by any resolutions.

 

VACATION OF OFFICE AND REMOVAL OF DIRECTOR

 

70.

The office of a Director shall be vacated if:

 

70.1

such Director gives notice in writing to the Company that he or she resigns the office of Director; or

 

70.2

such Director dies, becomes bankrupt or makes any arrangement or composition with such Director’s creditors generally; or

 

70.3

such Director is found to be or becomes of unsound mind.

 

71.

Any Director who shall have been elected by a specified group of Members may be removed from the Board, either for or without cause, only upon the vote or written consent of the group of Members then entitled to elect such Director in accordance with Article 63, given at a special meeting of such Members duly called or by an action by written consent for that purpose. Any vacancy in the Board of Directors caused as a result of such removal or one or more of the events set out in Article 70 of any Director who shall have been elected by a specified group of Members may be filled by, and only by, the vote or written consent of the group of Members then entitled to elect such Director in accordance with Article 63, given at a special meeting of such Members duly called or by an action by written consent for that purpose.

 

 

PROCEEDINGS OF DIRECTORS

 

72.

A Director may by a written instrument appoint an alternate who need not be a Director, and an alternate is entitled to attend meetings in the absence of the Director who appointed him and to vote or consent in place of the Director. At all meetings of the Board of Directors a majority of the votes of all the Directors (including no less than two-thirds (2/3) of all the Preferred Directors) in office elected in accordance with Article 63 shall be necessary and sufficient to constitute a quorum for the transaction of business, and the vote of a majority of the votes of the Directors present (in person or in alternate) at any meeting at which there is a quorum, shall be the act of the Board of Directors, except as may be otherwise specifically provided or required by the Statute, the Memorandum or these Articles (including Article 8). If only one Director is elected, such sole Director shall constitute a quorum. If a quorum shall not be present at any meeting of the Board of Directors, the Directors present thereat may adjourn the meeting, until a quorum shall be present, provided that, if notice of such meeting has been duly delivered to all Directors ten (10) Business Days prior to the scheduled meeting in accordance with the notice procedures hereunder, and the quorum is not present within three (3) hours from the time appointed for the meeting solely because of the absence of any Director, the meeting shall be adjourned to the seventh (7th) following Business Day at the same time and place (or to such other time or such other place as the Directors may determine) with notice delivered to all Directors forty-eight (48) hours prior to the adjourned meeting in accordance with the notice procedures under Articles 110 through 114 and, if at the adjourned meeting, the quorum is not present within three (3) hours from the time appointed for the meeting solely because of the absence of any Director(s), then the presence of such Director(s) shall not be required at such adjourned meeting for purposes of establishing a quorum, and the Directors consisting of a majority of all Directors that are entitled to the notice of and vote at the meeting shall be a quorum for such adjourned meeting. At such adjourned meeting, no business shall be transacted other than the business that might have been transacted at the meeting as originally notified.

 

73.

Subject to the provisions of these Articles, the Directors may regulate their proceedings as they think fit, provided however that the board meetings shall be held at least once every three (3) months unless the Board otherwise approves and that a written notice of each meeting, agenda of the business to be transacted at the meeting and all documents and materials to be circulated at or presented to the meeting shall be sent to all Directors and Observers entitled to receive notice of the meeting at least five (5) Business Days before the meeting and a copy of the minutes of the meeting shall be sent to such Persons.

 

74.

The Directors may participate in a meeting of the Board or of any committee thereof by conference telephone or other communications equipment by means of which all the Persons participating in the meeting can communicate with each other at the same time. Participation by a Person in a meeting in this manner is treated as presence in person at that meeting. Unless otherwise determined by the Directors, the meeting shall be deemed to be held at the place where the chairman is at the start of the meeting. In the event of a deadlock of the votes at any meeting of the Directors, the relevant matters shall be submitted to the Members for approval, subject to compliance with Article 8.4(B) hereof.

 

 

75.

A resolution in writing (in one or more counterparts) signed by all the Directors or all the members of a committee of the Board of Directors shall be as valid and effectual as if it had been passed at a meeting of the Directors, or committee of the Board of Directors as the case may be, duly convened and held.

 

76.

Meetings of the Board of Directors may be called by any Director on seven (7) days’ notice to each Director and each Observer in accordance with Articles 110 through 114.

 

77.

The continuing Directors may act notwithstanding any vacancy in their body, but if and so long as their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of Directors, the continuing Directors or Director may act for the purpose of increasing the number of Directors to that number, or of summoning a general meeting of the Company, but for no other purpose.

 

78.

The Directors may elect a chairman of their board and determine the period for which he or she is to hold office; but if no such chairman is elected, or if at any meeting the chairman shall not be present within ten (10) minutes after the time appointed for holding the same, the Directors present may choose one of their members to be chairman of the meeting.

 

79.

All acts done by any meeting of the Directors or of a committee of the Board of Directors shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any Director or that they or any of them were disqualified, be as valid as if every such Person had been duly appointed and qualified to be a Director.

 

PRESUMPTION OF ASSENT

 

80.

A Director of the Company who is present at a meeting of the Directors at which action on any Company matter is taken shall be presumed to have assented to the action taken unless the Director’s dissent shall be entered in the minutes of the meeting or unless the Director shall file his or her written dissent from such action with the Person acting as the chairman or secretary of the meeting before the adjournment thereof or shall forward such dissent by registered post to such Person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favour of such action.

 

DIRECTORS’ INTERESTS

 

81.

Subject to Article 84, a Director may hold any other office or place of profit under the Company (other than the office of Auditor) in conjunction with his or her office of Director for such period and on such terms as to remuneration and otherwise as the Directors may determine.

 

82.

Subject to Article 84, a Director may act by himself or herself or his or her firm in a professional capacity for the Company and such Director or firm shall be entitled to remuneration for professional services as if such Director were not a Director.

 

 

83.

Subject to Article 84, a Director of the Company may be or become a director or other officer of or otherwise interested in any company promoted by the Company or in which the Company may be interested as Member or otherwise, and no such Director shall be accountable to the Company for any remuneration or other benefits received by such Director as a director or officer of, or from his or her interest in, such other company.

 

84.

In addition to any further restrictions set forth in these Articles, no Person shall be disqualified from the office of Director or prevented by such office from contracting with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered into by or on behalf of the Company in which any Director shall be in any way interested (each, an “Interested Transaction”) be or be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realised by any such Interested Transaction by reason of such Director holding office or of the fiduciary relation thereby established, and any such Director may vote at a meeting of Directors on any resolution concerning a matter in which that Director has an interest (and if he votes his vote shall be counted) and shall be counted towards a quorum of those present at such meeting, in each case so long as the material facts of the interest of each Director in the agreement or transaction and his interest in or relationship to any other party to the agreement or transaction are disclosed in good faith to and are known by the other Directors. A general notice or disclosure to the Directors or otherwise contained in the minutes of a meeting or a written resolution of the directors or any committee thereof that a Director is a member of any specified firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure under this Article.

 

MINUTES

 

85.

The Directors shall cause minutes to be made in books kept for the purpose of all appointments of officers made by the Directors, all proceedings at meetings of the Company or the holders of any series of Shares and of the Directors, and of committees of the Board of Directors including the names of the Directors present at each meeting.

 

DELEGATION OF DIRECTORS’ POWERS

 

86.

Subject to these Articles (including Article 8.4(B)), the Board of Directors may establish any committees, and approve the delegation of any of their powers to any committee consisting of one or more Directors, provided that the Preferred Directors shall be appointed as members of such committee. Without prejudice to Article 8.4(B), any actions taken by any committee of the Board shall be approved by a majority of the members of the committee, so long as such approval includes the Approval of the Preferred Directors. The Board of Directors may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of any such committee. In the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in the place of the absent or disqualified member if such other Director’s appointment is approved or ratified by the Board of Directors.

 

 

87.

Subject to Article 8.4(B), any committee, to the extent allowed by Law and provided in the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Company. Each committee shall keep regular minutes and report to the Board of Directors when required. Subject to these Articles, the proceedings of a committee of the Board of Directors shall be governed by the Articles regulating the proceedings of the Board of Directors, so far as they are capable of applying.

 

88.

Subject to Article 8.4(B), the Board of Directors may also, with prior Approval of the Preferred Directors, delegate to any managing Director or any Director holding any other executive office such of their powers as they consider desirable to be exercised by such Person provided that the appointment of a managing Director shall be revoked forthwith if he or she ceases to be a Director. Subject to Article 8.4(B), any such delegation may be made subject to any conditions the Board of Directors, with prior Approval of the Preferred Directors, may impose, and either collaterally with or to the exclusion of their own powers and may be revoked or altered.

 

89.

Subject to these Articles (including Article 8.4(B)), the Directors may by power of attorney or otherwise appoint any company, firm, Person or body of Persons, whether nominated directly or indirectly by the Directors, to be the attorney or authorised signatory of the Company for such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney or other appointment may contain such provisions for the protection and convenience of Persons dealing with any such attorneys or authorised signatories as the Directors may think fit and may also authorise any such attorney or authorised signatory to delegate all or any of the powers, authorities and discretions vested in him or her.

 

90.

Subject to these Articles (including Article 8.4(B)), the Directors may appoint such officers as they consider necessary on such terms, at such remuneration and to perform such duties, and subject to such provisions as to disqualification and removal as the Directors may think fit. Subject to Article 8.4(B), unless otherwise specified in the terms of an officer’s appointment, an officer may be removed by resolution of the Directors or Members.

 

NO MINIMUM SHAREHOLDING

 

91.

There is no minimum shareholding required to be held by a Director.

 

 

REMUNERATION OF DIRECTORS

 

92.

Subject to Article 8.4(B), the remuneration to be paid to the Directors, if any, shall be such remuneration as determined by the Board or one of its committees (in each case, including the Approval of the Preferred Directors). A Director who is not an employee of any Group Company shall also be entitled to be paid all reasonable travelling, hotel and other out-of-pocket expenses properly incurred by them in connection with their attendance at meetings of the Board of Directors or committees of the Board of Directors, or general meetings of the Company, or separate meetings of the holders of any series of Shares or debentures of the Company, or otherwise in connection with the business of the Company.

 

93.

Subject to Article 8.4(B), the Directors may by resolution of the majority of the Board or one of its committees (in each case, including the Approval of the Preferred Directors) approve additional remuneration to any Director for any services other than his or her ordinary routine work as a Director. Any fees paid to a Director who is also counsel or solicitor to the Company, or otherwise serves it in a professional capacity, shall be in addition to his or her remuneration as a Director.

 

SEAL

 

94.

The Company may, if the Directors so determine, have a Seal. The Seal shall only be used by the authority of the Directors or of a committee of the Board of Directors authorised by the Board of Directors. Every instrument to which the Seal has been affixed shall be signed by at least one Person who shall be either a Director or some officer or other Person appointed by the Directors for the purpose.

 

95.

The Company may have for use in any place or places outside the Cayman Islands a duplicate Seal or Seals each of which shall be a facsimile of the common Seal of the Company and, if the Directors so determine, with the addition on its face of the name of every place where it is to be used.

 

96.

A Director or an officer authorized by the Board of Directors, representative or attorney of the Company may without further authority of the Directors affix the Seal over his or her signature alone to any document of the Company required to be authenticated by him or her under Seal or to be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever.

 

DIVIDENDS, DISTRIBUTIONS AND RESERVE

 

97.

Subject to the Statute and these Articles (including Articles 8.1 and 8.4(B)), the Directors may declare dividends and distributions on Shares in issue and authorise payment of the dividends or distributions out of the assets of the Company lawfully available therefor. No dividend or distribution shall be paid except out of the realised or unrealised profits of the Company, or out of the share premium account or as otherwise permitted by the Statute.

 

 

98.

All dividends and distributions shall be declared and paid according to the provisions of Articles 8 (including Articles 8.1 and 8.4(B)) and 9.1.

 

99.

The Directors may deduct from any dividend or distribution payable to any Member all sums of money (if any) then payable by such Member to the Company on account of calls or otherwise.

 

100.

Subject to the provisions of Articles 8 (including Articles 8.1 and 8.4(B)) and 9.1, the Directors may declare that any dividend or distribution be paid wholly or partly by the distribution of specific assets and in particular of shares, debentures or securities of any other company or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient and in particular may issue fractional Shares and fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the basis of the value so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees as may seem expedient to the Directors.

 

101.

Any dividend, distribution, interest or other monies payable in cash in respect of Shares may be paid by wire transfer to the holder or by cheque or warrant sent through the post directed to the registered address of the holder or, in the case of joint holders, to the registered address of the holder who is first named on the Register of Members or to such Person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant shall be made payable to the order of the Person to whom it is sent. Any one of two or more joint holders may give effectual receipts for any dividends, bonuses or other monies payable in respect of the Share held by them as joint holders.

 

102.

No dividend or distribution shall bear interest against the Company, except as expressly provided in these Articles.

 

103.

Any dividend that cannot be paid to a Member and/or that remains unclaimed after six (6) months from the date of declaration of such dividend may, in the discretion of the Directors, be paid into a separate account in the Company’s name; provided, that the Company shall not be constituted as a trustee in respect of that account and the dividend shall remain as a debt due to the Member. Any dividend that remains unclaimed after a period of six (6) years from the date of declaration of such dividend shall be forfeited and shall revert to the Company.

 

CAPITALIZATION

 

104.

Subject to these Articles (including Article 8.4(B)), the Directors may capitalise any sum standing to the credit of any of the Company’s reserve accounts (including share premium account and capital redemption reserve fund) or any sum standing to the credit of profit and loss account or otherwise available for distribution and to appropriate such sum to Members in the proportions in which such sum would have been divisible amongst them had the same been a distribution of profits by way of dividend as set forth in Article 8.1 and 9.1 hereof and to apply such sum on their behalf in paying up in full unissued Shares for allotment and distribution credited as fully paid-up to and amongst them in the proportion aforesaid. In such event, the Directors shall do all acts and things required to give effect to such capitalization, with full power to the Directors to make such provisions as they think fit for the case of Shares becoming distributable in fractions (including provisions whereby the benefit of fractional entitlements accrue to the Company rather than to the Members concerned). The Directors may authorise any Person to enter on behalf of all of the Members interested into an agreement with the Company providing for such capitalization and matters incidental thereto and any agreement made under such authority shall be effective and binding on all concerned.

 

 

BOOKS OF ACCOUNT

 

105.

The Directors shall cause proper books of account to be kept at such place as they may from time to time designate with respect to all sums of money received and expended by the Company and the matters in respect of which the receipt or expenditure takes place, all sales and purchases of goods by the Company and the assets and liabilities of the Company. Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary to give a true and fair view of the state of the Company’s affairs and to explain its transactions. Subject to Section 8 (Information and Inspection Rights) of the Shareholders Agreement, the Directors shall from time to time determine whether and to what extent and at what times and places, and under what conditions or regulations, the accounts and books of the Company or any of them shall be open to inspection of Members not being Directors and no such Member shall have any right of inspecting any account or book or document of the Company except as conferred by the Statute or authorized by the Directors or the Company in general meeting or in a written agreement binding on the Company. The Company shall cause all books of account to be maintained for a minimum period of five years from the date on which they were prepared.

 

106.

The Directors may from time to time cause to be prepared and to be laid before the Company in general meeting profit and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by Law.

 

AUDIT

 

107.

Subject to these Articles (including Article 8.4(B)), the Directors may appoint an Auditor of the Company who shall hold office until removed from office by a resolution of the Directors, and may fix the Auditor’s remuneration.

 

108.

Every Auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company and shall be entitled to require from the Directors and officers of the Company such information and explanation as may be necessary for the performance of the duties of the Auditor.

 

109.

Auditors shall, if so required by the Directors, make a report on the accounts of the Company during their tenure of office at the next annual general meeting following their appointment in the case of a company that is registered with the Registrar of Companies as an ordinary company, and at the next extraordinary general meeting following their appointment in the case of a company that is registered with the Registrar of Companies as an exempted company and at any other time during their term of office, upon request of the Directors or any general meeting of the Members.

 

 

NOTICES

 

110.

Except as otherwise provided in these Articles, notices shall be in writing. Notice may be given by the Company to any Member or Director either personally or by sending it by next-day or second-day courier service, fax, electronic mail or similar means to such Member or Director (as the case may be) or to the address of such Member or Director as shown in the Register of Members or the Register of Directors (as the case may be) (or where the notice is given by fax or electronic mail by sending it to the number or electronic mail address provided by such Member or Director).

 

111.

Where a notice is sent by next-day or second-day courier service, service of the notice shall be deemed to be effected by properly addressing, pre-paying and sending by next-day or second-day service through an internationally-recognized courier a letter containing the notice, with a written confirmation of delivery, and to have been effected at the earlier of (i) delivery (or when delivery is refused) and (ii) expiration of two (2) Business Days after the letter containing the same is sent as aforesaid. Where a notice is sent by fax or electronic mail, service of the notice shall be deemed to be effected by properly addressing and sending such notice through a transmitting organization, with a written confirmation of deliver, and to have been effected on the day the same is sent as aforesaid, if such day is a Business Day and if sent during normal business hours of the recipient, otherwise the next Business Day.

 

112.

A notice may be given by the Company to the Person or Persons that the Company has been advised are entitled to a Share or Shares in consequence of the death or bankruptcy of a Member in the same manner as other notices that are required to be given under these Articles and shall be addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description at the address supplied for that purpose by the Persons claiming to be so entitled, or at the option of the Company, by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not occurred.

 

113.

Notice of every general meeting shall be given in any manner hereinbefore authorised to every Person shown as a Member in the Register of Members on the record date for such meeting except that in the case of joint holders the notice shall be sufficient if given to the joint holder first named in the Register of Members and every Person upon whom the ownership of a Share devolves by reason of his or her being a legal personal representative or a trustee in bankruptcy of a Member of record where the Member of record but for his or her death or bankruptcy would be entitled to receive notice of the meeting, and no other Person shall be entitled to receive notices of general meetings.

 

 

114.

Whenever any notice is required by Law or these Articles to be given to any Director, member of a committee or Member, a waiver thereof in writing, signed by the Person or Persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

 

WINDING UP

 

115.

If the Company shall be wound up, assets available for distribution amongst the Members shall be distributed, in accordance with Articles 8.2 and 9.2.

 

116.

If the Company shall be wound up, the liquidator may, with the sanction of a Special Resolution of the Company and any other sanction required by the Statute, divide amongst the Members in kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may for that purpose value any assets and, subject to these Articles (including Articles 8.2 and 9.2), determine how the division shall be carried out as between the Members or different classes of Members. Subject to Articles 8.2 and 9.2, the liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the Members as the liquidator, with the like sanction, shall think fit, but so that no Member shall be compelled to accept any asset upon which there is a liability.

 

INDEMNITY

 

117.

To the maximum extent permitted by applicable Law, the Directors and officers for the time being of the Company and any trustee for the time being acting in relation to any of the affairs of the Company and their heirs, executors, administrators and personal representatives respectively shall be indemnified out of the assets of the Company from and against all actions, proceedings, costs, charges, losses, damages and expenses that they or any of them shall or may incur or sustain by reason of any act done or omitted in or about the execution of their duty in their respective offices or trusts, except such (if any) as they shall incur or sustain by or through their own fraud or dishonesty, and no such Director or officer or trustee shall be answerable for the acts, receipts, neglects or defaults of any other Director or officer or trustee or for joining in any receipt for the sake of conformity or for the solvency or honesty of any banker or other Persons with whom any monies or effects belonging to the Company may be lodged or deposited for safe custody or for any insufficiency of any security upon which any monies of the Company may be invested or for any other loss or damage due to any such cause as aforesaid or which may happen in or about the execution of his or her office or trust unless the same shall happen through the fraud or dishonesty of such Director or officer or trustee. Except with respect to proceedings to enforce rights to indemnification pursuant to this Article, the Company shall indemnify any such indemnitee pursuant to this Article in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors. The right to indemnification conferred in this Article shall include the right to be paid by the Company the expenses incurred in defending any such proceeding in advance of its final disposition to the maximum extent provided by, and subject to the requirements of, applicable Law, so long as the indemnitee agrees with the Company to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such indemnitee is not entitled to be indemnified for such expenses under this Article.

 

 

118.

To the maximum extent permitted by applicable Law and these Articles, the Directors and officers for the time being of the Company and any trustee for the time being acting in relation to any of the affairs of the Company and their heirs, executors, administrators and personal representatives respectively shall not be personally liable to the Company or its Members for monetary damages for breach of their duty in their respective offices, except such (if any) as they shall incur or sustain by or through their own fraud or dishonesty respectively.

 

FINANCIAL YEAR

 

119.

Unless the Directors otherwise prescribe, the financial year of the Company shall end on the 31st of December in each year and, following the year of incorporation, shall begin on the 1st of January in each year.

 

TRANSFER BY WAY OF CONTINUATION

 

120.

If the Company is exempted as defined in the Statute, it shall, subject to the provisions of the Statute and with the approval of a Special Resolution and the Approval of the Majority Preferred Holders, have the power to register by way of continuation as a body corporate under the Laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands.

 

DRAG ALONG RIGHTS

 

121.

In the event that (a) the Majority Preferred Holders, and (b) the holders of a majority of the Ordinary Shares (voting together as a single class and not including Class A Ordinary Shares issued upon conversion of Preferred Shares or otherwise held by any holder of Preferred Shares), each voting as separate classes (collectively, the “Drag Holders”) approve a Deemed Liquidation Event to any Person (the “Offeror”) that values the Company at no less than US$10,000,000,000 (the “Approved Sale”), then at the written request of the Drag Holders the Company shall promptly notify in writing each other holder of Equity Securities of the Company that is a Party of such approval and the material terms and conditions of such proposed Approved Sale, whereupon each such holder shall, in accordance with written instructions received from the Company at the written direction of the Drag Holders:

 

(i)

in the event such transaction is to be brought to a vote at a shareholder meeting, after receiving proper notice of any meeting of shareholders of the Company, vote on the approval of the Approved Sale, be present, in person or by proxy, as a holder of shares of voting securities, at all such meetings and be counted for the purposes of determining the presence of a quorum at such meetings;

 

 

(ii)

vote (in person, by proxy or by action by written consent, as applicable) all Shares in favour of such Approved Sale and in opposition to any and all other proposals that could reasonably be expected to delay or impair the ability of the Company to consummate such Approved Sale;

 

(iii)

refrain from exercising any dissenters’ rights or rights of appraisal under applicable Law at any time with respect to such Approved Sale;

 

(iv)

execute and deliver all related documentation and take such other action in support of the Approved Sale as shall reasonably be requested in writing by the Company;

 

(v)

execute and deliver all related documentation and take such other action in support of the Approved Sale as shall reasonably be requested in writing by the Company or the Drag Holders;

 

(vi)

if the Approved Sale is structured as a Share Sale, sell all (but not part) of his, her or its Shares, and, except as permitted in Article 122 below, on the same terms and conditions as the Drag Holders; and

 

(vii)

not deposit, and shall cause its Affiliates not to deposit, except as provided in these Articles or the Shareholders Agreement, any Shares owned by such shareholder or Affiliate in a voting trust or subject any such Shares to any arrangement or agreement with respect to the voting of such Shares, unless specifically requested in writing to do so by the Offeror in connection with the Approved Sale.

 

122.

Notwithstanding the foregoing, a shareholder will not be required to comply with Article 121 above in connection with any proposed Deemed Liquidation Event (the “Proposed Sale”) unless (a) upon the consummation of the Proposed Sale, (i) each holder of each class or series of the Company’s share capital will receive the same form of consideration for its shares of such class or series as is received by other holders in respect of their shares of such same class or series of share capital, (ii) each holder of a series of Preferred Shares will receive the same amount of consideration per share of such series of Preferred Shares as is received by other holders in respect of their shares of such same series, (iii) each holder of Ordinary Shares will receive the same amount of consideration per Ordinary Share as is received by other holders in respect of their Ordinary Shares, and (iv) the aggregate consideration receivable by all holders of Preferred Shares and Ordinary Shares shall be allocated among the holders of Preferred Shares and Ordinary Shares on the basis of the relative liquidation preferences to which the holders of each respective series of Preferred Shares and the holders of Ordinary Shares are entitled in a Deemed Liquidation Event in accordance with these Articles in effect immediately prior to the Proposed Sale and (b) such shareholder will (i) only be required to provide customary fundamental representations and warranties relating to its capacity, the enforceability of the relevant transaction documents against it and the title and ownership of the Shares to be transferred by it and will not be required to provide representations and warranties on the business or assets of the Group or on any Group Company and (ii) not be obliged to pay any amount with respect to any liabilities arising from the representations and warranties made by it in excess of its share of the total consideration paid by the Offeror.

 

 

123.

None of the transfer restrictions set forth in the Right of First Refusal and Co-Sale Agreement, these Articles and any other Transaction Documents shall apply in connection with an Approved Sale, notwithstanding anything in the Right of First Refusal and Co-Sale Agreement, these Articles and any other Transaction Documents to the contrary.

 

TERMINATION OF RIGHTS

 

124.

Notwithstanding anything to the contrary provided herein, as from the date on which the Company submits its first IPO application (the “First IPO Application Date”) to the SEHK and the Securities and Futures Commission (collectively, the “HK Listing Authorities”), except with written consent of the Company:

 

(a)

no holder of Shares shall be entitled to directly or indirectly transfer any Share;

 

(b)

no holder of Shares shall be entitled to request the redemption of any Share held by it in accordance with provisions set out herein, including but not limited to Article 8.5; and

 

(c)

no holder of Shares shall be entitled to, where applicable, exercise any divestment rights in the form of redemption, put option, drag-along rights, or otherwise, that are provided for herein

 

(collectively, the “Divestment Rights”); provided, that any Divestment Right shall be restored to the fullest effect upon the earlier of (i) such IPO application being rejected by any HK Listing Authority or otherwise withdrawn by the Company, and (ii) the twelve (12) month anniversary of the First IPO Application Date if such IPO fails to be consummated by such time.

 

125.

In the case of an IPO application having been made to the SEHK, the Parties hereby agree to, promptly after the receipt by the Company of a “post-hearing letter” from the SEHK together with a request to post a “Post Hearing Information Pack”, procure that all necessary resolutions are passed to adopt further amended and restated Articles in such form that is customary for the purpose of listing the Shares on the SEHK.

 

126.

For avoidance of doubt, upon conversion of the Preferred Shares into Ordinary Shares in accordance with these Articles, all privileges, preferences and rights attached to such Preferred Shares, including but not limited to the privileges, preferences and rights set out in Articles 8, 63 and 64, and Schedule A hereto, shall lapse and be terminated in their entirety, whereupon the obligations of the Company to the Shareholders under the Articles shall be determined in accordance with the Articles then in effect.

 

 

SCHEDULE A

 

1

Preemptive Right.

 

1.1            General. The Company hereby grants to each holder of the Preferred Shares (each, an “Investor”) the right of first refusal to purchase up to such Investor’s Pro Rata Share (as defined below) (and any oversubscription, as provided below), of all (or any part) of any New Securities that the Company may from time to time issue after the date of the Shareholders Agreement (the “Preemptive Right”). For purposes of this Section 1, the term “Investor” includes any Affiliates of an Investor. Each Investor shall be entitled to apportion the right of first refusal hereby granted it among itself and its partners and Affiliates in such proportions as it deems appropriate.

 

1.2            Pro Rata Share. Each Investor’s “Pro Rata Share” for purposes of the Preemptive Rights is the ratio of (a) the number of Ordinary Shares (including Preferred Shares on an as-converted basis, assuming full conversion and exercise of all options and other outstanding convertible and exercisable securities) held by such Investor, to (b) the total number of Ordinary Shares (including Preferred Shares on an as-converted basis, assuming full conversion and exercise of all options and other outstanding convertible and exercisable securities) then outstanding immediately prior to the issuance of New Securities giving rise to the Preemptive Rights.

 

1.3            New Securities. For purposes hereof, “New Securities” shall mean any New Securities issued after the date of the Shareholders Agreement, except for issuances or deemed issuances of Equity Securities carved out from the definition of New Securities as provided under Article 8.3(E)(5)(a)(iii).

 

1.4            Procedures.

 

1.4.1            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 Investor written notice of its intention to issue New Securities (the “First Participation Notice”), describing the identities of the proposed third party subscribers and their respective Controllers, the amount and type of New Securities, the price and the general terms upon which the Company proposes to issue such New Securities. Each Investor shall have thirty (30) days from the date of receipt of any such First Participation Notice to agree in writing to purchase up to such Investor’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 Investor’s Pro Rata Share of such New Securities). If any Investor fails to so respond in writing within such thirty (30) day period, then such Investor shall forfeit the right hereunder to purchase any of such New Securities, but shall not be deemed to forfeit any right with respect to any other issuance of New Securities.

 

 

1.4.2            Second Participation Notice; Oversubscription. If any Investor fails or declines to exercise, or if any New Securities remain available for subscription after any Investor has exercised, in full its Preemptive Rights under and in accordance with Section 1.4.1 above, the Company shall promptly give notice (the “Second Participation Notice”) to the Investors who exercised in full their Preemptive Rights (the “Oversubscription Participants”) under and in accordance with Section 1.4.1 above. Each Oversubscription Participant shall have fifteen (15) days from the date of the Second Participation Notice (the “Second Participation Period”) to notify the Company of its desire to purchase more than its Pro Rata Share of the New Securities, stating the number of the additional New Securities it proposes to buy (the “Additional Number”). Such notice may be made by telephone if confirmed in writing within two (2) Business Days. If, as a result thereof, such oversubscription exceeds the total number of the remaining New Securities available for purchase, each Oversubscription Participant will be entitled to purchase in the oversubscription only the number of remaining New Securities equal to the lesser of (x) the Additional Number and (y) the product obtained by multiplying (i) the number of the remaining New Securities available for subscription by (ii) a fraction, the numerator of which is the number of Ordinary Shares (including Preferred Shares on an as-converted basis, assuming full conversion and exercise of all options and other outstanding convertible and exercisable securities) held by such Oversubscription Participant and the denominator of which is the total number of Ordinary Shares (including Preferred Shares on an as-converted basis, assuming full conversion and exercise of all options and other outstanding convertible and exercisable securities) held by all the Oversubscription Participants.

 

1.5            Failure to Exercise. Upon the expiration of the Second Participation Period, or in the event no Investor exercises the Preemptive Rights within thirty (30) days following the issuance of the First Participation Notice, the Company shall have ninety (90) days thereafter to complete the sale to one or more third parties of the New Securities described in the First Participation Notice with respect to which the Preemptive Rights hereunder were not exercised at the same or a higher price and upon non-price terms not more favorable to the purchasers thereof than specified in the First Participation Notice. In the event that the Company has not issued and sold such New Securities within such ninety (90) day period, then the Company shall not thereafter issue or sell any New Securities without again first offering such New Securities to the Investors pursuant to this Section 1.

 

2

Restriction on Transfers; Rights of First Refusal and Co-Sale Rights.

 

2.1            Restriction on Transfers.

 

2.1.1            Principals. Each Principal, each Principal Holding Company or each of Permitted Transferees under Section 2.5(A)(a), regardless of such Principal’s employment status with the Group Companies, shall not directly or indirectly sell, assign, transfer, pledge, hypothecate, or otherwise encumber or dispose of in any way or otherwise grant any interest or right with respect to (“Transfer”) all or any part of any interest in any Equity Securities of the Company now or hereafter directly or indirectly owned or held by such Principal, in a single or series of related transactions, at any time prior to a Qualified IPO, without the prior written consent of the Board of Directors (including the Approval of the Preferred Directors).

 

 

2.1.2            Investors. For the avoidance of doubt, each Investor may freely Transfer any Equity Securities of the Company now or hereafter owned or held by such Investor without any limitation; provided, however, that (a) such Transfer is effected in compliance with all applicable Laws and (b) the transferee shall execute and deliver such documents and take such other actions as may be necessary for the transferee to join in and be bound by all the duties, burdens and obligations of the transferor imposed pursuant to the Right of First Refusal and Co-Sale Agreement (if not already a party thereto) and the Shareholders Agreement (if not already a party thereto) upon and after such Transfer. The Company will update its register of members upon the consummation of any such permitted Transfer. Subject to the Company’s prior written consent, which shall be deemed to have been automatically given other than with respect to any proposed disclosure of any Trade Secret (as defined in the Right of First Refusal and Co-Sale Agreement) or any information related to business collaborations with any OEM (as defined in the Right of First Refusal and Co-Sale Agreement), each Investor shall be entitled to disclose to any bona fide proposed transferee any information, documents or materials concerning the Company known to or in possession of such Investor, and the Company shall use its commercially reasonable efforts to provide any assistance or cooperation reasonably requested by such Investor or the proposed transferee in connection with such proposed transferee’s due diligence investigation of the Company. The Company may request such transferees to enter into a confidentiality agreement with the Company in a form and substance customary for transactions of a similar nature or otherwise satisfactory to the Company (acting reasonably).

 

2.1.3            Transfer to Competitors. If any Investor intends to directly or indirectly Transfer any Equity Securities of the Company to any Competitor (except for a Transfer of partnership interest by a limited partner of any Investor; provided, that such limited partner of an Investor is not recorded as a direct shareholder in the register of members of the Company, which Transfer shall not be subject to the restrictions under this Section 2.1.3), then such Investor shall promptly give a written notice (the “Competitor Transfer Notice”) to the Company and the Principals prior to such Transfer. The Competitor Transfer Notice shall describe in reasonable detail the proposed Transfer including, without limitation, the number of Equity Securities to be sold, the consideration to be paid and the identity of each prospective purchaser or transferee. Upon receipt of such Competitor Transfer Notice, the Company and the Principals shall have the right of first refusal, exercisable upon a written notice (the “Competitor ROFR Notice”) to the relevant Investor within fifteen (15) days of the date of the Competitor Transfer Notice of its election to exercise its right of first refusal hereunder, to purchase all of the Equity Interests to be sold on the same terms and conditions as set forth in the Competitor Transfer Notice. If the Company or any Principal fails to give a Competitor ROFR Notice within fifteen (15) days of the date of the Competitor Transfer Notice or gives a written notice stating that it/he will not exercise its right of first refusal or if such Company or Principal gave a Competitor ROFR Notice but failed to complete the purchase of the relevant Equity Securities set out in the Competitor Transfer Notice in accordance with this Section 2.1.3 within thirty (30) days of the Competitor ROFR Notice due to reasons attributable to the Company or such Principal, the relevant Investor shall be entitled to Transfer the Equity Securities proposed to be sold to the Competitor; provided, that such Transfer is bona fide and on the terms and conditions no more favorable than those set forth in the Competitor Transfer Notice.

 

2.1.4            Prohibited Transfers Void. Any Transfer of Equity Securities of the Company not made in compliance with this Schedule A shall be null and void as against the Company, shall not be recorded on the books of the Company and shall not be recognized by the Company or any Member of the Company.

 

2.1.5            No Indirect Transfers. Each Principal shall not circumvent or otherwise avoid the Transfer restrictions or intent thereof set forth in this Schedule A, whether by holding the Equity Securities of the Company indirectly through another Person or by causing or effecting, directly or indirectly, the Transfer or issuance of any Equity Securities by any such Person, or otherwise.

 

 

2.1.6            Cumulative Restrictions. For purposes of clarity, the restrictions on Transfer set forth in this Schedule A on a Person are cumulative with, and in addition to, the restrictions set forth in each other agreement imposing restrictions on Transfer by such Person of Equity Securities of the Company (collectively, the “Other Restriction Agreements”), including the Shareholders Agreement, the Share Restriction Agreements, and the Right of First Refusal and Co-Sale Agreement, and not in lieu thereof.

 

2.1.7            Exempt Transaction. Regardless of anything else contained herein, Section 2 and Section 3 shall not apply with respect to a Transfer made pursuant to Section 2.5 of this Schedule A, Section 11 of the Shareholders Agreement or Articles 121 and 122 of these Articles.

 

2.2            Rights of First Refusal.

 

2.2.1            Transfer Notice. To the extent the applicable consent of the Board of Directors (including the Approval of the Preferred Directors) is given pursuant to Section 2.1, if any Principal or any other holders of the Ordinary Shares (a “Transferor”) proposes to Transfer any Equity Securities of the Company or any interest therein to one or more third parties, then the Transferor shall give the Company and each Major Investor written notice of the Transferor’s intention to make the Transfer (the “Transfer Notice”), which shall include (i) a description of the Equity Securities to be transferred (the “Offered Shares”), (ii) the identity and address of the prospective transferee, and (iii) the consideration and the material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the Transferor has received a definitive offer from the prospective transferee and in good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer.

 

2.2.2            Option of the Company. The Company shall have an option for a period of ten (10) days following receipt of the Transfer Notice (the “Company Option Period”) to elect to purchase all or any portion of the Offered Shares, at the same price and subject to the same terms and conditions as described in the Transfer Notice, exercisable by written notice to the Transferor (with a copy to the Major Investors) before expiration of the Company Option Period.

 

2.2.3          Option of Investors.

 

2.2.3.1            To the extent the Company does not timely elect to purchase all of the Offered Shares pursuant to Section 2.2.2 above, then the Transferor and the Company shall deliver to each Major Investor written notice (the “Second Notice”) thereof within five (5) days after the expiration of the Company Option Period confirming the number of Offered Shares that have not been purchased by the Company, and each such Major Investor shall have an option for a period of thirty (30) days following receipt of the Second Notice (the “Option Period”) to elect to purchase all or any portion of its respective Pro Rata Share of the remaining Offered Shares at the same price and subject to the same terms and conditions as described in the Transfer Notice, by notifying the Transferor and the Company in writing before expiration of the Option Period as to the number of such Offered Shares that it wishes to purchase.

 

 

2.2.3.2            For the purposes of this Section 2.2.3, a Major Investor’s “Pro Rata Share” of such remaining Offered Shares shall be equal to (a) the total number of such remaining Offered Shares that have not been purchased by the Company, multiplied by (b) a fraction, the numerator of which shall be the aggregate number of Ordinary Shares held by such Major Investor on the date of the Transfer Notice (including all Preferred Shares held by such Major Investor on an as-converted to Ordinary Share basis) and the denominator of which shall be the total number of Ordinary Shares held by all Major Investors on such date (including all Preferred Shares held by such Major Investors on an as-converted to Ordinary Share basis).

 

2.2.3.3            If any Major Investor fails to exercise its right to purchase its full Pro Rata Share of such Offered Shares, the Company shall deliver written notice thereof (the “Third Notice”), within five (5) days after the expiration of the Option Period, to the Transferor and to each Major Investor that elected to purchase its entire Pro Rata Share of the Offered Shares (an “Exercising Shareholder”). The Exercising Shareholders shall have a right of re-allotment, and may exercise an additional right to purchase such unpurchased Offered Shares by notifying the Transferor and the Company in writing within fifteen (15) days after receipt of the Third Notice; provided, however, that if the Exercising Shareholders desire to purchase in aggregate more than the number of such unpurchased Offered Shares, then such unpurchased Offered Shares will be allocated to the extent necessary among the Exercising Shareholders in accordance with their relative Pro Rata Shares.

 

2.2.3.4            Subject to applicable securities Laws, each Major Investor shall be entitled to apportion the Offered Shares to be purchased among its Affiliates; provided, that such Major Investor notifies the Company and the Transferor in writing.

 

2.2.4          Procedure. If any Major Investor or the Company gives the Transferor notice that it desires to purchase Offered Shares, and, as the case may be, any re-allotment, then payment for the Offered Shares to be purchased shall be made by check (if agreeable to the Transferor), or by wire transfer in immediately available funds of the appropriate currency, against delivery of such Offered Shares to be purchased, at a place agreed to by the Transferor, the Company (if it is a purchaser) and all the Exercising Shareholders, and at the time of the scheduled closing therefor, but if they cannot agree, then at the principal executive offices of the Company on the seventy-fifth (75th) day after the Company’s receipt of the Transfer Notice, unless such notice contemplated a later closing date with the prospective third party transferee or unless the value of the purchase price has not yet been established pursuant to Section 2.2.5, in which case the closing shall be on such later date or as provided in Section 2.2.5.4. The Company shall update its register of members upon the consummation of any such Transfer.

 

2.2.5          Valuation of Property.

 

2.2.5.1            Should the purchase price specified in the Transfer Notice be payable in property other than cash or evidences of indebtedness, the Company and/or the Major Investors, as applicable, shall have the right to pay the purchase price in the form of cash equal in amount to the fair market value of such property.

 

 

2.2.5.2            If the Transferor, the Company (if it is a purchaser) and the Exercising Shareholders electing to purchase a majority of the Offered Shares elected to be purchased by all Exercising Shareholders (if they are purchasers) cannot agree on the cash value of such property within the Option Period, the valuation shall be made by an appraiser of internationally recognized standing jointly selected by agreement of such groups or, if they cannot agree on an appraiser within the Option Period, each such group shall select an appraiser of internationally recognized standing and such appraisers shall jointly designate another appraiser of internationally recognized standing, whose appraisal shall be determinative of such value.

 

2.2.5.3            The cost of such appraisal shall be shared equally by the Transferor, on the one hand, and the purchasers pro rata based on the number of Offered Shares such purchaser is purchasing, on the other hand.

 

2.2.5.4            If the value of the purchase price offered by the prospective transferee is not determined within sixty-five (65) days following the Company’s receipt of the Transfer Notice from the Transferor, the closing of the purchase of Offered Shares by the Company and/or the Major Investors shall be held on or prior to the tenth (10th) Business Day after such valuation shall have been made pursuant to this Section 2.2.5.

 

2.2.5.5            Notwithstanding any provision to the contrary in this Schedule A, if any Major Investor electing to purchase any Offered Shares disagrees with the value of the purchase price offered by the prospective transferee as determined pursuant to this Section 2.2.5, upon delivery of written notice by such Major Investor to the Transferor and the Company no less than five (5) days before the scheduled closing for such purchase, such Major Investor shall be deemed to not have exercised its right of first refusal pursuant to this Section 2.2 with respect to such Offered Shares and shall not be obligated to complete such purchase, in which case such Offered Shares may be reallocated to the extent appropriate among the Exercising Shareholders in accordance with their relative Pro Rata Shares, subject to the agreement of the Exercising Shareholders in writing.

 

2.3

Right of Co-Sale.

 

2.3.1          To the extent the Company and the Major Investors do not exercise (or are deemed to not have exercised) their respective rights of first refusal pursuant to Section 2.2 as to all of the Offered Shares proposed to be sold by the Transferor to the third party transferee identified in the Transfer Notice, the Transferor shall promptly give written notice thereof to each Major Investor not exercising (or deemed to not have exercised) any right of first refusal pursuant to Section 2.2 (the “Investor Co-Sale Notice”) (specifying in such Investor Co-Sale Notice the number of remaining Offered Shares as well as the number of Equity Securities that such Major Investor may participate in such sale), and each such Major Investor shall have the right to participate in such sale to the third party transferee identified in the Transfer Notice, of the remaining Offered Shares not purchased pursuant to Section 2.2 (the “Remaining Shares”), on the same terms and conditions as specified in the Transfer Notice (but in no event less favorable than the terms and conditions offered to the Transferor and; provided, that such Major Investor shall (i) only be required to provide customary fundamental representations and warranties as a holder of such Equity Securities relating to its capacity, the enforceability of the relevant transaction documents against it and the title and ownership of the Equity Securities to be transferred by it and shall not be required to provide representations and warranties on the business or assets of the Group or on any Group Company and (ii) not be obliged to pay any amount with respect to any liabilities arising from the representations and warranties made by it in excess of its share of the total consideration paid by the transferee) by notifying the Transferor in writing within ten (10) days following the date of the Investor Co-Sale Notice (each such electing Major Investor, a “Selling Investor”). Such Selling Investor’s notice to the Transferor shall indicate the number of Equity Securities the Selling Investor wishes to sell under its right to participate. To the extent one or more Major Investors exercise such right of participation in accordance with the terms and conditions set forth below, the number of Offered Shares that the Transferor may sell in the Transfer to the third-party transferee identified in the Transfer Notice shall be correspondingly reduced.

 

 

2.3.2          The total number of Equity Securities that each Selling Investor may elect to sell shall be equal to the product of (a) the aggregate number of Remaining Shares multiplied by (b) a fraction, the numerator of which is the number of Shares (on an as-converted basis) owned by such Selling Investor on the date of the Transfer Notice and the denominator of which is the total number of Shares owned by the Transferor and all Major Investors entitled to exercise their co-sale right hereunder.

 

2.3.3          Each Selling Investor shall effect its participation in the sale by promptly delivering to the Transferor for Transfer to the prospective purchaser, before the applicable closing, one or more share certificates, properly endorsed for transfer, which represent the type and number of Equity Securities which such Selling Investor elects to sell; provided, however, that if the prospective third party purchaser objects to the delivery of Ordinary Share Equivalents in lieu of Ordinary Shares, such Selling Investor shall only deliver Ordinary Shares (and therefore shall convert any such Ordinary Share Equivalents into Ordinary Shares) and certificates corresponding to such Ordinary Shares, and the Company shall effect any such conversion concurrent with the actual transfer of such Shares to the purchaser and contingent on such transfer by updating the register of members.

 

2.3.4          The share certificate or certificates that a Selling Investor delivers to the Transferor pursuant to this Section 2.3 shall be transferred to the prospective purchaser in consummation of the sale of the Equity Securities pursuant to the terms and conditions specified in the Transfer Notice, and the Transferor shall concurrently therewith remit to such Selling Investor that portion of the sale proceeds to which such Selling Investor is entitled by reason of its participation in such sale. The Company will update its register of members upon the consummation of any such Transfer.

 

2.3.5           To the extent that any prospective purchaser prohibits the participation by a Selling Investor exercising its co-sale rights hereunder in a proposed Transfer or otherwise refuses to purchase Shares or other securities from Selling Investor exercising its co-sale rights hereunder, the Transferor shall not sell to such prospective purchaser any Equity Securities unless and until, simultaneously with such sale, the Transferor shall purchase from such Selling Investor such Shares or other securities that such Selling Investor would otherwise be entitled to sell to the prospective purchaser pursuant to its co-sale rights for the same consideration and on the same terms and conditions as the proposed Transfer described in the Transfer Notice (but in no event less favourable than the terms and conditions offered to the Transferor and subject to the proviso in Section 2.3.1).

 

 

2.4

Non-Exercise of Rights of First Refusal and Co-Sale.

 

2.4.1          If the Company and the Major Investors do not elect (or are deemed to not have elected) to purchase all of the Offered Shares in accordance with Section 2.2, then, subject to the right of the Major Investors to exercise their rights to participate in the sale of Offered Shares within the time periods specified in Section 2.3, the Transferor shall have a period of ninety (90) days from the expiration of the Option Period in which to sell the remaining Offered Shares that have not been taken up under Section 2.2 and Section 2.3, as applicable, to the third party transferee identified in the Transfer Notice upon terms and conditions (including the purchase price) no more favorable to the purchaser than those specified in the Transfer Notice, so long as any such sale is effected in accordance with all applicable Laws. Each such transferee, prior to and as a condition to the consummation of any sale, shall execute and deliver to the parties to the Right of First Refusal and Co-Sale Agreement documents and other instruments assuming the obligations of such Transferor under these Articles, the Shareholders Agreement and the Right of First Refusal and Co-Sale Agreement and if applicable, the Share Restriction Agreements with respect to the Offered Shares, and the Transfer shall not be effective and shall not be recognized by the Company or any Member until such documents and instruments are so executed and delivered.

 

2.4.2          In the event the Transferor does not consummate the sale of such Offered Shares to the third party transferee identified in the Transfer Notice within such ninety (90) day period, the rights of the Major Investors under Section 2.2 and Section 2.3 shall be re-invoked and shall be applicable to each subsequent disposition of such Offered Shares by the Transferor until such rights lapse in accordance with the terms of this Schedule A.

 

2.4.3          The exercise, non-exercise or deemed non-exercise of the rights of the Major Investors under this Section 2 to purchase Equity Securities from a Transferor or participate in the sale of Equity Securities by a Transferor shall not adversely affect their rights to make subsequent purchases from the Transferor of Equity Securities or subsequently participate in sales of Equity Securities by the Transferor hereunder.

 

 

2.5            Limitations to Rights of First Refusal and Co-Sale and Transfer Restriction. Subject to the requirements of applicable Law, (A) the Transfer restriction under Section 2.1 shall not apply to (a) any Transfer or Transfers of any Equity Securities of the Company now or hereafter held by a Principal to such Principal’s parents, children, spouse, or to a trustee, executor, or other fiduciary for the benefit of such Principal or such Principal’s parents, children, spouse for bona fide estate planning purposes and/or the wholly owned affiliates of a Principal prior to a Qualified IPO; provided, that such Principal shall retain Control of such Equity Securities; (b) any Transfer or Transfers by a Principal which in the aggregate, over the term of the Right of First Refusal and Co-Sale Agreement, amount to no more than five percent (5%) of the Ordinary Shares as set forth opposite such Principal’s name on Schedule A to the Right of First Refusal and Co-Sale Agreement (including Ordinary Share Equivalents (as defined in the Right of First Refusal and Co-Sale Agreement)) held by such Principal as of the date of Closing (as adjusted for share splits, combinations, dividends, recapitalizations and the like) (each such transferee pursuant to clauses (a) and (b) above, a “Permitted Transferee,” and collectively, the “Permitted Transferees”); provided, that in each case, (i) such Transfer is effected in compliance with all applicable Laws, including without limitation, the SAFE Rules and Regulations, (ii) respecting any Transfer pursuant to clause (a) above, the Principal has provided the Major Investors reasonable evidence of the bona fide estate planning purposes for such Transfer and reasonable evidence of the satisfaction of all applicable filings or registrations required by SAFE under the SAFE Rules and Regulations, (iii) with respect to any Transfer pursuant to clauses (a) and (b) above, such Transfer will not result in a change of Control of the Company and (iv) each such Permitted Transferee under clause (a) above, prior to the completion of the Transfer, shall have executed document assuming the obligations of applicable holders of the Ordinary Shares under the Right of First Refusal and Co-Sale Agreement and Other Restriction Agreements as an applicable holder of the Ordinary Shares with respect to the transferred Equity Securities. Such transferred Equity Securities shall remain “Equity Securities” hereunder, and such transferee or donee shall be treated as a “Principal,” a “Principal Holding Company” or an “Individual Holder” for purposes of this Schedule A and the applicable Other Restriction Agreements; and (B) the right of first refusal and right of co-sale of the Company and the Major Investors under Section 2.2 and Section 2.3 shall not apply to clause (a) or (b) above; provided, that the requirements under clauses (i), (ii), (iii) and (iv) have been satisfied.

 

2.6            Prohibited Transfers. In the event the Transferor should sell any Equity Securities in contravention of the co-sale rights of the Major Investors under Section 2.3 (a “Prohibited Transfer”), the Major Investors, in addition to such other remedies as may be available at law, in equity or hereunder, shall have the put option provided below, and such Transferor shall be bound by the applicable provisions of such option.

 

2.6.1          Put Option. In the event of a Prohibited Transfer, each Major Investor shall have the right to sell to the Transferor the type and number of Equity Securities equal to the number of Equity Securities such Major Investor would have been entitled to Transfer to the third-party transferee under Section 2.3 hereof had the Prohibited Transfer been effected pursuant to and in compliance with the terms hereof. Such sale shall be made on the following terms and conditions.

 

2.6.1.1            The price per Share at which the Shares are to be sold to the Transferor shall be equal to the price per Share that would have been paid by the third-party transferee to such Major Investor and/or the Transferor in the Prohibited Transfer. The Transferor shall also reimburse each Major Investor for any and all reasonable fees and expense, including legal fees and expenses, incurred pursuant to the exercise or the attempted exercise of such Major Investor’s rights under Section 2.

 

2.6.1.2            Within ninety (90) days after the later of the dates on which a Major Investor (x) received notice of the Prohibited Transfer or (y) otherwise becomes aware of the Prohibited Transfer, such Major Investor shall, if exercising the option created hereby, deliver to the Transferor an instrument of Transfer and either the certificate or certificates representing shares to be sold under this Section 2.6 by such Major Investor, each certificate to be properly endorsed for Transfer, or an affidavit of lost certificate. The Transferor shall, upon receipt of the foregoing, pay the aggregate purchase price therefor and the amount of reimbursable fees and expenses, in cash by wire transfer of immediately available funds or by other means acceptable to such Major Investor. The Company will concurrently therewith record such Transfer on its books and update its register of members and will promptly thereafter and in any event within five (5) days reissue certificates, as applicable, to the Transferor and the Major Investor reflecting the new securities held by them giving effect to such Transfer.

 

 

2.6.2          Voidability of Prohibited Transfer. Notwithstanding anything to the contrary contained herein and the rights afforded to each Major Investor in this Section 2.6, any attempt by a Transferor to Transfer Equity Securities in violation of Section 2 shall be void, and the Company agrees 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 each of the Major Investors at the time of the Prohibited Transfer.

 

2.7            Lock-Up. In addition to but not in lieu of any other Transfer restriction contained herein, each of the Principals and the Individual Holders agrees that such Person will not during the period commencing on the date of the final prospectus relating to the first underwritten registered public offering of the Ordinary Shares and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days from the date of such final prospectus) (i) lend, offer, pledge, hypothecate, hedge, sell, make any short sale of, loan, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise Transfer or dispose of, directly or indirectly, any Equity Securities of the Company (other than those included in such offering) or (ii) enter into any swap or other arrangement that Transfers to another, in whole or in part, any of the economic consequences of ownership of such Equity Securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Equity Securities of the Company or other securities, in cash or otherwise.

 

3            Legend. Each existing or replacement certificate for Equity Securities of the Company now owned or hereafter acquired by each of the Principals, the Individual Holders and their Permitted Transferees shall bear the following legend:

 

“THE SALE, PLEDGE, HYPOTHECATION, ASSIGNMENT OR TRANSFER OF THESE SECURITIES IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT (AS AMENDED FROM TIME TO TIME) BY AND BETWEEN THE SHAREHOLDER, THE COMPANY AND CERTAIN OTHER PARTIES THERETO. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE COMPANY.”

 

The Company may annotate its register of members with an appropriate, corresponding legend. At such time as Equity Securities are no longer subject to the Right of First Refusal and Co-Sale Agreement, the Company shall, at the request of the holder of such Equity Securities, issue replacement certificates for such Equity Securities without such legend.

 

In order to ensure compliance with the terms of this Schedule A, the Company may issue appropriate “stop transfer” instructions to its Transfer agent, if any, and, if the Company acts as Transfer agent for its own securities, it may make appropriate notations to the same effect in its own records.

 

 

 

 

Exhibit 3.2

 

THE COMPANIES ACT (AS AMENDED)

 

OF THE CAYMAN ISLANDS

 

COMPANY LIMITED BY SHARES

 

NINTH AMENDED AND RESTATED MEMORANDUM AND ARTICLES OF ASSOCIATION

 

OF

 

 

Pony AI Inc.

 

 

(As adopted by a special resolution passed on September 3, 2024, and effective immediately prior to the completion of the Company’s initial public offering of ADSs representing its Class A Ordinary Shares)

 

 

THE COMPANIES ACT (AS AMENDED)

 

OF THE CAYMAN ISLANDS

 

COMPANY LIMITED BY SHARES

 

NINTH AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION

 

OF

 

Pony AI Inc.

 

(As adopted by a special resolution passed on September 3, 2024, and effective immediately prior to the completion of the Company’s initial public offering of ADSs representing its Class A Ordinary Shares)

 

1.

The name of the Company is Pony AI Inc.

 

2.

The Registered Office of the Company shall be at the offices of Osiris International Cayman Limited, Suite #4-210, Governors Square, 23 Lime Tree Bay Avenue, PO Box 32311, Grand Cayman KY1-1209, Cayman Islands, or at such other place as the Directors may from time to time decide.

 

3.

The objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by the Companies Act (As Amended) or as the same may be revised from time to time, or any other Law of the Cayman Islands.

 

4.

The Company has unrestricted corporate capacity. Without limitation to the foregoing, as provided by Section 27(2) of the Companies Act (As Amended), the Company has and is capable of exercising all of the functions of a natural Person of full capacity irrespective of any question of corporate benefit.

 

5.

The liability of each Member is limited to the amount from time to time unpaid on such Member’s Shares.

 

6.

The authorized share capital of the Company is US$300,000.00 divided into 600,000,000 ordinary shares of par value of US$0.0005 each, comprising (a) 498,911,230 Class A Ordinary Shares of par value of US$0.0005 each (the “Class A Ordinary Shares”), (b) 81,088,770 Class B Ordinary Shares of par value of US$0.0005 each (the “Class B Ordinary Shares”), and (c) 20,000,000 shares of par value of US$0.0005 each of such Class or Classes (however designated) as the Board may determine in accordance with the Memorandum and these Articles. Subject to the Statute and these Articles, the Company shall have power to redeem or purchase any of its Shares and to increase or reduce its authorized share capital and to sub-divide or consolidate the said Shares or any of them and to issue all or any part of its capital whether original, redeemed, increased or reduced with or without any preference, priority, special privilege or other rights or subject to any postponement of rights or to any conditions or restrictions whatsoever and so that unless the conditions of issue shall otherwise expressly provide every issue of Shares whether stated to be ordinary, preference or otherwise shall be subject to the powers on the part of the Company hereinbefore provided.

 

 

7.

If the Company is registered as exempted, its operations will be carried on subject to the provisions of Section 174 of the Companies Act (As Amended) and, subject to the provisions of the Companies Act (As Amended) and the Articles of Association of the Company, it shall have the power to register by way of continuation as a body corporate limited by shares under the Laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands.

 

8.

Capitalised terms that are not defined in this Memorandum of Association bear the same meaning as those given in the Articles of Association of the Company.

 

 

THE COMPANIES ACT (AS AMENDED)

 

OF THE CAYMAN ISLANDS

 

COMPANY LIMITED BY SHARES

 

NINTH AMENDED AND RESTATED ARTICLES OF ASSOCIATION

 

OF

 

Pony AI Inc.

 

(As adopted by a special resolution passed on September 3, 2024, and effective immediately prior to the completion of the Company’s initial public offering of ADSs representing its Class A Ordinary Shares)

 

INTERPRETATION

 

1.

In these Articles Table A in the First Schedule to the Statute does not apply and, unless there is something in the subject or context inconsistent therewith:

 

“ADS”	means an American Depositary Share representing Class A Ordinary Share(s).
“Affiliate”	means, in respect of a Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with such Person, and (i) in the case of a natural Person, shall include such Person’s spouse, parents, children, siblings, mother-in-law, father-in-law, brothers-in-law and sisters-in-law, a trust for the benefit of any of the foregoing, and a corporation, partnership or any other entity wholly or jointly owned by any of the foregoing, and (ii) in the case of an entity, shall include a partnership, a corporation or any other entity or any natural Person, which directly or indirectly through one or more intermediaries, Controls, is controlled by, or is under common Control with, such entity.
“Articles”	means these articles of association of the Company, as amended and altered from time to time.
“Audit Committee”	means the audit committee of the Company formed by the Board pursuant hereto, or any successor audit committee.

 

 

“Auditor”	means the Person for the time being performing the duties of auditor of the Company (if any).
“Beneficial Ownership”	shall have the meaning defined in Rule 13d-3 under the U.S. Securities Exchange Act of 1934, as amended.
“Board” or “Board of Directors”	means the board of directors of the Company.
“Business Day”	means any day that is not a Saturday, Sunday, legal holiday or other day on which commercial banks are required or authorized by law to be closed in the PRC, the Hong Kong Special Administrative Region, the United States or the Cayman Islands.
“Chairman”	means the chairman of the Board.
“Class” or “Classes”	means any class or classes of Shares as may from time to time be issued by the Company.
“Class A Ordinary Share”	means a class A ordinary share of par value of US$0.0005 each in the share capital of the Company having the rights set out in these Articles.
“Class B Ordinary Share”	means a class B ordinary share of par value of US$0.0005 each in the share capital of the Company having the rights set out in these Articles.
“Commission”	means the Securities and Exchange Commission of the United States of America or any other federal agency for the time being administering the Securities Act.
“Company”	means Pony AI Inc., a Cayman Islands exempted company.
“Company’s Website”	means the main corporate/investor relations website of the Company, the address or domain name of which has been disclosed in any registration statement filed with the Commission by the Company or which has otherwise been notified to Members.

 

 

“Control”	means, in relation to any Person, the power or authority, whether exercised or not, to direct the business, management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; provided, that such power or authority shall conclusively be presumed to exist upon possession of Beneficial Ownership or power to direct the vote of more than fifty percent (50%) of the votes entitled to be cast at a meeting of the members or shareholders of such Person or power to Control the composition of a majority of the board of directors of such Person; the terms “Controlled” and “Controlling” have meanings correlative to the foregoing.
“Designated Stock Exchange”	means the stock exchange in the United States on which any Shares or ADSs are listed for trading.
“Designated Stock Exchange Rules”	means the relevant code, rules and regulations, as amended, from time to time, applicable as a result of the original and continued listing of any Shares or ADSs on the Designated Stock Exchange.
“Director”	means a director serving on the Board for the time being of the Company and shall include an alternate Director appointed in accordance with these Articles.
“Electronic Record”	has the same meaning as given in the Electronic Transactions Act.
“Electronic Transactions Act”	means the Electronic Transactions Act (As Amended) of the Cayman Islands and any statutory amendment or re-enactment thereof.
“Family Member”	means, with respect to any natural Person, (a) such Person’s spouse, parents, siblings and other individuals living in the same household and (b) estates, trusts, partnerships and other Persons which directly or indirectly through one or more intermediaries are Controlled by the foregoing.
“Co-Founder(s)”	means Mr. Jun PENG and Mr. Tiancheng LOU

 

 

“Government Authority”	means any national, provincial, municipal or local government, administrative or regulatory body or department, court, tribunal, arbitrator or anybody that exercises the function of a regulator.
“Law”	means any federal, state, territorial, foreign or local law, common law, statute, ordinance, rule, regulation, code, measure, notice, circular, opinion or order of any Government Authority, including any rules promulgated by a stock exchange or regulatory body.
“Independent Director”	means a Director who is an independent director as defined in the Designated Stock Exchange Rules, as determined by the Board.
“Member”	means a Person for the time being duly registered in the Register of Members as a holder of Shares.
“Memorandum”	means the memorandum of association of the Company, as amended and altered from time to time.
“Non-independent Director”	means a Director who is not an Independent Director.
“Ordinary Resolution”	a Members resolution passed either (i) as a written resolution signed by all Members entitled to vote, or (ii) at a general meeting of Members by the affirmative vote of not less than a simple majority of all votes, cast by such Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at such general meeting (of which notice has been duly given).
“Ordinary Shares”	means the Class A Ordinary Shares and the Class B Ordinary Shares, collectively.
“Person”	means any individual, sole proprietorship, partnership, limited partnership, limited liability company, firm, joint venture, estate, trust, unincorporated organization, association, corporation, institution, public benefit corporation, entity or Government Authority or other enterprise or entity of any kind or nature.

 

 

“PRC”	means the People’s Republic of China, but solely for purposes hereof excludes the Hong Kong Special Administrative Region, the Macau Special Administrative Region and the island of Taiwan.
“Register of Members”	means the register maintained in accordance with the Statute and includes (except where otherwise stated) any duplicate Register of Members.
“Registered Office”	means the registered office for the time being of the Company.
“Seal”	means the common seal of the Company and includes every duplicate seal.
“Securities Act”	means the Securities Act of 1933 of the United States of America, as amended, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.
“Secretary”	means any natural Person, firm or corporation appointed by the Board to perform any of the duties of secretary of the Company and includes any assistant, deputy, temporary or acting secretary.
“Share” and “Shares”	means a share in the capital of the Company, and includes an Ordinary Share. All references to “Shares” herein shall be deemed to be Shares of any or all Classes as the context may require. For the avoidance of doubt, in these Articles the expression “Share” shall include a fraction of a Share.
“Share Premium Account”	means the share premium account established in accordance with these Articles and the Statute.
“Special Resolution”	has the same meaning as in the Statute, and includes an unanimous written resolution of the Members.
“Statute”	means the Companies Act (As Amended) of the Cayman Islands as amended and every statutory modification or re-enactment thereof for the time being in effect.

 

 

“Subsidiary”	means, with respect to any given Person, any other Person that is Controlled directly or indirectly by such given Person.
“US$”	means the lawful money of the United States of America.
“United States”	means the United States of America, its territories, its possessions and all areas subject to its jurisdiction.

 

2.

In these Articles:

 

2.1.

words importing the singular number include the plural number and vice versa;

 

2.2.

words importing the masculine gender include the feminine gender;

 

2.3.

words importing persons include corporations;

 

2.4.

“written” and “in writing” include all modes of representing or reproducing words in visible form, including in the form of an Electronic Record;

 

2.5.

references to provisions of any Law or regulation shall be construed as references to those provisions as amended, modified, re-enacted or replaced from time to time;

 

2.6.

any phrase introduced by the terms “including,” “include,” “in particular” or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms;

 

2.7.

the term “voting power” refers to the number of votes attributable to the Shares in accordance with the terms of the Memorandum and Articles;

 

2.8.

the term “or” is not exclusive;

 

2.9.

the term “including” will be deemed to be followed by, “but not limited to”;

 

2.10.

the terms “shall”, “will”, and “agrees” are mandatory, and the term “may” is permissive;

 

2.11.

the term “day” means “calendar day” (unless the term “Business Day” is used), and “month” means calendar month;

 

2.12.

the phrase “directly or indirectly” means directly, or indirectly through one or more intermediate Persons or through contractual or other arrangements, and “direct or indirect” has the correlative meaning;

 

2.13.

references to any documents shall be construed as references to such document as the same may be amended, supplemented, superseded, replaced or novated from time to time;

 

 

2.14.

when calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to these Articles, the date that is the reference date in calculating such period shall be excluded;

 

2.15.

“fully-diluted” or any variation thereof means all of the issued and outstanding Shares, treating the maximum number of Shares issuable under any issued and outstanding convertible securities and all Shares reserved for issuance under any of the Company’s share incentive plans or employee stock incentive plans as issued and outstanding;

 

2.16.

references to “in the ordinary course of business” and comparable expressions mean the ordinary and usual course of business of the relevant party, consistent in all material respects (including nature and scope) with the prior practice of such party;

 

2.17.

all references to dollars or to “US$” are to currency of the United States of America and all references to RMB are to currency of the PRC (and each shall be deemed to include reference to the equivalent amount in other currencies);

 

2.18.

if any payment hereunder would have been, but for this Article, due and payable on a date that is not a Business Day, then such payment shall instead be due and payable on the first Business Day after such date;

 

2.19.

headings are inserted for reference only and shall be ignored in construing these Articles; and

 

2.20.

Sections 8 and 19(3) of the Electronic Transactions Act shall not apply.

 

SHARE CAPITAL

 

3.

The authorized share capital of the Company is US$300,000 divided into 600,000,000 ordinary shares of par value of US$0.0005 each, comprising (a) 498,911,230 Class A Ordinary Shares of par value of US$0.0005 each, (b) 81,088,770 Class B Ordinary Shares of par value of US$0.0005 each, and (c) 20,000,000 shares of par value of US$0.0005 each of such Class or Classes (however designated) as the Board may determine in accordance with the Memorandum and these Articles; subject to any alteration of share capital effected pursuant to Articles ‎56 to ‎58.

 

4.

Subject to the Statute, the Memorandum and these Articles and, where applicable, Designated Stock Exchange Rules and/or the rules of any competent regulatory authority, any power of the Company to purchase or otherwise acquire its own Shares shall be exercisable by the Board in such manner, upon such terms and subject to such conditions as it thinks fit.

 

 

SHARES

 

5.

Subject to the Statute, these Articles and, where applicable, the Designated Stock Exchange Rules (and to any direction that may be given by the Company in general meeting) and without prejudice to any rights attached to any existing Shares, the Directors may in their absolute discretion and without the approval of the Members, cause the Company to:

 

(a).

allot, issue, grant options over or otherwise dispose of Shares (including fractions of a Share) with or without preferred, deferred or other rights or restrictions, whether in regard to dividend, voting, return of capital or otherwise, to such Persons, at such times and on such other terms as they think proper;

 

(b).

grant rights over Shares or other securities to be issued in one or more Classes or series as they deem necessary or appropriate and determine the designations, powers, preferences, privileges and other rights attaching to such Shares or securities, including dividend rights, voting rights, conversion rights, terms of redemption and liquidation preferences, any or all of which may be greater than the powers, preferences, privileges and rights associated with the then issued and outstanding Shares, at such times and on such other terms as they think proper; and

 

(c).

issue options, warrants or convertible securities or securities of similar nature conferring the right upon the holders thereof to subscribe for, purchase or receive any Class of Shares or securities in the capital of the Company on such terms as it may from time to time determine.

 

6.

The Directors may authorize the division of Shares into any number of Classes and the different Classes shall be authorized, established and designated (or re-designated as the case may be) and the variations in the relative rights (including, without limitation, voting, dividend and redemption rights), restrictions, preferences, privileges and payment obligations as between the different Classes (if any) may be fixed and determined by the Board or by an Ordinary Resolution. The Directors may issue from time to time, out of the authorized share capital of the Company, preferred shares with such preferred or other rights, all or any of which may be greater than the rights of Ordinary Shares, at such time and on such terms as they may think appropriate in their absolute discretion and without approval of the Members; provided, however, before any preferred shares of any such series are issued, the Board may by resolution of Directors determine, with respect to any series of preferred shares, the terms and rights of that series, including:

 

(a).

the designation of such series, the number of preferred shares to constitute such series and the subscription price thereof if different from the par value thereof;

 

(b).

whether the preferred shares of such series shall have voting rights, in addition to any voting rights provided by law, and, if so, the terms of such voting rights, which may be general or limited;

 

(c).

the dividends, if any, payable on such series, whether any such dividends shall be cumulative, and, if so, from what dates, the conditions and dates upon which such dividends shall be payable, and the preference or relation which such dividends shall bear to the dividends payable on any Shares of any other Class or any other series of Shares;

 

 

(d).

whether the preferred shares of such series shall be subject to redemption by the Company, and, if so, the times, prices and other conditions of such redemption;

 

(e).

whether the preferred shares of such series shall have any rights to receive any part of the assets available for distribution amongst the Members upon the liquidation of the Company, and, if so, the terms of such liquidation preference, and the relation which such liquidation preference shall bear to the entitlements of the holders of Shares of any other Class or any other series of Shares;

 

(f).

whether the preferred shares of such series shall be subject to the operation of a retirement or sinking fund and, if so, the extent to and manner in which any such retirement or sinking fund shall be applied to the purchase or redemption of the preferred shares of such series for retirement or other corporate purposes and the terms and provisions relative to the operation thereof;

 

(g).

whether the preferred shares of such series shall be convertible into, or exchangeable for, Shares of any other Class or any other series of preferred shares or any other securities and, if so, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same, and any other terms and conditions of conversion or exchange;

 

(h).

the limitations and restrictions, if any, to be effective while any preferred shares of such series are outstanding upon the payment of dividends or the making of other distributions on, and upon the purchase, redemption or other acquisition by the Company of, the existing Shares or Shares of any other Class of Shares or any other series of preferred shares;

 

(i).

the conditions or restrictions, if any, upon the creation of indebtedness of the Company or upon the issue of any additional Shares, including additional Shares of such series or of any other Class of Shares or any other series of preferred shares; and

 

(j).

any other powers, preferences and relative, participating, optional and other special rights, and any qualifications, limitations and restrictions thereof;

 

and, for such purposes, the Directors may reserve an appropriate number of Shares for the time being unissued.

 

7.

Neither the Company nor the Board shall be obliged, when making or granting any allotment of, offer of, option over or disposal of Shares, to make, or make available, any such allotment, offer, option or Shares to Members or others with registered addresses in any particular territory or territories being a territory or territories where, in the absence of a registration statement or other special formalities, this would or might, in the opinion of the Board, be unlawful or impracticable. Members affected as a result of the foregoing sentence shall not be, or be deemed to be, a separate Class of Members for any purpose whatsoever. Except as otherwise expressly provided in the resolution or resolutions providing for the establishment of any Class or series of preferred shares, no vote of the holders of preferred shares or Ordinary Shares shall be a prerequisite to the issuance of any Shares of any Class or series of the preferred shares authorized by and complying with the conditions of the Memorandum and these Articles.

 

 

8.

The Company shall not issue Shares to bearer.

 

9.

The Company may in connection with the issue of any Shares exercise all powers of paying commissions and brokerage conferred or permitted by Law. Such commissions and brokerage may be satisfied by the payment of cash or the lodgement of fully or partly paid-up Shares or partly in one way and partly in the other.

 

10.

The Directors may refuse to accept any application for Shares, and may accept any application in whole or in part, for any reason or for no reason.

 

FRACTIONAL SHARES

 

11.

The Directors may issue fractions of a Share and, if so issued, a fraction of a Share shall be subject to and carry the corresponding fraction of liabilities (whether with respect to nominal or par value, premium, contributions, calls or otherwise), limitations, preferences, privileges, qualifications, restrictions, rights (including, without prejudice to the generality of the foregoing, voting and participation rights) and other attributes of a whole Share. If more than one fraction of a Share of the same Class is issued to or acquired by the same Member such fractions shall be accumulated.

 

REGISTER OF MEMBERS

 

12.

The Company shall maintain or cause to be maintained the Register of Members in accordance with the Statute.

 

CLOSING REGISTER OF MEMBERS OR FIXING RECORD DATE

 

13.

For the purpose of determining Members entitled to notice of, or to vote at any meeting of Members or any adjournment thereof, or Members entitled to receive payment of any dividend, or in order to make a determination of Members for any other purpose, the Directors may provide that the Register of Members shall be closed for transfers for a stated period which shall not in any case exceed forty (40) calendar days. If the Register of Members shall be closed for the purpose of determining Members entitled to notice of, or to vote at, a meeting of Members, the Register of Members shall be closed for at least ten (10) calendar days immediately preceding the meeting and the record date for such determination shall be the date of closure of the Register of Members.

 

14.

In lieu of, or apart from, closing the Register of Members, the Directors may fix in advance or arrears a date as the record date for any such determination of Members entitled to notice of, or to vote at any meeting of the Members or any adjournment thereof, or for the purpose of determining the Members entitled to receive payment of any dividend or in order to make a determination of Members for any other purpose.

 

 

15.

If the Register of Members is not so closed and no record date is fixed for the determination of Members entitled to notice of, or to vote at, a meeting of Members or Members entitled to receive payment of a dividend, the date on which notice of the meeting is sent or the date on which the resolution of the Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of Members. When a determination of Members entitled to vote at any meeting of Members has been made as provided in this Article, such determination shall apply to any adjournment thereof.

 

CERTIFICATES FOR SHARES

 

16.

A Member shall only be entitled to a share certificate if the Directors resolve that share certificates shall be issued. Share certificates representing Shares, if any, shall be in such form as the Directors may determine. Share certificates shall be signed by one or more Directors or other Person authorized by the Directors. The Directors may authorise certificates to be issued with the authorized signature(s) affixed by mechanical process. All certificates for Shares shall be consecutively numbered or otherwise identified and shall specify the Shares to which they relate. All certificates surrendered to the Company for transfer shall be cancelled and, subject to these Articles, no new certificate shall be issued until the former certificate representing a like number of relevant Shares shall have been surrendered and cancelled.

 

17.

No certificate shall be issued representing Shares of more than one Class.

 

18.

The Company shall not be bound to issue more than one certificate for Shares held jointly by more than one Person and delivery of a certificate to one joint holder shall be a sufficient delivery to all of them. In the event that Shares are held jointly by several Persons, any request may be made by any one of the joint holders and if so made shall be binding on all of the joint holders.

 

19.

Every share certificate of the Company shall bear legends required under the applicable laws, including the Securities Act.

 

20.

Share certificates shall be issued within the relevant time limit as prescribed by Law or as the Designated Stock Exchange may from time to time determine, whichever is the shorter, after allotment or, except in the case of a transfer which the Company is for the time being entitled to refuse to register and does not register, after lodgment of a transfer with the Company.

 

21.

(1) Upon every transfer of Shares the certificate held by the transferor shall be given up to be cancelled, and shall forthwith be cancelled accordingly, and a new certificate shall be issued to the transferee in respect of the Shares transferred to him at such fee as is provided in paragraph (2) of this Article. If any of the Shares included in the certificate so given up shall be retained by the transferor a new certificate for the balance shall be issued to him at the aforesaid fee payable by the transferor to the Company in respect thereof.

 

 

(2) The fee referred to in paragraph (1) above shall be an amount not exceeding the relevant maximum amount as the Designated Stock Exchange may from time to time determine provided that the Board may at any time determine a lower amount for such fee.

 

22.

If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms (if any) as to evidence and indemnity and on the payment of such expenses reasonably incurred by the Company in investigating evidence, as the Directors may prescribe, and (in the case of defacement or wearing out) upon delivery of the old certificate.

 

REDEMPTION, REPURCHASE AND SURRENDER

 

23.

Subject to the provisions of the Statute and these Articles, the Company may:

 

(a).

issue Shares that are to be redeemed or are liable to be redeemed at the option of a Member or the Company. The redemption of Shares shall be effected in such manner and upon such terms as may be determined, before the issue of such Shares, by the Board;

 

(b).

purchase Shares (including any redeemable Shares) in such manner and upon such terms as have been approved by the Board, or are otherwise authorized by these Articles; and;

 

(c).

make a payment in respect of the redemption or purchase of Shares in any manner permitted by the Statute, including out of capital.

 

24.

The purchase of any Share shall not oblige the Company to purchase any other Share other than as may be required pursuant to applicable law and any other contractual obligations of the Company.

 

25.

The holder of the Shares being purchased shall be bound to deliver up to the Company the certificate(s) (if any) thereof for cancellation and thereupon the Company shall pay to him the purchase or redemption monies or consideration in respect thereof.

 

26.

The Directors may accept the surrender for no consideration of any fully paid Share.

 

TREASURY SHARES

 

27.

The Board may, prior to the purchase, redemption or surrender of any Share, determine that such Share shall be held as a treasury share. The Board may determine to cancel a treasury share or transfer a treasury share on such terms as it thinks proper (including, without limitation, for nil consideration).

 

NON RECOGNITION OF TRUSTS

 

28.

The Company shall not be bound by or compelled to recognize in any way (even when notified) any equitable, contingent, future or partial interest in any Share, or (except only as is otherwise provided by these Articles or the Statute) any other rights in respect of any Share other than an absolute right to the entirety thereof in the registered holder.

 

 

LIEN ON SHARES

 

29.

The Company shall have a first and paramount lien and charge on all Shares (whether fully paid-up or not) registered in the name of a Member (whether solely or jointly with others) for all debts, liabilities or engagements to or with the Company (whether presently payable or not) by such Member or his estate, either alone or jointly with any other Person, whether a Member or not, but the Directors may at any time declare any Share to be wholly or in part exempt from the provisions of this Article. The registration of a transfer of any such Share shall operate as a waiver of the Company’s lien (if any) thereon. The Company’s lien (if any) on a Share shall extend to all dividends or other monies payable in respect thereof.

 

30.

The Company may sell, in such manner as the Board thinks fit, any Shares on which the Company has a lien, if a sum in respect of which the lien exists is presently payable, and is not paid within fourteen (14) calendar days after a notice in writing stating and demanding payment of such part of the amount in respect of which the lien exists as is presently payable, has been given to the registered holder or holders for the time being of the Share, or the Person, of which the Company has notice, entitled thereto by reason of his death or bankruptcy.

 

31.

To give effect to any such sale, the Board may authorize some Person to transfer the Shares sold to the purchaser thereof. The purchaser shall be registered as the holder of the Shares comprised in any such transfer, and he shall not be bound by the application of the purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the proceedings in reference to the sale.

 

32.

The proceeds of the sale after deduction of expenses, fees and commission incurred by the Company shall be received by the Company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable and the residue, if any, shall (subject to a like lien for sums not presently payable as existed upon the Shares prior to the sale) be paid to the Person entitled to the Shares immediately prior to the sale.

 

CALLS ON SHARES

 

33.

The Directors may from time to time make calls upon the Members in respect of any monies unpaid on their Shares (whether on account of the nominal value of the Shares or by way of premium or otherwise) and not by the conditions of allotment thereof made payable at fixed terms, provided that no call shall be payable at less than one (1) month from the date fixed for the payment of the last preceding call, and each Member shall (subject to receiving at least fourteen (14) calendar days’ notice specifying the time or times of payment) pay to the Company at the specified time or times the amount called on the Shares. A call may be revoked or postponed as the Board may determine. A call may be made payable by installments.

 

34.

A call shall be deemed to have been made at the time when the resolution of the Directors authorizing such call was passed.

 

35.

The joint holders of a Share shall be jointly and severally liable to pay all calls in respect thereof.

 

 

36.

If a sum called in respect of a Share is not paid before or on a day appointed for payment thereof, the Persons from whom the sum is due shall pay interest on the sum from the day appointed for payment thereof to the time of actual payment at such rate as the Board may determine, but the Board shall be at liberty to waive payment of such interest either wholly or in part.

 

37.

Any sum which by the terms of issue of a Share becomes payable on allotment or at any fixed date, whether on account of the nominal value of the Share or by way of premium or otherwise, shall for the purposes of these Articles be deemed to be a call duly made, notified and payable on the date on which by the terms of issue the same becomes payable, and in the case of non-payment, all the relevant provisions of these Articles as to payment of interest forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified.

 

38.

Directors may, on the issue of Shares, differentiate between the holders as to the amount of calls or interest to be paid and the time of payment.

 

39.

The Board may, if it thinks fit, receive from any Member willing to advance the same, all or any part of the monies uncalled and unpaid upon any Shares held by him, and upon all or any of the monies so advanced may (until the same would but for such advances, become payable) pay interest at a rate as may be agreed upon between the Board and the Member paying such sum in advance. No such sum paid in advance of calls shall entitle the Member paying such sum to any portion of a dividend declared in respect of any period prior to the date upon which such sum would, but for such payment, become presently payable.

 

FORFEITURE OF SHARES

 

40.

If a Member fails to pay any call or installment of a call or to make any payment required by the terms of issue on the day appointed for payment thereof, the Directors may, at any time thereafter during such time as any part of the call, installment or payment remains unpaid, give notice requiring payment of any part of the call, installment or payment that is unpaid, together with any interest which may have accrued and all expenses that have been incurred by the Company by reason of such non-payment. Such notice shall name a day (not earlier than the expiration of fourteen (14) calendar days from the date of giving of the notice) on or before which the payment required by the notice is to be made, and shall state that, in the event of non-payment at or before the time appointed the Shares in respect of which such notice was given will be liable to be forfeited.

 

41.

If the requirements of any such notice as aforesaid are not complied with, any Share in respect of which the notice has been given may at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the Directors to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited Share and not actually paid before the forfeiture.

 

42.

A forfeited Share may be sold or otherwise disposed of on such terms and in such manner as the Board thinks fit, and at any time before a sale or disposition, the forfeiture may be cancelled on such terms as the Board sees fit.

 

 

43.

A Person whose Shares have been forfeited shall cease to be a Member in respect of the forfeited Shares, but shall, notwithstanding, remain liable to pay to the Company all monies which, at the date of forfeiture, were payable by him to the Company in respect of the Shares together with interest thereon, but his liability shall cease if and when the Company shall have received payment in full of all monies whenever payable in respect of the Shares.

 

44.

A certificate in writing under the hand of one (1) Director or the Secretary of the Company that a Share in the Company has been duly forfeited on a date stated in the declaration shall be conclusive evidence of the fact stated therein as against all Persons claiming to be entitled to the Share. The Company may receive the consideration given for the Share on any sale or disposition thereof and may execute a transfer of the Share in favor of the Person to whom the Share is sold or disposed of and he shall thereupon be registered as the holder of the Share and shall not be bound by the application of the purchase money, if any, nor shall his title to the Share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the Share.

 

45.

The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the nominal value of the Share or by way of premium as if the same had been payable by virtue of a call duly made and notified.

 

REGISTRATION OF EMPOWERING INSTRUMENTS

 

46.

The Company shall be entitled to charge a fee not exceeding US$l.00 on the registration of every probate, letter of administration, certificate of death or marriage, power of attorney, notice in lieu of distringas, or other instrument.

 

TRANSFER OF SHARES

 

47.

Subject to these Articles, any Member may transfer all or any of his Shares by an instrument of transfer in the usual or common form or in a form prescribed by the Designated Stock Exchange or in any other form approved by the Board and may be under hand or, if the transferor or transferee is a clearing house or a central depository house or its nominee(s), by hand or by machine imprinted signature or by such other manner of execution as the Board may approve from time to time.

 

48.

The instrument of transfer of any Share shall be in writing and in any usual or common form or such other form as the Directors may, in their absolute discretion, approve and be executed by or on behalf of the transferor and if in respect of a nil or partly paid up Share, or if so required by the Directors, shall also be executed on behalf of the transferee and shall be accompanied by the certificate (if any) of the Shares to which it relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer. The transferor shall be deemed to remain a Member until the name of the transferee is entered in the Register of Members in respect of the relevant Shares.

 

49.

The Directors shall register any transfer of Shares except where holders proposing or effecting the transfers of the Shares are subject to binding written agreements with the Company or applicable Laws which restrict the transfer of the Shares held by such holders and such holders have not complied with the terms of such agreements or the restrictions have not been waived in accordance with their terms, or such applicable Law, as the case may be. If the Directors refuse to register a transfer they shall notify the transferee within five (5) Business Days of such refusal, providing a detailed explanation of the reason therefor. Notwithstanding the foregoing, if a transfer complies with the holder’s transfer obligations and restrictions set forth in agreements with the Company, the Directors shall register such transfer.

 

 

50.

The Directors may in their absolute discretion decline to register any transfer of Shares which is not fully paid up or on which the Company has a lien. The Directors may also decline to register any transfer of any Share unless:

 

(a).

the instrument of transfer is lodged with the Company, accompanied by the certificate for the Shares to which it relates and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer;

 

(b).

the instrument of transfer is in respect of only one Class of Shares;

 

(c).

the instrument of transfer is properly stamped, if required;

 

(d).

in the case of a transfer to joint holders, the number of joint holders to whom the Share is to be transferred does not exceed four; and

 

(e).

a fee of such maximum sum as the Designated Stock Exchange may determine to be payable, or such lesser sum as the Board may from time to time require, is paid to the Company in respect thereof.

 

51.

The registration of transfers may, after compliance with any notice required by the Designated Stock Exchange Rules, be suspended and the Register of Members closed at such times and for such periods as the Directors may, in their absolute discretion, from time to time determine, provided always that such registration of transfer shall not be suspended nor the Register of Members closed for more than thirty (30) calendar days in any calendar year.

 

52.

All instruments of transfer that are registered shall be retained by the Company. If the Directors refuse to register a transfer of any Shares, they shall within two calendar months after the date on which the instrument of transfer was lodged with the Company send notice of the refusal to each of the transferor and the transferee.

 

TRANSMISSION OF SHARES

 

53.

If a Member dies, the survivor or survivors where such Member was a joint holder, and his or her legal personal representatives where such Member was a sole holder, shall be the only Persons recognised by the Company as having any title to such Member’s interest. The estate of a deceased Member is not thereby released from any liability in respect of any Share that had been jointly held by such Member.

 

54.

Any Person becoming entitled to a Share in consequence of the death or bankruptcy or liquidation or dissolution of a Member (or in any other way than by transfer) may, upon such evidence being produced as may from time to time be required by the Directors, elect either to become the holder of the Share or to have some Person nominated by him or her as the transferee.

 

 

55.

If the Person so becoming entitled shall elect to be registered as the holder, such Person shall deliver or send to the Company a notice in writing signed by such Person stating that he or she so elects.

 

AMENDMENTS OF MEMORANDUM AND ARTICLES OF ASSOCIATION AND ALTERATION OF CAPITAL

 

56.

Subject to the provisions of the Statute and the provisions of these Articles, the Company may from time to time by an Ordinary Resolution:

 

(a).

increase the share capital by such sum, to be divided into Shares of such Classes and amount, as the resolution shall prescribe and with such rights, priorities and privileges annexed thereto, as the Company in general meeting may determine;

 

(b).

consolidate and divide all or any of its share capital into Shares of larger amount than its existing Shares;

 

(c).

divide its Shares into several Classes and, without prejudice to any special rights previously conferred on the holders of existing Shares, attach thereto respectively any preferential, deferred, qualified or special rights, privileges, conditions or such restrictions which in the absence of any such determination by the Company in general meeting, as the Directors may determine; provided always that, for the avoidance of doubt, where a Class of Shares has been authorized by the Company, no resolution of the Company in general meeting is required for the issuance of Shares of that Class and the Directors may issue Shares of that Class and determine such rights, privileges, conditions or restrictions attaching thereto as aforesaid, and further provided that where the Company issues Shares which do not carry voting rights, the words “non-voting” shall appear in the designation of such Shares and where the equity capital includes Shares with different voting rights, the designation of each Class of Shares, other than those with the most favorable voting rights, must include the words “restricted voting” or “limited voting”;

 

(d).

subdivide its Shares, or any of them, into Shares of smaller amount than is fixed by the Memorandum or into Shares without par value (subject, nevertheless, to Law), and may by such resolution determine that, as between the holders of the Shares resulting from such sub-division, one or more of the Shares may have any such preferred, deferred or other rights or be subject to any such restrictions as compared with the other or others as the Company has power to attach to unissued or new Shares;

 

(e).

cancel any Shares that at the date of the passing of the resolution have not been taken or agreed to be taken by any Person and diminish the amount of its share capital by the amount of the Shares so cancelled or, in the case of Shares without par value, diminish the number of Shares into which its capital is divided; and

 

(f).

perform any action not required to be performed by Special Resolution.

 

 

57.

All new Shares created in accordance with the provisions of the preceding Article shall be subject to the same provisions of the Articles with reference to the payment of calls, liens, transfer, transmission, forfeiture and otherwise as the Shares in the original share capital. The Board may settle as it considers expedient any difficulty which arises in relation to any consolidation and division under the preceding Article and in particular but without prejudice to the generality of the foregoing may issue certificates in respect of fractions of Shares or arrange for the sale of the Shares representing fractions and the distribution of the net proceeds of sale (after deduction of the expenses of such sale) in due proportion amongst the Members who would have been entitled to the fractions, and for this purpose the Board may authorize some Person to transfer the Shares representing fractions to their purchaser or resolve that such net proceeds be paid to the Company for the Company’s benefit. Such purchaser will not be bound to see to the application of the purchase money nor will his title to the Shares be affected by any irregularity or invalidity in the proceedings relating to the sale.

 

58.

Subject to the provisions of the Statute and the provisions of these Articles, the Company may from time to time by Special Resolution:

 

(a).

change its name;

 

(b).

alter, amend or add to these Articles;

 

(c).

alter or add to the Memorandum with respect to any objects, powers or other matters specified therein; and

 

(d).

reduce its share capital and any capital redemption reserve fund in any manner authorized by Law.

 

SHARE RIGHTS

 

59.

The rights and restrictions attaching to the Ordinary Shares are as follows:

 

(a).

Income.

 

Holders of Ordinary Shares shall be entitled to such dividends as the Directors may in their absolute discretion lawfully declare from time to time.

 

(b).

Capital

 

Holders of Ordinary Shares shall be entitled to a return of capital on liquidation, dissolution or winding-up of the Company (other than on a conversion, redemption or purchase of Shares, or an equity financing or series of financings that do not constitute the sale of all or substantially all of the Shares of the Company).

 

(c).

Attendance at General Meetings and Voting

 

Holders of Ordinary Shares have the right to receive notice of, attend, speak and vote at general meetings (including extraordinary general meetings) of the Company. Holders of Ordinary Shares shall, at all times, vote together as one Class on all matters submitted to a vote by the Members. Each Class A Ordinary Share shall be entitled to one (1) vote on all matters subject to vote at general meetings (including annual and extraordinary general meetings) of the Company and each Class B Ordinary Share shall be entitled to ten (10) votes on all matters subject to vote at general meetings (including annual and extraordinary general meetings) of the Company.

 

 

(d).

Conversion

 

(i)

Each Class B Ordinary Share is convertible into one (1) fully paid Class A Ordinary Share at any time by the holder thereof. The right to convert shall be exercisable by the holder of the Class B Ordinary Share delivering a written notice to the Company that such holder elects to convert a specified number of Class B Ordinary Shares into Class A Ordinary Shares. In no event shall Class A Ordinary Shares be convertible into Class B Ordinary Shares.

 

(ii)

Subject to these Articles, upon any sale, transfer, assignment or disposition of Class B Ordinary Shares by a holder thereof to any Person which is not an Affiliate of each Co-Founder, or upon a change of Beneficial Ownership of any Class B Ordinary Shares as a result of which any Person who is not an Affiliate of each Co-Founder becomes a beneficial owner of such Ordinary Shares, such Class B Ordinary Shares shall be automatically and immediately converted into an equal number of Class A Ordinary Shares. For the avoidance of doubt, (i) a sale, transfer, assignment or disposition shall be effective upon the Company’s registration of such sale, transfer, assignment or disposition in the Register of Members; (ii) the creation of any pledge, charge, encumbrance or other third-party right of whatever description on any Class B Ordinary Shares to secure any contractual or legal obligations shall not be deemed as a sale, transfer, assignment or disposition for the purpose of this Article unless and until any such pledge, charge, encumbrance or other third-party right is enforced and results in the third party who is not an Affiliate of each Co-Founder becoming a beneficial owner of the relevant Class B Ordinary Shares in which case all the related Class B Ordinary Shares shall be automatically and immediately converted into the same number of Class A Ordinary Shares, and (iii) any sale, transfer, assignment or disposition of any Class B Ordinary Shares by a holder thereof to any Person which is an Affiliate of each Co-Founder shall not trigger the automatic conversion of such Class B Ordinary Shares into Class A Ordinary Shares as contemplated under this Article.

 

(iii)

Any conversion of Class B Ordinary Shares into Class A Ordinary Shares pursuant to this Article shall be effected in any manner permitted under Cayman Islands law, including by means of the re-designation, re-classification, and variation of rights of the relevant Class B Ordinary Share as a Class A Ordinary Share together with such rights and restrictions and which shall rank pari passu in all respects with the Class A Ordinary Shares then in issue. Such conversion shall become effective forthwith upon entries being made in the Register of Members to record the re-designation and re-classification of the relevant Class B Ordinary Shares as Class A Ordinary Shares.

 

 

(iv)

Upon conversion, the Company shall allot and issue the relevant Class A Ordinary Shares to the converting Member, enter or procure the entry of the name of the relevant holder of Class B Ordinary Shares as the holder of the relevant number of Class A Ordinary Shares resulting from the conversion of the Class B Ordinary Shares in, and make any other necessary and consequential changes to, the Register of Members and shall procure that certificates in respect of the relevant Class A Ordinary Shares, together with a new certificate for any unconverted Class B Ordinary Shares comprised in the certificate(s) surrendered by the holder of the Class B Ordinary Shares are issued to the holders of the Class A Ordinary Shares and Class B Ordinary Shares.

 

(v)

Any and all taxes and stamp, issue and registration duties (if any) arising on conversion shall be borne by the holder of Class B Ordinary Shares requesting conversion.

 

(vi)

Save and except for voting rights and conversion rights as set out in this Article, Class A Ordinary Shares and Class B Ordinary Shares shall rank pari passu and shall have the same rights, preferences, privileges and restrictions.

 

VARIATION OF RIGHTS OF SHARES

 

60.

Subject to the provision of these Articles, if at any time the share capital of the Company is divided into different Classes, the rights attached to any Class (unless otherwise provided by the terms of issue of the Shares of that Class) or Shares representing a portion of any Class may, whether or not the Company is being wound up, be varied with the consent in writing of the holders of not less than a majority of the issued Shares of that Class, or with the sanction of a Special Resolution passed at a separate meeting of the holders of the Shares of that Class.

 

61.

For the purpose of the preceding Article, all of the provisions of these Articles relating to general meetings shall apply, to the extent applicable, mutatis mutandis, to every meeting of holders of separate Class of Shares, except that the necessary quorum shall be one or more Persons holding or representing by proxy at least a majority of the issued Shares of such Class and that any Member holding Shares of such Class, present in person or by proxy, may demand a poll.

 

62.

Subject to the provisions of these Articles, the rights conferred upon the holders of the Shares of any Class issued with preferred or other rights shall not, subject to any rights or restrictions for the time being attached to the Shares of that Class, be deemed to be materially adversely varied or abrogated by the creation or issue of further Shares ranking pari passu therewith, and the rights of the holders of Shares shall not be deemed to be materially adversely varied by the creation or issue of Shares with preferred or other rights including, without limitation, the creation of Shares with enhanced or weighted voting rights.

 

 

REGISTERED OFFICE

 

63.

Subject to the provisions of the Statute, the Company may by resolution of the Directors change the location of its Registered Office.

 

GENERAL MEETINGS

 

64.

All general meetings other than annual general meetings shall be called extraordinary general meetings.

 

65.

The Company may, but shall not (unless required by the Statute or Designated Stock Exchange Rules) be obliged to hold a general meeting in each calendar year as its annual general meeting and shall specify the meeting as such in the notices calling it. The annual general meeting of the Company shall be held at such time and place as the Directors shall appoint. At these meetings, the report of the Directors (if any) shall be presented.

 

66.

The Chairman or a majority of the Directors may call general meetings, and they shall on a Members’ requisition forthwith proceed to convene an extraordinary general meeting of the Company.

 

67.

A Members’ requisition is a requisition of Members of the Company holding, on the date of deposit of the requisition in the aggregate, not less than one third of all votes attaching to the issued and outstanding Shares entitled to vote at general meetings of the Company as at the date of the requistion.

 

68.

The requisition must state the objects of the meeting and must be signed by the requisitionists and deposited at the Registered Office, and may consist of several documents in like form each signed by one or more requisitionists.

 

69.

If the Directors do not within twenty-one (21) calendar days from the date of the deposit of the requisition duly proceed to convene a general meeting to be held within a further twenty-one (21) calendar days, the requisitionists, or any of them representing more than fifty percent (50%) of the total voting rights of all of them, may themselves convene a general meeting, but any meeting so convened shall not be held after the expiration of three (3) calendar months after the expiration of the said twenty-one (21) calendar days.

 

70.

A general meeting convened as aforesaid by requisitionists shall be convened in the same manner as nearly as possible as that in which general meetings are to be convened by Directors.

 

NOTICE OF GENERAL MEETINGS

 

71.

At least seven (7) Business Days’ notice shall be given of any general meeting unless such notice is waived either before, at or after such meeting by the Members (or their proxies) holding a majority of all votes attaching to the issued and outstanding Shares entitled to attend and vote thereat. Every notice shall be exclusive of the day on which it is given or deemed to be given and shall specify the place, the day and the hour of the meeting and the general nature of the business and shall be given in the manner hereinafter mentioned or in such other manner, if any, as may be prescribed by the Company, provided that a general meeting of the Company shall, whether or not the notice specified in this regulation has been given and whether or not the provisions of the Articles regarding general meetings have been complied with, be deemed to have been duly convened if it is so agreed: (a) in the case of an annual general meeting, by all the Members (or their proxies) entitled to attend and vote thereat; and (b) in the case of an extraordinary general meeting, by a majority in the number of the Members (or their proxies) having a right to attend and vote at the meeting, being a majority together holding not less than two-thirds (2/3) in voting rights of the Shares giving that right.

 

 

72.

The accidental omission to give notice of a general meeting to, or the non-receipt of notice of a meeting by, any Person entitled to receive notice shall not invalidate the proceedings at any meeting.

 

PROCEEDINGS AT GENERAL MEETINGS

 

73.

No business shall be transacted at any general meeting unless a quorum is present at the time when the meeting proceeds to business. Save as otherwise provided by these Articles, the holder(s) of Shares which carry a majority of all votes attaching to all Shares in issue and entitled to vote at such general meeting, present in person or by proxy or, if a corporate or other non-natural Person, by its duly authorized representative, shall constitute a quorum; unless the Company has only one Member entitled to vote at such general meeting in which case the quorum shall be that one Member present in person or by proxy or (in the case of a corporation or other non-natural Person) by a duly authorized representative or proxy.

 

74.

A Person may participate at a general meeting by video conference, teleconference or other similar communications equipment by means of which all the Persons participating in such meeting can communicate with each other. Participation by a Person in a general meeting in this manner is treated as presence in person at that meeting.

 

75.

A resolution (including a Special Resolution) in writing (in one or more counterparts) signed by all Members for the time being entitled to receive notice of and to attend and vote at general meetings (or, being corporations, signed by their duly authorized representatives) shall be as valid and effective as if the resolution had been passed at a general meeting of the Company duly convened and held.

 

76.

If a quorum shall not be present or represented at any general meeting, the Members holding a majority of the aggregate voting power of all of the Shares of the Company present in person or by proxy at the meeting may adjourn the meeting from time to time, until a quorum shall be present or represented; provided that, if notice of such meeting has been duly delivered to all Members seven (7) Business Days prior to the scheduled meeting in accordance with the notice procedures hereunder, and the quorum is not present within one hour from the time appointed for the meeting solely because of the absence of any Member, the meeting shall be adjourned to the seventh (7th) following Business Day at the same time and place (or to such other time or such other place as the Directors may determine) with an updated notice delivered to all Members 48 hours prior to the adjourned meeting in accordance with the notice procedures under these Articles and, if at the adjourned meeting, the quorum is not present within half an hour from the time appointed for the meeting solely because of the absence of any Member, then the Members present in person and by proxy at the adjourned meeting shall form a quorum. At such adjourned meeting, any business may be transacted that might have been transacted at the meeting as originally notified.

 

 

77.

The Chairman, if any, shall preside as chairman at every general meeting of the Company, or if there is no such Chairman, or if he or she shall not be present within fifteen (15) minutes after the time appointed for the holding of the meeting, or is unwilling or unable to act, the Directors present shall elect one of their number, or shall designate a Member, to be chairman of the meeting.

 

78.

With the consent of a general meeting at which a quorum is present, the chairman may (and shall if so directed by the meeting), adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a general meeting is adjourned, notice of the adjourned meeting shall be given as in the case of an original meeting.

 

79.

A resolution put to the vote of the meeting shall be decided by poll and not on a show of hands.

 

80.

Except on a poll on a question of adjournment, a poll shall be taken as the chairman directs, and the result of the poll shall be deemed to be the resolution of the general meeting.

 

81.

A poll on a question of adjournment shall be taken forthwith.

 

VOTES OF MEMBERS

 

82.

Subject to any rights and restrictions for the time being attached to any Share, every Member present in person or by proxy (or, if a corporation or other non-natural Person, by its duly authorized representative or proxy) shall, at an annual or extraordinary general meeting of the Company, have one (1) vote for each Class A Ordinary Share and ten (10) votes for each Class B Ordinary Share, in each case of which he is the holder.

 

83.

In the case of joint holders of record, the vote of the senior holder who tenders a vote, whether in person or by proxy (or, if a corporation or other non-natural Person, by its duly authorized representative or proxy), shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be determined by the order in which the names of the holders stand in the Register of Members.

 

84.

A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction in lunacy, may vote by his or her committee, receiver, or other Person on such Member’s behalf appointed by that court, and any such committee, receiver, or other Person may vote by proxy.

 

85.

No Person shall be entitled to vote at any general meeting or at any separate meeting of the holders of a Class of Shares unless he is registered as a Member on the record date for such meeting nor unless all calls or other monies then payable by him in respect of Shares have been paid.

 

86.

No objection shall be raised to the qualification of any voter except at the general meeting or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at the meeting shall be valid. Any objection made in due time shall be referred to the chairman of the meeting whose decision shall be final and conclusive.

 

 

87.

Votes may be cast either personally or by proxy. A Member may appoint more than one proxy or the same proxy under one or more instruments to attend and vote at a meeting. All resolutions shall be determined by poll and not on a show of hands.

 

88.

A Member holding more than one Share need not cast the votes in respect of his Shares in the same way on any resolution and therefore may vote a Share or some or all such Shares either for or against a resolution and/or abstain from voting a Share or some or all of the Shares and, subject to the terms of the instrument appointing him, a proxy appointed under one or more instruments may vote a Share or some or all of the Shares in respect of which he is appointed either for or against a resolution and/or abstain from voting.

 

PROXIES

 

89.

The instrument appointing a proxy shall be in writing, be executed under the hand of the appointor or of his attorney duly authorized in writing, or, if the appointor is a corporation, under the hand of an officer or attorney duly authorized for that purpose. A proxy need not be a Member.

 

90.

The instrument appointing a proxy shall be deposited at the Registered Office or at such other place as is specified for that purpose in the notice convening the meeting, no later than the time for holding the meeting or adjourned meeting, provided that the chairman of the meeting may at his discretion direct that an instrument of proxy shall be deemed to have been duly deposited upon receipt of email, telex, cable or telecopy confirmation from the appointor that the instrument of proxy duly signed is in the course of transmission to the Company. An instrument of proxy that is not deposited in the manner permitted shall be invalid.

 

91.

The instrument appointing a proxy may be in any usual or common form or such other form as the Directors may approve and may be expressed to be for a particular meeting or any adjournment thereof or generally until revoked. An instrument appointing a proxy shall be deemed to confer authority to demand or join or concur in demanding a poll.

 

92.

Votes given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the Share in respect of which the proxy is given unless notice in writing of such death, insanity, revocation or transfer was received by the Company at the Registered Office before the commencement of the general meeting, or adjourned meeting at which it is sought to use the proxy.

 

CORPORATIONS ACTING BY REPRESENTATIVES

 

93.

Any corporation or other non-natural Person which is a Member or a Director may in accordance with its constitutional documents, or in the absence of such provision by resolution of its directors or other governing body, authorize such Person as it thinks fit to act as its representative or as an alternate Director (as appropriate) at any meeting of the Company or of any meeting of holders of a Class or of the Directors or of a committee of Directors, and the Person so authorized shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual Member or Director.

 

 

SHARES THAT MAY NOT BE VOTED

 

94.

Shares in the Company that are beneficially owned by the Company or held by it in a fiduciary capacity shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding Shares at any given time.

 

DEPOSITARY AND CLEARING HOUSES

 

95.

If a recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)) is a Member of the Company it may, by resolution of its directors or other governing body or by power of attorney, authorize such Person(s) as it thinks fit to act as its representative(s) at any general meeting of the Company or of any Class of Members provided that, if more than one Person is so authorized, the authorization shall specify the number and Class of Shares in respect of which each such Person is so authorized. A Person so authorized pursuant to this Article shall be entitled to exercise the same powers on behalf of the recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)) which he represents as that recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)) could exercise if it were an individual Member holding the number and Class of Shares specified in such authorization.

 

DIRECTORS

 

96.

Unless otherwise determined by the Company by an Ordinary Resolution, the authorized number of Directors shall not be less than three (3) Directors, and there shall be no maximum number of Directors.

 

97.

The Board shall have a Chairman elected and appointed by a majority of the Directors then in office. The period for which the Chairman will hold office will also be determined by a majority of all of the Directors then in office. The Chairman shall preside as chairman at every meeting of the Board, save and except that if the Chairman is not present at a meeting of the Board within fifteen (15) minutes after the time appointed for holding the same, or if the Chairman is unable or unwilling to act as the chairman of a meeting of the Board, the attending Directors may choose one of their number to be the chairman of the meeting.

 

98.

Subject to these Articles, the Company may by Ordinary Resolution appoint any Person to be a Director.

 

99.

Subject to these Articles, the Board may, by the affirmative vote of a simple majority of the remaining Directors present and voting at a Board meeting, appoint any Person as a Director, to fill a casual vacancy on the Board or as an addition to the existing Board. For the avoidance of any doubt, in the event a Director is to be re-elected and reappointed by the Board, the Director shall recuse himself or herself from voting on the resolution regarding his or her own re-election and reappointment. The Director may, however, exercise his or her voting rights with respect to the re-election and reappointment of other Directors.

 

 

100.

A Director shall hold office until the expiration of his or her term or his or her successor shall have been elected and qualified, or until his or her office is otherwise vacated.

 

101.

A Director shall not be required to hold any Shares in the Company by way of qualification. A Director who is not a Member of the Company shall nevertheless be entitled to attend and speak at general meetings.

 

102.

A Director may be removed from office by the affirmative vote of two-thirds (2/3) of the Directors then in office (except with regard to the removal of the Chairman from the Board, who may be removed from office by the affirmative vote of all other Directors), or by Ordinary Resolution, notwithstanding anything in these Articles or in any agreement between the Company and such Director (but without prejudice to any claim for damages under such agreement). Save as otherwise provided by these Articles, a vacancy on the Board created by the removal of a Director under the previous sentence may be filled by Ordinary Resolution or by the affirmative vote of a simple majority of the remaining Directors present and voting at a Board meeting. The notice of any meeting at which a resolution to remove a Director shall be proposed or voted upon must contain a statement of the intention to remove that Director and such notice must be served on that Director not less than two (2) calendar days before the meeting. Such Director is entitled to attend the meeting and be heard on the motion for his removal.

 

103.

The remuneration of the Directors or past Directors, including by way of compensation for loss of office, or as consideration for or in connection with his retirement from office (not being payment to which the Director is contractually entitled), may be determined by the Board or by a committee designated by the Board.

 

104.

The Directors shall be entitled to be paid their travelling, hotel and other expenses properly incurred by them in going to, attending and returning from meetings of the Directors, or any committee of the Directors, or general meetings of the Company, or otherwise in connection with the business of the Company, or to receive such fixed allowance in respect thereof as may be determined by the Directors from time to time, or a combination partly of one such method and partly the other.

 

105.

Subject to applicable Law, Designated Stock Exchange Rules and the Articles, the Board may establish any committee (consisting of such member or members of their body as they think fit) as the Board shall deem appropriate from time to time, and such committees shall have such rights, powers and privileges as granted to them by the Board from time to time.

 

POWERS AND DUTIES OF DIRECTORS

 

106.

Subject to the provisions of the Statute, the Memorandum and these Articles, the business and affairs of the Company shall be conducted as directed by the Board. The Board shall have all such powers and authorities, and may do all such acts and things, to the maximum extent permitted by applicable Law, the Memorandum and these Articles. No resolution passed by the Company in general meeting shall invalidate any prior act of the Directors that would have been valid if that resolution had not been passed. No alteration of the Memorandum or these Articles and no such direction shall invalidate any prior act of the Directors that would have been valid if that alteration had not been made or that direction had not been given. A duly convened meeting of Directors at which a quorum is present may exercise all powers exercisable by the Directors.

 

 

107.

The Board may, from time to time, and except as required by applicable Law or Designated Stock Exchange Rules, adopt, institute, amend, modify or revoke the corporate governance policies or initiatives of the Company and determine on various corporate governance related matters of the Company as the Board shall determine by resolution of Directors from time to time.

 

108.

Subject to these Articles, the Directors may from time to time appoint any natural Person or corporation, whether or not a Director to hold such office in the Company as the Directors may think necessary for the administration of the Company, including but not limited to, chief executive officer, one or more other executive officers, one or more vice-presidents, treasurer, assistant treasurer, manager or controller, and for such term and at such remuneration (whether by way of salary or commission or participation in profits or partly in one way and partly in another), and with such powers and duties as the Directors may think fit. Any natural Person or corporation so appointed by the Directors may be removed by the Directors. The Directors may also appoint one or more of their number to the office of managing director upon like terms, but any such appointment shall ipso facto terminate if any managing director ceases for any cause to be a Director, or if the Company by Ordinary Resolution resolves that his tenure of office be terminated.

 

109.

The Directors may appoint any natural Person or corporation to be a Secretary (and if need be, two or more Persons as joint Secretaries, an assistant Secretary or assistant Secretaries) who shall hold office for such term, at such remuneration and upon such conditions and with such powers as they think fit. Any Secretary or assistant Secretary so appointed by the Directors may be removed by the Directors.

 

110.

The Directors may from time to time and at any time by power of attorney (whether under Seal or under hand) or otherwise appoint any company, firm or Person or body of Persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys or authorized signatory (any such Person being an “Attorney” or “Authorized Signatory”, respectively) of the Company for such purposes and with such powers, authorities and discretion (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such power of attorney or other appointment may contain such provisions for the protection and convenience of Persons dealing with any such Attorney or Authorized Signatory as the Directors may think fit, and may also authorize any such Attorney or Authorized Signatory to delegate all or any of the powers, authorities and discretion vested in him.

 

111.

(1)            The Directors may from time to time provide for the management of the affairs of the Company in such manner as they shall think fit and the provisions contained in the three next following Articles shall not limit the general powers conferred by this Article.

 

(2)            All cheques, promissory notes, drafts, bills of exchange and other instruments, whether negotiable or transferable or not, and all receipts for moneys paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as the Board shall from time to time by resolution determine. The Company’s banking accounts shall be kept with such banker or bankers as the Board shall from time to time determine.

 

 

112.

The Directors from time to time and at any time may establish any committees, local boards or agencies for managing any of the affairs of the Company and may appoint any natural Person or corporation to be a member of such committees or local boards and may appoint any managers or agents of the Company and may fix the remuneration of any such natural Person or corporation.

 

113.

The Directors from time to time and at any time may delegate to any such committee, local board, manager or agent any of the powers, authorities and discretions for the time being vested in the Directors and may authorize the members for the time being of any such local board, or any of them to fill any vacancies therein and to act notwithstanding vacancies and any such appointment or delegation may be made on such terms and subject to such conditions as the Directors may think fit and the Directors may at any time remove any natural Person or corporation so appointed and may annul or vary any such delegation, but no Person dealing in good faith and without notice of any such annulment or variation shall be affected thereby.

 

114.

Any such delegates as aforesaid may be authorized by the Directors to sub-delegate all or any of the powers, authorities, and discretion for the time being vested in them.

 

BORROWING POWERS OF DIRECTORS

 

115.

The Directors may from time to time at their discretion exercise all the powers of the Company to borrow money, to mortgage or charge all or any part of its undertaking, property and assets (present and future) and uncalled capital, and to issue debentures, bonds and other securities, whenever money is borrowed or as security for any debt, liability or obligation of the Company or of any third party. Debentures, bonds and other securities may be made assignable free from any equities between the Company and the Person to whom the same may be issued. Any debentures, bonds or other securities may be issued at a discount (other than Shares), premium or otherwise and with any special privileges as to redemption, surrender, drawings, allotment of Shares, attending and voting at general meetings of the Members, appointment of Directors and otherwise.

 

VACATION OF OFFICE AND REMOVAL OF DIRECTOR

 

116.

The office of a Director shall be vacated if:

 

(a).

he gives notice in writing to the Company that he resigns the office of Director;

 

(b).

he dies, becomes bankrupt or makes any arrangement or composition with his creditors generally;

 

(c).

is prohibited by any applicable Law or Designated Stock Exchange Rules from being a Director;

 

 

(d).

he is found to be or becomes of unsound mind; or

 

(e).

is removed from office pursuant to any other provision of these Articles.

 

MEETINGS OF THE BOARD

 

117.

The Board shall meet at such times and in such places as the Board shall designate from time to time. A Director may, and a Secretary or assistant Secretary on the requisition of a Director shall, at any time convene a meeting of the Directors.

 

118.

Notice of a Board meeting shall be given two (2) calendar days prior to the meeting counting from the date service is deemed to take place as provided in these Articles and excluding the proposed date of the Board meeting; provided that such requirement may be waived in writing by a majority of the Directors then in office.

 

119.

Subject to these Articles, questions arising at any meeting shall be decided by a majority of votes of the Directors then in office at which there is a quorum, with each having one (1) vote and in case of an equality of votes the Chairman shall have a second or casting vote.

 

120.

A Director may participate in any meeting of the Board or of any committee of the Board by means of video conference, teleconference or other similar communications equipment by means of which all Persons participating in the meeting can hear each other and such participation shall constitute such Director’s presence in person at the meeting. Unless otherwise determined by the Directors, the meeting shall be deemed to be held at the place where the chairman is at the start of the meeting.

 

121.

The quorum necessary for the transaction of the business of the Board may be fixed by the Directors, and unless so fixed, the presence of a majority of Directors then in office shall constitute a quorum. A Director represented by proxy or by an alternate Director at any meeting shall be deemed to be present for the purposes of determining whether or not a quorum is present.

 

122.

If a quorum is not present at any duly called meeting, such meeting may be adjourned to a time no earlier than forty-eight (48) hours after written notice of such adjournment has been given to the Directors. The Directors present at such adjourned meeting shall constitute a quorum, provided that the Directors present at such adjourned meeting may only discuss and/or approve the matters as described in the meeting notice delivered to the Directors in accordance with these Articles.

 

123.

A resolution in writing (in one or more counterparts), signed by all of the Directors then in office or all of the members of a committee of Directors entitled to receive notice of a meeting of Directors or committee of Directors, as the case may be (an alternate Director, subject as provided otherwise in the terms of appointment of the alternate Director, being entitled to sign such a resolution on behalf of his appointer), shall be as valid and effectual as if it had been passed at a meeting of the Directors or committee, as the case may be, duly convened and held. When signed a resolution may consist of several documents each signed by one or more of the Directors or his duly appointed alternate.

 

 

124.

Subject to any regulations imposed on it by the Directors, a committee appointed by the Directors may elect a chairman of its meetings. If no such chairman is elected, or if at any meeting the chairman is not present within fifteen (15) minutes after the time appointed for holding the meeting, the committee members present may choose one of their number to be chairman of the meeting.

 

125.

A committee appointed by the Directors may meet and adjourn as it thinks proper. Subject to any regulations imposed on it by the Directors, questions arising at any meeting shall be determined by a majority of votes of the committee members present and in case of an equality of votes the chairman shall have a second or casting vote.

 

126.

All acts done by any meeting of the Directors or of a committee of Directors, or by any Person acting as a Director, shall notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such Director or Person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such Person had been duly appointed and was qualified to be a Director.

 

127.

The Company shall pay all fees, charges and expenses (including travel and related expenses) incurred by each Director in connection with: (i) attending the meetings of the Board and all committees thereof (if any) and (ii) conducting any other Company business requested by the Company.

 

PRESUMPTION OF ASSENT

 

128.

A Director who is present at a meeting of the Board at which action on any Company matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent from such action with the Person acting as the chairman or secretary of the meeting before the adjournment thereof or shall forward such dissent by registered post to such Person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action.

 

DIRECTORS’ INTERESTS

 

129.

A Director may:

 

(a).

hold any other office or place of profit with the Company (except that of Auditor) in conjunction with his office of Director for such period and upon such terms as the Board may determine. Any remuneration (whether by way of salary, commission, participation in profits or otherwise) paid to any Director in respect of any such other office or place of profit shall be in addition to any remuneration provided for by or pursuant to any other Article;

 

(b).

act by himself or his firm in a professional capacity for the Company (otherwise than as Auditor) and he or his firm may be remunerated for professional services as if he were not a Director;

 

 

(c).

continue to be or become a director, managing director, joint managing director, deputy managing director, executive director, manager or other officer or member of any other company promoted by the Company or in which the Company may be interested as a vendor, shareholder or otherwise and (unless otherwise agreed) no such Director shall be accountable for any remuneration, profits or other benefits received by him as a director, managing director, joint managing director, deputy managing director, executive director, manager or other officer or member of or from his interests in any such other company. Subject as otherwise provided by these Articles the Directors may exercise or cause to be exercised the voting powers conferred by the shares in any other company held or owned by the Company, or exercisable by them as Directors of such other company in such manner in all respects as they think fit (including the exercise thereof in favor of any resolution appointing themselves or any of them directors, managing directors, joint managing directors, deputy managing directors, executive directors, managers or other officers of such company) or voting or providing for the payment of remuneration to the director, managing director, joint managing director, deputy managing director, executive director, manager or other officers of such other company and any Director may vote in favor of the exercise of such voting rights in manner aforesaid notwithstanding that he may be, or about to be, appointed a director, managing director, joint managing director, deputy managing director, executive director, manager or other officer of such a company, and that as such he is or may become interested in the exercise of such voting rights in manner aforesaid.

 

Notwithstanding the foregoing, no “Independent Director” as defined in the rules of the Designated Stock Exchange or in Rule 10A-3 under the Exchange Act, and with respect of whom the Board has determined constitutes an “Independent Director” for purposes of compliance with applicable Law or the Company’s listing requirements, shall without the consent of the Audit Committee take any of the foregoing actions or any other action that would reasonably be likely to affect such Director’s status as an “Independent Director” of the Company.

 

130.

Subject to applicable Law and to these Articles, no Director or proposed or intending Director shall be disqualified by his office from contracting with the Company, either with regard to his tenure of any office or place of profit or as vendor, purchaser or in any other manner whatever, nor shall any such contract or any other contract or arrangement in which any Director is in any way interested be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company or the Members for any remuneration, profit or other benefits realized by any such contract or arrangement by reason of such Director holding that office or of the fiduciary relationship thereby established provided that such Director shall disclose the nature of his interest in any contract or arrangement in which he is interested in accordance with Article ‎131 herein. Any such transaction that would reasonably be likely to affect a Director’s status as an “Independent Director”, or that would constitute a “related party transaction” as defined by Item 7 of Form 20-F promulgated by the Commission, shall require the approval of the Audit Committee.

 

131.

A Director who to his knowledge is in any way, whether directly or indirectly, interested in a contract or arrangement or proposed contract or arrangement with the Company shall declare the nature of his interest at the meeting of the Board at which the question of entering into the contract or arrangement is first considered, if he knows his interest then exists, or in any other case at the first meeting of the Board after he knows that he is or has become so interested. For the purposes of this Article, a general notice to the Board by a Director to the effect that:

 

(a).

he is a member or officer of a specified company or firm and is to be regarded as interested in any contract or arrangement which may after the date of the notice be made with that company or firm; or

 

 

(b).

he is to be regarded as interested in any contract or arrangement which may after the date of the notice be made with a specified Person who is connected with him;

 

shall be deemed to be a sufficient declaration of interest under this Article in relation to any such contract or arrangement, provided that no such notice shall be effective unless either it is given at a meeting of the Board or the Director takes reasonable steps to secure that it is brought up and read at the next Board meeting after it is given.

 

132.

Following a declaration being made pursuant to the last preceding two Articles, subject to any separate requirement for Audit Committee approval under applicable Law or the Designated Stock Exchange Rules, a Director may vote in respect of any contract or proposed contract or arrangement in which such Director is interested and may be counted in the quorum at such meeting.

 

MINUTES

 

133.

The Directors shall cause minutes to be made for the purpose of all appointments of officers made by the Directors, all proceedings at meetings of the Company or the holders of any Class of Shares and of the Directors, and of committees of Directors including the names of the Directors or alternate Directors present at each meeting.

 

134.

When the chairman of a meeting of the Directors signs the minutes of such meeting the same shall be deemed to have been duly held notwithstanding that all the Directors have not actually come together or that there may have been a technical defect in the proceedings.

 

ALTERNATE DIRECTORS

 

135.

Any Director (other than an alternate Director) may by writing appoint any other Director, or any other Person willing to act, to be an alternate Director and by writing may remove from office an alternate Director so appointed by him.

 

136.

An alternate Director shall be entitled to receive notice of all meetings of Directors and of all meetings of committees of Directors of which his appointor is a member, to attend and vote at every such meeting at which the Director appointing him is not personally present, and generally to perform all the functions of his appointor as a Director in his absence.

 

137.

An alternate Director shall cease to be an alternate Director if his appointor ceases to be a Director.

 

138.

Any appointment or removal of an alternate Director shall be by notice to the Company signed by the Director making or revoking the appointment or in any other manner approved by the Directors.

 

139.

An alternate Director shall be deemed for all purposes to be a Director and shall alone be responsible for his own acts and defaults and shall not be deemed to be the agent of the Director appointing him.

 

 

AUDIT COMMITTEE

 

140.

Without prejudice to the freedom of the Directors to establish any other committees, for so long as the Shares of the Company (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, the Board shall establish and maintain an Audit Committee as a committee of the Board, the composition and responsibilities of which shall comply with the charter of the Audit Committee as adopted by the Board, the Designated Stock Exchange Rules and the rules and regulations of the Commission.

 

NO MINIMUM SHAREHOLDING

 

141.

The Company in general meeting may fix a minimum shareholding required to be held by a Director, but unless and until such a shareholding qualification is fixed, a Director is not required to hold Shares.

 

SEAL

 

142.

The Company may, if the Directors so determine, have a Seal. The Seal shall only be used by the authority of the Directors or of a committee of the Directors authorized by the Directors. Every instrument to which the Seal has been affixed shall be signed by at least one Person who shall be either a Director or some officer or other Person appointed by the Directors for the purpose.

 

143.

The Company may have for use in any place or places outside the Cayman Islands a duplicate Seal or Seals each of which shall be a facsimile of the common Seal of the Company and, if the Directors so determine, with the addition on its face of the name of every place where it is to be used.

 

144.

A Director or officer, representative or attorney of the Company may without further authority of the Directors affix the Seal over his signature alone to any document of the Company required to be authenticated by him under seal or to be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever.

 

DIVIDENDS, DISTRIBUTIONS AND RESERVE

 

145.

Subject to the Statute and these Articles any rights and restrictions for the time being attached to any Shares, the Directors may from time to time declare dividends (including interim dividends) and other distributions on Shares in issue and authorize payment of the dividends or distributions out of the funds of the Company lawfully available therefor. No dividend or distribution shall be paid except out of the realized or unrealized profits of the Company, or out of the Share Premium Account or as otherwise permitted by the Statute.

 

146.

Except as otherwise provided by the rights attached to Shares, all dividends shall be declared and paid according to the par value of the Shares that a Member holds. If any Share is issued on terms providing that it shall rank for dividend as from a particular date, that Share shall rank for dividend accordingly.

 

 

147.

The Directors may deduct from any dividend or distribution payable to any Member all sums of money (if any) then payable by him to the Company on account of calls or otherwise.

 

148.

The Directors may declare that any dividend or distribution be paid wholly or partly by the distribution of specific assets and in particular of shares, debentures, or securities of any other company or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient and in particular may issue fractional Shares and fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the basis of the value so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees as may seem expedient to the Directors.

 

149.

Any dividend, distribution, interest or other monies payable in cash in respect of Shares may be paid by wire transfer to the holder or by cheque or warrant sent through the post directed to the registered address of the holder or, in the case of joint holders, to the registered address of the holder who is first named on the Register of Members or to such Person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant shall be made payable to the order of the Person to whom it is sent.

 

150.

If several Persons are registered as joint holders of any Share, any of them may give effective receipts for any dividend or other moneys payable on or in respect of the Share.

 

151.

No dividend or distribution shall bear interest against the Company, except as expressly provided in these Articles.

 

152.

Any dividend which cannot be paid to a Member and/or which remains unclaimed after six (6) months from the date of declaration of such dividend may, in the discretion of the Directors, be invested or otherwise made use of by the Board for the benefit of the Company until claimed, or be paid into a separate account in the Company’s name, provided that the Company shall not be constituted as a trustee in respect of that account and the dividend shall remain as a debt due to the Member. Any dividend which remains unclaimed after a period of six (6) years from the date of declaration of such dividend shall be forfeited and shall revert to the Company.

 

CAPITALIZATION

 

153.

Subject to applicable Law, the Directors may:

 

(a).

resolve to capitalize any sum standing to the credit of any of the Company’s reserve accounts or funds (including the Share Premium Account and capital redemption reserve fund) or any sum standing to the credit of the profit and loss account or otherwise available for distribution;

 

(b).

appropriate the sum resolved to be capitalized to the Members in proportion to the nominal amount of Shares (whether or not fully paid) held by them respectively and apply that sum on their behalf in or towards:

 

(i)

paying up the amounts (if any) for the time being unpaid on Shares held by them respectively, or

 

 

(ii)

paying up in full unissued Shares or debentures of a nominal amount equal to that sum,

 

and issue and allot the Shares or debentures, credited as fully paid, to the Members (or as they may direct) in those proportions, or partly in one way and partly in the other, but the Share Premium Account, the capital redemption reserve and profits which are not available for distribution may, for the purposes of this Article, only be applied in paying up unissued Shares to be allotted to Members credited as fully paid;

 

(c).

make any arrangements they think fit to resolve a difficulty arising in the distribution of a capitalized reserve and in particular, without limitation, where Shares or debentures become distributable in fractions the Directors may deal with the fractions as they think fit;

 

(d).

authorize a Person to enter (on behalf of all the Members concerned) into an agreement with the Company providing for either:

 

(i)

the issuance and allotment to the Members respectively, credited as fully paid, of Shares or debentures to which they may be entitled on the capitalization, or

 

(ii)

the payment by the Company on behalf of the Members (by the application of their respective proportions of the reserves resolved to be capitalized) of the amounts or part of the amounts remaining unpaid on their existing Shares,

 

and any such agreement made under this authority being effective and binding on all those Members; and

 

(e).

generally do all acts and things required to give effect to the resolution.

 

154.

Notwithstanding any provisions in these Articles, the Directors may resolve to capitalize any sum standing to the credit of any of the Company’s reserve accounts or funds (including the Share Premium Account and capital redemption reserve fund) or any sum standing to the credit of the profit and loss account or otherwise available for distribution by applying such sum in paying up in full unissued Shares to be allotted and issued to:

 

(a).

employees (including Directors) or service providers of the Company or its Affiliates upon exercise or vesting of any options or awards granted under any share incentive scheme or employee benefit scheme or other arrangement which relates to such Persons that has been adopted or approved by the Directors or the Members;

 

(b).

any trustee of any trust or administrator of any share incentive scheme or employee benefit scheme to whom Shares are to be allotted and issued by the Company in connection with the operation of any share incentive scheme or employee benefit scheme or other arrangement which relates to such Persons that has been adopted or approved by the Directors or Members; or

 

 

(c).

any depositary of the Company for the purposes of the issue, allotment and delivery by the depositary of ADSs to employees (including Directors) or service providers of the Company or its Affiliates upon exercise or vesting of any options or awards granted under any share incentive scheme or employee benefit scheme or other arrangement which relates to such Persons that has been adopted or approved by the Directors or the Members.

 

BOOKS OF ACCOUNT

 

155.

The Directors shall cause proper books of account to be kept at such place as they may from time to time designate with respect to all sums of money received and expended by the Company and the matters in respect of which the receipt or expenditure takes place, all sales and purchases of goods by the Company and the assets and liabilities of the Company. Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary to give a true and fair view of the state of the Company’s affairs and to explain its transactions. The Directors shall from time to time determine whether and to what extent and at what times and places, and under what conditions or regulations, the accounts and books of the Company or any of them shall be open to inspection of Members not being Directors and no such Member shall have any right of inspecting any account or book or document of the Company except as conferred by the Statute or authorized by the Directors or the Company in general meeting or in a written agreement binding on the Company.

 

156.

The Directors may from time to time cause to be prepared and to be laid before the Company in general meeting profit and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by Law.

 

AUDIT

 

157.

Subject to applicable Law and Designated Stock Exchange Rules, the Directors may appoint an Auditor of the Company who shall hold office until removed from office by a resolution of the Directors.

 

158.

The remuneration of the Auditor shall be determined by the Audit Committee or, in the absence of such an Audit Committee, by the Board.

 

159.

If the office of auditor becomes vacant by the resignation or death of the Auditor, or by his becoming incapable of acting by reason of illness or other disability at a time when his services are required, the Directors shall fill the vacancy and determine the remuneration of such Auditor.

 

160.

Every Auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company and shall be entitled to require from the Directors and officers of the Company such information and explanation as may be necessary for the performance of the duties of the Auditor.

 

161.

Auditors shall, if so required by the Directors, make a report on the accounts of the Company during their tenure of office at the next annual general meeting following their appointment and at any time during their term of office upon request of the Directors or any general meeting of the Members.

 

 

162.

The statement of income and expenditure and the balance sheet provided for by these Articles shall be examined by the Auditor and compared by him with the books, accounts and vouchers relating thereto; and he shall make a written report thereon stating whether such statement and balance sheet are drawn up so as to present fairly the financial position of the Company and the results of its operations for the period under review and, in case information shall have been called for from Directors or officers of the Company, whether the same has been furnished and has been satisfactory. The financial statements of the Company shall be audited by the Auditor in accordance with generally accepted auditing standards. The Auditor shall make a written report thereon in accordance with generally accepted auditing standards and the report of the Auditor shall be submitted to the Audit Committee. The generally accepted auditing standards referred to herein may be those of a country or jurisdiction other than the Cayman Islands. If so, the financial statements and the report of the Auditor should disclose this act and name such country or jurisdiction.

 

SHARE PREMIUM ACCOUNT

 

163.

The Directors shall in accordance with the Statute establish a Share Premium Account and shall carry to the credit of such account from time to time a sum equal to the amount or value of the premium paid on the issue of any Share.

 

164.

There shall be debited to any Share Premium Account on the redemption or purchase of a Share the difference between the nominal value of such Share and the redemption or purchase price provided always that at the discretion of the Directors such sum may be paid out of the profits of the Company or, if permitted by the Statute, out of capital.

 

NOTICES

 

165.

Notices shall be in writing and may be given by the Company to any Member either personally or by sending it by post, overnight or international courier, facsimile or electronic mail to him or to his address as shown in the Register of Members (or where the notice is given by facsimile or electronic mail, by sending it to the facsimile number or electronic mail address provided by such Member), or by placing it on the Company’s Website.

 

166.

A notice may be given by the Company to the joint holders of record of a Share by giving the notice to the joint holder first named on the Register of Members in respect of the Share.

 

167.

A notice may be given by the Company to the Person or Persons which the Company has been advised are entitled to a Share or Shares in consequence of the death or bankruptcy of a Member by sending it through overnight or international courier as aforesaid in a pre-paid letter addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description at the address supplied for that purpose by the Persons claiming to be so entitled, or at the option of the Company by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not occurred.

 

168.

Notice of every general meeting shall be given in any manner hereinbefore authorized to: (a) every Person shown as a Member in the Register of Members on the record date for such meeting except that in the case of joint holders the notice shall be sufficient if given to the joint holder first named in the Register of Members; and (b) every Person upon whom the ownership of a Share devolves by reason of his being a legal personal representative or a trustee in bankruptcy of a Member of record where the Member of record but for his death or bankruptcy would be entitled to receive notice of the meeting. No other Person shall be entitled to receive notices of general meetings.

 

 

169.

Any notice or other document, if served by:

 

(a).

post, shall be deemed to have been served or delivered on the day following that on which the envelope containing the same, properly prepaid and addressed, is put into the post; in proving such service or delivery it shall be sufficient to prove that the envelope or wrapper containing the notice or document was properly addressed and put into the post and a certificate in writing signed by the Secretary or other officer of the Company or other Person appointed by the Board that the envelope or wrapper containing the notice or other document was so addressed and put into the post shall be conclusive evidence thereof;

 

(b).

facsimile, shall be deemed to have been served upon production by the transmitting facsimile machine of a report confirming transmission of the facsimile in full to the facsimile number of the recipient;

 

(c).

recognized courier service, shall be deemed to have been served 48 hours after the time when the letter containing the same is delivered to the courier service;

 

(d).

electronic mail, shall be deemed to have been served immediately upon the time of the transmission by electronic mail; or

 

(e).

placing it on the Company’s Website, shall be deemed to have been served immediately upon the time when the same is placed on the Company’s Website.

 

170.

Any Members present, either personally or by proxy, at any meeting of the Company shall for all purposes be deemed to have received due notice of such meeting and, where requisite, of the purposes for which such meeting was convened.

 

171.

A notice may be given by the Company to the Person or Persons which the Company has been advised are entitled to a Share or Shares in consequence of the death or bankruptcy of a Member in the same manner as other notices which are required to be given under these Articles and shall be addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description at the address supplied for that purpose by the Persons claiming to be so entitled, or at the option of the Company by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not occurred.

 

172.

Whenever any notice is required by Law or these Articles to be given to any Director, member of a committee or Member, a waiver thereof in writing, signed by the Person or Persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

 

 

INFORMATION

 

173.

No Member shall be entitled to require discovery of any information in respect of any detail of the Company’s trading or any information which is or may be in the nature of a trade secret or secret process which may relate to the conduct of the business of the Company and which in the opinion of the Board would not be in the interests of the Members of the Company to communicate to the public.

 

174.

The Board shall be entitled to release or disclose any information in its possession, custody or control regarding the Company or its affairs to any of its Members including, without limitation, information contained in the Register of Members and transfer books of the Company.

 

WINDING UP

 

175.

If the Company shall be wound up, the liquidator may, with the sanction of a Special Resolution and any other sanction required by the Statute, divide amongst the Members in specie or in kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may for that purpose value any assets and determine how the division shall be carried out as between the Members or different Classes of Members. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the Members as the liquidator, with the like sanction, shall think fit, but so that no Member shall be compelled to accept any asset upon which there is a liability.

 

176.

If the Company shall be wound up, and the assets available for distribution amongst the Members shall be insufficient to repay the whole of the share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Members in proportion to the par value of the Shares held by them. If in a winding up the assets available for distribution amongst the Members shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst the Members in proportion to the par value of the Shares held by them at the commencement of the winding up subject to a deduction from those Shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise. This Article is without prejudice to the rights of the holders of Shares issued upon special terms and conditions.

 

INDEMNITY

 

177.

Subject to the Statute, the Memorandum and these Articles and, where applicable, Designated Stock Exchange Rules and/or the rules of any competent regulatory authority, the Directors and officers for the time being of the Company and any trustee for the time being acting in relation to any of the affairs of the Company and their heirs, executors, administrators and personal representatives respectively shall be indemnified out of the assets of the Company from and against all actions, proceedings, costs, charges, losses, damages and expenses that they or any of them shall or may incur or sustain by reason of any act done or omitted in or about the execution of their duty in their respective offices or trusts, except such (if any) as they shall incur or sustain by or through their own fraud or dishonesty, and no such Director or officer or trustee shall be answerable for the acts, receipts, neglects or defaults of any other Director or officer or trustee or for joining in any receipt for the sake of conformity or for the solvency or honesty of any banker or other Persons with whom any monies or effects belonging to the Company may be lodged or deposited for safe custody or for any insufficiency of any security upon which any monies of the Company may be invested or for any other loss or damage due to any such cause as aforesaid or which may happen in or about the execution of his or her office or trust unless the same shall happen through the fraud or dishonesty of such Director or officer or trustee.

 

 

FISCAL YEAR

 

178.

Unless the Directors otherwise prescribe, the financial year of the Company shall end on the 31st of December in each year and, following the year of incorporation, shall begin on the 1st of January in each year.

 

DISCLOSURE

 

179.

The Directors, or any service providers (including the officers, the Secretary and the registered office agent of the Company) specifically authorized by the Directors, shall be entitled to disclose to any regulatory or judicial authority or to the Designated Stock Exchange any information regarding the affairs of the Company including without limitation information contained in the Register of Members and books of the Company.

 

TRANSFER BY WAY OF CONTINUATION

 

180.

The Company may by Special Resolution resolve to be registered by way of continuation in a jurisdiction outside the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing. In furtherance of a resolution adopted pursuant to this Article, the Directors may cause an application to be made to the Registrar of Companies to deregister the Company in the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing and may cause all such further steps as they consider appropriate to be taken to effect the transfer by way of continuation of the Company.

 

MERGERS AND CONSOLIDATIONS

 

181.

The Company shall have the power to merge or consolidate with one or more other constituent companies (as defined in the Statute) upon such terms as the Directors may determine and (to the extent required by the Statute) with the approval of a Special Resolution.

 

 

 

Exhibit 4.3

 

 

DEPOSIT AGREEMENT

 

 

by and among

 

Pony AI Inc.

 

as Issuer,

 

DEUTSCHE BANK TRUST COMPANY AMERICAS

 

as Depositary,

 

AND

 

THE HOLDERS AND BENEFICIAL OWNERS
OF AMERICAN DEPOSITARY SHARES EVIDENCED BY
AMERICAN DEPOSITARY RECEIPTS ISSUED HEREUNDER

 

 

Dated as of ________ , 2024

 

 

 

DEPOSIT AGREEMENT

 

DEPOSIT AGREEMENT, dated as of ________ , 2024, by and among (i) Pony AI Inc., a company incorporated in the Cayman Islands, with its principal executive office at 1301 Pearl Development Building, 1 Mingzhu 1st Street, Hengli Town, Nansha District, Guangzhou, People’s Republic of China, 511458 and its registered office at Osiris International Cayman Limited, Suite #4-210, Governors Square, 23 Lime Tree Bay Avenue, PO Box 32311, Grand Cayman KY1-1209, Cayman Islands (together with its successors, the “Company”), (ii) Deutsche Bank Trust Company Americas, an indirect wholly owned subsidiary of Deutsche Bank A.G., acting in its capacity as depositary, with its principal office at 1 Columbus Circle, New York, NY 10019, United States of America (the “Depositary”, which term shall include any successor depositary hereunder) and (iii) all Holders and Beneficial Owners of American Depositary Shares evidenced by American Depositary Receipts issued hereunder (all such capitalized terms as hereinafter defined).

 

W I T N E S S E T H  T H A T:

 

WHEREAS, the Company desires to establish an ADR facility with the Depositary to provide for the deposit of the Shares and the creation of American Depositary Shares representing the Shares so deposited;

 

WHEREAS, the Depositary is willing to act as the depositary for such ADR facility upon the terms set forth in this Deposit Agreement;

 

WHEREAS, the American Depositary Receipts evidencing the American Depositary Shares issued pursuant to the terms of this Deposit Agreement are to be substantially in the form of Exhibit A and Exhibit B annexed hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement;

 

WHEREAS, the American Depositary Shares to be issued pursuant to the terms of this Deposit Agreement are accepted for trading on the Nasdaq Global Select Market; and

 

WHEREAS, the Board of Directors of the Company (or an authorized committee thereof) has duly approved the establishment of an ADR facility upon the terms set forth in this Deposit Agreement, the execution and delivery of this Deposit Agreement on behalf of the Company, and the actions of the Company and the transactions contemplated herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

All capitalized terms used, but not otherwise defined, herein shall have the meanings set forth below, unless otherwise clearly indicated:

 

SECTION 1.1      “Affiliate” shall have the meaning assigned to such term by the Commission under Regulation C promulgated under the Securities Act.

 

SECTION 1.2      “Agent” shall mean such entity or entities as the Depositary may appoint under Section 7.8 hereof, including the Custodian or any successor or addition thereto.

 

 

SECTION 1.3      “American Depositary Share(s)” and “ADS(s)” shall mean the securities represented by the rights and interests in the Deposited Securities granted to the Holders and Beneficial Owners pursuant to this Deposit Agreement and evidenced by the American Depositary Receipts issued hereunder. Each American Depositary Share shall represent the right to receive ________ Share[s], until there shall occur a distribution upon Deposited Securities referred to in Section 4.2 hereof or a change in Deposited Securities referred to in Section 4.9 hereof with respect to which additional American Depositary Receipts are not executed and delivered and thereafter each American Depositary Share shall represent the Shares or Deposited Securities specified in such Sections.

 

SECTION 1.4      “Article” shall refer to an article of the American Depositary Receipts as set forth in the Form of Face of Receipt and Form of Reverse of Receipt in Exhibit A and Exhibit B annexed hereto.

 

SECTION 1.5      “Articles of Association” shall mean the articles of association of the Company, as amended from time to time.

 

SECTION 1.6      “ADS Record Date” shall have the meaning given to such term in Section 4.7 hereof.

 

SECTION 1.7      “Beneficial Owner” shall mean as to any ADS, any person or entity having a beneficial interest in such ADS. A Beneficial Owner need not be the Holder of the ADR evidencing such ADSs. A Beneficial Owner may exercise any rights or receive any benefits hereunder solely through the Holder of the ADR(s) evidencing the ADSs in which such Beneficial Owner has an interest.

 

SECTION 1.8      “Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not (a) a day on which banking institutions in the Borough of Manhattan, The City of New York are authorized or obligated by law or executive order to close and (b) a day on which the market(s) in which ADSs are traded are closed.

 

SECTION 1.9      “Commission” shall mean the Securities and Exchange Commission of the United States or any successor governmental agency in the United States.

 

SECTION 1.10      “Company” shall mean Pony AI Inc., a company incorporated and existing under the laws of the Cayman Islands, and its successors.

 

SECTION 1.11      “Corporate Trust Office” when used with respect to the Depositary, shall mean the corporate trust office of the Depositary at which at any particular time its depositary receipts business shall be administered, which, at the date of this Deposit Agreement, is located at 1 Columbus Circle, New York, NY 10019, U.S.A.

 

SECTION 1.12      “Custodian” shall mean, as of the date hereof, Deutsche Bank AG, Hong Kong Branch, having its principal office at 58/F International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong S.A.R., People’s Republic of China, as the custodian for the purposes of this Deposit Agreement, and any other firm or corporation which may hereinafter be appointed by the Depositary pursuant to the terms of Section 5.5 hereof as a successor or an additional custodian or custodians hereunder, as the context shall require. The term “Custodian” shall mean all custodians, collectively.

 

SECTION 1.13      “Deliver”, “Deliverable” and “Delivery” shall mean, when used in respect of American Depositary Shares, Receipts, Deposited Securities and Shares, the physical delivery of the certificate representing such security, or the electronic delivery of such security by means of book-entry transfer, as appropriate, including, without limitation, through DRS/Profile. With respect to DRS/Profile ADRs, the terms “execute”, “issue”, “register”, “surrender”, “transfer” or “cancel” refer to applicable entries or movements to or within DRS/Profile.

 

 

SECTION 1.14      “Deposit Agreement” shall mean this Deposit Agreement and all exhibits annexed hereto, as the same may from time to time be amended and supplemented in accordance with the terms hereof.

 

SECTION 1.15      “Depositary” shall mean Deutsche Bank Trust Company Americas, an indirect wholly owned subsidiary of Deutsche Bank AG, in its capacity as depositary under the terms of this Deposit Agreement, and any successor depositary hereunder.

 

SECTION 1.16      “Deposited Securities” as of any time shall mean Shares at such time deposited or deemed to be deposited under this Deposit Agreement and any and all other securities, property and cash received or deemed to be received by the Depositary or the Custodian in respect thereof and held hereunder, subject, in the case of cash, to the provisions of Section 4.6.

 

SECTION 1.17      “Dollars” and “$” shall mean the lawful currency of the United States.

 

SECTION 1.18      “DRS/Profile” shall mean the system for the uncertificated registration of ownership of securities pursuant to which ownership of ADSs is maintained on the books of the Depositary without the issuance of a physical certificate and transfer instructions may be given to allow for the automated transfer of ownership between the books of DTC and the Depositary. Ownership of ADSs held in DRS/Profile is evidenced by periodic statements issued by the Depositary to the Holders entitled thereto.

 

SECTION 1.19      “DTC” shall mean The Depository Trust Company, the central book-entry clearinghouse and settlement system for securities traded in the United States, and any successor thereto.

 

SECTION 1.20      “DTC Participants” shall mean participants within DTC.

 

SECTION 1.21      “Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as from time to time amended.

 

SECTION 1.22      “Foreign Currency” shall mean any currency other than Dollars.

 

SECTION 1.23      “Foreign Registrar” shall mean the entity, if any, that carries out the duties of registrar for the Shares or any successor as registrar for the Shares and any other appointed agent of the Company for the transfer and registration of Shares or, if no such agent is so appointed and acting, the Company.

 

SECTION 1.24      “Holder” shall mean the person in whose name a Receipt is registered on the books of the Depositary (or the Registrar, if any) maintained for such purpose. A Holder may or may not be a Beneficial Owner. A Holder shall be deemed to have all requisite authority to act on behalf of those Beneficial Owners of the ADRs registered in such Holder’s name.

 

SECTION 1.25      “Indemnified Person” and “Indemnifying Person” shall have the respective meanings set forth in Section 5.8 hereof.

 

SECTION 1.26      “Losses” shall have the meaning set forth in Section 5.8 hereof.

 

SECTION 1.27      “Memorandum” shall mean the memorandum of association of the Company.

 

SECTION 1.28      “Opinion of Counsel” shall mean a written opinion from legal counsel to the Company who is acceptable to the Depositary.

 

SECTION 1.29      “Receipt(s); “American Depositary Receipt(s)”; and “ADR(s)” shall mean the certificate(s) or statement(s) issued by the Depositary evidencing the American Depositary Shares issued under the terms of this Deposit Agreement, as such Receipts may be amended from time to time in accordance with the provisions of this Deposit Agreement. References to Receipts shall include physical certificated Receipts as well as ADSs issued through any book-entry system, including, without limitation, DRS/Profile, unless the context otherwise requires.

 

 

SECTION 1.30      “Registrar” shall mean the Depositary or any bank or trust company having an office in the Borough of Manhattan, The City of New York, which shall be appointed by the Depositary to register ownership of Receipts and transfer of Receipts as herein provided, and shall include any co-registrar appointed by the Depositary for such purposes. Registrars (other than the Depositary) may be removed and substitutes appointed by the Depositary.

 

SECTION 1.31      “Restricted ADRs” shall have the meaning set forth in Section 2.11 hereof.

 

SECTION 1.32      “Restricted ADSs” shall have the meaning set forth in Section 2.11 hereof.

 

SECTION 1.33      “Restricted Securities” shall mean Shares which (i) have been acquired directly or indirectly from the Company or any of its Affiliates in a transaction or chain of transactions not involving any public offering and subject to resale limitations under the Securities Act or the rules issued thereunder, or (ii) are held by an officer or director (or persons performing similar functions) or other Affiliate of the Company or (iii) are subject to other restrictions on sale or deposit under the laws of the United States or the Cayman Islands, under a shareholders’ agreement, shareholders’ lock-up agreement or the Articles of Association or under the regulations of an applicable securities exchange unless, in each case, such Shares are being sold to persons other than an Affiliate of the Company in a transaction (x) covered by an effective resale registration statement or (y) exempt from the registration requirements of the Securities Act (as hereafter defined) and the Shares are not, when held by such person, Restricted Securities.

 

SECTION 1.34      “Restricted Shares” shall have the meaning set forth in Section 2.11 hereof.

 

SECTION 1.35      “Securities Act” shall mean the United States Securities Act of 1933, as from time to time amended.

 

SECTION 1.36      “Shares” shall mean Class A ordinary shares in registered form of the Company, par value $0.0005 each, heretofore or hereafter validly issued and outstanding and fully paid. References to Shares shall include evidence of rights to receive Shares, whether or not stated in the particular instance; provided, however, that in no event shall Shares include evidence of rights to receive Shares with respect to which the full purchase price has not been paid or Shares as to which pre-emptive rights have theretofore not been validly waived or exercised; provided further, however, that, if there shall occur any change in par value, split-up, consolidation, reclassification, exchange, conversion or any other event described in Section 4.9 hereof in respect of the Shares, the term “Shares” shall thereafter, to the extent permitted by law, represent the successor securities resulting from such change in par value, split-up, consolidation, reclassification, exchange, conversion or event.

 

SECTION 1.37      “United States” or “U.S.” shall mean the United States of America.

 

ARTICLE II.

 

APPOINTMENT OF DEPOSITARY; FORM OF RECEIPT; DEPOSIT OF SHARES; EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS

 

SECTION 2.1      Appointment of Depositary. The Company hereby appoints the Depositary as exclusive depositary for the Deposited Securities and hereby authorizes and directs the Depositary to act in accordance with the terms set forth in this Deposit Agreement. Each Holder and each Beneficial Owner, upon acceptance of any ADSs (or any interest therein) issued in accordance with the terms of this Deposit Agreement, shall be deemed for all purposes to (a) be a party to and bound by the terms of this Deposit Agreement and the applicable ADR(s) and (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in this Deposit Agreement and the applicable ADR(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of this Deposit Agreement and the applicable ADR(s) (the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof).

 

 

SECTION 2.2      Form and Transferability of Receipts.

 

(a)            Form. Receipts in certificated form shall be substantially in the form set forth in Exhibit A and Exhibit B annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided. Receipts may be issued in denominations of any number of American Depositary Shares. No Receipt in certificated form shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose, unless such Receipt shall have been dated and signed by the manual or facsimile signature of a duly authorized signatory of the Depositary. The Depositary shall maintain books on which each Receipt so executed and Delivered, in the case of Receipts in certificated form, and each Receipt issued through any book-entry system, including, without limitation, DRS/Profile, in either case as hereinafter provided, and the transfer of each such Receipt shall be registered. Receipts in certificated form bearing the manual or facsimile signature of a duly authorized signatory of the Depositary who was at any time a proper signatory of the Depositary shall bind the Depositary, notwithstanding the fact that such signatory has ceased to hold such office prior to the execution and Delivery of such Receipts by the Registrar or did not hold such office on the date of issuance of such Receipts.

 

Notwithstanding anything in this Deposit Agreement or in the form of Receipt to the contrary, to the extent available by the Depositary, ADSs shall be evidenced by Receipts issued through any book-entry system, including, without limitation, DRS/Profile, unless certificated Receipts are specifically requested by the Holder. Holders and Beneficial Owners shall be bound by the terms and conditions of this Deposit Agreement and of the form of Receipt, regardless of whether their Receipts are in certificated form or are issued through any book-entry system, including, without limitation, DRS/Profile.

 

(b)            Legends. In addition to the foregoing, the Receipts may, and upon the written request of the Company shall, be endorsed with, or have incorporated in the text thereof, such legends or recitals or modifications not inconsistent with the provisions of this Deposit Agreement as may be (i) necessary to enable the Depositary and the Company to perform their respective obligations hereunder, (ii) required to comply with any applicable laws or regulations, or with the rules and regulations of any securities exchange or market upon which ADSs may be traded, listed or quoted, or to conform with any usage with respect thereto, (iii) necessary to indicate any special limitations or restrictions to which any particular ADRs or ADSs are subject by reason of the date of issuance of the Deposited Securities or otherwise or (iv) required by any book-entry system in which the ADSs are held. Holders and Beneficial Owners shall be deemed, for all purposes, to have notice of, and to be bound by, the terms and conditions of the legends set forth, in the case of Holders, on the ADR registered in the name of the applicable Holders or, in the case of Beneficial Owners, on the ADR representing the ADSs owned by such Beneficial Owners.

 

(c)            Title. Subject to the limitations contained herein and in the form of Receipt, title to a Receipt (and to the ADSs evidenced thereby), when properly endorsed (in the case of certificated Receipts) or upon delivery to the Depositary of proper instruments of transfer, shall be transferable by delivery with the same effect as in the case of a negotiable instrument under the laws of the State of New York; provided, however, that the Depositary, notwithstanding any notice to the contrary, may treat the Holder thereof as the absolute owner thereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in this Deposit Agreement and for all other purposes and neither the Depositary nor the Company will have any obligation or be subject to any liability under this Deposit Agreement to any holder of a Receipt, unless such holder is the Holder thereof.

 

 

SECTION 2.3      Deposits.

 

(a)            Subject to the terms and conditions of this Deposit Agreement and applicable law, Shares or evidence of rights to receive Shares may be deposited by any person (including the Depositary in its individual capacity but subject, however, in the case of the Company or any Affiliate of the Company, to Section 5.7 hereof) at any time beginning on the 181^st day after the date of the prospectus contained in the registration statement on Form F-1 under which the ADSs are first sold or on such earlier date as the Company (with the approval of the underwriters referred to in the said prospectus) may specify in writing to the Depositary, whether or not the transfer books of the Company or the Foreign Registrar, if any, are closed, by Delivery of the Shares to the Custodian. Except for Shares deposited by the Company in connection with the initial sale of ADSs under the registration statement on Form F-1, no deposit of Shares shall be accepted under this Deposit Agreement prior to such date. Every deposit of Shares shall be accompanied by the following: (A)(i) in the case of Shares represented by certificates issued in registered form, appropriate instruments of transfer or endorsement, in a form satisfactory to the Custodian, (ii) in the case of Shares represented by certificates issued in bearer form, such Shares or the certificates representing such Shares and (iii) in the case of Shares Delivered by book-entry transfer, confirmation of such book-entry transfer to the Custodian or that irrevocable instructions have been given to cause such Shares to be so transferred, (B) such certifications and payments (including, without limitation, the Depositary’s fees and related charges) and evidence of such payments (including, without limitation, stamping or otherwise marking such Shares by way of receipt) as may be required by the Depositary or the Custodian in accordance with the provisions of this Deposit Agreement or as may be deemed by them to be appropriate in the circumstances, (C) if the Depositary so requires, a written order directing the Depositary to execute and Deliver to, or upon the written order of, the person or persons stated in such order a Receipt or Receipts for the number of American Depositary Shares representing the Shares so deposited, (D) evidence satisfactory to the Depositary (which may include an opinion of counsel reasonably satisfactory to the Depositary provided at the cost of the person seeking to deposit Shares) that all conditions to such deposit have been met and all necessary approvals have been granted by, and there has been compliance with the rules and regulations of, any applicable governmental agency and (E) if the Depositary so requires, (i) an agreement, assignment or instrument satisfactory to the Depositary or the Custodian which provides for the prompt transfer by any person in whose name the Shares are or have been recorded to the Custodian of any distribution, or right to subscribe for additional Shares or to receive other property in respect of any such deposited Shares or, in lieu thereof, such indemnity or other agreement as shall be satisfactory to the Depositary or the Custodian and (ii) if the Shares are registered in the name of the person on whose behalf they are presented for deposit, a proxy or proxies entitling the Custodian to exercise voting rights in respect of the Shares for any and all purposes until the Shares so deposited are registered in the name of the Depositary, the Custodian or any nominee. No Share shall be accepted for deposit unless accompanied by confirmation or such additional evidence, if any is required by the Depositary, that is reasonably satisfactory to the Depositary or the Custodian that all conditions to such deposit have been satisfied by the person depositing such Shares under the laws and regulations of the Cayman Islands and any necessary approval has been granted by any governmental body in the Cayman Islands, if any, which is then performing the function of the regulator of currency exchange. The Depositary may issue Receipts against evidence of rights to receive Shares from the Company, any agent of the Company or any custodian, registrar, transfer agent, clearing agency or other entity involved in ownership or transaction records in respect of the Shares. Without limitation of the foregoing, the Depositary shall not knowingly accept for deposit under this Deposit Agreement any Shares or other Deposited Securities required to be registered under the provisions of the Securities Act, unless a registration statement is in effect as to such Shares or other Deposited Securities, or any Shares or other Deposited Securities the deposit of which would violate any provisions of the Memorandum and Articles of Association. The Depositary shall use commercially reasonable efforts to comply with reasonable written instructions of the Company that the Depositary shall not accept for deposit hereunder any Shares specifically identified in such instructions at such times and under such circumstances as may reasonably be specified in such instructions in order to facilitate the Company’s compliance with the securities laws in the United States and other jurisdictions, provided that the Company shall indemnify the Depositary and the Custodian for any claims and losses arising from not accepting the deposit of any Shares identified in the Company’s instructions.

 

 

(b)            As soon as practicable after receipt of any permitted deposit hereunder and compliance with the provisions of this Deposit Agreement, the Custodian shall present the Shares so deposited, together with the appropriate instrument or instruments of transfer or endorsement, duly stamped, to the Foreign Registrar for transfer and registration of the Shares (as soon as transfer and registration can be accomplished and at the expense of the person for whom the deposit is made) in the name of the Depositary, the Custodian or a nominee of either. Deposited Securities shall be held by the Depositary or by a Custodian for the account and to the order of the Depositary or a nominee, in each case for the account of the Holders and Beneficial Owners, at such place or places as the Depositary or the Custodian shall determine.

 

(c)            In the event any Shares are deposited which entitle the holders thereof to receive a per-share distribution or other entitlement in an amount different from the Shares then on deposit, the Depositary is authorized to take any and all actions as may be necessary (including, without limitation, making the necessary notations on Receipts) to give effect to the issuance of such ADSs and to ensure that such ADSs are not fungible with other ADSs issued hereunder until such time as the entitlement of the Shares represented by such non-fungible ADSs equals that of the Shares represented by ADSs prior to such deposit. The Company agrees to give timely written notice to the Depositary if any Shares issued or to be issued contain rights different from those of any other Shares theretofore issued and shall assist the Depositary with the establishment of procedures enabling the identification of such non-fungible Shares upon Delivery to the Custodian.

 

SECTION 2.4      Execution and Delivery of Receipts. After the deposit of any Shares pursuant to Section 2.3 hereof, the Custodian shall notify the Depositary of such deposit and the person or persons to whom or upon whose written order a Receipt or Receipts are Deliverable in respect thereof and the number of American Depositary Shares to be evidenced thereby. Such notification shall be made by letter, first class airmail postage prepaid, or, at the request, risk and expense of the person making the deposit, by cable, telex, SWIFT, facsimile or electronic transmission. After receiving such notice from the Custodian, the Depositary, subject to this Deposit Agreement (including, without limitation, the payment of the fees, expenses, taxes and/or other charges owing hereunder), shall issue the ADSs representing the Shares so deposited to or upon the order of the person or persons named in the notice delivered to the Depositary and shall execute and Deliver a Receipt registered in the name or names requested by such person or persons evidencing in the aggregate the number of American Depositary Shares to which such person or persons are entitled.

 

SECTION 2.5      Transfer of Receipts; Combination and Split-up of Receipts.

 

(a)            Transfer. The Depositary, or, if a Registrar (other than the Depositary) for the Receipts shall have been appointed, the Registrar, subject to the terms and conditions of this Deposit Agreement, shall register transfers of Receipts on its books, upon surrender at the Corporate Trust Office of the Depositary of a Receipt by the Holder thereof in person or by duly authorized attorney, properly endorsed in the case of a certificated Receipt or accompanied by, or in the case of Receipts issued through any book-entry system, including, without limitation, DRS/Profile, receipt by the Depositary of, proper instruments of transfer (including signature guarantees in accordance with standard industry practice) and duly stamped as may be required by the laws of the State of New York, of the United States, of the Cayman Islands and of any other applicable jurisdiction. Subject to the terms and conditions of this Deposit Agreement, including payment of the applicable fees and charges of the Depositary set forth in Section 5.9 hereof and Article (9) of the Receipt, the Depositary shall execute a new Receipt or Receipts and Deliver the same to or upon the order of the person entitled thereto evidencing the same aggregate number of American Depositary Shares as those evidenced by the Receipts surrendered.

 

 

(b)            Combination and Split Up. The Depositary, subject to the terms and conditions of this Deposit Agreement shall, upon surrender of a Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or Receipts and upon payment to the Depositary of the applicable fees and charges set forth in Section 5.9 hereof and Article (9) of the Receipt, execute and Deliver a new Receipt or Receipts for any authorized number of American Depositary Shares requested, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered.

 

(c)            Co-Transfer Agents. The Depositary may appoint one or more co-transfer agents for the purpose of effecting transfers, combinations and split-ups of Receipts at designated transfer offices on behalf of the Depositary. In carrying out its functions, a co-transfer agent may require evidence of authority and compliance with applicable laws and other requirements by Holders or persons entitled to such Receipts and will be entitled to protection and indemnity, in each case to the same extent as the Depositary. Such co-transfer agents may be removed and substitutes appointed by the Depositary. Each co-transfer agent appointed under this Section 2.5 (other than the Depositary) shall give notice in writing to the Depositary accepting such appointment and agreeing to be bound by the applicable terms of this Deposit Agreement.

 

(d)            Substitution of Receipts. At the request of a Holder, the Depositary shall, for the purpose of substituting a certificated Receipt with a Receipt issued through any book-entry system, including, without limitation, DRS/Profile, or vice versa, execute and Deliver a certificated Receipt or deliver a statement, as the case may be, for any authorized number of ADSs requested, evidencing the same aggregate number of ADSs as those evidenced by the relevant Receipt.

 

SECTION 2.6      Surrender of Receipts and Withdrawal of Deposited Securities. Upon surrender, at the Corporate Trust Office of the Depositary, of American Depositary Shares for the purpose of withdrawal of the Deposited Securities represented thereby, and upon payment of (i) the fees and charges of the Depositary for the making of withdrawals of Deposited Securities and cancellation of Receipts (as set forth in Section 5.9 hereof and Article (9) of the Receipt) and (ii) all fees, taxes and/or governmental charges payable in connection with such surrender and withdrawal, and subject to the terms and conditions of this Deposit Agreement, the Memorandum and Articles of Association, Section 7.11 hereof and any other provisions of or governing the Deposited Securities and other applicable laws, the Holder of such American Depositary Shares shall be entitled to Delivery, to him or upon his order, of the Deposited Securities at the time represented by the American Depositary Shares so surrendered. American Depositary Shares may be surrendered for the purpose of withdrawing Deposited Securities by Delivery of a Receipt evidencing such American Depositary Shares (if held in certificated form) or by book-entry Delivery of such American Depositary Shares to the Depositary.

 

A Receipt surrendered for such purposes shall, if so required by the Depositary, be properly endorsed in blank or accompanied by proper instruments of transfer in blank, and if the Depositary so requires, the Holder thereof shall execute and deliver to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be Delivered to or upon the written order of a person or persons designated in such order. Thereupon, the Depositary shall direct the Custodian to Deliver (without unreasonable delay) at the designated office of the Custodian or through a book-entry delivery of the Shares (in either case, subject to Sections 2.7, 3.1, 3.2, 5.9, hereof and to the other terms and conditions of this Deposit Agreement, to the Memorandum and Articles of Association, and to the provisions of or governing the Deposited Securities and applicable laws, now or hereafter in effect) to or upon the written order of the person or persons designated in the order delivered to the Depositary as provided above, the Deposited Securities represented by such American Depositary Shares, together with any certificate or other proper documents of or relating to title of the Deposited Securities as may be legally required, as the case may be, to or for the account of such person.

 

 

The Depositary may refuse to accept for surrender American Depositary Shares only in the circumstances described in Article (4) of the Receipt. Subject thereto, in the case of surrender of a Receipt evidencing a number of American Depositary Shares representing other than a whole number of Shares, the Depositary shall cause ownership of the appropriate whole number of Shares to be Delivered in accordance with the terms hereof, and shall, at the discretion of the Depositary, either (i) issue and Deliver to the person surrendering such Receipt a new Receipt evidencing American Depositary Shares representing any remaining fractional Share, or (ii) sell or cause to be sold the fractional Shares represented by the Receipt surrendered and remit the proceeds of such sale (net of (a) applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and (b) taxes and/or governmental charges) to the person surrendering the Receipt.

 

At the request, risk and expense of any Holder so surrendering a Receipt, and for the account of such Holder, the Depositary shall direct the Custodian to forward (to the extent permitted by law) any cash or other property (other than securities) held in respect of, and any certificate or certificates and other proper documents of or relating to title to, the Deposited Securities represented by such Receipt to the Depositary for delivery at the Corporate Trust Office of the Depositary, and for further Delivery to such Holder. Such direction shall be given by letter or, at the request, risk and expense of such Holder, by cable, telex or facsimile transmission. Upon receipt by the Depositary of such direction, the Depositary may make delivery to such person or persons entitled thereto at the Corporate Trust Office of the Depositary of any dividends or cash distributions with respect to the Deposited Securities represented by such American Depositary Shares, or of any proceeds of sale of any dividends, distributions or rights, which may at the time be held by the Depositary.

 

SECTION 2.7      Limitations on Execution and Delivery, Transfer, etc. of Receipts; Suspension of Delivery, Transfer, etc.

 

(a)            Additional Requirements. As a condition precedent to the execution and Delivery, registration, registration of transfer, split-up, subdivision, combination or surrender of any Receipt, the Delivery of any distribution thereon (whether in cash or shares) or withdrawal of any Deposited Securities, the Depositary or the Custodian may require (i) payment from the depositor of Shares or presenter of the Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees and charges of the Depositary as provided in Section 5.9 hereof and Article (9) of the Receipt hereto, (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature or any other matter contemplated by Section 3.1 hereof and (iii) compliance with (A) any laws or governmental regulations relating to the execution and Delivery of Receipts or American Depositary Shares or to the withdrawal or Delivery of Deposited Securities and (B) such reasonable regulations and procedures as the Depositary may establish consistent with the provisions of this Deposit Agreement and applicable law.

 

(b)            Additional Limitations. The issuance of ADSs against deposits of Shares generally or against deposits of particular Shares may be suspended, or the issuance of ADSs against the deposit of particular Shares may be withheld, or the registration of transfer of Receipts in particular instances may be refused, or the registration of transfers of Receipts generally may be suspended, during any period when the transfer books of the Depositary are closed or if any such action is deemed necessary or advisable by the Depositary or the Company, in good faith, at any time or from time to time because of any requirement of law, any government or governmental body or commission or any securities exchange on which the Receipts or Shares are listed, or under any provision of this Deposit Agreement or provisions of, or governing, the Deposited Securities, or any meeting of shareholders of the Company or for any other reason, subject, in all cases, to Section 7.11 hereof.

 

(c)            The Depositary shall not issue ADSs prior to the receipt of Shares or deliver Shares prior to the receipt and cancellation of ADSs.

 

 

SECTION 2.8      Lost Receipts, etc. To the extent the Depositary has issued Receipts in physical certificated form, in case any Receipt shall be mutilated, destroyed, lost or stolen, unless the Depositary has notice that such ADR has been acquired by a bona fide purchaser, subject to Section 5.9 hereof, the Depositary shall execute and Deliver a new Receipt (which, in the discretion of the Depositary may be issued through any book-entry system, including, without limitation, DRS/Profile, unless specifically requested otherwise) in exchange and substitution for such mutilated Receipt upon cancellation thereof, or in lieu of and in substitution for such destroyed, lost or stolen Receipt. Before the Depositary shall execute and Deliver a new Receipt in substitution for a destroyed, lost or stolen Receipt, the Holder thereof shall have (a) filed with the Depositary (i) a request for such execution and Delivery before the Depositary has notice that the Receipt has been acquired by a bona fide purchaser and (ii) a sufficient indemnity bond in form and amount acceptable to the Depositary and (b) satisfied any other reasonable requirements imposed by the Depositary.

 

SECTION 2.9      Cancellation and Destruction of Surrendered Receipts. All Receipts surrendered to the Depositary shall be cancelled by the Depositary. The Depositary is authorized to destroy Receipts so cancelled in accordance with its customary practices. Cancelled Receipts shall not be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose.

 

SECTION 2.10      Maintenance of Records. The Depositary agrees to maintain records of all Receipts surrendered and Deposited Securities withdrawn under Section 2.6, substitute Receipts Delivered under Section 2.8 and cancelled or destroyed Receipts under Section 2.9, in keeping with the procedures ordinarily followed by stock transfer agents located in the United States.

 

SECTION 2.11      Restricted ADSs. At the request and expense of the Company, or at the request and expense of a holder of Shares and with the written consent of the Company, and notwithstanding anything to the contrary in this Deposit Agreement, the Depositary may establish procedures permitting a deposit of Shares that are or may be Restricted Securities (“Restricted Shares”) and the Delivery of restricted American Depositary Shares (“Restricted ADSs”, the ADRs evidencing such Restricted ADSs being the “Restricted ADRs”) representing those Restricted Shares as provided in this Section 2.11. Such procedures shall also govern the removal of the Restrictive Legend (as defined below) from Restricted ADRs, the transfer of Restricted ADRs and the Restricted ADSs evidenced thereby, and the cancellation of Restricted ADRs and withdrawal of Deposited Securities (including Restricted Shares).

 

(a)            The Company shall assist the Depositary in the establishment of such procedures and agrees that it shall take all steps necessary and reasonably satisfactory to the Depositary to ensure that deposits of Restricted Shares, issuances and transfers of Restricted ADRs and the Restricted ADSs evidenced thereby, and cancellations of Restricted ADRs and withdrawals of Deposited Securities (including Restricted Shares) pursuant to such procedures do not violate the provisions of the Securities Act or any other applicable laws. Depositors of Restricted Shares, holders and transferees of Restricted ADRs and the Restricted ADSs evidenced thereby, and the Company may be required to provide such written certifications and instructions as the Depositary or the Company deem necessary, as well as an appropriate Opinion of Counsel in the Cayman Islands and the United States.

 

(b)            The Restricted ADSs shall not be eligible for inclusion in any book-entry settlement system, including, without limitation, DTC, and shall be segregated on the Depositary’s register as a class of securities separate from, and not fungible with, outstanding American Depositary Shares that are not Restricted ADSs so that Restricted ADSs shall represent interests only in the corresponding Restricted Shares.

 

(c)            Prior to the deposit of Restricted Shares, the depositor shall deliver to the Depositary a delivery order that (i) discloses or acknowledges all restrictions on transferability of the Restricted Shares (and to that extent need not represent and warrant that the deposited Shares are not Restricted Securities), and (ii) provides that the depositor agrees that the Restricted ADSs will be subject to a specified legend in a form provided by the Company and satisfactory to the Depositary (the “Restrictive Legend”) that describes those restrictions and agrees to comply with those restrictions.

 

 

(d)            Except as otherwise provided in this Section 2.11 and except as required by applicable law, the Restricted ADRs and the Restricted ADSs evidenced thereby shall be treated as ADRs and ADSs issued outstanding under the terms of this Deposit Agreement, all provisions of this Deposit Agreement shall apply to Restricted ADSs. In the event that, in determining the rights and obligations of parties hereto with respect to any Restricted ADSs, any conflict arises between (i) the terms of this Deposit Agreement (other than this Section 2.11) and (ii) the terms of this Section 2.11 or of the applicable Restricted ADR, the terms and conditions set forth in this Section 2.11 and of the Restricted ADR shall be controlling and shall govern the rights and obligations of the parties to this Deposit Agreement pertaining to the deposited Restricted Shares, the Restricted ADSs and Restricted ADRs.

 

ARTICLE III.

 

CERTAIN OBLIGATIONS OF HOLDERS
AND BENEFICIAL OWNERS OF RECEIPTS

 

SECTION 3.1      Proofs, Certificates and Other Information. Any person presenting Shares for deposit shall provide, any Holder and any Beneficial Owner may be required to provide, and every Holder and Beneficial Owner agrees from time to time to provide to the Depositary or the Custodian such proof of citizenship or residence, taxpayer status, payment of all applicable taxes or other governmental charges, exchange control approval, legal or beneficial ownership of ADSs and Deposited Securities, compliance with applicable laws and the terms of this Deposit Agreement and the provisions of, or governing, the Deposited Securities or other information, to execute such certifications and to make such representations and warranties and to provide such other information and documentation as the Depositary may deem necessary or proper or as the Company may reasonably require by written request to the Depositary consistent with its obligations hereunder. The Depositary and the Registrar, as applicable, may withhold the execution or Delivery or registration of transfer of any Receipt or the distribution or sale of any dividend or other distribution of rights or of the proceeds thereof, or to the extent not limited by the terms of Section 7.11 hereof, the Delivery of any Deposited Securities, until such proof or other information is filed or such certifications are executed, or such representations and warranties are made, or such other documentation or information provided, in each case to the Depositary’s and the Company’s satisfaction. The Depositary shall from time to time on the written request of the Company advise the Company of the availability of any such proofs, certificates or other information and shall, at the Company’s sole expense, provide or otherwise make available copies thereof to the Company upon written request therefor by the Company, unless such disclosure is prohibited by law. Each Holder and Beneficial Owner agrees to provide any information requested by the Company or the Depositary pursuant to this Section 3.1. Nothing herein shall obligate the Depositary to (i) obtain any information for the Company if not provided by the Holders or Beneficial Owners or (ii) verify or vouch for the accuracy of the information so provided by the Holders or Beneficial Owners.

 

Every Holder and Beneficial Owner agrees to indemnify the Depositary, the Company, the Custodian, the Agents and each of their respective directors, officers, employees, agents and Affiliates against, and to hold each of them harmless from, any Losses which any of them may incur or which may be made against any of them as a result of or in connection with any inaccuracy in or omission from any such proof, certificate, representation, warranty, information or document furnished by or on behalf of such Holder and/or Beneficial Owner or as a result of any such failure to furnish any of the foregoing.

 

The obligations of Holders and Beneficial Owners under Section 3.1 shall survive any transfer of Receipts, any surrender of Receipts or withdrawal of Deposited Securities or the termination of this Deposit Agreement.

 

 

SECTION 3.2      Liability for Taxes and Other Charges. If any present or future tax or other governmental charge shall become payable by the Depositary or the Custodian with respect to any ADR or any Deposited Securities or American Depositary Shares, such tax or other governmental charge shall be payable by the Holders and Beneficial Owners to the Depositary and such Holders and Beneficial Owners shall be deemed liable therefor. The Company, the Custodian and/or the Depositary may withhold or deduct from any distributions made in respect of Deposited Securities and may sell for the account of a Holder and/or Beneficial Owner any or all of the Deposited Securities and apply such distributions and sale proceeds in payment of such taxes (including applicable interest and penalties) and charges, with the Holder and the Beneficial Owner remaining fully liable for any deficiency. In addition to any other remedies available to it, the Depositary and the Custodian may refuse the deposit of Shares, and the Depositary may refuse to issue ADSs, to Deliver ADRs, to register the transfer, split-up or combination of ADRs and (subject to Section 7.11 hereof) the withdrawal of Deposited Securities, until payment in full of such tax, charge, penalty or interest is received. The liability of Holders and Beneficial Owners under this Section 3.2 shall survive any transfer of Receipts, any surrender of Receipts and withdrawal of Deposited Securities or the termination of this Deposit Agreement.

 

SECTION 3.3      Representations and Warranties on Deposit of Shares. Each person depositing Shares under this Deposit Agreement shall be deemed thereby to represent and warrant that (i) such Shares and the certificates therefor are duly authorized, validly issued, fully paid, non-assessable and were legally obtained by such person, (ii) all preemptive (and similar) rights, if any, with respect to such Shares have been validly waived or exercised, (iii) the person making such deposit is duly authorized to do so, (iv) the Shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim and are not, and the American Depositary Shares issuable upon such deposit will not be, Restricted Securities (except as contemplated by Section 2.11), (v) the Shares presented for deposit have not been stripped of any rights or entitlements and (vi) the Shares are not subject to any lock-up agreement with the Company or other party, or the Shares are subject to a lock-up agreement but such lock-up agreement has terminated or the lock-up restrictions imposed thereunder have expired. Such representations and warranties shall survive the deposit and withdrawal of Shares, the issuance and cancellation of American Depositary Shares in respect thereof and the transfer of such American Depositary Shares. If any such representations or warranties are false in any way, the Company and the Depositary shall be authorized, at the cost and expense of the person depositing Shares, to take any and all actions necessary to correct the consequences thereof.

 

SECTION 3.4      Compliance with Information Requests. Notwithstanding any other provision of this Deposit Agreement, the Articles of Association and applicable law, each Holder and Beneficial Owner agrees to (a) provide such information as the Company or the Depositary may request pursuant to law (including, without limitation, relevant Cayman Islands law, any applicable law of the United States, the Memorandum and Articles of Association, any resolutions of the Company’s Board of Directors adopted pursuant to the Memorandum and Articles of Association, the requirements of any markets or exchanges upon which the Shares, ADSs or Receipts are listed or traded, or to any requirements of any electronic book-entry system by which the ADSs or Receipts may be transferred), (b) be bound by and subject to applicable provisions of the laws of the Cayman Islands, the Memorandum and Articles of Association and the requirements of any markets or exchanges upon which the ADSs, Receipts or Shares are listed or traded, or pursuant to any requirements of any electronic book-entry system by which the ADSs, Receipts or Shares may be transferred, to the same extent as if such Holder and Beneficial Owner held Shares directly, in each case irrespective of whether or not they are Holders or Beneficial Owners at the time such request is made and, without limiting the generality of the foregoing, (c) comply with all applicable provisions of Cayman Islands law, the rules and requirements of any stock exchange on which the Shares are, or will be registered, traded or listed and the Articles of Association regarding any such Holder or Beneficial Owner's interest in Shares (including the aggregate of ADSs and Shares held by each such Holder or Beneficial Owner) and/or the disclosure of interests therein, whether or not the same may be enforceable against such Holder or Beneficial Owner. The Depositary agrees to use its reasonable efforts to forward upon the request of the Company, and at the Company’s expense, any such request from the Company to the Holders and to forward to the Company any such responses to such requests received by the Depositary.

 

 

ARTICLE IV.

 

THE DEPOSITED SECURITIES

 

SECTION 4.1      Cash Distributions. Whenever the Depositary receives confirmation from the Custodian of receipt of any cash dividend or other cash distribution on any Deposited Securities, or receives proceeds from the sale of any Shares, rights, securities or other entitlements under the terms hereof, the Depositary will, if at the time of receipt thereof any amounts received in a Foreign Currency can in the judgment of the Depositary (pursuant to Section 4.6 hereof) be converted on a practicable basis into Dollars transferable to the United States, promptly convert or cause to be converted such cash dividend, distribution or proceeds into Dollars (on the terms described in Section 4.6 hereof) and will distribute promptly the amount thus received (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and (b) taxes and/or governmental charges) to the Holders of record as of the ADS Record Date in proportion to the number of American Depositary Shares held by such Holders respectively as of the ADS Record Date. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Holder a fraction of one cent. Any such fractional amounts shall be rounded down to the nearest whole cent and so distributed to Holders entitled thereto. Holders and Beneficial Owners understand that in converting Foreign Currency, amounts received on conversion are calculated at a rate which exceeds the number of decimal places used by the Depositary to report distribution rates. The excess amount may be retained by the Depositary as an additional cost of conversion, irrespective of any other fees and expenses payable or owing hereunder and shall not be subject to escheatment. If the Company, the Custodian or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities an amount on account of taxes, duties or other governmental charges, the amount distributed to Holders of the ADSs representing such Deposited Securities shall be reduced accordingly. Such withheld amounts shall be forwarded by the Company, the Custodian or the Depositary to the relevant governmental authority. Evidence of payment thereof by the Company shall be forwarded by the Company to the Depositary upon request. The Depositary shall forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file with governmental agencies such reports as are necessary to obtain benefits under the applicable tax treaties for the Holders and Beneficial Owners of Receipts.

 

SECTION 4.2      Distribution in Shares. If any distribution upon any Deposited Securities consists of a dividend in, or free distribution of, Shares, the Company shall cause such Shares to be deposited with the Custodian and registered, as the case may be, in the name of the Depositary, the Custodian or any of their nominees. Upon receipt of confirmation of such deposit from the Custodian, the Depositary shall establish the ADS Record Date upon the terms described in Section 4.7 hereof and shall, subject to Section 5.9 hereof, either (i) distribute to the Holders as of the ADS Record Date in proportion to the number of ADSs held as of the ADS Record Date, additional ADSs, which represent in the aggregate the number of Shares received as such dividend, or free distribution, subject to the other terms of this Deposit Agreement (including, without limitation, (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) taxes and/or governmental charges), or (ii) if additional ADSs are not so distributed, each ADS issued and outstanding after the ADS Record Date shall, to the extent permissible by law, thenceforth also represent rights and interests in the additional Shares distributed upon the Deposited Securities represented thereby (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) taxes and/or governmental charges). In lieu of Delivering fractional ADSs, the Depositary shall sell the number of Shares represented by the aggregate of such fractions and distribute the proceeds upon the terms described in Section 4.1 hereof. The Depositary may withhold any such distribution of Receipts if it has not received satisfactory assurances from the Company (including an Opinion of Counsel furnished at the expense of the Company) that such distribution does not require registration under the Securities Act or is exempt from registration under the provisions of the Securities Act. To the extent such distribution may be withheld, the Depositary may dispose of all or a portion of such distribution in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable, and the Depositary shall distribute the net proceeds of any such sale (after deduction of applicable taxes and/or governmental charges and fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary) to Holders entitled thereto upon the terms described in Section 4.1 hereof.

 

 

SECTION 4.3      Elective Distributions in Cash or Shares. Whenever the Company intends to distribute a dividend payable at the election of the holders of Shares in cash or in additional Shares, the Company shall give notice thereof to the Depositary at least 30 days prior to the proposed distribution stating whether or not it wishes such elective distribution to be made available to Holders of ADSs. Upon receipt of notice indicating that the Company wishes such elective distribution to be made available to Holders of ADSs, the Depositary shall consult with the Company to determine, and the Company shall assist the Depositary in its determination, whether it is lawful and reasonably practicable to make such elective distribution available to the Holders of ADSs. The Depositary shall make such elective distribution available to Holders only if (i) the Company shall have timely requested that the elective distribution is available to Holders of ADRs, (ii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7 hereof (including, without limitation, any legal opinions of counsel in any applicable jurisdiction that the Depositary in its reasonable discretion may request, at the expense of the Company) and (iii) the Depositary shall have determined that such distribution is lawful and reasonably practicable. If the above conditions are not satisfied, the Depositary shall, to the extent permitted by law, distribute to the Holders, on the basis of the same determination as is made in the local market in respect of the Shares for which no election is made, either cash upon the terms described in Section 4.1 hereof or additional ADSs representing such additional Shares upon the terms described in Section 4.2 hereof. If the above conditions are satisfied, the Depositary shall establish an ADS Record Date (on the terms described in Section 4.7 hereof) and establish procedures to enable Holders to elect the receipt of the proposed dividend in cash or in additional ADSs. The Company shall assist the Depositary in establishing such procedures to the extent necessary. Subject to Section 5.9 hereof, if a Holder elects to receive the proposed dividend in cash, the dividend shall be distributed upon the terms described in Section 4.1 hereof or in ADSs, the dividend shall be distributed upon the terms described in Section 4.2 hereof. Nothing herein shall obligate the Depositary to make available to Holders a method to receive the elective dividend in Shares (rather than ADSs). There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to receive elective distributions on the same terms and conditions as the holders of Shares.

 

SECTION 4.4      Distribution of Rights to Purchase Shares.

 

(a)            Distribution to ADS Holders. Whenever the Company intends to distribute to the holders of the Deposited Securities rights to subscribe for additional Shares, the Company shall give notice thereof to the Depositary at least 60 days prior to the proposed distribution stating whether or not it wishes such rights to be made available to Holders of ADSs. Upon timely receipt of a notice indicating that the Company wishes such rights to be made available to Holders of ADSs, the Depositary shall consult with the Company to determine, and the Company shall determine, whether it is lawful and reasonably practicable to make such rights available to the Holders. The Depositary shall make such rights available to Holders only if (i) the Company shall have timely requested that such rights be made available to Holders, (ii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7 hereof and (iii) the Depositary shall have determined that such distribution of rights is lawful and reasonably practicable. In the event any of the conditions set forth above are not satisfied, the Depositary shall proceed with the sale of the rights as contemplated in Section 4.4(b) below or, if timing or market conditions may not permit, do nothing thereby allowing such rights to lapse. In the event all conditions set forth above are satisfied, the Depositary shall establish an ADS Record Date (upon the terms described in Section 4.7 hereof) and establish procedures to distribute such rights (by means of warrants or otherwise) and to enable the Holders to exercise the rights (upon payment of applicable fees and charges of, and expenses incurred by, the Depositary and taxes and/or other governmental charges). Nothing herein shall obligate the Depositary to make available to the Holders a method to exercise such rights to subscribe for Shares (rather than ADSs).

 

 

(b)            Sale of Rights. If (i) the Company does not timely request the Depositary to make the rights available to Holders or requests that the rights not be made available to Holders, (ii) the Depositary fails to receive satisfactory documentation within the terms of Section 5.7 hereof or determines it is not lawful or reasonably practicable to make the rights available to Holders or (iii) any rights made available are not exercised and appear to be about to lapse, the Depositary shall determine whether it is lawful and reasonably practicable to sell such rights, and if it so determines that it is lawful and reasonably practicable, endeavour to sell such rights in a riskless principal capacity or otherwise, at such place and upon such terms (including public or private sale) as it may deem proper. The Company shall assist the Depositary to the extent necessary to determine such legality and practicability. The Depositary shall, upon such sale, convert and distribute proceeds of such sale (net of applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) upon the terms set forth in Section 4.1 hereof.

 

(c)            Lapse of Rights. If the Depositary is unable to make any rights available to Holders upon the terms described in Section 4.4(a) hereof or to arrange for the sale of the rights upon the terms described in Section 4.4(b) hereof, the Depositary shall allow such rights to lapse.

 

The Depositary shall not be responsible for (i) any failure to determine that it may be lawful or practicable to make such rights available to Holders in general or any Holders in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale or exercise or (iii) the content of any materials forwarded to the Holders on behalf of the Company in connection with the rights distribution.

 

Notwithstanding anything to the contrary in this Section 4.4, if registration (under the Securities Act or any other applicable law) of the rights or the securities to which any rights relate may be required in order for the Company to offer such rights or such securities to Holders and to sell the securities represented by such rights, the Depositary will not distribute such rights to the Holders (i) unless and until a registration statement under the Securities Act covering such offering is in effect or (ii) unless the Company furnishes at its expense the Depositary with opinion(s) of counsel for the Company in the United States and counsel to the Company in any other applicable country in which rights would be distributed, in each case satisfactory to the Depositary, to the effect that the offering and sale of such securities to Holders and Beneficial Owners are exempt from, or do not require registration under, the provisions of the Securities Act or any other applicable laws. In the event that the Company, the Depositary or the Custodian shall be required to withhold and does withhold from any distribution of property (including rights) an amount on account of taxes and/or other governmental charges, the amount distributed to the Holders shall be reduced accordingly. In the event that the Depositary determines that any distribution in property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, the Depositary may dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable to pay any such taxes and/or charges.

 

There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to exercise rights on the same terms and conditions as the holders of Shares or be able to exercise such rights. Nothing herein shall obligate the Company to file any registration statement in respect of any rights or Shares or other securities to be acquired upon the exercise of such rights or otherwise to register or qualify the offer or sale of such rights or securities under the applicable law of any other jurisdiction for any purpose.

 

 

SECTION 4.5      Distributions Other Than Cash, Shares or Rights to Purchase Shares.

 

(a)            Whenever the Company intends to distribute to the holders of Deposited Securities property other than cash, Shares or rights to purchase additional Shares, the Company shall give notice thereof to the Depositary at least 30 days prior to the proposed distribution and shall indicate whether or not it wishes such distribution to be made to Holders of ADSs. Upon receipt of a notice indicating that the Company wishes such distribution be made to Holders of ADSs, the Depositary shall determine whether such distribution to Holders is lawful and practicable. The Depositary shall not make such distribution unless (i) the Company shall have timely requested the Depositary to make such distribution to Holders, (ii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7 hereof and (iii) the Depositary shall have determined that such distribution is lawful and reasonably practicable.

 

(b)            Upon receipt of satisfactory documentation and the request of the Company to distribute property to Holders of ADSs and after making the requisite determinations set forth in (a) above, the Depositary may distribute the property so received to the Holders of record as of the ADS Record Date, in proportion to the number of ADSs held by such Holders respectively and in such manner as the Depositary may deem practicable for accomplishing such distribution (i) upon receipt of payment or net of the applicable fees and charges of, and expenses incurred by, the Depositary and (ii) net of any taxes and/or other governmental charges. The Depositary may dispose of all or a portion of the property so distributed and deposited, in such amounts and in such manner (including public or private sale) as the Depositary may deem practicable or necessary to satisfy any taxes (including applicable interest and penalties) and other governmental charges applicable to the distribution.

 

(c)            If (i) the Company does not request the Depositary to make such distribution to Holders or requests the Depositary not to make such distribution to Holders, (ii) the Depositary does not receive satisfactory documentation within the terms of Section 5.7 hereof or (iii) the Depositary determines that all or a portion of such distribution is not reasonably practicable or feasible, the Depositary shall endeavor to sell or cause such property to be sold in a public or private sale, at such place or places and upon such terms as it may deem proper and shall distribute the net proceeds, if any, of such sale received by the Depositary (net of applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) to the Holders as of the ADS Record Date upon the terms of Section 4.1 hereof. If the Depositary is unable to sell such property, the Depositary may dispose of such property in any way it deems reasonably practicable under the circumstances for nominal or no consideration and Holders and Beneficial Owners shall have no rights thereto or arising therefrom.

 

SECTION 4.6      Conversion of Foreign Currency. Whenever the Depositary or the Custodian shall receive Foreign Currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and in the judgment of the Depositary such Foreign Currency can at such time be converted on a practicable basis (by sale or in any other manner that it may determine in accordance with applicable law) into Dollars transferable to the United States and distributable to the Holders entitled thereto, the Depositary shall convert or cause to be converted, by sale or in any other manner that it may determine, such Foreign Currency into Dollars, and shall distribute such Dollars (net of any fees, expenses, taxes and/or other governmental charges incurred in the process of such conversion) in accordance with the terms of the applicable sections of this Deposit Agreement. If the Depositary shall have distributed warrants or other instruments that entitle the holders thereof to such Dollars, the Depositary shall distribute such Dollars to the holders of such warrants and/or instruments upon surrender thereof for cancellation, in either case without liability for interest thereon. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Holders on account of exchange restrictions, the date of delivery of any Receipt or otherwise.

 

In converting Foreign Currency, amounts received on conversion may be calculated at a rate which exceeds the number of decimal places used by the Depositary to report distribution rates (which in any case will not be less than two decimal places). Any excess amount may be retained by the Depositary as an additional cost of conversion, irrespective of any other fees and expenses payable or owing hereunder and shall not be subject to escheatment.

 

 

If such conversion or distribution can be effected only with the approval or license of any government or agency thereof, the Depositary may file such application for approval or license, if any, as it may deem necessary, practicable and at nominal cost and expense. Nothing herein shall obligate the Depositary to file or cause to be filed, or to seek effectiveness of any such application or license.

 

If at any time the Depositary shall determine that in its judgment the conversion of any Foreign Currency and the transfer and distribution of proceeds of such conversion received by the Depositary is not practical or lawful, or if any approval or license of any governmental authority or agency thereof that is required for such conversion, transfer and distribution is denied, or not obtainable at a reasonable cost, within a reasonable period or otherwise sought, the Depositary shall, in its sole discretion but subject to applicable laws and regulations, either (i) distribute the Foreign Currency (or an appropriate document evidencing the right to receive such Foreign Currency) received by the Depositary to the Holders entitled to receive such Foreign Currency or (ii) hold such Foreign Currency uninvested and without liability for interest thereon for the respective accounts of the Holders entitled to receive the same.

 

Holders and Beneficial Owners are directed to refer to Section 7.9 hereof for certain disclosure related to conversion of Foreign Currency.

 

SECTION 4.7      Fixing of Record Date. Whenever necessary in connection with any distribution (whether in cash, Shares, rights, or other distribution), or whenever for any reason the Depositary causes a change in the number of Shares that are represented by each American Depositary Share, or whenever the Depositary shall receive notice of any meeting of or solicitation of holders of Shares or other Deposited Securities, or whenever the Depositary shall find it necessary or convenient, the Depositary shall fix a record date (the “ADS Record Date”), as close as practicable to the record date fixed by the Company with respect to the Shares (if applicable), for the determination of the Holders who shall be entitled to receive such distribution, to give instructions for the exercise of voting rights at any such meeting, to give or withhold such consent, to receive such notice or solicitation or to otherwise take action or to exercise the rights of Holders with respect to such changed number of Shares represented by each American Depositary Share or for any other reason. Subject to applicable law and the provisions of Sections 4.1 through 4.6 hereof and to the other terms and conditions of this Deposit Agreement, only the Holders of record at the close of business in New York on such ADS Record Date shall be entitled to receive such distribution, to give such voting instructions, to receive such notice or solicitation, or otherwise take action.

 

SECTION 4.8      Voting of Deposited Securities. Subject to the next sentence, as soon as practicable after receipt of notice of any meeting at which the holders of Deposited Securities are entitled to vote, or of solicitation of consents or proxies from holders of Deposited Securities, the Depositary shall fix the ADS Record Date in respect of such meeting or such solicitation of consents or proxies. The Depositary shall, if requested by the Company in writing in a timely manner (the Depositary having no obligation to take any further action if the request shall not have been received by the Depositary at least 30 Business Days prior to the date of such vote or meeting) and at the Company’s expense, and provided no U.S. legal prohibitions exist, mail by regular, ordinary mail delivery (or by electronic mail or as otherwise may be agreed between the Company and the Depositary in writing from time to time) or otherwise distribute as soon as practicable after receipt thereof to Holders as of the ADS Record Date: (a) such notice of meeting or solicitation of consent or proxy; (b) a statement that the Holders at the close of business on the ADS Record Date will be entitled, subject to any applicable law, the provisions of this Deposit Agreement, the Company’s Memorandum and Articles of Association and the provisions of or governing the Deposited Securities (which provisions, if any, shall be summarized in pertinent part by the Company), to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by such Holder’s American Depositary Shares; and (c) a brief statement as to the manner in which such voting instructions may be given to the Depositary, or in which instructions may be deemed to have been given in accordance with this Section 4.8, including an express indication that instructions may be given (or be deemed to have been given in accordance with the immediately following paragraph of this section if no instruction is received) to the Depositary to give a discretionary proxy to a person or persons designated by the Company. Voting instructions may be given only in respect of a number of American Depositary Shares representing an integral number of Deposited Securities. Upon the timely receipt of voting instructions of a Holder on the ADS Record Date in the manner specified by the Depositary, the Depositary shall endeavor, insofar as practicable and permitted under applicable law, the provisions of this Deposit Agreement, the Company’s Memorandum and Articles of Association and the provisions of or governing the Deposited Securities, to vote or cause the Custodian to vote the Deposited Securities (in person or by proxy) represented by American Depositary Shares evidenced by such Receipt in accordance with such voting instructions.

 

 

In the event that (i) the Depositary timely receives voting instructions from a Holder which fail to specify the manner in which the Depositary is to vote the Deposited Securities represented by such Holder’s ADSs or (ii) no timely instructions are received by the Depositary from a Holder with respect to any of the Deposited Securities represented by the ADSs held by such Holder on the ADS Record Date, the Depositary shall (unless otherwise specified in the notice distributed to Holders) deem such Holder to have instructed the Depositary to give a discretionary proxy to a person designated by the Company with respect to such Deposited Securities and the Depositary shall give a discretionary proxy to a person designated by the Company to vote such Deposited Securities, provided, however, that no such instruction shall be deemed to have been given and no such discretionary proxy shall be given with respect to any matter as to which the Company informs the Depositary (and the Company agrees to provide such information as promptly as practicable in writing, if applicable) that (x) the Company does not wish to give such proxy, (y) the Company is aware or should reasonably be aware that substantial opposition exists from Holders against the outcome for which the person designated by the Company would otherwise vote or (z) the outcome for which the person designated by the Company would otherwise vote would materially and adversely affect the rights of holders of Deposited Securities, provided, further, that the Company will have no liability to any Holder or Beneficial Owner resulting from such notification.

 

In the event that voting on any resolution or matter is conducted on a show of hands basis in accordance with the Memorandum and Articles of Association, the Depositary will refrain from voting and the voting instructions (or the deemed voting instructions, as set out above) received by the Depositary from Holders shall lapse. The Depositary will have no obligation to demand voting on a poll basis with respect to any resolution and shall have no liability to any Holder or Beneficial Owner for not having demanded voting on a poll basis.

 

Neither the Depositary nor the Custodian shall, under any circumstances exercise any discretion as to voting, and neither the Depositary nor the Custodian shall vote, attempt to exercise the right to vote, or in any way make use of for purposes of establishing a quorum or otherwise, the Deposited Securities represented by ADSs except pursuant to and in accordance with such written instructions from Holders, including the deemed instruction to the Depositary to give a discretionary proxy to a person designated by the Company. Deposited Securities represented by ADSs for which (i) no timely voting instructions are received by the Depositary from the Holder, or (ii) timely voting instructions are received by the Depositary from the Holder but such voting instructions fail to specify the manner in which the Depositary is to vote the Deposited Securities represented by such Holder’s ADSs, shall be voted in the manner provided in this Section 4.8. Notwithstanding anything else contained herein, and subject to applicable law, regulation and the Memorandum and Articles of Association, the Depositary shall, if so requested in writing by the Company, represent all Deposited Securities (whether or not voting instructions have been received in respect of such Deposited Securities from Holders as of the ADS Record Date) for the purpose of establishing quorum at a meeting of shareholders.

 

There can be no assurance that Holders or Beneficial Owners generally or any Holder or Beneficial Owner in particular will receive the notice described above with sufficient time to enable the Holder to return voting instructions to the Depositary in a timely manner.

 

Notwithstanding the above, save for applicable provisions of the law of the Cayman Islands, and in accordance with the terms of Section 5.3 hereof, the Depositary shall not be liable for any failure to carry out any instructions to vote any of the Deposited Securities or the manner in which such vote is cast or the effect of such vote.

 

 

SECTION 4.9      Changes Affecting Deposited Securities. Upon any change in par value, split-up, subdivision, cancellation, consolidation or any other reclassification of Deposited Securities or upon any recapitalization, reorganization, amalgamation, merger or consolidation or sale of assets affecting the Company or to which it is otherwise a party, any securities which shall be received by the Depositary or the Custodian in exchange for, or in conversion of or replacement or otherwise in respect of, such Deposited Securities shall, to the extent permitted by law, be treated as new Deposited Securities under this Deposit Agreement and the Receipts shall, subject to the provisions of this Deposit Agreement and applicable law, evidence American Depositary Shares representing the right to receive such additional securities. Alternatively, the Depositary may, with the Company’s approval, and shall, if the Company shall so request, subject to the terms of this Deposit Agreement and receipt of an Opinion of Counsel furnished at the Company’s expense satisfactory to the Depositary (stating that such distributions are not in violation of any applicable laws or regulations), execute and deliver additional Receipts, as in the case of a stock dividend on the Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts. In either case, as well as in the event of newly deposited Shares, necessary modifications to the form of Receipt contained in Exhibit A and Exhibit B hereto, specifically describing such new Deposited Securities and/or corporate change, shall also be made. The Company agrees that it will, jointly with the Depositary, amend the Registration Statement on Form F-6 as filed with the Commission to permit the issuance of such new form of Receipt. Notwithstanding the foregoing, in the event that any security so received may not be lawfully distributed to some or all Holders, the Depositary may, with the Company’s approval, and shall, if the Company requests, subject to receipt of an Opinion of Counsel (furnished at the Company’s expense) satisfactory to the Depositary that such action is not in violation of any applicable laws or regulations, sell such securities at public or private sale, at such place or places and upon such terms as it may deem proper and may allocate the net proceeds of such sales (net of fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) for the account of the Holders otherwise entitled to such securities upon an averaged or other practicable basis without regard to any distinctions among such Holders and distribute the net proceeds so allocated to the extent practicable as in the case of a distribution received in cash pursuant to Section 4.1 hereof. The Depositary shall not be responsible for (i) any failure to determine that it may be lawful or feasible to make such securities available to Holders in general or to any Holder in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale or (iii) any liability to the purchaser of such securities.

 

SECTION 4.10      Available Information.  The Company is subject to the periodic reporting requirements of the Exchange Act applicable to foreign private issuers (as defined in Rule 405 of the Securities Act) and accordingly files certain information with the Commission. These reports and documents can be inspected and copied at the Commission’s website at www.sec.gov or at the public reference facilities maintained by the Commission located at 100 F Street, N.E., Washington D.C. 20549, U.S.A.

 

SECTION 4.11      Reports.  The Depositary shall make available during normal business hours on any Business Day for inspection by Holders at its Corporate Trust Office any reports and communications, including any proxy soliciting materials, received from the Company which are both received by the Depositary, the Custodian, or the nominee of either of them as the holder of the Deposited Securities and made generally available to the holders of such Deposited Securities by the Company. The Company agrees to provide to the Depositary, at the Company’s expense, all such documents that it provides to the Custodian. Unless otherwise agreed in writing by the Company and the Depositary, the Depositary shall, at the expense of the Company and in accordance with Section 5.6 hereof, also mail to Holders by regular, ordinary mail delivery or by electronic transmission (if agreed by the Company and the Depositary) copies of notices and reports when furnished by the Company pursuant to Section 5.6 hereof.

 

 

SECTION 4.12      List of Holders.  Promptly upon written request by the Company, the Depositary shall, at the expense of the Company, furnish to it a list, as of a recent date, of the names, addresses and holdings of American Depositary Shares by all persons in whose names Receipts are registered on the books of the Depositary.

 

SECTION 4.13      Taxation; Withholding.  The Depositary will, and will instruct the Custodian to, forward to the Company or its agents such information from its records as the Company may request to enable the Company or its agents to file necessary tax reports with governmental authorities or agencies. The Depositary, the Custodian or the Company and its agents but shall not be obligated to, file such reports as are necessary to reduce or eliminate applicable taxes on dividends and on other distributions in respect of Deposited Securities under applicable tax treaties or laws for the Holders and Beneficial Owners. Holders and Beneficial Owners of American Depositary Shares may be required from time to time, and in a timely manner to provide and/or file such proof of taxpayer status, residence and beneficial ownership (as applicable), to execute such certificates and to make such representations and warranties, or to provide any other information or documents, as the Depositary or the Custodian may deem necessary or proper to fulfill the Depositary’s or the Custodian’s obligations under applicable law. The Holders and Beneficial Owners shall indemnify the Depositary, the Company, the Custodian, the Agents and their respective directors, officers, employees, agents and Affiliates against, and hold each of them harmless from, any claims by any governmental authority with respect to taxes, additions to tax, penalties or interest arising out of any refund of taxes, reduced rate of withholding at source or other tax benefit obtained by the Beneficial Owner or Holder or out of or in connection with any inaccuracy in or omission from any such proof, certificate, representation, warranty, information or document furnished by or on behalf of such Holder or Beneficial Owner. The obligations of Holders and Beneficial Owners under this Section 4.13 shall survive any transfer of Receipts, any surrender of Receipts and withdrawal of Deposited Securities or the termination of this Deposit Agreement.

 

The Company shall remit to the appropriate governmental authority or agency any amounts required to be withheld by the Company and owing to such governmental authority or agency. Upon any such withholding, the Company shall remit to the Depositary information, in a form reasonably satisfactory to the Depositary, about such taxes and/or governmental charges withheld or paid, and, if so requested, the tax receipt (or other proof of payment to the applicable governmental authority) therefor. The Depositary shall, to the extent required by U.S. law, report to Holders (i) any taxes withheld by it; (ii) any taxes withheld by the Custodian, subject to information being provided to the Depositary by the Custodian and (iii) any taxes withheld by the Company, subject to information being provided to the Depositary by the Company. The Depositary and the Custodian shall not be required to provide the Holders with any evidence of the remittance by the Company (or its agents) of any taxes withheld, or of the payment of taxes by the Company, except to the extent the evidence is provided by the Company to the Depositary. None of the Depositary, the Custodian or the Company shall be liable for the failure by any Holder or Beneficial Owner to obtain the benefits of credits on the basis of non-U.S. tax paid against such Holder’s or Beneficial Owner’s income tax liability.

 

In the event that the Depositary determines that any distribution in property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary shall withhold the amount required to be withheld and may by public or private sale dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner as the Depositary deems necessary and practicable to pay such taxes and/or charges and the Depositary shall distribute the net proceeds of any such sale after deduction of such taxes and/or charges to the Holders entitled thereto in proportion to the number of American Depositary Shares held by them respectively.

 

The Depositary is under no obligation to provide the Holders and Beneficial Owners with any information about the tax status of the Company. The Depositary shall not incur any liability for any tax consequences that may be incurred by Holders and Beneficial Owners on account of their ownership of the American Depositary Shares, including without limitation, tax consequences resulting from the Company (or any of its subsidiaries) being treated as a “Passive Foreign Investment Company” (as defined in the U.S. Internal Revenue Code of 1986, as amended and the regulations issued thereunder) or otherwise.

 

 

ARTICLE V.

 

THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY

 

SECTION 5.1      Maintenance of Office and Transfer Books by the Registrar.  Until termination of this Deposit Agreement in accordance with its terms, the Depositary or if a Registrar for the Receipts shall have been appointed, the Registrar shall maintain in the Borough of Manhattan, the City of New York, an office and facilities for the execution and delivery, registration, registration of transfers, combination and split-up of Receipts, the surrender of Receipts and the Delivery and withdrawal of Deposited Securities in accordance with the provisions of this Deposit Agreement.

 

The Depositary or the Registrar as applicable, shall keep books for the registration of Receipts and transfers of Receipts which at all reasonable times shall be open for inspection by the Company and by the Holders of such Receipts, provided that such inspection shall not be, to the Depositary’s or the Registrar’s knowledge, for the purpose of communicating with Holders of such Receipts in the interest of a business or object other than the business of the Company or other than a matter related to this Deposit Agreement or the Receipts.

 

The Depositary or the Registrar, as applicable, may close the transfer books with respect to the Receipts, at any time and from time to time, when deemed necessary or advisable by it in connection with the performance of its duties hereunder, or at the reasonable written request of the Company.

 

If any Receipts or the American Depositary Shares evidenced thereby are listed on one or more stock exchanges or automated quotation systems in the United States, the Depositary shall act as Registrar or appoint a Registrar or one or more co-registrars for registration of Receipts and transfers, combinations and split-ups, and to countersign such Receipts in accordance with any requirements of such exchanges or systems. Such Registrar or co-registrars may be removed and a substitute or substitutes appointed by the Depositary.

 

If any Receipts or the American Depositary Shares evidenced thereby are listed on one or more securities exchanges, markets or automated quotation systems, (i) the Depositary shall be entitled to, and shall, take or refrain from taking such action(s) as it may deem necessary or appropriate to comply with the requirements of such securities exchange(s), market(s) or automated quotation system(s) applicable to it, notwithstanding any other provision of this Deposit Agreement; and (ii) upon the reasonable request of the Depositary, the Company shall provide the Depositary such information and assistance as may be reasonably necessary for the Depositary to comply with such requirements, to the extent that the Company may lawfully do so.

 

Each Registrar and co-registrar appointed under this Section 5.1 shall give notice in writing to the Depositary accepting such appointment and agreeing to be bound by the applicable terms of this Deposit Agreement.

 

SECTION 5.2      Exoneration.  None of the Depositary, the Custodian or the Company shall be obligated to do or perform any act which is inconsistent with the provisions of this Deposit Agreement or shall incur any liability to Holders, Beneficial Owners or any third parties (i) if the Depositary, the Custodian or the Company or their respective controlling persons or agents (including without limitation, the Agents) shall be prevented or forbidden from, or delayed in, doing or performing any act or thing required by the terms of this Deposit Agreement, by reason of any provision of any present or future law or regulation of the United States or any state thereof, the Cayman Islands or any other country, or of any other governmental authority or regulatory authority or stock exchange, or on account of the possible criminal or civil penalties or restraint, or by reason of any provision, present or future, of the Memorandum and Articles of Association or any provision of or governing any Deposited Securities, or by reason of any act of God or war or other circumstances beyond its control (including, without limitation, nationalization, expropriation, currency restrictions, work stoppage, strikes, civil unrest, revolutions, rebellions, explosions and computer failure), (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement or in the Memorandum and Articles of Association or provisions of or governing Deposited Securities, (iii) for any action or inaction of the Depositary, the Custodian or the Company or their respective controlling persons or agents (including without limitation, the Agents) in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, any Beneficial Owner or authorized representative thereof, or any other person believed by it in good faith to be competent to give such advice or information, (iv) for the inability by a Holder or Beneficial Owner to benefit from any distribution, offering, right or other benefit which is made available to holders of Deposited Securities but is not, under the terms of this Deposit Agreement, made available to Holders of American Depositary Shares or (v) for any special, consequential, indirect or punitive damages for any breach of the terms of this Deposit Agreement or otherwise.

 

 

The Depositary, its controlling persons, its agents (including without limitation, the Agents), the Custodian and the Company, its controlling persons and its agents may rely and shall be protected in acting upon any written notice, request, opinion or other document believed by it to be genuine and to have been signed or presented by the proper party or parties.

 

No disclaimer of liability under the Securities Act or the Exchange Act is intended by any provision of this Deposit Agreement.

 

SECTION 5.3      Standard of Care.  The Company and the Depositary and their respective directors, officers, Affiliates, employees and agents (including without limitation, the Agents) assume no obligation and shall not be subject to any liability under this Deposit Agreement or any Receipts to any Holder(s) or Beneficial Owner(s) or other persons, except in accordance with Section 5.8 hereof, provided, that the Company and the Depositary and their respective directors, officers, Affiliates, employees and agents (including without limitation, the Agents) agree to perform their respective obligations specifically set forth in this Deposit Agreement or the applicable ADRs without gross negligence or willful misconduct.

 

Without limitation of the foregoing, neither the Depositary, nor the Company, nor any of their respective controlling persons, directors, officers, affiliates, employees or agents (including without limitation, the Agents), shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the Receipts, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expenses (including fees and disbursements of counsel) and liabilities be furnished as often as may be required (and no Custodian shall be under any obligation whatsoever with respect to such proceedings, the responsibility of the Custodian being solely to the Depositary).

 

The Depositary and its directors, officers, affiliates, employees and agents (including without limitation, the Agents) shall not be liable for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any vote is cast or the effects of any vote. The Depositary shall not incur any liability for any failure to determine that any distribution or action may be lawful or reasonably practicable, for the content of any information submitted to it by the Company for distribution to the Holders or for any inaccuracy of any translation thereof, for any investment risk associated with acquiring an interest in the Deposited Securities, for the validity or worth of the Deposited Securities or for any tax consequences that may result from the ownership of ADSs, Shares or Deposited Securities, for the credit-worthiness of any third party, for allowing any rights to lapse upon the terms of this Deposit Agreement or for the failure or timeliness of any notice from the Company, or for any action or non action by it in reliance upon the opinion, advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder or any other person believed by it in good faith to be competent to give such advice or information. The Depositary and its agents (including without limitation, the Agents) shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without gross negligence or willful misconduct while it acted as Depositary.

 

 

SECTION 5.4      Resignation and Removal of the Depositary; Appointment of Successor Depositary.  The Depositary may at any time resign as Depositary hereunder by written notice of resignation delivered to the Company, such resignation to be effective on the earlier of (i) the 90th day after delivery thereof to the Company (whereupon the Depositary shall, in the event no successor depositary has been appointed by the Company, be entitled to take the actions contemplated in Section 6.2 hereof) and (ii) the appointment by the Company of a successor depositary and its acceptance of such appointment as hereinafter provided, save that, any amounts, fees, costs or expenses owed to the Depositary hereunder or in accordance with any other agreements otherwise agreed in writing between the Company and the Depositary from time to time shall be paid to the Depositary prior to such resignation.

 

The Company shall use reasonable efforts to appoint such successor depositary, and give notice to the Depositary of such appointment, not more than 90 days after delivery by the Depositary of written notice of resignation as provided in this Section 5.4. In the event that notice of the appointment of a successor depositary is not provided by the Company in accordance with the preceding sentence, the Depositary shall be entitled to take the actions contemplated in Section 6.2 hereof.

 

The Depositary may at any time be removed by the Company by written notice of such removal, which removal shall be effective on the later of (i) the 90th day after delivery thereof to the Depositary (whereupon the Depositary shall be entitled to take the actions contemplated in Section 6.2 hereof if a successor depositary has not been appointed), and (ii)  the appointment by the Company of a successor depositary and its acceptance of such appointment as hereinafter provided, save that, any amounts, fees, costs or expenses owed to the Depositary hereunder or in accordance with any other agreements otherwise agreed in writing between the Company and the Depositary from time to time shall be paid to the Depositary prior to such removal.

 

In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its best efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, the City of New York. Every successor depositary shall be required by the Company to execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed (except as required by applicable law), shall become fully vested with all the rights, powers, duties and obligations of its predecessor. The predecessor depositary, upon payment of all sums due to it and on the written request of the Company, shall (i) execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder (other than as contemplated in Sections 5.8 and 5.9 hereof), (ii) duly assign, transfer and deliver all right, title and interest to the Deposited Securities to such successor, and (iii) deliver to such successor a list of the Holders of all outstanding Receipts and such other information relating to Receipts and Holders thereof as the successor may reasonably request. Any such successor depositary shall promptly mail notice of its appointment to such Holders.

 

Any corporation into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act and, notwithstanding anything to the contrary in this Deposit Agreement, the Depositary may assign or otherwise transfer all or any of its rights and benefits under this Deposit Agreement (including any cause of action arising in connection with it) to Deutsche Bank AG or any branch thereof or any entity which is a direct or indirect subsidiary or other affiliate of Deutsche Bank AG.

 

 

SECTION 5.5      The Custodian.  The Custodian or its successors in acting hereunder shall be subject at all times and in all respects to the direction of the Depositary for the Deposited Securities for which the Custodian acts as custodian and shall be responsible solely to it. If any Custodian resigns or is discharged from its duties hereunder with respect to any Deposited Securities and no other Custodian has previously been appointed hereunder, the Depositary shall promptly appoint a substitute custodian. The Depositary shall require such resigning or discharged Custodian to deliver the Deposited Securities held by it, together with all such records maintained by it as Custodian with respect to such Deposited Securities as the Depositary may request, to the Custodian designated by the Depositary. Whenever the Depositary determines, in its discretion, that it is appropriate to do so, it may appoint an additional entity to act as Custodian with respect to any Deposited Securities, or discharge the Custodian with respect to any Deposited Securities and appoint a substitute custodian, which shall thereafter be Custodian hereunder with respect to the Deposited Securities. After any such change, the Depositary shall give notice thereof in writing to all Holders.

 

Upon the appointment of any successor depositary, any Custodian then acting hereunder shall, unless otherwise instructed by the Depositary, continue to be the Custodian of the Deposited Securities without any further act or writing and shall be subject to the direction of the successor depositary. The successor depositary so appointed shall, nevertheless, on the written request of any Custodian, execute and deliver to such Custodian all such instruments as may be proper to give to such Custodian full and complete power and authority to act on the direction of such successor depositary.

 

SECTION 5.6      Notices and Reports.  On or before the first date on which the Company gives notice, by publication or otherwise, of any meeting of holders of Shares or other Deposited Securities, or of any adjourned meeting of such holders, or of the taking of any action by such holders other than at a meeting, or of the taking of any action in respect of any cash or other distributions or the offering of any rights in respect of Deposited Securities, the Company shall transmit to the Depositary and the Custodian a copy of the notice thereof in English but otherwise in the form given or to be given to holders of Shares or other Deposited Securities. The Company shall also furnish to the Custodian and the Depositary a summary, in English, of any applicable provisions or proposed provisions of the Memorandum and Articles of Association that may be relevant or pertain to such notice of meeting or be the subject of a vote thereat.

 

The Company will also transmit to the Depositary (a) English language versions of the other notices, reports and communications which are made generally available by the Company to holders of its Shares or other Deposited Securities and (b) English language versions of the Company’s annual and other reports prepared in accordance with the applicable requirements of the Commission. The Depositary shall arrange, at the request of the Company and at the Company’s expense, for the mailing of copies thereof to all Holders, or by any other means as agreed between the Company and the Depositary (at the Company’s expense) or make such notices, reports and other communications available for inspection by all Holders, provided, that, the Depositary shall have received evidence sufficiently satisfactory to it, including in the form of an Opinion of Counsel regarding U.S. law or of any other applicable jurisdiction, furnished at the expense of the Company, as the Depositary reasonably requests, that the distribution of such notices, reports and any such other communications to Holders from time to time is valid and does not or will not infringe any local, U.S. or other applicable jurisdiction regulatory restrictions or requirements if so distributed and made available to Holders. The Company will timely provide the Depositary with the quantity of such notices, reports, and communications, as requested by the Depositary from time to time, in order for the Depositary to effect such mailings. The Company has delivered to the Depositary and the Custodian a copy of the Memorandum and Articles of Association along with the provisions of or governing the Shares and any other Deposited Securities issued by the Company or any Affiliate of the Company, in connection with the Shares, in each case, to the extent not in English, along with a certified English translation thereof, and promptly upon any amendment thereto or change therein, the Company shall deliver to the Depositary and the Custodian a copy of such amendment thereto or change therein, to the extent not in English, along with a certified English translation thereof. The Depositary may rely upon such copy for all purposes of this Deposit Agreement.

 

 

The Depositary will make available, at the expense of the Company, a copy of any such notices, reports or communications issued by the Company and delivered to the Depositary for inspection by the Holders of the Receipts evidencing the American Depositary Shares representing such Shares governed by such provisions at the Depositary’s Corporate Trust Office, at the office of the Custodian and at any other designated transfer office.

 

SECTION 5.7      Issuance of Additional Shares, ADSs etc.  The Company agrees that in the event it or any of its Affiliates proposes (i) an issuance, sale or distribution of additional Shares, (ii) an offering of rights to subscribe for Shares or other Deposited Securities, (iii) an issuance of securities convertible into or exchangeable for Shares, (iv) an issuance of rights to subscribe for securities convertible into or exchangeable for Shares, (v) an elective dividend of cash or Shares, (vi) a redemption of Deposited Securities, (vii) a meeting of holders of Deposited Securities, or solicitation of consents or proxies, relating to any reclassification of securities, merger, subdivision, amalgamation or consolidation or transfer of assets, (viii) any reclassification, recapitalization, reorganization, merger, amalgamation, consolidation or sale of assets which affects the Deposited Securities or (ix) a distribution of property other than cash, Shares or rights to purchase additional Shares it will obtain U.S. legal advice and take all steps necessary to ensure that the application of the proposed transaction to Holders and Beneficial Owners does not violate the registration provisions of the Securities Act, or any other applicable laws (including, without limitation, the Investment Company Act of 1940, as amended, the Exchange Act or the securities laws of the states of the United States). In support of the foregoing, the Company will furnish to the Depositary at its request, at the Company’s expense, (a) a written opinion of U.S. counsel (satisfactory to the Depositary) stating whether or not application of such transaction to Holders and Beneficial Owners (1) requires a registration statement under the Securities Act to be in effect or (2) is exempt from the registration requirements of the Securities Act and/or (3) dealing with such other issues requested by the Depositary; (b) a written opinion of Cayman Islands counsel (satisfactory to the Depositary) stating that (1) making the transaction available to Holders and Beneficial Owners does not violate the laws or regulations of the Cayman Islands and (2) all requisite regulatory and corporate consents and approvals have been obtained in the Cayman Islands; and (c) as the Depositary may request, a written Opinion of Counsel in any other jurisdiction in which Holders or Beneficial Owners reside to the effect that making the transaction available to such Holders or Beneficial Owners does not violate the laws or regulations of such jurisdiction as well as certificates of the Company as to such matters as the Depositary may deem necessary or appropriate in the circumstances. If the filing of a registration statement is required, the Depositary shall not have any obligation to proceed with the transaction unless it shall have received evidence reasonably satisfactory to it that such registration statement has been declared effective and that such distribution is in accordance with all applicable laws or regulations. If, being advised by counsel, the Company determines that a transaction is required to be registered under the Securities Act, the Company will either (i) register such transaction to the extent necessary, (ii) alter the terms of the transaction to avoid the registration requirements of the Securities Act or (iii) direct the Depositary to take specific measures, in each case as contemplated in this Deposit Agreement, to prevent such transaction from violating the registration requirements of the Securities Act.

 

The Company agrees with the Depositary that neither the Company nor any of its Affiliates will at any time (i) deposit any Shares or other Deposited Securities, either upon original issuance or upon a sale of Shares or other Deposited Securities previously issued and reacquired by the Company or by any such Affiliate, or (ii) issue additional Shares, rights to subscribe for such Shares, securities convertible into or exchangeable for Shares or rights to subscribe for such securities, unless such transaction and the securities issuable in such transaction are exempt from registration under the Securities Act or have been registered under the Securities Act (and such registration statement has been declared effective).

 

Notwithstanding anything else contained in this Deposit Agreement, nothing in this Deposit Agreement shall be deemed to obligate the Company to file any registration statement in respect of any proposed transaction.

 

 

SECTION 5.8      Indemnification.  The Company agrees to indemnify the Depositary, any Custodian and each of their respective directors, officers, employees, agents (including without limitation, the Agents) and Affiliates against, and hold each of them harmless from, any losses, liabilities, taxes, costs, claims, judgments, proceedings, actions, demands and any charges or expenses of any kind whatsoever (including, but not limited to, reasonable fees and expenses of counsel together with, in each case, value added tax and any similar tax charged or otherwise imposed in respect thereof) (collectively referred to as “Losses”) which the Depositary or any agent (including without limitation, the Agents) thereof may incur or which may be made against it as a result of or in connection with its appointment or the exercise of its powers and duties under this Agreement or that may arise (a) out of or in connection with any offer, issuance, sale, resale, transfer, deposit or withdrawal of Receipts, American Depositary Shares, the Shares, or other Deposited Securities, as the case may be, (b) out of or in connection with any offering documents in respect thereof or (c) out of or in connection with acts performed or omitted, including, but not limited to, any delivery by the Depositary on behalf of the Company of information regarding the Company in connection with this Deposit Agreement, the Receipts, the American Depositary Shares, the Shares, or any Deposited Securities, in any such case (i) by the Depositary, the Custodian or any of their respective directors, officers, employees, agents (including without limitation, the Agents) and Affiliates, except to the extent any such Losses arise out of the gross negligence or wilful misconduct of any of them, or (ii) by the Company or any of its directors, officers, employees, agents and Affiliates.

 

The Depositary agrees to indemnify the Company and hold it harmless from any Losses which may arise out of acts performed or omitted to be performed by the Depositary arising out of its gross negligence or wilful misconduct. Notwithstanding the above, in no event shall the Depositary or any of its directors, officers, employees, agents (including without limitation, the Agents) and/or Affiliates be liable for any special, consequential, indirect or punitive damages to the Company, Holders, Beneficial Owners or any other person.

 

Any person seeking indemnification hereunder (an “Indemnified Person”) shall notify the person from whom it is seeking indemnification (the “Indemnifying Person”) of the commencement of any indemnifiable action or claim promptly after such Indemnified Person becomes aware of such commencement (provided that the failure to make such notification shall not affect such Indemnified Person’s rights to indemnification except to the extent the Indemnifying Person is materially prejudiced by such failure) and shall consult in good faith with the Indemnifying Person as to the conduct of the defense of such action or claim that may give rise to an indemnity hereunder, which defense shall be reasonable under the circumstances. No Indemnified Person shall compromise or settle any action or claim that may give rise to an indemnity hereunder without the consent of the Indemnifying Person, which consent shall not be unreasonably withheld.

 

The obligations set forth in this Section shall survive the termination of this Deposit Agreement and the succession or substitution of any party hereto.

 

SECTION 5.9      Fees and Charges of Depositary.  The Company, the Holders, the Beneficial Owners, and persons depositing Shares or surrendering ADSs for cancellation and withdrawal of Deposited Securities shall be required to pay to the Depositary the Depositary’s fees and related charges identified as payable by them respectively as provided for under Article (9) of the Receipt. All fees and charges so payable may, at any time and from time to time, be changed by agreement between the Depositary and the Company, but, in the case of fees and charges payable by Holders and Beneficial Owners, only in the manner contemplated in Section 6.1 hereof. The Depositary shall provide, without charge, a copy of its latest fee schedule to anyone upon request.

 

The Depositary and the Company may reach separate agreement in relation to the payment of any additional remuneration to the Depositary in respect of any exceptional duties which the Depositary finds necessary or desirable and agreed by both parties in the performance of its obligations hereunder and in respect of the actual costs and expenses of the Depositary in respect of any notices required to be given to the Holders in accordance with Article (20) of the Receipt.

 

 

In connection with any payment by the Company to the Depositary:

 

(i)	all fees, taxes, duties, charges, costs and expenses which are payable by the Company shall be paid or be procured to be paid by the Company (and any such amounts which are paid by the Depositary shall be reimbursed to the Depositary by the Company upon demand therefor);

 

(ii)	such payment shall be subject to all necessary applicable exchange control and other consents and approvals having been obtained. The Company undertakes to use its reasonable endeavours to obtain all necessary approvals that are required to be obtained by it in this connection; and

 

(iii)

the Depositary may request, in its sole but reasonable discretion after reasonable consultation with the Company, an Opinion of Counsel regarding U.S. law, the laws of the Cayman Islands or of any other relevant jurisdiction, to be furnished at the expense of the Company, if at any time it deems it necessary to seek such an Opinion of Counsel regarding the validity of any action to be taken or instructed to be taken under this Agreement.

 

The Company agrees to promptly pay to the Depositary such other fees, charges and expenses and to reimburse the Depositary for such out-of-pocket expenses as the Depositary and the Company may agree to in writing from time to time. Responsibility for payment of such charges may at any time and from time to time be changed by agreement between the Company and the Depositary.

 

All payments by the Company to the Depositary under this Section 5.9 shall be paid without set-off or counterclaim, and free and clear of and without deduction or withholding for or on account of, any present or future taxes, levies, imports, duties, fees, assessments or other charges of whatever nature, imposed by the Cayman Islands or by any department, agency or other political subdivision or taxing authority thereof or therein, and all interest, penalties or similar liabilities with respect thereto.

 

The right of the Depositary to receive payment of fees, charges and expenses as provided above shall survive the termination of this Deposit Agreement. As to any Depositary, upon the resignation or removal of such Depositary as described in Section 5.4 hereof, such right shall extend for those fees, charges and expenses incurred prior to the effectiveness of such resignation or removal.

 

SECTION 5.10      Restricted Securities Owners/Ownership Restrictions.  From time to time or upon request of the Depositary, the Company shall provide to the Depositary a list setting forth, to the actual knowledge of the Company, those persons or entities who beneficially own Restricted Securities and the Company shall update such list on a regular basis. The Depositary may rely on such list or update but shall not be liable for any action or omission made in reliance thereon. The Company agrees to advise in writing each of the persons or entities who, to the knowledge of the Company, holds Restricted Securities that such Restricted Securities are ineligible for deposit hereunder (except under the circumstances contemplated in Section 2.11) and, to the extent practicable, shall require each of such persons to represent in writing that such person will not deposit Restricted Securities hereunder (except under the circumstances contemplated in Section 2.11). Holders and Beneficial Owners shall comply with any limitations on ownership of Shares under the Memorandum and Articles of Association or applicable Cayman Islands law as if they held the number of Shares their ADSs represent. The Company shall, in accordance with Article (24) of the Receipt, inform Holders and Beneficial Owners and the Depositary of any other limitations on ownership of Shares that the Holders and Beneficial Owners may be subject to by reason of the number of ADSs held under the Articles of Association or applicable Cayman Islands law, as such restrictions may be in force from time to time.

 

The Company may, in its sole discretion, but subject to applicable law, instruct the Depositary to take action with respect to the ownership interest of any Holder or Beneficial Owner pursuant to the Memorandum and Articles of Association, including but not limited to, the removal or limitation of voting rights or the mandatory sale or disposition on behalf of a Holder or Beneficial Owner of the Shares represented by the ADRs held by such Holder or Beneficial Owner in excess of such limitations, if and to the extent such disposition is permitted by applicable law and the Memorandum and Articles of Association; provided that any such measures are practicable and legal and can be undertaken without undue burden or expense, and provided further the Depositary’s agreement to the foregoing is conditional upon it being advised of any applicable changes in the Memorandum and Articles of Association. The Depositary shall have no liability for any actions taken in accordance with such instructions.

 

 

ARTICLE VI.

 

AMENDMENT AND TERMINATION

 

SECTION 6.1      Amendment/Supplement.  Subject to the terms and conditions of this Section 6.1 and applicable law, the Receipts outstanding at any time, the provisions of this Deposit Agreement and the form of Receipt attached hereto and to be issued under the terms hereof may at any time and from time to time be amended or supplemented by written agreement between the Company and the Depositary in any respect which they may deem necessary or desirable and not materially prejudicial to the Holders without the consent of the Holders or Beneficial Owners. Any amendment or supplement which shall impose or increase any fees or charges (other than charges in connection with foreign exchange control regulations, and taxes and/or other governmental charges, delivery and other such expenses payable by Holders or Beneficial Owners), or which shall otherwise materially prejudice any substantial existing right of Holders or Beneficial Owners, shall not, however, become effective as to outstanding Receipts until 30 days after notice of such amendment or supplement shall have been given to the Holders of outstanding Receipts. Notice of any amendment to this Deposit Agreement or form of Receipts shall not need to describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided, however, that, in each such case, the notice given to the Holders identifies a means for Holders and Beneficial Owners to retrieve or receive the text of such amendment (i.e., upon retrieval from the Commission's, the Depositary's or the Company's website or upon request from the Depositary).The parties hereto agree that any amendments or supplements which (i) are reasonably necessary (as agreed by the Company and the Depositary) in order for (a) the American Depositary Shares to be registered on Form F-6 under the Securities Act or (b) the American Depositary Shares or the Shares to be traded solely in electronic book-entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to materially prejudice any substantial rights of Holders or Beneficial Owners. Every Holder and Beneficial Owner at the time any amendment or supplement so becomes effective shall be deemed, by continuing to hold such American Depositary Share or Shares, to consent and agree to such amendment or supplement and to be bound by this Deposit Agreement as amended and supplemented thereby. In no event shall any amendment or supplement impair the right of the Holder to surrender such Receipt and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Notwithstanding the foregoing, if any governmental body should adopt new laws, rules or regulations which would require amendment or supplement of this Deposit Agreement to ensure compliance therewith, the Company and the Depositary may amend or supplement this Deposit Agreement and the Receipt at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to this Deposit Agreement in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance with such laws, rules or regulations.

 

 

SECTION 6.2      Termination.  The Depositary shall, at any time at the written direction of the Company, terminate this Deposit Agreement by mailing notice of such termination to the Holders of all Receipts then outstanding at least 90 days prior to the date fixed in such notice for such termination, provided that, the Depositary shall be reimbursed for any amounts, fees, costs or expenses owed to it in accordance with the terms of this Deposit Agreement and in accordance with any other agreements as otherwise agreed in writing between the Company and the Depositary from time to time, prior to such termination shall take effect. If 90 days shall have expired after (i) the Depositary shall have delivered to the Company a written notice of its election to resign, or (ii) the Company shall have delivered to the Depositary a written notice of the removal of the Depositary, and in either case a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.4 hereof, the Depositary may terminate this Deposit Agreement by mailing notice of such termination to the Holders of all Receipts then outstanding at least 30 days prior to the date fixed for such termination. On and after the date of termination of this Deposit Agreement, each Holder will, upon surrender of such Receipt at the Corporate Trust Office of the Depositary, upon the payment of the charges of the Depositary for the surrender of Receipts referred to in Section 2.6 hereof and subject to the conditions and restrictions therein set forth, and upon payment of any applicable taxes and/or governmental charges, be entitled to Delivery, to him or upon his order, of the amount of Deposited Securities represented by such Receipt. If any Receipts shall remain outstanding after the date of termination of this Deposit Agreement, the Registrar thereafter shall discontinue the registration of transfers of Receipts, and the Depositary shall suspend the distribution of dividends to the Holders thereof, and shall not give any further notices or perform any further acts under this Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights or other property as provided in this Deposit Agreement, and shall continue to Deliver Deposited Securities, subject to the conditions and restrictions set forth in Section 2.6 hereof, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for Receipts surrendered to the Depositary (after deducting, or charging, as the case may be, in each case, the charges of the Depositary for the surrender of a Receipt, any expenses for the account of the Holder in accordance with the terms and conditions of this Deposit Agreement and any applicable taxes and/or governmental charges or assessments). At any time after the expiration of six months from the date of termination of this Deposit Agreement, the Depositary may sell the Deposited Securities then held hereunder and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it hereunder, in an unsegregated account, without liability for interest for the pro rata benefit of the Holders of Receipts whose Receipts have not theretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations under this Deposit Agreement with respect to the Receipts and the Shares, Deposited Securities and American Depositary Shares, except to account for such net proceeds and other cash (after deducting, or charging, as the case may be, in each case, the charges of the Depositary for the surrender of a Receipt, any expenses for the account of the Holder in accordance with the terms and conditions of this Deposit Agreement and any applicable taxes and/or governmental charges or assessments). Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary hereunder. The obligations under the terms of this Deposit Agreement and Receipts of Holders and Beneficial Owners of ADSs outstanding as of the effective date of any termination shall survive such effective date of termination and shall be discharged only when the applicable ADSs are presented by their Holders to the Depositary for cancellation under the terms of this Deposit Agreement and the Holders have each satisfied any and all of their obligations hereunder (including, but not limited to, any payment and/or reimbursement obligations which relate to prior to the effective date of termination but which payment and/or reimbursement is claimed after such effective date of termination).

 

Notwithstanding anything contained in this Deposit Agreement or any ADR, in connection with the termination of this Deposit Agreement, the Depositary may, independently and without the need for any action by the Company, make available to Holders of ADSs a means to withdraw the Deposited Securities represented by their ADSs and to direct the deposit of such Deposited Securities into an unsponsored American depositary shares program established by the Depositary, upon such terms and conditions as the Depositary may deem reasonably appropriate, subject however, in each case, to satisfaction of the applicable registration requirements by the unsponsored American depositary shares program under the Securities Act, and to receipt by the Depositary of payment of the applicable fees and charges of, and reimbursement of the applicable expenses incurred by, the Depositary.

 

 

ARTICLE VII.

 

MISCELLANEOUS

 

SECTION 7.1      Counterparts.  This Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of such counterparts together shall constitute one and the same agreement. Copies of this Deposit Agreement shall be maintained with the Depositary and shall be open to inspection by any Holder during business hours.

 

SECTION 7.2      No Third-Party Beneficiaries.  This Deposit Agreement is for the exclusive benefit of the parties hereto (and their successors) and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person, except to the extent specifically set forth in this Deposit Agreement. Nothing in this Deposit Agreement shall be deemed to give rise to a partnership or joint venture among the parties hereto nor establish a fiduciary or similar relationship among the parties. The parties hereto acknowledge and agree that (i) the Depositary and its Affiliates may at any time have multiple banking relationships with the Company and its Affiliates, (ii) the Depositary and its Affiliates may be engaged at any time in transactions in which parties adverse to the Company or the Holders or Beneficial Owners may have interests and (iii) nothing contained in this Agreement shall (a) preclude the Depositary or any of its Affiliates from engaging in such transactions or establishing or maintaining such relationships, or (b) obligate the Depositary or any of its Affiliates to disclose such transactions or relationships or to account for any profit made or payment received in such transactions or relationships.

 

SECTION 7.3      Severability.  In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.

 

SECTION 7.4      Holders and Beneficial Owners as Parties; Binding Effect.  The Holders and Beneficial Owners from time to time of American Depositary Shares shall be parties to this Deposit Agreement and shall be bound by all of the terms and conditions hereof and of any Receipt by acceptance hereof or any beneficial interest therein.

 

SECTION 7.5      Notices.  Any and all notices to be given to the Company shall be deemed to have been duly given if personally delivered or sent by first-class mail, air courier or cable, telex, facsimile transmission or electronic transmission, confirmed by letter, addressed to Floor 20, Building A1, Zhongguancun No.1, 81 Beiqing Road, Haidian District, Beijing, the People’s Republic of China, 100094, Attention: Tian Gao, Esq., or to any other address which the Company may specify in writing to the Depositary or at which it may be effectively given such notice in accordance with applicable law.

 

Any and all notices to be given to the Depositary shall be deemed to have been duly given if personally delivered or sent by first-class mail, air courier or cable, telex, facsimile transmission or by electronic transmission (if agreed by the Company and the Depositary), at the Company’s expense, unless otherwise agreed in writing between the Company and the Depositary, confirmed by letter, addressed to Deutsche Bank Trust Company Americas, 1 Columbus Circle, New York, NY 10019, USA, Attention: ADR Department, telephone: +1 212 250-9100, facsimile: + 1 212 797 0327 or to any other address which the Depositary may specify in writing to the Company.

 

Any and all notices to be given to any Holder shall be deemed to have been duly given if personally delivered or sent by first-class mail or cable, telex, facsimile transmission or by electronic transmission (if agreed by the Company and the Depositary), at the Company’s expense, unless otherwise agreed in writing between the Company and the Depositary, addressed to such Holder at the address of such Holder as it appears on the transfer books for Receipts of the Depositary, or, if such Holder shall have filed with the Depositary a written request that notices intended for such Holder be mailed to some other address, at the address specified in such request. Notice to Holders shall be deemed to be notice to Beneficial Owners for all purposes of this Deposit Agreement.

 

 

Delivery of a notice sent by mail, air courier or cable, telex, facsimile or electronic transmission shall be deemed to be effective at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a cable, telex, facsimile or electronic transmission) is deposited, postage prepaid, in a post-office letter box or delivered to an air courier service. The Depositary or the Company may, however, act upon any cable, telex, facsimile or electronic transmission received by it from the other or from any Holder, notwithstanding that such cable, telex, facsimile or electronic transmission shall not subsequently be confirmed by letter as aforesaid, as the case may be.

 

SECTION 7.6      Governing Law and Jurisdiction.  This Deposit Agreement and the Receipts shall be interpreted in accordance with, and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, the laws of the State of New York without reference to the principles of choice of law thereof. Subject to the Depositary's rights under the third paragraph of this Section 7.6, the Company and the Depositary agree that the United States District Court for the Southern District of New York (or, if the United States District Court for the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts in New York County, New York) shall have exclusive jurisdiction to hear and determine any suit, action or proceeding and to settle any dispute between them that may arise out of or relate in any way to this Deposit Agreement including without limitation claims under the Securities Act and, for such purposes, each irrevocably submits to the exclusive jurisdiction of such courts. Notwithstanding the above, the parties hereto agree that any judgment and/or order from any such New York court can be enforced in any court having jurisdiction thereof. The Company hereby irrevocably designates, appoints and empowers Cogency Global Inc., (the “Process Agent”), now at 122 East 42nd Street, 18th Floor New York, NY 10168, as its authorized agent to receive and accept for and on its behalf, and on behalf of its properties, assets and revenues, service by mail of any and all legal process, summons, notices and documents that may be served in any suit, action or proceeding brought against the Company in such courts as described in the preceding sentence or in the next paragraph of this Section 7.6. If for any reason the Process Agent shall cease to be available to act as such, the Company agrees to designate a new agent in the City of New York on the terms and for the purposes of this Section 7.6 reasonably satisfactory to the Depositary. The Company further hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents in any suit, action or proceeding against the Company, by service by mail of a copy thereof upon the Process Agent (whether or not the appointment of such Process Agent shall for any reason prove to be ineffective or such Process Agent shall fail to accept or acknowledge such service), with a copy mailed to the Company by registered or certified air mail, postage prepaid, to its address provided in Section 7.5 hereof. The Company agrees that the failure of the Process Agent to give any notice of such service to it shall not impair or affect in any way the validity of such service or any judgment rendered in any action or proceeding based thereon.

 

The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any actions, suits or proceedings brought in any court as provided in this Section 7.6, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

 

The Company, the Depositary and by holding an American Depositary Share (or interest therein) Holders and Beneficial Owners each agree that, notwithstanding the foregoing, with regard to any claim or dispute or difference of whatever nature between or involving the parties hereto arising directly or indirectly from the relationship created by this Deposit Agreement, the Depositary, in its sole discretion, shall be entitled to refer such dispute or difference for final settlement by arbitration (“Arbitration”) in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the “Rules”) then in force. The arbitration shall be conducted by three arbitrators, one nominated by the Depositary, one nominated by the Company, and one nominated by the two party-appointed arbitrators within 30 calendar days of the confirmation of the nomination of the second arbitrator. If any arbitrator has not been nominated within the time limits specified herein and in the Rules, then such arbitrator shall be appointed by the American Arbitration Association in accordance with the Rules. Judgment upon the award rendered by the arbitrators may be enforced in any court having jurisdiction thereof. The seat and place of any reference to arbitration shall be New York City, New York, and the procedural law of such arbitration shall be New York law. The language to be used in the arbitration shall be English. The fees of the arbitrator and other costs incurred by the parties in connection with such Arbitration shall be paid by the party or parties that is (are) unsuccessful in such Arbitration. For the avoidance of doubt this paragraph does not preclude Holders and Beneficial Owners from pursuing claims under the Securities Act or the Exchange Act in federal courts.

 

 

Holders and Beneficial Owners understand, and by holding an American Depositary Share or an interest therein, such Holders and Beneficial Owners each irrevocably agrees that any legal suit, action or proceeding against or involving the Company or the Depositary, regardless of whether such legal suit, action or proceeding also involves parties other than the Company or the Depositary, arising out of or relating in any way to this Deposit Agreement, the American Depositary Shares or Receipts, or the transactions contemplated hereby or thereby or by virtue of ownership thereof, including without limitation claims under the Securities Act, may only be instituted in the United States District Court for the Southern District of New York (or, if the United States District Court for the Southern District of New York lacks subject matter jurisdiction over a particular dispute, in the state courts in New York County, New York), and by holding an American Depositary Share or an interest therein each irrevocably waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Holders and Beneficial Owners agree that the provisions of this paragraph shall survive such Holders’ and Beneficial Owners’ ownership of American Depositary Shares or interests therein.

 

EACH PARTY TO THIS DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH HOLDER AND BENEFICIAL OWNER AND/OR HOLDER OF INTERESTS IN ANY ADRs) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE DEPOSITARY AND/OR THE COMPANY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE ADSs OR THE ADRs, THIS DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR ANY OTHER THEORY).

 

The provisions of this Section 7.6 shall survive any termination of this Deposit Agreement, in whole or in part.

 

SECTION 7.7      Assignment.  Subject to the provisions and exceptions set forth in Section 5.4 hereof, this Deposit Agreement may not be assigned by either the Company or the Depositary.

 

SECTION 7.8      Agents.  The Depositary shall be entitled, in its sole but reasonable discretion, to appoint one or more agents (the “Agents”) of which it shall have control for the purpose, inter alia, of making distributions to the Holders or otherwise carrying out its obligations under this Agreement.

 

SECTION 7.9      Affiliates etc.  The Depositary reserves the right to utilize and retain a division or Affiliate(s) of the Depositary to direct, manage and/or execute any public and/or private sale of Shares, rights, securities, property or other entitlements hereunder and to engage in the conversion of Foreign Currency hereunder.  It is anticipated that such division and/or Affiliate(s) will charge the Depositary a fee and/or commission in connection with each such transaction, and seek reimbursement of its costs and expenses related thereto.  Such fees/commissions, costs and expenses, shall be deducted from amounts distributed hereunder and shall not be deemed to be fees of the Depositary under Article (9) of the Receipt or otherwise. Persons are advised that in converting foreign currency into U.S. dollars the Depositary may utilize Deutsche Bank AG or its affiliates (collectively, “DBAG”) to effect such conversion by seeking to enter into a foreign exchange (“FX”) transaction with DBAG. When converting currency, the Depositary is not acting as a fiduciary for the holders or beneficial owners of depositary receipts or any other person. Moreover, in executing FX transactions, DBAG will be acting in a principal capacity, and not as agent, fiduciary or broker, and may hold positions for its own account that are the same, similar, different or opposite to the positions of its customers, including the Depositary. When the Depositary seeks to execute an FX transaction to accomplish such conversion, customers should be aware that DBAG is a global dealer in FX for a full range of FX products and, as a result, the rate obtained in connection with any requested foreign currency conversion may be impacted by DBAG executing FX transactions for its own account or with another customer. In addition, in order to source liquidity for any FX transaction relating to any foreign currency conversion, DBAG may internally share economic terms relating to the relevant FX transaction with persons acting in a sales or trading capacity for DBAG or one of its agents. DBAG may charge fees and/or commissions to the Depositary or add a mark-up in connection with such conversions, which are reflected in the rate at which the foreign currency will be converted into U.S. dollars. The Depositary, its Affiliates and their agents, on their own behalf, may own and deal in any class of securities of the Company and its Affiliates and in ADSs.

 

 

SECTION 7.10      Exclusivity.  The Company agrees not to appoint any other depositary for the issuance or administration of depositary receipts evidencing any class of stock of the Company so long as Deutsche Bank Trust Company Americas is acting as Depositary hereunder.

 

SECTION 7.11      Compliance with U.S. Securities Laws.  Notwithstanding anything in this Deposit Agreement to the contrary, the withdrawal or Delivery of Deposited Securities will not be suspended by the Company or the Depositary except as would be permitted by Instruction I.A.(1) of the General Instructions to Form F-6 Registration Statement, as amended from time to time, under the Securities Act.

 

SECTION 7.12      Titles.  All references in this Deposit Agreement to exhibits, Articles, sections, subsections, and other subdivisions refer to the exhibits, Articles, sections, subsections and other subdivisions of this Deposit Agreement unless expressly provided otherwise. The words “this Deposit Agreement”, “herein”, “hereof”, “hereby”, “hereunder”, and words of similar import refer to this Deposit Agreement as a whole as in effect between the Company, the Depositary and the Holders and Beneficial Owners of ADSs and not to any particular subdivision unless expressly so limited. Pronouns in masculine, feminine and neuter gender shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa unless the context otherwise requires. Titles to sections of this Deposit Agreement are included for convenience only and shall be disregarded in construing the language contained in this Deposit Agreement.

 

 

IN WITNESS WHEREOF, PONY AI INC. and DEUTSCHE BANK TRUST COMPANY AMERICAS have duly executed this Deposit Agreement as of the day and year first above set forth and all Holders and Beneficial Owners shall become parties hereto upon acceptance by them of American Depositary Shares evidenced by Receipts issued in accordance with the terms hereof.

 

	PONY AI INC.
	By:
		Name:
		Title:
	DEUTSCHE BANK TRUST COMPANY AMERICAS
	By:
		Name:
		Title:
	By:
		Name:
		Title:

 

 

EXHIBIT A

 

	CUSIP________
	ISIN________
	American Depositary Shares (Each American Depositary Share representing ________ Fully Paid Class A Ordinary Share[s])

 

[FORM OF FACE OF RECEIPT]

 

AMERICAN DEPOSITARY RECEIPT

 

for

 

AMERICAN DEPOSITARY SHARES

 

representing

 

DEPOSITED ORDINARY SHARES

 

of

 

Pony AI Inc.

 

(Incorporated under the laws of the Cayman Islands)

 

DEUTSCHE BANK TRUST COMPANY AMERICAS, as depositary (herein called the “Depositary”), hereby certifies that ________________ is the owner of ______________ American Depositary Shares (hereinafter “ADS”), representing deposited ordinary shares, each of Par Value of U.S. $0.0005 including evidence of rights to receive such ordinary shares (the “Shares”) of Pony AI Inc., a company incorporated under the laws of the Cayman Islands (the “Company”). As of the date of the Deposit Agreement (hereinafter referred to), each ADS represents ________ Shares deposited under the Deposit Agreement with the Custodian which at the date of execution of the Deposit Agreement is Deutsche Bank AG, Hong Kong Branch (the “Custodian”). The ratio of Depositary Shares to shares of stock is subject to subsequent amendment as provided in Article IV of the Deposit Agreement. The Depositary’s Corporate Trust Office is located at 1 Columbus Circle, New York, NY 10019, U.S.A.

 

(1)            The Deposit Agreement. This American Depositary Receipt is one of an issue of American Depositary Receipts (“Receipts”), all issued or to be issued upon the terms and conditions set forth in the Deposit Agreement, dated as of ________ (as amended from time to time, the “Deposit Agreement”), by and among the Company, the Depositary, and all Holders and Beneficial Owners from time to time of Receipts issued thereunder, each of whom by accepting a Receipt agrees to become a party thereto and becomes bound by all the terms and conditions thereof. The Deposit Agreement sets forth the rights and obligations of Holders and Beneficial Owners of Receipts and the rights and duties of the Depositary in respect of the Shares deposited thereunder and any and all other securities, property and cash from time to time, received in respect of such Shares and held thereunder (such Shares, other securities, property and cash are herein called “Deposited Securities”). Copies of the Deposit Agreement are on file at the Corporate Trust Office of the Depositary and the Custodian.

 

 

Each owner and each Beneficial Owner, upon acceptance of any ADSs (or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement, shall be deemed for all purposes to (a) be a party to and bound by the terms of the Deposit Agreement and applicable ADR(s), and (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement and the applicable ADR(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the applicable ADR(s) (the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof).

 

The statements made on the face and reverse of this Receipt are summaries of certain provisions of the Deposit Agreement and the Memorandum and Articles of Association (as in effect on the date of the Deposit Agreement) and are qualified by and subject to the detailed provisions of the Deposit Agreement, to which reference is hereby made. All capitalized terms used herein which are not otherwise defined herein shall have the meanings ascribed thereto in the Deposit Agreement. To the extent there is any inconsistency between the terms of this Receipt and the terms of the Deposit Agreement, the terms of the Deposit Agreement shall prevail. Prospective and actual Holders and Beneficial Owners are encouraged to read the terms of the Deposit Agreement. The Depositary makes no representation or warranty as to the validity or worth of the Deposited Securities. The Depositary has made arrangements for the acceptance of the American Depositary Shares into DTC. Each Beneficial Owner of American Depositary Shares held through DTC must rely on the procedures of DTC and the DTC Participants to exercise and be entitled to any rights attributable to such American Depositary Shares. The Receipt evidencing the American Depositary Shares held through DTC will be registered in the name of a nominee of DTC. So long as the American Depositary Shares are held through DTC or unless otherwise required by law, ownership of beneficial interests in the Receipt registered in the name of DTC (or its nominee) will be shown on, and transfers of such ownership will be effected only through, records maintained by (i) DTC (or its nominee), or (ii) DTC Participants (or their nominees).

 

(2)            Surrender of Receipts and Withdrawal of Deposited Securities. Upon surrender, at the Corporate Trust Office of the Depositary, of ADSs evidenced by this Receipt for the purpose of withdrawal of the Deposited Securities represented thereby, and upon payment of (i) the fees and charges of the Depositary for the making of withdrawals of Deposited Securities and cancellation of Receipts (as set forth in Section 5.9 of the Deposit Agreement and Article (9) hereof) and (ii) all fees, taxes and/or governmental charges payable in connection with such surrender and withdrawal, and, subject to the terms and conditions of the Deposit Agreement, the Memorandum and Articles of Association, Section 7.11 of the Deposit Agreement, Article (22) hereof and the provisions of or governing the Deposited Securities and other applicable laws, the Holder of the American Depositary Shares evidenced hereby is entitled to Delivery, to him or upon his order, of the Deposited Securities represented by the ADS so surrendered. ADS may be surrendered for the purpose of withdrawing Deposited Securities by Delivery of a Receipt evidencing such ADS (if held in registered form) or by book-entry delivery of such ADS to the Depositary.

 

 

A Receipt surrendered for such purposes shall, if so required by the Depositary, be properly endorsed in blank or accompanied by proper instruments of transfer in blank, and if the Depositary so requires, the Holder thereof shall execute and deliver to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be Delivered to or upon the written order of a person or persons designated in such order. Thereupon, the Depositary shall direct the Custodian to Deliver (without unreasonable delay) at the designated office of the Custodian or through a book-entry delivery of the Shares (in either case subject to the terms and conditions of the Deposit Agreement, to the Memorandum and Articles of Association, and to the provisions of or governing the Deposited Securities and applicable laws, now or hereafter in effect), to or upon the written order of the person or persons designated in the order delivered to the Depositary as provided above, the Deposited Securities represented by such ADSs, together with any certificate or other proper documents of or relating to title for the Deposited Securities or evidence of the electronic transfer thereof (if available) as the case may be to or for the account of such person. Subject to Article (4) hereof, in the case of surrender of a Receipt evidencing a number of ADSs representing other than a whole number of Shares, the Depositary shall cause ownership of the appropriate whole number of Shares to be Delivered in accordance with the terms hereof, and shall, at the discretion of the Depositary, either (i) issue and Deliver to the person surrendering such Receipt a new Receipt evidencing American Depositary Shares representing any remaining fractional Share, or (ii) sell or cause to be sold the fractional Shares represented by the Receipt so surrendered and remit the proceeds thereof (net of (a) applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and (b) taxes and/or governmental charges) to the person surrendering the Receipt. At the request, risk and expense of any Holder so surrendering a Receipt, and for the account of such Holder, the Depositary shall direct the Custodian to forward (to the extent permitted by law) any cash or other property (other than securities) held in respect of, and any certificate or certificates and other proper documents of or relating to title to, the Deposited Securities represented by such Receipt to the Depositary for Delivery at the Corporate Trust Office of the Depositary, and for further Delivery to such Holder. Such direction shall be given by letter or, at the request, risk and expense of such Holder, by cable, telex or facsimile transmission. Upon receipt of such direction by the Depositary, the Depositary may make delivery to such person or persons entitled thereto at the Corporate Trust Office of the Depositary of any dividends or cash distributions with respect to the Deposited Securities represented by such Receipt, or of any proceeds of sale of any dividends, distributions or rights, which may at the time be held by the Depositary.

 

(3)            Transfers, Split-Ups and Combinations of Receipts. Subject to the terms and conditions of the Deposit Agreement, the Registrar shall register transfers of Receipts on its books, upon surrender at the Corporate Trust Office of the Depositary of a Receipt by the Holder thereof in person or by duly authorized attorney, properly endorsed in the case of a certificated Receipt or accompanied by, or in the case of Receipts issued through any book-entry system, including, without limitation, DRS/Profile, receipt by the Depositary of proper instruments of transfer (including signature guarantees in accordance with standard industry practice) and duly stamped as may be required by the laws of the State of New York, of the United States, of the Cayman Islands and of any other applicable jurisdiction. Subject to the terms and conditions of the Deposit Agreement, including payment of the applicable fees and expenses incurred by, and charges of, the Depositary, the Depositary shall execute and Deliver a new Receipt(s) (and if necessary, cause the Registrar to countersign such Receipt(s)) and deliver same to or upon the order of the person entitled to such Receipts evidencing the same aggregate number of ADSs as those evidenced by the Receipts surrendered. Upon surrender of a Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or Receipts upon payment of the applicable fees and charges of the Depositary, and subject to the terms and conditions of the Deposit Agreement, the Depositary shall execute and deliver a new Receipt or Receipts for any authorized number of ADSs requested, evidencing the same aggregate number of ADSs as the Receipt or Receipts surrendered.

 

 

(4)            Pre-Conditions to Registration, Transfer, Etc. As a condition precedent to the execution and Delivery, registration, registration of transfer, split-up, subdivision, combination or surrender of any Receipt, the delivery of any distribution thereon (whether in cash or shares) or withdrawal of any Deposited Securities, the Depositary or the Custodian may require (i) payment from the depositor of Shares or presenter of the Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees and charges of the Depositary as provided in the Deposit Agreement and in this Receipt, (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature or any other matter and (iii) compliance with (A) any laws or governmental regulations relating to the execution and Delivery of Receipts and ADSs or to the withdrawal of Deposited Securities and (B) such reasonable regulations of the Depositary or the Company consistent with the Deposit Agreement and applicable law.

 

The issuance of ADSs against deposits of Shares generally or against deposits of particular Shares may be suspended, or the issuance of ADSs against the deposit of particular Shares may be withheld, or the registration of transfer of Receipts in particular instances may be refused, or the registration of transfer of Receipts generally may be suspended, during any period when the transfer books of the Depositary are closed or if any such action is deemed necessary or advisable by the Depositary or the Company, in good faith, at any time or from time to time because of any requirement of law, any government or governmental body or commission or any securities exchange upon which the Receipts or Share are listed, or under any provision of the Deposit Agreement or provisions of, or governing, the Deposited Securities or any meeting of shareholders of the Company or for any other reason, subject in all cases to Article (22) hereof.

 

The Depositary shall not issue ADSs prior to the receipt of Shares or deliver Shares prior to the receipt and cancellation of ADSs.

 

(5)            Compliance With Information Requests. Notwithstanding any other provision of the Deposit Agreement or this Receipt, each Holder and Beneficial Owner of the ADSs represented hereby agrees to comply with requests from the Company pursuant to the laws of the Cayman Islands, the rules and requirements of the NASDAQ and any other stock exchange on which the Shares are, or will be registered, traded or listed, the Memorandum and Articles of Association, which are made to provide information as to the capacity in which such Holder or Beneficial Owner owns ADSs and regarding the identity of any other person interested in such ADSs and the nature of such interest and various other matters whether or not they are Holders and/or Beneficial Owner at the time of such request. The Depositary agrees to use reasonable efforts to forward any such requests to the Holders and to forward to the Company any such responses to such requests received by the Depositary.

 

 

(6)            Liability of Holder for Taxes, Duties and Other Charges. If any tax or other governmental charge shall become payable by the Depositary or the Custodian with respect to any Receipt or any Deposited Securities or ADSs, such tax or other governmental charge shall be payable by the Holders and Beneficial Owners to the Depositary. The Company, the Custodian and/or the Depositary may withhold or deduct from any distributions made in respect of Deposited Securities and may sell for the account of the Holder and/or Beneficial Owner any or all of the Deposited Securities and apply such distributions and sale proceeds in payment of such taxes (including applicable interest and penalties) or charges, with the Holder and the Beneficial Owner hereof remaining fully liable for any deficiency. The Custodian may refuse the deposit of Shares, and the Depositary may refuse to issue ADSs, to deliver Receipts, register the transfer, split-up or combination of ADRs and (subject to Article (22) hereof) the withdrawal of Deposited Securities, until payment in full of such tax, charge, penalty or interest is received.

 

The liability of Holders and Beneficial Owners under the Deposit Agreement shall survive any transfer of Receipts, any surrender of Receipts and withdrawal of Deposited Securities or the termination of the Deposit Agreement.

 

Holders understand that in converting Foreign Currency, amounts received on conversion are calculated at a rate which may exceed the number of decimal places used by the Depositary to report distribution rates (which in any case will not be less than two decimal places). Any excess amount may be retained by the Depositary as an additional cost of conversion, irrespective of any other fees and expenses payable or owing hereunder and shall not be subject to escheatment.

 

(7)            Representations and Warranties of Depositors. Each person depositing Shares under the Deposit Agreement shall be deemed thereby to represent and warrant that (i) such Shares (and the certificates therefor) are duly authorized, validly issued, fully paid, non-assessable and were legally obtained by such person, (ii) all preemptive (and similar) rights, if any, with respect to such Shares, have been validly waived or exercised, (iii) the person making such deposit is duly authorized so to do, (iv) the Shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim, and are not, and the ADSs issuable upon such deposit will not be, Restricted Securities (except as contemplated by Section 2.11 of the Deposit Agreement), (v) the Shares presented for deposit have not been stripped of any rights or entitlements and (vi) the Shares are not subject to any lock-up agreement with the Company or other party, or the Shares are subject to a lock-up agreement but such lock-up agreement has terminated or the lock-up restrictions imposed thereunder have expired or been validly waived. Such representations and warranties shall survive the deposit and withdrawal of Shares and the issuance, cancellation and transfer of ADSs. If any such representations or warranties are false in any way, the Company and Depositary shall be authorized, at the cost and expense of the person depositing Shares, to take any and all actions necessary to correct the consequences thereof.

 

(8)            Filing Proofs, Certificates and Other Information. Any person presenting Shares for deposit shall provide, any Holder and any Beneficial Owner may be required to provide, and every Holder and Beneficial Owner agrees, from time to time to provide to the Depositary such proof of citizenship or residence, taxpayer status, payment of all applicable taxes and/or other governmental charges, exchange control approval, legal or beneficial ownership of ADSs and Deposited Securities, compliance with applicable laws and the terms of the Deposit Agreement and the provisions of, or governing, the Deposited Securities or other information as the Depositary deems necessary or proper or as the Company may reasonably require by written request to the Depositary consistent with its obligations under the Deposit Agreement. Pursuant to the Deposit Agreement, the Depositary and the Registrar, as applicable, may withhold the execution or Delivery or registration of transfer of any Receipt or the distribution or sale of any dividend or other distribution of rights or of the proceeds thereof, or to the extent not limited by the terms of Article (22) hereof or the terms of the Deposit Agreement, the Delivery of any Deposited Securities until such proof or other information is filed or such certifications are executed, or such representations and warranties are made, or such other documentation or information provided, in each case to the Depositary’s and the Company’s satisfaction. The Depositary shall from time to time on the written request of the Company advise the Company of the availability of any such proofs, certificates or other information and shall, at the Company’s sole expense, provide or otherwise make available copies thereof to the Company upon written request therefor by the Company, unless such disclosure is prohibited by law. Each Holder and Beneficial Owner agrees to provide, any information requested by the Company or the Depositary pursuant to this paragraph. Nothing herein shall obligate the Depositary to (i) obtain any information for the Company if not provided by the Holders or Beneficial Owners or (ii) verify or vouch for the accuracy of the information so provided by the Holders or Beneficial Owners.

 

 

Every Holder and Beneficial Owner agrees to indemnify the Depositary, the Company, the Custodian, the Agents and each of their respective directors, officers, employees, agents and Affiliates against, and to hold each of them harmless from, any Losses which any of them may incur or which may be made against any of them as a result of or in connection with any inaccuracy in or omission from any such proof, certificate, representation, warranty, information or document furnished by or on behalf of such Holder and/or Beneficial Owner or as a result of any such failure to furnish any of the foregoing.

 

The obligations of Holders and Beneficial Owners under the Deposit Agreement shall survive any transfer of Receipts, any surrender of Receipts and withdrawal of Deposited Securities or the termination of the Deposit Agreement.

 

(9)            Charges of Depositary. The Depositary reserves the right to charge the following fees for the services performed under the terms of the Deposit Agreement, provided, however, that no fees shall be payable upon distribution of cash dividends so long as the charging of such fee is prohibited by the exchange, if any, upon which the ADSs are listed:

 

(i)            to any person to whom ADSs are issued or to any person to whom a distribution is made in respect of ADS distributions pursuant to stock dividends or other free distributions of stock, bonus distributions, stock splits or other distributions (except where converted to cash), a fee not in excess of U.S. $ 5.00 per 100 ADSs (or fraction thereof) so issued under the terms of the Deposit Agreement to be determined by the Depositary;

 

(ii)            to any person surrendering ADSs for withdrawal of Deposited Securities or whose ADSs are cancelled or reduced for any other reason including, inter alia, cash distributions made pursuant to a cancellation or withdrawal, a fee not in excess of U.S. $ 5.00 per 100 ADSs reduced, cancelled or surrendered (as the case may be);

 

(iii)            to any holder of ADSs (including, without limitation, Holders), a fee not in excess of U.S. $ 5.00 per 100 ADSs held for the distribution of cash dividends;

 

(iv)            to any holder of ADSs (including, without limitation, Holders), a fee not in excess of U.S. $ 5.00 per 100 ADSs held for the distribution of cash entitlements (other than cash dividends) and/or cash proceeds, including proceeds from the sale of rights, securities and other entitlements;

 

 

(v)            to any holder of ADSs (including, without limitation, Holders), a fee not in excess of U.S. $ 5.00 per 100 ADSs (or portion thereof) issued upon the exercise of rights; and

 

(vi)            for the operation and maintenance costs in administering the ADSs an annual fee not in excess of U.S. $ 5.00 per 100 ADSs, such fee to be assessed against Holders of record as of the date or dates set by the Depositary as it sees fit and collected at the sole discretion of the Depositary by billing such Holders for such fee or by deducting such fee from one or more cash dividends or other cash distributions.

 

In addition, Holders, Beneficial Owners, any person depositing Shares for deposit and any person surrendering ADSs for cancellation and withdrawal of Deposited Securities will be required to pay the following charges:

 

(i)            taxes (including applicable interest and penalties) and other governmental charges;

 

(ii)            such registration fees as may from time to time be in effect for the registration of Shares or other Deposited Securities with the Foreign Registrar and applicable to transfers of Shares or other Deposited Securities to or from the name of the Custodian, the Depositary or any nominees upon the making of deposits and withdrawals, respectively;

 

(iii)            such cable, telex, facsimile and electronic transmission and delivery expenses as are expressly provided in the Deposit Agreement to be at the expense of the depositor depositing or person withdrawing Shares or Holders and Beneficial Owners of ADSs;

 

(iv)            the expenses and charges incurred by the Depositary and/or a division or Affiliate(s) of the Depositary in the conversion of Foreign Currency;

 

(v)            such fees and expenses as are incurred by the Depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to Shares, Deposited Securities, ADSs and ADRs;

 

(vi)            the fees and expenses incurred by the Depositary in connection with the delivery of Deposited Securities, including any fees of a central depository for securities in the local market, where applicable;

 

(vii)            any additional fees, charges, costs or expenses that may be incurred by the Depositary or a division or Affiliate(s) of the Depositary from time to time.

 

Any other fees and charges of, and expenses incurred by, the Depositary or the Custodian under the Deposit Agreement shall be for the account of the Company unless otherwise agreed in writing between the Company and the Depositary from time to time. All fees and charges may, at any time and from time to time, be changed by agreement between the Depositary and Company but, in the case of fees and charges payable by Holders or Beneficial Owners, only in the manner contemplated by Article (20) hereof.

 

The Depositary may make payments to the Company and/or may share revenue with the Company derived from fees collected from Holders and Beneficial Owners, upon such terms and conditions as the Company and the Depositary may agree from time to time.

 

 

(10)            Title to Receipts. It is a condition of this Receipt, and every successive Holder of this Receipt by accepting or holding the same consents and agrees, that title to this Receipt (and to each ADS evidenced hereby) is transferable by delivery of the Receipt, provided it has been properly endorsed or accompanied by proper instruments of transfer, such Receipt being a certificated security under the laws of the State of New York. Notwithstanding any notice to the contrary, the Depositary may deem and treat the Holder of this Receipt (that is, the person in whose name this Receipt is registered on the books of the Depositary) as the absolute owner hereof for all purposes. The Depositary shall have no obligation or be subject to any liability under the Deposit Agreement or this Receipt to any holder of this Receipt or any Beneficial Owner unless such holder is the Holder of this Receipt registered on the books of the Depositary or, in the case of a Beneficial Owner, such Beneficial Owner or the Beneficial Owner’s representative is the Holder registered on the books of the Depositary.

 

(11)            Validity of Receipt. This Receipt shall not be entitled to any benefits under the Deposit Agreement or be valid or enforceable for any purpose, unless this Receipt has been (i) dated, (ii) signed by the manual or facsimile signature of a duly authorized signatory of the Depositary, (iii) if a Registrar for the Receipts shall have been appointed, countersigned by the manual or facsimile signature of a duly authorized signatory of the Registrar and (iv) registered in the books maintained by the Depositary or the Registrar, as applicable, for the issuance and transfer of Receipts. Receipts bearing the facsimile signature of a duly-authorized signatory of the Depositary or the Registrar, who at the time of signature was a duly-authorized signatory of the Depositary or the Registrar, as the case may be, shall bind the Depositary, notwithstanding the fact that such signatory has ceased to be so authorized prior to the execution and delivery of such Receipt by the Depositary or did not hold such office on the date of issuance of such Receipts.

 

(12)            Available Information; Reports; Inspection of Transfer Books. The Company is subject to the periodic reporting requirements of the Exchange Act applicable to foreign private issuers (as defined in Rule 405 of the Securities Act) and accordingly files certain information with the Commission. These reports and documents can be inspected and copied at the public reference facilities maintained by the Commission located at 100 F Street, N.E., Washington D.C. 20549, U.S.A. The Depositary shall make available during normal business hours on any Business Day for inspection by Holders at its Corporate Trust Office any reports and communications, including any proxy soliciting materials, received from the Company which are both (a) received by the Depositary, the Custodian, or the nominee of either of them as the holder of the Deposited Securities and (b) made generally available to the holders of such Deposited Securities by the Company.

 

The Depositary or the Registrar, as applicable, shall keep books for the registration of Receipts and transfers of Receipts which at all reasonable times shall be open for inspection by the Company and by the Holders of such Receipts, provided that such inspection shall not be, to the Depositary’s or the Registrar’s knowledge, for the purpose of communicating with Holders of such Receipts in the interest of a business or object other than the business of the Company or other than a matter related to the Deposit Agreement or the Receipts.

 

The Depositary or the Registrar, as applicable, may close the transfer books with respect to the Receipts, at any time or from time to time, when deemed necessary or advisable by it in good faith in connection with the performance of its duties hereunder, or at the reasonable written request of the Company subject, in all cases, to Article (22) hereof.

 

 

Dated:

DEUTSCHE BANK TRUST COMPANY AMERICAS, as Depositary

 

	By:
	By:

 

The address of the Corporate Trust Office of the Depositary is 1 Columbus Circle, New York, NY 10019, U.S.A.

 

 

EXHIBIT B

 

[FORM OF REVERSE OF RECEIPT]
SUMMARY OF CERTAIN ADDITIONAL PROVISIONS
OF THE DEPOSIT AGREEMENT

 

(13)            Dividends and Distributions in Cash, Shares, etc. Whenever the Depositary receives confirmation from the Custodian of receipt of any cash dividend or other cash distribution on any Deposited Securities, or receives proceeds from the sale of any Shares, rights securities or other entitlements under the Deposit Agreement, the Depositary will, if at the time of receipt thereof any amounts received in a Foreign Currency can, in the judgment of the Depositary (upon the terms of the Deposit Agreement), be converted on a practicable basis, into Dollars transferable to the United States, promptly convert or cause to be converted such dividend, distribution or proceeds into Dollars and will distribute promptly the amount thus received (net of applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) to the Holders of record as of the ADS Record Date in proportion to the number of ADSs representing such Deposited Securities held by such Holders respectively as of the ADS Record Date. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Holder a fraction of one cent. Any such fractional amounts shall be rounded down to the nearest whole cent and so distributed to Holders entitled thereto. Holders and Beneficial Owners understand that in converting Foreign Currency, amounts received on conversion are calculated at a rate which exceeds the number of decimal places used by the Depositary to report distribution rates. The excess amount may be retained by the Depositary as an additional cost of conversion, irrespective of any other fees and expenses payable or owing hereunder and shall not be subject to escheatment. If the Company, the Custodian or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities an amount on account of taxes, duties or other governmental charges, the amount distributed to Holders on the ADSs representing such Deposited Securities shall be reduced accordingly. Such withheld amounts shall be forwarded by the Company, the Custodian or the Depositary to the relevant governmental authority. Evidence of payment thereof by the Company shall be forwarded by the Company to the Depositary upon request. The Depositary shall forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file with governmental agencies such reports as are necessary to obtain benefits under the applicable tax treaties for the Holders and Beneficial Owners of Receipts.

 

If any distribution upon any Deposited Securities consists of a dividend in, or free distribution of, Shares, the Company shall cause such Shares to be deposited with the Custodian and registered, as the case may be, in the name of the Depositary, the Custodian or their nominees. Upon receipt of confirmation of such deposit, the Depositary shall, subject to and in accordance with the Deposit Agreement, establish the ADS Record Date and either (i) distribute to the Holders as of the ADS Record Date in proportion to the number of ADSs held by such Holders as of the ADS Record Date, additional ADSs, which represent in aggregate the number of Shares received as such dividend, or free distribution, subject to the terms of the Deposit Agreement (including, without limitation, the applicable fees and charges of, and expenses incurred by, the Depositary, and taxes and/or governmental charges), or (ii) if additional ADSs are not so distributed, each ADS issued and outstanding after the ADS Record Date shall, to the extent permissible by law, thenceforth also represent rights and interests in the additional Shares distributed upon the Deposited Securities represented thereby (net of the applicable fees and charges of, and the expenses incurred by, the Depositary, and taxes and/or governmental charges). In lieu of delivering fractional ADSs, the Depositary shall sell the number of Shares represented by the aggregate of such fractions and distribute the proceeds upon the terms set forth in the Deposit Agreement.

 

 

In the event that (x) the Depositary determines that any distribution in property (including Shares) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, or, (y) if the Company, in the fulfillment of its obligations under the Deposit Agreement, has either (a) furnished an opinion of U.S. counsel determining that Shares must be registered under the Securities Act or other laws in order to be distributed to Holders (and no such registration statement has been declared effective), or (b) fails to timely deliver the documentation contemplated in the Deposit Agreement, the Depositary may dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable, and the Depositary shall distribute the net proceeds of any such sale (after deduction of taxes and/or governmental charges, and fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary) to Holders entitled thereto upon the terms of the Deposit Agreement. The Depositary shall hold and/or distribute any unsold balance of such property in accordance with the provisions of the Deposit Agreement.

 

Upon timely receipt of a notice indicating that the Company wishes an elective distribution to be made available to Holders upon the terms described in the Deposit Agreement, the Depositary shall, upon provision of all documentation required under the Deposit Agreement, (including, without limitation, any legal opinions the Depositary may request under the Deposit Agreement) determine whether such distribution is lawful and reasonably practicable. If so, the Depositary shall, subject to the terms and conditions of the Deposit Agreement, establish an ADS Record Date according to Article (14) hereof and establish procedures to enable the Holder hereof to elect to receive the proposed distribution in cash or in additional ADSs. If a Holder elects to receive the distribution in cash, the dividend shall be distributed as in the case of a distribution in cash. If the Holder hereof elects to receive the distribution in additional ADSs, the distribution shall be distributed as in the case of a distribution in Shares upon the terms described in the Deposit Agreement. If such elective distribution is not lawful or reasonably practicable or if the Depositary did not receive satisfactory documentation set forth in the Deposit Agreement, the Depositary shall, to the extent permitted by law, distribute to Holders, on the basis of the same determination as is made in the Cayman Islands, in respect of the Shares for which no election is made, either (x) cash or (y) additional ADSs representing such additional Shares, in each case, upon the terms described in the Deposit Agreement. Nothing herein shall obligate the Depositary to make available to the Holder hereof a method to receive the elective dividend in Shares (rather than ADSs). There can be no assurance that the Holder hereof will be given the opportunity to receive elective distributions on the same terms and conditions as the holders of Shares.

 

 

Whenever the Company intends to distribute to the holders of the Deposited Securities rights to subscribe for additional Shares, the Company shall give notice thereof to the Depositary at least 60 days prior to the proposed distribution stating whether or not it wishes such rights to be made available to Holders of ADSs. Upon timely receipt by the Depositary of a notice indicating that the Company wishes such rights to be made available to Holders of ADSs, the Company shall determine whether it is lawful and reasonably practicable to make such rights available to the Holders. The Depositary shall make such rights available to any Holders only if the Company shall have timely requested that such rights be made available to Holders, the Depositary shall have received the documentation required by the Deposit Agreement, and the Depositary shall have determined that such distribution of rights is lawful and reasonably practicable. If such conditions are not satisfied, the Depositary shall sell the rights as described below. In the event all conditions set forth above are satisfied, the Depositary shall establish an ADS Record Date and establish procedures (x) to distribute such rights (by means of warrants or otherwise) and (y) to enable the Holders to exercise the rights (upon payment of the applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges). Nothing herein or in the Deposit Agreement shall obligate the Depositary to make available to the Holders a method to exercise such rights to subscribe for Shares (rather than ADSs). If (i) the Company does not timely request the Depositary to make the rights available to Holders or if the Company requests that the rights not be made available to Holders, (ii) the Depositary fails to receive the documentation required by the Deposit Agreement or determines it is not lawful or reasonably practicable to make the rights available to Holders, or (iii) any rights made available are not exercised and appear to be about to lapse, the Depositary shall determine whether it is lawful and reasonably practicable to sell such rights, and if it so determines that it is lawful and reasonably practicable, endeavour to sell such rights in a riskless principal capacity or otherwise, at such place and upon such terms (including public and/or private sale) as it may deem proper. The Depositary shall, upon such sale, convert and distribute proceeds of such sale (net of applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) upon the terms hereof and in the Deposit Agreement. If the Depositary is unable to make any rights available to Holders or to arrange for the sale of the rights upon the terms described above, the Depositary shall allow such rights to lapse. The Depositary shall not be responsible for (i) any failure to determine that it may be lawful or practicable to make such rights available to Holders in general or any Holders in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale, or exercise, or (iii) the content of any materials forwarded to the Holders on behalf of the Company in connection with the rights distribution.

 

Notwithstanding anything herein to the contrary, if registration (under the Securities Act and/or any other applicable law) of the rights or the securities to which any rights relate may be required in order for the Company to offer such rights or such securities to Holders and to sell the securities represented by such rights, the Depositary will not distribute such rights to the Holders (i) unless and until a registration statement under the Securities Act covering such offering is in effect or (ii) unless the Company furnishes to the Depositary opinion(s) of counsel for the Company in the United States and counsel to the Company in any other applicable country in which rights would be distributed, in each case satisfactorily to the Depositary, to the effect that the offering and sale of such securities to Holders and Beneficial Owners are exempt from, or do not require registration under, the provisions of the Securities Act or any other applicable laws. In the event that the Company, the Depositary or the Custodian shall be required to withhold and does withhold from any distribution of property (including rights) an amount on account of taxes and/or other governmental charges, the amount distributed to the Holders shall be reduced accordingly. In the event that the Depositary determines that any distribution in property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, the Depositary may dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable to pay any such taxes and/or charges.

 

 

There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to exercise rights on the same terms and conditions as the holders of Shares or to exercise such rights. Nothing herein shall obligate the Company to file any registration statement in respect of any rights or Shares or other securities to be acquired upon the exercise of such rights or otherwise to register or qualify the offer or sale of such rights or securities under the applicable law of any other jurisdiction for any purpose.

 

Upon receipt of a notice regarding property other than cash, Shares or rights to purchase additional Shares, to be made to Holders of ADSs, the Depositary shall determine, after consultation with the Company, whether such distribution to Holders is lawful and reasonably practicable. The Depositary shall not make such distribution unless (i) the Company shall have timely requested the Depositary to make such distribution to Holders, (ii) the Depositary shall have received the documentation required by the Deposit Agreement, and (iii) the Depositary shall have determined that such distribution is lawful and reasonably practicable. Upon satisfaction of such conditions, the Depositary shall distribute the property so received to the Holders of record as of the ADS Record Date, in proportion to the number of ADSs held by such Holders respectively and in such manner as the Depositary may deem practicable for accomplishing such distribution (i) upon receipt of payment or net of the applicable fees and charges of, and expenses incurred by, the Depositary, and (ii) net of any taxes and/or governmental charges. The Depositary may dispose of all or a portion of the property so distributed and deposited, in such amounts and in such manner (including public or private sale) as the Depositary may deem practicable or necessary to satisfy any taxes (including applicable interest and penalties) or other governmental charges applicable to the distribution.

 

If the conditions above are not satisfied, the Depositary shall sell or cause such property to be sold in a public or private sale, at such place or places and upon such terms as it may deem proper and shall distribute the proceeds of such sale received by the Depositary (net of (a) applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and (b) taxes and/or governmental charges) to the Holders upon the terms hereof and of the Deposit Agreement. If the Depositary is unable to sell such property, the Depositary may dispose of such property in any way it deems reasonably practicable under the circumstances.

 

(14)            Fixing of Record Date. Whenever necessary in connection with any distribution (whether in cash, Shares, rights or other distribution), or whenever for any reason the Depositary causes a change in the number of Shares that are represented by each ADS, or whenever the Depositary shall receive notice of any meeting of or solicitation of holders of Shares or other Deposited Securities, or whenever the Depositary shall find it necessary or convenient in connection with the giving of any notice, or any other matter, the Depositary shall fix a record date (the “ADS Record Date”), as close as practicable to the record date fixed by the Company with respect to the Shares (if applicable), for the determination of the Holders who shall be entitled to receive such distribution, to give instructions for the exercise of voting rights at any such meeting, or to give or withhold such consent, or to receive such notice or solicitation or to otherwise take action, or to exercise the rights of Holders with respect to such changed number of Shares represented by each ADS or for any other reason. Subject to applicable law and the terms and conditions of this Receipt and the Deposit Agreement, only the Holders of record at the close of business in New York on such ADS Record Date shall be entitled to receive such distributions, to give such voting instructions, to receive such notice or solicitation, or otherwise take action.

 

 

(15)            Voting of Deposited Securities. Subject to the next sentence, as soon as practicable after receipt of notice of any meeting at which the holders of Deposited Securities are entitled to vote, or of solicitation of consents or proxies from holders of Deposited Securities, the Depositary shall fix the ADS Record Date in respect of such meeting or such solicitation of consents or proxies. The Depositary shall, if requested by the Company in writing in a timely manner (the Depositary having no obligation to take any further action if the request shall not have been received by the Depositary at least 30 Business Days prior to the date of such vote or meeting) and at the Company’s expense, and provided no U.S. legal prohibitions exist, mail by regular, ordinary mail delivery (or by electronic mail or as otherwise may be agreed between the Company and the Depositary in writing from time to time) or otherwise distribute as soon as practicable after receipt thereof to Holders as of the ADS Record Date: (a) such notice of meeting or solicitation of consent or proxy; (b) a statement that the Holders at the close of business on the ADS Record Date will be entitled, subject to any applicable law, the provisions of the Deposit Agreement, the Company’s Memorandum and Articles of Association and the provisions of or governing the Deposited Securities (which provisions, if any, shall be summarized in pertinent part by the Company), to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by such Holder’s American Depositary Shares; and (c) a brief statement as to the manner in which such voting instructions may be given to the Depositary or, in which instructions may be deemed to have been given in accordance with this Article (15), including an express indication that instructions may be given (or be deemed to have been given in accordance with the immediately following paragraph of this section if no instruction is received) to the Depositary to give a discretionary proxy to a person or persons designated by the Company. Voting instructions may be given only in respect of a number of American Depositary Shares representing an integral number of Deposited Securities. Upon the timely receipt of voting instructions of a Holder on the ADS Record Date in the manner specified by the Depositary, the Depositary shall endeavor, insofar as practicable and permitted under applicable law, the provisions of the Deposit Agreement, the Company’s Memorandum and Articles of Association and the provisions of or governing the Deposited Securities, to vote or cause the Custodian to vote the Deposited Securities (in person or by proxy) represented by American Depositary Shares evidenced by such Receipt in accordance with such voting instructions.

 

In the event that (i) the Depositary timely receives voting instructions from a Holder which fail to specify the manner in which the Depositary is to vote the Deposited Securities represented by such Holder’s ADSs or (ii) no timely instructions are received by the Depositary from a Holder with respect to any of the Deposited Securities represented by the ADSs held by such Holder on the ADS Record Date, the Depositary shall (unless otherwise specified in the notice distributed to Holders) deem such Holder to have instructed the Depositary to give a discretionary proxy to a person designated by the Company with respect to such Deposited Securities and the Depositary shall give a discretionary proxy to a person designated by the Company to vote such Deposited Securities, provided, however, that no such instruction shall be deemed to have been given and no such discretionary proxy shall be given with respect to any matter as to which the Company informs the Depositary (and the Company agrees to provide such information as promptly as practicable in writing, if applicable) that (x) the Company does not wish to give such proxy, (y) the Company is aware or should reasonably be aware that substantial opposition exists from Holders against the outcome for which the person designated by the Company would otherwise vote or (z) the outcome for which the person designated by the Company would otherwise vote would materially and adversely affect the rights of holders of Deposited Securities, provided, further, that the Company will have no liability to any Holder or Beneficial Owner resulting from such notification.

 

 

In the event that voting on any resolution or matter is conducted on a show of hands basis in accordance with the Memorandum and Articles of Association, the Depositary will refrain from voting and the voting instructions (or the deemed voting instructions, as set out above) received by the Depositary from Holders shall lapse. The Depositary will have no obligation to demand voting on a poll basis with respect to any resolution and shall have no liability to any Holder or Beneficial Owner for not having demanded voting on a poll basis.

 

Neither the Depositary nor the Custodian shall, under any circumstances exercise any discretion as to voting, and neither the Depositary nor the Custodian shall vote, attempt to exercise the right to vote, or in any way make use of for purposes of establishing a quorum or otherwise, Deposited Securities represented by ADSs except pursuant to and in accordance with such written instructions from Holders, including the deemed instruction to the Depositary to give a discretionary proxy to a person designated by the Company. Deposited Securities represented by ADSs for which (i) no timely voting instructions are received by the Depositary from the Holder, or (ii) timely voting instructions are received by the Depositary from the Holder but such voting instructions fail to specify the manner in which the Depositary is to vote the Deposited Securities represented by such Holder’s ADSs, shall be voted in the manner provided in this Article (15). Notwithstanding anything else contained herein, and subject to applicable law, regulation and the Memorandum and Articles of Association, the Depositary shall, if so requested in writing by the Company, represent all Deposited Securities (whether or not voting instructions have been received in respect of such Deposited Securities from Holders as of the ADS Record Date) for the purpose of establishing quorum at a meeting of shareholders.

 

There can be no assurance that Holders or Beneficial Owners generally or any Holder or Beneficial Owner in particular will receive the notice described above with sufficient time to enable the Holder to return voting instructions to the Depositary in a timely manner.

 

Notwithstanding the above, save for applicable provisions of the law of the Cayman Islands, and in accordance with the terms of Section 5.3 of the Deposit Agreement, the Depositary shall not be liable for any failure to carry out any instructions to vote any of the Deposited Securities or the manner in which such vote is cast or the effect of such vote.

 

(16)            Changes Affecting Deposited Securities. Upon any change in par value, split-up, subdivision, cancellation, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger, amalgamation or consolidation or sale of assets affecting the Company or to which it otherwise is a party, any securities which shall be received by the Depositary or a Custodian in exchange for, or in conversion of or replacement or otherwise in respect of, such Deposited Securities shall, to the extent permitted by law, be treated as new Deposited Securities under the Deposit Agreement, and the Receipts shall, subject to the provisions of the Deposit Agreement and applicable law, evidence ADSs representing the right to receive such additional securities. Alternatively, the Depositary may, with the Company’s approval, and shall, if the Company shall so requests, subject to the terms of the Deposit Agreement and receipt of satisfactory documentation contemplated by the Deposit Agreement, execute and deliver additional Receipts as in the case of a stock dividend on the Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts, in either case, as well as in the event of newly deposited Shares, with necessary modifications to this form of Receipt specifically describing such new Deposited Securities and/or corporate change. Notwithstanding the foregoing, in the event that any security so received may not be lawfully distributed to some or all Holders, the Depositary may, with the Company’s approval, and shall if the Company requests, subject to receipt of satisfactory legal documentation contemplated in the Deposit Agreement, sell such securities at public or private sale, at such place or places and upon such terms as it may deem proper and may allocate the net proceeds of such sales (net of fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) for the account of the Holders otherwise entitled to such securities and distribute the net proceeds so allocated to the extent practicable as in the case of a distribution received in cash pursuant to the Deposit Agreement. The Depositary shall not be responsible for (i) any failure to determine that it may be lawful or feasible to make such securities available to Holders in general or any Holder in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale, or (iii) any liability to the purchaser of such securities.

 

(17)            Exoneration. None of the Depositary, the Custodian or the Company shall be obligated to do or perform any act which is inconsistent with the provisions of the Deposit Agreement or shall incur any liability to Holders, Beneficial Owners or any third parties (i) if the Depositary, the Custodian or the Company or their respective controlling persons or agents shall be prevented or forbidden from, or subjected to any civil or criminal penalty or restraint on account of, or delayed in, doing or performing any act or thing required by the terms of the Deposit Agreement and this Receipt, by reason of any provision of any present or future law or regulation of the United States, the Cayman Islands or any other country, or of any other governmental authority or regulatory authority or stock exchange, or by reason of any provision, present or future of the Memorandum and Articles of Association or any provision of or governing any Deposited Securities, or by reason of any act of God or war or other circumstances beyond its control, (including, without limitation, nationalization, expropriation, currency restrictions, work stoppage, strikes, civil unrest, revolutions, rebellions, explosions and computer failure), (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement or in the Memorandum and Articles of Association or provisions of or governing Deposited Securities, (iii) for any action or inaction of the Depositary, the Custodian or the Company or their respective controlling persons or agents in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, any Beneficial Owner or authorized representative thereof, or any other person believed by it in good faith to be competent to give such advice or information, (iv) for any inability by a Holder or Beneficial Owner to benefit from any distribution, offering, right or other benefit which is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Holders of ADS or (v) for any special, consequential, indirect or punitive damages for any breach of the terms of the Deposit Agreement or otherwise. The Depositary, its controlling persons, its agents (including without limitation, the Agents), any Custodian and the Company, its controlling persons and its agents may rely and shall be protected in acting upon any written notice, request, opinion or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. No disclaimer of liability under the Securities Act or the Exchange Act is intended by any provision of the Deposit Agreement.

 

 

(18)            Standard of Care. The Company and the Depositary and their respective directors, officers, Affiliates, employees and agents (including without limitation, the Agents) assume no obligation and shall not be subject to any liability under the Deposit Agreement or the Receipts to Holders or Beneficial Owners or other persons, except in accordance with Section 5.8 of the Deposit Agreement, provided, that the Company and the Depositary and their respective directors, officers, Affiliates, employees and agents (including without limitation, the Agents) agree to perform their respective obligations specifically set forth in the Deposit Agreement without gross negligence or wilful misconduct. The Depositary and its directors, officers, Affiliates, employees and agents (including without limitation, the Agents) shall not be liable for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any vote is cast or the effect of any vote. The Depositary shall not incur any liability for any failure to determine that any distribution or action may be lawful or reasonably practicable, for the content of any information submitted to it by the Company for distribution to the Holders or for any inaccuracy of any translation thereof, for any investment risk associated with acquiring an interest in the Deposited Securities, for the validity or worth of the Deposited Securities or for any tax consequences that may result from the ownership of ADSs, Shares or Deposited Securities, for the credit-worthiness of any third party, for allowing any rights to lapse upon the terms of the Deposit Agreement or for the failure or timeliness of any notice from the Company or for any action or non action by it in reliance upon the opinion, advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder or any other person believed by it in good faith to be competent to give such advice or information. The Depositary and its agents (including without limitation, the Agents) shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without gross negligence or willful misconduct while it acted as Depositary.

 

(19)            Resignation and Removal of the Depositary; Appointment of Successor Depositary. The Depositary may at any time resign as Depositary under the Deposit Agreement by written notice of resignation delivered to the Company, such resignation to be effective on the earlier of (i) the 90th day after delivery thereof to the Company (whereupon the Depositary shall, in the event no successor depositary has been appointed by the Company, be entitled to take the actions contemplated in the Deposit Agreement), or (ii) the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement, save that, any amounts, fees, costs or expenses owed to the Depositary under the Deposit Agreement or in accordance with any other agreements otherwise agreed in writing between the Company and the Depositary from time to time shall be paid to the Depositary prior to such resignation. The Company shall use reasonable efforts to appoint such successor depositary, and give notice to the Depositary of such appointment, not more than 90 days after delivery by the Depositary of written notice of resignation as provided in the Deposit Agreement. The Depositary may at any time be removed by the Company by written notice of such removal which notice shall be effective on the later of (i) the 90th day after delivery thereof to the Depositary (whereupon the Depositary shall be entitled to take the actions contemplated in the Deposit Agreement if a successor depositary has not been appointed), or (ii) the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement save that, any amounts, fees, costs or expenses owed to the Depositary under the Deposit Agreement or in accordance with any other agreements otherwise agreed in writing between the Company and the Depositary from time to time shall be paid to the Depositary prior to such removal. In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its best efforts to appoint a successor depositary which shall be a bank or trust company having an office in the Borough of Manhattan, the City of New York and if it shall have not appointed a successor depositary the provisions referred to in Article (21) hereof and correspondingly in the Deposit Agreement shall apply. Every successor depositary shall be required by the Company to execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor. The predecessor depositary, upon payment of all sums due to it and on the written request of the Company, shall (i) execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder (other than as contemplated in the Deposit Agreement), (ii) duly assign, transfer and deliver all right, title and interest to the Deposited Securities to such successor, and (iii) deliver to such successor a list of the Holders of all outstanding Receipts and such other information relating to Receipts and Holders thereof as the successor may reasonably request. Any such successor depositary shall promptly mail notice of its appointment to such Holders. Any corporation into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act and, notwithstanding anything to the contrary in the Deposit Agreement, the Depositary may assign or otherwise transfer all or any of its rights and benefits under the Deposit Agreement (including any cause of action arising in connection with it) to Deutsche Bank AG or any branch thereof or any entity which is a direct or indirect subsidiary or other affiliate of Deutsche Bank AG.

 

 

(20)            Amendment/Supplement. Subject to the terms and conditions of this Article (20), and applicable law, this Receipt and any provisions of the Deposit Agreement may at any time and from time to time be amended or supplemented by written agreement between the Company and the Depositary in any respect which they may deem necessary or desirable without the consent of the Holders or Beneficial Owners. Any amendment or supplement which shall impose or increase any fees or charges (other than the charges of the Depositary in connection with foreign exchange control regulations, and taxes and/or other governmental charges, delivery and other such expenses), or which shall otherwise materially prejudice any substantial existing right of Holders or Beneficial Owners, shall not, however, become effective as to outstanding Receipts until 30 days after notice of such amendment or supplement shall have been given to the Holders of outstanding Receipts. Notice of any amendment to the Deposit Agreement or form of Receipts shall not need to describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided, however, that, in each such case, the notice given to the Holders identifies a means for Holders and Beneficial Owners to retrieve or receive the text of such amendment (i.e., upon retrieval from the Commission's, the Depositary's or the Company's website or upon request from the Depositary). The parties hereto agree that any amendments or supplements which (i) are reasonably necessary (as agreed by the Company and the Depositary) in order for (a) the ADSs to be registered on Form F-6 under the Securities Act or (b) the ADSs or Shares to be traded solely in electronic book-entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to materially prejudice any substantial rights of Holders or Beneficial Owners. Every Holder and Beneficial Owner at the time any amendment or supplement so becomes effective shall be deemed, by continuing to hold such ADS, to consent and agree to such amendment or supplement and to be bound by the Deposit Agreement as amended or supplemented thereby. In no event shall any amendment or supplement impair the right of the Holder to surrender such Receipt and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Notwithstanding the foregoing, if any governmental body should adopt new laws, rules or regulations which would require amendment or supplement of the Deposit Agreement to ensure compliance therewith, the Company and the Depositary may amend or supplement the Deposit Agreement and the Receipt at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to the Deposit Agreement in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance with such laws, or rules or regulations.

 

(21)            Termination. The Depositary shall, at any time at the written direction of the Company, terminate the Deposit Agreement by mailing notice of such termination to the Holders of all Receipts then outstanding at least 90 days prior to the date fixed in such notice for such termination provided that, the Depositary shall be reimbursed for any amounts, fees, costs or expenses owed to it in accordance with the terms of the Deposit Agreement and in accordance with any other agreements as otherwise agreed in writing between the Company and the Depositary from time to time, prior to such termination shall take effect. If 90 days shall have expired after (i) the Depositary shall have delivered to the Company a written notice of its election to resign, or (ii) the Company shall have delivered to the Depositary a written notice of the removal of the Depositary, and in either case a successor depositary shall not have been appointed and accepted its appointment as provided herein and in the Deposit Agreement, the Depositary may terminate the Deposit Agreement by mailing notice of such termination to the Holders of all Receipts then outstanding at least 30 days prior to the date fixed for such termination. On and after the date of termination of the Deposit Agreement, each Holder will, upon surrender of such Holder’s Receipt at the Corporate Trust Office of the Depositary, upon the payment of the charges of the Depositary for the surrender of Receipts referred to in Article (2) hereof and in the Deposit Agreement and subject to the conditions and restrictions therein set forth, and upon payment of any applicable taxes and/or governmental charges, be entitled to delivery, to him or upon his order, of the amount of Deposited Securities represented by such Receipt. If any Receipts shall remain outstanding after the date of termination of the Deposit Agreement, the Registrar thereafter shall discontinue the registration of transfers of Receipts, and the Depositary shall suspend the distribution of dividends to the Holders thereof, and shall not give any further notices or perform any further acts under the Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights or other property as provided in the Deposit Agreement, and shall continue to deliver Deposited Securities, subject to the conditions and restrictions set forth in the Deposit Agreement, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for Receipts surrendered to the Depositary (after deducting, or charging, as the case may be, in each case the charges of the Depositary for the surrender of a Receipt, any expenses for the account of the Holder in accordance with the terms and conditions of the Deposit Agreement and any applicable taxes and/or governmental charges or assessments). At any time after the expiration of six months from the date of termination of the Deposit Agreement, the Depositary may sell the Deposited Securities then held hereunder and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it hereunder, in an unsegregated account, without liability for interest for the pro rata benefit of the Holders of Receipts whose Receipts have not theretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement with respect to the Receipts and the Shares, Deposited Securities and ADSs, except to account for such net proceeds and other cash (after deducting, or charging, as the case may be, in each case the charges of the Depositary for the surrender of a Receipt, any expenses for the account of the Holder in accordance with the terms and conditions of the Deposit Agreement and any applicable taxes and/or governmental charges or assessments) and except as set forth in the Deposit Agreement. Upon the termination of the Deposit Agreement, the Company shall be discharged from all obligations under the Deposit Agreement except as set forth in the Deposit Agreement. The obligations under the terms of the Deposit Agreement and Receipts of Holders and Beneficial Owners of ADSs outstanding as of the effective date of any termination shall survive such effective date of termination and shall be discharged only when the applicable ADSs are presented by their Holders to the Depositary for cancellation under the terms of the Deposit Agreement and the Holders have each satisfied any and all of their obligations hereunder (including, but not limited to, any payment and/or reimbursement obligations which relate to prior to the effective date of termination but which payment and/or reimbursement is claimed after such effective date of termination).

 

 

Notwithstanding anything contained in the Deposit Agreement or any ADR, in connection with the termination of the Deposit Agreement, the Depositary may, independently and without the need for any action by the Company, make available to Holders of ADSs a means to withdraw the Deposited Securities represented by their ADSs and to direct the deposit of such Deposited Securities into an unsponsored American depositary shares program established by the Depositary, upon such terms and conditions as the Depositary may deem reasonably appropriate, subject however, in each case, to satisfaction of the applicable registration requirements by the unsponsored American depositary shares program under the Securities Act, and to receipt by the Depositary of payment of the applicable fees and charges of, and reimbursement of the applicable expenses incurred by, the Depositary.

 

(22)            Compliance with U.S. Securities Laws; Regulatory Compliance. Notwithstanding any provisions in this Receipt or the Deposit Agreement to the contrary, the withdrawal or Delivery of Deposited Securities will not be suspended by the Company or the Depositary except as would be permitted by Section I.A.(1) of the General Instructions to Form F-6 Registration Statement, as amended from time to time, under the Securities Act.

 

(23)            Certain Rights of the Depositary. The Depositary, its Affiliates and their agents, on their own behalf, may own and deal in any class of securities of the Company and its Affiliates and in ADSs. The Depositary may issue ADSs against evidence of rights to receive Shares from the Company, any agent of the Company or any custodian, registrar, transfer agent, clearing agency or other entity involved in ownership or transaction records in respect of the Shares.

 

(24)            Ownership Restrictions. Owners and Beneficial Owners shall comply with any limitations on ownership of Shares under the Memorandum and Articles of Association or applicable Cayman Islands law as if they held the number of Shares their American Depositary Shares represent. The Company shall inform the Owners, Beneficial Owners and the Depositary of any such ownership restrictions in place from time to time.

 

(25)            Waiver. EACH PARTY TO THE DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH HOLDER AND BENEFICIAL OWNER AND/OR HOLDER OF INTERESTS IN ANY ADRs) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE DEPOSITARY AND/OR THE COMPANY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE ADSs OR THE ADRs, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR ANY OTHER THEORY).

 

 

(ASSIGNMENT AND TRANSFER SIGNATURE LINES)

 

FOR VALUE RECEIVED, the undersigned Holder hereby sell(s), assign(s) and transfer(s) unto ______________________________ whose taxpayer identification number is _______________________ and whose address including postal zip code is ____________________________, the within Receipt and all rights thereunder, hereby irrevocably constituting and appointing ________________________ attorney-in-fact to transfer said Receipt on the books of the Depositary with full power of substitution in the premises.

 

Dated:

Name:

 

	By:
	Title:
		NOTICE: The signature of the Holder to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatsoever.
		If the endorsement be executed by an attorney, executor, administrator, trustee or guardian, the person executing the endorsement must give his/her full title in such capacity and proper evidence of authority to act in such capacity, if not on file with the Depositary, must be forwarded with this Receipt.
SIGNATURE GUARANTEED

 

 

ARTICLE I. DEFINITIONS			1
	SECTION 1.1	“Affiliate”	1
	SECTION 1.2	“Agent”	1
	SECTION 1.3	“American Depositary Share(s)” and “ADS(s)”	2
	SECTION 1.4	“Article”	2
	SECTION 1.5	“Articles of Association”	2
	SECTION 1.6	“ADS Record Date”	2
	SECTION 1.7	“Beneficial Owner”	2
	SECTION 1.8	“Business Day”	2
	SECTION 1.9	“Commission”	2
	SECTION 1.10	“Company”	2
	SECTION 1.11	“Corporate Trust Office”	2
	SECTION 1.12	“Custodian”	2
	SECTION 1.13	“Deliver”, “Deliverable” and “Delivery”	2
	SECTION 1.14	“Deposit Agreement”	3
	SECTION 1.15	“Depositary”	3
	SECTION 1.16	“Deposited Securities”	3
	SECTION 1.17	“Dollars” and “$”	3
	SECTION 1.18	“DRS/Profile”	3
	SECTION 1.19	“DTC”	3
	SECTION 1.20	“DTC Participants”	3
	SECTION 1.21	“Exchange Act”	3
	SECTION 1.22	“Foreign Currency”	3
	SECTION 1.23	“Foreign Registrar”	3
	SECTION 1.24	“Holder”	3
	SECTION 1.25	“Indemnified Person” and “Indemnifying Person”	3
	SECTION 1.26	“Losses”	3
	SECTION 1.27	“Memorandum”	3
	SECTION 1.28	“Opinion of Counsel”	3
	SECTION 1.29	“Receipt(s); “American Depositary Receipt(s)”; and “ADR(s)”	3
	SECTION 1.30	“Registrar”	4
	SECTION 1.31	“Restricted ADRs”	4
	SECTION 1.32	“Restricted ADSs”	4
	SECTION 1.33	“Restricted Securities”	4
	SECTION 1.34	“Restricted Shares”	4
	SECTION 1.35	“Securities Act”	4
	SECTION 1.36	“Shares”	4
	SECTION 1.37	“United States” or “U.S.”	4
ARTICLE II. APPOINTMENT OF DEPOSITARY; FORM OF RECEIPT; DEPOSIT OF SHARES; EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS			4
	SECTION 2.1	Appointment of Depositary	4
	SECTION 2.2	Form and Transferability of Receipts	5
	SECTION 2.3	Deposits	6
	SECTION 2.4	Execution and Delivery of Receipts	7
	SECTION 2.5	Transfer of Receipts; Combination and Split-up of Receipts	7

 

 

	SECTION 2.6	Surrender of Receipts and Withdrawal of Deposited Securities	8
	SECTION 2.7	Limitations on Execution and Delivery, Transfer, etc. of Receipts; Suspension of Delivery, Transfer, etc.	9
	SECTION 2.8	Lost Receipts, etc.	10
	SECTION 2.9	Cancellation and Destruction of Surrendered Receipts	10
	SECTION 2.10	Maintenance of Records	10
	SECTION 2.11	Restricted ADSs	10
ARTICLE III. CERTAIN OBLIGATIONS OF HOLDERS AND BENEFICIAL OWNERS OF RECEIPTS			11
	SECTION 3.1	Proofs, Certificates and Other Information	11
	SECTION 3.2	Liability for Taxes and Other Charges	12
	SECTION 3.3	Representations and Warranties on Deposit of Shares	12
	SECTION 3.4	Compliance with Information Requests	12
ARTICLE IV. THE DEPOSITED SECURITIES			13
	SECTION 4.1	Cash Distributions	13
	SECTION 4.2	Distribution in Shares	13
	SECTION 4.3	Elective Distributions in Cash or Shares	14
	SECTION 4.4	Distribution of Rights to Purchase Shares	14
	SECTION 4.5	Distributions Other Than Cash, Shares or Rights to Purchase Shares	16
	SECTION 4.6	Conversion of Foreign Currency	16
	SECTION 4.7	Fixing of Record Date	17
	SECTION 4.8	Voting of Deposited Securities	17
	SECTION 4.9	Changes Affecting Deposited Securities	19
	SECTION 4.10	Available Information	19
	SECTION 4.11	Reports	19
	SECTION 4.12	List of Holders	20
	SECTION 4.13	Taxation; Withholding	20
ARTICLE V. THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY			21
	SECTION 5.1	Maintenance of Office and Transfer Books by the Registrar	21
	SECTION 5.2	Exoneration	21
	SECTION 5.3	Standard of Care	22
	SECTION 5.4	Resignation and Removal of the Depositary; Appointment of Successor Depositary	23
	SECTION 5.5	The Custodian	24
	SECTION 5.6	Notices and Reports	24
	SECTION 5.7	Issuance of Additional Shares, ADSs etc.	25
	SECTION 5.8	Indemnification	26
	SECTION 5.9	Fees and Charges of Depositary	26
	SECTION 5.10	Restricted Securities Owners/Ownership Restrictions	27
ARTICLE VI. AMENDMENT AND TERMINATION			28
	SECTION 6.1	Amendment/Supplement	28
	SECTION 6.2	Termination	29
ARTICLE VII. MISCELLANEOUS			30
	SECTION 7.1	Counterparts	30
	SECTION 7.2	No Third-Party Beneficiaries	30

 

 

	SECTION 7.3	Severability	30
	SECTION 7.4	Holders and Beneficial Owners as Parties; Binding Effect	30
	SECTION 7.5	Notices	30
	SECTION 7.6	Governing Law and Jurisdiction	31
	SECTION 7.7	Assignment	32
	SECTION 7.8	Agents	32
	SECTION 7.9	Affiliates etc.	32
	SECTION 7.10	Exclusivity	33
	SECTION 7.11	Compliance with U.S. Securities Laws	33
	SECTION 7.12	Titles	33

EXHIBIT A	35

EXHIBIT

B

44

 

 

 

Exhibit 5.1

 

Partners:		17 October 2024 PONY AI INC. Osiris International Cayman Limited Suite #4-210, Governors Square 23 Lime Tree Bay Avenue, PO Box 32311 Grand Cayman KY1-1209, Cayman Islands	Our Ref: MRC/KH/P3886-H23912
Paul Aherne	**
Brett Basdeo	***
John Cartwright	*
Audrey Coker	*
John Crook	*
Mark Cummings	*****
Natalie Curtis	****
James Gaden	****
Kristen Kwok	**
Wing Lam	*
William Lee	*
Thomas Pugh	*****
Andrew Randall	**
Victoria Raymond	*
Rupen Shah	*****

 

Dear Sir or Madam

 

PONY AI INC.

 

We have acted as Cayman Islands legal advisers to Pony AI Inc. (the "Company") in connection with the Company’s registration statement on Form F-1, including all amendments or supplements thereto (the "Registration Statement filed with the Securities and Exchange Commission under the U.S. Securities Act of 1933, as amended, relating to the offering (the "Offering") by the Company of American Depositary Shares ("ADSs") representing the Class A Ordinary Shares of the Company of a par value of US$0.0005 each (the “Class A Ordinary Shares”). We are furnishing this opinion as exhibit 5.1 to the Registration Statement.

 

For the purposes of giving this opinion, we have examined and relied upon the originals, copies or translations of the documents listed in Schedule 1.

 

In giving this opinion we have relied upon the assumptions set out in Schedule 2, which we have not independently verified.

 

We are Cayman Islands Attorneys at Law and express no opinion as to any laws other than the laws of the Cayman Islands in force and as interpreted at the date of this opinion.  We have not, for the purposes of this opinion, made any investigation of the laws, rules or regulations of any other jurisdiction.  Except as explicitly stated herein, we express no opinion in relation to any representation or warranty contained in any of the documents cited in this opinion nor upon matters of fact or the commercial terms of the transactions the subject of this opinion.

 

Based upon the examinations and assumptions stated herein and upon such searches as we have conducted and having regard to legal considerations which we consider relevant, and subject to the qualifications set out in Schedule 3, and under the laws of the Cayman Islands, we give the following opinions in relation to the matters set out below.

 

1.

The Company is an exempted company duly incorporated with limited liability, validly existing under the laws of the Cayman Islands and is in good standing with the Registrar of Companies in the Cayman Islands (the "Registrar").

 

Walkers (Hong Kong)

 

滙嘉律師事務所 (香港)

 

15th Floor, Alexandra House, 18 Chater Road, Central, Hong Kong

 

T +852 2284 4566 F +852 2284 4560

 

Bermuda | British Virgin Islands | Cayman Islands | Dubai | Guernsey | Hong Kong | Ireland | Jersey | London | Singapore

 

^*England and Wales; ^**BVI; ^***Cayman Islands; ^****New South Wales (Australia); ^*****Bermuda

 

 

Walkers

Page 2

 

2.

The authorised share capital of the Company, with effect immediately prior to the completion of the Offering, will be US$300,000.00 divided into 600,000,000 ordinary shares of par value of US$0.0005 each, comprising (a) 498,911,230 Class A Ordinary Shares, (b) 81,088,770 Class B Ordinary Shares of par value of US$0.0005 each, and (c) 20,000,000 shares of par value of US$0.0005 each of such Class or Classes (however designated, as defined in the Memorandum and Articles) as the Board (as defined in the Memorandum and Articles) may determine in accordance with the Memorandum and Articles.

 

3.

The issue and allotment of the Class A Ordinary Shares pursuant to the Registration Statement have been duly authorised. When allotted, issued and fully paid for as contemplated in the Registration Statement and when appropriate entries have been made in the Register of Members of the Company, the Class A Ordinary Shares to be issued by the Company will be validly issued, fully paid and non-assessable (meaning that no additional sums may be levied in respect of such Class A Ordinary Shares on the holder thereof by the Company).

 

4.

The statements under the caption “Taxation – Cayman Islands Taxation” in the prospectus forming part of the Registration Statement, to the extent that they constitute statements of Cayman Islands law, are accurate in all material respects.

 

We hereby consent to the use of this opinion in, and the filing hereof, as an exhibit to the Registration Statement and to the reference to our firm under the heading "Legal Matters" and elsewhere in the prospectus included in the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended, or the Rules and Regulations of the Commission thereunder.

 

This opinion is limited to the matters referred to herein and shall not be construed as extending to any other matter or document not referred to herein. This opinion is given solely for your benefit and the benefit of your legal advisers acting in that capacity in relation to this transaction and may not be relied upon by any other person without our prior written consent.

 

This opinion shall be construed in accordance with the laws of the Cayman Islands.

 

Yours faithfully
/s/ WALKERS (HONG KONG)
WALKERS (HONG KONG)

 

  

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Schedule 1

 

LIST OF DOCUMENTS EXAMINED

 

1.

The Eighth Amended and Restated Memorandum and Articles of Association as adopted on 3 September 2024 (the "Memorandum and Articles"), the special resolutions passed on 3 September 2024 in relation to the amendments to the Memorandum and Articles, the Ninth Amended and Restated Memorandum and Articles of Association as adopted by a special resolution passed on 3 September 2024 and effective conditional and immediately prior to the completion of the Offering (the "A&R M&A"), the Register of Members (the "Register of Members") and Register of Directors of the Company, in each case, copies of which have been provided to us by the Company's registered office in the Cayman Islands (together the "Company Records").

 

2.

A copy of a Certificate of Good Standing dated 11 October 2024 in respect of the Company issued by the Registrar (the "Certificate of Good Standing").

 

3.

A copy of the executed written resolutions of the Board of Directors of the Company dated 17 October 2024 and a copy of the executed minutes of a meeting of the shareholders of the Company held on 3 September 2024 (collectively, the "Resolutions").

 

4.

The Registration Statement.

 

 

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Schedule 2 

 

ASSUMPTIONS

 

1.

The originals of all documents examined in connection with this opinion (the "Documents" and any "Document") are authentic. The signatures, initials and seals on the documents are genuine and are those of a person or persons given power to execute the documents. All documents purporting to be sealed have been so sealed. All copies are complete and conform to their originals.

 

2.

The Memorandum and Articles reviewed by us are the memorandum and articles of association of the Company that are in effect on the date hereof. The A&R M&A reviewed by us are the memorandum and articles of association of the Company that will be in effect on the issue and sale of the Class A Ordinary Shares.

 

3.

The Company Records are complete and accurate and all matters required by law and the Memorandum and Articles and the A&R M&A to be recorded therein are completely and accurately so recorded.

 

4.

The Registration Statement will be duly authorised, executed and delivered by or on behalf of all relevant parties prior to the issue and sale of the Class A Ordinary Shares and will be legal, valid, binding and enforceable against all relevant parties in accordance with their terms under the laws of the State of New York and all other relevant laws (other than the laws of the Cayman Islands).

 

5.

The Resolutions have been duly executed (and where by a corporate entity such execution has been duly authorised if so required) by or on behalf of each shareholder or director of the Company, as the case may be, and the signatures and initials thereon are those of a person or persons in whose name the Resolutions have been expressed to be signed.

 

6.

The Resolutions and any power of attorney given by the Company to execute the Documents remain in full force and effect and have not been revoked or varied.

 

 

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Schedule 3 

 

QUALIFICATIONS

 

1.

The term "enforceable" and its cognates as used in this opinion means that the obligations assumed by any party under the documents cited in this opinion are of a type which the Courts enforce.  This does not mean that those obligations will necessarily be enforced in all circumstances in accordance with their terms.  In particular:

 

(a)

enforcement of obligations and the priority of obligations may be limited by bankruptcy, insolvency, liquidation, restructuring, reorganisation, readjustment of debts or moratorium and other laws of general application relating to or affecting the rights of creditors or by prescription or lapse of time;

 

(b)

enforcement may be limited by general principles of equity and, in particular, the availability of certain equitable remedies such as injunction or specific performance of an obligation may be limited where a Court considers damages to be an adequate remedy;

 

(c)

claims may become barred under statutes of limitation or may be or become subject to defences of set-off, counterclaim, estoppel and similar defences;

 

(d)

where obligations are to be performed in a jurisdiction outside the Cayman Islands, they may not be enforceable in the Cayman Islands to the extent that performance would be illegal under the laws of, or contrary to the public policy of, that jurisdiction;

 

(e)

a judgment of a Court may be required to be made in Cayman Islands dollars;

 

(f)

to the extent that any provision of the documents cited in this opinion is adjudicated to be penal in nature, it will not be enforceable in the Courts; in particular, the enforceability of any provision of the documents cited in this opinion that is adjudicated to constitute a secondary obligation which imposes a detriment on the contract-breaker out of all proportion to any legitimate interest of the innocent party in the enforcement of the primary obligation may be limited;

 

(g)

to the extent that the performance of any obligation arising under the documents cited in this opinion would be fraudulent or contrary to public policy, it will not be enforceable in the Courts;

 

(h)

in the case of an insolvent liquidation of the Company, its liabilities are required to be translated into the functional currency of the Company (being the currency of the primary economic environment in which it operated as at the commencement of the liquidation) at the exchange rates prevailing on the date of commencement of the voluntary liquidation or the day on which the winding up order is made (as the case may be);

 

 

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(i)

a Court will not necessarily award costs in litigation in accordance with contractual provisions in this regard; and

 

(j)

the effectiveness of terms in the documents cited in this opinion excusing any party from a liability or duty otherwise owed or indemnifying that party from the consequences of incurring such liability or breaching such duty shall be construed in accordance with, and shall be limited by, applicable law, including generally applicable rules and principles of common law and equity.

 

2.

Our opinion as to good standing is based solely upon receipt of the Certificate of Good Standing issued by the Registrar. The Company shall be deemed to be in good standing under section 200A of the Companies Act (as amended) of the Cayman Islands on the date of issue of the certificate if all fees and penalties under the Companies Act have been paid and the Registrar has no knowledge that the Company is in default under the Companies Act.

 

3.

We express no opinion upon any provisions in the Memorandum and Articles, the A&R M&A, or any document which contains a reference to any law or statute that is not a Cayman Islands law or statute.

 

 

 

CERTAIN INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS [****], HAS BEEN EXCLUDED PURSUANT TO ITEM 601(B)(10)(IV) OF REGULATION S-K UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

 

Exhibit 10.1

 

Pony AI Inc.

 

2016 Share Plan

 

Adopted on December 3, 2016

 

 

Pony AI Inc. 2016 Share Plan

 

SECTION 1.        ESTABLISHMENT AND PURPOSE.

 

The purpose of this Plan is to offer persons selected by the Company an opportunity to acquire a proprietary interest in the success of the Company, or to increase such interest, by acquiring Shares. The Plan provides both for the direct award or sale of Shares and for the grant of Options to purchase Shares and the grant of Restricted Share Units over Shares. Options granted under the Plan may be ISOs intended to qualify under Code Section 422 or Nonstatutory Options which are not intended to so qualify.

 

Capitalized terms are defined in Section 13.

 

SECTION 2.        ADMINISTRATION.

  

(a)            Committees of the Board of Directors. The Plan may be administered by one or more Committees. Each Committee shall consist, as required by applicable law, of one or more members of the Board of Directors who have been appointed by the Board of Directors. Each Committee shall have such authority and be responsible for such functions as the Board of Directors has assigned to it. If no Committee has been appointed, the entire Board of Directors shall administer the Plan. Any reference to the Board of Directors in the Plan shall be construed as a reference to the Committee (if any) to whom the Board of Directors has assigned a particular function.

 

(b)            Authority of the Board of Directors. Subject to the provisions of the Plan, the Board of Directors shall have full authority and discretion to take any actions it deems necessary or advisable for the administration of the Plan. Notwithstanding anything to the contrary in the Plan, with respect to the terms and conditions of awards granted to Participants outside the United States, the Board of Directors may vary from the provisions of the Plan to the extent it determines it necessary and appropriate to do so; provided that it may not vary from those Plan terms requiring shareholder approval pursuant to Section 11(d) below. All decisions, interpretations and other actions of the Board of Directors shall be final and binding on all Purchasers, all Optionees and all persons deriving their rights from a Purchaser or Optionee.

 

 

SECTION 3.         ELIGIBILITY.

 

(a)            General Rule. Only Employees, Outside Directors and Consultants shall be eligible for the grant of Nonstatutory Options, Restricted Share Units or the direct award or sale of Shares. Only Employees shall be eligible for the grant of ISOs.

 

(b)            Ten-Percent Shareholders. A person who owns more than 10% of the total combined voting power of all classes of outstanding shares of the Company, its Parent or any of its Subsidiaries shall not be eligible for the grant of an ISO unless (i) the Exercise Price is at least 110% of the Fair Market Value of a Share on the Date of Grant (but in no event less than the par value per Share), and (ii) such ISO by its terms is not exercisable after the expiration of five years from the Date of Grant. For purposes of this Subsection (b), in determining share ownership, the attribution rules of Code Section 424(d) shall be applied.

 

SECTION 4.        SHARES SUBJECT TO PLAN.

  

(a)            Basic Limitation. Not more than 2,000,000 Shares may be issued under the Plan, subject to Subsection (b) below and Section 9(a). All of these Shares may be issued upon the exercise of ISOs. The number of Shares that are subject to Options, Restricted Share Units or other rights outstanding at any time under the Plan may not exceed the number of Shares that then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan. Shares offered under the Plan may be authorized but unissued Shares or treasury Shares.

 

 

(b)            Additional Shares. In the event that Shares previously issued under the Plan are reacquired by the Company, such Shares shall be added to the number of Shares then available for issuance under the Plan. In the event that Shares that otherwise would have been issuable under the Plan are withheld by the Company in payment of the Purchase Price, Exercise Price or withholding taxes, such Shares shall remain available for issuance under the Plan. In the event that an outstanding Option or other right for any reason expires or is canceled, the Shares allocable to the unexercised portion of such Option or other right shall be added to the number of Shares then available for issuance under the Plan.

 

SECTION 5.        TERMS AND CONDITIONS OF AWARDS OR SALES.

 

(a)            Grant or Purchase Agreement. Each award of Shares under the Plan shall be evidenced by a Share Grant Agreement between the Grantee and the Company. Each sale of Shares under the Plan (other than upon exercise of an Option) shall be evidenced by a Share Purchase Agreement between the Purchaser and the Company. Such award or sale shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of Directors deems appropriate for inclusion in a Share Grant Agreement or Share Purchase Agreement. The provisions of the various Share Grant Agreements and Share Purchase Agreements entered into under the Plan need not be identical.

 

(b)            Duration of Offers and Nontransferability of Rights. Any right to purchase Shares under the Plan (other than an Option) shall automatically expire if not exercised by the Purchaser within 30 days (or such other period as may be specified in the Award Agreement) after the grant of such right was communicated to the Purchaser by the Company. Such right is not transferable and may be exercised only by the Purchaser to whom such right was granted.

 

 

(c)            Purchase Price. The Purchase Price of Shares to be offered under the Plan, if newly issued, shall not be less than the par value of such Shares. Subject to the foregoing, the Board of Directors shall determine the Purchase Price of Shares to be offered under the Plan at its sole discretion. The Purchase Price shall be payable in a form described in Section 7.

 

SECTION 6.        TERMS AND CONDITIONS OF OPTIONS.

 

(a)            Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Share Option Agreement between the Optionee and the Company. The Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions that are not inconsistent with the Plan and that the Board of Directors deems appropriate for inclusion in a Share Option Agreement. The provisions of the various Share Option Agreements entered into under the Plan need not be identical.

 

(b)            Number of Shares. Each Share Option Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 9. The Share Option Agreement shall also specify whether the Option is an ISO or a Nonstatutory Option.

 

(c)            Exercise Price. Each Share Option Agreement shall specify the Exercise Price. The Exercise Price of an Option shall not be less than 100% of the Fair Market Value of a Share on the Date of Grant but in no event less than the par value per Share, and in the case of an ISO a higher percentage may be required by Section 3(b). Subject to the preceding sentence, the Exercise Price shall be determined by the Board of Directors at its sole discretion. The Exercise Price shall be payable in a form described in Section 7. This Subsection (c) shall not apply to an Option granted pursuant to an assumption of, or substitution for, another option in a manner that complies with Code Section 424(a) (whether or not the Option is an ISO).

 

 

(d)            Exercisability. Each Share Option Agreement shall specify the date when all or any installment of the Option is to become exercisable. No Option shall be exercisable unless the Optionee (i) has delivered an executed copy of the Share Option Agreement to the Company or (ii) otherwise agrees to be bound by the terms of the Share Option Agreement. The Board of Directors shall determine the exercisability provisions of the Share Option Agreement at its sole discretion.

 

(e)            Basic Term. The Share Option Agreement shall specify the term of the Option. The term shall not exceed 10 years from the Date of Grant, and in the case of an ISO a shorter term may be required by Section 3(b). Subject to the preceding sentence, the Board of Directors at its sole discretion shall determine when an Option is to expire.

 

(f)            Termination of Service (Except by Death). Except as otherwise provided in a Share Option Agreement, if an Optionee’s Service terminates for any reason other than the Optionee’s death, then the Optionee’s Options shall expire on the earliest of the following dates:

 

(i)            The expiration date determined pursuant to Subsection (e) above;

 

(ii)           The date three months after the termination of the Optionee’s Service for any reason other than Disability, or such earlier or later date as the Board of Directors may determine (but in no event earlier than 30 days after the termination of the Optionee’s Service); or

 

(iii)          The date six months after the termination of the Optionee’s Service by reason of Disability, or such later date as the Board of Directors may determine.

 

 

The Optionee may exercise all or part of the Optionee’s Options at any time before the expiration of such Options under the preceding sentence, but only to the extent that such Options had become exercisable before the Optionee’s Service terminated (or became exercisable as a result of the termination) and the underlying Shares had vested before the Optionee’s Service terminated (or vested as a result of the termination). The balance of such Options shall lapse when the Optionee’s Service terminates. In the event that the Optionee dies after the termination of the Optionee’s Service but before the expiration of the Optionee’s Options, all or part of such Options may be exercised (prior to expiration) by the executors or administrators of the Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had become exercisable before the Optionee’s Service terminated (or became exercisable as a result of the termination) and the underlying Shares had vested before the Optionee’s Service terminated (or vested as a result of the termination).

 

(g)            Leaves of Absence. For purposes of Subsection (f) above, Service shall be deemed to continue while the Optionee is on a bona fide leave of absence, if such leave was approved by the Company in writing and if continued crediting of Service for this purpose is expressly required by the terms of such leave or by applicable law (as determined by the Company).

 

(h)            Death of Optionee. Except as otherwise provided in a Share Option Agreement, if an Optionee dies while the Optionee is in Service, then the Optionee’s Options shall expire on the earlier of the following dates:

 

(i)            The expiration date determined pursuant to Subsection (e) above; or

 

(ii)           The date 12 months after the Optionee’s death, or such earlier or later date as the Board of Directors may determine (but in no event earlier than six months after the Optionee’s death).

 

 

All or part of the Optionee’s Options may be exercised at any time before the expiration of such Options under the preceding sentence by the executors or administrators of the Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had become exercisable before the Optionee’s death (or became exercisable as a result of the death) and the underlying Shares had vested before the Optionee’s death (or vested as a result of the Optionee’s death). The balance of such Options shall lapse when the Optionee dies.

 

(i)            Pre-Exercise Restrictions on Transfer of Options or Shares. An Option shall be transferable by the Optionee only by (i) a beneficiary designation, (ii) a will or (iii) the laws of descent and distribution, except as provided in the next sentence. If the applicable Share Option Agreement so provides, a Nonstatutory Option shall also be transferable by gift or domestic relations order to a Family Member of the Optionee. An ISO may be exercised during the lifetime of the Optionee only by the Optionee or by the Optionee’s guardian or legal representative. In addition, an Option shall comply with all conditions of Rule 12h-1(f)(1) under the Exchange Act until the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. Such conditions include, without limitation, the transferability restrictions set forth in Rule 12h-1(f)(1)(iv) and (v) under the Exchange Act, which shall apply to an Option and, prior to exercise, to the Shares to be issued upon exercise of such Option during the period commencing on the Date of Grant and ending on the earlier of (i) the date when the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or (ii) the date when the Company makes a determination that it will cease to rely on the exemption afforded by Rule 12h-1(f)(1) under the Exchange Act. During such period, an Option and, prior to exercise, the Shares to be issued upon exercise of such Option shall be restricted as to any pledge, hypothecation or other transfer by the Optionee, including any short position, any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act) or any “call equivalent position” (as defined in Rule 16a-1(b) under the Exchange Act).

 

 

(j)            No Rights as a Shareholder. An Optionee, or a transferee of an Optionee, shall have no rights as a shareholder with respect to any Shares covered by the Optionee’s Option until such person becomes entitled to receive such Shares by filing a notice of exercise and paying the Exercise Price pursuant to the terms of such Option.

 

(k)           Modification, Extension and Assumption of Options. Within the limitations of the Plan, the Board of Directors may modify, extend or assume outstanding Options or may accept the cancellation of outstanding Options (whether granted by the Company or another issuer) in return for the grant of new Options or a different type of award for the same or a different number of Shares and at the same or a different Exercise Price (if applicable). The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, impair the Optionee’s rights or increase the Optionee’s obligations under such Option

 

(l)            Company’s Right to Cancel Certain Options. Any other provision of the Plan or a Share Option Agreement notwithstanding, the Company shall have the right at any time to cancel an Option that was not granted in compliance with Rule 701 under the Securities Act. Prior to canceling such Option, the Company shall give the Optionee not less than 30 days’ notice in writing. If the Company elects to cancel such Option, it shall deliver to the Optionee consideration with an aggregate Fair Market Value equal to the excess of (i) the Fair Market Value of the Shares subject to such Option as of the time of the cancellation over (ii) the Exercise Price of such Option. The consideration may be delivered in the form of cash or cash equivalents, in the form of Shares, or a combination of both. If the consideration would be a negative amount, such Option may be cancelled without the delivery of any consideration.

 

 

SECTION 7.        PAYMENT FOR SHARES.

 

(a)            General Rule. The entire Purchase Price or Exercise Price of Shares issued under the Plan shall be payable in cash or cash equivalents at the time when such Shares are purchased, except as otherwise provided in this Section 7. In addition, the Board of Directors in its sole discretion may also permit payment through any of the methods described in (b) through (g) below:

 

(b)            Services Rendered. Shares may be awarded under the Plan in consideration of services rendered to the Company, a Parent or a Subsidiary prior to the award provided that no Share is issued for less than its par value paid in cash to the Company.

 

(c)            Promissory Note. All or a portion of the Purchase Price or Exercise Price (as the case may be) of Shares issued under the Plan may be paid with a full-recourse promissory note. The Shares shall be pledged as security for payment of the principal amount of the promissory note and interest thereon. The interest rate payable under the terms of the promissory note shall not be less than the minimum rate (if any) required to avoid the imputation of additional interest under the Code. Subject to the foregoing, the Board of Directors (at its sole discretion) shall specify the term, interest rate, amortization requirements (if any) and other provisions of such note.

 

(d)            Surrender of Shares. All or any part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee. Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value as of the date when the Option is exercised.

 

(e)            Exercise/Sale. If the Shares are publicly traded, all or part of the Exercise Price and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company.

 

 

(f)            Net Exercise.  An Option may permit exercise through a “net exercise” arrangement pursuant to which the Company will reduce the number of Shares issued upon exercise by the largest whole number of Shares having an aggregate Fair Market Value (determined by the Board of Directors as of the exercise date) that does not exceed the aggregate Exercise Price or the sum of the aggregate Exercise Price plus all or a portion of the minimum amount required to be withheld under applicable tax law (with the Company accepting from the Optionee payment of cash or cash equivalents to satisfy any remaining balance of the aggregate Exercise Price and, if applicable, any additional withholding obligation not satisfied through such reduction in Shares); provided that to the extent Shares subject to an Option are withheld in this manner, the number of Shares subject to the Option following the net exercise will be reduced by the sum of the number of Shares withheld and the number of Shares delivered to the Optionee as a result of the exercise.

 

(g)            Other Forms of Payment. To the extent that an Award Agreement so provides, the Purchase Price or Exercise Price of Shares issued under the Plan may be paid in any other form permitted by applicable laws.

 

SECTION 8.        TERMS AND CONDITIONS OF RESTRICTED SHARE UNITS.

 

(a)            Restricted Share Unit Award Agreement

 

Each Restricted Share Unit Award under the Plan shall be evidenced by a Restricted Share Unit Award Agreement between the Grantee and the Company. The Restricted Share Unit Award shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions that are not inconsistent with the Plan and that the Board of Directors deems appropriate for inclusion in a Restricted Share Unit Award Agreement. The provisions of the various Restricted Share Unit Award Agreements entered into under the Plan need not be identical.

 

 

(b)            Number of Shares

 

Each Restricted Share Unit Award Agreement shall specify the number of Shares that are subject to the Restricted Share Unit Award and shall provide for the adjustment of such number in accordance with Section 9.

 

(c)            Vesting Conditions

 

Each Restricted Share Unit Award may or may not be subject to vesting, as determined by the Board of Directors in its sole discretion. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Share Unit Award Agreement. A Restricted Share Unit Award Agreement may provide for accelerated vesting upon certain specified events.

 

(d)            Voting Rights

 

The holders of Restricted Share Unit Awards shall have no voting rights.

 

(e)            Settlement of Restricted Share Unit Awards

 

Settlement of any vested Restricted Share Unit Award may be made in the form of (a) Shares, (b) cash or (c) any combination of both, as determined by the Board of Directors in its sole discretion. The actual number of Restricted Share Units eligible for settlement may be larger or smaller than the number included in the original Restricted Share Unit Award, based on predetermined performance factors. Methods of converting Restricted Share Units into cash may include (without limitation) a method based on the average Fair Market Value of a Share over a series of trading days. Vested Restricted Share Units shall be settled in such manner and at such time(s) as specified in the Restricted Share Unit Award Agreement. Until a Restricted Share Unit Award is settled, the number of such Restricted Share Units shall be subject to adjustment pursuant to Section 9.

 

 

(f)            Modification or Assumption of Restricted Share Units

 

Within the limitations of the Plan, the Board of Directors may modify or assume outstanding Restricted Share Units or may accept the cancellation of outstanding Restricted Share Units (whether granted by the Company or by another issuer) in return for the grant of new Restricted Share Units for the same or a different number of Shares or in return for the grant of a different type of Award.

 

SECTION 9.        ADJUSTMENT OF SHARES.

 

(a)            General. In the event of a subdivision of the outstanding Shares, a declaration of a dividend payable in Shares, a combination or consolidation of the outstanding Shares into a lesser number of Shares, a reclassification, or any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company, proportionate adjustments shall automatically be made in each of (i) the number and kind of Shares available for future grants under Section 4, (ii) the number and kind of Shares covered by each outstanding Option and any outstanding and unexercised right to purchase Shares that has not yet expired pursuant to Section 5(b), (iii) the Exercise Price under each outstanding Option and the Purchase Price applicable to any unexercised share purchase right described in clause (ii) above, (iv) the number and kind of Shares covered by each outstanding Restricted Share Unit that has not yet expired and (v) any repurchase price that applies to Shares granted under the Plan pursuant to the terms of a Company repurchase right under the applicable Award Agreement. In the event of a declaration of an extraordinary dividend payable in a form other than Shares in an amount that has a material effect on the Fair Market Value of the Shares, a recapitalization, a spin-off, or a similar occurrence, the Board of Directors at its sole discretion may make appropriate adjustments in one or more of the items listed in clauses (i) through (iv) above. No fractional Shares shall be issued under the Plan as a result of an adjustment under this Section 9(a), although the Board of Directors in its sole discretion may make a cash payment in lieu of fractional Shares.

 

 

(b)            Corporate Transactions. In the event that the Company is a party to a merger or consolidation, or in the event of a sale of all or substantially all of the Company’s shares or assets, all Shares acquired under the Plan and all Options and other Plan awards outstanding on the effective date of the transaction shall be treated in the manner described in the definitive transaction agreement (or, in the event the transaction does not entail a definitive agreement to which the Company is party, in the manner determined by the Board of Directors in its capacity as administrator of the Plan, with such determination having final and binding effect on all parties), which agreement or determination need not treat all Options and awards (or all portions of an Option or an award) in an identical manner. The treatment specified in the transaction agreement may include (without limitation) one or more of the following with respect to each outstanding Option or award:

 

(i)            Continuation of the Option or award by the Company (if the Company is the surviving company).

 

(ii)           Assumption of the Option by the surviving company or its parent in a manner that complies with Code Section 424(a) (whether or not the Option is an ISO) and applicable foreign exchange and tax requirements.

 

(iii)          Substitution by the surviving company or its parent of a new option for the Option in a manner that complies with Code Section 424(a) (whether or not the Option is an ISO) and applicable foreign exchange and tax requirements.

 

(iv)          Cancellation of the Option and a payment to the Optionee with respect to each Share subject to the portion of the Option that is vested as of the transaction date equal to the excess of (A) the value, as determined by the Board of Directors in its absolute discretion, of the property (including cash) received by the holder of a Share as a result of the transaction, over (B) the per-Share Exercise Price of the Option (such excess, the “Spread”).  Such payment shall be made in the form of cash, cash equivalents, or securities of the surviving company or its parent having a value equal to the Spread.  In addition, any escrow, holdback, earn-out or similar provisions in the transaction agreement may apply to such payment to the same extent and in the same manner as such provisions apply to the holders of Shares. If the Spread applicable to an Option is zero or a negative number, then the Option may be cancelled without making a payment to the Optionee.

 

 

(v)           Cancellation of the Option without the payment of any consideration; provided that the Optionee shall be notified of such treatment and given an opportunity to exercise the Option (to the extent the Option is vested or becomes vested as of the effective date of the transaction) during a period of not less than five (5) business days preceding the effective date of the transaction, unless (A) a shorter period is required to permit a timely closing of the transaction and (B) such shorter period still offers the Optionee a reasonable opportunity to exercise the Option. Any exercise of the Option during such period may be contingent upon the closing of the transaction.

 

(vi)          Suspension of the Optionee’s right to exercise the Option during a limited period of time preceding the closing of the transaction if such suspension is administratively necessary to permit the closing of the transaction.

 

(vii)         Termination of any right the Optionee has to exercise the Option prior to vesting in the Shares subject to the Option (i.e., “early exercise”), such that following the closing of the transaction the Option may only be exercised to the extent it is vested.

 

For the avoidance of doubt, the Board of Directors has discretion to accelerate, in whole or part, the vesting and exercisability of an Option or other Plan award, including the vesting and settlement of a Restricted Share Unit Award in connection with a corporate transaction covered by this Section 9(b).

 

 

(c)            Reservation of Rights. Except as provided in this Section 9, a Participant shall have no rights by reason of (i) any subdivision or consolidation of shares of any class, (ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares of any class. Any issuance by the Company of shares of any class, or securities convertible into shares of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets.

 

SECTION 10.        PRE-EXERCISE INFORMATION REQUIREMENT.

 

(a)            Application of Requirement. This Section 10 shall apply only during a period that (i) commences when the Company begins to rely on the exemption described in Rule 12h-1(f)(1) under the Exchange Act, as determined by the Company in its sole discretion, and (ii) ends on the earlier of (A) the date when the Company ceases to rely on such exemption, as determined by the Company in its sole discretion, or (B) the date when the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. In addition, this Section 10 shall in no event apply to an Optionee after he or she has fully exercised all of his or her Options.

 

(b)            Scope of Requirement. The Company shall provide to each Optionee the information described in Rule 701(e)(3), (4) and (5) under the Securities Act. Such information shall be provided at six-month intervals, and the financial statements included in such information shall not be more than 180 days old. The foregoing notwithstanding, the Company shall not be required to provide such information unless the Optionee has agreed in writing, on a form prescribed by the Company, to keep such information confidential.

 

 

SECTION 11.        MISCELLANEOUS PROVISIONS.

 

(a)            Securities Law Requirements. Shares shall not be issued under the Plan unless, in the opinion of counsel acceptable to the Board of Directors, the issuance and delivery of such Shares comply with (or are exempt from) all applicable requirements of law, including (without limitation) the Securities Act, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any exchange or other securities market on which the Company’s securities may then be traded. The Company shall not be liable for a failure to issue Shares as a result of such requirements.

 

(b)            No Retention Rights. Nothing in the Plan or in any right or Option granted under the Plan shall confer upon the Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Participant) or of the Participant, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause.

 

(c)            Treatment as Compensation. Any compensation that an individual earns or is deemed to earn under this Plan shall not be considered a part of his or her compensation for purposes of calculating contributions, accruals or benefits under any other plan or program that is maintained or funded by the Company, a Parent or a Subsidiary.

 

(d)            Governing Law. The Plan and all awards, sales and grants under the Plan shall be governed by, and construed in accordance with, the laws of the Cayman Islands, as such laws are applied to contracts entered into and performed in such jurisdiction.

 

 

(e)            Conditions and Restrictions on Shares. Shares issued under the Plan shall be subject to such forfeiture conditions, rights of repurchase, rights of first refusal, other transfer restrictions and such other terms and conditions as the Board of Directors may determine. Such conditions and restrictions shall be set forth in the applicable Award Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally. In addition, Shares issued under the Plan shall be subject to conditions and restrictions imposed either by applicable law or by Company policy, as adopted from time to time, designed to ensure compliance with applicable law or laws with which the Company determines in its sole discretion to comply including in order to maintain any statutory, regulatory or tax advantage.

 

(f)            Tax Matters.

 

(i)            As a condition to the award, grant, issuance, vesting, purchase, exercise or transfer of any award, or Shares issued pursuant to any award, granted under this Plan, the Participant shall make such arrangements as the Board of Directors may require or permit for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such event.

 

(ii)           Unless otherwise expressly set forth in an Award Agreement, it is intended that awards granted under the Plan shall be exempt from Code Section 409A, and any ambiguity in the terms of an Award Agreement and the Plan shall be interpreted consistently with this intent. To the extent an award is not exempt from Code Section 409A (any such award, a “409A Award”), any ambiguity in the terms of such award and the Plan shall be interpreted in a manner that to the maximum extent permissible supports the award’s compliance with the requirements of that statute. Notwithstanding anything to the contrary permitted under the Plan, in no event shall a modification of an Award not already subject to Code Section 409A be given effect if such modification would cause the Award to become subject to Code Section 409A unless the parties explicitly acknowledge and consent to the modification as one having that effect. A 409A Award shall be subject to such additional rules and requirements as specified by the Board of Directors from time to time in order for it to comply with the requirements of Code Section 409A. In this regard, if any amount under a 409A Award is payable upon a “separation from service” to an individual who is considered a “specified employee” (as each term is defined under Code Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the Participant’s separation from service or (ii) the Participant’s death, but only to the extent such delay is necessary to prevent such payment from being subject to Section 409A(a)(1). In addition, if a transaction subject to Section 8(b) constitutes a payment event with respect to any 409A Award, then the transaction with respect to such award must also constitute a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) to the extent required by Code Section 409A.

 

 

(iii)            Neither the Company nor any member of the Board of Directors shall have any liability to a Participant in the event an award held by the Participant fails to achieve its intended characterization under applicable tax law, or any payment cannot be made or is otherwise delayed due to applicable foreign exchange restrictions.

 

(g)            Languages.

 

In case of any inconsistency between Chinese and English in this Plan, the English version shall prevail.

 

SECTION 12.        DURATION AND AMENDMENTS; SHAREHOLDER APPROVAL.

 

(a)            Term of the Plan. The Plan, as set forth herein, shall become effective on the date of its adoption by the Board of Directors, subject to approval of the Company’s shareholders under Subsection (d) below. The Plan shall terminate automatically 10 years after the later of (i) the date when the Board of Directors adopted the Plan or (ii) the date when the Board of Directors approved the most recent increase in the number of Shares reserved under Section 4 that was also approved by the Company’s shareholders. The Plan may be terminated on any earlier date pursuant to Subsection (b) below.

 

 

(b)            Right to Amend or Terminate the Plan. Subject to Subsection (d) below, the Board of Directors may amend, suspend or terminate the Plan at any time and for any reason.

 

(c)            Effect of Amendment or Termination. No Shares shall be issued or sold and no Option or Restricted Share Unit Award shall be granted under the Plan after the termination thereof, except upon exercise of an Option (or any other right to purchase Shares) granted under the Plan prior to such termination. The termination of the Plan, or any amendment thereof, shall not affect any Share or Restricted Share Unit Award previously issued or any Option previously granted under the Plan.

 

(d)            Shareholder Approval. To the extent required by applicable law, the Plan will be subject to approval of the Company’s shareholders within 12 months of its adoption date. To the extent required by applicable law, any amendment of the Plan will be subject to the approval of the Company’s shareholders within 12 months of the amendment date if it (i) increases the number of Shares available for issuance under the Plan (except as provided in Section 8), or (ii) materially changes the class of persons who are eligible for the grant of ISOs. In addition, an amendment effecting any other material change to the Plan terms will be subject to approval of the Company’s shareholder only if required by applicable law. Shareholder approval shall not be required for any other amendment of the Plan.

 

SECTION 13.        DEFINITIONS.

 

(a)            “Award” means individually or collectively, a grant under the Plan of Options, Restricted Share Units or any other award to acquire Shares made under the Plan.

 

 

(b)            “Award Agreement” means a Share Grant Agreement, Restricted Share Unit Award Agreement, Share Option Agreement or Share Purchase Agreement.

 

(c)            “Board of Directors” means the Board of Directors of the Company, as constituted from time to time.

 

(d)            “Code” means the U.S. Internal Revenue Code of 1986, as amended.

 

(e)            “Committee” means a committee of the Board of Directors, as described in Section 2(a).

 

(f)            “Company” means Pony AI Inc., a Cayman Islands company.

 

(g)            “Consultant” means a person, excluding Employees and Outside Directors, who performs bona fide services for the Company, a Parent or a Subsidiary as a consultant or advisor and who qualifies as a consultant or advisor under Rule 701(c)(1) of the Securities Act or under Instruction A.1.(a)(1) of Form S-8 under the Securities Act.

 

(h)            “Date of Grant” means the date of grant specified in the applicable Share Option Agreement, which date shall be the later of (i) the date on which the Board of Directors resolved to grant the Option or (ii) the first day of the Optionee’s Service.

 

(i)            “Disability” means that the Optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment.

 

(j)            “Employee” means any individual who is a common-law employee of the Company, a Parent or a Subsidiary.

 

(k)            “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

 

 

(l)            “Exercise Price” means the amount for which one Share may be purchased upon exercise of an Option, as specified by the Board of Directors in the applicable Share Option Agreement.

 

(m)            “Fair Market Value” means the fair market value of a Share, as determined by the Board of Directors in good faith. Such determination shall be conclusive and binding on all persons.

 

(n)            “Family Member” means (i) any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships, (ii) any person sharing the Optionee’s household (other than a tenant or employee), (iii) a trust in which persons described in Clause (i) or (ii) have more than 50% of the beneficial interest, (iv) a foundation in which persons described in Clause (i) or (ii) or the Optionee control the management of assets and (v) any other entity in which persons described in Clause (i) or (ii) or the Optionee own more than 50% of the voting interests.

 

(o)            “Grantee” means a person to whom the Board of Directors has awarded Shares under the Plan, including through the grant of a Restricted Share Unit Award.

 

(p)            “IPO” shall mean the first firm commitment underwritten public offering pursuant to an effective registration statement on an established national or foreign securities exchange covering the offer and sale by the Company of its equity securities, as a result of or following which the Shares shall be publicly held, and “IPO Date” shall mean the date on which the IPO occurs.

 

(q)            “ISO” means an Option that qualifies as an incentive stock option as described in Code Section 422(b). Notwithstanding its designation as an ISO, an Option that does not qualify as an ISO under applicable law shall be treated for all purposes as a Nonstatutory Option.

 

 

(r)            “Nonstatutory Option” means an Option that does not qualify as an incentive stock option as described in Code Section 422(b) or 423(b).

 

(s)            “Option” means an ISO or Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares.

 

(t)            “Optionee” means a person who holds an Option.

 

(u)            “Outside Director” means a member of the Board of Directors who is not an Employee.

 

(v)            “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.

 

(w)            “Participant” means a Grantee, Optionee or Purchaser.

 

(x)            “Plan” means this Pony AI Inc. 2016 Share Plan.

 

(y)            “Purchase Price” means the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Board of Directors.

 

(z)            “Purchaser” means a person to whom the Board of Directors has offered the right to purchase Shares under the Plan (other than upon exercise of an Option).

 

 

(aa)          “Restricted Share Unit” means a bookkeeping entry representing the equivalent of one Share, granted pursuant to Section 8.

 

(bb)         “Restricted Share Unit Award” means an award of Restricted Share Units.

 

(cc)          “Restricted Share Unit Award Agreement” means the agreement between the Company and a Grantee that contains the terms, conditions and restrictions pertaining to the Grantee’s Restricted Share Unit Award.

 

(dd)         “Sale Event” means the consummation of the following transactions in which holders of Shares receive cash or marketable securities tradable on an established national or foreign securities exchange: (i) a sale of all or substantially all of the assets of the Company determined on a consolidated basis to an unrelated person or entity; (ii) a merger, reorganization, or consolidation involving the Company in which the shares of voting share of the Company outstanding immediately prior to such transaction represent or are converted into or exchanged for securities of the surviving or resulting entity immediately upon completion of such transaction which represent less than 50% of the outstanding voting power of such surviving or resulting entity; or (iii) the acquisition of all or a majority of the outstanding voting share of the Company in a single transaction or series of related transactions by a person or group of persons. For the avoidance of doubt, an initial public offering, any subsequent public offering, another capital raising event, and a merger effected solely to change the Company’s domicile shall not constitute a “Sale Event.” In addition, a transaction shall not constitute a Sale Event unless such transaction also qualifies as an event under Treasury Regulation Section 1.409A-3(i)(5)(v) (change in the ownership of a corporation), Treasury Regulation Section 1.409A-3(i)(5)(vi) (change in the effective control of a corporation), or Treasury Regulation Section 1.409A-3(i)(5)(vii) (change in the ownership of a substantial portion of a corporation’s assets).

 

(ee)          “Securities Act” means the U.S. Securities Act of 1933, as amended.

 

 

(ff)           “Service” means service as an Employee, Outside Director or Consultant.

 

(gg)         “Share” means one ordinary share of the Company, as adjusted in accordance with Section 9 (if applicable).

 

(hh)         “Share Grant Agreement” means the agreement between the Company and a Grantee who is awarded Shares under the Plan that contains the terms, conditions and restrictions pertaining to the award of such Shares.

 

(ii)            “Share Option Agreement” means the agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to the Optionee’s Option.

 

(jj)            “Share Purchase Agreement” means the agreement between the Company and a Purchaser who purchases Shares under the Plan that contains the terms, conditions and restrictions pertaining to the purchase of such Shares.

 

(kk)          “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain, or (ii) any corporation whose assets, or portions thereof, are consolidated with the net earnings of the subject entity and are recorded on the books of the subject entity for financial reporting purposes in accordance with IFRS and/or PRC GAAP or any internationally recognized accounting standard; or (iii) any corporation with respect to which the subject entity has the power to otherwise direct the business and policies of that entity directly or indirectly through another subsidiary. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

 

 

Exhibit A

 

[************]

 

 

 

Exhibit 10.2

 

FORM OF INDEMNIFICATION AGREEMENT

 

Pony AI Inc.

 

This Indemnification Agreement (this “Agreement”), made and entered into as of the ______________day of______________, 2024, by and between Pony AI Inc., an exempted company with limited liability under the laws of Cayman Islands (the “Company”) and______________ (“Indemnitee”).

 

W I T N E S S E T H:

 

WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors or executive officers unless they are provided with adequate protection through insurance or adequate indemnification against risks of claims and actions against them arising out of their service to and activities on behalf of the corporation.

 

WHEREAS, the Company and Indemnitee recognize the continued difficulty in obtaining liability insurance for its directors and officers, the significant increases in the cost of such insurance and the general reductions in the coverage of such insurance.

 

WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons.

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future.

 

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified.

 

WHEREAS, this Agreement is a supplement to and in furtherance of the memorandum and articles of association of the Company (as may from time to time be supplemented and amended) (the “Memorandum and Articles”) and any resolutions adopted pursuant thereto and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

 

WHEREAS, Indemnitee does not regard the protection available under the Memorandum and Articles and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director of the Company without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and take on additional service for or on behalf of the Company on the condition that he be so indemnified.

 

 

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

ARTICLE 1
CERTAIN DEFINITIONS

 

(a) As used in this Agreement:

 

“Change of Control” means any one of the following circumstances occurring after the date hereof: (i) there shall have occurred an event required to be reported with respect to the Company in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item or any similar schedule or form) under the Exchange Act, regardless of whether the Company is then subject to such reporting requirement; (ii) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) shall have become, without prior approval of the Company’s Board by approval of at least two-thirds of the Continuing Directors, the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company’s then outstanding voting securities (provided that, for purposes of this clause (ii), the term “person” shall exclude (x) the Company, (y) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (z) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company); (iii) there occurs a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 51% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity; (iv) all or substantially all the assets of the Company are sold or disposed of in a transaction or series of related transactions; (v) the approval by the stockholders of the Company of a complete liquidation of the Company; or (vi) the Continuing Directors cease for any reason to constitute at least a majority of the members of the Board.

 

“Continuing Director” means each director on the Board on the date hereof.

 

“Corporate Status” means the status of a person who is or was a director, officer, trustee, general partner, managing member, fiduciary, board of directors’ committee member, employee or agent of the Company or of any other Enterprise.

 

“Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

 

“Enterprise” means (i) the Company, (ii) any of the Company’s subsidiaries and affiliates, and (iii) any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, trustee, general partner, managing member, fiduciary, board of directors’ committee member, employee or agent.

 

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

 

“Expenses” means all direct and indirect costs (including attorneys’ fees, retainers, court costs, transcripts, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses) reasonably incurred in connection with (i) prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding or (ii) establishing or enforcing a right to indemnification under this Agreement, the Memorandum and Articles, applicable law or otherwise. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding, including the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent. For the avoidance of doubt, Expenses, however, shall not include any Liabilities.

 

“Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporate law and neither currently is, nor in the five years previous to its selection or appointment has been, retained to represent (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification agreements) or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

 

“Liabilities” means any losses or liabilities, including any judgments, fines, penalties and amounts paid in settlement, arising out of or in connection with any Proceeding (including all interest, assessments and other charges paid or payable in connection with or in respect of any such judgments, fines, penalties or amounts paid in settlement).

 

 

“Proceeding” means any threatened, pending or completed action, derivative action, suit, claim, counterclaim, cross claim, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether civil (including intentional and unintentional tort claims), criminal, administrative or investigative, including any appeal therefrom, and whether instituted by or on behalf of the Company or any other party, or any inquiry or investigation that Indemnitee in good faith believes might lead to the institution of any such action, suit or other proceeding hereinabove listed in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of any Corporate Status of Indemnitee, or by reason of any action taken (or failure to act) by him or her or of any action (or failure to act) on his or her part while serving in any Corporate Status.

 

(b)  For the purposes of this Agreement:

 

References to “Company” shall include, in addition to the resulting or surviving corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents, so that if Indemnitee is or was a director, officer, employee, or agent of such constituent corporation or is or was serving at the request of such constituent corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, then Indemnitee shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as Indemnitee would have with respect to such constituent corporation if its separate existence had continued.

 

Reference to “other enterprise” shall include employee benefit plans; references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to any of the Company’s subsidiaries, affiliates, an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

 

Reference to “including” shall mean “including, without limitation,” regardless of whether the words “without limitation” actually appear, references to the words “herein,” “hereof” and “hereunder” and other words of similar import shall refer to this Agreement as a whole and not to any particular paragraph, subparagraph, section, subsection or other subdivision.

 

ARTICLE 2
SERVICES BY INDEMNITEE

 

Section 2.01. Services By Indemnitee. Indemnitee hereby agrees to serve or continue to serve as [for directors] a director of the Company, for so long as Indemnitee is duly elected or appointed or until Indemnitee tenders his or her resignation or is removed. [for officers] an officer of the Company until such time as Indemnitee’s employment is terminated for any reason.

 

ARTICLE 3
INDEMNIFICATION

 

Section 3.01. General. (a) The Company hereby agrees to and shall indemnify Indemnitee and hold Indemnitee harmless from and against any and all Expenses and Liabilities, in either case, actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf by reason of Indemnitee’s Corporate Status, to the fullest extent permitted by applicable law. The Company’s indemnification obligations set forth in this Section 3.01 shall apply (i) in respect of Indemnitee’s past, present and future service in any Corporate Status and (ii) regardless of whether Indemnitee is serving in any Corporate Status at the time any such Expense or Liability is incurred.

 

 

For purposes of this Agreement, the meaning of the phrase “to the fullest extent permitted by applicable law” shall include, but not be limited to:

 

(i) to the fullest extent permitted by any provision of the Companies Act (as amended) of the Cayman Islands (the “Companies Act”) or the corresponding provision of any successor statute, and

 

(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the Companies Act adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

 

(b) Witness Expenses. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his or her Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on his or her behalf in connection therewith.

 

(c) Expenses as a Party Where Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law, to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or her in connection therewith. If Indemnitee is not wholly successful in such Proceeding, but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall, to the fullest extent permitted by applicable law, indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on his or her behalf in connection with each successfully resolved claim, issue or matter. All such indemnification against Expenses shall be offset by the amount of cash, if any, received by the Indemnitee resulting from his/her success therein. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

Section 3.02. Exclusions. Notwithstanding any provision of this Agreement and unless Indemnitee ultimately is successful on the merits with respect to any such claim, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:

 

(a)  for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law, regardless of whether the securities are subject to the requirements of such provisions; or (ii) any reimbursement of the Company by Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);

 

(b) except as otherwise provided in Sections 6.01(e), prior to a Change of Control, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law;

 

(c) to the extent that Indemnitee is indemnified and actually received such payment other than pursuant to this Agreement;

 

(d) in connection with a judicial action by or in the right of the Company, in respect of any claim, issue or matter as to which the Indemnitee shall have been adjudicated by final judgment in a court of law to be liable for fraud or willful default in the performance of his duty to the Company unless and only to the extent that any court in which such action was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnification for such Expenses as such court shall deem proper;

 

 

(e) for any judgment, fine or penalty which the Company is prohibited by applicable law from paying as indemnity;

 

(f) on account of Indemnitee's conduct which is finally adjudged to have been intentional misconduct, a knowing violation of applicable law or a transaction from which Indemnitee derived an improper personal benefit; or

 

(g) arising out of Indemnitee’s breach of an employment agreement or any other agreement with the Company (if any) or, if applicable, any subsidiary or affiliate of the Company.

 

ARTICLE 4
ADVANCEMENT OF EXPENSES; DEFENSE OF CLAIMS

 

Section 4.01. Advances. Notwithstanding any provision of this Agreement to the contrary, the Company shall advance any Expenses actually and reasonably incurred by Indemnitee in connection with any Proceeding within 30 Business Days after the receipt by the Company of each statement in writing requesting such advance from time to time, whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s ability to repay such amounts and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. Advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements in writing to the Company to support the advances claimed. Any excess of the advanced Expenses over the actual Expenses will be promptly repaid to the Company. To the extent Indemnitee has not requested any advanced payment of Expenses from the Company, Indemnitee shall be entitled to receive reimbursement for the Expenses incurred in connection with a Proceeding from the Company as soon as practicable after Indemnitee makes a written request to the Company for reimbursement. As used in this Section and this Agreement, the term “Business Day” shall have the meaning given to it under the Memorandum and Articles.

 

Section 4.02. Repayment of Advances or Other Expenses. Indemnitee agrees that Indemnitee shall reimburse the Company for all Expenses advanced by the Company pursuant to Section 4.01, in the event and only to the extent that it shall be determined by final judgment or other final adjudication under the provisions of any applicable law (as to which all rights of appeal therefrom have been exhausted or lapsed) that Indemnitee is not entitled to be indemnified by the Company for such Expenses.

 

Section 4.03. Defense of Claims. The Company will be entitled to participate in the Proceeding at its own expense. Upon the delivery of written notice by the Company to Indemnitee, the Company shall be entitled to assume the defense of any Proceeding with counsel consented to by Indemnitee (such consent not to be unreasonably withheld), except for such Proceeding brought by the Company or as to which the Indemnitee has reasonably concluded that there may be a conflict of interest between the Company and the Indemnitee. After delivery of such notice, consent to such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees or expenses of counsel subsequently incurred by Indemnitee with respect to such Proceeding; provided that (i) Indemnitee shall have the right to employ separate counsel in respect of any Proceeding at Indemnitee’s expense and (ii) if (A) the employment of counsel by Indemnitee has been previously authorized in writing by the Company or (B) Indemnitee shall have reasonably concluded upon the advice of counsel that there is a conflict of interest between the Company and Indemnitee in the conduct of the defense of such Proceeding, then in each such case the fees and expenses of Indemnitee’s counsel shall be borne by the Company. Neither party to this Agreement shall settle any Proceeding in any manner that would impose any Expense, judgment, fine, damages, penalty or limitation on Indemnitee without the other party’s written consent. Neither the Company nor Indemnitee shall unreasonably withhold its consent to any proposed settlement. The Company shall not be liable to indemnify the Indemnitee under this Agreement with regard to any Proceeding if the Company was not given a reasonable and timely opportunity to participate in the defense and/or settlement of such Proceeding.

 

 

ARTICLE 5 PROCEDURES FOR NOTIFICATION OF AND DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION

 

Section 5.01. Notification; Request For Indemnification. (a) As a condition precedent to Indemnitee’s right to obtain indemnification under this Agreement, as soon as reasonably practicable after receipt by Indemnitee of a written notice that he or she is a party to or a participant (as a witness or otherwise) in any Proceeding or of any other matter in respect of which Indemnitee intends to seek indemnification or advancement of Expenses hereunder, Indemnitee shall provide to the Company written notice thereof, including the nature of and the facts underlying the Proceeding.

 

(b)  As a condition precedent to an Indemnitee’s right to obtain indemnification under this Agreement, Indemnitee shall deliver to the Company a written request for indemnification, including therewith such information as is reasonably available to Indemnitee and reasonably necessary to determine Indemnitee’s entitlement to indemnification hereunder and such information as reasonably requested by the Company. Such request(s) may be delivered from time to time and at such time(s) as Indemnitee deems appropriate in his or her sole discretion. Indemnitee’s entitlement to indemnification shall be determined according to Section 5.02 of this Agreement and applicable law.

 

Section 5.02. Determination of Entitlement. (a) Where there has been a written request by Indemnitee for indemnification pursuant to Section 5.01(b), then as soon as is reasonably practicable (but in any event not later than 60 calendar days) after final disposition of the relevant Proceeding, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case: (i) if a Change of Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, or (B) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) Business Days after such determination. Indemnitee shall reasonably cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees and disbursements) actually and reasonably incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification).

 

(b)  If entitlement to indemnification is to be determined by Independent Counsel pursuant to Section 5.02(a)(ii), such Independent Counsel shall be selected by Indemnitee, and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. If entitlement to indemnification is to be determined by Independent Counsel pursuant to Section 5.02(a)(i)(B) (or if Indemnitee requests that such selection be made by the Board), such Independent Counsel shall be selected by the Company in which case the Company shall give written notice to Indemnitee advising him or her of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within ten (10) Business Days after such written notice of selection shall have been received, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 1 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court of competent jurisdiction has determined that such objection is without merit. If, within 20 Business Days after the submission by Indemnitee of a written request for indemnification pursuant to Section 5.01(b) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 5.02(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 6.01(a) of this Agreement, the Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

 

 

(c)  The Company agrees to pay the reasonable fees and expenses of any Independent Counsel serving under this Agreement.

 

Section 5.03. Presumptions and Burdens of Proof; Effect of Certain Proceedings. (a) In making any determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 5.01(b) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of any person, persons or entity to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by any person, persons or entity that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

 

(b)  If the person, persons or entity empowered or selected under Section 5.02 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within the sixty (60) day period referred to in Section 5.02(a), the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) calendar days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto.

 

(c)  The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

 

(d)  For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is in good faith reliance on the records or books of account of any Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of such Enterprise in the course of their duties, or on the advice of legal counsel for such Enterprise or on information or records given or reports made to such Enterprise by an independent certified public accountant or by an appraiser or other expert selected by such Enterprise. The provisions of this Section 5.03(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed or found to have met the applicable standard of conduct set forth in this Agreement.

 

(e)  The knowledge and/or actions, or failure to act, of any other director, trustee, partner, managing member, fiduciary, officer, agent or employee of any Enterprise shall not be imputed to Indemnitee for purposes of determining any right to indemnification under this Agreement.

 

 

ARTICLE 6
REMEDIES OF INDEMNITEE

 

Section 6.01. Adjudication or Arbitration. (a) In the event of any dispute between Indemnitee and the Company hereunder as to entitlement to indemnification or advancement of Expenses (including where (i) a determination is made pursuant to Section 5.02 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 4.01 of this Agreement, (iii) payment of indemnification pursuant to Section 3.01 of this Agreement is not made within ten (10) Business Days after a determination has been made that Indemnitee is entitled to indemnification, (iv) no determination as to entitlement to indemnification is timely made pursuant to Section 5.02 of this Agreement and no payment of indemnification is made within ten (10) Business Days after entitlement is deemed to have been determined pursuant to Section 5.03(b)) or (v) a contribution payment is not made in a timely manner pursuant to Section 8.04 of this Agreement, then Indemnitee shall be entitled to an adjudication by a court of his or her entitlement to such indemnification, contribution or advancement. Alternatively, in such case, Indemnitee, at his or her option, may seek an award in arbitration to be conducted by the Hong Kong International Arbitration Centre. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

 

(b)  In the event that a determination shall have been made pursuant to Section 5.02(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 6.01 shall be conducted in all respects as a de novo trial, or arbitration, on the merits, and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 6.01 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be, and the Company may not refer to or introduce into evidence any determination pursuant to Section 5.02(a) of this Agreement adverse to Indemnitee for any purpose. If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 6.01, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 4.02 until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed).

 

(c)  If a determination shall have been made pursuant to Section 5.02(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 6.01, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

 

(d)  The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 6.01 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.

 

(e)  The Company shall indemnify Indemnitee to the fullest extent permitted by law against all Expenses and, if requested by Indemnitee in writing, shall advance such Expenses to Indemnitee, which are reasonably incurred by Indemnitee in connection with any judicial proceeding or arbitration brought by Indemnitee for (i) indemnification or advances of Expenses by the Company (or otherwise for the enforcement, interpretation or defense of his or her rights) under this Agreement or any other agreement, including any other indemnification, contribution or advancement agreement, or any provision of the Memorandum and Articles now or hereafter in effect or (ii) recovery or advances under any directors’ and officers’ liability insurance policy maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, contribution, advancement or insurance recovery, as the case may be.

 

ARTICLE 7
DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE

 

Section 7.01. D&O Liability Insurance. To the extent that the Company maintains a policy or policies of insurance (“D&O Liability Insurance”) providing liability insurance for directors and officers of the Company in their capacities as such (and for any capacity in which any director or officer of the Company serves any other Enterprise at the request of the Company), in respect of acts or omissions occurring while serving in such capacity, Indemnitee shall be covered by the D&O Liability Insurance, in accordance with its or their terms, to the maximum extent of the coverage available for any other director or officer under such policy or policies. The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided) hereunder or any other agreement, including any other indemnification, contribution or advancement agreement, or any provision of the Memorandum and Articles now or hereafter in effect if and to the extent that Indemnitee has actually received such payment under valid and enforceable D&O Liability Insurance.

 

 

Section 7.02. Evidence of Coverage. Upon request by Indemnitee, the Company shall provide copies of all policies of D&O Liability Insurance providing liability insurance for Indemnitee obtained and maintained in accordance with Section 7.01 of this Agreement. Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain D&O Liability Insurance if the Company determines in good faith that such insurance is not reasonably available, the premium costs for such insurance are disproportionate to the amount of coverage provided, or the coverage is reduced by exclusions so as to provide an insufficient benefit.

 

ARTICLE 8
MISCELLANEOUS

 

Section 8.01. Non-exclusivity of Rights. The rights of indemnification, contribution and advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled to under applicable law, the Memorandum and Articles, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

 

Section 8.02. Insurance and Subrogation. (a) If, at the time the Company receives notice of a claim hereunder, the Company has D&O Liability Insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies. The failure or refusal of any such insurer to pay any such amount shall not affect or impair the obligations of the Company under this Agreement.

 

(b)  In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

(c)  The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided) hereunder if and to the extent that Indemnitee has actually received such payment under any insurance policy (including without limitation to policies of the D&O Liability Insurance) or other indemnity provision.

 

Section 8.03. The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, fiduciary, board of directors’ committee member, employee or agent of any other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such Enterprise.

 

Section 8.04. Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving rise to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s). The relative fault of the Company on the one hand and of the Indemnitee on the other hand shall be determined by reference to, among other things, the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances resulting in such judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses. The Company agrees that it would not be just and equitable if contribution pursuant to this Section 8.04 were determined by pro rata allocation or any other method of allocation which does not take account of the foregoing equitable considerations.

 

 

Section 8.05. Amendment. This Agreement may not be modified or amended except by a written instrument executed by or on behalf of each of the parties hereto. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit, restrict or reduce any right of Indemnitee under this Agreement in respect of any act or omission, or any event occurring, prior to such amendment, alteration or repeal. To the extent that a change in applicable law, whether by statute or judicial decision limits rights with respect to indemnification, contribution or advancement of Expenses, it is the intent of the parties hereto that the rights with respect to indemnification, contribution or advancement of Expenses in effect prior to such change shall remain in full force and effect to the extent permitted by applicable law.

 

Section 8.06. Waivers. The observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) by the party entitled to enforce such term only by a writing signed by the party against which such waiver is to be asserted. Unless otherwise expressly provided herein, no delay on the part of any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party hereto of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

 

Section 8.07. Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement between the parties hereto with respect to the matters covered hereby, and any other prior or contemporaneous oral or written understandings or agreements with respect to the matters covered hereby are superseded by this Agreement, provided that this Agreement is a supplement to and in furtherance of the Memorandum and Articles and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

 

Section 8.08. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

 

Section 8.09. Notices. All notices, requests, demands and other communications under this Agreement shall be in writing (which may be by facsimile transmission). All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. The address for notice to a party is as shown on the signature page of this Agreement, or such other address as any party shall have given by written notice to the other party as provided above.

 

Section 8.10. Binding Effect. (a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.

 

(b)  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company, spouses, heirs, and executors, administrators, personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all or substantially all, or a substantial part of the business or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the manner and to the same extent that the Company would be required to perform if no such succession had taken place.

 

 

(c)  The indemnification, contribution and advancement of Expenses provided by, or granted pursuant to this Agreement shall continue during the period Indemnitee is an officer and/or a director of the Company or is or was serving at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding by reason of his former or current capacity at the Company or any other enterprise at the Company’s request, whether or not he is acting or serving in any such capacity at the time any Expense is incurred for which indemnification can be provided under this Agreement. This Agreement shall inure to the benefit of the heirs, executors, administrators, legatees and assigns of such Indemnitee.

 

Section 8.11. Governing Law. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, Cayman laws, without regard to its conflict of laws rules.

 

Section 8.12. Consent to Jurisdiction. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 6.01(a) of this Agreement, each of the parties to this Agreement irrevocably agrees that the courts of the Cayman Islands shall have nonexclusive jurisdiction to hear and determine any claim, suit, action or proceeding, and to settle any disputes, which may arise out of or are in any way related to or in connection with this Agreement, and, for such purposes, irrevocably submits to the nonexclusive jurisdiction of such courts.

 

Section 8.13. Headings. The Article and Section headings in this Agreement are for convenience of reference only, and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.

 

Section 8.14. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

 

Section 8.15. U.S. Federal Preemption. Notwithstanding the foregoing, both the Company and Indemnitee acknowledge that in certain instances, U.S. federal law or public policy may override applicable law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. Such instances include, but are not limited to, the U.S. Securities and Exchange Commission’s (the “SEC”) prohibition on indemnification for liabilities arising under certain U.S. federal securities laws. Indemnitee also understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee.

 

Section 8.16. No Employment Rights. Nothing in this Agreement is intended to create in Indemnitee any right to continued employment with the Company.

 

Section 8.17. Use of Certain Terms. As used in this Agreement, the words “herein,” “hereof,” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular paragraph, subparagraph, section, subsection, or other subdivision. Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.

 

 

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered to be effective as of the date first above written.

 

	Pony AI Inc.
	By:
		Name:
		Title:
	Address:
	Facsimile:
	Attention:
	With a copy to:
	Address:
	Facsimile:
	Attention:
	INDEMNITEE
	Address:
	Facsimile:

 

 

	With a copy to:
	Address:
	Facsimile:
	Attention:

 

 

 

Exhibit 10.3

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”), dated as of __________, is entered between Pony AI Inc., a company incorporated in the Cayman Islands (the “Company” and, together with its subsidiaries, the “Group”) and __________ (the “Executive”).

 

WHEREAS, the Company and the Executive wish to enter into an employment agreement whereby the Executive will be employed by the Company in accordance with the terms and conditions stated below;

 

NOW, THEREFORE, the parties hereby agree as follows:

 

ARTICLE 1
Employment, Duties And Responsibilities

 

Section 1.01. Employment. The Executive shall serve as the __________ of the Company. The Executive hereby accepts such employment and agrees to devote substantially all of the Executive’s time and efforts to promoting the interests of the Group.

 

Section 1.02. Duties and Responsibilities. Subject to the supervision of and direction by the Board of Directors of the Company, the Executive shall perform such duties as are similar in nature to those duties and services customarily associated with the positions set forth above.

 

Section 1.03. Base of Operation. The Executive’s principal base of operation for the performance of his or her duties and responsibilities under this Agreement shall be the offices of the Company in __________, and at such other places as shall from time to time be reasonably necessary to fulfill the Executive’s obligations hereunder.

 

ARTICLE 2
Term

 

Section 2.01. Term.

 

(a)            Subject to other terms and conditions of this Agreement, the employment pursuant to this Agreement (the “Employment”) shall commence on __________ and shall have an indefinite duration, unless it is terminated pursuant to this Agreement or as mutually agreed by the parties hereto.

 

(b)            The Executive represents and warrants to the Company that neither the execution and delivery of this Agreement nor the performance of the Executive’s duties hereunder violates or will violate the provisions of any other agreement to which the Executive is a party or by which the Executive is bound.

 

 

(c)            It is understood and agreed that to the extent an employment agreement or similar agreement has been entered into by and between a member of the Group on one hand and the Executive on the other hand (the “Operative Employment Agreement”), and the Operative Employment Agreement is terminated for any reasons pursuant to the terms therein, the Employment shall also be terminated unless mutually agreed by both parties.

 

ARTICLE 3
Compensation And Expenses

 

Section 3.01. Salary, Remuneration and Benefits. The Executive’s salary, remuneration and benefits shall be determined by the Company and shall be specified in the Operative Employment Agreement or any other agreement between the Company or another member of the Group on one hand and the Executive on the other hand. The Executive’s salary, remuneration and benefits shall be reviewed by the Board of Directors (or its designated compensation committee) and/or the management of the Company in accordance with the relevant policies adopted by the Company from time to time.

 

Section 3.02. Expenses. The Company will reimburse the Executive for reasonable documented business-related expenses incurred by the Executive in connection with the performance of the Executive’s duties hereunder during the term of the Employment, subject, however, to the Company’s policies and guidelines relating to business-related expenses as in effect from time to time during the duration of the employment, provided that, the Executive shall provide the Company with all appropriate receipts and vouchers.

 

Section 3.03. Employee Benefit Plans. The Executive shall be entitled to participate during the term of the Employment in employee benefit plans, programs and arrangements of the Company as may be in effect from time to time, including, without limitation, any share incentive plan, comprehensive health insurance and retirement scheme, subject to the terms and provisions of such plan and the execution of the award agreement and other related agreements between the Company and the Executive, as well as the terms and conditions as set forth in the Operative Employment Agreement.

 

Section 3.04. Payer of Compensation. Subject to the terms and conditions as set forth in the Operative Employment Agreement, all compensation, salary, benefits and remuneration pursuant to this Agreement may be paid by the Company or any of its subsidiaries, as decided by the Company in its sole discretion.

 

ARTICLE 4
Exclusivity, Non-compete, Non-solicitation, Confidentiality, and Intellectual Property

 

Section 4.01. Exclusivity. The Executive agrees to perform his or her duties, responsibilities and obligations hereunder efficiently and to the best of his or her ability. The Executive agrees that the Executive will devote substantially all of the Executive’s working time, care and attention and best efforts to such duties, responsibilities and obligations throughout the term of the Employment. The Executive agrees that all of his or her activities as an employee of the Company shall be in conformity with all present and future policies, rules and regulations and directions of the Company not inconsistent with this Agreement and the Operative Employment Agreement.

 

 

Section 4.02. Non-compete, Non-solicitation and Confidentiality.

 

(a) Non-compete. The Executive agrees that during the term of the Employment and for the twenty-four (24) months following the termination for any reason of the Employment, unless otherwise agreed by the Company, he or she will not, and will cause its affiliates not to, directly or indirectly (whether as a controller, agent, director, employee, partner, shareholder, management or otherwise): (i) be employed or self-employed in, engage in or own or hold any interest in, or provide any consulting, technical and other services or any assistance to any Competing Businesses; (ii) invest in any Competing Businesses; (iii) establish an entity that engages in any Competing Businesses; or (iv) provide any services that competes with those provided by the Group to any former, current or prospective customers of the Group. As used herein, a “Competing Business” means any business that is substantially similar to, or is in direct or indirect competition or would potentially compete with, any businesses conducted by the Company or any member of the Group, including but are not limited to those conducted by the entities as specified in the Operative Employment Agreement or any other agreement between the Company or any other member of the Group on one hand and the Executive on the other hand. The Executive also agreed that, throughout the term of the Employment and at all times thereafter, he or she will not and will cause his or her affiliates not to engage in any conduct that would damage the reputation of the Group.

 

(b) Non-solicitation. The Executive agrees that he or she will not and will cause his or her affiliates not to, directly or indirectly, (i) employ or otherwise use the services provided by a current employee of a member of the Group, a person that has unilaterally terminated his or her employment with a member of the Group without undergoing proper departure procedures, or any former employee of a member of the Group who is subject to non-compete restrictions; (ii) during the term of the Employment and for the twenty-four (24) months following the termination for any reason of the Employment, solicit or attempt to solicit (a) any officer or employee of any member of the Group to terminate his or her employment with such member of the Group; or (b) a person who is a customer, supplier, agent, licensee, licensor of any member of the Group or any other person that has an actual or prospective business relation with any member of the Group to terminate its relationship with the Group or to alter such relationship in a manner adverse to the Group.

 

(c) Confidentiality. Throughout the term of the Employment and at all times thereafter, the Executive shall keep in strict confidence and not to use all non-public information relating to the technology, business, financial condition and other aspects of the Company, including but not limited to know-how, confidential technical, financial, marketing, distribution and commercial information and other trade secrets, business methods, products, processes, procedures, development or experimental projects, plans, service providers, students, customers and users and such non-public information relating to the students, customers, users and suppliers of the Group, and, except as authorized by the Company, may not disclose or provide to any person, firm, corporation or entity such non-public information, and may not use such non-public information for any purpose other than to fulfill his or her responsibilities in the best interest of the Company. The Executive shall also comply with the Company’s corporate policies and any other agreements on confidentiality that the Executive may enter into with the Company or any other member of the Group. This provision and such other confidentiality policies and agreements are hereinafter collectively referred to as the “Confidentiality Terms.” The Executive shall comply with the Confidentiality Terms throughout the term of the Employment and at all times thereafter.

 

 

(d)  Operative Employment Agreement. Both parties hereto acknowledge that the Executive shall continue to comply with the provisions relating to non-compete, non-solicitation and confidentiality in the Operative Employment Agreement or another agreement entered into between the Company or any other member of the Group on one hand and the Executive on the other hand.

 

Section 4.03. Transfer of Intellectual Property. The Executive hereby agrees to transfer to the Company or another member of the Group as designated by the Company all intellectual property rights in the works created during the Employment or other intellectual property rights deemed to be occupational works in accordance with applicable laws and regulations (the “Occupational Works”). The “intellectual property rights” as referred to in this section means all current and future intellectual property rights, including but not limited to patent rights, trademarks or copyrights in any country, whether registered or not. The Executive agrees that, throughout the course of the Employment and at all times thereafter, he or she shall execute necessary documents and take necessary action to implement the foregoing transfer of the Occupational Works to the Group. The Executive acknowledged that the Company shall, where permitted by applicable laws and regulations, hold all rights and interests in the Occupational Works, including any patent or copyrights. The Executive further agrees that, throughout the course of the Employment and at all times thereafter, the Executive and his or her heirs, assignees and representatives will, upon the Company’s requests, assign exclusively to the Company or another member of the Group as designated by the Company any right, title and interest in the Occupational Work and assist in the preparation and execution of all applications and instruments and carry out other tasks or procedures necessary in accordance with applicable laws and regulations for the Company or another member of the Group as designated by the Company to obtain and maintain the patent and other intellectual property right in any applicable jurisdictions and/or protecting the rights and interests of the Company or another member of the Group as designated by the Company in the Occupational Works.

 

ARTICLE 5
Termination of the employment

 

Section 5.01. Termination by Company. The Company shall have the right to terminate the Employment at any time with “Cause” without advance notice pursuant to the terms and conditions hereof. For purposes of this Agreement, “Cause” shall have the meanings ascribed to it in the Operative Employment Agreement. For purposes of this Section 5.01, no act or failure to act, on the part of the Executive shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the act or omission of the Executive was in the best interest of the Company. The Company may also terminate the Executive’s employment at any time with or without Cause by giving a 30 days’ advance notice in writing.

 

 

Section 5.02. Termination by the Executive. The Executive shall have the right to terminate the Employment at any time by giving a 30 days’ advance notice in writing pursuant to the terms and conditions under the Operative Employment Agreement. If the Executive terminates the employment under this Section 5.02, the Company is not obliged to pay to the Executive any financial compensation for such termination.

 

Section 5.03. Death. In the event the Executive passes away during the term of the Employment, this Agreement shall automatically terminate, effective on the date of the Executive’s death.

 

Section 5.04.  Effect of Termination.

 

(a)            In the event of termination of the Executive’s employment, by either party for any reason, the Company shall pay to the Executive (or his or her beneficiary in the event of his or her death) any base salary or other compensation earned but not paid to the Executive prior to the effective date of such termination. All other benefits due the Executive following his or her termination of employment shall be determined in accordance with the plans, policies and practices of the Company.

 

(b)            In the event of termination of the Executive’s employment by the Company other than for Cause, the Company shall pay to the Executive any additional amount as provided by applicable law.

 

ARTICLE 6
Miscellaneous

 

Section 6.01. Benefit Assignment; Assignment; Beneficiary. This Agreement shall inure to the benefit of and be binding upon the Company and its assigns. This Agreement shall also inure to the benefit of, and be enforceable by, the Executive and the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amount would still be payable to the Executive hereunder if the Executive had continued to live, all such amounts shall be paid in accordance with the terms of this Agreement to the Executive’s beneficiary, devisee, legatee or other designee, or if there is no such designee, to the Executive’s estate.

 

Section 6.02. Notices. Any notice required or permitted hereunder shall be in writing and shall be sufficiently given if personally delivered or if sent by registered or certified mail, national overnight courier, or email. In the case of the Company, to the office or email account of the Head of Human Resources; and in the case of the Executive, to the address or email account appearing on the employment records of the Company, from time to time. Any notice given hereunder shall be deemed to have been given at the time of receipt thereof by the person to whom such notice is given.

 

 

Section 6.03. Entire Agreement; Amendment. This Agreement contains the entire agreement of the parties hereto with respect to the terms and conditions of the Executive’s employment with the Company and, subject to Section 4.02(d) of this Agreement, supersedes any and all prior agreements and understandings, whether written or oral, between the parties hereto with respect to the employment of the Executive with the Company. For the avoidance of doubt, in case of any conflict between this Agreement and the Operative Employment Agreement as to the Executive’s compensation, the term of the Employment, and the Executive’s non-compete, confidentiality and non-solicitation obligations, the Operative Employment Agreement shall prevail. This Agreement may not be changed or modified except by an amendment in writing signed by both of the parties hereto.

 

Section 6.04. Waiver. The waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a continuing waiver or as a consent to or waiver of any subsequent breach hereof.

 

Section 6.05. Headings. The article and section headings herein are for convenience of reference only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

 

Section 6.06. Governing Law. This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of Hong Kong Special Administration Region of the People’s Republic of China (“Hong Kong”).

 

Section 6.07. Agreement To Take Actions. Each party hereto shall execute and deliver such documents, certificates, agreements and other instruments, and shall take such other actions, as may be reasonably necessary or desirable in order to perform his or its obligations under this Agreement or to effectuate the purposes hereof.

 

Section 6.08. Arbitration. Any dispute between the parties hereto respecting the meaning and intent of this Agreement or any of its terms and provisions shall be submitted to the Hong Kong International Arbitration Centre (“HKIAC”) for arbitration in accordance with HKIAC’s arbitration rules in effect at the time. The arbitral award is final and binding upon the parties thereto. The arbitration tribunal will consist of three arbitrators (one appointed by claimant, the second appointed by respondent and the third appointed by the first two arbitrators or the Chairman of HKIAC). The arbitration seat shall be in Hong Kong. The language of arbitration shall be English and Chinese.

 

Section 6.09. Survivorship. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations.

 

Section 6.10. Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision or provisions of this Agreement, which shall remain in full force and effect.

 

 

Section 6.11. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

 

Section 6.13. Withholding. All payments to the Executive hereunder shall be subject to withholding to the extent required by applicable law.

 

 

IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement as of the date first above written.

 

 

	Pony AI Inc.
	By:
		Name:
		Title:

 

	EXECUTIVE
	Name:
	Title:

 

 

 

Exhibit 10.4

 

Pony AI Inc.

 

DIRECTOR AGREEMENT

 

This Director Agreement (the “Agreement”) is made and entered into as of___________, by and between Pony AI Inc., a Cayman Islands company (the “Company”), and ___________ (Passport / ID Card No.: ___________) (the “Director”).

 

I.              SERVICES

 

1.1  Board of Directors. The Director is appointed to serve as a director of the Company’s Board of Directors (the “Board”), effective as of the date when the Securities and Exchange Commission (the “SEC”) declares effective the Company’s registration statement on Form F-1 (the “Effective Date”) that was initially submitted to the SEC confidentially on March 27, 2023, until the earlier of (i) the second anniversary of the effective appointment of the Director, (ii) the date on which the Director ceases to be a member of the Board for any reason, or (iii) the date of termination of this Agreement in accordance with Section 5.2 hereof (such earlier date being the “Expiration Date”). The Board shall consist of the Director and such other members as are nominated and elected pursuant to the then-current Memorandum and Articles of Association of the Company (the “Memorandum and Articles”).

 

1.2  Director Services. The Director’s services to the Company hereunder shall include services on the Board and services on the ___________ committee of the Board in accordance with applicable law and stock exchange rules as well as the Memorandum and Articles, and such other services mutually agreed to by the Director and the Company (the “Director Services”).

 

II.             COMPENSATION

 

2.1  Fees to Director. The Director shall receive from the Company a cash payment in the amount of US$___________ for each quarter of the Director Services, payable at the end of each quarter of the Director Services, until the Expiration Date.

 

2.2  Equity Awards. Subject to approval by the Board, the Company agrees to grant to the Director for each year after the Effective Date, pursuant to a then-effective share incentive plan of the Company (the “Plan”): ___________ share options (the “Options”) of the Company valued at US$___________ of the then-current fair market value. The Options shall in all respects be subject to the terms and conditions of the Plan and the award agreement to be entered by and between the Company and Director.

 

2.3  Director and Officer Liability Insurance. The Company shall maintain a customary director and officer liability insurance policy to insure the Director against any losses incurred in lawsuits or other legal proceedings brought against the Director in connection with the Director Services.

 

III.           duties of director

 

3.1  Fiduciary Duties. In fulfilling his/her managerial responsibilities, the Director shall be charged with a fiduciary duty to the Company. The Director shall be attentive and inform himself/herself of all material facts regarding a decision before taking any action. In addition, the Director’s actions shall be motivated solely by the best interests of the Company.

 

 

3.2  Confidentiality. During the Term of this Agreement, and for a period of one (1) year after the Expiration Date, the Director shall maintain in strict confidence all information he/she has obtained or shall obtain from the Company that the Company has designated as “confidential” or that is by its nature confidential, relating to the Company’s business, operations, properties, assets, services, condition (financial or otherwise), liabilities, employee relations, customers (including customer usage statistics), suppliers, prospects, technology, or trade secrets, except to the extent such information (i) is in the public domain through no act or omission of the Director, (ii) is required to be disclosed by law or a valid order by a court or other governmental body, or (iii) is independently learned by the Director outside of his/her relationship with the Company and its affiliates (the “Confidential Information”).

 

3.3  Non-disclosure and Non-use Obligations. The Director will use the Confidential Information solely to perform the Director Services for the benefit of the Company. The Director will treat all Confidential Information of the Company with the same degree of care as the Director treats his/her own Confidential Information, and the Director will use his/her best efforts to protect the Confidential Information. The Director will not use the Confidential Information for his/her own benefit or the benefit of any other person or entity, except as may be specifically permitted in this Agreement. The Director will immediately give notice to the Company of any unauthorized use or disclosure by or through him/her, or of which he/she becomes aware, of the Confidential Information. The Director agrees to assist the Company in remedying any such unauthorized use or disclosure of the Confidential Information.

 

3.4  Return of the Company Property. All materials furnished to the Director by the Company, whether delivered to the Director by the Company or made by the Director in the performance of Director Services under this Agreement (the “Company Property”), are the sole and exclusive property of the Company. The Director agrees to promptly deliver the original and any copies of the Company Property to the Company at any time upon the Company’s request. Upon termination of this Agreement by either party for any reason, the Director agrees to promptly deliver to the Company or destroy, at the Company’s option, the original and any copies of the Company Property. The Director agrees to certify in writing that the Director has so returned or destroyed all such Company Property.

 

IV.           COVENANTS OF director

 

4.1  No Conflict of Interest. During the Term of this Agreement, the Director shall not be employed by, own, manage, control or participate in the ownership, management, operation or control of any business entities that is competitive with the Company, which are identified on Exhibit A attached hereto (as amended and supplemented by the Company in its sole and absolute discretion from time to time), or otherwise undertake any obligation inconsistent with the terms hereof, provided that Director may continue the Director’s current affiliation or other current relationships with the entity or entities described on Exhibit B (all of which entities are referred to collectively as “Current Affiliations”). This Agreement is subject to the current terms and agreements governing the Director’s relationship with Current Affiliations, and nothing in this Agreement is intended to be or will be construed to inhibit or limit any of the Director’s obligations to Current Affiliations. The Director represents that nothing in this Agreement conflicts with the Director’s obligations to Current Affiliations. If the Director undertakes any duty, investment or other obligation that may present a conflict of interest prohibited under this Section 4.1, the Director shall inform the Board in writing with ten (10) days prior notice. If the Board decides such proposed new obligation would present an actual conflict of interest prohibited hereunder and the Director still undertakes the new obligation, the Board shall have the right to remove the Director from the Board.

 

4.2  Non-interference with Business. During the Term of this Agreement, and for a period of two (2) years after the Expiration Date, the Director agrees not to interfere with the business of the Company in any manner. By way of example and not of limitation, the Director agrees not to solicit or induce any employee, independent contractor, customer, supplier, or business partner of the Company to terminate or breach his/her/its employment, contractual or other relationship with the Company.

 

V.            Term and Termination

 

5.1  Term. This Agreement is effective as of the Effective Date as provided for in Section 1.1 above and will continue until the Expiration Date (the “Term”).

 

 

5.2  Resignation. The Director may terminate this Agreement at any time upon thirty (30) days prior written notice to the Company, or such shorter period as agreed upon by the parties.

 

5.3  Survival. The rights and obligations contained in Articles III and IV will survive any termination or expiration of this Agreement.

 

VI.           Miscellaneous

 

6.1  Assignment. Except as expressly permitted by this Agreement, neither party shall assign, delegate, or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the other party. Subject to the foregoing, this Agreement will be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors, and assigns.

 

6.2  No Waiver. The failure of any party to insist upon the strict observance and performance of the terms of this Agreement shall not be deemed a waiver of other obligations hereunder, nor shall it be considered a future or continuing waiver of the same terms.

 

6.3  Notices. Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated: (i) by personal delivery when delivered personally; (ii) by overnight courier upon written verification of receipt; (iii) by facsimile transmission upon acknowledgment of receipt of electronic transmission; or (iv) by certified or registered mail, return receipt requested, upon verification of receipt. Notice shall be sent to the addresses set forth on the signature page of this Agreement or such other address as either party may specify in writing.

 

6.4  Governing Law. This Agreement shall be governed in all respects by the laws of the Cayman Islands without regard to conflicts of law principles thereof.

 

6.5  Severability. Should any provisions of this Agreement be held by a court of law to be illegal, invalid, or unenforceable, the legality, validity, and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby.

 

6.6  Entire Agreement. This Agreement constitutes the entire agreement between the parties relating to this subject matter and supersedes all prior or contemporaneous oral or written agreements concerning such subject matter. The terms of this Agreement will govern all Director Services undertaken by the Director for the Company.

 

6.7  Amendments. This Agreement may only be amended, modified or changed by an agreement signed by the Company and the Director. The terms contained herein may not be altered, supplemented, or interpreted by any course of dealing or practices.

 

6.8  Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

[The remainder of this page is intentionally left blank.]

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

Company:			Pony AI Inc.
Address:
1301 Pearl Development Building,
1 Mingzhu 1st Street,			By:
Hengli Town, Nansha District, Guangzhou,			Name:	Dr. Jun Peng
People’s Republic of China, 511458			Title:	Chairman of the Board, Chief Executive Officer
Director:			[DIRECTOR NAME]
Address:

 

[Signature Page to Director Agreement]

 

 

EXHIBIT A

 

List of Company Competitors

 

 

EXHIBIT B

 

List of Director’s Current Affiliations

 

 

 

Exhibit 10.5

 

Exclusive Business Cooperation Agreement

 

This Exclusive Business Cooperation Agreement (this "Agreement") is entered into as of June 1, 2020, in Beijing, the PRC, by and among the following parties.

 

Party A: Beijing (HX) Pony AI Technology Co., Ltd.

 

Address: Room 1701, 17/F, and16/F, Building 1, Zone 1, 81 Beiqing Road, Haidian District, Beijing

 

Party B: Beijing (ZX) Pony.AI Technology Co., Ltd.

 

Address: Room 01, 1/F, Building 2, 68 Beiqing Road, Haidian District, Beijing

 

Party C: Hong Kong Pony AI Limited

 

Address: Suite 603 6/F, Laws Commercial Plaza, 788 Cheung Sha Wan Road, Kowloon, Hong Kong

 

Party A, Party B and Party C are hereinafter referred to individually as a "Party" and collectively as the "Parties".

 

WHEREAS:

 

1.	Party A is a wholly foreign-owned enterprise registered in the People's Republic of China (hereinafter referred to as the "PRC") and possesses the resources necessary to provide technological services and business consulting services:

 

2.	Party B is a domestic company registered in the PRC;

 

3.

Party A agrees to utilize its human, technology and information strengths to provide Party B with relevant exclusive technology services, technology consulting and other services (see below for the specific scope) during the term hereof, while Party B agrees to accept such services provided by Party A or its designee in accordance with the terms hereof.

 

NOW, THEREFORE, Party A, Party B and Party C agree by consensus as follows:

 

1.	Service Provision by Party A

 

1.1

Subject to the terms and conditions set forth herein, Party B hereby appoints Party A as its exclusive service provider to provide Party B with comprehensive business support, technology services and consulting services during the term hereof, covering all or part of the services within the business scope of Party B as determined by Party A from time to time, including but not limited to the following: business consulting, intellectual property licensing, equipment or leasing, marketing consulting etc. (hereinafter referred to as, collectively, the "Services").

 

 

1.2

Party B agrees to accept the consulting and services provided by Party A. Party B further agrees that, except with Party A's prior written consent, during the term hereof, Party B may not accept any consulting and/or services from, nor enter into any cooperation with, any third party with respect to the matters covered hereby. Party A may designate another party (such designated party may enter into certain agreements as described in Article 1.3 hereof with Party B) to provide the consulting and/or services hereunder for Party B.

 

1.3

In order to ensure that Party B meets the cash flow requirements in its day-to-day operations and/or offsets any losses incurred during the course of its operations, regardless of whether or not Party B actually incurs any such operating losses, Party A shall be obliged to provide financial support to Party B (only to the extent permitted by PRC law). Party A may provide such financial support to Party B by way of an entrusted bank loan or a loan, and shall enter into a separate contract for such entrusted loan or loan.

 

1.4

Method of Service Provision

 

1.4.1

The Parties agree that, during the term hereof, the Parties may enter into other technology service agreements and consulting service agreements, either directly or through their respective affiliates, to provide for specific content, methods, personnel and fees in respect of specific technology services and consulting services.

 

1.4.2

For the purpose of performance hereof, the Parties agree that during the term hereof, they may enter into an intellectual property rights (including but not limited to: software, trademarks, patents, know-how) licensing agreement, either directly or through their respective affiliates, which agreement shall allow Party B to use the relevant intellectual property rights of Party A at any time depending on Party B's business needs.

 

1.4.3

For the purpose of performance hereof, the Parties agree that during the term hereof, the Parties may enter into an equipment or plant lease agreement, either directly or through their respective affiliates, which agreement shall allow Party B to use the relevant equipment or plant of Party A at any time depending on Party B's business needs.

 

1.4.4

Party A may, at its sole discretion, subcontract to a third party a portion of the Services to be provided to Party B hereunder.

 

2.

Calculation of Service Fee, Payment Method, Financial Statements, Audit and Taxation

 

2.1

The Parties agree that, in respect of the Services provided by Party A, Party B shall pay to Party A 100% of its net revenue as a service fee (hereinafter referred to as the "Service Fee"). During the term hereof, Party A shall have the right to adjust such Service Fee at its sole discretion without Party B's consent. The Parties agree that the Service Fee hereunder shall be determined and paid in the manner set out in the separate written agreement among the Parties. At the time of payment, Party A shall invoice Party B for the corresponding technology service fee within seven (7) business days upon receipt of Party B's management statements and operating data (which shall specify the amount of Party B's net revenue for the applicable period). Party B shall pay the amount stated in the invoice within seven (7) business days upon receipt of such invoice. All payments shall be made by remittance or other means acceptable to the Parties into the bank account designated by Party A. The Parties agree that Party A may change such payment instructions from time to time by serving a notice on Party B.

 

 

2.2

Party B shall, within 90 days of the end of each fiscal year, (a) provide Party A with its audited financial statements for the current fiscal year, which shall have been audited and certified by an independent certified public accountant approved by Party A; and (b) if there is any shortfall in the total amount of monthly payments made by Party B to Party A during the fiscal year as shown in the audited financial statements, pay such shortfall to Party A.

 

2.3

Party B shall prepare financial statements that meet Party A's requirements in accordance with the requirements of laws and business practices.

 

2.4

Upon five (5) business days' notice from Party A, Party B shall allow Party A and/or its appointed auditor to audit the relevant books and records of Party B at its principal place of business and to make copies of such part of the books and records as may be required to verify the accuracy of the amount of revenue and statements of Party B.

 

2.5

The Parties hereto shall solely bear their own tax burdens incurred by them as a result of the performance hereof.

 

3.

Intellectual Property Rights, Confidentiality and Non-Competition

 

3.1

Party A shall own exclusive and proprietary rights and interests in and to all rights, titles, interests and intellectual property rights arising or created as a result of the performance hereof, including but not limited to copyrights, patents, patent applications, trademarks, software, know-hows, trade secrets and otherwise, whether developed by Party A or by Party B.

 

3.2

The Parties acknowledge that any oral or written information exchanged by them in connection with this Agreement is confidential. Each Party shall keep all such information confidential and may not disclose any such information to any third party without the written consent of the other Party, except (a) to the extent that such information is or becomes known to the public ( other than due to disclosure to the public by the receiving party); (b) to the extent that such disclosure is required by applicable law or the rules or regulations of any stock exchange; or (c) to the extent that such information is required to be disclosed by any Party to its legal counsel or financial advisor in connection with the transactions contemplated hereunder, where such legal counsel or financial advisor is also subject to obligations of confidentiality similar to those contained in this Article. Any disclosure of any confidential information by a person or body employed by any Party shall be deemed to be a disclosure of such confidential information by such Party, and such Party shall be legally liable for any breach of this Agreement. This Article shall survive termination of this Agreement for any reason whatsoever.

 

3.3

Party B shall not conduct (directly or indirectly) any business other than those permitted under Party B's business license and operating permit, nor shall it conduct, directly or indirectly, any business in the PRC that competes with Party A's business, including investing in an entity that conducts a business that competes with Party A's business, nor shall it conduct any other business beyond the scope approved by Party A in writing.

 

 

3.4

The Parties agree that this Article shall survive any modification, annulment or termination of this Agreement.

 

4.

Representations and Warranties

 

4.1

Party A represents and warrants that:

 

4.1.1

Party A is a company legally incorporated and validly existing under the laws of the PRC.

 

4.1.2

Party A enters into and performs this Agreement within the scope of its legal personality and its business operations; Party A has taken the necessary corporate actions and has been granted proper authorization and obtained the consents and approvals of third parties and governmental authorities, and will not violate any laws or other restrictions binding upon or affecting Party A.

 

4.1.3

This Agreement constitutes the legal, valid and binding obligation of Party A, and is enforceable against it in accordance with the terms hereof.

 

4.2

Party B represents and warrants that:

 

4.2.1

Party B is a company legally incorporated and validly existing under the laws of the PRC.

 

4.2.2

Party B enters into and performs this Agreement within the scope of its legal personality and its business operations; Party B has taken the necessary corporate actions and has been granted proper authorization and obtained the consents and approvals of third parties and governmental authorities, and will not violate any laws or other restrictions binding upon or affecting Party B.

 

4.2.3

This Agreement constitutes the legal, valid and binding obligation of Party B, and shall be enforceable against it.

 

5.

Effectiveness and Term

 

5.1

This Agreement is executed as of the date first above written and shall take effect as of such date. This Agreement shall remain in effect for a period of ten (10) years unless terminated earlier in accordance with the provisions of this Agreement or any other agreement separately entered into by the Parties.

 

5.2

The term hereof may be extended by written confirmation from Party A prior to the expiration of this Agreement. The extended term shall be determined by Party A and Party B shall unconditionally accept such extended term.

 

6.

Termination

 

6.1

This Agreement shall be terminated as of the date of expiration unless renewed in accordance with the relevant terms hereof.

 

6.2

During the term hereof, unless Party A has been grossly negligent or fraudulent towards Party B, Party B may not terminate this Agreement prior to the date of expiration. However, Party A shall have the right to terminate this Agreement at any time by giving 30 days' prior written notice to Party B.

 

 

6.3

The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.

 

6.4

Early termination or expiration of this Agreement for any reason does not relieve any Party from all payment obligations hereunder (including but not limited to the Service Fee) due prior to the date of termination or expiration hereof, nor does this waive any liability for breach incurred prior to the termination of this Agreement. The payable Service Fee arising prior to the termination of this Agreement shall be paid to Party A within fifteen (15) business days from the date of termination hereof.

 

7.

Governing Law, Dispute Resolution and Change of Law

 

7.1

The execution, entry into force, interpretation, performance, modification and termination hereof and the resolution of disputes hereunder shall be governed by the laws of the PRC.

 

7.2

In the event of any dispute arising out of the interpretation and performance of the provisions hereof, the Parties shall negotiate in good faith to resolve such dispute. If the Parties fail to agree on the resolution of such dispute within 30 days after any Party has requested that such dispute be resolved by negotiation, then any Party may submit such dispute to the China International Economic and Trade Arbitration Commission for resolution by arbitration in accordance with its arbitration rules then in effect. The arbitration shall take place in Beijing and shall be conducted in the Chinese language. The arbitral award shall be final and binding upon the Parties.

 

7.3

In the event of any dispute arising out of the interpretation and performance hereof or in the event that any dispute is under arbitration, the Parties hereto shall continue to exercise their respective rights and perform their respective obligations hereunder, except for the matters in dispute.

 

7.4

If, at any time after the date hereof, any PRC law, regulation or rule is promulgated or changed, or the interpretation or application of such law, regulation or rule is changed, the following provisions shall apply: (a) If such change in law or newly promulgated provision is more favorable to any Party than the relevant law, regulation, decree or provision in effect on the date hereof (and the other Party is not materially adversely affected), each Party shall promptly apply to receive the benefits arising from such change or new provision. Each Party shall use its best efforts to cause such application to be approved; and (b) if, as a result of such change in law or newly promulgated provision, the economic interests of any Party hereunder are materially adversely affected directly or indirectly, this Agreement shall continue to be enforced in accordance with its original terms. Each Party shall use all lawful means to obtain a waiver of compliance with such change or provision. If the adverse effect on the economic interests of any Party cannot be resolved in accordance with the provisions hereof, upon notice by the affected Party to the other Parties, the Parties shall promptly negotiate and make all necessary modifications to this Agreement to maintain the affected Party's economic interests hereunder.

 

8.

Indemnity

 

Party B shall indemnify and hold Party A harmless from any loss, damage, liability or expense resulting from any action, claim or other demand against Party A arising out of or caused by the consulting and Services provided by Party A at Party B's request, unless such loss, damage, liability or expense arises out of Party A's gross negligence or willful misconduct.

 

 

9. Notice

 

9.1

All notices and other communications required or permitted to be given hereunder shall be delivered by hand or sent by postage prepaid registered mail, commercial courier service or facsimile to the following address of such Party. A further acknowledgment of each notice shall be sent by e-mail. The date on which such notice is deemed to have been validly served shall be determined as follows:

 

9.1.1

A notice shall be deemed to have been validly delivered on the date of dispatch or rejection if it is sent by personal delivery, courier service or registered mail, postage prepaid, at the address specified for receipt of the notice.

 

9.1.2

A notice, if sent by fax, shall be deemed to have been validly delivered on the date of successful transmission (which shall be evidenced by an automatically generated transmission confirmation message).

 

9.2

For the purposes of notification, the addresses of the Parties are as follows:

 

Party A: Beijing (HX) Pony AI Technology Co., Ltd.

Address: Room 01, 1/F, Building 2, 68 Beiqing Road, Haidian District, Beijing

Attn: LI Hengyu

 

Party B: Beijing (ZX) Pony.AI Technology Co., Ltd.

Address: Room 01, 1/F, Building 2, 68 Beiqing Road, Haidian District, Beijing

Attn: LI Hengyu

 

Party C: Hong Kong Pony AI Limited

Address: Suite 603 6, Laws Commercial Plaza, 788 Cheung Sha Wan Road, Kowloon, Hong Kong

 

9.3

Any Party may change its address for receiving notices at any time by giving notice to the other Party in accordance with the provisions of this Article.

 

10. Assignment

 

10.1

Party B may not assign its rights and obligations hereunder to any third party without the prior written consent of Party A.

 

10.2

Party B agrees that Party A may assign its rights and obligations hereunder to any third party by giving a prior written notice to Party B, without having to obtain Party B's consent.

 

11. Severability

 

If one or more provisions hereof shall be held invalid, illegal or unenforceable in any respect under any law or regulation, the validity, legality or enforceability of the remaining provisions hereof shall not be affected or impaired in any respect. The Parties shall negotiate in good faith and strive to replace such invalid, unlawful or unenforceable provision(s) with a provision(s) that is/are valid to the fullest extent permitted by law and desired by the Parties, where such valid provision(s) shall have an economic effect as similar as possible to that of such invalid, illegal or unenforceable provision(s).

 

 

12. Modifications and Supplements

 

Any modification and supplement to this Agreement shall be made in writing. Amendments and supplements executed by the Parties in connection with this Agreement shall be an integral part hereof and shall have the same legal force and effect as this Agreement.

 

13. Pre-existing Agreement

 

The Exclusive Business Cooperation Agreement dated December 27, 2017 between Party A and Party B is superseded by this Agreement and terminated as of the date hereof.

 

14. Language and Counterparts

 

This Agreement is written in Chinese and is made in three copies, one for each Party, which shall be equally authentic.

 

[The remainder of this page is intentionally left blank]

 

 

IN WITNESS WHEREOF, the Parties have caused this Exclusive Business Cooperation Agreement to be executed by their authorized representatives as of the date first above written.

 

Party A: Beijing (HX) Pony AI Technology Co., Ltd.

 

Company seal: /s/ Beijing (HX) Pony AI Technology Co., Ltd.

By:	/s/ LI Hengyu
Name:	LI Hengyu
Title:	Legal Representative

 

Party B: Beijing (ZX) Pony.AI Technology Co., Ltd.

By:	/s/ LI Hengyu
Name:	LI Hengyu
Title:	Legal Representative

 

 

IN WITNESS WHEREOF, the Parties have caused this Exclusive Business Cooperation Agreement to be executed by their authorized representatives as of the date first above written.

 

Party C: Hong Kong pony AI Limited

By:	/s/ PENG Jun
Name:	PENG Jun
Title:	Authorized Representative

 

 

 

 

CERTAIN INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS [****], HAS BEEN EXCLUDED PURSUANT TO ITEM 601(B)(10)(IV) OF REGULATION S-K UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

 

Exhibit 10.6

 

Share Pledge Agreement

 

This Share Pledge Agreement (this "Agreement") is entered into as of June 1, 2020, in Beijing, the PRC, by and among the following parties:

 

Party A: Beijing (HX) Pony AI Technology Co., Ltd. (hereinafter referred to as the "Pledgee")

 

Address: Room A029, 2/F, 88 Xiangshan Road, Haidian District, Beijing

 

Legal Representative: LI Hengyu

 

Party B:

 

(1)

XU Suping

 

ID no.: [************]

 

(2)

LI Hengyu

 

ID no.: [************]

 

(3)

ZHOU Jun

 

ID no.: [************]

 

(4)

WANG Haojun

 

ID no.: [************]

 

(5)

LOU Tiancheng

 

ID no.: [************]

 

(6)

LIU Bocong

 

ID no.: [************]

 

(7)

TANG Fengheng

 

ID no.: [************]

 

(8)

ZHAI Jing

 

ID no.: [************]

 

(hereinafter referred to as, collectively, the "Pledgors")

 

 

Party C: Beijing (ZX) Pony.AI Technology Co., Ltd.

 

Address: Room 01, 1/F, Building 2, 68 Beiqing Road, Haidian District, Beijing

 

Legal Representative: LI Hengyu

 

Party D: Hong Kong Pony AI Limited

 

Address: Suite 603 6/F, Laws Commercial Plaza, 788 Cheung Sha Wan Road, Kowloon, Hong Kong

 

In this Agreement, the Pledgee, the Pledgors, Party C and Party D are hereinafter referred to individually as a "Party" and collectively as the "Parties".

 

WHEREAS:

 

1.

The Pledgors are citizens of the People's Republic of China (hereinafter referred to as the "PRC") and own 100% of the equity interests in Party C in the aggregate. Party C is a limited liability company incorporated in Beijing, the PRC. Party C acknowledges the respective rights and obligations of the Pledgee and the Pledgors hereunder and agrees to provide any necessary assistance in registering the Pledge;

 

2.

The Pledgee is a wholly foreign-owned enterprise incorporated in Beijing, the PRC. The Pledgee and Party C entered into an Exclusive Business Cooperation Agreement as of June 1, 2020;

 

3.

To ensure that the Pledgee receives from Party C all payments due and payable by Party C, including but not limited to consulting and service fees, the Pledgors hereby pledge all of the Equity Interests they hold in Party C as security for the payment of the consulting and service fees by Party C under the Exclusive Business Cooperation Agreement.

 

1.

Definitions

 

Unless otherwise specified herein, the following terms shall have the meanings given below:

 

1.1

"Pledge" shall mean the security interest granted by the Pledgors to the Pledgee pursuant to Article 2 hereof, i.e. the priority of the Pledgee to be paid out of the conversion, auction or sale price of the Equity Interests.

 

1.2

"Equity Interests" shall mean all equity interests legally held now and acquired in the future by the Pledgors in Party C.

 

1.3

"Pledge Term" shall mean the term set forth in Article 3 hereof.

 

1.4

"Business Cooperation Agreement" shall mean the Exclusive Business Cooperation Agreement dated June 1, 2020 between the Pledgee that is partly owned by the Pledgors, on one hand, and Party C, on the other hand.

 

1.5

"Event of Default" shall mean any of the circumstances set forth in Article 7 hereof.

 

1.6

"Notice of Default" shall mean a notice issued by the Pledgee pursuant to this Contract declaring an Event of Default.

 

2.

Pledge

 

2.1

As a collateral security for the immediate and complete payment and performance of any or all payments owed by Party C (including, without limitation, consulting and service fees payable to the Pledgee under the Business Cooperation Agreement when they become due and payable (whether on the specified due date, by early repayment or otherwise), hereinafter collectively referred to as the "Secured Obligations"), the Pledgors hereby pledge to the Pledgee an aggregate of 100% of the Equity Interests of Party C held by the Pledgors by way of first priority pledge.

 

 

2.2

Where any of the following events occurs (hereinafter referred to as a "Cause of Settlement"), the value of the Secured Obligations shall be determined on the basis of the total amount of the Secured Obligations due and unpaid to the Pledgee as of the most recent date prior to or on the date of occurrence of such Cause of Settlement (hereinafter referred to as the "Established Obligations"):

 

(a)

The Business Cooperation Agreement expires or is terminated in accordance with the relevant provisions thereunder;

 

(b)

An Event of Default under Article 7 hereof occurs and remains unresolved, causing the Pledgee to serve a Notice of Default on the relevant Pledgor in accordance with Article 7.3;

 

(c)

The Pledgee reasonably believes, through appropriate investigation, that the Pledgor and/or Party C is insolvent or is likely to be placed in a state of insolvency; or

 

(d)

Any other event where the determination of the Secured Obligations is required under the relevant PRC laws.

 

2.3

For the avoidance of doubt, the date of occurrence of the Cause of Settlement shall be the Settlement Date (hereinafter referred to as the "Settlement Date"). The Pledgee shall be entitled, at its option, to realize the Pledge in accordance with Article 8 on or after the Settlement Date.

 

2.4

During the Pledge Term (as defined below), the Pledgee shall be entitled to receive any dividends or other distributable benefits arising from the Equity Interests.

 

3.

Pledge Term

 

3.1

The Pledge shall take effect from the date of its registration and establishment with the competent administration for industry and commerce (hereinafter referred to as the "Registration Authority") in the place where Party C is located, and the term of such Pledge (hereinafter referred to as the "Pledge Term") shall not be terminated until the last of the obligations secured by such Pledge is paid or performed. The Parties agree that, upon the execution of this Agreement, the Pledgors and Party A shall use their best efforts to apply to the Registration Authority for registration of the establishment of the share pledge in accordance with the "Measures for Registration of Share Pledges with the Administrations for Industry and Commerce" at the earliest date of the procedure prescribed by the Registration Authority. The Parties further agree that within thirty (30) days from the date of formal acceptance of the application for registration of the share pledge by the Registration Authority and within two (2) months following the execution of this Agreement, they will complete all the procedures for registration of the share pledge, obtain the registration notice issued by the Registration Authority, and cause the matters concerning the share pledge to be recorded completely and accurately in the share pledge register by the Registration Authority.

 

3.2

If, during the Pledge Term, Party C fails to pay the exclusive consulting or service fees under the Business Cooperation Agreement or fails to perform other aspects thereof, the Pledgee shall have the right, but not the obligation, to dispose of such Pledge in accordance with the provisions hereof.

 

 

4.

Custody of Equity Records Subject to Pledge

 

4.1

During the Pledge Term specified herein, the Pledgors shall, within one week from the date of establishment of the registration of the Pledge, place in the custody of the Pledgee the original certificates of equity contribution and the register of shareholders recording the Pledge (and such other documents as the Pledgee may reasonably request, including but not limited to the notice of registration of the Pledge issued by the competent administration for industry and commerce). The Pledgee shall keep such items in its custody throughout the Pledge Term as specified herein.

 

4.2

During the Pledge Term, the Pledgee shall be entitled to receive the dividends arising from the Equity Interests.

 

5.

Representations and Warranties of the Pledgors and Party C

 

Each Pledgor represents and warrants to the Pledgee that:

 

5.1

The Pledgor is the sole legal and beneficial owner of the Equity Interests and has legal, complete and full ownership in the Equity Interests, except subject to a separate agreement between the Pledgor and the Pledgee.

 

5.2

The Pledgee shall have the right to dispose of and transfer the Equity Interests in accordance with the provisions set forth herein.

 

5.3

The Pledgor has not created any security interest or other encumbrance on the Equity Interests other than the Pledge, the Equity Interests are not subject to any dispute as to ownership, are not subject to attachment or other legal proceedings or similar threats, and are available for pledge and transfer in accordance with applicable law.

 

5.4

The execution of this Agreement by the Pledgor and the exercise of its rights hereunder, or the performance of its obligations hereunder, will not violate any law, regulation, any agreement or contract to which the Pledgor is a party, or any undertaking made by the Pledgor to any third party.

 

5.5

All the documents, information, statements and vouchers provided by the Pledgor to the Pledgee are accurate, true, complete and valid.

 

Party C represents and warrants to the Pledgee that:

 

5.6

Party C is a limited liability company duly incorporated and validly existing under the laws of the PRC with independent legal personality; it has full and independent legal status and legal capacity to enter into, deliver and perform this Agreement.

 

5.7

This Agreement, once duly executed by Party C, shall constitute a legal, valid and binding obligation of Party C.

 

5.8

Party C has the full right and authority within Party C to enter into and deliver this Agreement and all other documents in connection with the transactions contemplated hereby, and it has the full right and authority to consummate the transactions contemplated hereby.

 

5.9

There is no material security interest or other encumbrance on the assets owned by Party C that may affect the rights and interests of the Pledgee in the Equity Interests (including, but not limited to, any transfer of any intellectual property rights of Party C or any asset with a value of RMB100,000 or above, or any encumbrance on the title or use rights attached to such assets).

 

 

5.10

No litigation, arbitration or other legal proceedings are pending or, to the knowledge of Party C, threatened in any court or arbitral tribunal against the Equity Interests, Party C or its assets, nor are there any administrative proceedings or administrative penalties pending or, to the knowledge of Party C, threatened in any governmental or administrative agency against the Equity Interests, Party C or its assets that would materially or adversely affect Party C's financial condition or the ability of the Pledgors to perform their obligations and security liabilities under this Agreement.

 

5.11

Party C hereby agrees to be jointly and severally liable to the Pledgee for the representations and warranties made by all or any of the Pledgors hereunder.

 

5.12

Party C hereby warrants to the Pledgee that the foregoing representations and warranties will be true and correct and will be fully complied with at all times and under all circumstances until the obligations hereunder are fully performed or the Secured Obligations are fully discharged.

 

6.

Undertakings and Further Agreements of the Pledgors and Party C

 

Each Pledgor undertakes and further agrees that:

 

6.1

During the term hereof, the Pledgor hereby undertakes to the Pledgee that:

 

6.1.1

Except for the performance of the Exclusive Purchase Option Agreement entered into by the Pledgor, the Pledgee and Party C as of June 1, 2020, the Pledgor may not, without the prior written consent of the Pledgee, make or permit others to make any transfer of all or any part of the Equity Interests, create or permit to exist any security interest or other encumbrance over the Equity Interests that might affect the rights and interests of the Pledgee in the Equity Interests;

 

6.1.2

The Pledgor shall comply with the provisions of all laws and regulations applicable to the pledge of rights and shall, within five days upon receipt of any notice, order or recommendation issued or made by the competent authority (or any other party concerned) in respect of the Pledge, present the said notice, order or recommendation to the Pledgee and shall comply with such notice, order or recommendation or make such objections and representations in respect thereof as the Pledgee may reasonably request or with the consent of the Pledgee;

 

6.1.3

The Pledgor shall immediately notify the Pledgee of any event or notice received by the Pledgor which may have an effect on the Pledgee's rights in the Equity Interests or any part thereof, and any event or notice received by the Pledgor which may have an effect on any warranties and other obligations of the Pledgor arising hereunder.

 

6.2

The Pledgor agrees that the rights of the Pledgee acquired hereunder in respect of the Pledge shall not be interrupted or jeopardized by legal proceedings instituted by the Pledgor or any successor or representative of the Pledgor or any other person.

 

6.3

In order to protect or perfect the security interest granted hereunder for the payment of consulting and service fees under the Business Cooperation Agreement, and for the performance of the Business Cooperation Agreement, the Pledgor hereby undertakes to execute and cause other parties interested in the Pledge to execute in good faith all certificates, agreements, deeds and/or undertakings required by the Pledgee. The Pledgor also undertakes to carry out and cause other parties interested in the Pledge to carry out the acts required by the Pledgee, in furtherance of the exercise by the Pledgee of its rights and authority granted to it hereunder, and to execute all relevant documents concerning the ownership of the Equity Interests with the Pledgee or the Pledgee's designee (natural/legal person). The Pledgor undertakes to provide the Pledgee, within a reasonable period of time, with all notices, orders and decisions requested by the Pledgee in connection with the Pledge.

 

 

6.4

The Pledgor hereby undertakes to the Pledgee that he/she will observe and perform all warranties, undertakings, agreements, representations and conditions hereunder. If the Pledgor fails to perform or partially performs its warranties, undertakings, agreements, representations and conditions, the Pledgor shall indemnify the Pledgee for all losses arising therefrom.

 

6.5

If the Equity Interests pledged hereunder are subject to any enforcement measures imposed by a court or any other governmental authority for any reason whatsoever, the Pledgor shall use all his/her efforts, including (but not limited to) providing additional assurances to the court or taking other measures, to discharge such enforcement measures imposed on the Equity Interests by such court or other authority.

 

6.6

If there is any possibility that the value of the Equity Interests may decrease to such an extent as to jeopardize the rights of the Pledgee, the Pledgee may require the Pledgor to provide additional security or guarantee. Should the Pledgor fail to do so, the Pledgee may at any time auction or sell off the Equity Interests and apply the proceeds therefrom towards the early settlement of the Secured Obligations or deposit the same; any expenses arising therefrom shall be borne solely by the Pledgor.

 

6.7

Without the prior written consent of the Pledgee, the Pledgor and/or Party C may not, on its own (or help others), increase, reduce, transfer or encumber the registered capital of Party C (or his/her capital contribution to Party C), including the Equity Interests. Subject to compliance with this provision, the Equity Interests registered and acquired by the Pledgor in Party C after the date hereof shall be referred to as "Additional Equity Interests". The Pledgor and Party C shall enter into a supplementary share pledge agreement with the Pledgee in respect of the Additional Equity Interests immediately upon the acquisition of such Additional Equity Interests by the Pledgor, and shall cause the board of directors and the shareholders' meeting of Party C to approve such supplementary share pledge agreement, and shall submit to the Pledgee all the documents required for the supplementary share pledge agreement, including but not limited to: (a) the original shareholder capital contribution certificate issued by Party C in respect of the Additional Equity Interests; and (b) a certified copy of the capital verification report issued by a PRC certified public accountant in respect of the Additional Equity Interests. The Pledgor and Party C shall register the establishment of the pledge of the Additional Equity Interest in accordance with the provisions of Article 3.1 hereof.

 

6.8

Unless the Pledgee gives prior written instructions to the contrary, the Pledgor and/or Party C agrees that in the event of a transfer of part or all of the shares between the Pledgor and any third party (hereinafter referred to as the "Share Transferee") in breach of this Agreement, the Pledgor and/or Party C shall ensure that the Share Transferee unconditionally acknowledges the Pledge, and shall perform the necessary procedures for registration of the change of pledge (including but not limited to executing the relevant documents) in order to ensure the survival of the Pledge.

 

6.9

If the Pledgee provides a further loan to Party C, the Pledgor and/or Party C agrees to pledge the Equity Interests to grant a pledge to the Pledgee to secure such further loan and to perform the relevant procedures as soon as possible as required by laws, regulations or local practices (if any), including but not limited to the executing relevant documents and completing the relevant procedures for registration of the establishment (or change) of the pledge.

 

 

Party C undertakes and further agrees that:

 

6.10

If the consent, permission, waiver, authorization of any third party or the approval, license, waiver of or registration or filing with any governmental authority (if required by law) is required in connection with the execution and performance of this Agreement and the pledge of Equity Interests hereunder, Party C will endeavor to assist in obtaining and keeping the same in full force and effect during the term hereof.

 

6.11

Without the prior written consent of the Pledgee, Party C will not assist or allow the Pledgor to create any new pledge or grant any other security interest over the Equity Interests, nor will it assist or allow the Pledgor to transfer the Equity Interests.

 

6.12

Party C agrees to strictly comply with the obligations under Articles 6.7, 6.8 and 6.9 hereof together with the Pledgor.

 

6.13

Without the prior written consent of the Pledgee, Party C may not transfer its assets or create or permit to exist on Party C's assets any security interest or other encumbrances that may affect the rights and interests of the Pledgee in the Equity Interests (including but not limited to the transfer of any intellectual property rights of Party C or any asset with a value of RMB500,000 or above, or any encumbrances on title or use rights attached to such assets).

 

6.14

In the event of any legal proceedings, arbitration or other claims which may adversely affect Party C, the Equity Interests or the interests of the Pledgee under the series of cooperation agreements (including but not limited to the Business Cooperation Agreement) and this Agreement, Party C undertakes to notify the Pledgee in writing as soon as possible and in a timely manner and, upon the reasonable request of the Pledgee, to take all necessary measures to secure the Pledgee's pledge interest in the Equity Interests.

 

6.15

Party C shall not perform or permit any act or action that may adversely affect the Pledgee's interest under the series of cooperation agreements (including but not limited to the Business Cooperation Agreement) and this Agreement or the Equity Interests.

 

6.16

Party C will, within the first month of each calendar quarter, provide the Pledgee with financial statements of Party C for the previous calendar quarter, including but not limited to balance sheet, income statement and cash flow statement.

 

6.17

Party C undertakes to take all necessary measures and to execute all necessary documents to ensure the Pledgee's pledge interest in the Equity Interests and the exercise and realization of such interest, upon the reasonable request of the Pledgee.

 

6.18

In the event of any transfer of the Equity Interests as a result of the exercise of the Pledge hereunder, Party C undertakes to take all measures necessary to consummate such transfer.

 

7.

Events of Default

 

7.1

Each of the following shall be deemed as an Event of Default:

 

7.1.1

Party C fails to pay in full the consulting and service fees payable under the Business Cooperation Agreement or fails to repay the loan, or breaches any of Party C's other obligations under such agreement;

 

 

7.1.2

Any representation or warranty made by the Pledgor in Article 5 hereof contains a material misrepresentation or error and/or the Pledgor breaches any warranty in Article 5 hereof;

 

7.1.3

The Pledgor and Party C fail to complete the registration of the pledge of the Equity Interests with the Registration Authority as set forth in Article 3.1;

 

7.1.4

The Pledgor and Party C breach any of the provisions set forth herein;

 

7.1.5

Except as expressly provided in Article 6.1.1, the Pledgor transfers or attempts to transfer or relinquish the pledged Equity Interests or assigns the pledged Equity Interests without the written consent of the Pledgee;

 

7.1.6

The Pledgor's own loans, warranties, indemnities, undertakings or other debt liabilities to any third party (1) are required to be repaid or performed in advance due to the Pledgor's default; or (2) are due but cannot be repaid or performed as scheduled;

 

7.1.7

Any approval, license, permit or authorization of a governmental authority that makes this Agreement enforceable, legal and effective is withdrawn, suspended, rendered invalid or materially altered;

 

7.1.8

The enactment of applicable law renders this Agreement illegal or renders the Pledgor unable to continue to perform his/her obligations hereunder;

 

7.1.9

There has been an adverse change in the property owned by the Pledgor which, in the opinion of the Pledgee, has affected the ability of the Pledgor to perform his/her obligations hereunder;

 

7.1.10

The successor or trustee of Party C may only partially perform or refuse to perform its payment obligations under the Business Cooperation Agreement; and

 

7.1.11

Any other circumstances where the Pledgor is or may be unable to exercise its rights in respect of the Pledge.

 

7.2

Upon becoming aware or discovering that any of the circumstances described in Article 7.1 or any event that may lead to such circumstances has occurred, the Pledgor shall immediately notify the Pledgee in writing accordingly.

 

7.3

Unless the Event of Default set forth in this Article 7.1 has been successfully resolved to the satisfaction of the Pledgee within thirty (30) days from the date of notice given by the Pledgee, the Pledgee may, at any time upon or after the occurrence of such Event of Default, give a Notice of Default to the Pledgor requiring the Pledgor to immediately pay all outstanding payments due and payable under the Business Cooperation Agreement and all other payments due and payable to the Pledgee, and/or to repay the loan and/or to dispose of the Pledge as provided in Article 8 hereof.

 

8.

Exercise of Pledge

 

8.1

The Pledgor may not transfer the Pledge or his/her Equity Interests in Party C without the written consent of the Pledgee until the Business Cooperation Agreement is fully performed and the consulting and service fees stated therein are paid in full.

 

8.2

The Pledgee may give a Notice of Default to the Pledgor when exercising the Pledge.

 

8.3

Subject to the provisions of Article 7.3, the Pledgee may exercise the right to enforce the Pledge simultaneously with or at any time after the giving of a Notice of Default in accordance with Article 7.2. Once the Pledgee has elected to enforce the Pledge, the Pledgor shall cease to have any right or interest in relation to the Equity Interests.

 

 

8.4

In the event of a default, to the extent permitted by and in accordance with applicable law, the Pledgee shall be entitled to dispose of the pledged Equity Interests in accordance with law; if there is any balance remaining after the entire amount received by the Pledgee as a result of the exercise of its Pledge is applied towards the satisfaction of the Secured Obligations, such balance shall be paid to the Pledgor or to the person entitled to receive such amount (without interest).

 

8.5

When the Pledgee disposes of the Pledge in accordance with this Agreement, the Pledgor and Party C shall provide the necessary assistance to enable the Pledgee to enforce the Pledge in accordance with this Agreement.

 

8.6

All actual expenses, taxes and all legal fees incurred in connection with the creation of the pledge of the Equity Interests hereunder and the realization of the rights of the Pledgee shall be borne by the Pledgor, except where the law requires the Pledgee to bear such expenses.

 

9.

Assignment

 

9.1

The Pledgor may not be entitled to assign or delegate its rights and obligations hereunder without the prior written consent of the Pledgee.

 

9.2

This Agreement shall be binding on the Pledgor and its successors and permitted assigns and shall be valid in respect of the Pledgee and each of its successors and assigns.

 

9.3

At any time, the Pledgee may assign any and all of its rights and obligations under the Business Cooperation Agreement to its designee (natural/legal person), in which case the assignee shall be entitled to and assume the rights and obligations of the Pledgee hereunder as if it were an original party hereto. When the Pledgee assigns its rights and obligations under the Business Cooperation Agreement, upon the request of the Pledgee, the Pledgor shall execute the relevant agreement or other documents in connection with such assignment.

 

9.4

In the event of a change of the Pledgee as a result of the assignment, upon the request of the Pledgee, the Pledgor shall enter into a new pledge agreement with the successor Pledgee on the same terms and conditions as this Agreement.

 

9.5

The Pledgor shall strictly comply with the provisions of this Agreement and other contracts executed jointly or severally by the Parties hereto or any of them, including the Exclusive Option Agreement and the Power of Attorney granted to the Pledgee, perform his/her obligations under this Agreement and other contracts and refrain from acts/omissions that may affect the validity and enforceability hereof and thereof. The Pledgor may not exercise any of his/her remaining rights with respect to the Equity Interests pledged hereunder except in accordance with the written instructions of the Pledgee.

 

10.

Termination

 

Upon full performance of the Business Cooperation Agreement and full payment of the consulting and service fees hereunder and upon termination of Party C's obligations under the Business Cooperation Agreement, this Agreement shall be terminated and the Pledgee shall cancel or terminate this Agreement as soon as reasonably practicable.

 

 

11.

Handling Charges and Other Expenses

 

All costs and actual expenses in connection with this Agreement, including but not limited to attorney's fees, cost of production, stamp duty and any other taxes and fees shall be borne by Party C. If the Pledgee is required by applicable law to bear certain relevant taxes and expenses, the Pledgor shall cause Party C to reimburse the Pledgee in full for the taxes and expenses already paid by it.

 

12.

Duty of Confidentiality

 

The Parties acknowledge that any oral or written information exchanged by them in connection with this Agreement is confidential. Each Party shall keep all such information confidential and may not disclose any such information to any third party without the written consent of the other Party, except (a) to the extent that such information is or becomes known to the public ( other than due to disclosure to the public by the receiving party); (b) to the extent that such disclosure is required by applicable law or the rules or regulations of any stock exchange; or (c) to the extent that such information is required to be disclosed by any Party to its legal counsel or financial advisor in connection with the transactions contemplated hereunder, where such legal counsel or financial advisor is also subject to obligations of confidentiality similar to those contained in this Article. Any disclosure of any confidential information by a person or body employed by any Party shall be deemed to be a disclosure of such confidential information by such Party, and such Party shall be legally liable for any breach of this Agreement. This Article shall survive termination of this Agreement for any reason whatsoever.

 

13.

Governing Law and Dispute Resolution

 

13.1

The execution, entry into force, interpretation and performance of this Agreement and the resolution of disputes hereunder shall be governed by the laws duly published and publicly available in the PRC. Matters not covered by the laws duly published and publicly available in the PRC shall be governed by international legal principles and practices.

 

13.2

In the event of any dispute arising out of the interpretation and performance of the provisions hereof, the Parties shall negotiate in good faith to resolve such dispute. If the Parties fail to agree on the resolution of such dispute within 30 days after any Party has requested that such dispute be resolved by negotiation, then any Party may submit such dispute to the China International Economic and Trade Arbitration Commission for resolution by arbitration in accordance with its arbitration rules then in effect. The arbitration shall take place in Beijing and shall be conducted in the Chinese language. The arbitral award shall be final and binding upon the Parties.

 

13.3

In the event of any dispute arising out of the interpretation and performance hereof or in the event that any dispute is under arbitration, the Parties hereto shall continue to exercise their respective rights and perform their respective obligations hereunder, except for the matters in dispute.

 

14.

Notice

 

14.1

All notices and other communications required or permitted to be given hereunder shall be delivered by hand or sent by postage prepaid registered mail, commercial courier service or facsimile to the following address of such Party. A further acknowledgment of each notice shall be sent by e-mail. The date on which such notice is deemed to have been validly served shall be determined as follows:

 

14.1.1

A notice shall be deemed to have been validly delivered on the date of dispatch or rejection if it is sent by personal delivery, courier service or registered mail, postage prepaid, at the address specified for receipt of the notice.

 

 

14.1.2

A notice, if sent by fax, shall be deemed to have been validly delivered on the date of successful transmission (which shall be evidenced by an automatically generated transmission confirmation message).

 

14.2

For the purposes of notification, the addresses of the Parties are as follows:

 

Party A: Beijing (HX) Pony AI Technology Co., Ltd.

 

Address: Room 01, 1/F, Building 2, 68 Beiqing Road, Haidian District, Beijing

 

Attn: LI Hengyu

 

Party B: XU Suping, LI Hengyu, ZHOU Jun, WANG Haojun, LOU Tiancheng, LIU Bocong, TANG Fengheng, ZHAI Jing

 

Party C: Beijing (ZX) Pony.AI Technology Co., Ltd.

 

Address: Room 01, 1/F, Building 2, 68 Beiqing Road, Haidian District, Beijing

 

Attn: LI Hengyu

 

Party D: Hong Kong Pony AI Limited

 

Address: Suite 603 6/F, Laws Commercial Plaza, 788 Cheung Sha Wan Road, Kowloon, Hong Kong

 

14.3

Any Party may change its address for receiving notices at any time by giving notice to the other Party in accordance with the provisions of this Article.

 

15.

Pre-existing Agreement

 

The Share Pledge Agreement dated December 27, 2017 among Party A, Party B and Party C is superseded by this Agreement and terminated as of the date hereof.

 

16.

Severability

 

If one or more provisions hereof shall be held invalid, illegal or unenforceable in any respect under any law or regulation, the validity, legality or enforceability of the remaining provisions hereof shall not be affected or impaired in any respect. The Parties shall negotiate in good faith and strive to replace such invalid, unlawful or unenforceable provision(s) with a provision(s) that is/are valid to the fullest extent permitted by law and desired by the Parties, where such valid provision(s) shall have an economic effect as similar as possible to that of such invalid, illegal or unenforceable provision(s).

 

17.

Annexes

 

The annexes set forth herein shall constitute an integral part of this Agreement.

 

18.

Effectiveness

 

18.1

Any amendments, modifications and supplements to this Agreement shall be made in writing and shall become effective upon signature or stamping by the Parties and completion of governmental registration procedures, if applicable.

 

 

18.2

This Agreement is written in Chinese and is made in twelve (12) copies, one (1) copy for each Pledgor, the Pledgee, Party C and Party D, and one (1) copy to be filed with the Registration Authority, which shall be equally authentic.

 

[The remainder of this page is intentionally left blank]

 

 

IN WITNESS WHEREOF, the Parties have caused this Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

Party A: Beijing (HX) Pony AI Technology Co., Ltd.

 

Company seal: /s/ Beijing (HX) Pony AI Technology Co., Ltd.

 

By:	/s/ LI Hengyu
Name:	LI Hengyu
Title:	Legal Representative

 

 

IN WITNESS WHEREOF, the Parties have caused this Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

Party B:	XU Suping			ZHAI Jing
	By:	/s/ XU Suping		By:	/s/ ZHAI Jing
	ZHOU Jun			WANG Haojun
	By:	/s/ ZHOU Jun		By:	/s/ WANG Haojun
	LOU Tiancheng			LIU Bocong
	By:	/s/ LOU Tiancheng		By:	/s/ LIU Bocong
	TANG Fengheng
	By:	/s/ TANG Fengheng
	LI Hengyu
	By:	/s/ LI Hengyu

 

 

IN WITNESS WHEREOF, the Parties have caused this Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

Party C: Beijing (ZX) Pony.AI Technology Co., Ltd.

 

Company seal: /s/ Beijing (HX) Pony AI Technology Co., Ltd.

 

By:	/s/ LI Hengyu
Name:	LI Hengyu
Title:	Legal Representative

 

 

IN WITNESS WHEREOF, the Parties have caused this Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

Party D: Hong Kong Pony AI Limited

 

By:	/s/ Jun Peng
Name:	Jun Peng
Title:	Authorized Representative

 

 

CERTAIN INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS [****], HAS BEEN EXCLUDED PURSUANT TO ITEM 601(B)(10)(IV) OF REGULATION S-K UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

 

Supplementary Agreement to Share Pledge Agreement

 

This Supplementary Agreement to Share Pledge Agreement (this "Agreement") is entered into as of February 1, 2021, in Beijing, the PRC, by and among the following parties:

 

Party A: Beijing (HX) Pony AI Technology Co., Ltd. (hereinafter referred to as the "Pledgee")

 

Address: Room 1701, 17/F, and16/F, Building 1, Zone 1, 81 Beiqing Road, Haidian District, Beijing

 

Legal Representative: LI Hengyu

 

Party B:

 

(1)

XU Suping

 

ID no.: [************]

 

(2)

LI Hengyu

 

ID no.: [************]

 

(3)

ZHOU Jun

 

ID no.: [************]

 

(4)

WANG Haojun

 

ID no.: [************]

 

(5)

LOU Tiancheng

 

ID no.: [************]

 

(6)

LIU Bocong

 

ID no.: [************]

 

(7)

TANG Fengheng

 

ID no.: [************]

 

(8)

ZHAI Jing

 

ID no.: [************]

 

(hereinafter referred to as, collectively, the "Pledgors")

 

 

Party C: Beijing (ZX) Pony.AI Technology Co., Ltd.

 

Address: Room 1701, 17/F, and16/F, Building 1, Zone 1, 81 Beiqing Road, Haidian District, Beijing

 

Legal Representative: ZHANG Ning

 

Party D: Hong Kong Pony AI Limited

 

Address: Suite 603 6/F, Laws Commercial Plaza, 788 Cheung Sha Wan Road, Kowloon, Hong Kong

 

In this Agreement, the Pledgee, the Pledgors, Party C and Party D are hereinafter referred to individually as a "Party" and collectively as the "Parties".

 

WHEREAS:

 

1.

The Parties entered into the Share Pledge Agreement as of June 1, 2020 (hereinafter collectively referred to as the "Original Share Pledge Agreement");

 

2.

LIU Bocong and WANG Haojun entered into a Share Transfer Agreement whereby LIU Bocong transferred all of his equity interests in Party C to TANG Fengheng.

 

3.

The Parties intend to amend the Original Share Pledge Agreement.

 

NOW, THEREFORE, the Parties agree as follows:

 

1.

Liu Bocong shall cease to be a party to the Original Pledge Agreement and shall no longer have any rights or obligations under the Original Pledge Agreement.

 

2.

Article 2.1 of the Original Share Pledge Agreement stipulates that the amounts of Equity Interests pledged by the Pledgors and the amounts of obligations secured by them are as follows:

 

Name of Pledgor		Amount of Secured Obligations (in RMB 10,000)				Amount of Pledged Equity Interests (in RMB 10,000)
LI Hengyu			10				10
LIU Bocong			500				500
LOU Tiancheng			4900				4900
TANG Fengheng			2590				2590
WANG Haojun			500				500
XU Suping			500				500
ZHAI Jing			500				500
ZHOU Jun			500				500

 

 

The Parties hereby agree to modify the amounts of Equity Interests pledged by the Pledgors and the amounts of obligations secured by them as follows:

 

Name of Pledgor		Amount of Secured Obligations (in RMB 10,000)				Amount of Pledged Equity Interests (in RMB 10,000)
LI Hengyu			10				10
LOU Tiancheng			4900				4900
TANG Fengheng			2590				2590
WANG Haojun			1000				1000
XU Suping			500				500
ZHAI Jing			500				500
ZHOU Jun			500				500

 

3.

This Agreement is an amendment to the Original Share Pledge Agreement, and anything not agreed herein shall be subject to the Original Share Pledge Agreement.

 

4.

This Agreement is written in Chinese and is made in eleven (11) copies, one (1) copy for each Pledgor, the Pledgee and Party C, and one (1) copy to be filed with the Registration Authority, which shall be equally authentic.

 

[The remainder of this page is intentionally left blank]

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

Beijing (HX) Pony AI Technology Co., Ltd.
By:	/s/ LI Hengyu
Title:	Legal Representative

 

Beijing (ZX) Pony.AI Technology Co., Ltd.
By:	/s/ ZHANG Ning
Title:	Legal Representative

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

	XU Suping			LOU Tiancheng
	By:	/s/ XU Suping		By:	/s/ LOU Tiancheng
	ZHOU Jun			WANG Haojun
	By:	/s/ ZHOU Jun		By:	/s/ WANG Haojun
	LIU Bocong			ZHAI Jing
	By:	/s/ LIU Bocong		By:	/s/ ZHAI Jing
	LI Hengyu			TANG Fengheng
	By:	/s/ LI Hengyu		By:	/s/ TANG Fengheng

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

Hong Kong Pony AI Limited
By:	/s/ PENG Jun
Title:	Authorized Representative

 

 

CERTAIN INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS [****], HAS BEEN EXCLUDED PURSUANT TO ITEM 601(B)(10)(IV) OF REGULATION S-K UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

 

Supplementary Agreement to Share Pledge Agreement

 

This Supplementary Agreement to Share Pledge Agreement (this "Agreement") is entered into as of July 1, 2021, in Beijing, the PRC, by and among the following parties:

 

Party A: Beijing (HX) Pony AI Technology Co., Ltd. (hereinafter referred to as the "Pledgee")

 

Address: Room 1701, 17/F, and16/F, Building 1, Zone 1, 81 Beiqing Road, Haidian District, Beijing

 

Legal Representative: LI Hengyu

 

Party B:

 

(1)

XU Suping

 

ID no.: [************]

 

(2)

LI Hengyu

 

ID no.: [************]

 

(3)

ZHOU Jun

 

ID no.: [************]

 

(4)

WANG Haojun

 

ID no.: [************]

 

(5)

LOU Tiancheng

 

ID no.: [************]

 

(6)

TANG Fengheng

 

ID no.: [************]

 

(7)

ZHAI Jing

 

ID no.: [************]

 

(hereinafter referred to as, collectively, the "Pledgors")

 

 

Party C: Beijing (ZX) Pony.AI Technology Co., Ltd.

 

Address: Room 1701, 17/F, and16/F, Building 1, Zone 1, 81 Beiqing Road, Haidian District, Beijing

 

Legal Representative: ZHANG Ning

 

Party D: Hong Kong Pony AI Limited

 

Address: Suite 603 6/F, Laws Commercial Plaza, 788 Cheung Sha Wan Road, Kowloon, Hong Kong

 

In this Agreement, the Pledgee, the Pledgors, Party C and Party D are hereinafter referred to individually as a "Party" and collectively as the "Parties".

 

WHEREAS:

 

1.

The Parties entered into the Share Pledge Agreement as of June 1, 2020 and a supplementary agreement as of February 1, 2021 (hereinafter collectively referred to as the "Original Share Pledge Agreement");

 

2.

ZHAI Jing and TANG Fengheng entered into a Share Transfer Agreement whereby ZHAI Jing transferred all of her equity interests in Party C to TANG Fengheng.

 

3.

The Parties intend to amend the Original Share Pledge Agreement.

 

NOW, THEREFORE, the Parties agree as follows:

 

1.

ZHAI Jing shall cease to be a party to the Original Pledge Agreement and shall no longer have any rights or obligations under the Original Pledge Agreement.

 

2.

Article 2.1 of the Original Share Pledge Agreement stipulates that the amounts of Equity Interests pledged by the Pledgors and the amounts of obligations secured by them are as follows:

 

Name of Pledgor		Amount of Secured Obligations (in RMB 10,000)				Amount of Pledged Equity Interests (in RMB 10,000)
LI Hengyu			10				10
LOU Tiancheng			4900				4900
TANG Fengheng			2590				2590
WANG Haojun			1000				1000
XU Suping			500				500
ZHAI Jing			500				500
ZHOU Jun			500				500

 

 

The Parties hereby agree to modify the amounts of Equity Interests pledged by the Pledgors and the amounts of obligations secured by them as follows:

 

Name of Pledgor		Amount of Secured Obligations (in RMB 10,000)				Amount of Pledged Equity Interests (in RMB 10,000)
LI Hengyu			10				10
LOU Tiancheng			4900				4900
TANG Fengheng			3090				3090
WANG Haojun			1000				1000
XU Suping			500				500
ZHOU Jun			500				500

 

3.

This Agreement is an amendment to the Original Share Pledge Agreement, and anything not agreed herein shall be subject to the Original Share Pledge Agreement.

 

4.

This Agreement is written in Chinese and is made in eleven (11) copies, one (1) copy for each Pledgor, the Pledgee and Party C, and one (1) copy to be filed with the Registration Authority, which shall be equally authentic.

 

[The remainder of this page is intentionally left blank]

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

Beijing (HX) Pony AI Technology Co., Ltd.
By:	/s/ LI Hengyu
Title:	Legal Representative

 

Beijing (ZX) Pony.AI Technology Co., Ltd.
By:	/s/ ZHANG Ning
Title:	Legal Representative

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

	XU Suping			LOU Tiancheng
	By:	/s/ XU Suping		By:	/s/ LOU Tiancheng
	ZHOU Jun			WANG Haojun
	By:	/s/ ZHOU Jun		By:	/s/ WANG Haojun
	TANG Fengheng			ZHAI Jing
	By:	/s/ TANG Fengheng		By:	/s/ ZHAI Jing
	LI Hengyu
	By:	/s/ LI Hengyu

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

Hong Kong Pony AI Limited
By:	/s/ PENG Jun
Title:	Authorized Representative

 

 

 

CERTAIN INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS [****], HAS BEEN EXCLUDED PURSUANT TO ITEM 601(B)(10)(IV) OF REGULATION S-K UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

 

Exhibit 10.7

 

 

 

Exclusive Option Agreement

 

This Exclusive Option Agreement (this "Agreement") is entered into as of June 1, 2020, in Beijing, the PRC, by and among the following parties.

 

Party A:	Beijing (HX) Pony AI Technology Co., Ltd., a limited liability company incorporated and existing under the laws of the PRC, with its address at Room 1701, 17/F, and16/F, Building 1, Zone 1, 81 Beiqing Road, Haidian District, Beijing
Party B:	XU Suping, a citizen of the People's Republic of China (the "PRC"), whose ID no. is: [************];   LI Hengyu, a citizen of the People's Republic of China (the "PRC"), whose ID no. is: [************];   WANG Haojun, a citizen of the People's Republic of China (the "PRC"), whose ID no. is: [************];   LOU Tiancheng, a citizen of the People's Republic of China (the "PRC"), whose ID no. is: [************];   LIU Bocong, a citizen of the People's Republic of China (the "PRC"), whose ID no. is: [************];   TANG Fengheng, a citizen of the People's Republic of China (the "PRC"), whose ID no. is: [************];   ZHAI Jing, a citizen of the People's Republic of China (the "PRC"), whose ID no. is: [************];   ZHOU Jun, a citizen of the People's Republic of China (the "PRC"), whose ID no. is: [************];
Party C:	Beijing (ZX) Pony.AI Technology Co., Ltd., a limited liability company incorporated and existing under the laws of the PRC, with its registered address at Room 01, 1/F, Building 2, 68 Beiqing Road, Haidian District, Beijing.
Party D:	Hong Kong Pony AI Limited, a company incorporated and existing under the laws of Hong Kong with its address at Suite 603 6/F, Laws Commercial Plaza, 788 Cheung Sha Wan Road, Kowloon, Hong Kong

 

In this Agreement, Party A, Party B, Party C and Party D are hereinafter referred to individually as a "Party" and collectively as the "Parties".

 

 

WHEREAS:

 

Party B holds 100% of the equity interests in Party C in the aggregate; and

 

Party B intends to jointly grant Party A an irrevocable, exclusive option to purchase all of the equity interests in Party C;

 

NOW, THEREFORE, the Parties agree by consensus as follows:

 

1.

Purchase and Sale of Equity Interests

 

1.1

Grant of Option

 

Party B hereby irrevocably grants Party A an irrevocable and exclusive option (hereinafter referred to as the "Equity Purchase Option") to purchase or designate one or more persons (hereinafter each referred to as a "Designee") to purchase from Party B all or part of its equity interests in Party C at any time in one or more installments, to the extent permitted by PRC law, in accordance with the exercise steps determined by Party A in its sole discretion and at the price set forth in Article 1.3 hereof. No third party, other than Party A and the Designee, shall be entitled to the Equity Purchase Option or other rights in relation to Party B's equity interests. Party C hereby consents to the granting of the Equity Purchase Option by Party B to Party A. For the purposes of this Paragraph and this Agreement, "person" means an individual, corporation, joint venture, partnership, business, trust or unincorporated organization.

 

1.2

Exercise Steps

 

Party A's exercise of its Equity Purchase Option shall be subject to compliance with the laws and regulations of the PRC. When exercising the Equity Purchase Option, Party A shall give a written notice (hereinafter referred to as the "Equity Purchase Notice") to Party B, setting out the following: (a) Party A's decision to exercise the Equity Purchase Option; (b) the share of the equity interests that Party A intends to purchase from Party B (hereinafter referred to as the "Purchased Equity Interests"); and (c) the date of purchase/date of transfer of the Purchased Equity Interests.

 

1.3

Equity Purchase Price and Payment

 

Except where PRC law requires an assessment at the time of Party A's exercise of the option, the purchase price of the Purchased Equity Interests (hereinafter referred to as the "Equity Purchase Price") shall be an amount equal to the capital contribution made by Party B to the actual registered capital of Party C in respect of the Purchased Equity Interests. The Equity Purchase Price shall be paid by Party A into the account designated by Party B within seven (7) days from the date when the Purchased Equity Interests are formally transferred into Party A's name, after the necessary tax withholding and payment on the Equity Purchase Price has been made in accordance with PRC law.

 

1.4

Transfer of Purchased Equity Interests

 

For each exercise of the Equity Purchase Option by Party A:

 

1.4.1.

Party B shall cause Party C to convene a shareholders' meeting in a timely manner, at which a resolution shall be adopted approving the transfer of the Purchased Equity Interests from Party B to Party A and/or its Designee;

 

1.4.2.

Party B shall enter into an equity transfer contract with Party A and/or (where applicable) the Designee with respect to each transfer in accordance with the provisions of this Agreement and the Equity Purchase Notice;

 

 

1.4.3.

The Parties shall execute all other necessary contracts, agreements or documents (including, but not limited to, amendments to the Articles of Association), obtain all necessary governmental licenses and permits (including, but not limited to, the Company's business license), and take all necessary actions to transfer, free and clear of any security interest, the valid title to the Purchased Equity Interests to Party A and/or its Designee and cause Party A and/or its Designee to become the registered owners of the Purchased Equity Interests. For the purposes of this Paragraph and this Agreement, "Security Interests" include a guarantee, hypothecation, third party right or interest, any stock option, right of acquisition, right of first refusal, right of set-off, retention of title or other security arrangements, etc.; however, for the sake of clarity, this does not include any security interest arising under this Agreement and Party B's Share Pledge Agreement. "Party B's Share Pledge Agreement" under this Paragraph and this Agreement refers to the Share Pledge Agreement (hereinafter referred to as the "Share Pledge Agreement") entered into by Party A, Party B and Party C as of the date hereof, pursuant to which Party B pledges all of its equity interests in Party C to Party A to secure the performance of Party C's obligations under the Exclusive Business Cooperation Agreement entered into between Party C and Party A as of the date hereof (hereinafter referred to as the "Exclusive Business Cooperation Agreement").

 

2.

Undertakings

 

2.1

Undertakings Concerning Party C

 

Party B (as the shareholders of Party C) and Party C hereby undertake that:

 

2.1.1

They will not in any way supplement, alter or amend the Articles of Association and rules and regulations of Party C, increase or reduce its registered capital, or otherwise change its registered capital structure without the prior written consent of Party A;

 

2.1.2

They will, in accordance with sound financial and commercial standards and practices, keep the Company in existence, operate its business and conduct its affairs prudently and efficiently, and cause Party C to perform its obligations under the Exclusive Business Cooperation Agreement;

 

2.1.3

They will not sell, transfer, mortgage or otherwise dispose of, or permit the creation of any security interest encumbrance on, any legal or beneficial interest in any asset, business or revenue of Party C at any time from the date hereof without the prior written consent of Party A;

 

2.1.4

Following a legal liquidation as described in Article 3.6, Party B will pay Party A the full amount of any residual value it receives on a non-two-way payment basis, or cause such payment to occur. If such payment is prohibited by PRC law, Party B will pay such proceeds to Party A or a party designated by Party A to the extent permitted by PRC law;

 

2.1.5

They will not incur, inherit, guarantee or permit to exist any indebtedness without the prior written consent of Party A, except for (i) indebtedness incurred in the ordinary course of business and not through a loan; and (ii) indebtedness which has been disclosed to Party A and consented to in writing by Party A;

 

 

2.1.6

They have been operating all of Party C's business in the ordinary course of business to maintain the value of Party C's assets and will refrain from any acts/omissions that might affect its operating condition and the value of its assets;

 

2.1.7

They will not cause Party C to enter into any material contract without the prior written consent of Party A, except for contracts entered into in the ordinary course of business (for the purposes of this Paragraph, a contract is considered material if its value exceeds RMB100,000);

 

2.1.8

They will not cause Party C to provide loans or credit or any form of security to any person without the prior written consent of Party A;

 

2.1.9

Upon Party A's request, they will provide it with all information regarding Party C's operations and financial condition;

 

2.1.10

If requested by Party A, they shall purchase and maintain insurance from an insurer acceptable to Party A in respect of Party C's assets and operations in an amount and with coverage consistent with that of a company carrying on similar business;

 

2.1.11

They will not cause or permit Party C to merge or combine with any person, or to acquire or invest in any person, or cause or permit Party C to sell its assets with a value of RMB100,000 or more, without the prior written consent of Party A;

 

2.1.12

They shall immediately notify Party A of any litigation, arbitration or administrative proceedings that have occurred or might occur in connection with Party C's assets, business or revenue;

 

2.1.13

In order to maintain Party C's ownership of all of its assets, they shall execute all such documents, take all such actions and file all such complaints or defenses against all claims as may be necessary or appropriate;

 

2.1.14

They shall ensure that Party C will not pay dividends in any form to its shareholders without the prior written consent of Party A, but upon written request of Party A, Party C shall immediately distribute all distributable profits to its shareholders; and

 

2.1.15

Upon Party A's request, they shall appoint any person designated by them to be a director of Party C and/or remove the incumbent directors of Party C.

 

2.2

Undertakings of Party B and Party C

 

Party B hereby undertakes that:

 

2.2.1

Party B shall not sell, transfer, pledge or otherwise dispose of, or permit the creation of any security interest encumbrance on, any legal or beneficial interest in the equity interest owned by them in Party C without the prior written consent of Party A, except for a pledge created on such equity interest pursuant to Party B's Share Pledge Agreement;

 

2.2.2

Party B may not request Party C to make dividends or other forms of profit distribution in respect of the equity interest owned by Party B in Party C, nor may they propose or vote in favor of any resolution of the shareholders' meeting in relation thereto. In any event, if Party B receives any profit, profit distribution or dividend from Party C, Party B shall immediately pay or transfer such profit, profit distribution or dividend to Party A or a party designated by Party A for the benefit of Party C, to the extent permitted by PRC law, as a service fee payable by Party C to Party A under the Exclusive Business Cooperation Agreement.

 

 

2.2.3

Party B shall procure that the shareholders' meeting and/or the board of directors of Party C will not approve the sale, transfer, hypothecation or other disposal of any legal or beneficial interest in, or permit the creation of any security interest encumbrance on, the equity interest owned by Party B in Party C without Party A's prior written consent, except for a pledge created on such equity interest pursuant to Party B's Share Pledge Agreement;

 

2.2.4

Party B shall procure that the shareholders' meeting or the board of directors of Party C will not approve any merger or combination with, or acquisition of or investment in, any person without Party A's prior written consent;

 

2.2.5

Party B shall immediately notify Party A of any litigation, arbitration or administrative proceedings that have taken place or might take place in connection with the equity interest owned by Party B in Party C;

 

2.2.6

Party B shall procure that the shareholders' meeting or board of directors of Party C shall vote for its approval of the transfer of the Purchased Equity Interests as provided herein and take any and all other actions that Party A may require;

 

2.2.7

In order to maintain Party B's ownership of the equity interests in Party C, Party B shall execute all such documents, take all such actions and file all such complaints or defenses against all claims as may be necessary or appropriate;

 

2.2.8

Upon Party A's request, Party B shall appoint any person designated by them to be a director of Party C;

 

2.2.9

Upon Party A's request from time to time, Party B shall immediately and unconditionally transfer their equity interests in Party C to Party A's Designee pursuant to the Equity Purchase Option hereunder, and Party B hereby waives their right of first refusal (if any) in respect of an equity transfer by another existing shareholder of Party C; and

 

2.2.10

Party B shall strictly comply with the provisions of this Agreement and other contracts entered into by Party B, Party C and Party A jointly or severally, perform their obligations under this Agreement and such other contracts and refrain from any act/omission which might affect the validity and enforceability hereof and thereof. If Party B shall have any residual rights in respect of the equity interests under this Agreement or under the Share Pledge Agreement entered into by the Parties hereto or under the Power of Attorney granted in favor of Party A, Party B shall not exercise such rights except in accordance with Party A's written instructions.

 

3.

Representations and Warranties

 

Party B and Party C hereby jointly and severally represent and warrant to Party A as of the date hereof and as of each date of transfer of the Purchased Equity Interests that:

 

3.1

They have the authority to enter into and deliver this Agreement and any equity transfer contract to which they are a party in connection with the Purchased Equity Interests to be transferred hereunder (each, a "Transfer Contract"), and to perform their obligations hereunder and under any Transfer Contract. Party B and Party C agree to enter into a Transfer Contract with terms consistent with those set forth herein upon the exercise of the Equity Purchase Option by Party A. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute legal, valid and binding obligations of, and shall be enforceable against, them in accordance with their terms;

 

 

3.2

Neither the execution and delivery of this Agreement or any Transfer Contract nor the obligations hereunder or under any Transfer Contract shall: (i) result in any violation of any applicable law of the PRC; (ii) conflict with Party C's Articles of Association, rules and regulations or other organizational documents; (iii) result in any breach of any contract or instrument to which they are a party or by which they are bound, or constitute any default under any contract or instrument to which they are a party or by which they are bound; (iv) result in any breach of any condition for the grant and/or continuation in force of any license or permit issued to any of them: or (v) result in the suspension or revocation of, or the imposition of additional conditions on, any license or permit issued to any of them;

 

3.3

Party B has good and marketable title to the equity interests owned by it in Party C. Party B has not created any security interest on such equity interests other than pursuant to Party B's Share Pledge Agreement;

 

3.4

Party C has good and marketable title to all of its assets and has not created any security interest on the said assets;

 

3.5

Party C has no outstanding indebtedness other than (i) those incurred in the ordinary course of business; and (ii) those which have been disclosed to and consented to in writing by Party A;

 

3.6

If Party C is dissolved or liquidated as required by PRC law, Party C shall, to the extent permitted by PRC law and at the lowest price permitted by PRC law, sell all of its assets to Party A or any other eligible party designated by Party A. Party C shall, to the extent applicable under PRC law then in effect, waive any payment obligations of Party A or its designated eligible party arising therefrom; or any proceeds arising from such transaction shall, to the extent applicable under PRC law then in effect, be paid to Party A or its designated eligible party as part of the service fee under the Exclusive Business Cooperation Agreement;

 

3.7

Party C will comply with all PRC laws and regulations applicable to asset acquisitions; and

 

3.8

There are no pending or threatened litigation, arbitration or administrative proceedings in relation to the equity interests in Party C, the assets of Party C or Party C itself.

 

4.

Effective Date

 

This Agreement shall become effective as of the date of its execution by the Parties and shall be valid for a period of 10 years, renewable at the option of Party A. If Party A fails to confirm the renewal of this Agreement upon its expiration, this Agreement shall be automatically renewed until Party A delivers a confirmation letter determining the renewal period of this Agreement.

 

5.

Governing Law and Dispute Resolution

 

5.1

Governing Law

 

The execution, entry into force, interpretation, performance, modification and termination of this Agreement and the resolution of disputes hereunder shall be governed by the laws duly published and publicly available in the PRC. Matters not covered by the laws duly published and publicly available in the PRC shall be governed by international legal principles and practices.

 

 

5.2

Dispute Resolution

 

5.3

In the event of any dispute arising out of the interpretation and performance of the provisions hereof, the Parties shall first resolve such dispute through friendly negotiation. If the Parties fail to agree on the resolution of such dispute within 30 days after any Party has requested the other Parties to resolve such dispute by negotiation, then any Party may submit such dispute to the China International Economic and Trade Arbitration Commission for resolution by arbitration in accordance with its arbitration rules then in effect. The arbitration shall take place in Beijing and shall be conducted in the Chinese language. The arbitral award shall be final and binding upon the Parties.

 

6.

Taxes and Expenses

 

Each Party shall pay any and all transfer and registration taxes, expenses and fees incurred by or imposed on such Party in accordance with PRC law in connection with the preparation and execution of this Agreement and the Transfer Contracts and the consummation of the transactions contemplated hereunder and under the Transfer Contracts.

 

7.

Notice

 

7.1

All notices and other communications required or permitted to be given hereunder shall be delivered by hand or sent by postage prepaid registered mail, commercial courier service or facsimile to the following address of such Party. A further acknowledgment of each notice shall be sent by e-mail. The date on which such notice is deemed to have been validly served shall be determined as follows:

 

7.1.1

A notice shall be deemed to have been validly delivered on the date of dispatch or rejection if it is sent by personal delivery, courier service or registered mail, postage prepaid, at the address specified for receipt of the notice.

 

7.1.2

A notice, if sent by fax, shall be deemed to have been validly delivered on the date of successful transmission (which shall be evidenced by an automatically generated transmission confirmation message).

 

7.2

For the purposes of notification, the addresses of the Parties are as follows:

 

Party A:	Beijing (HX) Pony AI Technology Co., Ltd.
Address:	Room 01, 1/F, Building 2, 68 Beiqing Road, Haidian District, Beijing
Attn:	LI Hengyu
Party B:	XU Suping	LI Hengyu
	Tel: [****]	Tel: [****]
	WANG Haojun	LOU Tiancheng
	Tel: [****]	Tel: [****]
	LIU Bocong	TANG Fengheng
	Tel: [****]	Tel: [****]
	ZHOU Jun	ZHAI Jing
	Tel: [****]	Tel: [****]

 

Party C:	Beijing (ZX) Pony.AI Technology Co., Ltd.
Address:	Room 01, 1/F, Building 2, 68 Beiqing Road, Haidian District, Beijing
Attn:	LI Hengyu
Party D:	Hong Kong Pony AI Limited
Address:	Suite 603 6/F, Laws Commercial Plaza, 788 Cheung Sha Wan Road, Kowloon, Hong Kong

 

7.3

Any Party may change its address for receiving notices at any time by giving notice to the other Party in accordance with the provisions of this Article.

 

8.

Duty of Confidentiality

 

The Parties acknowledge that any oral or written information exchanged by them in connection with this Agreement is confidential. Each Party shall keep all such information confidential and may not disclose any such information to any third party without the written consent of the other Party, except (a) to the extent that such information is or becomes known to the public ( other than due to disclosure to the public by the receiving party); (b) to the extent that such disclosure is required by applicable law or the rules or regulations of any stock exchange; or (c) to the extent that such information is required to be disclosed by any Party to its legal counsel or financial advisor in connection with the transactions contemplated hereunder, where such legal counsel or financial advisor is also subject to obligations of confidentiality similar to those contained in this Article. Any disclosure of any confidential information by a person or body employed by any Party shall be deemed to be a disclosure of such confidential information by such Party, and such Party shall be legally liable for any breach of this Agreement. This Article shall survive termination of this Agreement for any reason whatsoever.

 

9.

Further Assurance

 

The Parties agree to execute promptly such documents and to take such further actions as are reasonably necessary or desirable to carry out the provisions and purposes of this Agreement.

 

10.

Miscellaneous

 

10.1

Pre-existing Agreement

 

The Exclusive Option Agreement dated December 27, 2017 among Party A, Party B and Party C is superseded by this Agreement and terminated as of the date hereof.

 

10.2

Amendment, Modification and Supplement

 

Any amendment, modification and supplement to this Agreement shall be made by written agreement executed by all of the Parties.

 

10.3

Entire Agreement

 

This Agreement shall constitute the entire agreement between the Parties hereto with respect to the subject matter hereof and shall supersede all prior negotiations, representations and contracts, both oral and written, with respect to the subject matter hereof, except for any written amendments, supplements or modifications made after the execution hereof.

 

 

10.4

Headings

 

The headings herein are for convenience of reading only and shall not be used to interpret, explain or otherwise affect the meaning of the provisions hereof.

 

10.5

Language

 

This Agreement is written in Chinese and is made in eleven (11) copies, one (1) copy for Party A, each person comprised in Party B, Party C and Party D, which shall be equally authentic.

 

10.6

Severability

 

If one or more provisions hereof shall be held invalid, illegal or unenforceable in any respect under any law or regulation, the validity, legality or enforceability of the remaining provisions hereof shall not be affected or impaired in any respect. The Parties shall negotiate in good faith and strive to replace such invalid, unlawful or unenforceable provision(s) with a provision(s) that is/are valid to the fullest extent permitted by law and desired by the Parties, where such valid provision(s) shall have an economic effect as similar as possible to that of such invalid, illegal or unenforceable provision(s).

 

10.7

Successors

 

This Agreement shall be binding upon and shall inure to the benefit of the respective successors of the Parties and the assigns permitted by such Parties.

 

10.8

Survival

 

10.7.1

Any obligations incurred or expiring as a result of this Agreement prior to the expiration or earlier termination hereof shall survive the expiration or earlier termination hereof.

 

10.7.2

The provisions of Articles 5, 7, 8 and this Article 10.9 shall survive the termination hereof.

 

10.9

Waiver

 

Any Party may waive the terms and conditions hereof, provided that such waiver is in writing and signed by the Parties. No waiver by any Party in respect of a breach by the other Parties in one case shall be deemed to be a waiver by such Party in respect of a similar breach in other cases.

 

[The remainder of this page is intentionally left blank]

 

 

IN WITNESS WHEREOF, the Parties have caused this Exclusive Option Agreement to be executed by their authorized representatives as of the date first above written.

 

Party A: Beijing (HX) Pony AI Technology Co., Ltd.

 

Company seal: Beijing (HX) Pony.AI Technology Co., Ltd.

By:	/s/ LI Hengyu
Name:	LI Hengyu
Title:	Legal Representative

 

 

IN WITNESS WHEREOF, the Parties have caused this Exclusive Option Agreement to be executed by their authorized representatives as of the date first above written.

Party B:	XU Suping			ZHAI Jing
	By:	/s/ XU Suping		By:	/s/ ZHAI Jing
	ZHOU Jun			WANG Haojun
	By:	/s/ ZHOU Jun		By:	/s/ WANG Haojun
	LOU Tiancheng			LIU Bocong
	By:	/s/ LOU Tiancheng		By:	/s/ LIU Bocong
	TANG Fengheng
	By:	/s/ TANG Fengheng

 

 

IN WITNESS WHEREOF, the Parties have caused this Exclusive Option Agreement to be executed by their authorized representatives as of the date first above written.

 

Party B: LI Hengyu

 

By:

/s/ LI Hengyu

 

 

IN WITNESS WHEREOF, the Parties have caused this Exclusive Option Agreement to be executed by their authorized representatives as of the date first above written.

 

Party C: Beijing (ZX) Pony.AI Technology Co., Ltd.

 

Company seal: /s/ Beijing (ZX) Pony.AI Technology Co., Ltd.

By:	/s/ LI Hengyu
Name:	LI Hengyu
Title:	Legal Representative

 

 

IN WITNESS WHEREOF, the Parties have caused this Exclusive Option Agreement to be executed by their authorized representatives as of the date first above written.

 

Party D: Hong Kong Pony AI Limited

By:	/s/ PENG Jun
Name:	PENG Jun
Title:	Authorized Representative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CERTAIN INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS [****], HAS BEEN EXCLUDED PURSUANT TO ITEM 601(B)(10)(IV) OF REGULATION S-K UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

 

Exhibit 10.8

 

 

Power of Attorney

 

Date: July 22, 2021

 

I, TANG Fengheng, a citizen of the People's Republic of China (hereinafter referred to as the "PRC"), ID no. [************], the holder of 30.9% of the entire registered capital (hereinafter referred to as "My Equity Interest") of Beijing (ZX) Pony.AI Technology Co., Ltd. (hereinafter referred to as the "Company"), in respect of My Equity Interest, hereby irrevocably authorize Beijing (HX) Pony AI Technology Co., Ltd. (hereinafter referred to as the "WFOE"), to exercise the following rights during the term of this Power of Attorney:

 

I hereby authorize the WFOE as my sole agent and attorney-in-fact to act on my behalf with respect to all matters relating to My Equity Interest, including but not limited to: 1) proposing, convening, and participating in the shareholders' meetings of the Company: 2) exercising all shareholder rights and shareholder voting rights to which I am entitled in accordance with the laws of the PRC and the Articles of Association of the Company, including but not limited to selling or transferring or pledging or disposing of part or all of My Equity Interest; and 3) designating and appointing on my behalf the legal representative (chairman), directors, supervisors, chief executive officer (or manager) and other senior executives of the Company.

 

Without limiting the generality of the authority granted under this Power of Attorney, the WFOE shall have the power and authority hereunder to execute on my behalf the assignment agreement agreed in the Exclusive Purchase Option Agreement (where I am required to be a party thereto), and to perform the terms of the Share Pledge Agreement and the Exclusive Purchase Option Agreement to which I am a party, and which are executed on the same date as this Power of Attorney.

 

All the acts performed by the WFOE in relation to MY Equity Interest shall be deemed to be my own acts and all documents thus executed shall be deemed to be executed by me. The WFOE may act on its own will without seeking my prior consent in doing so, and I hereby acknowledge and approve such acts done and/or documents executed by the WFOE.

 

The WFOE shall have the right, at its sole discretion, to delegate or assign its rights relating to the foregoing matters to any other person or entity without prior notice to or consent from me.

 

Provided that I am a shareholder of the Company, this Power of Attorney shall be irrevocable and continue in force from the date of its execution, unless the WFOE gives written instructions to the contrary. Upon written notice to me from the WFOE to terminate this Power of Attorney in whole or in part, I shall immediately withdraw the mandate and authority given to the WFOE herein and immediately execute a power of attorney in the same form as this Power of Attorney to give the same mandate and authority to any other person nominated by the WFOE as set forth herein.

 

During the term of this Power of Attorney, I hereby waive all the rights already delegated to the WFOE in this Power of Attorney in connection with My Equity Interest and may not exercise such rights on my own.

 

[The remainder of this page is intentionally left blank]

 

 

	Name:	TANG Fengheng
	By:	/s/ TANG Fengheng

 

 

 

 

 

 

 

 

 

 

 

 

CERTAIN INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS [****], HAS BEEN EXCLUDED PURSUANT TO ITEM 601(B)(10)(IV) OF REGULATION S-K UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

 

Exhibit 10.9

 

 

Spousal Consent

 

I, PENG Li (ID No. [************]), am the legal spouse of TANG Fengheng (ID no. [************]). On September 14, 2020, I hereby unconditionally and irrevocably consented to the execution of the following documents by TANG Fengheng on September 14, 2020 (hereinafter referred to as the "Restructuring Documents") and consented to the disposal of the equity interest in Guangzhou (ZX) Pony.AI Technology Co., Ltd. (hereinafter referred to as the "Domestic Company") held by TANG Fengheng and registered in his name in accordance with the following documents:

 

(1)

The Share Pledge Agreement entered into with Guangzhou (HX) Pony AI Technology Co., Ltd. (hereinafter referred to as the "WFOE") and the Domestic Company;

 

(2)

The Exclusive Option Agreement entered into with the WFOE and the Domestic Company; and

 

(3)

The Power of Attorney.

 

I undertake not to make any claim in respect of the equity interest held by TANG Fengheng in the Domestic Company. I further acknowledge that TANG Fengheng may perform the Restructuring Documents and further amend or terminate the Restructuring Documents without my separate authorization or consent.

 

I undertake to execute all documents and take all actions necessary to ensure proper performance of the Restructuring Documents (as amended from time to time).

 

I agree and undertake that if I acquire any of the equity interest in the Domestic Company held by TANG Fengheng for any reason, I shall be bound by the Restructuring Documents (as amended from time to time) and shall comply with my obligations as a shareholder of the Domestic Company under the Restructuring Documents (as amended from time to time) and to that end, upon request by the WFOE, I shall execute a series of written documents in substantially the same form and substance as the Restructuring Documents (as amended from time to time).

 

[The remainder of this page is intentionally left blank]

 

 

Committed by: PENG Li
By:	/s/ PENG Li

 

 

 

CERTAIN INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS [****], HAS BEEN EXCLUDED PURSUANT TO ITEM 601(B)(10)(IV) OF REGULATION S-K UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

 

Exhibit 10.10

 

 

Supplementary Agreement to Control Agreements

 

This Supplementary Agreement to Control Agreements (this "Agreement") is entered into as of January 30, 2023, in Beijing, by and among the following parties:

 

Party A: Beijing (HX) Pony AI Technology Co., Ltd.

 

Address: Room 1701, 17/F, and16/F, Building 1, Zone 1, 81 Beiqing Road, Haidian District, Beijing

 

Legal Representative: LI Hengyu

 

Party B:

 

(1)

XU Suping, ID no.: [************]

 

(2)

LI Hengyu, ID no.: [************]

 

(3)

ZHOU Jun, ID no.: [************]

 

(4)

WANG Haojun, ID no.: [************]

 

(5)

LOU Tiancheng, ID no.: [************]

 

(6)

LIU Bocong, ID no.: [************]

 

(7)

TANG Fengheng, ID no.: [************]

 

(8)

ZHAI Jing, passport no.: [************]

 

Party C: Beijing (ZX) Pony.AI Technology Co., Ltd.

 

Address: Room 1701, 17/F, and16/F, Building 1, Zone 1, 81 Beiqing Road, Haidian District, Beijing

 

Legal Representative: ZHANG Ning

 

Party D: Hong Kong Pony AI Limited

 

Address: Suite 603 6/F, Laws Commercial Plaza, 788 Cheung Sha Wan Road, Kowloon, Hong Kong

 

In this Agreement, Party A, Party B, Party C and Party D are hereinafter referred to individually as a "Party" and collectively as the "Parties".

 

WHEREAS:

 

1.

Party A, Party C and Party D entered into the Exclusive Business Cooperation Agreement as of June 1, 2020 (hereinafter referred to as the "Exclusive Business Cooperation Agreement");

 

 

2.

The Parties entered into the Exclusive Option Agreement as of June 1, 2020 (hereinafter referred to as the "Exclusive Option Agreement");

 

3.

The Parties entered into the Share Pledge Agreement as of June 1, 2020 (hereinafter referred to as the "Share Pledge Agreement");

 

4.

LIU Bocong and ZHAI Jing each issued a Power of Attorney to Party A on June 1, 2020 (hereinafter referred to as a "Power of Attorney" or the "Powers of Attorney");

 

5.

The Parties entered into the Supplementary Agreement to Share Pledge Agreement (hereinafter referred to as the "Supplementary Agreement (I)") as of February 1, 2021 with respect to LIU Bocong's transfer of all of his equity interests in Party C to WANG Haojun;

 

6.

The Parties other than LIU Bocong entered into the Supplementary Agreement to Share Pledge Agreement (hereinafter referred to as the "Supplementary Agreement (II)") as of July 1, 2021 with respect to ZHAI Jing's transfer of all of her equity interests in Party C to TANG Fengheng;

 

7.

The Parties intend to amend the Exclusive Business Cooperation Agreement, the Exclusive Option Agreement, the Share Pledge Agreement, the Powers of Attorney, the Supplementary Agreement (I), and the Supplementary Agreement (II).

 

NOW, THEREFORE, the Parties agree by consensus as follows:

 

1.

The Parties agree and acknowledge that the signatory "Hong Kong Pony AI Limited" as set out in the Exclusive Business Cooperation Agreement, the Exclusive Option Agreement and the Share Pledge Agreement is in fact Party D, and that Party D executed the Exclusive Business Cooperation Agreement, the Exclusive Option Agreement and the Share Pledge Agreement on June 1, 2020.

 

2.

The Parties irrevocably agree, acknowledge and ratify that:

 

2.1

With effect from February 1, 2021, LIU Bocong shall cease to be a party to the Exclusive Option Agreement, the Share Pledge Agreement and the Power of Attorney (hereinafter collectively referred to as the "Control Agreements Relating to the Existing Shareholders") and shall cease to have or assume all and/or any of the rights or obligations thereunder.

 

2.2

With effect from July 1, 2021, ZHAI Jing shall cease to be a party to the Control Agreements Relating to the Existing Shareholders and shall cease to have or assume all and or any of the rights or obligations thereunder.

 

3.

LIU Bocong and ZHAI Jing respectively agree and acknowledge that:

 

3.1

They irrevocably and unconditionally release and discharge any disputes, claims, demands, rights, actions or causes of action of any kind or nature whatsoever, whether past, present or future, which they have or might have against Party A, Party B (other than themselves), Party C and Party D, directly or indirectly in connection with or arising out of the Control Agreements Relating to Existing Shareholders (as amended from time to time).

 

3.2

They irrevocably and unconditionally release and discharge any disputes, claims, demands, rights, actions or causes of action of any kind or nature whatsoever, whether past, present or future, which their heirs, successors, assigns or executors have or might have against Party A, Party B (other than themselves), Party C and Party D, and their present and past directors, officers, employees, legal counsels and agents (as applicable), and the affiliates of such parties, and the successors and assigns of such parties, directly or indirectly in connection with or arising out of the Control Agreements Relating to Existing Shareholders (as amended from time to time).

 

 

4.

The Parties, other than LIU Bocong and ZHAI Jing, agree and acknowledge that, Article 2.1 of the Exclusive Business Cooperation Agreement shall be changed in its entirety as follows: "The Parties agree that the Service Fee payable by Party B to Party A in respect of the Services provided by Party A shall be 100% of the total consolidated profits of Party B in any fiscal year, offsetting the accumulated losses (if any) of Party B and its subsidiaries (if any) in the preceding fiscal years, and after deduction of working capital, expenses, taxes and other statutory contributions required in any fiscal year, as well as reasonable operating profits determined in accordance with applicable PRC tax principles and tax practices (hereinafter referred to as the "Service Fee"). During the term hereof, Party A shall have the right to adjust such Service Fee at its sole discretion without Party B's consent. The Parties agree that the Service Fee hereunder shall be determined and paid in the manner set out in the separate written agreement among the Parties. At the time of payment, Party A shall invoice Party B for the corresponding technology service fee within seven (7) business days upon receipt of Party B's management statements and operating data and other documents that enable Party A to account for the amount of the Service Fee. Party B shall pay the amount stated in the invoice within seven (7) business days upon receipt of such invoice. All payments shall be made by remittance or other means acceptable to the Parties into the bank account designated by Party A. The Parties agree that Party A may change such payment instructions from time to time by serving a notice on Party B".

 

5.

The Parties agree and acknowledge the Supplementary Agreement (I) is amended as follows:

 

5.1

Article 1 of the "WHEREAS" clause of the Supplementary Agreement (I) shall be changed in its entirety as follows: "The Parties entered into the Share Pledge Agreement as of June 1, 2020 (hereinafter referred to as the "Original Share Pledge Agreement" or the "Original Pledge Agreement") ".

 

5.2

Article 2 of the "WHEREAS" clause of the Supplementary Agreement (I) shall be changed in its entirety as follows: "LIU Bocong and WANG Haojun entered into a Share Transfer Agreement whereby LIU Bocong transferred all of his equity interests in Party C to WANG Haojun".

 

6.

The Parties other than LIU Bocong agree and acknowledge the Supplementary Agreement (II) is amended as follows:

 

6.1

The legal representative of Party A mentioned in Supplementary Agreement (II) is changed to "LI Hengyu" from "ZHANG Ning".

 

6.2

Article 1 of the "WHEREAS" clause of the Supplementary Agreement (II) shall be changed in its entirety as follows: "The Parties entered into the Share Pledge Agreement as of June 1, 2020, and entered into the Supplementary Agreement to the Share Pledge Agreement with LIU Bocong as of February 1, 2021 (hereinafter collectively referred to as the "Original Share Pledge Agreement" or the "Original Pledge Agreement")".

 

7.

For the avoidance of doubt, if the changed terms involve definitions or abbreviations, such definitions or abbreviations shall be used under the corresponding agreement or contract, and the definitions or abbreviations referred to herein shall not apply to such changed terms.

 

8.

This Agreement is an amendment to the Exclusive Business Cooperation Agreement, the Exclusive Option Agreement, the Share Pledge Agreement, the Powers of Attorney, the Supplementary Agreement (I) and the Supplementary Agreement (II), and anything not agreed herein shall be subject to the Exclusive Business Cooperation Agreement, the Exclusive Option Agreement, the Share Pledge Agreement, the Powers of Attorney, the Supplementary Agreement (I) and the Supplementary Agreement (II), as applicable.

 

9.

This Agreement is written in Chinese and is made in eleven (11) copies, one for each Party, which shall be equally authentic.

 

[The remainder of this page is intentionally left blank]

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to Control Agreements to be executed by their authorized representatives as of the date first above written.

 

Beijing (HX) Pony AI Technology Co., Ltd.

 

By:

/s/ LI Hengyu

 

Title: Legal Representative

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to Control Agreements to be executed by their authorized representatives as of the date first above written.

 

Beijing (ZX) Pony.AI Technology Co., Ltd.

 

By:

/s/ ZHANG Ning

 

Title: Legal Representative

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to Control Agreements to be executed by their authorized representatives as of the date first above written.

 

XU Suping

 

By:

/s/ XU Suping

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to Control Agreements to be executed by their authorized representatives as of the date first above written.

 

LI Hengyu

 

By:

/s/ LI Hengyu

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to Control Agreements to be executed by their authorized representatives as of the date first above written.

 

ZHOU Jun

 

By:

/s/ ZHOU Jun

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to Control Agreements to be executed by their authorized representatives as of the date first above written.

 

WANG Haojun

 

By:

/s/ WANG Haojun

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to Control Agreements to be executed by their authorized representatives as of the date first above written.

 

LOU Tiancheng

 

By:

/s/ LOU Tiancheng

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to Control Agreements to be executed by their authorized representatives as of the date first above written.

 

LIU Bocong

 

By:

/s/ LIU Bocong

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to Control Agreements to be executed by their authorized representatives as of the date first above written.

 

TANG Fengheng

 

By:

/s/ TANG Fengheng

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to Control Agreements to be executed by their authorized representatives as of the date first above written.

 

ZHAI Jing

 

By:

/s/ ZHAI Jing

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to Control Agreements to be executed by their authorized representatives as of the date first above written.

 

Hong Kong Pony AI Limited

 

By:

/s/ PENG Jun

 

Title: Legal Representative

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.11

 

 

Exclusive Business Cooperation Agreement

 

This Exclusive Business Cooperation Agreement (this "Agreement") is entered into as of June 1, 2020, in Guangzhou, the PRC, by and among the following parties.

 

Party A: Guangzhou (HX) Pony AI Technology Co., Ltd.

 

Address: Room 1301, 1 Mingzhu 1st Street, Hengli Town, Nansha District, Guangzhou (office only)

 

Party B: Guangzhou (ZX) Pony.AI Technology Co., Ltd.

 

Address: Room 1201, 1 Mingzhu 1st Street, Hengli Town, Nansha District, Guangzhou (office only)

 

Party C: Hong Kong Pony AI Limited

 

Address: Suite 603 6/F, Laws Commercial Plaza, 788 Cheung Sha Wan Road, Kowloon, Hong Kong

 

Party A, Party B and Party C are hereinafter referred to individually as a "Party" and collectively as the "Parties".

 

WHEREAS:

 

1.

Party A is a wholly foreign-owned enterprise registered in the People's Republic of China (hereinafter referred to as the "PRC") and possesses the resources necessary to provide technological services and business consulting services:

 

2.

Party B is a domestic company registered in the PRC;

 

3.

Party A agrees to utilize its human, technology and information strengths to provide Party B with relevant exclusive technology services, technology consulting and other services (see below for the specific scope) during the term hereof, while Party B agrees to accept such services provided by Party A or its designee in accordance with the terms hereof.

 

NOW, THEREFORE, the Parties agree by consensus as follows:

 

1.

Service Provision by Party A

 

1.1

Subject to the terms and conditions set forth herein, Party B hereby appoints Party A as its exclusive service provider to provide Party B with comprehensive business support, technology services and consulting services during the term hereof, covering all or part of the services within the business scope of Party B as determined by Party A from time to time, including but not limited to the following: business consulting, intellectual property licensing, equipment or leasing, marketing consulting etc. (hereinafter referred to as, collectively, the "Services").

 

 

1.2

Party B agrees to accept the consulting and services provided by Party A. Party B further agrees that, except with Party A's prior written consent, during the term hereof, Party B may not accept any consulting and/or services from, nor enter into any cooperation with, any third party with respect to the matters covered hereby. Party A may designate another party (such designated party may enter into certain agreements as described in Article 1.3 hereof with Party B) to provide the consulting and/or services hereunder for Party B.

 

1.3

In order to ensure that Party B meets the cash flow requirements in its day-to-day operations and/or offsets any losses incurred during the course of its operations, regardless of whether or not Party B actually incurs any such operating losses, Party A shall be obliged to provide financial support to Party B (only to the extent permitted by PRC law). Party A may provide such financial support to Party B by way of an entrusted bank loan or a loan, and shall enter into a separate contract for such entrusted loan or loan.

 

1.4

Method of Service Provision

 

1.4.1

The Parties agree that, during the term hereof, the Parties may enter into other technology service agreements and consulting service agreements, either directly or through their respective affiliates, to provide for specific content, methods, personnel and fees in respect of specific technology services and consulting services.

 

1.4.2

For the purpose of performance hereof, the Parties agree that during the term hereof, they may enter into an intellectual property rights (including but not limited to: software, trademarks, patents, know-how) licensing agreement, either directly or through their respective affiliates, which agreement shall allow Party B to use the relevant intellectual property rights of Party A at any time depending on Party B's business needs.

 

1.4.3

For the purpose of performance hereof, the Parties agree that during the term hereof, the Parties may enter into an equipment or plant lease agreement, either directly or through their respective affiliates, which agreement shall allow Party B to use the relevant equipment or plant of Party A at any time depending on Party B's business needs.

 

1.4.4

Party A may, at its sole discretion, subcontract to a third party a portion of the Services to be provided to Party B hereunder.

 

2.

Calculation of Service Fee, Payment Method, Financial Statements, Audit and Taxation

 

2.1

The Parties agree that, in respect of the Services provided by Party A, Party B shall pay to Party A 100% of its net revenue as a service fee (hereinafter referred to as the "Service Fee"). During the term hereof, Party A shall have the right to adjust such Service Fee at its sole discretion without Party B's consent. The Parties agree that the Service Fee hereunder shall be determined and paid in the manner set out in the separate written agreement among the Parties. At the time of payment, Party A shall invoice Party B for the corresponding technology service fee within seven (7) business days upon receipt of Party B's management statements and operating data (which shall specify the amount of Party B's net revenue for the applicable period). Party B shall pay the amount stated in the invoice within seven (7) business days upon receipt of such invoice. All payments shall be made by remittance or other means acceptable to the Parties into the bank account designated by Party A. The Parties agree that Party A may change such payment instructions from time to time by serving a notice on Party B.

 

 

2.2

Party B shall, within 90 days of the end of each fiscal year, (a) provide Party A with its audited financial statements for the current fiscal year, which shall have been audited and certified by an independent certified public accountant approved by Party A; and (b) if there is any shortfall in the total amount of monthly payments made by Party B to Party A during the fiscal year as shown in the audited financial statements, pay such shortfall to Party A.

 

2.3

Party B shall prepare financial statements that meet Party A's requirements in accordance with the requirements of laws and business practices.

 

2.4

Upon five (5) business days' notice from Party A, Party B shall allow Party A and/or its appointed auditor to audit the relevant books and records of Party B at its principal place of business and to make copies of such part of the books and records as may be required to verify the accuracy of the amount of revenue and statements of Party B.

 

2.5

The Parties hereto shall solely bear their own tax burdens incurred by them as a result of the performance hereof.

 

3.

Intellectual Property Rights, Confidentiality and Non-Competition

 

3.1

Party A shall own exclusive and proprietary rights and interests in and to all rights, titles, interests and intellectual property rights arising or created as a result of the performance hereof, including but not limited to copyrights, patents, patent applications, trademarks, software, know-hows, trade secrets and otherwise, whether developed by Party A or by Party B.

 

3.2

The Parties acknowledge that any oral or written information exchanged by them in connection with this Agreement is confidential. Each Party shall keep all such information confidential and may not disclose any such information to any third party without the written consent of the other Party, except (a) to the extent that such information is or becomes known to the public ( other than due to disclosure to the public by the receiving party); (b) to the extent that such disclosure is required by applicable law or the rules or regulations of any stock exchange; or (c) to the extent that such information is required to be disclosed by any Party to its legal counsel or financial advisor in connection with the transactions contemplated hereunder, where such legal counsel or financial advisor is also subject to obligations of confidentiality similar to those contained in this Article. Any disclosure of any confidential information by a person or body employed by any Party shall be deemed to be a disclosure of such confidential information by such Party, and such Party shall be legally liable for any breach of this Agreement. This Article shall survive termination of this Agreement for any reason whatsoever.

 

3.3

Party B shall not conduct (directly or indirectly) any business other than those permitted under Party B's business license and operating permit, nor shall it conduct, directly or indirectly, any business in the PRC that competes with Party A's business, including investing in an entity that conducts a business that competes with Party A's business, nor shall it conduct any other business beyond the scope approved by Party A in writing.

 

 

3.4

The Parties agree that this Article shall survive any modification, annulment or termination of this Agreement.

 

4.

Representations and Warranties

 

4.1

Party A represents and warrants that:

 

4.1.1

Party A is a company legally incorporated and validly existing under the laws of the PRC.

 

4.1.2

Party A enters into and performs this Agreement within the scope of its legal personality and its business operations; Party A has taken the necessary corporate actions and has been granted proper authorization and obtained the consents and approvals of third parties and governmental authorities, and will not violate any laws or other restrictions binding upon or affecting Party A.

 

4.1.3

This Agreement constitutes the legal, valid and binding obligation of Party A, and is enforceable against it in accordance with the terms hereof.

 

4.2

Party B represents and warrants that:

 

4.2.1

Party B is a company legally incorporated and validly existing under the laws of the PRC.

 

4.2.2

Party B enters into and performs this Agreement within the scope of its legal personality and its business operations; Party B has taken the necessary corporate actions and has been granted proper authorization and obtained the consents and approvals of third parties and governmental authorities, and will not violate any laws or other restrictions binding upon or affecting Party B.

 

4.2.3

This Agreement constitutes the legal, valid and binding obligation of Party B, and shall be enforceable against it.

 

5.

Effectiveness and Term

 

5.1

This Agreement is executed as of the date first above written and shall take effect as of such date. This Agreement shall remain in effect for a period of ten (10) years unless terminated earlier in accordance with the provisions of this Agreement or any other agreement separately entered into by the Parties.

 

5.2

The term hereof may be extended by written confirmation from Party A prior to the expiration of this Agreement. The extended term shall be determined by Party A and Party B shall unconditionally accept such extended term.

 

6.

Termination

 

6.1

This Agreement shall be terminated as of the date of expiration unless renewed in accordance with the relevant terms hereof.

 

6.2

During the term hereof, unless Party A has been grossly negligent or fraudulent towards Party B, Party B may not terminate this Agreement prior to the date of expiration. However, Party A shall have the right to terminate this Agreement at any time by giving 30 days' prior written notice to Party B.

 

 

6.3

The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.

 

6.4

Early termination or expiration of this Agreement for any reason does not relieve any Party from all payment obligations hereunder (including but not limited to the Service Fee) due prior to the date of termination or expiration hereof, nor does this waive any liability for breach incurred prior to the termination of this Agreement. The payable Service Fee arising prior to the termination of this Agreement shall be paid to Party A within fifteen (15) business days from the date of termination hereof.

 

7.

Governing Law, Dispute Resolution and Change of Law

 

7.1

The execution, entry into force, interpretation, performance, modification and termination hereof and the resolution of disputes hereunder shall be governed by the laws of the PRC.

 

7.2

In the event of any dispute arising out of the interpretation and performance of the provisions hereof, the Parties shall negotiate in good faith to resolve such dispute. If the Parties fail to agree on the resolution of such dispute within 30 days after any Party has requested that such dispute be resolved by negotiation, then any Party may submit such dispute to the China International Economic and Trade Arbitration Commission for resolution by arbitration in accordance with its arbitration rules then in effect. The arbitration shall take place in Guangzhou and shall be conducted in the Chinese language. The arbitral award shall be final and binding upon the Parties.

 

7.3

In the event of any dispute arising out of the interpretation and performance hereof or in the event that any dispute is under arbitration, the Parties hereto shall continue to exercise their respective rights and perform their respective obligations hereunder, except for the matters in dispute.

 

7.4

If, at any time after the date hereof, any PRC law, regulation or rule is promulgated or changed, or the interpretation or application of such law, regulation or rule is changed, the following provisions shall apply: (a) If such change in law or newly promulgated provision is more favorable to any Party than the relevant law, regulation, decree or provision in effect on the date hereof (and the other Party is not materially adversely affected), each Party shall promptly apply to receive the benefits arising from such change or new provision. Each Party shall use its best efforts to cause such application to be approved; and (b) if, as a result of such change in law or newly promulgated provision, the economic interests of any Party hereunder are materially adversely affected directly or indirectly, this Agreement shall continue to be enforced in accordance with its original terms. Each Party shall use all lawful means to obtain a waiver of compliance with such change or provision. If the adverse effect on the economic interests of any Party cannot be resolved in accordance with the provisions hereof, upon notice by the affected Party to the other Parties, the Parties shall promptly negotiate and make all necessary modifications to this Agreement to maintain the affected Party's economic interests hereunder.

 

8.

Indemnity

 

Party B shall indemnify and hold Party A harmless from any loss, damage, liability or expense resulting from any action, claim or other demand against Party A arising out of or caused by the consulting and Services provided by Party A at Party B's request, unless such loss, damage, liability or expense arises out of Party A's gross negligence or willful misconduct.

 

 

9.

Notice

 

9.1

All notices and other communications required or permitted to be given hereunder shall be delivered by hand or sent by postage prepaid registered mail, commercial courier service or facsimile to the following address of such Party. A further acknowledgment of each notice shall be sent by e-mail. The date on which such notice is deemed to have been validly served shall be determined as follows:

 

9.1.1

A notice shall be deemed to have been validly delivered on the date of dispatch or rejection if it is sent by personal delivery, courier service or registered mail, postage prepaid, at the address specified for receipt of the notice.

 

9.1.2

A notice, if sent by fax, shall be deemed to have been validly delivered on the date of successful transmission (which shall be evidenced by an automatically generated transmission confirmation message).

 

9.2

For the purposes of notification, the addresses of the Parties are as follows:

 

Party A: Guangzhou (HX) Pony AI Technology Co., Ltd.

Address: 12/F, Building 1, Pearl Bay Development Building, Nansha District, Guangzhou

Attn: ZHANG Ning

 

Party B: Guangzhou (ZX) Pony.AI Technology Co., Ltd.

Address: 12/F, Building 1, Pearl Bay Development Building, Nansha District, Guangzhou

Attn: ZHANG Ning

 

Party C: Hong Kong Pony AI Limited

Address: Suite 603 6, Laws Commercial Plaza, 788 Cheung Sha Wan Road, Kowloon, Hong Kong

 

9.3

Any Party may change its address for receiving notices at any time by giving notice to the other Party in accordance with the provisions of this Article.

 

10.

Assignment

 

10.1

Party B may not assign its rights and obligations hereunder to any third party without the prior written consent of Party A.

 

10.2

Party B agrees that Party A may assign its rights and obligations hereunder to any third party by giving a prior written notice to Party B, without having to obtain Party B's consent.

 

11.

Severability

 

If one or more provisions hereof shall be held invalid, illegal or unenforceable in any respect under any law or regulation, the validity, legality or enforceability of the remaining provisions hereof shall not be affected or impaired in any respect. The Parties shall negotiate in good faith and strive to replace such invalid, unlawful or unenforceable provision(s) with a provision(s) that is/are valid to the fullest extent permitted by law and desired by the Parties, where such valid provision(s) shall have an economic effect as similar as possible to that of such invalid, illegal or unenforceable provision(s).

 

 

12.

Modifications and Supplements

 

Any modification and supplement to this Agreement shall be made in writing. Amendments and supplements executed by the Parties in connection with this Agreement shall be an integral part hereof and shall have the same legal force and effect as this Agreement.

 

13.

Pre-existing Agreement

 

The Exclusive Business Cooperation Agreement dated June 27, 2018 among the Parties is superseded by this Agreement and terminated as of the date hereof.

 

14.

Language and Counterparts

 

This Agreement is written in Chinese and is made in three copies, one for each Party, which shall be equally authentic.

 

[The remainder of this page is intentionally left blank]

 

 

IN WITNESS WHEREOF, the Parties have caused this Exclusive Business Cooperation Agreement to be executed by their authorized representatives as of the date first above written.

 

Party A: Guangzhou (HX) Pony AI Technology Co., Ltd.

 

Company seal: /s/ Guangzhou (HX) Pony AI Technology Co., Ltd.

By:	/s/ ZHANG Ning
Name:	ZHANG Ning
Title:	Legal Representative

 

Party B: Guangzhou (ZX) Pony.AI Technology Co., Ltd.

 

By:	/s/ ZHANG Ning
Name:	ZHANG Ning
Title:	Legal Representative

 

 

IN WITNESS WHEREOF, the Parties have caused this Exclusive Business Cooperation Agreement to be executed by their authorized representatives as of the date first above written.

 

Party C: Hong Kong Pony AI Limited

By:	/s/ PENG Jun
Name:	PENG Jun
Title:	Authorized Representative

 

 

 

 

CERTAIN INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS [****], HAS BEEN EXCLUDED PURSUANT TO ITEM 601(B)(10)(IV) OF REGULATION S-K UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

 

Exhibit 10.12

 

 

Share Pledge Agreement

 

This Share Pledge Agreement (this "Agreement") is entered into as of September 14, 2020, in Guangzhou, by and among the following parties:

 

Party A: Guangzhou (HX) Pony AI Technology Co., Ltd. (hereinafter referred to as the "Pledgee")

 

Address: Room 1301, 1 Mingzhu 1st Street, Hengli Town, Nansha District, Guangzhou (office only)

 

Legal Representative: MO Luyi

 

Party B:

 

(1)

TANG Fengheng

 

ID no.: [************]

 

(2)

LOU Tiancheng

 

ID no.: [************]

 

(3)

MO Luyi

 

ID no.: [************]

 

(Hereinafter referred to as, collectively, the "Pledgors")

 

Party C: Guangzhou (ZX) Pony.AI Technology Co., Ltd.

 

Address: Room 1201, 1 Mingzhu 1st Street, Hengli Town, Nansha District, Guangzhou (office only)

 

Legal Representative: MO Luyi

 

Party D: Hong Kong Pony AI Limited

 

Address: Suite 603 6/F, Laws Commercial Plaza, 788 Cheung Sha Wan Road, Kowloon, Hong Kong

 

In this Agreement, the Pledgee, the Pledgors, Party C and Party D are hereinafter referred to individually as a "Party" and collectively as the "Parties".

 

WHEREAS:

 

1.

The Pledgors are citizens of the People's Republic of China (hereinafter referred to as the "PRC") and own 100% of the equity interests in Party C in the aggregate. Party C is a limited liability company incorporated in Guangzhou, the PRC. Party C acknowledges the respective rights and obligations of the Pledgee and the Pledgors hereunder and agrees to provide any necessary assistance in registering the Pledge;

 

 

2.

The Pledgee is a wholly foreign-owned enterprise incorporated in Guangzhou, the PRC. The Pledgee and Party C entered into an Exclusive Business Cooperation Agreement as of June 1, 2020;

 

3.

To ensure that the Pledgee receives from Party C all payments due and payable by Party C, including but not limited to consulting and service fees, the Pledgors hereby pledge all of the Equity Interests they hold in Party C as security for the payment of the consulting and service fees by Party C under the Exclusive Business Cooperation Agreement.

 

1.

Definitions

 

Unless otherwise specified herein, the following terms shall have the meanings given below:

 

1.1

"Pledge" shall mean the security interest granted by the Pledgors to the Pledgee pursuant to Article 2 hereof, i.e. the priority of the Pledgee to be paid out of the conversion, auction or sale price of the Equity Interests.

 

1.2

"Equity Interests" shall mean all equity interests legally held now and acquired in the future by the Pledgors in Party C.

 

1.3

"Pledge Term" shall mean the term set forth in Article 3 hereof.

 

1.4

"Business Cooperation Agreement" shall mean the Exclusive Business Cooperation Agreement dated June 1, 2020 between the Pledgee that is partly owned by the Pledgors, on one hand, and Party C, on the other hand.

 

1.5

"Event of Default" shall mean any of the circumstances set forth in Article 7 hereof.

 

1.6

"Notice of Default" shall mean a notice issued by the Pledgee pursuant to this Contract declaring an Event of Default.

 

2.

Pledge

 

2.1

As a collateral security for the immediate and complete payment and performance of any or all payments owed by Party C (including, without limitation, consulting and service fees payable to the Pledgee under the Business Cooperation Agreement when they become due and payable (whether on the specified due date, by early repayment or otherwise), hereinafter collectively referred to as the "Secured Obligations"), the Pledgors hereby pledge to the Pledgee an aggregate of 100% of the Equity Interests of Party C held by the Pledgors by way of first priority pledge.

 

2.2

Where any of the following events occurs (hereinafter referred to as a "Cause of Settlement"), the value of the Secured Obligations shall be determined on the basis of the total amount of the Secured Obligations due and unpaid to the Pledgee as of the most recent date prior to or on the date of occurrence of such Cause of Settlement (hereinafter referred to as the "Established Obligations"):

 

(a)

The Business Cooperation Agreement expires or is terminated in accordance with the relevant provisions thereunder;

 

(b)

An Event of Default under Article 7 hereof occurs and remains unresolved, causing the Pledgee to serve a Notice of Default on the relevant Pledgor in accordance with Article 7.3;

 

 

(c)

The Pledgee reasonably believes, through appropriate investigation, that the Pledgor and/or Party C is insolvent or is likely to be placed in a state of insolvency; or

 

(d)

Any other event where the determination of the Secured Obligations is required under the relevant PRC laws.

 

2.3

For the avoidance of doubt, the date of occurrence of the Cause of Settlement shall be the Settlement Date (hereinafter referred to as the "Settlement Date"). The Pledgee shall be entitled, at its option, to realize the Pledge in accordance with Article 8 on or after the Settlement Date.

 

2.4

During the Pledge Term (as defined below), the Pledgee shall be entitled to receive any dividends or other distributable benefits arising from the Equity Interests.

 

3.

Pledge Term

 

3.1

The Pledge shall take effect from the date of its registration and establishment with the competent administration for industry and commerce (hereinafter referred to as the "Registration Authority") in the place where Party C is located, and the term of such Pledge (hereinafter referred to as the "Pledge Term") shall not be terminated until the last of the obligations secured by such Pledge is paid or performed. The Parties agree that, upon the execution of this Agreement, the Pledgors and Party A shall use their best efforts to apply to the Registration Authority for registration of the establishment of the share pledge in accordance with the "Measures for Registration of Share Pledges with the Administrations for Industry and Commerce" at the earliest date of the procedure prescribed by the Registration Authority. The Parties further agree that within thirty (30) days from the date of formal acceptance of the application for registration of the share pledge by the Registration Authority and within two (2) months following the execution of this Agreement, they will complete all the procedures for registration of the share pledge, obtain the registration notice issued by the Registration Authority, and cause the matters concerning the share pledge to be recorded completely and accurately in the share pledge register by the Registration Authority.

 

3.2

If, during the Pledge Term, Party C fails to pay the exclusive consulting or service fees under the Business Cooperation Agreement or fails to perform other aspects thereof, the Pledgee shall have the right, but not the obligation, to dispose of such Pledge in accordance with the provisions hereof.

 

4.

Custody of Equity Records Subject to Pledge

 

4.1

During the Pledge Term specified herein, the Pledgors shall, within one week from the date of establishment of the registration of the Pledge, place in the custody of the Pledgee the original certificates of equity contribution and the register of shareholders recording the Pledge (and such other documents as the Pledgee may reasonably request, including but not limited to the notice of registration of the Pledge issued by the competent administration for industry and commerce). The Pledgee shall keep such items in its custody throughout the Pledge Term as specified herein.

 

4.2

During the Pledge Term, the Pledgee shall be entitled to receive the dividends arising from the Equity Interests.

 

 

5.

Representations and Warranties of the Pledgors and Party C

 

Each Pledgor represents and warrants to the Pledgee that:

 

5.1

The Pledgor is the sole legal and beneficial owner of the Equity Interests and has legal, complete and full ownership in the Equity Interests, except subject to a separate agreement between the Pledgor and the Pledgee.

 

5.2

The Pledgee shall have the right to dispose of and transfer the Equity Interests in accordance with the provisions set forth herein.

 

5.3

The Pledgor has not created any security interest or other encumbrance on the Equity Interests other than the Pledge, the Equity Interests are not subject to any dispute as to ownership, are not subject to attachment or other legal proceedings or similar threats, and are available for pledge and transfer in accordance with applicable law.

 

5.4

The execution of this Agreement by the Pledgor and the exercise of its rights hereunder, or the performance of its obligations hereunder, will not violate any law, regulation, any agreement or contract to which the Pledgor is a party, or any undertaking made by the Pledgor to any third party.

 

5.5

All the documents, information, statements and vouchers provided by the Pledgor to the Pledgee are accurate, true, complete and valid.

 

Party C represents and warrants to the Pledgee that:

 

5.6

Party C is a limited liability company duly incorporated and validly existing under the laws of the PRC with independent legal personality; it has full and independent legal status and legal capacity to enter into, deliver and perform this Agreement.

 

5.7

This Agreement, once duly executed by Party C, shall constitute a legal, valid and binding obligation of Party C.

 

5.8

Party C has the full right and authority within Party C to enter into and deliver this Agreement and all other documents in connection with the transactions contemplated hereby, and it has the full right and authority to consummate the transactions contemplated hereby.

 

5.9

There is no material security interest or other encumbrance on the assets owned by Party C that may affect the rights and interests of the Pledgee in the Equity Interests (including, but not limited to, any transfer of any intellectual property rights of Party C or any asset with a value of RMB100,000 or above, or any encumbrance on the title or use rights attached to such assets).

 

5.10

No litigation, arbitration or other legal proceedings are pending or, to the knowledge of Party C, threatened in any court or arbitral tribunal against the Equity Interests, Party C or its assets, nor are there any administrative proceedings or administrative penalties pending or, to the knowledge of Party C, threatened in any governmental or administrative agency against the Equity Interests, Party C or its assets that would materially or adversely affect Party C's financial condition or the ability of the Pledgors to perform their obligations and security liabilities under this Agreement.

 

5.11

Party C hereby agrees to be jointly and severally liable to the Pledgee for the representations and warranties made by all or any of the Pledgors hereunder.

 

5.12

Party C hereby warrants to the Pledgee that the foregoing representations and warranties will be true and correct and will be fully complied with at all times and under all circumstances until the obligations hereunder are fully performed or the Secured Obligations are fully discharged.

 

 

6.

Undertakings and Further Agreements of the Pledgors and Party C

 

Each Pledgor undertakes and further agrees that:

 

6.1

During the term hereof, the Pledgor hereby undertakes to the Pledgee that:

 

6.1.1

Except for the performance of the Exclusive Purchase Option Agreement entered into by the Pledgor, the Pledgee and Party C as of June 1, 2020, the Pledgor may not, without the prior written consent of the Pledgee, make or permit others to make any transfer of all or any part of the Equity Interests, create or permit to exist any security interest or other encumbrance over the Equity Interests that might affect the rights and interests of the Pledgee in the Equity Interests;

 

6.1.2

The Pledgor shall comply with the provisions of all laws and regulations applicable to the pledge of rights and shall, within five days upon receipt of any notice, order or recommendation issued or made by the competent authority (or any other party concerned) in respect of the Pledge, present the said notice, order or recommendation to the Pledgee and shall comply with such notice, order or recommendation or make such objections and representations in respect thereof as the Pledgee may reasonably request or with the consent of the Pledgee;

 

6.1.3

The Pledgor shall immediately notify the Pledgee of any event or notice received by the Pledgor which may have an effect on the Pledgee's rights in the Equity Interests or any part thereof, and any event or notice received by the Pledgor which may have an effect on any warranties and other obligations of the Pledgor arising hereunder.

 

6.2

The Pledgor agrees that the rights of the Pledgee acquired hereunder in respect of the Pledge shall not be interrupted or jeopardized by legal proceedings instituted by the Pledgor or any successor or representative of the Pledgor or any other person.

 

6.3

In order to protect or perfect the security interest granted hereunder for the payment of consulting and service fees under the Business Cooperation Agreement, and for the performance of the Business Cooperation Agreement, the Pledgor hereby undertakes to execute and cause other parties interested in the Pledge to execute in good faith all certificates, agreements, deeds and/or undertakings required by the Pledgee. The Pledgor also undertakes to carry out and cause other parties interested in the Pledge to carry out the acts required by the Pledgee, in furtherance of the exercise by the Pledgee of its rights and authority granted to it hereunder, and to execute all relevant documents concerning the ownership of the Equity Interests with the Pledgee or the Pledgee's designee (natural/legal person). The Pledgor undertakes to provide the Pledgee, within a reasonable period of time, with all notices, orders and decisions requested by the Pledgee in connection with the Pledge.

 

6.4

The Pledgor hereby undertakes to the Pledgee that he/she will observe and perform all warranties, undertakings, agreements, representations and conditions hereunder. If the Pledgor fails to perform or partially performs its warranties, undertakings, agreements, representations and conditions, the Pledgor shall indemnify the Pledgee for all losses arising therefrom.

 

6.5

If the Equity Interests pledged hereunder are subject to any enforcement measures imposed by a court or any other governmental authority for any reason whatsoever, the Pledgor shall use all his/her efforts, including (but not limited to) providing additional assurances to the court or taking other measures, to discharge such enforcement measures imposed on the Equity Interests by such court or other authority.

 

 

6.6

If there is any possibility that the value of the Equity Interests may decrease to such an extent as to jeopardize the rights of the Pledgee, the Pledgee may require the Pledgor to provide additional security or guarantee. Should the Pledgor fail to do so, the Pledgee may at any time auction or sell off the Equity Interests and apply the proceeds therefrom towards the early settlement of the Secured Obligations or deposit the same; any expenses arising therefrom shall be borne solely by the Pledgor.

 

6.7

Without the prior written consent of the Pledgee, the Pledgor and/or Party C may not, on its own (or help others), increase, reduce, transfer or encumber the registered capital of Party C (or his/her capital contribution to Party C), including the Equity Interests. Subject to compliance with this provision, the Equity Interests registered and acquired by the Pledgor in Party C after the date hereof shall be referred to as "Additional Equity Interests". The Pledgor and Party C shall enter into a supplementary share pledge agreement with the Pledgee in respect of the Additional Equity Interests immediately upon the acquisition of such Additional Equity Interests by the Pledgor, and shall cause the board of directors and the shareholders' meeting of Party C to approve such supplementary share pledge agreement, and shall submit to the Pledgee all the documents required for the supplementary share pledge agreement, including but not limited to: (a) the original shareholder capital contribution certificate issued by Party C in respect of the Additional Equity Interests; and (b) a certified copy of the capital verification report issued by a PRC certified public accountant in respect of the Additional Equity Interests. The Pledgor and Party C shall register the establishment of the pledge of the Additional Equity Interest in accordance with the provisions of Article 3.1 hereof.

 

6.8

Unless the Pledgee gives prior written instructions to the contrary, the Pledgor and/or Party C agrees that in the event of a transfer of part or all of the shares between the Pledgor and any third party (hereinafter referred to as the "Share Transferee") in breach of this Agreement, the Pledgor and/or Party C shall ensure that the Share Transferee unconditionally acknowledges the Pledge, and shall perform the necessary procedures for registration of the change of pledge (including but not limited to executing the relevant documents) in order to ensure the survival of the Pledge.

 

6.9

If the Pledgee provides a further loan to Party C, the Pledgor and/or Party C agrees to pledge the Equity Interests to grant a pledge to the Pledgee to secure such further loan and to perform the relevant procedures as soon as possible as required by laws, regulations or local practices (if any), including but not limited to the executing relevant documents and completing the relevant procedures for registration of the establishment (or change) of the pledge.

 

Party C undertakes and further agrees that:

 

6.10

If the consent, permission, waiver, authorization of any third party or the approval, license, waiver of or registration or filing with any governmental authority (if required by law) is required in connection with the execution and performance of this Agreement and the pledge of Equity Interests hereunder, Party C will endeavor to assist in obtaining and keeping the same in full force and effect during the term hereof.

 

6.11

Without the prior written consent of the Pledgee, Party C will not assist or allow the Pledgor to create any new pledge or grant any other security interest over the Equity Interests, nor will it assist or allow the Pledgor to transfer the Equity Interests.

 

6.12

Party C agrees to strictly comply with the obligations under Articles 6.7, 6.8 and 6.9 hereof together with the Pledgor.

 

 

6.13

Without the prior written consent of the Pledgee, Party C may not transfer its assets or create or permit to exist on Party C's assets any security interest or other encumbrances that may affect the rights and interests of the Pledgee in the Equity Interests (including but not limited to the transfer of any intellectual property rights of Party C or any asset with a value of RMB500,000 or above, or any encumbrances on title or use rights attached to such assets).

 

6.14

In the event of any legal proceedings, arbitration or other claims which may adversely affect Party C, the Equity Interests or the interests of the Pledgee under the series of cooperation agreements (including but not limited to the Business Cooperation Agreement) and this Agreement, Party C undertakes to notify the Pledgee in writing as soon as possible and in a timely manner and, upon the reasonable request of the Pledgee, to take all necessary measures to secure the Pledgee's pledge interest in the Equity Interests.

 

6.15

Party C shall not perform or permit any act or action that may adversely affect the Pledgee's interest under the series of cooperation agreements (including but not limited to the Business Cooperation Agreement) and this Agreement or the Equity Interests.

 

6.16

Party C will, within the first month of each calendar quarter, provide the Pledgee with financial statements of Party C for the previous calendar quarter, including but not limited to balance sheet, income statement and cash flow statement.

 

6.17

Party C undertakes to take all necessary measures and to execute all necessary documents to ensure the Pledgee's pledge interest in the Equity Interests and the exercise and realization of such interest, upon the reasonable request of the Pledgee.

 

6.18

In the event of any transfer of the Equity Interests as a result of the exercise of the Pledge hereunder, Party C undertakes to take all measures necessary to consummate such transfer.

 

7.

Events of Default

 

7.1

Each of the following shall be deemed as an Event of Default:

 

7.1.1

Party C fails to pay in full the consulting and service fees payable under the Business Cooperation Agreement or fails to repay the loan, or breaches any of Party C's other obligations under such agreement;

 

7.1.2

Any representation or warranty made by the Pledgor in Article 5 hereof contains a material misrepresentation or error and/or the Pledgor breaches any warranty in Article 5 hereof;

 

7.1.3

The Pledgor and Party C fail to complete the registration of the pledge of the Equity Interests with the Registration Authority as set forth in Article 3.1;

 

7.1.4

The Pledgor and Party C breach any of the provisions set forth herein;

 

7.1.5

Except as expressly provided in Article 6.1.1, the Pledgor transfers or attempts to transfer or relinquish the pledged Equity Interests or assigns the pledged Equity Interests without the written consent of the Pledgee;

 

7.1.6

The Pledgor's own loans, warranties, indemnities, undertakings or other debt liabilities to any third party (1) are required to be repaid or performed in advance due to the Pledgor's default; or (2) are due but cannot be repaid or performed as scheduled;

 

 

7.1.7

Any approval, license, permit or authorization of a governmental authority that makes this Agreement enforceable, legal and effective is withdrawn, suspended, rendered invalid or materially altered;

 

7.1.8

The enactment of applicable law renders this Agreement illegal or renders the Pledgor unable to continue to perform his/her obligations hereunder;

 

7.1.9

There has been an adverse change in the property owned by the Pledgor which, in the opinion of the Pledgee, has affected the ability of the Pledgor to perform his/her obligations hereunder;

 

7.1.10

The successor or trustee of Party C may only partially perform or refuse to perform its payment obligations under the Business Cooperation Agreement; and

 

7.1.11

Any other circumstances where the Pledgor is or may be unable to exercise its rights in respect of the Pledge.

 

7.2

Upon becoming aware or discovering that any of the circumstances described in Article 7.1 or any event that may lead to such circumstances has occurred, the Pledgor shall immediately notify the Pledgee in writing accordingly.

 

7.3

Unless the Event of Default set forth in this Article 7.1 has been successfully resolved to the satisfaction of the Pledgee within thirty (30) days from the date of notice given by the Pledgee, the Pledgee may, at any time upon or after the occurrence of such Event of Default, give a Notice of Default to the Pledgor requiring the Pledgor to immediately pay all outstanding payments due and payable under the Business Cooperation Agreement and all other payments due and payable to the Pledgee, and/or to repay the loan and/or to dispose of the Pledge as provided in Article 8 hereof.

 

8.

Exercise of Pledge

 

8.1

The Pledgor may not transfer the Pledge or his/her Equity Interests in Party C without the written consent of the Pledgee until the Business Cooperation Agreement is fully performed and the consulting and service fees stated therein are paid in full.

 

8.2

The Pledgee may give a Notice of Default to the Pledgor when exercising the Pledge.

 

8.3

Subject to the provisions of Article 7.3, the Pledgee may exercise the right to enforce the Pledge simultaneously with or at any time after the giving of a Notice of Default in accordance with Article 7.2. Once the Pledgee has elected to enforce the Pledge, the Pledgor shall cease to have any right or interest in relation to the Equity Interests.

 

8.4

In the event of a default, to the extent permitted by and in accordance with applicable law, the Pledgee shall be entitled to dispose of the pledged Equity Interests in accordance with law; if there is any balance remaining after the entire amount received by the Pledgee as a result of the exercise of its Pledge is applied towards the satisfaction of the Secured Obligations, such balance shall be paid to the Pledgor or to the person entitled to receive such amount (without interest).

 

8.5

When the Pledgee disposes of the Pledge in accordance with this Agreement, the Pledgor and Party C shall provide the necessary assistance to enable the Pledgee to enforce the Pledge in accordance with this Agreement.

 

8.6

All actual expenses, taxes and all legal fees incurred in connection with the creation of the pledge of the Equity Interests hereunder and the realization of the rights of the Pledgee shall be borne by the Pledgor, except where the law requires the Pledgee to bear such expenses.

 

 

9.

Assignment

 

9.1

The Pledgor may not be entitled to assign or delegate its rights and obligations hereunder without the prior written consent of the Pledgee.

 

9.2

This Agreement shall be binding on the Pledgor and its successors and permitted assigns and shall be valid in respect of the Pledgee and each of its successors and assigns.

 

9.3

At any time, the Pledgee may assign any and all of its rights and obligations under the Business Cooperation Agreement to its designee (natural/legal person), in which case the assignee shall be entitled to and assume the rights and obligations of the Pledgee hereunder as if it were an original party hereto. When the Pledgee assigns its rights and obligations under the Business Cooperation Agreement, upon the request of the Pledgee, the Pledgor shall execute the relevant agreement or other documents in connection with such assignment.

 

9.4

In the event of a change of the Pledgee as a result of the assignment, upon the request of the Pledgee, the Pledgor shall enter into a new pledge agreement with the successor Pledgee on the same terms and conditions as this Agreement.

 

9.5

The Pledgor shall strictly comply with the provisions of this Agreement and other contracts executed jointly or severally by the Parties hereto or any of them, including the Exclusive Option Agreement and the Power of Attorney granted to the Pledgee, perform his/her obligations under this Agreement and other contracts and refrain from acts/omissions that may affect the validity and enforceability hereof and thereof. The Pledgor may not exercise any of his/her remaining rights with respect to the Equity Interests pledged hereunder except in accordance with the written instructions of the Pledgee.

 

10.

Termination

 

Upon full performance of the Business Cooperation Agreement and full payment of the consulting and service fees hereunder and upon termination of Party C's obligations under the Business Cooperation Agreement, this Agreement shall be terminated and the Pledgee shall cancel or terminate this Agreement as soon as reasonably practicable.

 

11.

Handling Charges and Other Expenses

 

All costs and actual expenses in connection with this Agreement, including but not limited to attorney's fees, cost of production, stamp duty and any other taxes and fees shall be borne by Party C. If the Pledgee is required by applicable law to bear certain relevant taxes and expenses, the Pledgor shall cause Party C to reimburse the Pledgee in full for the taxes and expenses already paid by it.

 

12.

Duty of Confidentiality

 

The Parties acknowledge that any oral or written information exchanged by them in connection with this Agreement is confidential. Each Party shall keep all such information confidential and may not disclose any such information to any third party without the written consent of the other Party, except (a) to the extent that such information is or becomes known to the public ( other than due to disclosure to the public by the receiving party); (b) to the extent that such disclosure is required by applicable law or the rules or regulations of any stock exchange; or (c) to the extent that such information is required to be disclosed by any Party to its legal counsel or financial advisor in connection with the transactions contemplated hereunder, where such legal counsel or financial advisor is also subject to obligations of confidentiality similar to those contained in this Article. Any disclosure of any confidential information by a person or body employed by any Party shall be deemed to be a disclosure of such confidential information by such Party, and such Party shall be legally liable for any breach of this Agreement. This Article shall survive termination of this Agreement for any reason whatsoever.

 

 

13.

Governing Law and Dispute Resolution

 

13.1

The execution, entry into force, interpretation and performance of this Agreement and the resolution of disputes hereunder shall be governed by the laws duly published and publicly available in the PRC. Matters not covered by the laws duly published and publicly available in the PRC shall be governed by international legal principles and practices.

 

13.2

In the event of any dispute arising out of the interpretation and performance of the provisions hereof, the Parties shall negotiate in good faith to resolve such dispute. If the Parties fail to agree on the resolution of such dispute within 30 days after any Party has requested that such dispute be resolved by negotiation, then any Party may submit such dispute to the China International Economic and Trade Arbitration Commission for resolution by arbitration in accordance with its arbitration rules then in effect. The arbitration shall take place in Guangzhou and shall be conducted in the Chinese language. The arbitral award shall be final and binding upon the Parties.

 

13.3

In the event of any dispute arising out of the interpretation and performance hereof or in the event that any dispute is under arbitration, the Parties hereto shall continue to exercise their respective rights and perform their respective obligations hereunder, except for the matters in dispute.

 

14.

Notice

 

14.1

All notices and other communications required or permitted to be given hereunder shall be delivered by hand or sent by postage prepaid registered mail, commercial courier service or facsimile to the following address of such Party. A further acknowledgment of each notice shall be sent by e-mail. The date on which such notice is deemed to have been validly served shall be determined as follows:

 

14.1.1

A notice shall be deemed to have been validly delivered on the date of dispatch or rejection if it is sent by personal delivery, courier service or registered mail, postage prepaid, at the address specified for receipt of the notice.

 

14.1.2

A notice, if sent by fax, shall be deemed to have been validly delivered on the date of successful transmission (which shall be evidenced by an automatically generated transmission confirmation message).

 

14.2

For the purposes of notification, the addresses of the Parties are as follows:

 

Party A: Guangzhou (HX) Pony AI Technology Co., Ltd.

 

Address: 106 East Fengze Road, Nansha District, Guangzhou (self-numbered Building 1)

 

Attn: MO Luyi

 

Party B: TANG Fengheng, LOU Tiancheng, MO Luyi

 

 

Party C: Guangzhou (ZX) Pony.AI Technology Co., Ltd.

 

Address: 106 East Fengze Road, Nansha District, Guangzhou (self-numbered Building 1)

 

Attn: MO Luyi

 

Party D: Hong Kong Pony AI Limited

 

Address: Suite 603 6/F, Laws Commercial Plaza, 788 Cheung Sha Wan Road, Kowloon, Hong Kong

 

14.3

Any Party may change its address for receiving notices at any time by giving notice to the other Party in accordance with the provisions of this Article.

 

15.

Severability

 

If one or more provisions hereof shall be held invalid, illegal or unenforceable in any respect under any law or regulation, the validity, legality or enforceability of the remaining provisions hereof shall not be affected or impaired in any respect. The Parties shall negotiate in good faith and strive to replace such invalid, unlawful or unenforceable provision(s) with a provision(s) that is/are valid to the fullest extent permitted by law and desired by the Parties, where such valid provision(s) shall have an economic effect as similar as possible to that of such invalid, illegal or unenforceable provision(s).

 

16.

Annexes

 

The annexes set forth herein shall constitute an integral part of this Agreement.

 

17.

Effectiveness

 

17.1	Any amendments, modifications and supplements to this Agreement shall be made in writing and shall become effective upon signature or stamping by the Parties and completion of governmental registration procedures, if applicable.

 

17.2	This Agreement is written in Chinese and is made in twelve (12) copies, one (1) copy for each Pledgor, the Pledgee, Party C and Party D, and one (1) copy to be filed with the Registration Authority, which shall be equally authentic.

 

[The remainder of this page is intentionally left blank]

 

 

IN WITNESS WHEREOF, the Parties have caused this Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

Party A: Guangzhou (HX) Pony AI Technology Co., Ltd.

 

Company seal: /s/ Guangzhou (HX) Pony AI Technology Co., Ltd.

By:	/s/ MO Luyi
Name:	MO Luyi
Title:	Legal Representative

 

 

IN WITNESS WHEREOF, the Parties have caused this Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

Party B: LOU Tiancheng  

 

By:

/s/ LOU Tiancheng

 

 

IN WITNESS WHEREOF, the Parties have caused this Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

Party B: TANG Fengheng

 

By:

/s/ TANG Fengheng

 

 

IN WITNESS WHEREOF, the Parties have caused this Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

Party B: MO Luyi

 

By:

/s/ MO Luyi

 

 

Party C: Guangzhou (ZX) Pony.AI Technology Co., Ltd. (official seal)

By:	/s/ MO Luyi
Name:	MO Luyi
Title:	Legal Representative

 

 

IN WITNESS WHEREOF, the Parties have caused this Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

Party D: Hong Kong Pony AI Limited

By:	/s/ PENG Jun
Name:	PENG Jun
Title:	Authorized Representative

 

 

 

 

 

 

 

 

 

 

 

 

CERTAIN INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS [****], HAS BEEN EXCLUDED PURSUANT TO ITEM 601(B)(10)(IV) OF REGULATION S-K UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

 

Exhibit 10.13

 

 

Exclusive Option Agreement

 

This Exclusive Option Agreement (this "Agreement") is entered into as of September 14, 2020, in Guangzhou, the PRC, by and among the following parties.

 

Party A: Address:	Guangzhou (HX) Pony AI Technology Co., Ltd. Room 1301, 1 Mingzhu 1st Street, Hengli Town, Nansha District, Guangzhou (office only)
Party B:	LOU Tiancheng, a PRC citizen, whose ID no. is: [*************]; TANG Fengheng, a PRC citizen, whose ID no. is: [*************]; MO Luyi, a PRC citizen, whose ID no. is: [*************].
Party C:	Guangzhou (ZX) Pony.AI Technology Co., Ltd., a limited liability company incorporated and existing under the laws of the PRC, with its registered address at Room 1201, 1 Mingzhu 1st Street, Hengli Town, Nansha District, Guangzhou (office only).
Party D: Address:	Hong Kong Pony AI Limited Suite 603 6/F, Laws Commercial Plaza, 788 Cheung Sha Wan Road, Kowloon, Hong Kong

 

In this Agreement, Party A, Party B, Party C and Party D are hereinafter referred to individually as a "Party" and collectively as the "Parties".

 

WHEREAS:

 

Party B holds 100% of the equity interests in Party C in the aggregate; and

 

Party B intends to jointly grant Party A an irrevocable, exclusive option to purchase all of the equity interests in Party C;

 

NOW, THEREFORE, the Parties agree by consensus as follows:

 

1.

Purchase and Sale of Equity Interests

 

1.1

Grant of Option

 

Party B hereby irrevocably grants Party A an irrevocable and exclusive option (hereinafter referred to as the "Equity Purchase Option") to purchase or designate one or more persons (hereinafter each referred to as a "Designee") to purchase from Party B all or part of its equity interests in Party C at any time in one or more installments, to the extent permitted by PRC law, in accordance with the exercise steps determined by Party A in its sole discretion and at the price set forth in Article 1.3 hereof. No third party, other than Party A and the Designee, shall be entitled to the Equity Purchase Option or other rights in relation to Party B's equity interests. Party C hereby consents to the granting of the Equity Purchase Option by Party B to Party A. For the purposes of this Paragraph and this Agreement, "person" means an individual, corporation, joint venture, partnership, business, trust or unincorporated organization.

 

 

1.2

Exercise Steps

 

Party A's exercise of its Equity Purchase Option shall be subject to compliance with the laws and regulations of the PRC. When exercising the Equity Purchase Option, Party A shall give a written notice (hereinafter referred to as the "Equity Purchase Notice") to Party B, setting out the following: (a) Party A's decision to exercise the Equity Purchase Option; (b) the share of the equity interests that Party A intends to purchase from Party B (hereinafter referred to as the "Purchased Equity Interests"); and (c) the date of purchase/date of transfer of the Purchased Equity Interests.

 

1.3

Equity Purchase Price and Payment

 

Except where PRC law requires an assessment at the time of Party A's exercise of the option, the purchase price of the Purchased Equity Interests (hereinafter referred to as the "Equity Purchase Price") shall be an amount equal to the capital contribution made by Party B to the actual registered capital of Party C in respect of the Purchased Equity Interests. The Equity Purchase Price shall be paid by Party A into the account designated by Party B within seven (7) days from the date when the Purchased Equity Interests are formally transferred into Party A's name, after the necessary tax withholding and payment on the Equity Purchase Price has been made in accordance with PRC law.

 

1.4

Transfer of Purchased Equity Interests

 

For each exercise of the Equity Purchase Option by Party A:

 

1.4.1.

Party B shall cause Party C to convene a shareholders' meeting in a timely manner, at which a resolution shall be adopted approving the transfer of the Purchased Equity Interests from Party B to Party A and/or its Designee;

 

1.4.2.

Party B shall enter into an equity transfer contract with Party A and/or (where applicable) the Designee with respect to each transfer in accordance with the provisions of this Agreement and the Equity Purchase Notice;

 

1.4.3.

The Parties shall execute all other necessary contracts, agreements or documents (including, but not limited to, amendments to the Articles of Association), obtain all necessary governmental licenses and permits (including, but not limited to, the Company's business license), and take all necessary actions to transfer, free and clear of any security interest, the valid title to the Purchased Equity Interests to Party A and/or its Designee and cause Party A and/or its Designee to become the registered owners of the Purchased Equity Interests. For the purposes of this Paragraph and this Agreement, "Security Interests" include a guarantee, hypothecation, third party right or interest, any stock option, right of acquisition, right of first refusal, right of set-off, retention of title or other security arrangements, etc.; however, for the sake of clarity, this does not include any security interest arising under this Agreement and Party B's Share Pledge Agreement. "Party B's Share Pledge Agreement" under this Paragraph and this Agreement refers to the Share Pledge Agreement (hereinafter referred to as the "Share Pledge Agreement") entered into by Party A, Party B and Party C as of the date hereof, pursuant to which Party B pledges all of its equity interests in Party C to Party A to secure the performance of Party C's obligations under the Exclusive Business Cooperation Agreement entered into between Party C and Party A as of the date hereof (hereinafter referred to as the "Exclusive Business Cooperation Agreement").

 

 

2.

Undertakings

 

2.1

Undertakings Concerning Party C

 

Party B (as the shareholders of Party C) and Party C hereby undertake that:

 

2.1.1

They will not in any way supplement, alter or amend the Articles of Association and rules and regulations of Party C, increase or reduce its registered capital, or otherwise change its registered capital structure without the prior written consent of Party A;

 

2.1.2

They will, in accordance with sound financial and commercial standards and practices, keep the Company in existence, operate its business and conduct its affairs prudently and efficiently, and cause Party C to perform its obligations under the Exclusive Business Cooperation Agreement;

 

2.1.3

They will not sell, transfer, mortgage or otherwise dispose of, or permit the creation of any security interest encumbrance on, any legal or beneficial interest in any asset, business or revenue of Party C at any time from the date hereof without the prior written consent of Party A;

 

2.1.4

Following a legal liquidation as described in Article 3.6, Party B will pay Party A the full amount of any residual value it receives on a non-two-way payment basis, or cause such payment to occur. If such payment is prohibited by PRC law, Party B will pay such proceeds to Party A or a party designated by Party A to the extent permitted by PRC law;

 

2.1.5

They will not incur, inherit, guarantee or permit to exist any indebtedness without the prior written consent of Party A, except for (i) indebtedness incurred in the ordinary course of business and not through a loan; and (ii) indebtedness which has been disclosed to Party A and consented to in writing by Party A;

 

2.1.6

They have been operating all of Party C's business in the ordinary course of business to maintain the value of Party C's assets and will refrain from any acts/omissions that might affect its operating condition and the value of its assets;

 

2.1.7

They will not cause Party C to enter into any material contract without the prior written consent of Party A, except for contracts entered into in the ordinary course of business (for the purposes of this Paragraph, a contract is considered material if its value exceeds RMB100,000);

 

2.1.8

They will not cause Party C to provide loans or credit or any form of security to any person without the prior written consent of Party A;

 

2.1.9

Upon Party A's request, they will provide it with all information regarding Party C's operations and financial condition;

 

2.1.10

If requested by Party A, they shall purchase and maintain insurance from an insurer acceptable to Party A in respect of Party C's assets and operations in an amount and with coverage consistent with that of a company carrying on similar business;

 

 

2.1.11

They will not cause or permit Party C to merge or combine with any person, or to acquire or invest in any person, or cause or permit Party C to sell its assets with a value of RMB100,000 or more, without the prior written consent of Party A;

 

2.1.12

They shall immediately notify Party A of any litigation, arbitration or administrative proceedings that have occurred or might occur in connection with Party C's assets, business or revenue;

 

2.1.13

In order to maintain Party C's ownership of all of its assets, they shall execute all such documents, take all such actions and file all such complaints or defenses against all claims as may be necessary or appropriate;

 

2.1.14

They shall ensure that Party C will not pay dividends in any form to its shareholders without the prior written consent of Party A, but upon written request of Party A, Party C shall immediately distribute all distributable profits to its shareholders; and

 

2.1.15

Upon Party A's request, they shall appoint any person designated by them to be a director of Party C and/or remove the incumbent directors of Party C.

 

2.2

Undertakings of Party B and Party C

 

Party B hereby undertakes that:

 

2.2.1

Party B shall not sell, transfer, pledge or otherwise dispose of, or permit the creation of any security interest encumbrance on, any legal or beneficial interest in the equity interest owned by them in Party C without the prior written consent of Party A, except for a pledge created on such equity interest pursuant to Party B's Share Pledge Agreement;

 

2.2.2

Party B may not request Party C to make dividends or other forms of profit distribution in respect of the equity interest owned by Party B in Party C, nor may they propose or vote in favor of any resolution of the shareholders' meeting in relation thereto. In any event, if Party B receives any profit, profit distribution or dividend from Party C, Party B shall immediately pay or transfer such profit, profit distribution or dividend to Party A or a party designated by Party A for the benefit of Party C, to the extent permitted by PRC law, as a service fee payable by Party C to Party A under the Exclusive Business Cooperation Agreement.

 

2.2.3

Party B shall procure that the shareholders' meeting and/or the board of directors of Party C will not approve the sale, transfer, hypothecation or other disposal of any legal or beneficial interest in, or permit the creation of any security interest encumbrance on, the equity interest owned by Party B in Party C without Party A's prior written consent, except for a pledge created on such equity interest pursuant to Party B's Share Pledge Agreement;

 

2.2.4

Party B shall procure that the shareholders' meeting or the board of directors of Party C will not approve any merger or combination with, or acquisition of or investment in, any person without Party A's prior written consent;

 

2.2.5

Party B shall immediately notify Party A of any litigation, arbitration or administrative proceedings that have taken place or might take place in connection with the equity interest owned by Party B in Party C;

 

 

2.2.6

Party B shall procure that the shareholders' meeting or board of directors of Party C shall vote for its approval of the transfer of the Purchased Equity Interests as provided herein and take any and all other actions that Party A may require;

 

2.2.7

In order to maintain Party B's ownership of the equity interests in Party C, Party B shall execute all such documents, take all such actions and file all such complaints or defenses against all claims as may be necessary or appropriate;

 

2.2.8

Upon Party A's request, Party B shall appoint any person designated by them to be a director of Party C;

 

2.2.9

Upon Party A's request from time to time, Party B shall immediately and unconditionally transfer their equity interests in Party C to Party A's Designee pursuant to the Equity Purchase Option hereunder, and Party B hereby waives their right of first refusal (if any) in respect of an equity transfer by another existing shareholder of Party C; and

 

2.2.10

Party B shall strictly comply with the provisions of this Agreement and other contracts entered into by Party B, Party C and Party A jointly or severally, perform their obligations under this Agreement and such other contracts and refrain from any act/omission which might affect the validity and enforceability hereof and thereof. If Party B shall have any residual rights in respect of the equity interests under this Agreement or under the Share Pledge Agreement entered into by the Parties hereto or under the Power of Attorney granted in favor of Party A, Party B shall not exercise such rights except in accordance with Party A's written instructions.

 

3.

Representations and Warranties

 

Party B and Party C hereby jointly and severally represent and warrant to Party A as of the date hereof and as of each date of transfer of the Purchased Equity Interests that:

 

3.1

They have the authority to enter into and deliver this Agreement and any equity transfer contract to which they are a party in connection with the Purchased Equity Interests to be transferred hereunder (each, a "Transfer Contract"), and to perform their obligations hereunder and under any Transfer Contract. Party B and Party C agree to enter into a Transfer Contract with terms consistent with those set forth herein upon the exercise of the Equity Purchase Option by Party A. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute legal, valid and binding obligations of, and shall be enforceable against, them in accordance with their terms;

 

3.2

Neither the execution and delivery of this Agreement or any Transfer Contract nor the obligations hereunder or under any Transfer Contract shall: (i) result in any violation of any applicable law of the PRC; (ii) conflict with Party C's Articles of Association, rules and regulations or other organizational documents; (iii) result in any breach of any contract or instrument to which they are a party or by which they are bound, or constitute any default under any contract or instrument to which they are a party or by which they are bound; (iv) result in any breach of any condition for the grant and/or continuation in force of any license or permit issued to any of them: or (v) result in the suspension or revocation of, or the imposition of additional conditions on, any license or permit issued to any of them;

 

3.3

Party B has good and marketable title to the equity interests owned by it in Party C. Party B has not created any security interest on such equity interests other than pursuant to Party B's Share Pledge Agreement;

 

 

3.4

Party C has good and marketable title to all of its assets and has not created any security interest on the said assets;

 

3.5

Party C has no outstanding indebtedness other than (i) those incurred in the ordinary course of business; and (ii) those which have been disclosed to and consented to in writing by Party A;

 

3.6

If Party C is dissolved or liquidated as required by PRC law, Party C shall, to the extent permitted by PRC law and at the lowest price permitted by PRC law, sell all of its assets to Party A or any other eligible party designated by Party A. Party C shall, to the extent applicable under PRC law then in effect, waive any payment obligations of Party A or its designated eligible party arising therefrom; or any proceeds arising from such transaction shall, to the extent applicable under PRC law then in effect, be paid to Party A or its designated eligible party as part of the service fee under the Exclusive Business Cooperation Agreement;

 

3.7

Party C will comply with all PRC laws and regulations applicable to asset acquisitions; and

 

3.8

There are no pending or threatened litigation, arbitration or administrative proceedings in relation to the equity interests in Party C, the assets of Party C or Party C itself.

 

4.

Effective Date

 

This Agreement shall become effective as of the date of its execution by the Parties and shall be valid for a period of 10 years, renewable at the option of Party A. If Party A fails to confirm the renewal of this Agreement upon its expiration, this Agreement shall be automatically renewed until Party A delivers a confirmation letter determining the renewal period of this Agreement.

 

5.

Governing Law and Dispute Resolution

 

5.1

Governing Law

 

The execution, entry into force, interpretation, performance, modification and termination of this Agreement and the resolution of disputes hereunder shall be governed by the laws duly published and publicly available in the PRC. Matters not covered by the laws duly published and publicly available in the PRC shall be governed by international legal principles and practices.

 

5.2

Dispute Resolution

 

5.3

In the event of any dispute arising out of the interpretation and performance of the provisions hereof, the Parties shall first resolve such dispute through friendly negotiation. If the Parties fail to agree on the resolution of such dispute within 30 days after any Party has requested the other Parties to resolve such dispute by negotiation, then any Party may submit such dispute to the China International Economic and Trade Arbitration Commission for resolution by arbitration in accordance with its arbitration rules then in effect. The arbitration shall take place in Guangzhou and shall be conducted in the Chinese language. The arbitral award shall be final and binding upon the Parties.

 

6.

Taxes and Expenses

 

Each Party shall pay any and all transfer and registration taxes, expenses and fees incurred by or imposed on such Party in accordance with PRC law in connection with the preparation and execution of this Agreement and the Transfer Contracts and the consummation of the transactions contemplated hereunder and under the Transfer Contracts.

 

 

7.

Notice

 

7.1

All notices and other communications required or permitted to be given hereunder shall be delivered by hand or sent by postage prepaid registered mail, commercial courier service or facsimile to the following address of such Party. A further acknowledgment of each notice shall be sent by e-mail. The date on which such notice is deemed to have been validly served shall be determined as follows:

 

7.1.1

A notice shall be deemed to have been validly delivered on the date of dispatch or rejection if it is sent by personal delivery, courier service or registered mail, postage prepaid, at the address specified for receipt of the notice.

 

7.1.2

A notice, if sent by fax, shall be deemed to have been validly delivered on the date of successful transmission (which shall be evidenced by an automatically generated transmission confirmation message).

 

7.2

For the purposes of notification, the addresses of the Parties are as follows:

 

Party A:	Guangzhou (HX) Pony AI Technology Co., Ltd.
Address:	12/F, Building 1, Pearl Bay Development Building, Nansha District, Guangzhou
Attn:	MO Luyi
Party B:	LOU Tiancheng, TANG Fengheng, MO Luyi
Party C:	Guangzhou (ZX) Pony.AI Technology Co., Ltd.
Address:	12/F, Building 1, Pearl Bay Development Building, Nansha District, Guangzhou
Attn:	MO Luyi
Party D:	Hong Kong Pony AI Limited
Address:	Suite 603 6/F, Laws Commercial Plaza, 788 Cheung Sha Wan Road, Kowloon, Hong Kong

 

7.3

Any Party may change its address for receiving notices at any time by giving notice to the other Party in accordance with the provisions of this Article.

 

8.

Duty of Confidentiality

 

The Parties acknowledge that any oral or written information exchanged by them in connection with this Agreement is confidential. Each Party shall keep all such information confidential and may not disclose any such information to any third party without the written consent of the other Party, except (a) to the extent that such information is or becomes known to the public ( other than due to disclosure to the public by the receiving party); (b) to the extent that such disclosure is required by applicable law or the rules or regulations of any stock exchange; or (c) to the extent that such information is required to be disclosed by any Party to its legal counsel or financial advisor in connection with the transactions contemplated hereunder, where such legal counsel or financial advisor is also subject to obligations of confidentiality similar to those contained in this Article. Any disclosure of any confidential information by a person or body employed by any Party shall be deemed to be a disclosure of such confidential information by such Party, and such Party shall be legally liable for any breach of this Agreement. This Article shall survive termination of this Agreement for any reason whatsoever.

 

 

9.

Further Assurance

 

The Parties agree to execute promptly such documents and to take such further actions as are reasonably necessary or desirable to carry out the provisions and purposes of this Agreement.

 

10.

Miscellaneous

 

10.1

Amendment, Modification and Supplement

 

Any amendment, modification and supplement to this Agreement shall be made by written agreement executed by all of the Parties.

 

10.2

Entire Agreement

 

This Agreement shall constitute the entire agreement between the Parties hereto with respect to the subject matter hereof and shall supersede all prior negotiations, representations and contracts, both oral and written, with respect to the subject matter hereof, except for any written amendments, supplements or modifications made after the execution hereof.

 

10.3

Headings

 

The headings herein are for convenience of reading only and shall not be used to interpret, explain or otherwise affect the meaning of the provisions hereof.

 

10.4

Language

 

This Agreement is written in Chinese and is made in eleven (11) copies, one (1) copy for Party A, each person comprised in Party B, Party C and Party D, which shall be equally authentic.

 

10.5

Severability

 

If one or more provisions hereof shall be held invalid, illegal or unenforceable in any respect under any law or regulation, the validity, legality or enforceability of the remaining provisions hereof shall not be affected or impaired in any respect. The Parties shall negotiate in good faith and strive to replace such invalid, unlawful or unenforceable provision(s) with a provision(s) that is/are valid to the fullest extent permitted by law and desired by the Parties, where such valid provision(s) shall have an economic effect as similar as possible to that of such invalid, illegal or unenforceable provision(s).

 

10.6

Successors

 

This Agreement shall be binding upon and shall inure to the benefit of the respective successors of the Parties and the assigns permitted by such Parties.

 

10.7

Survival

 

10.7.1

Any obligations incurred or expiring as a result of this Agreement prior to the expiration or earlier termination hereof shall survive the expiration or earlier termination hereof.

 

10.7.2

The provisions of Articles 5, 7, 8 and this Article 10.9 shall survive the termination hereof.

 

10.8

Waiver

 

Any Party may waive the terms and conditions hereof, provided that such waiver is in writing and signed by the Parties. No waiver by any Party in respect of a breach by the other Parties in one case shall be deemed to be a waiver by such Party in respect of a similar breach in other cases.

 

[The remainder of this page is intentionally left blank]

 

 

IN WITNESS WHEREOF, the Parties have caused this Exclusive Option Agreement to be executed by their authorized representatives as of the date first above written.

 

Party A: Guangzhou (HX) Pony AI Technology Co., Ltd.

 

Company seal: /s/ Guangzhou (HX) Pony AI Technology Co., Ltd.

By:	/s/ MO Luyi
Name:	MO Luyi
Title:	Legal Representative

 

 

IN WITNESS WHEREOF, the Parties have caused this Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

Party B: LOU Tiancheng

 

By:

/s/ LOU Tiancheng

 

 

IN WITNESS WHEREOF, the Parties have caused this Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

Party B: TANG Fengheng

 

By:

/s/ TANG Fengheng

 

 

IN WITNESS WHEREOF, the Parties have caused this Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

Party B: MO Luyi

 

By:

/s/ MO Luyi

 

 

IN WITNESS WHEREOF, the Parties have caused this Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

Party C: Guangzhou (ZX) Pony.AI Technology Co., Ltd. (official seal)

By:	/s/ MO Luyi
Name:	MO Luyi
Title:	Legal Representative

 

 

IN WITNESS WHEREOF, the Parties have caused this Share Pledge Agreement to be executed by their authorized representatives as of the date first above written.

 

Party D: Hong Kong Pony AI Limited

By:	/s/ PENG Jun
Name:	PENG Jun
Title:	Authorized Representative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CERTAIN INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS [****], HAS BEEN EXCLUDED PURSUANT TO ITEM 601(B)(10)(IV) OF REGULATION S-K UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

 

Exhibit 10.14

 

 

Power of Attorney

 

Date: September 14, 2020

 

I, TANG Fengheng, a citizen of the People's Republic of China (hereinafter referred to as the "PRC"), ID no. [************], the holder of 49.90% of the entire registered capital (hereinafter referred to as "My Equity Interest") of Guangzhou (ZX) Pony.AI Technology Co., Ltd. (hereinafter referred to as the "Company"), in respect of My Equity Interest, hereby irrevocably authorize Guangzhou (HX) Pony AI Technology Co., Ltd. (hereinafter referred to as the "WFOE"), to exercise the following rights during the term of this Power of Attorney:

 

I hereby authorize the WFOE as my sole agent and attorney-in-fact to act on my behalf with respect to all matters relating to My Equity Interest, including but not limited to: 1) proposing, convening, and participating in the shareholders' meetings of the Company: 2) exercising all shareholder rights and shareholder voting rights to which I am entitled in accordance with the laws of the PRC and the Articles of Association of the Company, including but not limited to selling or transferring or pledging or disposing of part or all of My Equity Interest; and 3) designating and appointing on my behalf the legal representative (chairman), directors, supervisors, chief executive officer (or manager) and other senior executives of the Company.

 

Without limiting the generality of the authority granted under this Power of Attorney, the WFOE shall have the power and authority hereunder to execute on my behalf the assignment agreement agreed in the Exclusive Purchase Option Agreement (where I am required to be a party thereto), and to perform the terms of the Share Pledge Agreement and the Exclusive Purchase Option Agreement to which I am a party, and which are executed on the same date as this Power of Attorney.

 

All the acts performed by the WFOE in relation to MY Equity Interest shall be deemed to be my own acts and all documents thus executed shall be deemed to be executed by me. The WFOE may act on its own will without seeking my prior consent in doing so, and I hereby acknowledge and approve such acts done and/or documents executed by the WFOE.

 

The WFOE shall have the right, at its sole discretion, to delegate or assign its rights relating to the foregoing matters to any other person or entity without prior notice to or consent from me.

 

Provided that I am a shareholder of the Company, this Power of Attorney shall be irrevocable and continue in force from the date of its execution, unless the WFOE gives written instructions to the contrary. Upon written notice to me from the WFOE to terminate this Power of Attorney in whole or in part, I shall immediately withdraw the mandate and authority given to the WFOE herein and immediately execute a power of attorney in the same form as this Power of Attorney to give the same mandate and authority to any other person nominated by the WFOE as set forth herein.

 

During the term of this Power of Attorney, I hereby waive all the rights already delegated to the WFOE in this Power of Attorney in connection with My Equity Interest and may not exercise such rights on my own.

 

[The remainder of this page is intentionally left blank]

 

	Name:	TANG Fengheng
	By:	/s/ TANG Fengheng

 

 

 

 

 

 

 

 

 

 

 

 

CERTAIN INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS [****], HAS BEEN EXCLUDED PURSUANT TO ITEM 601(B)(10)(IV) OF REGULATION S-K UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

 

Exhibit 10.15

 

 

Supplementary Agreement to Control Agreements

 

This Supplementary Agreement to Control Agreements (this "Agreement") is entered into as of January 30, 2023, in Beijing, by and among the following parties:

 

Party A: Guangzhou (HX) Pony AI Technology Co., Ltd.

 

Address: Room 1301, 1 Mingzhu 1st Street, Hengli Town, Nansha District, Guangzhou (office only)

 

Legal Representative: MO Luyi

 

Party B:

 

(1)

TANG Fengheng, ID no.: [************]

 

(2)

LOU Tiancheng, ID no.: [************]

 

(3)

MO Luyi, ID no.: [************]

 

Party C: Guangzhou (ZX) Pony.AI Technology Co., Ltd.

 

Room 1201, 1 Mingzhu 1st Street, Hengli Town, Nansha District, Guangzhou (office only)

 

Legal Representative: MO Luyi

 

Party D: Hong Kong Pony AI Limited

 

Address: Suite 603 6/F, Laws Commercial Plaza, 788 Cheung Sha Wan Road, Kowloon, Hong Kong

 

In this Agreement, Party A, Party B, Party C and Party D are hereinafter referred to individually as a "Party" and collectively as the "Parties".

 

WHEREAS:

 

1.

Party A, Party C and Party D entered into the Exclusive Business Cooperation Agreement dated June 1, 2020 (hereinafter referred to as the "Exclusive Business Cooperation Agreement");

 

2.

The Parties entered into the Exclusive Option Agreement dated September 14, 2020 (hereinafter referred to as the "Exclusive Option Agreement");

 

3.

The Parties entered into the Share Pledge Agreement dated September 14, 2020 (hereinafter referred to as the "Share Pledge Agreement");

 

4.

The Parties intend to amend the Exclusive Business Cooperation Agreement, the Exclusive Option Agreement, and the Share Pledge Agreement.

 

 

NOW, THEREFORE, the Parties agree by consensus as follows:

 

1.

The Parties agree and acknowledge that the signatory "Hong Kong Pony AI Limited" as set out in the Exclusive Business Cooperation Agreement, the Exclusive Option Agreement and the Share Pledge Agreement is in fact Party D, and that Party D executed the Exclusive Business Cooperation Agreement on June 1, 2020 and the Exclusive Option Agreement and the Share Pledge Agreement on September 14, 2020.

 

2.

The Parties agree and acknowledge that Article 2.1 of the Exclusive Business Cooperation Agreement shall be changed in its entirety as follows: "The Parties agree that the Service Fee payable by Party B to Party A in respect of the Services provided by Party A shall be 100% of the total consolidated profits of Party B in any fiscal year, offsetting the accumulated losses (if any) of Party B and its subsidiaries (if any) in the preceding fiscal years, and after deduction of working capital, expenses, taxes and other statutory contributions required in any fiscal year, as well as reasonable operating profits determined in accordance with applicable PRC tax principles and tax practices (hereinafter referred to as the "Service Fee"). During the term hereof, Party A shall have the right to adjust such Service Fee at its sole discretion without Party B's consent. The Parties agree that the Service Fee hereunder shall be determined and paid in the manner set out in the separate written agreement among the Parties. At the time of payment, Party A shall invoice Party B for the corresponding technology service fee within seven (7) business days upon receipt of Party B's management statements and operating data and other documents that enable Party A to account for the amount of the Service Fee. Party B shall pay the amount stated in the invoice within seven (7) business days upon receipt of such invoice. All payments shall be made by remittance or other means acceptable to the Parties into the bank account designated by Party A. The Parties agree that Party A may change such payment instructions from time to time by serving a notice on Party B".

 

3.

The Parties agree and acknowledge that Article 1.4.3 of the Exclusive Option Agreement shall be changed in its entirety as follows: "The Parties shall execute all other necessary contracts, agreements or documents (including, but not limited to, amendments to the Articles of Association), obtain all necessary governmental licenses and permits (including, but not limited to, the Company's business license), and take all necessary actions to transfer, free and clear of any security interest, the effective ownership of the Purchased Equity to Party A and/or its Designee and cause Party A and/or its Designee to become the registered owners of the Purchased Equity. For the purposes of this Paragraph and this Agreement, 'Security Interests' include a guarantee, hypothecation, third party right or interest, any stock option, right of acquisition, right of first refusal, right of set-off, retention of title or other security arrangements, etc.; however, for the sake of clarity, this does not include any security interest arising under this Agreement and Party B's Share Pledge Agreement. Party B's Share Pledge Agreement under this Paragraph and this Agreement refers to the Share Pledge Agreement ( as amended from time to time, hereinafter referred to as the "Share Pledge Agreement") entered into by the Parties as of the date hereof, pursuant to which Party B pledges all of its equity interests in Party C to Party A to secure the performance of Party C's obligations under the Exclusive Business Cooperation Agreement dated June 1, 2020 (hereinafter referred to as the "Exclusive Business Cooperation Agreement") between Party C and Party A and Party D".

 

4.

The Parties agree and acknowledge that the Share Pledge Agreement is amended as follows:

 

4.1

Article 6.1.1 of the Share Pledge Agreement shall be changed in its entirety as follows: "Except for the performance of the Exclusive Option Agreement entered into by the Parties as of September 14, 2020, the Pledgor may not, without the prior written consent of the Pledgee, make or permit others to make any transfer of all or any part of the Equity Interests, create or permit to exist any security interest or other encumbrance over the Equity Interests that might affect the rights and interests of the Pledgee in the Equity Interests ".

 

 

4.2

Add a new Article 17.3 to Article 17 "Effectiveness" of the Share Pledge Agreement: "This Agreement shall constitute the entire agreement among the Parties hereto with respect to the subject matter hereof, except for any amendments, supplements or modifications made in writing following the execution hereof, and shall supersede all prior negotiations, representations and contracts, both oral and written, with respect to the subject matter hereof; for the avoidance of doubt, for the purposes hereof, the version of the Share Pledge Agreement submitted to the registration authority for the purpose of the share pledge shall remain in effect, but in the event of any inconsistency between such version and this Agreement, or in the event of any uncovered matter, this Agreement prevail".

 

5.

For the avoidance of doubt, if the changed terms involve definitions or abbreviations, such definitions or abbreviations shall be used under the corresponding agreement or contract, and the definitions or abbreviations referred to herein shall not apply to such changed terms.

 

6.

This Agreement is an amendment to the Exclusive Business Cooperation Agreement, the Exclusive Option Agreement and the Share Pledge Agreement, and anything not agreed herein shall be subject to the Exclusive Business Cooperation Agreement, the Exclusive Option Agreement and the Share Pledge Agreement, as applicable.

 

7.

This Agreement is written in Chinese and is made in six (6) copies, one for each Party, which shall be equally authentic.

 

[The remainder of this page is intentionally left blank]

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to the Control Agreements to be executed by their authorized representatives as of the date first above written.

 

Guangzhou (HX) Pony AI Technology Co., Ltd.

By:	/s/ MO Luyi
Title:	Legal Representative

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to the Control Agreements to be executed by their authorized representatives as of the date first above written.

 

Guangzhou (ZX) Pony.AI Technology Co., Ltd.

By:	/s/ MO Luyi
Title:	Legal Representative

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to the Control Agreements to be executed by their authorized representatives as of the date first above written.

 

TANG Fengheng

 

By:

/s/ TANG Fengheng

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to the Control Agreements to be executed by their authorized representatives as of the date first above written.

 

LOU Tiancheng

 

By:

/s/ LOU Tiancheng

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to the Control Agreements to be executed by their authorized representatives as of the date first above written.

 

MO Luyi

 

By:

/s/ MO Luyi

 

 

IN WITNESS WHEREOF, the Parties have executed or caused this Supplementary Agreement to the Control Agreements to be executed by their authorized representatives as of the date first above written.

 

Hong Kong Pony AI Limited

By:	/s/ PENG Jun
Title:	Legal Representative

 

 

 

 

 

 

 

 

 

 

 

 

CERTAIN INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS [****], HAS BEEN EXCLUDED PURSUANT TO ITEM 601(B)(10)(IV) OF REGULATION S-K UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

 

Exhibit 10.16

 

Sui (Nantou) Hezi [2018] No.21

Contract No.: GZZX-18-0022

 

Guangzhou Office Lease Contract

 

Lessor (hereinafter referred to as Party A): Guangzhou Nantou Real Estate Development Co., Ltd.

Domicile: No. 9, Ground Floor, No. 412 and 414 Huangmei Road, No. 13 and 15 Qitian Street, Qilin New Village, Huangge Town, Nansha District, Guangzhou

Legal Representative: YU Lequn

 

Lessee (hereinafter referred to as Party B): Guangzhou (ZX) Pony. AI Technology Co., Ltd.

Domicile: No. 106 East Fengze Road (Self-numbered Building 1) X1301-F3590 (Cluster Registration) (JM), Nansha District, Guangzhou

Legal Representative: HU Wen

 

In accordance with the relevant national, provincial and municipal laws and regulations as well as various requirements for real estate administration, Party A and Party B, in line with the principles of equality and voluntariness, hereby enter into this Contract by consensus, and jointly undertake to abide by it and be subject to the supervision and administration of the local real estate administration authorities.

 

Article 1 Party A agrees to lease to Party B the entire 12/F of Building 1 and the entire Building 3 (excluding underground space) (hereinafter referred to as the "Leased Property") located at Pearl Development Building, Lingshan Island’s Tip, Hengli Town, Nansha District, for the office and exhibition purposes. The leased gross floor area is 2,616.25 square meters (wherein the 12th floor of Building 1 is used for office purpose, with a gross floor area of approximately 1,777.37 square meters; the entire Building 3 is used to establish an autonomous driving experience center, with 521.99 square meters on the first floor, 242.50 square meters on the second floor and 74.39 square meters on the third floor, adding up to a gross floor area of 838.88 square meters in Building 3. The final gross floor area is subject to that registered on the real estate title certificate). The current status of the Leased Property is: 🗹 No leakage of wall plumbing 🗹 Complete windows and doors 🗹 Other situation: the 12th floor of Building 1 is delivered in unfurnished condition, and the whole Building 3 is delivered with existing preliminary furnishings (see Annex 5 for details). The specific location and area of the site leased by Party B are shown on the drawing attached to this Contract, and the Parties inspected and approved the same on site when entering into this Contract.

 

Article 2 Lease Term, Purpose, Performance Bond and Utilities Bond

 

1.

The Parties agree that the lease term will be 10 years from August 1, 2018 to July 31, 2028.

 

2.

Lease purpose: Commercial office building.

 

3.

Within 5 working days after the signing of this Contract, Party B shall pay Party A two months' rent, i.e. RMB 847,505.4 (in words: RMB Eight Hundred and Forty-seven Thousand Five Hundred and Five Point Four only), as the performance deposit for Party B's performance of this Contract, and deposit the performance bond into the bank account designated by Party A under this Contract, and provide Party A with the bank's receipt of payment, while Party A shall provide Party B with a receipt for the same amount.

 

 

4.

The utilities bond shall be calculated by multiplying the gross floor area of the Leased Property of Party B by RMB 15/m2 and shall be paid by Party B into the bank account designated by Party A hereunder within 5 working days after the signing of this Contract in a lump sum of RMB 39,243.75 (in words: RMB Thirty-nine Thousand Two Hundred and Forty-three Point Seven Five only). Party B shall provide Party A with the bank's receipt of payment while Party A shall provide Party B with a receipt for the same amount.

 

Article 3 Rent, Property Management Fee and Other Expenses

 

1.

The rental rates (calculated on the basis of the itemized floor area under this Contract) are as follows:

 

Leased Property	Monthly Rental Amount for the First Year (Currency: RMB, Unit: Yuan)		Rent Breakdown and Subsequent Rent Increases
	In numbers	In words
12th floor of Building 1	RMB 213,284.4	RMB Two Hundred and Thirteen Thousand Two Hundred and Eighty-Four Point Four only	(1) During the period from August 1, 2018 to July 31, 2019 (the first year of such Leased Property), rent will be charged at the rate of RMB 120/month/m2, wherein the period from August 1, 2018 to October 31, 2018 will serve as the renovation period with a rent of RMB 0/month, and from November 2018 onwards, rent will be charged at the aforementioned rate; (2) For every completed twelve months from August 1, 2018, the monthly rental rate will be increased by 5% from the previous year's rate effective from the following month (e.g. the rent will be adjusted to RMB 126/month/m2 from August 2019, and so on).
1st floor of Building 3	RMB 156,597	RMB One Hundred and Fifty-six Thousand Five Hundred and Ninety Seven only	(1) The rent will be charged at the rate of RMB 300/month/m2; (2) For every completed twelve months from August 1, 2018, the monthly rental rate will be increased by 5% from the previous year's rate effective from the following month (e.g. the rent will be adjusted to RMB 315/month/m2 from August 2019, and so on).
2nd floor of Building 3	RMB 41,225	RMB Forty-one Thousand Two Hundred and Twenty-five only	(1) The rent will be charged at the rate of RMB 170/month/m2; (2) For every completed twelve months from August 1, 2018, the monthly rental rate will be increased by 5% from the previous year's rate effective from the following month (e.g. the rent will be adjusted to RMB 178.5/month/m2 from August 2019, and so on).
3rd floor of Building 3	RMB 12,646.3	RMB Twelve Thousand Six Hundred and Forty-six Point Three only

 

 

Note: The lease term of 10 years remains unchanged, and the starting point of rent calculation is based on the actual date of delivery, while other calculation points are postponed accordingly.

 

2.

Party A and Party B negotiate and determine the property management fee at RMB 15/m2/month (calculated on the gross floor area leased under this Contract), and Party B shall settle the fee with the property management company by itself. In case of adjustment of the rate of property management fee, Party B shall negotiate with the property management company.

 

3.

The rent will be settled and paid on a monthly basis. Party B shall deposit the monthly rent into the bank account designated by Party A under this Contract prior to the 10th day of each month (in case of a holiday, postponed to the first working day after the holiday).

 

4.

Prior to August 1, 2018, Party B shall pay the first month's rent of Building 3 (covering the period from August 1, 2018 to August 31, 2018) in the amount of RMB 210,468.3 (in words: Two Hundred and Ten Thousand Four Hundred and Sixty-eight Point Three only).

 

The first three months (from August 1, 2018 to October 31, 2018) of the 12th floor of Building 1 is the decoration period with a rental rate of RMB 0/month; Party B shall, prior to November 1, 2018, pay the rent of the 12th floor of Building 1 for that month (from November 1, 2018 to November 30, 2018) in the amount of RMB 213,284.4 (in words: RMB Two Hundred and Thirteen Thousand Two Hundred and Eighty-four Point Four only).

 

5.

Party B shall provide Party A with the bank's receipt for payment following the bank transfer, while Party A shall issue a legal and valid VAT invoice to Party B. Otherwise, Party B shall have the right to refuse to pay the next month's rent and shall not be deemed to be in breach. If Party B fails to pay the rent and other expenses within the period agreed in this Contract, it shall be held liable for breach as agreed in this Contract.

 

6.

During the lease term, the property management fee, water, electricity, gas, network, telephone, TV subscription and indoor facilities maintenance fees etc. related to the Leased Property shall be solely borne by Party B. The electricity loss and common water costs shall be shared in proportion to the electricity consumed by the tenants. Water, and electricity charges incurred by and the common water and electricity charges apportioned to Party B shall be collected and paid by the property management company on behalf of Party B.

 

Article 4 The bank account designated by Party A under this Contract:

 

Company name: [************]

Account bank: [************]

Account no.: [************]

 

Article 5 Delivery, Return and Vacation of the Leased Property

 

1.

Party A shall deliver the Leased Property to Party B in accordance with the agreed conditions prior to August 1, 2018. The delivery shall be deemed to be completed after the Parties through property inspection sign the House Handover and Equipment List (Annex 5) and Party A hands over the keys to the Leased Property. The property management fee, utilities charges, gas charges and other related expenses incurred prior to the delivery of the property shall be borne by the actual occupant.

 

 

2.

Upon expiration of the lease term or termination of this Contract, Party B shall complete the relocation within fifteen days from the date of termination of the lease (the daily rent shall be accrued and paid in accordance with the current rental rate during the relocation period). Party A has the right to require Party B to return the Leased Property as it was delivered (among which the secondary fire pipelines, smoke detectors, sprinklers and fixtures added by Party B during the lease term shall not be removed), and Party B shall return the Leased Property and its appurtenant items, equipment and facilities in accordance with the original state and the House Handover and Equipment List.

 

3.

Party B shall remove the items belonging to it before vacating the Leased Property. After Party B vacates the Leased Property, Party B shall be deemed to have relinquished the ownership of the items left by Party B in the Leased Property and Party A shall have the right to dispose of such items at its own discretion. If Party A incurs expenses for clearing and disposing of such items, Party B shall be obliged to reimburse Party A for such expenses.

 

4.

In case of breach by Party B, in addition to Party B's liability for breach of contract as agreed in this Contract, Party A shall have the right to place a lien on Party B's property as required by the circumstances. If Party B fails to pay the amount due within five days after Party A notifies Party B in writing of the lien on its property, Party B shall be deemed to have consented to Party A's disposal of the liened property by sale or other legal means to satisfy the outstanding amount. The expenses incurred by Party A for disposal of the liened property by sale or other legal means shall be borne by Party B.

 

5.

Upon the expiration of the lease term or the termination of this Contract, if Party B commits no breach of contract and pays off the outstanding rent, property management fee, utilities and other expenses incurred by Party B during the lease term, Party A will refund the performance bond and utilities bond to Party B interest-free upon confirmation by Party A and the property management company.

 

6.

If Party B fails to return the Leased Property upon the expiration of the lease term or the termination of this Contract, Party A shall have the right to recover from Party B the usage fee of the property occupied after the expiration until the actual return of the Leased Property at the rate twice the standard rent.

 

Article 6 Property Management Provisions

 

Party B agrees that the property management services will be provided by the property management company entrusted by Party A. The property management company mainly manages the security, sanitation, landscaping, order, fire-fighting, cleaning and supply of water and electricity in the common areas outside the Leased Property, while Party B shall be responsible for the aforesaid matters inside the Leased Property. Party B shall submit to the management of the property management company, comply with the management code and various management regulations specified by the property management company, and pay the fees payable such as utilities, parking fees, and sewage charges and bear the corresponding share of the costs in accordance with the relevant regulations.

 

Article 7 Decoration and Maintenance Provisions

 

1.

Party B may not demolish and alter the structure and facilities of the property, increase the load on the external walls, overload the property, stack flammable, explosive and dangerous items, or renovate the property without permission, subject to the relevant municipal regulations of Guangzhou.

 

2.

The Leased Property is delivered for use on an as is basis (at the time of entering into this Contract, Party B has fully understood the current status of the Leased Property and confirmed that it meets Party B's actual needs). With Party A's written consent, Party B may carry out interior decoration of the Leased Property at its own expense. If this Contract is terminated through no fault of Party A, Party A shall not be required to provide any compensation or indemnity to Party B for the expenses incurred by Party B in connection with the interior decoration of the Leased Property. When decorating the Leased Property, Party B must comply with the decoration rules and regulations specified by Party A and the property management company, and pay the decoration deposit to the property management company. In case of connection, alteration or relocation of central systems such as water, electricity, gas, fire-fighting, communication, security, and sewage, as well as addition and alteration of other fixed facilities, Party B must obtain the written consent of Party A and the property management company, and be subject to the supervision by Party A and the property management company.

 

 

3.

Upon completion of all of its decoration works, Party B shall report to the property management company and relevant government departments for inspection to determine that the decoration works meet the safety specifications, and provide valid documents to Party A for future reference.

 

4.

Party B shall be responsible for the repair and replacement for the wear and tear of the equipment (such as air conditioners, tables and chairs, faucets, doors and windows) and consumable items such as light bulbs added by Party B to the Leased Property. Party B shall make reasonable use of the Leased Property and its ancillary facilities. If damage is caused due to improper use, Party B shall immediately make repairs or compensate Party A for the loss.

 

5.

If the basic equipment and facilities provided by Party A after Party B leases the property cannot meet its operational needs, Party B shall fund the construction of the required water and electricity expansion, sewerage, environmental protection facilities, environmental renovation and other projects, as well as the installation and configuration of production equipment, water and electricity supply, power distribution, fire protection and environmental protection facilities that Party B adds for its own operational needs. If the renovation operations are subject to inspection and acceptance by environmental protection, health, fire protection and other departments, Party B shall handle these in accordance with the procedures and requirements provided by relevant laws, regulations and policies, and obtain permission or pass the inspection and acceptance before putting such facilities into use, otherwise the resulting administrative penalties shall be solely borne by Party B. If losses are thus caused to Party A, Party B shall compensate for all the losses incurred by Party A.

 

Article 8 Rights and Obligations of Party A

 

1.

Party A shall have the right to collect from Party B the rent and other expenses that shall be borne by Party B as agreed in this Contract.

 

2.

Party A shall have the right to supervise and give reasonable advice on Party B's use of the Leased Property. Party A shall have the right to enforce the relevant provisions of this Contract in case Party B violates the provisions of this Contract. However, Party A may not disturb or hinder Party B's normal and reasonable use of the Leased Property.

 

3.

During the lease term, Party A shall notify Party B in writing not less than 2 months in advance if Party A transfers the Leased Property, or 30 calendar days in advance if Party B hypothecates the Leased Property.

 

4.

If Party B is required to go through relevant approval procedures due to business or other requirements of laws and regulations, Party A shall render necessary assistance.

 

5.

During the lease term, Party A may directly commission the property management service provider to assist in the management of the Leased Property and coordinate the resolution of disputes.

 

Article 9 Rights and Obligations of Party B

 

1.

Party B shall pay the rent and other related expenses in full and on time as agreed in this Contract.

 

 

2.

During the lease term, without Party A's written consent, Party B may not sublease part or all of the Leased Property to a third party, lend the same to a third party for use with or without compensation, or otherwise make the same available for use by a third party. If Party A approves in writing Party B to sublease or lend the Leased Property for use by a third party, Party B shall ensure that such third party fully complies with Party B's obligations under this Contract. Party B shall be jointly and severally liable for any loss incurred by Party A as a result of the acts of such third party.

 

3.

In accordance with relevant laws and regulations, Party B shall be responsible for handling, at its own expense, all matters required by law to be completed before opening, such as business license, secondary fire protection, and environmental protection, while Party A shall provide necessary assistance. Party B shall not start operation until it has successfully applied for and obtained such licenses and certificates on its own.

 

4.

Party B shall be solely responsible for the internal sanitation, security, utilities, telephone, air conditioning, landscaping costs of the Leased Property and all other costs arising from the use of the property for commercial activities (including but not limited to the costs of broadband, cable TV and other equipment installed by Party B upon its own application).

 

5.

During the lease term, Party B may not store any flammable, explosive, toxic or radioactive items or prohibited items in the Leased Property, nor may it engage in any illegal activities therein.

 

6.

Party B has no right to alter the purpose for which the Leased Property has been leased without permission.

 

7.

Under the same conditions as those proposed by any other interested customer, Party B shall have the priority to renew the lease, with the rent and other lease conditions being subject to the contract re-signed by the Parties.

 

8.

Party B shall provide the aforesaid fire-fighting equipment at its own expense at the rate of two 3 kg fire extinguishers and two gas masks per 20 square meters in accordance with the regulations of the government fire department (subject to the latest equipment requirements of the government fire department).

 

Article 10 Breaches

 

Either Party violating this Contract shall be deemed to be in breach, and the Breaching Party shall be held liable for such breach and compensate for the economic loss thus sustained by the Non-breaching Party. At the same time, the Breaching Party shall bear the legal costs, preservation fees, attorney's fees, travel expenses, notary fees, investigation fees, announcement fees, evaluation and appraisal fees, and enforcement fees incurred by the Non-breaching Party to pursue the liability of the Breaching Party. The circumstances falling under the following provisions shall be dealt with accordingly:

 

1.

If Party A refuses to perform this Contract without any agreed or legal reason during the lease term, Party B shall notify Party A in writing and requests it to take appropriate measures within a reasonable period of time. If Party A fails to take such measures within a reasonable period of time upon Party B's reminder, Party B shall have the right to terminate this Contract and require Party A to return the performance bond in double.

 

2.

During the lease term, any of the following acts of Party B will be deemed as a serious breach of contract, which shall entitle Party A to terminate this Contract without returning the performance bond to Party B, demand compensation for losses, and take measures (including but not limited to) cutting off water and electricity supply:

 

(1)

Party B owes Party A the rent or property management fee for 30 consecutive calendar days, or defaults on the rent or property management fee more than twice in a year;

 

 

(2)

Party B defaults on the payment of water and electricity charges to the extent of RMB 3,000 or more;

 

(3)

Party B breaches Paragraph 1 of Article 7 or Paragraphs 2, 3, 5 and 6 of Article 9 of this Contract;

 

(4)

In the course of production and operation, Party B negatively affects the normal operations of other owners or tenants, giving rise to 3 incidents such as complaints and petitions cumulatively;

 

(5)

Party B damages public and private interests by conducting illegal activities;

 

(6)

Party B violates the relevant laws and regulations on production safety management, and refuses to make rectification or fails to complete the rectification satisfactorily;

 

(7)

Party B damages the Leased Property intentionally;

 

(8)

Other circumstances where this Contract may be terminated and the property repossessed as provided by laws and regulations.

 

In the case of Subparagraphs 1 and 2 above, for each day of delay, the overdue liquidated damages shall be accrued on a daily basis at the rate of three ten-thousandths of the amount in arrears from the overdue date, and the rent shall be accrued in accordance with the provisions of Article 2 of this Contract and the actual lease term.

 

3.

If a Party unilaterally proposes to cancel this Contract during the lease term due to no legal or agreed reasons, the Non-breaching Party shall be entitled to claim damages and to receive liquidated damages at the rate of 20% of the total rent for the duration of the lease.

 

Article 11 Negotiated Modification or Rescission

 

Either Party may promptly propose to modify or rescind this Contract without incurring liability to the other Party for breach of contract if any of the following circumstances arises:

 

1.

The performance of the lease contract cannot be continued due to changes in laws, regulations, local policies or due to force majeure;

 

2.

The property is required to be expropriated or requisitioned for urban construction planning or urban renewal and renovation; and

 

3.

The relevant matters have been contractually stipulated or agreed upon by the Parties but are not fulfilled.

 

Article 12 Miscellaneous

 

1.

Party A has the right to appoint a property management company for property management, and any change of the property management company shall not affect the performance of this Contract.

 

2.

Party B acknowledges that prior to entering into this Contract, it has gained detailed knowledge of the current status of the Leased Property and has no objection to this Contract; by executing this Contract, Party B is deemed to have agreed to assume responsibility and perform its obligations in accordance with the provisions of this Contract.

 

3.

In case of any conflict between the relevant documents involved in Party B's application for business qualification certificates and this Contract, the provisions of this Contract shall prevail.

 

4.

This Contract shall be governed by the relevant laws of the People's Republic of China. In the course of performance of this Contract, if any dispute arises, such dispute shall be resolved through negotiation, failing which, either Party may file a lawsuit with the people's court in the place where the Leased Property is located.

 

5.

The Parties acknowledge that the addresses for service of documents agreed upon by them in this Contract are true and valid, and such addresses are applicable to the non-litigation stage, arbitration stage and the first instance, second instance, retrial and enforcement procedures of the litigation stage. Once a dispute enters into the above-mentioned proceedings, the people's court of competent jurisdiction may serve all kinds of legal instruments either directly or by post at the agreed addresses for service of instruments, and the Parties shall bear the legal consequences of valid service in accordance with this Contract. If a Party needs to change its address for service of instruments, it shall notify the other Party in writing within 7 working days after the change. If it fails to notify the other Party in the agreed manner, the original address for service of instruments shall remain the valid address for service.

 

 

(1)

Any instrument sent by express mail or registered mail by Party A (or Party B) at Party B's (or Party A's) address for service as agreed in this Contract shall be deemed to be served five days after it is sent.

 

(2)

The competent people's court will effect service at the addresses agreed upon by the Parties. If a legal instrument is not actually received by a Party because the address for service provided or confirmed by the Party is inaccurate, or the Party fails to promptly inform the other Party or the people's court in accordance with the procedures after the address for service has changed, or the Party or its designated recipient refuses to sign for it, the service shall also be deemed completed. In the case of service by mail, the date of return of the instrument shall be deemed to be the date of service; in the case of direct service, the date of service shall be deemed to be the date when the server certifies the relevant facts on the proof of service.

 

6.

From the date of entering into this Contract, Party B shall provide the relevant documents required for the filing and registration of the housing lease, while Party A shall be responsible for completing the filing and registration within 7 working days thereafter.

 

7.

This Contract is made in octuplicate, and shall come into effect after it is signed and affixed with the official seals by the legal representatives or authorized representatives of the Parties. Party A shall hold four copies, Party B three copies and one copy shall be submitted for filing purpose.

 

8.

Reminder and acknowledgement: Party A has drawn Party B's attention to a comprehensive and accurate understanding of the terms and conditions of this Contract and has provided corresponding explanations of the terms and conditions at Party B's request, and the Parties share the same understanding of the meaning of this Contract. Party B is aware and acknowledges that Party A has given special reminders and full explanations concerning the terms that relieve Party A of its liabilities and limit Party B's rights when entering into this Contract.

 

9.

Special Provisions:

 

(1)

If the Leased Property is equipped with air conditioners and basic decoration, Party B shall be responsible for the maintenance of the same during the lease term and bear the costs arising therefrom. If any air conditioner in the Leased Property is found to be damaged upon the expiration or termination of this Contract, Party B shall compensate Party A for the loss according to the agreement between the Parties or according to the assessment report issued by a qualified assessment agency.

 

(2)

This Contract is effective simultaneously with the Site Borrowing Contract entered into between the Parties on April 28, 2018, and if there is any conflict between them, the provisions of this Contract shall prevail. The property management fee, utilities charges and other fees paid by Party B pursuant to the Site Borrowing Contract shall be automatically converted into the corresponding amounts under this Contract, and Party B shall still be required to fulfill the payment obligations in case of any shortfall.

 

 

(The remainder of this page is intentionally left blank)

 

Annexes: 1. Floor Plan of the Leased Property; 2. Specific Floor Area of the Leased Property; 3. Copy of the Business License of the Lessee; 4. Production Safety Management Agreement; 5. House Handover and Equipment List

 

This page is intentionally left blank to serve as the signature page to "Guangzhou Office Lease Contract" entered into between [Guangzhou Nantou Real Estate Development Co., Ltd.] and [Guangzhou (ZX) Pony. AI Technology Co., Ltd.].

 

Party A: Guangzhou Nantou Real Estate Development Co., Ltd.

Legal Representative or Authorized Representative (signature): /s/ YU Lequn

Correspondence address: 6/F, Development Exhibition Center, Pearl Bay, Lingshan Island's Tip, Hengli Town, Nansha District, Guangzhou

Contact number:

Date: May 2, 2018

 

Party B: Guangzhou (ZX) Pony. AI Technology Co., Ltd.

Legal Representative or Authorized Representative (signature): /s/ HU Wen

Account bank: Business Department, Nansha Branch, Guangdong Pilot Free Trade Zone Branch, China Merchants Bank

Account name: [************]

Bank account no.: [************]

Taxpayer Identification Number: [************]

Contact number: [************]

Address: 18/F, Unit 1, Xiangjiang International Finance Center, Nansha District, Guangzhou

Date: May 2, 2018

 

 

 

 

CERTAIN INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS [****], HAS BEEN EXCLUDED PURSUANT TO ITEM 601(B)(10)(IV) OF REGULATION S-K UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

 

Exhibit 10.17

 

Guangzhou Office Lease Contract

 

Lessor (hereinafter referred to as Party A): Guangzhou Nantou Real Estate Development Co., Ltd.

Domicile: No. 9, Ground Floor, No. 412 and 414 Huangmei Road, No. 13 and 15 Qitian Street, Qilin New Village, Huangge Town, Nansha District, Guangzhou

Legal Representative: SONG Rong

 

Lessee (hereinafter referred to as Party B): Guangzhou (ZX) Pony. AI Technology Co., Ltd.

Domicile: No. 106 East Fengze Road (Self-numbered Building 1) X1301-F4229 (Cluster Registration) (JM), Nansha District, Guangzhou

Legal Representative: ZHANG Ning

 

In accordance with the relevant national, provincial and municipal laws and regulations as well as various requirements for real estate administration, Party A and Party B, in line with the principles of equality and voluntariness, hereby enter into this Contract by consensus, and jointly undertake to abide by it and be subject to the supervision and administration of the local real estate administration authorities.

 

Article 1 Party A agrees to lease to Party B the Units 1301, 1302, 1303, 1304, 1305, 1306, 1307, 1308, 1309, 1310 and 1311 (hereinafter referred to as the "Leased Property") located at Pearl Development Building, 1 Mingzhu 1st Street, Hengli Town, Nansha District, Guangzhou, for the office purposes. The leased gross floor area is 1,794.08 square meters. The current status of the Leased Property is: 🗹 No leakage of wall plumbing 🗹 Complete windows and doors 🗹 Other situation: to be delivered in unfurnished condition. The specific location and area of the site leased by Party B are shown on the drawing attached to this Contract, and the Parties inspected and approved the same on site when entering into this Contract.

 

Article 2 Lease Term, Purpose, Performance Bond and Utilities Bond

 

1.

The Parties agree that the lease term will be 5 years from October 1, 2019 to September 30, 2024.

 

2.

Lease purpose: Commercial office building.

 

3.

Within 5 working days after the signing of this Contract, Party B shall pay Party A two months' rent, i.e. RMB 430,579.2 (in words: RMB Four Hundred and Thirty Thousand Five Hundred and Seventy-nine Point Two only), as the performance deposit for Party B's performance of this Contract, and deposit the performance bond into the bank account designated by Party A under this Contract, and provide Party A with the bank's receipt of payment, while Party A shall provide Party B with a receipt for the same amount.

 

4.

The utilities bond shall be calculated by multiplying the gross floor area of the Leased Property of Party B by RMB 15/m2 and shall be paid by Party B into the bank account designated by Party A hereunder within 5 working days after the signing of this Contract in a lump sum of RMB 26,911.2 (in words: RMB Twenty-six Thousand Nine Hundred and Eleven Point Two only). Party B shall provide Party A with the bank's receipt of payment while Party A shall provide Party B with a legal receipt for the same amount.

 

 

Article 3 Rent, Property Management Fee and Other Expenses

 

1.

The rental rate (calculated on the basis of the itemized floor area under this Contract) is RMB 120/month/m2 (inclusive of tax, at a VAT rate of 5%); in view of Party B's need to decorate the property, the rent will be charged at RMB 90/month/m2 for the first year, with an increment of 5% on top of the normal price commencing in the second year, as follows:

 

Leased Property	Floor Area (Square Meters)	Rent and Increment
Units 1301, 1302, 1303, 1304, 1305, 1306, 1307, 1308, 1309, 1310 and 1311	1794.08	(1) From October 1, 2019 to September 30, 2020, the rental rate will be RMB 90/month/m2 (inclusive of tax, at a VAT rate of 5%); (2) From October 1, 2020 to September 30, 2021, the rent will be charged at a rate of RMB 126/month/m2 (inclusive of tax, at a VAT rate of 5%); (3) For every completed twelve months from October 1, 2021, the monthly rental rate will be increased by 5% from the previous year's rate effective from the following month (e.g. the rent will be adjusted to RMB 132.3/month/m2 from October 1, 2021 (inclusive of tax, at a VAT rate of 5%), and so on).

 

Note: The lease term of 5 years remains unchanged, and the starting point of rent calculation is based on the actual date of delivery, while other calculation points are postponed accordingly.

 

2.

Rent Details

 

Lease Term	Monthly Rent Amount (Currency: RMB) (Inclusive of Tax, at a VAT Rate of 5%)
	In numbers	In words
From October 1, 2019 to September 30, 2020	161,467.20	One Hundred and Sixty-one Thousand Four Hundred and Sixty-seven Point Two only
From October 1, 2020 to September 30, 2021	226,054.08	Two Hundred and Twenty-six Thousand and Fifty-four Point Zero Eight only
From October 1, 2021 to September 30, 2022	237,356.78	Two Hundred and Thirty-seven Thousand Three Hundred and Fifty-six Point Seven Eight only
From October 1, 2022 to September 30, 2023	249,224.62	Two Hundred and Forty-nine Thousand Two Hundred and Twenty-four Point Six Two only
From October 1, 2023 to September 30, 2024	261,685.85	Two Hundred and Sixty-one Thousand Six Hundred Eighty-five Point Eight Five only

 

 

Note: If the country adjusts the VAT rate during the lease term, the rental rate will be adjusted accordingly, and the non-taxable part of the adjusted rental rate will remain the same as that prior to such adjustment.

 

3.

Party A and Party B negotiate and determine the property management fee at RMB 15/m2/month (calculated on the gross floor area leased under this Contract), and Party B shall settle the fee with the property management company by itself. In case of adjustment of the rate of property management fee, Party B shall negotiate with the property management company.

 

4.

The rent will be settled and paid on a monthly basis. Party B shall deposit the monthly rent into the bank account designated by Party A under this Contract prior to the 10th day of each month (in case of a holiday, postponed to the first working day after the holiday).

 

5.

Party B shall provide Party A with the bank's receipt for payment following the bank transfer, while Party A shall issue a legal and valid VAT invoice for the same amount to Party B within five working days upon receipt of the corresponding amount. Otherwise, Party B shall have the right to refuse to pay the next month's rent and shall not be deemed to be in breach. Except under the foregoing circumstances, If Party B fails to pay the rent and other expenses within the period agreed in this Contract, it shall be held liable for breach as agreed in this Contract.

 

6.

During the lease term, the property management fee, water, electricity, gas, network, telephone, TV subscription and indoor facilities maintenance fees etc. related to the Leased Property shall be solely borne by Party B. The electricity loss and common water costs shall be shared in proportion to the electricity consumed by the tenants. Water, and electricity charges incurred by and the common water and electricity charges apportioned to Party B shall be collected and paid by the property management company on behalf of Party B.

 

Article 4 The bank account designated by Party A under this Contract:

 

Company name: [************]

Account bank: [************]

Account no.: [************]

 

Article 5 Delivery, Return and Vacation of the Leased Property

 

1.

Party A shall deliver the Leased Property to Party B in accordance with the agreed conditions prior to September 30, 2019. The delivery shall be deemed to be completed after the Parties through property inspection sign the Unit Handover Confirmation Letter and Party A hands over the keys to the Leased Property. The property management fee, utilities charges, gas charges and other related expenses incurred prior to the delivery of the property shall be borne by the actual occupant.

 

2.

Upon expiration of the lease term or termination of this Contract, Party B shall complete the relocation within fifteen days from the date of termination of the lease (the daily rent shall be accrued and paid in accordance with the current rental rate during the relocation period). Party A has the right to require Party B to return the Leased Property as it was delivered (among which the secondary fire pipelines, smoke detectors, sprinklers and fixtures added by Party B during the lease term shall not be removed), and Party B shall return the Leased Property and its appurtenant items, equipment and facilities in accordance with the original state.

 

 

3.

Party B shall remove the items belonging to it before vacating the Leased Property. After Party B vacates the Leased Property, Party B shall be deemed to have relinquished the ownership of the items left by Party B in the Leased Property and Party A shall have the right to dispose of such items at its own discretion. If Party A incurs expenses for clearing and disposing of such items, Party B shall be obliged to reimburse Party A for such expenses.

 

4.

In case of breach by Party B, in addition to Party B's liability for breach of contract as agreed in this Contract, Party A shall have the right to place a lien on Party B's property as required by the circumstances. If Party B fails to pay the amount due within five days after Party A notifies Party B in writing of the lien on its property, Party B shall be deemed to have consented to Party A's disposal of the liened property by sale or other legal means to satisfy the outstanding amount. The expenses incurred by Party A for disposal of the liened property by sale or other legal means shall be borne by Party B.

 

5.

Upon the expiration of the lease term or the termination of this Contract, if Party B commits no breach of contract and pays off the outstanding rent, property management fee, utilities and other expenses incurred by Party B during the lease term, Party A will refund the performance bond and utilities bond to Party B interest-free upon confirmation by Party A and the property management company.

 

6.

If Party B fails to return the Leased Property upon the expiration of the lease term or the termination of this Contract, Party A shall have the right to recover from Party B the usage fee of the property occupied after the expiration until the actual return of the Leased Property at the rate twice the standard rent.

 

Article 6 Property Management Provisions

 

Party B agrees that the property management services will be provided by the property management company entrusted by Party A. The property management company mainly manages the security, sanitation, landscaping, order, fire-fighting, cleaning and supply of water and electricity in the common areas outside the Leased Property, while Party B shall be responsible for the aforesaid matters inside the Leased Property. Party B shall submit to the management of the property management company, comply with the management code and various management regulations specified by the property management company, and pay the fees payable such as utilities, parking fees, and sewage charges and bear the corresponding share of the costs in accordance with the relevant regulations.

 

Article 7 Decoration and Maintenance Provisions

 

1.

Party B may not demolish and alter the structure and facilities of the property, increase the load on the external walls, overload the property, stack flammable, explosive and dangerous items, or renovate the property without permission, subject to the relevant municipal regulations of Guangzhou.

 

2.

The Leased Property is delivered for use on an as is basis (at the time of entering into this Contract, Party B has fully understood the current status of the Leased Property and confirmed that it meets Party B's actual needs). With Party A's written consent, Party B may carry out interior decoration of the Leased Property at its own expense. If this Contract is terminated through no fault of Party A, Party A shall not be required to provide any compensation or indemnity to Party B for the expenses incurred by Party B in connection with the interior decoration of the Leased Property. When decorating the Leased Property, Party B must comply with the decoration rules and regulations specified by Party A and the property management company, and pay the decoration deposit to the property management company. In case of connection, alteration or relocation of central systems such as water, electricity, gas, fire-fighting, communication, security, and sewage, as well as addition and alteration of other fixed facilities, Party B must obtain the written consent of Party A and the property management company, and be subject to the supervision by Party A and the property management company.

 

 

3.

Upon completion of all of its decoration works, Party B shall report to the property management company and relevant government departments for inspection to determine that the decoration works meet the safety specifications, and provide valid documents to Party A for future reference.

 

4.

Party B shall be responsible for the repair and replacement for the wear and tear of the equipment (such as air conditioners, tables and chairs, faucets, doors and windows) and consumable items such as light bulbs added by Party B to the Leased Property. Party B shall make reasonable use of the Leased Property and its ancillary facilities. If damage is caused due to improper use, Party B shall immediately make repairs or compensate Party A for the loss.

 

5.

If the basic equipment and facilities provided by Party A after Party B leases the property cannot meet its operational needs, Party B shall fund the construction of the required water and electricity expansion, sewerage, environmental protection facilities, environmental renovation and other projects, as well as the installation and configuration of production equipment, water and electricity supply, power distribution, fire protection and environmental protection facilities that Party B adds for its own operational needs. If the renovation operations are subject to inspection and acceptance by environmental protection, health, fire protection and other departments, Party B shall handle these in accordance with the procedures and requirements provided by relevant laws, regulations and policies, and obtain permission or pass the inspection and acceptance before putting such facilities into use, otherwise the resulting administrative penalties shall be solely borne by Party B. If losses are thus caused to Party A, Party B shall compensate for all the losses incurred by Party A.

 

Article 8 Rights and Obligations of Party A

 

1.

Party A shall have the right to collect from Party B the rent and other expenses that shall be borne by Party B as agreed in this Contract.

 

2.

Party A shall have the right to supervise and give reasonable advice on Party B's use of the Leased Property. Party A shall have the right to enforce the relevant provisions of this Contract in case Party B violates the provisions of this Contract. However, Party A may not disturb or hinder Party B's normal and reasonable use of the Leased Property.

 

3.

During the lease term, Party A shall notify Party B in writing not less than 2 months in advance if Party A transfers the Leased Property, or 30 calendar days in advance if Party B hypothecates the Leased Property. For the avoidance of doubt, the occurrence of any change in the ownership of the Leased Property during the lease term that is not caused by the exercise of the mortgage by the mortgagee shall not affect the validity of this Lease Contract; if Party A terminates this Contract on such basis, it shall be held liable for breach in accordance with Paragraph 3 of Article 10 hereof.

 

4.

If Party B is required to go through relevant approval procedures due to business or other requirements of laws and regulations, Party A shall render necessary assistance.

 

5.

During the lease term, Party A may directly commission the property management service provider to assist in the management of the Leased Property and coordinate the resolution of disputes.

 

6.

Party A shall keep strictly confidential the non-public information of Party B that it becomes aware of during the lease term, including but not limited to technical information, intellectual property rights, information of R&D technicians (excluding information learned through regular channels such as information used for normal access cards and meal cards), trade secrets, etc. Party A shall not provide or disclose the above information of Party B to other parties in any form except with Party B's prior written consent. The provisions of this Article shall not be invalidated by the rescission or termination of this Contract.

 

 

Article 9 Rights and Obligations of Party B

 

1.

Party B shall pay the rent and other related expenses in full and on time as agreed in this Contract.

 

2.

During the lease term, without Party A's written consent, Party B may not sublease part or all of the Leased Property to a third party, lend the same to a third party for use with or without compensation, or otherwise make the same available for use by a third party. If Party A approves in writing Party B to sublease or lend the Leased Property for use by a third party, Party B shall ensure that such third party fully complies with Party B's obligations under this Contract. Party B shall be jointly and severally liable for any loss incurred by Party A as a result of the acts of such third party. If Party B really needs to arrange for its affiliates or third parties to occupy the Leased Property during the lease term due to reasonable commercial planning, the Parties may negotiate separately on a case-by-case basis and Party A agrees to render active cooperation.

 

3.

In accordance with relevant laws and regulations, Party B shall be responsible for handling, at its own expense, all matters required by law to be completed before opening, such as business license, secondary fire protection, and environmental protection, while Party A shall provide necessary assistance. Party B shall not start operation until it has successfully applied for and obtained such licenses and certificates on its own.

 

4.

Party B shall be solely responsible for the internal sanitation, security, utilities, telephone, air conditioning, landscaping costs of the Leased Property and all other costs arising from the use of the property for commercial activities (including but not limited to the costs of broadband, cable TV and other equipment installed by Party B upon its own application).

 

5.

During the lease term, Party B may not store any flammable, explosive, toxic or radioactive items or prohibited items in the Leased Property, nor may it engage in any illegal activities therein.

 

6.

Party B has no right to alter the purpose for which the Leased Property has been leased without permission.

 

7.

Under the same conditions as those proposed by any other interested customer, Party B shall have the priority to renew the lease, with the rent and other lease conditions being subject to the contract re-signed by the Parties.

 

8.

Party B shall provide the aforesaid fire-fighting equipment at its own expense at the rate of two 3 kg fire extinguishers and two gas masks per 20 square meters in accordance with the regulations of the government fire department (subject to the latest equipment requirements of the government fire department).

 

Article 10 Breaches

 

Either Party violating this Contract shall be deemed to be in breach, and the Breaching Party shall be held liable for such breach and compensate for the economic loss thus sustained by the Non-breaching Party. At the same time, the Breaching Party shall bear the legal costs, preservation fees, attorney's fees, travel expenses, notary fees, investigation fees, announcement fees, evaluation and appraisal fees, and enforcement fees incurred by the Non-breaching Party to pursue the liability of the Breaching Party. The circumstances falling under the following provisions shall be dealt with accordingly:

 

1.

If Party A refuses to perform this Contract without any agreed or legal reason during the lease term, Party B shall notify Party A in writing and requests it to take appropriate measures within a reasonable period of time. If Party A fails to take such measures within a reasonable period of time upon Party B's reminder, Party B shall have the right to terminate this Contract and require Party A to return the performance bond in double.

 

 

2.

During the lease term, any of the following acts of Party B will be deemed as a serious breach of contract, which shall entitle Party A to terminate this Contract without returning the performance bond to Party B, demand compensation for losses, and take measures (including but not limited to) cutting off water and electricity supply:

 

(1)

Party B owes Party A the rent or property management fee for 30 consecutive calendar days, or defaults on the rent or property management fee more than twice in a year;

 

(2)

Party B defaults on the payment of water and electricity charges to the extent of RMB 3,000 or more;

 

(3)

Party B breaches Paragraph 1 of Article 7 or Paragraphs 2, 3, 5 and 6 of Article 9 of this Contract;

 

(4)

In the course of production and operation, Party B negatively affects the normal operations of other owners or tenants, giving rise to 3 incidents such as complaints and petitions cumulatively;

 

(5)

Party B damages public and private interests by conducting illegal activities;

 

(6)

Party B violates the relevant laws and regulations on production safety management, and refuses to make rectification or fails to complete the rectification satisfactorily;

 

(7)

Party B damages the Leased Property intentionally;

 

(8)

Other circumstances where this Contract may be terminated and the property repossessed as provided by laws and regulations.

 

In the case of Subparagraphs 1 and 2 above, for each day of delay, the overdue liquidated damages shall be accrued on a daily basis at the rate of three ten-thousandths of the amount in arrears from the overdue date, and the rent shall be accrued in accordance with the provisions of Article 2 of this Contract and the actual lease term.

 

3.

If a Party unilaterally proposes to cancel this Contract during the lease term due to no legal or agreed reasons, the Non-breaching Party shall be entitled to claim damages and to receive liquidated damages at the rate of 20% of the total rent for the duration of the lease.

 

Article 11 Negotiated Modification or Rescission

 

Either Party may promptly propose to modify or rescind this Contract without incurring liability to the other Party for breach of contract if any of the following circumstances arises:

 

1.

The performance of the lease contract cannot be continued due to changes in laws, regulations, local policies or due to force majeure;

 

2.

The property is required to be expropriated or requisitioned for urban construction planning or urban renewal and renovation; and

 

3.

The relevant matters have been contractually stipulated or agreed upon by the Parties but are not fulfilled.

 

Article 12 Miscellaneous

 

1.

Party A has the right to appoint a property management company for property management, and any change of the property management company shall not affect the performance of this Contract.

 

2.

Party A acknowledges that prior to the execution of this Contract, it has fully disclosed to Party B the information concerning the Leased Property that is not materially concealed or misleading, and has no objection to this Contract; by executing this Contract, Party A is deemed to have agreed to assume responsibility and perform its obligations in accordance with the provisions of this Contract.

 

 

3.

Party B acknowledges that prior to entering into this Contract, it has gained detailed knowledge of the current status of the Leased Property and has no objection to this Contract; by executing this Contract, Party B is deemed to have agreed to assume responsibility and perform its obligations in accordance with the provisions of this Contract.

 

4.

In case of any conflict between the relevant documents involved in Party B's application for business qualification certificates and this Contract, the provisions of this Contract shall prevail.

 

5.

This Contract shall be governed by the relevant laws of the People's Republic of China. In the course of performance of this Contract, if any dispute arises, such dispute shall be resolved through negotiation, failing which, either Party may file a lawsuit with the people's court in the place where the Leased Property is located.

 

6.

The Parties acknowledge that the addresses for service of documents agreed upon by them in this Contract are true and valid, and such addresses are applicable to the non-litigation stage, arbitration stage and the first instance, second instance, retrial and enforcement procedures of the litigation stage. Once a dispute enters into the above-mentioned proceedings, the people's court of competent jurisdiction may serve all kinds of legal instruments either directly or by post at the agreed addresses for service of instruments, and the Parties shall bear the legal consequences of valid service in accordance with this Contract. If a Party needs to change its address for service of instruments, it shall notify the other Party in writing within 7 working days after the change. If it fails to notify the other Party in the agreed manner, the original address for service of instruments shall remain the valid address for service.

 

(1)

Any instrument sent by express mail or registered mail by Party A (or Party B) at Party B's (or Party A's) address for service as agreed in this Contract shall be deemed to be served five days after it is sent.

 

(2)

The competent people's court will effect service at the addresses agreed upon by the Parties. If a legal instrument is not actually received by a Party because the address for service provided or confirmed by the Party is inaccurate, or the Party fails to promptly inform the other Party or the people's court in accordance with the procedures after the address for service has changed, or the Party or its designated recipient refuses to sign for it, the service shall also be deemed completed. In the case of service by mail, the date of return of the instrument shall be deemed to be the date of service; in the case of direct service, the date of service shall be deemed to be the date when the server certifies the relevant facts on the proof of service.

 

7.

From the date of entering into this Contract, Party B shall provide the relevant documents required for the filing and registration of the housing lease, while Party A shall be responsible for completing the filing and registration within 7 working days thereafter.

 

8.

This Contract is made in octuplicate, and shall come into effect after it is signed and affixed with the official seals by the legal representatives or authorized representatives of the Parties. Party A shall hold four copies, Party B three copies and one copy shall be submitted for filing purpose.

 

9.

Reminder and acknowledgement: Party A has drawn Party B's attention to a comprehensive and accurate understanding of the terms and conditions of this Contract and has provided corresponding explanations of the terms and conditions at Party B's request, and the Parties share the same understanding of the meaning of this Contract. Party B is aware and acknowledges that Party A has given special reminders and full explanations concerning the terms that relieve Party A of its liabilities and limit Party B's rights when entering into this Contract.

 

(The remainder of this page is intentionally left blank)

 

 

Annexes: 1. Floor Plan of the Leased Property; 2. Specific Floor Area of the Leased Property; 3. Copy of the Business License of the Lessee; 4. Production Safety Management Agreement; 5. Copy of the Real Estate Title Certificate of the Leased Property

 

This page is intentionally left blank to serve as the signature page to "Guangzhou Office Lease Contract" entered into between [Guangzhou Nantou Real Estate Development Co., Ltd.] and [Guangzhou (ZX) Pony. AI Technology Co., Ltd.].

 

Party A: Guangzhou Nantou Real Estate Development Co., Ltd.

Legal Representative or Authorized Representative (signature): /s/ SONG Rong

Correspondence address: 7/F, Pearl Development Building, 1 Mingzhu 1st Street, Hengli Town, Nansha District, Guangzhou

Contact number: [************]

Date: September 12, 2019

 

Party B: Guangzhou (ZX) Pony. AI Technology Co., Ltd.

Legal Representative or Authorized Representative (signature): /s/ ZHANG Ning

Account bank:

Account name:

Bank account no.:

Taxpayer Identification Number:

Contact number:

Correspondence address: 12/F, Pearl Development Building, 1 Mingzhu 1st Street, Hengli Town, Nansha District, Guangzhou

Date:

 

 

 

 

Exhibit 16.1

 

March 24, 2023

 

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549-7561

 

Dear Sirs/Madams:

 

We have read the disclosures under the heading “Change in Registrant’s Certifying Accountant” included in the prospectus forming a part of Pony AI Inc. (the “Company”) Confidential Submission of its Registration Statement on Form F-1 to be submitted with the Securities Exchange Commission on or around March 27, 2023 (the “Disclosures”) and have the following comments:

 

1.

We agree with the statements made in the first through third paragraphs of the Disclosures.

 

2.

We have no basis on which to agree or disagree with the statements made in paragraph four of the Disclosures.

 

Yours truly,

 

/s/ Deloitte & Touche LLP

 

San Jose, California, United States

 

 

 

 

Exhibit 21.1

 

List of Principal Subsidiaries of the Registrant

 

Principal Subsidiaries		Place of Incorporation
Pony.ai, Inc.		Delaware, United States
HongKong Pony AI Limited		Hong Kong
Beijing (HX) Pony AI Technology Co., Ltd.		PRC
Beijing (YX) Pony AI Technology Co., Ltd.		PRC
Guangzhou (HX) Pony AI Technology Co., Ltd.		PRC
Shanghai (ZX) Pony AI Technology Development Co., Ltd.		PRC
Beijing (ZX) Pony AI Technology Co., Ltd.		PRC
Guangzhou (ZX) Pony AI Technology Co., Ltd.		PRC
Shanghai (YX) Pony AI Technology Co., Ltd.		PRC
Qingdao Cyantron Logistics Technology Co., Ltd.		PRC

 

 

 

Exhibit 23.1

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We consent to the use in this Registration Statement on Form F-1 of our report dated September 9, 2024, relating to the financial statements of Pony AI Inc. We also consent to the reference to us under the heading "Experts" in such Registration Statement.

 

/s/ Deloitte Touche Tohmatsu Certified Public Accountants LLP

Shanghai, the People's Republic of China

 

October 17, 2024

 

 

 

Exhibit 99.1

 

Pony AI Inc.

(the “Company”)

 

Code of Business Conduct and Ethics
Adopted October 17, 2024

 

Introduction

 

This Code of Business Conduct and Ethics (the “Code”) has been adopted by our Board of Directors (the “Board”) and summarizes the standards that must guide our actions. Although they cover a wide range of business practices and procedures, these standards cannot and do not cover every issue that may arise, or every situation in which ethical decisions must be made, but rather set forth key guiding principles that represent Company policies and establish conditions for employment at the Company.

 

We must strive to foster a culture of honesty and accountability. Our commitment to the highest level of ethical conduct should be reflected in all of the Company’s business activities, including, but not limited to, relationships with employees, customers, suppliers, competitors, the government, the public and our shareholders. All of our employees, officers and directors must conduct themselves according to the language and spirit of this Code and seek to avoid even the appearance of improper behavior. Even well-intentioned actions that violate the law or this Code may result in negative consequences for the Company and for the individuals involved.

 

One of our Company’s most valuable assets is our reputation for integrity, professionalism and fairness. We should all recognize that our actions are the foundation of our reputation and adhering to this Code and applicable law is imperative.

 

Conflicts of Interest

 

Our employees, officers and directors have an obligation to conduct themselves in an honest and ethical manner and to act in the best interest of the Company. All employees, officers and directors should endeavor to avoid situations that present a potential or actual conflict between their interest and the interest of the Company.

 

A “conflict of interest” occurs when a person’s private interest interferes in any way, or even appears to interfere, with the interests of the Company as a whole, including those of its subsidiaries and affiliates. A conflict of interest may arise when an employee, officer or director takes an action or has an interest that may make it difficult for him or her to perform his or her work objectively and effectively. A conflict of interest may also arise when an employee, officer or director (or a member of his or her family) receives improper personal benefits as a result of the employee’s, officer’s or director’s position in the Company.

 

Although it would not be possible to describe every situation in which a conflict of interest may arise, the following are examples of situations that may constitute a conflict of interest:

 

·

Working, in any capacity, for a competitor, customer or supplier while employed by the Company.

 

·

Accepting gifts of more than modest value or receiving personal discounts (if such discounts are not generally offered to the public) or other benefits as a result of your position in the Company from a competitor, customer or supplier.

 

 

·

Competing with the Company for the purchase or sale of property, products, services or other interests.

 

·

Having an interest in a transaction involving the Company, a competitor, customer or supplier (other than as an employee, officer or director of the Company and not including routine investments in publicly traded companies).

 

·

Receiving a loan or guarantee of an obligation as a result of your position with the Company.

 

·

Directing business to a supplier owned or managed by, or which employs, a relative or friend.

 

Situations involving a conflict of interest may not always be obvious or easy to resolve. You should report actions that may involve a conflict of interest to the Audit Committee of the Board.

 

In order to avoid conflicts of interests, senior executive officers and directors must disclose to the Audit Committee of the Board any material transaction or relationship that reasonably could be expected to give rise to such a conflict. Conflicts of interests involving the Audit Committee of the Board shall be disclosed to the Board.

 

In the event that an actual or apparent conflict of interest arises between the personal and professional relationship or activities of an employee, officer or director, the employee, officer or director involved is required to handle such conflict of interest in an ethical manner in accordance with the provisions of this Code.

 

Quality of Public Disclosures

 

The Company has a responsibility to provide full and accurate information in our public disclosures, in all material respects, about the Company’s financial condition and results of operations. Our reports and documents filed with or submitted to the United States Securities and Exchange Commission and our other public communications shall include full, fair, accurate, timely and understandable disclosure.

 

Compliance with Laws, Rules and Regulations

 

We are strongly committed to conducting our business affairs with honesty and integrity and in full compliance with all applicable laws, rules and regulations. No employee, officer or director of the Company shall commit an illegal or unethical act, or instruct others to do so, for any reason.

 

Compliance with this Code and Reporting of Any Illegal or Unethical Behavior

 

All employees, directors and officers are expected to comply with all of the provisions of this Code. The Code will be strictly enforced, and violations will be dealt with immediately, including by subjecting persons who violate its provisions to corrective and/or disciplinary action such as dismissal or removal from office. Violations of the Code that involve illegal behavior will be reported to the appropriate authorities.

 

Situations which may involve a violation of ethics, laws, rules, regulations or this Code may not always be clear and may require the exercise of judgment or the making of difficult decisions. Employees, officers and directors should promptly report any concerns about a violation of ethics, laws, rules, regulations or this Code to their supervisors or the legal department or a department with similar duties and responsibilities of the Company (the “Legal Department”) or, in the case of accounting, internal accounting controls or auditing matters, the Audit Committee of the Board. Interested parties may also communicate directly with the Company’s non-management directors through contact information located in the Company’s annual report on Form 20-F.

 

 

Any concerns about a violation of ethics, laws, rules, regulations or this Code by any senior executive officer or director should be reported promptly to the Audit Committee of the Board. Any such concerns involving the Audit Committee should be reported to the Board. Reporting of such violations may also be done anonymously through email to the Company at a designated email address for compliance reporting. An anonymous report should provide enough information about the incident or situation to allow the Company to investigate properly. If concerns or complaints require confidentiality, including keeping an identity anonymous, the Company will endeavor to protect this confidentiality, subject to applicable law, regulation or legal proceedings.

 

The Company encourages all employees, officers and directors to report any suspected violations promptly and intends to thoroughly investigate any good faith reports of violations. The Company will not tolerate any kind of retaliation for reports or complaints regarding misconduct that were made in good faith. Open communication of issues and concerns by all employees, officers and directors without fear of retribution or retaliation is vital to the successful implementation of this Code. All employees, officers and directors are required to cooperate in any internal investigations of misconduct and unethical behavior.

 

The Company recognizes the need for this Code to be applied equally to everyone it covers. The Legal Department of the Company will have primary authority and responsibility for the enforcement of this Code, subject to the supervision of the Audit Committee of the Board, and the Company will devote the necessary resources to enable the Legal Department to establish such procedures as may be reasonably necessary to create a culture of accountability and facilitate compliance with this Code. Questions concerning this Code should be directed to the Legal Department.

 

The provisions of this section are qualified in their entirety by reference to the following section.

 

Reporting Violations to a Governmental Agency

 

Employees have the right under applicable law to certain protections for cooperating with or reporting legal violations to governmental agencies or entities and self-regulatory organizations. As such, nothing in this Code is intended to prohibit any employee from disclosing or reporting violations to, or from cooperating with, a governmental agency or entity or self-regulatory organization, and employees may do so without notifying the Company. The Company may not retaliate against all employees for any of these activities, and nothing in this Code or otherwise requires any employee to waive any monetary award or other payment that he or she might become entitled to from a governmental agency or entity, or self-regulatory organization.

 

All employees of the Company have the right to:

 

·

Report possible violations of applicable law or regulation that have occurred, are occurring, or are about to occur to any governmental agency or entity, or self-regulatory organization;

 

·

Cooperate voluntarily with, or respond to any inquiry from, or provide testimony before any self-regulatory organization or any other national or local regulatory or law enforcement authority;

 

·

Make reports or disclosures to law enforcement or a regulatory authority without prior notice to, or authorization from, the Company; and

 

·

Respond truthfully to a valid subpoena.

 

 

All employees have the right to not be retaliated against for reporting, either internally to the Company or to any governmental agency or entity or self-regulatory organization, information which the employee reasonably believes relates to a possible violation of law. It is a violation of law to retaliate against anyone who has reported such potential misconduct either internally or to any governmental agency or entity or self-regulatory organization. Retaliatory conduct includes discharge, demotion, suspension, threats, harassment, and any other manner of discrimination in the terms and conditions of employment because of any lawful act the employee may have performed. It is unlawful for the company to retaliate against an employee for reporting possible misconduct either internally or to any governmental agency or entity or self-regulatory organization when requested by such agency or organization.

 

Notwithstanding anything contained in this Code or otherwise, employees may disclose confidential Company information, including the existence and terms of any confidential agreements between the employee and the Company (including employment or severance agreements), to any governmental agency or entity or self-regulatory organization when requested by such agency or organization.

 

The Company cannot require an employee to withdraw reports or filings alleging possible violations of national or local law or regulation, and the Company may not offer employees any kind of inducement, including payment, to do so.

 

An employee’s rights and remedies as a whistleblower protected under applicable whistleblower laws, including a monetary award, if any, may not be waived by any agreement, policy form, or condition of employment, including by a predispute arbitration agreement.

 

Even if an employee has participated in a possible violation of law, the employee may be eligible to participate in the confidentiality and retaliation protections afforded under applicable whistleblower laws, and the employee may also be eligible to receive an award under such laws.

 

Waivers and Amendments

 

Any waiver (including any implicit waiver) of the provisions in this Code for executive officers or directors may only be granted by the Board or a committee thereof and will be promptly disclosed to the Company’s shareholders. Any such waiver will also be disclosed in the Company’s annual report on Form 20-F. Amendments to this Code must be approved by the Board and will also be disclosed in the Company’s annual report on Form 20-F.

 

Trading on Inside Information

 

Using non-public Company information to trade in securities, or providing a family member, friend or any other person with non-public Company information, is illegal. All non-public, Company information should be considered inside information and should never be used for personal gain. You are required to familiarize yourself and comply with the Company’s Statement of Policy Concerning Trading in Company Securities, copies of which are distributed to all employees, officers and directors and are available from the Legal Department. You should contact the Legal Department with any questions about your ability to buy or sell securities.

 

 

Protection of Confidential Proprietary Information

 

Confidential proprietary information generated by and gathered in our business is a valuable Company asset. Protecting this information plays a vital role in our continued growth and ability to compete, and all proprietary information should be maintained in strict confidence, except when disclosure is authorized by the Company or required by law.

 

Proprietary information includes all non-public information that might be useful to competitors or that could be harmful to the Company, its customers or its suppliers if disclosed. Intellectual property such as trade secrets, patents, trademarks and copyrights, as well as business, research and new product plans, objectives and strategies, records, databases, salary and benefits data, employee medical information, customer, employee and suppliers lists and any unpublished financial or pricing information must also be protected.

 

Unauthorized use or distribution of proprietary information violates Company policy and could be illegal. Such use or distribution could result in negative consequences for both the Company and the individuals involved, including potential legal and disciplinary actions. We respect the property rights of other companies and their proprietary information and require our employees, officers and directors to observe such rights.

 

Your obligation to protect the Company’s proprietary and confidential information continues even after you leave the Company, and you must return all proprietary information in your possession upon leaving the Company.

 

The provisions of this section are qualified in their entirety by the section entitled “Reporting Violations to Governmental Agencies” above.

 

Protection and Proper Use of Company Assets

 

Protecting Company assets against loss, theft or other misuse is the responsibility of every employee, officer and director. Loss, theft and misuse of Company assets directly impact our profitability. Any suspected loss, misuse or theft should be reported to a supervisor or the Legal Department.

 

The sole purpose of the Company’s equipment, vehicles, supplies and electronic resources (including hardware, software and the data thereon) is the conduct of our business. They may only be used for Company business consistent with Company guidelines.

 

Corporate Opportunities

 

Employees, officers and directors are prohibited from taking for themselves business opportunities that are discovered through the use of corporate property, information or position. No employee, officer or director may use corporate property, information or position for personal gain, and no employee, officer or director may compete with the Company. Competing with the Company may involve engaging in the same line of business as the Company or any situation in which the employee, officer or director takes away from the Company opportunities for sales or purchases of property, products, services or interests. Employees, officers and directors owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises.

 

 

Fair Dealing

 

Each employee, officer and director of the Company should endeavor to deal fairly with customers, suppliers, competitors, the public and one another at all times and in accordance with ethical business practices.

 

Each employee has an obligation to comply with the anti-corruption and anti-bribery laws of the People’s Republic of China and any other regions and countries in which the Company operates. No one should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing practice. No bribes, kickbacks or other similar payments in any form shall be made directly or indirectly to or for anyone for the purpose of obtaining or retaining business or obtaining any other favorable action. In the event of a violation of these provisions, the Company and any employee, officer or director involved may be subject to disciplinary action as well as potential civil or criminal liability for violation of this policy.

 

Occasional business gifts to, or entertainment of, non-government employees in connection with business discussions or the development of business relationships are generally deemed appropriate in the conduct of Company business. However, these gifts should be given infrequently and their value should be modest. Gifts or entertainment in any form that would likely result in a feeling or expectation of personal obligation should not be extended or accepted.

 

Practices that are acceptable in a commercial business environment may be against the law or the policies governing national or local government employees. Therefore, no gifts or business entertainment of any kind may be given to any government employee without the prior approval of a supervisor or the Legal Department.

 

Except in certain limited circumstances, the United States Foreign Corrupt Practices Act (the “FCPA”) prohibits giving anything of value directly or indirectly to any “non-U.S. official” for the purpose of obtaining or retaining business. When in doubt as to whether a contemplated payment or gift may violate the FCPA, contact a supervisor or the Audit Committee of the Board before taking any action.

 

Equal Opportunity, Non-Discrimination and Fair Employment

 

The Company’s policies for recruitment, advancement and retention of employees forbid discrimination on the basis of any criteria prohibited by law, including but not limited to race, sex and age. Our policies are designed to ensure that employees are treated, and treat each other, fairly and with respect and dignity. In keeping with this objective, conduct involving discrimination or harassment of others will not be tolerated. All employees, officers and directors are required to comply with the Company’s policy on equal opportunity, non-discrimination and fair employment, copies of which were distributed by and are available from the Legal Department.

 

Compliance with Antitrust Laws

 

The antitrust laws prohibit agreements among competitors on such matters as prices, terms of sale to customers and the allocation of markets or customers. Antitrust laws can be complex, and violations may subject the Company and its employees to criminal sanctions, including fines, jail time and civil liability. If you have any questions about our antitrust compliance policies, consult the Legal Department.

 

 

Trade Controls

 

Employees are required to comply with all applicable trade laws and economic sanctions laws and regulations. These laws generally apply to the import, export and transfer of certain products and technology by U.S. companies.

 

Political Contributions and Activities

 

Any political contributions made by or on behalf of the Company and any solicitations for political contributions of any kind must be lawful and in compliance with Company policies. This policy applies solely to the use of Company assets and is not intended to discourage or prevent individual employees, officers or directors from making political contributions or engaging in political activities on their own behalf. No one may be reimbursed directly or indirectly by the Company for personal political contributions.

 

Environment, Health and Safety

 

We are committed to conducting our business in compliance with all applicable environmental and workplace health and safety laws and regulations. We strive to provide a safe and healthy work environment for our employees and to avoid adverse impact and injury to the environment and the communities in which we conduct our business. Achieving this goal is the responsibility of all officers, directors and employees.

 

Dealings with the Community

 

We are committed to being a responsible member of and recognize the mutual benefits of engaging and building relationships with, the communities in which we operate. Wherever the Company operates, we strive to make a positive and meaningful contribution to the surrounding community and to ensure the distribution of a fair share of benefits to all stakeholders impacted by its activities, including the surrounding community. We strongly encourage our employees to play a positive role in the community.

 

Doing Business with Others

 

We strive to promote the application of the standards of this Code by those with whom we do business. Our policies, therefore, prohibit the engaging of a third party to perform any act prohibited by law or by this Code, and we shall avoid doing business with others who intentionally and continually violate the law or the standards of this Code.

 

Accuracy of Company Financial Records

 

We maintain the highest standards in all matters relating to accounting, financial controls, internal reporting and taxation. All financial books, records and accounts must accurately reflect transactions and events and conform both to required accounting principles and to the Company’s system of internal controls. Records shall not be distorted in any way to hide, disguise or alter the Company’s true financial position.

 

 

Retention of Records

 

All Company business records and communications shall be clear, truthful and accurate. Employees, officers and directors of the Company shall avoid exaggeration, guesswork, legal conclusions and derogatory remarks or characterizations of people and companies. This applies to communications of all kinds, including email and “informal” notes or memos. Records should always be handled according to the Company’s record retention policies. If an employee, officer or director is unsure whether a document should be retained, consult a supervisor or the Legal Department before proceeding.

 

Anti-Money Laundering

 

We are committed to preserving our reputation in the financial community by assisting in efforts to combat money laundering and terrorist financing. Money laundering is the practice of disguising the ownership or source of illegally obtained funds through a series of transactions to “clean” the funds, so they appear to be proceeds from legal activities.

 

We have adopted measures to reduce the extent to which the Company’s facilities, products and services can be used for a purpose connected with market abuse or financial crimes. Additionally, where necessary, we screen customers, potential customers and suppliers to ensure that our products and services cannot be used to facilitate money laundering or terrorist activity. If you have any questions about our internal anti-money laundering process and procedure, consult the Legal Department.

 

Social Media

 

Unless you are authorized by the Company, you are discouraged from discussing the Company as part of your personal use of social media. While business should only be conducted through approved channels, we understand that social media is used as a source of information and as a form of communicating with friends, family and workplace contacts.

 

When you are using social media and identify yourself as a Company employee, officer or director or mention the Company incidentally, for instance on Weixin or professional networking site, please remember the following:

 

·

Never disclose confidential information about the Company or its business, customers or suppliers.

 

·

Make clear that any views expressed are your own and not those of the Company.

 

·

Remember that our policy on Equal Opportunity, Non-Discrimination and Fair Employment applies to social media sites.

 

·

Be respectful of your colleagues and all persons associated with the Company, including customers and suppliers.

 

·

Promptly report to the Company’s corporate communications department any social media content which inaccurately or inappropriately discusses the Company.

 

·

Never respond to any information, including information that may be inaccurate about the Company.

 

 

·

Never post documents, parts of documents, images or video or audio recordings that have been made with Company property or of Company products, services or people or at Company functions or events.

 

Professional Networking

 

Online networking on professional or industry sites has become an important and effective way for colleagues to stay in touch and exchange information. Employees, officers and directors should use good judgment when posting information about themselves or the Company on any of these services.

 

What you post about the Company or yourself will reflect on all of us. When using professional networking sites, you should observe the same standards of professionalism and integrity described in our code and follow the social media guidelines outlined above.

 

Drug-Free, Violence-Free Workplace

 

The use of alcohol and drugs can impair your ability to work effectively and productively. Except at approved Company functions, or with appropriate authorization, you may not drink alcohol on Company premises.

 

You are prohibited from working while your performance is impaired by alcohol or any other drug whether legal or illegal. Additionally, you may not possess any non-pharmaceutical drugs on Company premises or at work-related functions.

 

We strictly prohibit acts of hostility, intimidation or violence towards others in the workplace and in places where our business is being conducted. You may not bring firearms, explosives or any other weapons onto Company premises, or to any work-related setting, regardless of whether you are licensed to carry such weapons.

 

Government Inquiries

 

The Company cooperates with government agencies and authorities. Forward all requests for information, other than routine requests, to the Legal Department immediately to ensure that we respond appropriately.

 

All information provided must be truthful and accurate. Never mislead any investigator. Do not ever alter or destroy documents or records subject to an investigation.

 

Review

 

The Board shall review this Code annually and make changes as appropriate.

 

 

 

Exhibit 99.2

 

 

October 17, 2024

 

To: Pony AI Inc.

 

Re: The Listing of Pony AI Inc. (the “Company”) on the Nasdaq Global Market

 

Ladies and Gentlemen:

 

We are qualified lawyers of the People’s Republic of China (the “PRC”, which, for the purpose of this opinion, does not include the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan) and as such are qualified to issue this legal opinion on the laws of the PRC. We have acted as your legal counsel on the laws of the PRC in connection with (i) the proposed initial public offering (the “Offering”) of certain number of American depositary shares (the “ADSs”, each representing certain number of Class A ordinary shares of the Company), by the Company as set forth in the Company’s registration statement on Form F-1, including all amendments or supplements thereto (the “Registration Statement”), filed by the Company with the United States Securities and Exchange Commission (the “SEC”) in relation to the Offering, and (ii) the proposed listing and trading of the Company’s ADSs on the Nasdaq Global Market.

 

The following terms as used in this opinion are defined as follows:

 

“M&A Rules”

means the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (关于外国投资者并购境内企业的规定), which was issued by six PRC regulatory agencies, namely, the Ministry of Commerce, the State-owned Assets Supervision and Administration Commission, the State Administration for Taxation, the State Administration for Industry and Commerce, the China Securities Regulatory Commission (the “CSRC”) and the State Administration for Foreign Exchange, on August 8, 2006 and became effective on September 8, 2006, as amended by the Ministry of Commerce on June 22, 2009.

 

海问律师事务所HAIWEN & PARTNERS

 

北京市海问律师事务所

 

地址：北京市朝阳区东三环中路5号财富金融中心20层（邮编100020） 

Address：20/F, Fortune Financial Center, 5 Dong San Huan Central Road, Chaoyang District, Beijing 100020, China 

电话(Tel): (+86 10) 8560 6888 传真(Fax)：(+86 10) 8560 6999 www.haiwen-law.com

 

北京BEIJING丨上海 SHANGHAI丨深圳 SHENZHEN丨香港 HONG KONG丨成都 CHENGDU丨海口 HAIKOU

 

 

“PRC Authorities”	means any national, provincial or local governmental, regulatory or administrative authority, agency or commission in the PRC, or any court, tribunal or any other judicial or arbitral body in the PRC.
“PRC Companies”	means, collectively, the PRC-incorporated companies as set out in Schedule I attached hereto.
“PRC Laws”	means any and all laws, regulations, statutes, rules, decrees, notices, and supreme court’s judicial interpretations currently in force and publicly available in the PRC as of the date hereof.

 

For the purpose of giving this opinion, we have examined the originals or copies, certified or otherwise identified to our satisfaction of corporate records, agreements, documents and other instruments provided to us and such other documents or certificates issued or representations made by officials of government authorities and other public organizations and by officers and representatives of the Company as we have deemed necessary and appropriate as a basis for the opinions hereinafter set forth.

 

In such examination, we have assumed: (i) the genuineness of all signatures, the authenticity of all documents submitted to us as originals; (ii) the conformity to originals of all documents submitted to us as certified or reproduced copies; (iii) that all factual statements made in all documents are correct in all material respects; (iv) that all parties to the documents have full power and authority to enter into, and have duly executed and delivered, such documents; (v) that any document submitted to us remains in full force and effect up to the date of this opinion and has not been amended, varied, cancelled or superseded by any other document, agreement or action; and (vi) that, in response to our due diligence inquiries, requests and investigation for the purpose of this opinion, all the relevant information and materials that have been provided to us by the Company are true, accurate, complete and not misleading, and that the Company has not withheld anything that, if disclosed to us, would reasonably cause us to alter this opinion in whole or in part. Where important facts were not independently established to us, we have relied upon certificates issued by governmental authorities and appropriate representatives of the Company and/or other relevant entities and/or upon representations made by such persons in the course of our inquiry and consultation.

 

 

We do not purport to be experts on and do not purport to be generally familiar with or qualified to express legal opinions on any laws other than the PRC Laws and accordingly express no legal opinion herein on any laws of any jurisdiction other than the PRC. For the purpose of this opinion, the laws of the PRC do not include the laws of Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan.

 

Based on the foregoing and subject to any matters not disclosed to us, we are of the following opinion:

 

1.

Based on our understanding of the current PRC Laws, the ownership structure of the PRC Companies, both currently and immediately after giving effect to the Offering, does not and will not violate applicable PRC Laws currently in effect. However, there are substantial uncertainties regarding the interpretation and application of PRC Laws and future PRC laws and regulations, and there can be no assurance that the PRC Authorities will not take a view that is contrary to or otherwise different from our opinion stated above.

 

2.

The M&A Rules, among other things, purport to require that an offshore special purpose vehicle controlled directly or indirectly by PRC domestic companies or individuals and formed for purposes of overseas listing through acquisition of PRC domestic interests obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. The CSRC has not issued any definitive rules or interpretations concerning whether offerings such as the Offering are subject to the CSRC approval procedures under the M&A Rules. Based on our understanding of the PRC Laws, the Company is not required to obtain approval from the CSRC under the M&A Rules for listing and trading of the ADSs. However, uncertainties still exist as to how the M&A Rules will be interpreted and implemented and our opinion stated above is subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules, and there can be no assurance that the PRC Authorities will not take a view that is contrary to or otherwise different from our opinion stated above;

 

 

3.

The statements set forth in the Registration Statement under the caption “Taxation – People’s Republic of China Taxation” insofar as such statements purport to constitute summaries of the matters of the PRC Laws, fairly reflect the matters purported to be summarized and are true and correct in all material respects and constitute our opinion on such matters; and

 

The PRC Laws referred herein are laws of the PRC currently in force and there is no guarantee that any of such laws will not be changed, amended or replaced in the immediate future or in the longer term with or without retrospective effect.

 

This opinion is intended to be used in the context which is specifically referred to herein and each section should be looked at as a whole and no part should be extracted and referred to independently. It is delivered in our capacity as the Company’s PRC legal counsel solely for the purpose of the Registration Statement publicly submitted to the SEC on the date of this opinion and may not be used for any other purpose without our prior written consent. We hereby consent to the use of this opinion in, and the filing hereof as an exhibit to, the Registration Statement, and to the reference to our name in such Registration Statement. We do not thereby admit that we fall within the category of the persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended, or the regulations promulgated thereunder.

 

Yours faithfully,
/s/ Haiwen & Partners
Haiwen & Partners

 

 

SCHEDULE I

 

List of PRC Companies

 

1.

Beijing (HX) Pony AI Technology Co., Ltd.

北京小马慧行科技有限公司 

 

2.

Beijing (YX) Pony AI Technology Co., Ltd.

北京小马易行科技有限公司 

 

3.

Guangzhou (HX) Pony AI Technology Co., Ltd.

广州小马慧行科技有限公司 

 

4.

Shenzhen (YX) Pony AI Technology Co., Ltd.

深圳小马易行科技有限公司

 

5.

Shanghai (ZX) Pony AI Technology Development Co., Ltd.

上海小马智行智能科技发展有限公司

 

6.

Beijing Pony Truck Technology Co., Ltd.

北京小马智卡科技有限公司

 

7.

Guangzhou Pony Truck Co., Ltd.

 广州小马智卡科技有限公司

 

8.

Guangzhou Pony Intelligent Logistics Technology Co., Ltd.

广州小马智慧物流科技有限公司

 

9.

Cyantron Logistics Technology Co., Ltd.

青骓物流科技有限公司

 

10.

Qingdao Cyantron Logistics Technology Co., Ltd.

青岛青骓物流科技有限公司

 

11.

Shanghai (YX) Pony AI Technology Co., Ltd.

小马易行科技(上海)有限公司

 

12.

Beijing (RX) Pony AI Technology Co., Ltd.

北京小马睿行科技有限公司

 

13.

Guangzhou (YX) Pony AI Technology Co., Ltd.

 

广州小马易行科技有限公司

 

14.

Beijing (ZX) Pony AI Technology Co., Ltd.

北京小马智行科技有限公司

 

15.

Jiangsu RYE Data Technology Co., Ltd.

江苏黑麦数据科技有限公司

 

16.

Tianjin Poplar LLP

天津白杨科技合伙企业（有限合伙）

 

17.

Guangzhou (ZX) Pony AI Technology Co., Ltd.

广州小马智行科技有限公司

 

18.

Guangzhou Bibi Technology Co., Ltd.

广州哔哔出行科技服务有限公司

 

 

 

Exhibit 99.3

 

 

 

October 17, 2024

Pony AI Inc.
Suite #4-210, Governors Square

23 Lime Tree Bay Avenue. PO Box 32311

Grand Cayman KY1-1209, Cayman Islands

 

Re: Consent of Frost & Sullivan

 

Ladies and Gentlemen,

 

Reference is made to the registration statement on Form F-1 (the “Registration Statement”) filed by Pony AI Inc. (the “Company”) with the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended, in connection with its proposed initial public offering (the “Proposed IPO”).

 

We hereby consent to the use of and references to our name and the inclusion of information, data and statements from our research reports and amendments thereto, including, without limitation, the industry report titled “Global Autonomous Market Independent Market Research” (collectively, the “Reports”), and any subsequent amendments to the Reports, as well as the citation of our independent industry reports and amendments thereto, (i) in the Registration Statement and any amendments thereto, including, but not limited to, under the “Prospectus Summary”, “Industry” and “Business” sections; (ii) in any written correspondence with the SEC, (iii) in any other future filings with the SEC by the Company, including, without limitation, filings on Form 20-F, Form 6-K and other SEC filings (collectively, the “SEC Filings”), (iv) on the websites or in the publicity materials of the Company and its subsidiaries and affiliates, (v) in institutional and retail roadshows and other activities in connection with the Proposed IPO, and (vi) in other publicity and marketing materials in connection with the Proposed IPO.

 

We further hereby consent to the filing of this letter as an exhibit to the Registration Statement and any amendments thereto and as an exhibit to any other SEC Filings by the Company for the use of our data and information cited for the above-mentioned purposes.

 

[Signature page follows]

 

 

Yours faithfully,

 

For and on behalf of

Frost & Sullivan Limited

 

 

/s/ Charles Lau Name: Charles Lau
Title: Executive Director

 

 

 

Exhibit 99.4

 

Consent

 

Pony AI Inc. (the “Company”) has filed a Registration Statement on Form F-1 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), in connection with the Company’s initial public offering of Class A ordinary shares. In connection therewith, I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of the Company in the Registration Statement, as may be amended from time to time. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.

 

By:	/s/ Jackson Tai
Name:	Jackson Tai
Date:	October 17, 2024

 

 

 

Exhibit 99.5

 

Consent

 

Pony AI Inc. (the “Company”) has filed a Registration Statement on Form F-1 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), in connection with the Company’s initial public offering of Class A ordinary shares. In connection therewith, I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of the Company in the Registration Statement, as may be amended from time to time. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.

 

By:	/s/ Mark Qiu
Name:	Mark Qiu
Date:	October 17, 2024

 

 

 

Exhibit 107

 

Calculation of Filing Fee Tables

 

Form F-1

(Form Type)

 

Pony AI Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Newly Registered Securities

 

	Security Type	Security Class  Title	Fee Calculation or Carry Forward Rule	Amount Registered	Proposed Maximum Offering Price Per Unit	Maximum Aggregate Offering Price (1)	Fee Rate	Amount of Registration Fee
Fees to Be Paid	Equity	Class A ordinary shares, par value US$0.0005 per share (2)	Rule 457(o)			US$100,000,000 (3)	US$0.00015310	US$15,310.00
		Net Fee Due						US$15,310.00

 

(1)

Includes (a) Class A ordinary shares represented by ADSs that may be purchased by the underwriters pursuant to their over-allotment option, and (b) all Class A ordinary shares represented by ADSs initially offered and sold outside the United States that may be resold from time to time in the United States either as part of the distribution or within 40 days after the later of the effective date of this registration statement and the date the securities are first bona fide offered to the public.

 

(2)

American depositary shares issuable upon deposit of Class A ordinary shares registered hereby will be registered under a separate registration statement on Form F-6, as amended. Each American depositary share represents              Class A ordinary shares.

 

(3)

Estimated solely for the purpose of determining the amount of registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended.