Exhibit 1.1

 

[●] American Depositary Shares
Representing
[●] Class A Ordinary Shares
(par value US$0.00001 per share)

 

XCHG LIMITED

 

UNDERWRITING AGREEMENT

 

[●], 2024

 

 

[·], 2024

 

US Tiger Securities, Inc.

437 Madison Avenue, 27^th Floor

New York, NY 10022

United States of America

 

Huatai Securities (USA), Inc.

21 Floor East, 280 Park Avenue

New York, NY 10017

United States of America

 

As representatives (the “Representatives”) of the several Underwriters named in Schedule I hereto

 

Ladies and Gentlemen:

 

XCHG Limited, an exempted company incorporated in the Cayman Islands (the “Company”), proposes to issue and sell to the several Underwriters named in Schedule I hereto (the “Underwriters”) an aggregate of [·] American Depositary Shares (“ADSs”) representing [·] Class A ordinary shares, par value US$0.00001 per share, of the Company (the “Firm ADSs”).

 

The Company also proposes to issue and sell to the several Underwriters not more than an additional [·] American Depositary Shares representing [·] Class A ordinary shares, par value US$0.00001 per share, of the Company (the “Additional ADSs”) if and to the extent that the Representatives, as managers of the offering, shall have determined to exercise, on behalf of the Underwriters, the right to purchase such American Depositary Shares granted to the Underwriters in Section 2 hereof. The Firm ADSs and the Additional ADSs are hereinafter collectively referred to as the “Offered Securities.” The Class A ordinary shares, par value US$0.00001 per share, and the Class B ordinary shares, par value US$0.00001 per share, of the Company to be outstanding after giving effect to the sales contemplated hereby are hereinafter referred to as the “Ordinary Shares.”

 

The ADSs are to be issued pursuant to a deposit agreement (the “Deposit Agreement”), dated as of [·], 2024, among the Company, The Bank of New York Mellon, as depositary (the “Depositary”), and holders from time to time of the American Depositary Receipts (the “ADRs”) issued by the Depositary and evidencing the ADSs. The ADSs will represent the right to receive the Class A ordinary shares deposited pursuant to the Deposit Agreement.

 

 

The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form F-1, including a prospectus, relating to the Class A ordinary shares represented by the Offered Securities. The registration statement as amended at the time it becomes effective, including the information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A under the Securities Act of 1933, as amended (the “Securities Act”), is hereinafter referred to as the “Registration Statement”; the prospectus in the form first used to confirm sales of Offered Securities (or in the form first made available to the Underwriters by the Company to meet requests of purchasers pursuant to Rule 173 under the Securities Act) is hereinafter referred to as the “Prospectus.” If the Company has filed an abbreviated registration statement to register additional ADSs pursuant to Rule 462(b) under the Securities Act (the “Rule 462 Registration Statement”), then any reference herein to the term “Registration Statement” shall be deemed to include such Rule 462 Registration Statement. The Company has filed a registration statement on Form F-6 relating to the Offered Securities with the Commission (such registration statement on Form F-6, including all exhibits thereto, as amended at the time such registration statement becomes effective, being hereafter referred to as the “ADS Registration Statement”). The Company has also filed, in accordance with Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), a registration statement on Form 8-A (the “Form 8-A Registration Statement”) to register the Class A ordinary shares, par value US$0.00001 per share, of the Company under Section 12(b) of the Exchange Act.

 

For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act, “Time of Sale Prospectus” means the preliminary prospectus together with the documents and pricing information set forth in Schedule II hereto, “broadly available road show” means a “bona fide electronic road show” as defined in Rule 433(h)(5) under the Securities Act that has been made available without restriction to any person, “CSRC Archive Rules” means the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies (关于加强境内企业境外发行证券和上市相关保密和档案管理工作的规定) issued by the China Securities Regulatory Commission (the “CSRC”), Ministry of Finance of the PRC, National Administration of State Secrets Protection of the PRC, and National Archives Administration of the PRC (effective from March 31, 2023), as amended, supplemented or otherwise modified from time to time, “CSRC Filing Rules” means the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (境内企业境外发行证券和上市管理试行办法) and supporting guidelines issued by the CSRC (effective from March 31, 2023), as amended, supplemented or otherwise modified from time to time, “CSRC Filing Report” means the filing report of the Company in relation to the offering, including any amendments, supplements and/or modifications thereof, submitted to the CSRC on June 7, 2023 pursuant to Article 13 of the CSRC Filing Rules, “CSRC Filing(s)” means any letters, filings, correspondence, communications, documents, responses, undertakings and submissions in any form, including any amendments, supplements and/or modifications thereof, made or to be made to the CSRC, relating to or in connection with the offering pursuant to the CSRC Filing Rules and other applicable rules and requirements of the CSRC (including, without limitation, the CSRC Filing Report), and “CSRC Rules” means the CSRC Filing Rules and the CSRC Archive Rules. As used herein, the terms “Registration Statement,” “preliminary prospectus,” “Time of Sale Prospectus” and “Prospectus” shall include the documents, if any, incorporated by reference therein as of the date hereof.

 

 

1.            Representations and Warranties of the Company. The Company represents and warrants to and agrees with each of the Underwriters that:

 

(a)            Each of the Registration Statement, the ADS Registration Statement and the Form 8-A Registration Statement has become effective; no stop order suspending the effectiveness of the Registration Statement, the ADS Registration Statement or the Form 8-A Registration Statement is in effect, and no proceedings for such purpose are pending before or, to the Company’s knowledge, threatened by the Commission.

 

(b)            (i) Each of the Registration Statement, ADS Registration Statement and the Form 8-A Registration Statement, when it became effective, did not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) each of the Registration Statement, the ADS Registration Statement and the Prospectus complies and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder, (iii) the Form 8-A Registration Statement complies and, as amended or supplemented, if applicable, will comply in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder, (iv) the Time of Sale Prospectus does not, and at the time of each sale of the Offered Securities in connection with the offering when the Prospectus is not yet available to prospective purchasers and at the Closing Date (as defined in Section 4) and at each Option Closing Date (as defined in Section 2), the Time of Sale Prospectus, as then amended or supplemented by the Company, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (v) each road show, if any, when considered together with the Time of Sale Prospectus, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and (vi) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph do not apply to statements or omissions in the Registration Statement, the Time of Sale Prospectus or the Prospectus based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein, it being understood and agreed that the only such information is that described in Section 9(b).

 

 

(c)            The Company is not an “ineligible issuer” in connection with the offering pursuant to Rules 164, 405 and 433 under the Securities Act. Any free writing prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Each free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or on behalf of or used or referred to by the Company complies or will comply in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Any such free writing prospectus, as of its issue date and at all subsequent times through the completion of the sale of the Offered Securities, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement, the Time of Sale Prospectus or any preliminary or other prospectus deemed to part thereof that has not been superseded or modified. Except for the free writing prospectuses, if any, identified in Schedule II hereto, and electronic road shows, if any, each furnished to the Representatives before first use, the Company has not prepared, used or referred to, and will not, without the prior consent of the Representatives, prepare, use or refer to, any free writing prospectus.

 

(d)            The Company has been duly incorporated, is validly existing as an exempted company with limited liability in good standing under the laws of the Cayman Islands, has the corporate power and authority to own its property and to conduct its business as described in the Time of Sale Prospectus and is duly qualified to transact business and is in good standing (or the foreign equivalent to the extent the concept is applicable in such jurisdiction) in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not, individually or in the aggregate, result in a material adverse change or effect, or any development involving a prospective material adverse change or effect, in or on the condition (financial or otherwise), results of operations, shareholders’ equity, business, management, properties or prospects of the Company and its subsidiaries, taken as a whole, or on the ability of the Company and its subsidiaries to carry out their obligations under this Agreement and the Deposit Agreement(a “Material Adverse Effect”). The currently effective memorandum and articles of association or other constitutive or organizational documents of the Company comply with the requirements of applicable Cayman Islands law and are in full force and effect. The amended and restated memorandum and articles of association of the Company to be adopted immediately prior to closing on the Closing Date, filed as Exhibit [3.2] to the Registration Statement, comply with the requirements of applicable Cayman Islands law and, immediately following closing on the Closing Date, will be in full force and effect.

 

 

(e)            Each of the Company’s subsidiaries has been duly incorporated, is validly existing as a corporation or organization in good standing under the laws of the jurisdiction of its incorporation or organization, has the corporate power and authority to own its property and to conduct its business as described in the Time of Sale Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect; all of the equity interests of each subsidiary have been duly and validly authorized and issued, are owned directly or indirectly by the Company, are duly paid (to the extent payment has become due) in accordance with its respective articles of association in effect as of the date hereof, and non-assessable and are free and clear of all liens, encumbrances, equities or claims. None of the outstanding share capital or equity interest in any subsidiary was issued in violation of preemptive or similar rights of any security holder of such subsidiary. All of the constitutive or organizational documents of each of the subsidiaries comply with the requirements of applicable laws of its jurisdiction of incorporation or organization and are in full force and effect.

 

(f)            Except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, (i) none of the Company nor any of its subsidiaries is currently prohibited, directly or indirectly, from (1) paying any dividends or making any other distributions on its share capital, (2) making or repaying any loan or advance to the Company or any other subsidiary or (3) transferring any of its properties or assets to the Company or any other subsidiary; and (ii) all dividends and other distributions declared and payable upon the share capital of the Company or any of its subsidiaries (1) may be converted into foreign currency that may be freely transferred out of such entity’s jurisdiction of incorporation, without the consent, approval, authorization or order of, or qualification with, any court or governmental agency or body in such entity’s jurisdiction of incorporation or tax residence; and (2) are not and will not be subject to withholding, value added or other taxes under the currently effective laws and regulations of such entity’s jurisdiction of incorporation, without the necessity of obtaining any consents, approvals, authorizations, orders, registrations, clearances or qualifications of or with any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency having jurisdiction over the Company, any of the subsidiaries or any of their respective properties, assets or operations (each, a “Governmental Entity”).

 

(g)            The Company possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the subsidiaries, through its rights to authorize the shareholders of the subsidiaries to exercise their voting rights.

 

(h)            The Offered Securities have been approved for listing on the [NASDAQ Global Market], subject to official notice of issuance.

 

 

(i)             This Agreement has been duly authorized, executed and delivered by the Company.

 

(j)             The Deposit Agreement has been duly authorized and, when executed and delivered by the Company and, assuming due authorization, execution and delivery by the Depositary, will constitute a valid and legally binding agreement of the Company, enforceable in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and upon issuance by the Depositary of ADRs evidencing Offered Securities and the deposit of Class A ordinary shares in respect thereof in accordance with the provisions of the Deposit Agreement, such ADRs will be duly and validly issued and the persons in whose names the ADRs are registered will be entitled to the rights specified therein and in the Deposit Agreement; and the Deposit Agreement and the ADRs conform in all material respects to the descriptions thereof contained in each of the Time of Sale Prospectus and the Prospectus.

 

(k)            The authorized share capital of the Company conforms as to legal matters to the description thereof contained in each of the Time of Sale Prospectus and the Prospectus.

 

(l)             The Ordinary Shares issued and outstanding prior to the issuance of the Class A ordinary shares represented by the Offered Securities to be sold by the Company have been duly authorized and are validly issued, fully paid and non-assessable.

 

(m)           The Class A ordinary shares represented by the Offered Securities to be sold by the Company have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable, and the issuance of such Class A ordinary shares will not be subject to any preemptive or similar rights. Except as disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus, no person has the right, contractual or otherwise, to cause the Company to issue or sell to it any Ordinary Shares, ADSs or any other share capital of or other equity interests in the Company.

 

(n)           Neither the Company nor any of its subsidiaries is (i) in breach of or in default under any laws, regulations, rules, orders, judgments, decrees, guidelines or notices of its jurisdiction of organization or any other jurisdiction where it operates, (ii) in violation of its constitutive or organizational documents, or (iii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound, except in the case of (i) and (iii) above, where any such breach or default would not, individually or in aggregate, have a Material Adverse Effect.

 

 

(o)           The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement and the Deposit Agreement will not contravene any provision of applicable law or the memorandum and articles of association of the Company or any agreement or other instrument binding upon the Company or any of its subsidiaries that is material to the Company and its subsidiaries, taken as a whole, or any judgment, order or decree of any Governmental Entity having jurisdiction over the Company or any subsidiary, and no consent, approval, authorization or order of, or qualification with, any Governmental Entity is required for the performance by the Company of its obligations under this Agreement and the Deposit Agreement, except such as may be required by the securities or Blue Sky laws of the various states of the United States in connection with the offer and sale of the Offered Securities.

 

(p)            The application of the net proceeds from the offering of Offered Securities, as described in the Time of Sale Prospectus and the Prospectus, will not (i) contravene any provision of any current and applicable laws or the current constituent documents of the Company or any of its subsidiaries, (ii) contravene the terms or provisions of, or constitute a default under, any material indenture, mortgage, deed of trust, loan agreement, note, lease or other agreement or instrument currently binding upon the Company or any of its subsidiaries, or (iii) contravene or violate the terms or provisions of any order or decree of any Governmental Entity having jurisdiction over the Company or any subsidiary.

 

(q)           There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Time of Sale Prospectus.

 

(r)            There are no legal or governmental proceedings pending or threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject (i) other than proceedings accurately described in all material respects in the Time of Sale Prospectus and proceedings that would not have a Material Adverse Effect or (ii) that are required to be described in the Registration Statement or the Prospectus and are not so described; and there are no statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required.

 

(s)            Each preliminary prospectus filed as part of the registration statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

 

(t)            The Company is not, and immediately after giving effect to the offering and sale of the Offered Securities and the application of the proceeds thereof as described in the Prospectus will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

 

(u)            The Company and its subsidiaries (i) are in compliance with any and all applicable national, provincial, local and foreign laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a Material Adverse Effect.

 

(v)            There are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) which would, singly or in the aggregate, have a Material Adverse Effect.

 

(w)           Except as disclosed in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Securities Act with respect to any securities of the Company or to require the Company to include such securities with the Ordinary Shares registered pursuant to the Registration Statement.

 

 

(x)            Neither the Company nor any of its subsidiaries or their respective affiliates, nor any director or officer, nor, to the best of the Company’s knowledge, any employee, agent, affiliate, or representative of or other person associated with or acting on behalf of the Company or any of its subsidiaries or their respective affiliates, (i) has used any funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) has taken or will take any action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any foreign or domestic “government official” (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) to influence official action or secure an improper advantage; (iii) has violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or has committed an offence under the Bribery Act 2010 of the United Kingdom or any other applicable anti-bribery or anti-corruption laws; (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit; or (v) will use, directly or indirectly, the proceeds of this offering in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any person in violation of any applicable anti-corruption laws; and the Company and its subsidiaries and affiliates have conducted their businesses in compliance with applicable anti-corruption laws and have instituted and maintained and will continue to maintain policies and procedures designed to promote and achieve compliance with such laws and with the representation and warranty contained herein. No investigation, action, suit or proceedings by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of the subsidiaries with respect to the Anti-Corruption Laws is pending or threatened.

 

(y)            The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with all applicable financial recordkeeping and reporting requirements, including, to the extent applicable, those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of all jurisdictions where the Company and its subsidiaries conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental or regulatory agency (collectively, the “Anti-Money Laundering Laws”), and each of the Company and the subsidiaries has instituted and maintained policies and procedures designed to ensure continued compliance therewith and with the representation and warranty contained herein, and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the best of the Company’s knowledge, threatened.

 

 

(z)            (i) Neither the Company nor any of its subsidiaries, nor any director, officer of the Company or any of its subsidiaries, nor, to the best of the Company’s knowledge, any employee, agent, affiliate, representative or other person associated with or acting on behalf of the Company or any of its subsidiaries, is an individual or entity (“Person”) that is, or is owned 50% or more or controlled by a Person that is:

 

(A)            the subject or the target of any sanctions or export control restrictions administered or enforced by the U.S. government, including but not limited to the Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the U.S. Department of State (including, without limitation, the designation as a “specially designated national”, “blocked person” or “Chinese Military-Industrial Complex Company”), the U.S. Department of State, the U.S. Department of Commerce (including, without limitation, designation on the “Entity List” or “Unverified List”), the United Nations Security Council (“UNSC”), the European Union (“EU”) (including under Council Regulation (EC) No. 194/2008), or His Majesty’s Treasury (“HMT”), the Hong Kong Monetary Authority (“HKMA”), or other applicable sanctions authority (collectively, “Sanctions”), nor

 

(B)             engaged in any activities sanctionable under the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010, the Iran Sanctions Act, the Iran Threat Reduction and Syria Human Rights Act, or any applicable executive order; nor

 

(C)             located, organized or resident in a country, region or territory that is, or whose government is, the subject or the target of Sanctions (including, without limitation, the Crimea region of Ukraine, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, Cuba, Iran, North Korea and Syria).

 

(ii)            The Company represents and covenants that the Company and its subsidiaries will not, directly or indirectly, use the proceeds of the offering of the Offered Securities, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person:

 

(A)            to fund or facilitate any activities or business of, with, or involving any Person or in any country, region or territory that, at the time of such funding or facilitation, is, or whose government is, the subject or the target of Sanctions; or

 

(B)             in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering of the Offered Securities, whether as underwriter, advisor, investor or otherwise).

 

 

(iii)           The Company represents and covenants that, for the past five years, the Company and its subsidiaries have not knowingly engaged in, are not now knowingly engaged in, and will not engage in, any dealings or transactions with any Person, or in any country, region or territory, that at the time of the dealing or transaction is or was, or whose government was, the subject or the target of Sanctions, or that would result in a violation of Sanctions by any Person (including any Person participating in the offering of the Offered Securities);

 

(iv)           None of the issue and sale of the Offered Securities, the execution, delivery and performance of this Agreement, the consummation of any other transaction contemplated hereby, or the provision of services contemplated by this Agreement to the Company will result in a violation of any of the Sanctions.

 

(aa)          Subsequent to the respective dates as of which information is given in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, (i) the Company and its subsidiaries have not incurred any material liability or obligation, direct or contingent, nor entered into any material transaction; (ii) the Company has not purchased any of its outstanding share capital, nor declared, paid or otherwise made any dividend or distribution of any kind on its share capital other than ordinary and customary dividends; and (iii) there has not been any material change in the share capital, short-term debt or long-term debt of the Company and its subsidiaries, except in each case as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus.

 

(bb)         The Company and its subsidiaries have good and marketable title (in fee simple in the case of real property in applicable jurisdictions, and valid land use rights and building ownership certificates in the case of real property in the PRC) to all real property and good and marketable title to all personal property owned by them which is material to the business of the Company and its subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and its subsidiaries; and any real property and buildings held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries, except in each case as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus.

 

 

(cc)          The Company and its subsidiaries own, possess, or have been authorized to use, or can acquire on reasonable terms, sufficient trademarks, trade names, patent rights, copyrights, domain names, licenses, trade secrets, inventions, technology, know-how and other intellectual property and similar rights, including registrations and applications for registration thereof (collectively, “Intellectual Property Rights”) necessary or material to the conduct of the business as now conducted, and the expected expiration of any such Intellectual Property Rights would not, individually or in the aggregate, have a Material Adverse Effect. To the knowledge of the Company, (i) there is no material infringement, misappropriation, breach, default or other violation, or the occurrence of any event that with notice or the passage of time would constitute any of the foregoing, by any third parties of any of the Intellectual Property Rights of the Company or its subsidiaries; (ii) there is no pending or threatened action, suit, proceeding or claim by others challenging the Company’s or the subsidiaries’ rights in or to, or the violation of any of the terms of, any of their Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim; and (iii) there is no pending or threatened action, suit, proceeding or claim by others that the Company or any of its subsidiaries infringes, misappropriates or otherwise violates or conflicts with any Intellectual Property Rights or other proprietary rights of others and the Company is unaware of any other fact which would form a reasonable basis for any such claim, except in each case covered by clauses (i) to (iii) such as would not, if determined adversely to the Company or its subsidiaries, individually or in the aggregate, have a Material Adverse Effect.

 

(dd)         The Company’s and the subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications and databases are adequate for, and operate and perform as required in connection with, the operation of the business of the Company and the subsidiaries as currently conducted, free and clear of all bugs, errors, defects, Trojan horses, time bombs, malware and other corruption, except where such inadequacies would not, individually or in the aggregate, result in a Material Adverse Effect. The Company has adopted and maintains data privacy and security policies designed to comply with all applicable laws, and each of the Company and the subsidiaries has at all times complied with all applicable policies and third-party obligations (imposed by applicable laws, regulations or contracts) regarding the collection, use, transfer, storage, protection, disposal and disclosure by the Company and the subsidiaries of personally identifiable information and data and any other information and data collected from or provided by third parties as well as data that may constitute trade secrets and working secrets of any Governmental Entity or would otherwise be detrimental to national security or public interest pursuant to the applicable laws in all material respects. The Company and the subsidiaries have taken all commercially reasonable steps to protect the information technology systems and data used in connection with the operation of the Company and the subsidiaries and/or the offering. There has been no material security breach or attack or other compromise of or relating to any such information technology systems or data, and, no material action, suit or proceeding (including, without limitation, governmental investigations or inquiries) by or before any Governmental Entity involving the Company or any of the subsidiaries with respect to applicable cybersecurity, data privacy and security and confidentiality or archive administration laws is pending or threatened. The Company has not been informed by any Governmental Entity that the Company must file for a cybersecurity review under the Cybersecurity Review Measures of the Cyberspace Administration of China, which came into effect on February 25, 2022. The Company will use reasonable best efforts to fully cooperate once being informed by any Governmental Entity of any such cybersecurity review and report to the Cybersecurity Review Office once relevant products and services provided by the Company may affect national security and is required by applicable Laws to make such report. The Company has not received any notice or determination from any Governmental Entity or competent industry authorities identifying the Company or any of its subsidiaries as a critical information infrastructure operator.

 

 

(ee)          No material labor dispute with the employees of the Company or any of its subsidiaries exists, except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, or, to the knowledge of the Company, is imminent; and the Company is not aware of any existing, threatened or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers or contractors that could have a Material Adverse Effect.

 

(ff)           Neither the Company nor any of its subsidiaries has sent or received any written communication regarding termination of, or intent not to renew, any of the material contracts or agreements specifically referred to or described in the Time of Sale Prospectus, or specifically referred to or described in, or filed as an exhibit to, the Registration Statement, and no such termination or non-renewal has been threatened by the Company, any of its subsidiaries or, to the Company’s knowledge after due inquiry, any other party to any such contract or agreement.

 

(gg)         The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; neither the Company nor any of its subsidiaries has been refused any insurance coverage sought or applied for; and neither the Company nor any of its subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect, except in each case as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus.

 

(hh)         The Company and its subsidiaries possess all licenses, consents, authorizations, approvals, orders, certificates and permits issued by the appropriate national, provincial, local or foreign regulatory authorities necessary to conduct their respective businesses; neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such license, consent, authorization, approval, order, certificate or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect, except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus; and the Company and its subsidiaries are in compliance with the provisions of all such licenses, consents, authorizations, approvals, orders, certificates or permits in all material respects.

 

 

(ii)            The Company maintains effective internal control over financial reporting (as defined under Rule 13-a15 and Rule 15d-15 under the Exchange Act) and a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles in the United States and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, since the end of the Company’s most recent audited fiscal year, there has been (i) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (ii) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company’s principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective.

 

(jj)            The Company has taken all necessary actions to ensure that, upon the effectiveness of the Registration Statement, it will be in compliance with all provisions of the Sarbanes-Oxley Act of 2002 and all rules and regulations promulgated thereunder or implementing the provisions thereof (the “Sarbanes-Oxley Act”) that are then in effect and with which the Company is required to comply as of the effectiveness of the Registration Statement, and is actively taking steps to ensure that it will be in compliance with other provisions of the Sarbanes-Oxley Act not currently in effect, upon the effectiveness of such provisions, or which will become applicable to the Company at all times after the effectiveness of the Registration Statement.

 

(kk)          KPMG Huazhen LLP, who have audited certain financial statements of the Company, are independent public accountants as required by the Act and the rules and regulations of the Commission thereunder and are independent in accordance with the requirements of the U.S. Public Company Accounting Oversight Board.

 

 

(ll)            The audited consolidated financial statements (and the notes thereto) of the Company included in the Registration Statement, Time of Sale Prospectus and Prospectus fairly present in all material respects the consolidated financial position of the Company as of the dates specified and the consolidated results of operations and changes in the consolidated financial position of the Company for the years specified, and such financial statements have been prepared in conformity with U.S. GAAP applied on a consistent basis throughout the years presented (other than as described therein); the summary and selected consolidated financial data included in the Registration Statement, Time of Sale Prospectus and Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited consolidated financial statements included therein. The Company is not reviewing or investigating, and neither the Company’s independent auditors nor its internal auditors have recommended that the Company review or investigate, (i) adding to, deleting, changing the application of, or changing the Company’s disclosure with respect to, any of the Company’s material accounting policies, (ii) any matter that could result in a restatement of the Company’s financial statements for any annual or interim period during the current or prior two fiscal years, or (iii) any significant deficiency, material weakness, change in internal controls or fraud involving management or other employees who have a significant role in internal controls.

 

(mm)        The section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates” in the Time of Sale Prospectus accurately describes: (i) accounting policies which the Company believes are the most important in the portrayal of the Company’s financial condition and results of operations and which require management’s most difficult, subjective or complex judgments (“Critical Accounting Estimates”); (ii) judgments and uncertainties affecting the application of Critical Accounting Estimates; and (iii) the likelihood that materially different amounts would be reported under different conditions or using different assumptions; and the Company’s Board of Directors and management have reviewed and agreed with the selection, application and disclosure of Critical Accounting Estimates and have consulted with its independent public accountants with regard to such disclosure.

 

(nn)         The section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Time of Sale Prospectus accurately and fully describes: (i) all material trends, demands, commitments, events, uncertainties and risks, and the potential effects thereof, that the Company believes would materially affect liquidity and are reasonably likely to occur; and (ii) all off-balance sheet transactions, arrangements, and obligations, including, without limitation, relationships with unconsolidated entities that are contractually limited to narrow activities that facilitate the transfer of or access to assets by the Company or any of its subsidiaries, such as structured finance entities and special purpose entities (collectively, “off-balance sheet arrangements”) that are reasonably likely to have a material effect on the liquidity of the Company or any of its subsidiaries or the availability thereof or the requirements of the Company or any of its subsidiaries for capital resources.

 

 

(oo)         The statements in the Time of Sale Prospectus and the Prospectus under the headings “Prospectus Summary,” “Risk Factors,” “Use of Proceeds”, “Dividend Policy”, “Enforceability of Civil Liabilities,” “Corporate History and Structure,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” “Regulation,” “Management”, “Related Party Transactions,” “Description of Share Capital,” “Description of American Depositary Shares,” “Shares Eligible for Future Sale”, “Taxation” and “Underwriting,” insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are accurate, complete and fair summaries of such matters described therein in all material respects.

 

(pp)         Any statistical and market-related data included in the Registration Statement, the Time of Sale Prospectus or the Prospectus are based on or derived from sources that the Company believes, after reasonable inquiry, to be reliable and accurate and, to the extent required, the Company has obtained the written consent to the use of such data from such sources.

 

(qq)         Except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, the Company has not sold, issued or distributed any Ordinary Shares during the six-month period preceding the date hereof, including any sales pursuant to Rule 144A under, or Regulation D or S of, the Securities Act, other than shares issued pursuant to employee benefit plans, qualified share option plans or other employee compensation plans or pursuant to outstanding options, rights or warrants.

 

(rr)           Neither the Company nor any of its subsidiaries has taken, directly or indirectly, any action which was designed to or which has constituted or which might reasonably be expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Offered Securities.

 

(ss)          The Company and each of its subsidiaries have filed all national, provincial, local and foreign tax returns required to be filed through the date of this Agreement or have requested extensions thereof (except where the failure to file would not, individually or in the aggregate, have a Material Adverse Effect) and have paid all taxes required to be paid thereon (except for cases in which the failure to file or pay would not have a Material Adverse Effect, or, except as currently being contested in good faith and for which reserves required by U.S. GAAP have been created in the financial statements of the Company), and no tax deficiency has been determined adversely to the Company or any of its subsidiaries which has had (nor does the Company nor any of its subsidiaries have any notice or knowledge of any tax deficiency which could reasonably be expected to be determined adversely to the Company or its subsidiaries and which could reasonably be expected to have) a Material Adverse Effect.

 

 

(tt)           From the time of initial confidential submission of the Registration Statement to the Commission through the date hereof, the Company has been and is an “emerging growth company,” as defined in Section 2(a) of the Securities Act (an “Emerging Growth Company”).

 

(uu)         The Company (i) has not alone engaged in any Testing-the-Waters Communication other than Testing-the-Waters Communications with the consent of the Representatives with entities that are qualified institutional buyers within the meaning of Rule 144A under the Securities Act or institutions that are accredited investors within the meaning of Rule 501 under the Securities Act and (ii) has not authorized anyone other than the Representatives to engage in Testing-the-Waters Communications. The Company reconfirms that the Representatives have been authorized to act on its behalf in undertaking Testing-the-Waters Communications. The Company has not distributed any Written Testing-the-Waters Communications other than those listed on Schedule III hereto. “Testing-the-Waters Communication” means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act. “Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Securities Act.

 

(vv)         As of the time of each sale of Offered Securities in connection with the offering when the Prospectus is not yet available to prospective purchasers, no individual Written Testing-the-Waters Communication, when considered together with the Time of Sale Prospectus, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(ww)        The Company has not distributed and, prior to the later of the Closing Date or any Option Closing Date and the completion of the distribution of the Offered Securities will not distribute any offering material in connection with the offering and sale of the Offered Securities other than any preliminary prospectus, the Prospectus, any free writing prospectuses, if any, identified in Schedule II hereto and any Written Testing-the-Waters Communications listed on Schedule III hereto.

 

(xx)           Except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, none of the Company or any of its subsidiaries is engaged in any material transactions with its directors, officers, management, shareholders, or any other affiliate, including any person who formerly held a position as a director, officer and/or shareholder.

 

 

(yy)          There are no contracts, agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or any Underwriter for a brokerage commission, finder’s fee or other similar payment in connection with the issuance and sale of the ADSs and the Class A ordinary shares represented thereby.

 

(zz)          The Company is aware of and has been advised as to, the content of the Rules on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors jointly promulgated by the Ministry of Commerce, the State Assets Supervision and Administration Commission, the State Tax Administration, the State Administration of Industry and Commerce, the CSRC and the State Administration of Foreign Exchange of the PRC on August 8, 2006, as amended on June 22, 2009 (together with any official clarification, guidance, interpretation or implementation rules related thereto, the “M&A Rules”), in particular the relevant provisions thereof which purport to require offshore special purpose vehicles, or SPVs, formed for listing purposes and controlled directly or indirectly by PRC companies or individuals, to obtain the approval of the CSRC prior to the listing and trading of their securities on an overseas stock exchange; the Company is aware of and has been advised as to, the content of the CSRC Rules; the Company has received legal advice specifically with respect to the M&A Rules and the CSRC Rules from its PRC counsel and the Company understands such legal advice; and the Company has fully communicated such legal advice from its PRC counsel to each of its directors that signed the Registration Statement and each director has confirmed that he or she understands such legal advice; the Company and each director of the Company that signed the Registration Statement understand the potential personal liability to which each director of the Company that signed the Registration Statement and the executive officers of the Company may be subject in the event that the offering and sales of the Offered Securities as contemplated in this Agreement or the listing and trading of the Offered Securities on the [NASDAQ Global Market] were deemed not to be in compliance with the M&A Rules or the CSRC Rules.

 

(aaa)        Except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, the issuance and sale of the Offered Securities and the Class A ordinary shares represented thereby, the listing and trading of the Offered Securities on the [NASDAQ Global Market] and the consummation of the transactions contemplated by this Agreement and the Deposit Agreement are not and will not be at the Closing Date or any Option Closing Date adversely affected by the M&A Rules. The Company has not been informed by any Governmental Entity that it needs to obtain approval from any Governmental Entity in connection with the transactions contemplated under this Agreement, and to the Company’s knowledge no such approval is required.

 

(bbb)       The Company has complied with all requirements and timely submitted all requisite filings in connection with the offering (including, without limitation, the CSRC Filing Report) with the CSRC pursuant to the CSRC Filing Rules and all applicable Laws, and the Company has not received any notice of rejection, withdrawal or revocation from the CSRC in connection with such CSRC Filings. Each of the CSRC Filings is and remains complete, true and accurate and not misleading in any respect, is in compliance with the disclosure requirements pursuant to the CSRC Filing Rules and does not omit any information which would make the statements made therein, in light of the circumstances under which they were made, misleading in any respect.

 

 

(ccc)        Each of the Company and its subsidiaries that were incorporated outside of the PRC has taken, or is in the process of taking, reasonable steps to comply with, and to ensure compliance by each of its shareholders, option holders, directors, officers and employees that is, or is directly or indirectly owned or controlled by, a PRC resident or PRC citizen with any applicable rules and regulations of the relevant PRC government agencies (including but not limited to the Ministry of Commerce, the National Development and Reform Commission and the State Administration of Foreign Exchange) relating to overseas investment by PRC residents and citizens or the repatriation of the proceeds from overseas offering and listing by offshore special purpose vehicles controlled directly or indirectly by PRC companies and individuals, such as the Company (the “PRC Overseas Investment and Listing Regulations”), including without limitation, requesting each shareholder, option holder, director, officer and employee that is, or is directly or indirectly owned or controlled by, a PRC resident or citizen to complete any registration and other procedures required under applicable PRC Overseas Investment and Listing Regulations.

 

(ddd)        [Reserved].

 

(eee)        Except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, there are no affiliations or associations between any member of FINRA and the Company; there are no affiliations or associations between (i) any member of FINRA and (ii) any of the Company’s officers, directors or, to the knowledge of the Company, 10% or greater security holders or any beneficial owner of the Company’s unregistered equity securities that were acquired at any time on or after the 180th day immediately preceding the date the Registration Statement was initially filed with the Commission.

 

(fff)          Except for any taxes imposed on any Underwriter by the PRC, Hong Kong, or the Cayman Islands as a result of any present or former connection (other than any connection resulting from the transactions contemplated by this Agreement) between such Underwriter and the jurisdiction imposing such taxes, no stamp, documentary, issuance, registration, transfer, withholding, capital gains, income or other taxes or duties are payable by or on behalf of the Underwriters, the Company or any of its subsidiaries in the Cayman Islands, Hong Kong or the PRC, or to any taxing authority thereof or therein, in connection with (i) the execution, delivery or consummation of this Agreement (except for nominal stamp duty if this Agreement is executed in or brought into the Cayman Islands), (ii) the creation, allotment and issuance of the Class A ordinary shares represented by the Offered Securities, (iii) the deposit with the Depositary of the Class A ordinary shares represented by the Offered Securities by the Company against the issuance of ADRs evidencing the Offered Securities, (iv) the sale and delivery of the Offered Securities to the Underwriters or purchasers procured by the Underwriters, or (iv) the resale and delivery of the Offered Securities by the Underwriters in the manner contemplated herein.

 

 

(ggg)       The Company does not expect to be a “passive foreign investment company” (“PFIC”) for U.S. federal income tax purposes for its current taxable year.

 

(hhh)       It is not necessary under the laws of the Cayman Islands (i) to enable the Underwriters to enforce their rights under this Agreement or to enable any holder of Offered Securities to enforce their respective rights thereunder, provided that they are not otherwise engaged in business in the Cayman Islands, or (ii) solely by reason of the execution, delivery or consummation of this Agreement, for any of the Underwriters or any holder of Offered Securities or Ordinary Shares to be qualified or entitled to carry out business in the Cayman Islands.

 

(iii)           Under the laws of the Cayman Islands, each holder of ADRs evidencing Offered Securities issued pursuant to the Deposit Agreement shall be entitled, subject to the Deposit Agreement, to seek enforcement of its rights through the Depositary or its nominee registered as representative of the holders of the ADRs in a direct suit, action or proceeding against the Company.

 

(jjj)           Each of this Agreement and the Deposit Agreement is in proper form under the laws of the Cayman Islands for the enforcement thereof against the Company; and to ensure the legality, validity, enforceability or admissibility into evidence in Cayman Islands of this Agreement and the Deposit Agreement, it is not necessary that this Agreement or the Deposit Agreement be filed or recorded with any court or other authority in the Cayman Islands or that any stamp or similar tax in the Cayman Islands be paid on or in respect of this Agreement, the Deposit Agreement or any other documents to be furnished hereunder, except for nominal stamp duty if the documents are executed in or brought into the Cayman Islands.

 

(kkk)        The Company is a “foreign private issuer” as defined in Rule 405 of the Securities Act.

 

(lll)           Except as described under the section “Enforceability of Civil Liabilities” in the Time of Sale Prospectus and the Prospectus, the courts of the Cayman Islands, Hong Kong and the PRC would recognize as a valid judgment any final monetary judgment obtained against the Company in the courts of the State of New York.

 

 

(mmm)     Neither the Company nor any of its subsidiaries nor any of its or their properties or assets has any immunity from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution or otherwise) under the laws of the Cayman Islands, Hong Kong or the PRC. The irrevocable and unconditional waiver and agreement of the Company contained in Section 19(a) not to plead or claim any such immunity in any legal action, suit or proceeding based on this Agreement is valid and binding under the laws of the Cayman Islands, Hong Kong and the PRC.

 

(nnn)       The choice of law of the State of New York as the governing law of this Agreement is a valid choice of law under the laws of the Cayman Islands, Hong Kong and the PRC and will be honored by the courts of the Cayman Islands, Hong Kong and the PRC, subject to the discretion of the relevant courts and public policies and other principles to be considered by such courts and the other conditions described under the section titled “Enforceability of Civil Liabilities” in the Time of Sale Prospectus. The Company has the power to submit, and pursuant to Section 19(a) has, to the extent permitted by law, legally, validly, effectively and irrevocably submitted, to the jurisdiction of the Specified Courts (as defined in Section 19(a)), and has the power to designate, appoint and empower, and pursuant to Section 19(a), has legally, validly and effectively designated, appointed and empowered an agent for service of process in any suit or proceeding based on or arising under this Agreement in any of the Specified Courts.

 

(ooo)       No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Registration Statement, the Time of Sale Prospectus and the Prospectus (including all amendments and supplements thereto) has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

 

(ppp)       Neither the Company nor, to the knowledge of the Company, any of its affiliates, is a party to any scheme or arrangement through which shareholders or potential shareholders are being loaned, given or otherwise having money made available for the purchase of Offered Securities whether before, in or after the offering. The Company is not aware of any such scheme or arrangement, regardless of whether it is a party to a formal agreement.

 

2.            Agreements to Sell and Purchase. The Company hereby agrees to sell to the several Underwriters, and each Underwriter, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees, severally and not jointly, to purchase from the Company at US$[·] per ADS (the “Purchase Price”) the number of Firm ADSs (subject to such adjustments to eliminate fractional shares as the Representatives may determine) that bears the same proportion to the number of Firm ADSs to be sold by the Company as the number of Firm ADSs set forth in Schedule I hereto opposite the name of such Underwriter bears to the total number of Firm ADSs.

 

 

On the basis of the representations and warranties contained in this Agreement, and subject to its terms and conditions, the Company agrees to sell to the Underwriters the Additional ADSs, and the Underwriters shall have the right to purchase, severally and not jointly, up to [·] Additional ADSs at the Purchase Price, provided, however, that the amount paid by the Underwriters for any Additional ADSs shall be reduced by an amount per share equal to any dividends declared by the Company and payable on the Firm ADSs but not payable on such Additional ADSs. The Representatives may exercise this right on behalf of the Underwriters in whole or from time to time in part by giving written notice not later than 30 days after the date of this Agreement. Any exercise notice shall specify the number of Additional ADSs to be purchased by the Underwriters and the date on which such shares are to be purchased. Each purchase date must be at least one business day after the written notice is given and may not be earlier than the closing date for the Firm ADSs nor later than ten business days after the date of such notice. Additional ADSs may be purchased as provided in Section 4 hereof solely for the purpose of covering over-allotments made in connection with the offering of the Firm ADSs. On each day, if any, that Additional ADSs are to be purchased (an “Option Closing Date”), each Underwriter agrees, severally and not jointly, to purchase the number of Additional ADSs (subject to such adjustments to eliminate fractional shares as the Representatives may determine) that bears the same proportion to the total number of Additional ADSs to be purchased on such Option Closing Date as the number of Firm ADSs set forth in Schedule I hereto opposite the name of such Underwriter bears to the total number of Firm ADSs.

 

The Company hereby agrees that, without the prior written consent of the Representatives on behalf of the Underwriters, it will not, during the period ending 180 days after the date of the Prospectus (the “Restricted Period”), (1) offer, pledge, issue, sell, 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, lend, or otherwise transfer or dispose of, directly or indirectly, any ADSs or Ordinary Shares or any other securities so owned convertible into or exercisable or exchangeable for ADSs or Ordinary Shares or (2) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the ADSs or Ordinary Shares, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of ADSs, Ordinary Shares or such other securities, in cash or otherwise or (3) submit or file any registration statement with the Commission relating to any ADSs or Ordinary Shares or any securities convertible into or exercisable or exchangeable for ADSs or Ordinary Shares or publicly disclose the intention to take any such action (other than registration statements on Form S-8 relating to the issuance, vesting, exercise or settlement of equity awards granted or to be granted pursuant to any share incentive plan that is in effect as of the date hereof and disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus).

 

 

The restrictions contained in the preceding paragraph shall not apply to (a) the Offered Securities to be sold hereunder, (b) the issuance by the Company of ADSs or Ordinary Shares upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof and which is described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, provided that the Company shall cause the recipient of such securities to not sell, transfer, pledge or otherwise dispose his or her interest in such securities during the Restricted Period, (c) the issuance of Ordinary Shares or securities convertible into or exercisable for Ordinary Shares (whether upon the exercise of stock options or otherwise) or the grant of options to purchase Ordinary Shares or other equity-based compensation pursuant to share incentive plans that are in effect as of the date hereof and disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus, provided that the Company shall cause the recipient of such securities to not sell, transfer, pledge or otherwise dispose his or her interest in such securities during the Restricted Period, (d) the deposit of Ordinary Shares with the Depositary for conversion into ADSs in connection with the contemplated issuance of share awards under the Company’s share incentive plans that are in effect as of the date hereof and disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus, or (e) facilitating the establishment of a trading plan on behalf of a shareholder, officer or director of the Company pursuant to Rule 10b5-1 under the Exchange Act for the transfer of ADSs or Ordinary Shares of the Company, provided that (i) such plan does not provide for the transfer of Ordinary Shares or ADSs during the Restricted Period and (ii) no public announcement or filing under the Exchange Act is required of or voluntarily made by or on behalf of the Company regarding the establishment of such plan.

 

If the Representatives, in their sole discretion, agree to release or waive the restrictions set forth in a “lock-up” agreement described in Section 5(n) hereof for an officer or director of the Company and provides the Company with notice of the impending release or waiver at least three business days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit B hereto through a major news service at least two business days before the effective date of the release or waiver.

 

3.            Terms of Public Offering. The Company is advised by the Representatives that the Underwriters propose to make a public offering of their respective portions of the Offered Securities as soon after the Registration Statement and this Agreement have become effective as in the judgment of the Representatives is advisable. The Company is further advised by the Representatives that the Offered Securities are to be offered to the public initially at $US[·] per ADS (the “Public Offering Price”).

 

4.            Payment and Delivery. Payment for the Firm ADSs to be sold by the Company shall be made to the Company in Federal or other funds immediately available in New York City to the account specified by the Company to the Underwriters at least forty-eight hours in advance of such payment against delivery of such Firm ADSs for the respective accounts of the several Underwriters at 10:00 a.m., New York City time, on [·], 2024, or at such other time on the same or such other date, not later than [·], 2024, as shall be designated in writing by the Representatives. The time and date of such payment are hereinafter referred to as the “Closing Date.”

 

Payment for any Additional ADSs shall be made to the Company in Federal or other funds immediately available in New York City to the account specified by the Company to the Underwriters at least forty-eight hours in advance of such payment against delivery of such Additional ADSs for the respective accounts of the several Underwriters at 10:00 a.m., New York City time, on the date specified in the corresponding notice described in Section 2 or at such other time on the same or on such other date, in any event not later than [·], 2024, as shall be designated in writing by the Representatives.

 

 

The Firm ADSs and Additional ADSs shall be registered in such names and in such denominations as the Representatives shall request in writing not later than one full business day prior to the Closing Date or the applicable Option Closing Date, as the case may be. The Firm ADSs and Additional ADSs shall be delivered to the Representatives on the Closing Date or an Option Closing Date, as the case may be, for the respective accounts of the several Underwriters through the facilities of the Depository Trust Company. The Purchase Price payable by the Underwriters shall be reduced by (i) any transfer taxes paid by, or on behalf of, the Underwriters in connection with the transfer of the Offered Securities to the Underwriters duly paid and (ii) any withholding required by law.

 

5.            Conditions to the Underwriters’ Obligations. The obligations of the Company to sell the Offered Securities to the Underwriters and the several obligations of the Underwriters to purchase and pay for the Offered Securities on the Closing Date are subject to the condition that the Registration Statement shall have become effective not later than [·] (New York City time) on the date hereof.

 

The several obligations of the Underwriters are subject to the following further conditions:

 

(a)            Subsequent to the execution and delivery of this Agreement and prior to the Closing Date there shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Time of Sale Prospectus that, in the judgment of the Representatives, is material and adverse and that makes it, in the judgment of the Representatives, impracticable to market the Offered Securities on the terms and in the manner contemplated in the Time of Sale Prospectus. The CSRC shall have accepted the CSRC Filings and published the filing results according to the CSRC Rules in respect of the CSRC Filings on its website, and such notice of acceptance and/or filing results published shall not have otherwise been rejected, withdrawn, revoked or invalidated prior to the Closing Date;

 

(b)            The Underwriters shall have received on the Closing Date a certificate, dated the Closing Date and signed by an executive officer of the Company, to the effect set forth in Section 5(a), Section 5(p) and Section 5(w) and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct as of the Closing Date and that the Company has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied hereunder on or before the Closing Date.

 

 

The officer signing and delivering such certificate may rely upon the best of his or her knowledge as to proceedings threatened.

 

(c)            The Underwriters shall have received on the Closing Date, a certificate, dated the Closing Date and signed by the chief financial officer of the Company, with respect to certain operating data and financial figures contained in the Registration Statement, the Time of Sale Prospectus and the Prospectus, in form and substance satisfactory to the Underwriters.

 

(d)            The Underwriters shall have received on the Closing Date an opinion and negative assurance letter of Davis Polk & Wardwell LLP, U.S. counsel for the Company, dated the Closing Date, in form and substance reasonably satisfactory to the Underwriters.

 

(e)            The Underwriters shall have received on the Closing Date an opinion of Maples and Calder (Hong Kong) LLP, Cayman Islands counsel for the Company, dated the Closing Date, in form and substance reasonably satisfactory to the Underwriters.

 

(f)             The Underwriters shall have received on the Closing Date an opinion of Fangda Partners, PRC counsel for the Company, dated the Closing Date, in form and substance reasonably satisfactory to the Underwriters.

 

(g)            The Underwriters shall have received on the Closing Date an opinion of GORG Partnerschaft von Rechtsanwalten mbB, German counsel for XCharge Europe GmbH, dated the Closing Date, in form and substance reasonably satisfactory to the Underwriters.

 

(h)            The Underwriters shall have received on the Closing Date an opinion of Davis Polk & Wardwell LLP, Hong Kong counsel for XCHARGE HK LIMITED, dated the Closing Date, in form and substance reasonably satisfactory to the Underwriters.

 

(i)             The Underwriters shall have received on the Closing Date an opinion of Maples and Calder (Hong Kong), British Virgin Islands counsel for Xcar Limited, dated the Closing Date, in form and substance reasonably satisfactory to the Underwriters.

 

The opinions of counsel for the Company (except for the opinion of PRC counsel for the Company) described above shall be rendered to the Underwriters at the request of the Company, and shall so state therein.

 

(j)             The Underwriters shall have received on the Closing Date an opinion and negative assurance letter of Latham & Watkins LLP, U.S. counsel for the Underwriters, dated the Closing Date, in form and substance satisfactory to the Underwriters.

 

 

(k)            The Underwriters shall have received on the Closing Date an opinion of Haiwen & Partners, PRC counsel for the Underwriters, dated the Closing Date, in form and substance satisfactory to the Underwriters.

 

(l)             The Underwriters shall have received on the Closing Date an opinion of Emmet, Marvin & Martin, LLP, counsel for the Depositary, dated the Closing Date, in form and substance satisfactory to the Underwriters.

 

(m)           The Underwriters shall have received, on each of the date hereof and the Closing Date, a letter dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to the Underwriters, from KPMG Huazhen LLP, independent public accountants, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement, the Time of Sale Prospectus and the Prospectus; provided that the letter delivered on the Closing Date shall use a “cut-off date” not earlier than the date hereof.

 

(n)            The “lock-up” agreements, each substantially in the form of Exhibit A hereto, between the Company, the Representatives and certain shareholders, officers and directors of the Company relating to sales and certain other dispositions of ADSs, Ordinary Shares or certain other securities, delivered to the Representatives on or before the date hereof, shall be in full force and effect on the Closing Date.

 

(o)            The several obligations of the Underwriters to purchase Additional ADSs hereunder are subject to the delivery to the Representatives on the applicable Option Closing Date of the following:

 

(i)             a certificate, dated the Option Closing Date and signed by an executive officer of the Company, confirming that the certificate delivered on the Closing Date pursuant to Section 5(b) hereof remains true and correct as of such Option Closing Date;

 

(ii)            an opinion and negative assurance letter Davis Polk & Wardwell LLP, U.S. counsel for the Company, dated the Option Closing Date, relating to the Additional ADSs to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(d) hereof;

 

(iii)           an opinion of Maples and Calder (Hong Kong) LLP, Cayman Islands counsel for the Company, dated the Option Closing Date, relating to the Additional ADSs to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(e) hereof;

 

 

(iv)           an opinion of Fangda Partners, PRC counsel for the Company, dated the Option Closing Date, relating to the Additional ADSs to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(f) hereof;

 

(v)            an opinion of GORG Partnerschaft von Rechtsanwalten mbB, German counsel for XCharge Europe GmbH, dated the Option Closing Date, relating to the Additional ADSs to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(g) hereof;

 

(vi)           an opinion of Davis Polk & Wardwell LLP, Hong Kong counsel for XCHARGE HK LIMITED, dated the Option Closing Date, relating to the Additional ADSs to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(h) hereof;

 

(vii)          an opinion of Maples and Calder (Hong Kong), British Virgin Islands counsel for Xcar Limited, dated the Option Closing Date, relating to the Additional ADSs to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(i) hereof;

 

(viii)         an opinion and negative assurance letter of Latham & Watkins LLP, U.S. counsel for the Underwriters, dated the Option Closing Date, relating to the Additional ADSs to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(j) hereof;

 

(ix)            an opinion of Haiwen & Partners, PRC counsel for the Underwriters, dated the Option Closing Date, relating to the Additional ADSs to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(k) hereof;

 

(x)             an opinion of Emmet, Marvin & Martin, LLP, counsel for the Depositary, dated the Option Closing Date, relating to the Additional ADSs to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(l) hereof;

 

(xi)            a letter dated the Option Closing Date, in form and substance satisfactory to the Underwriters, from KPMG Huazhen LLP, independent public accountants, substantially in the same form and substance as the letter furnished to the Underwriters pursuant to Section 5(m) hereof; provided that the letter delivered on the Option Closing Date shall use a “cut-off date” not earlier than three business days prior to such Option Closing Date; and

 

 

(xii)          such other documents as the Representatives may reasonably request with respect to the good standing of the Company, the due authorization and issuance of the Additional ADSs to be sold on such Option Closing Date and other matters related to the issuance of such Additional ADSs.

 

(p)            There shall not have been any adverse legislative or regulatory developments in the PRC following the signing of this Agreement, which in the Representatives’ sole judgment in good faith after consultation with the Company, would make it inadvisable or impractical to proceed with the public offering or the delivery of the Offered Securities at the Closing Date or any Option Closing Date, as the case may be, on the terms and in the manner contemplated in this Agreement.

 

(q)            The Company and the Depositary shall have executed and delivered the Deposit Agreement and, in the case of the Company, a side letter (the “Depositary Side Letter”) addressed to the Depositary, instructing the Depositary not to accept any shareholder’s deposit of Ordinary Shares in the Company’s American Depositary Receipt facility or issue any new ADSs evidencing the ADSs to any shareholder or any third party, unless consented to by the Company, and the Deposit Agreement shall be in full force and effect on the Closing Date. The Company and the Depositary shall have taken all actions necessary to permit the deposit of the Offered Securities and the issuance of the ADSs representing such Class A ordinary shares in accordance with the Deposit Agreement.

 

(r)            The Depositary shall have furnished or caused to be furnished to the Underwriters a certificate satisfactory to the Representatives of one of its authorized officers with respect to the deposit with it of the ADSs against issuance of the Offered Securities, the execution, issuance, countersignature and delivery of the ADSs pursuant to the Deposit Agreement and such other matters related thereto as the Representatives may reasonably request.

 

(s)            The ADSs representing the Offered Securities shall have been approved for listing on the [NASDAQ Global Market], subject only to official notice of issuance.

 

(t)             If the Company elects to rely upon Rule 462(b) under the Securities Act, the Company shall have filed a Rule 462 Registration Statement with the Commission in compliance with Rule 462(b) promptly after 4:00 p.m., New York City time, on the date of this Agreement, and the Company shall have at the time of filing either paid to the Commission the filing fee for the Rule 462 Registration Statement or given irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Securities Act.

 

 

(u)            The Company shall have filed the Prospectus with the Commission (including the information required by Rule 430A under the Securities Act) in the manner and within the time period required by Rule 424(b) under the Securities Act; or the Company shall have filed a post-effective amendment to the Registration Statement containing the information required by such Rule 430A, and such post-effective amendment shall have become effective.

 

(v)            No free writing prospectus, Prospectus or amendment or supplement to the Registration Statement, the ADS Registration Statement or the Prospectus shall have been filed to which the Representatives object in writing.

 

(w)           No stop order suspending the effectiveness of the Registration Statement, the ADS Registration Statement, any Rule 462 Registration Statement, or any post-effective amendment to the Registration Statement, shall be in effect and no proceedings for such purpose shall have been instituted or threatened by the Commission.

 

(x)            FINRA shall not have raised any objection with respect to the fairness or reasonableness of the underwriting, or other arrangements of the transactions contemplated hereby.

 

(y)            At or prior to the Closing Date and each Option Closing Date, the Offered Securities shall be eligible for clearance and settlement through the facilities of the DTC.

 

(z)            On the Closing Date or Option Closing Date, as the case may be, the Representatives and counsel for the Underwriters shall have received such information, documents, certificates and opinions as they may reasonably require for the purposes of enabling them to pass upon the accuracy and completeness of any statement in the Registration Statement, the Time of Sale Prospectus and the Prospectus, issuance and sale of the Offered Securities as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained.

 

6.            Covenants of the Company. The Company covenants with each Underwriter as follows:

 

(a)            To comply with the requirements of Rule 430A, and notify the Representatives immediately, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement, the Form 8-A Registration Statement or the ADS Registration Statement shall become effective, or any supplement to the Prospectus (including any prospectus wrapper) or any amended Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement, the Form 8-A Registration Statement, the ADS Registration Statement or any amendment or supplement to the Prospectus or for additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, the Form 8-A Registration Statement, the ADS Registration Statement or any post-effective amendment or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus, or of the suspension of the qualification of the Offered Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(e) of the 1933 Act concerning the Registration Statement or the ADS Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the 1933 Act in connection with the offering of the Offered Securities. The Company will effect all filings required under Rule 424(b), in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and will take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company will use reasonable efforts to prevent the issuance of any stop order, prevention or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.

 

 

(b)            To furnish to the Representatives, without charge, copies of the Registration Statement (including exhibits thereto) and for delivery to each other Underwriter a copy of the Registration Statement (without exhibits thereto) and to furnish to the Representatives in New York City, without charge, prior to 10:00 a.m. New York City time on the business day next succeeding the date of this Agreement and during the period mentioned in Section 6(i) or 6(j) below, as many copies of the Time of Sale Prospectus, the Prospectus and any supplements and amendments thereto or to the Registration Statement as the Representatives may reasonably request.

 

(c)            Before amending or supplementing the Registration Statement, the ADS Registration Statement, the Form 8-A Registration Statement, the Time of Sale Prospectus or the Prospectus, to furnish to the Representatives a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which the Representatives reasonably object.

 

(d)            To give the Representatives notice of its intention to make any filing pursuant to the Exchange Act prior to or on the later of the Closing Date or any Option Closing Date and to furnish the Representatives with copies of any such documents a reasonable amount of time prior to such proposed filing, and not to file or use any such document to which the Representatives or counsel for the Underwriters shall object.

 

(e)            To furnish to the Representatives a copy of each proposed free writing prospectus (including any electronic roadshow), or amendment thereof or supplement thereto, to be prepared by or on behalf of, used by, or referred to by the Company and not to use or refer to any proposed free writing prospectus to which the Representatives reasonably object.

 

 

(f)            If at any time following issuance of a free writing prospectus there occurred or occurs an event or development as a result of which such free writing prospectus conflicted or would conflict with the information contained in the Registration Statement or the ADS Registration Statement relating to the Offered Securities or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances, prevailing at that subsequent time, not misleading, to promptly notify the Representatives and to promptly (subject to Section 6(c)) amend or supplement, at its own expense, such free writing prospectus to eliminate or correct such conflict, untrue statement or omission.

 

(g)            Not to take any action that would result in an Underwriter or the Company being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of the Underwriter that the Underwriter otherwise would not have been required to file thereunder.

 

(h)            Not to (and to cause its affiliates not to) take, directly or indirectly, any action which is designed to or which constitutes or which would reasonably be expected to cause or result in stabilization or manipulation of the price of any security of the Company or facilitate the sale or resale of the Offered Securities.

 

(i)             If the Time of Sale Prospectus is being used to solicit offers to buy the Offered Securities at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Time of Sale Prospectus in order to make the statements therein, in the light of the circumstances, not misleading, or if any event shall occur or condition exist as a result of which the Time of Sale Prospectus conflicts with the information contained in the Registration Statement then on file, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Time of Sale Prospectus to comply with applicable law, forthwith to prepare, file with the Commission (subject to the last clause of this subsection (i)) and furnish, at its own expense, to the Underwriters and to any dealer upon request, either amendments or supplements to the Time of Sale Prospectus so that the statements in the Time of Sale Prospectus as so amended or supplemented will not, in the light of the circumstances when the Time of Sale Prospectus is delivered to a prospective purchaser, be misleading or so that the Time of Sale Prospectus, as amended or supplemented, will no longer conflict with the Registration Statement, or so that the Time of Sale Prospectus, as amended or supplemented, will comply with applicable law; to promptly give the Representatives written notice of any such event or condition of which the Company becomes aware; and before amending or supplementing the Time of Sale Prospectus, to furnish to the Representatives a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which the Representatives reasonably object.

 

 

(j)            If, during such period after the first date of the public offering of the Offered Securities as in the opinion of counsel for the Underwriters the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the Securities Act) is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the Securities Act) is delivered to a purchaser, not misleading, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Prospectus to comply with applicable law, forthwith to prepare, file with the Commission (subject to the last clause of this subsection (j)) and furnish, at its own expense, to the Underwriters and to the dealers (whose names and addresses the Representatives will furnish to the Company) to which Offered Securities may have been sold by the Representatives on behalf of the Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the Securities Act) is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with applicable law; to promptly give the Representatives written notice of any such event or condition of which the Company becomes aware; and before amending or supplementing the Prospectus, to furnish to the Representatives a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which the Representatives reasonably object.

 

(k)            To endeavor to qualify the Offered Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request.

 

(l)            To make generally available to the Company’s security holders and to the Representatives as soon as practicable an earnings statement covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the date of this Agreement which shall satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder. The Company, during the period when the Prospectus is required to be delivered under the Securities Act, will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and the applicable rules and regulations of the Commission thereunder. During the three-year period after the date of this Agreement, the Company will furnish to the Representatives and, upon request, to each of the other Underwriters, as soon as practicable after the end of each fiscal year, a copy of its annual report to shareholders for such year; and the Company will furnish to the Representatives (i) as soon as available, a copy of each report of the Company filed with the Commission under the Exchange Act or mailed to shareholders, and (ii) from time to time, such other information concerning the Company as the Representatives may reasonably request. However, so long as the Company is subject to the reporting requirements of either Section 13 or Section 15(d) of the Exchange Act and is timely filing reports with the Commission on its EDGAR reporting system, it is not required to furnish such reports or statements filed through EDGAR to the Underwriters.

 

 

(m)            To use the net proceeds received by it from the sale of the Offered Securities pursuant to this Agreement in the manner specified in the Time of Sale Prospectus under the caption “Use of Proceeds” and in compliance with any applicable laws, rules and regulations of any governmental body, agency or court having jurisdiction over the Company or any subsidiary; to not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions, or in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise); and to maintain and implement adequate internal controls and procedures to monitor and audit transactions that are reasonably designed to detect and prevent any use of the proceeds from the offering of the Offered Securities contemplated hereby that is inconsistent with any of the Company’s representations and obligations under the preceding sentence.

 

(n)            Not to facilitate any shareholder’s conversion of Ordinary Shares to ADSs during the Restricted Period and not to release the Depositary from the obligations set forth in, or otherwise amend, terminate or fail to enforce, the Depositary Agreement without the prior written consent of the Representatives. The Company shall at all times maintain transfer restrictions with respect to the ADSs and Ordinary Shares that are subject to transfer restrictions pursuant to this Agreement and the “lock-up” agreements referred to in Section 5(n) and shall ensure compliance with such restrictions on transfer of restricted ADSs and Ordinary Shares. The Company shall retain all share certificates that are by their terms subject to transfer restrictions until such time as such transfer restrictions are no longer applicable to such securities.

 

(o)            To pay, and indemnify and hold the Underwriters harmless against, any stamp, issue, registration, documentary, transfer, or other similar taxes or duties imposed under the laws of Cayman Islands, Hong Kong or the PRC or any political sub-division or taxing authority thereof or therein that is payable in connection with (i) the execution, delivery, consummation or enforcement of this Agreement or the Deposit Agreement, (ii) the creation, allotment and issuance of the Class A ordinary shares represented by the Offered Securities, (iii) the sale and delivery of the Offered Securities to the Underwriters or purchasers procured by the Underwriters, or (iv) the resale and delivery of the Offered Securities by the Underwriters in the manner contemplated herein.

 

 

(p)            To promptly notify the Representatives if the Company ceases to be an Emerging Growth Company at any time prior to the later of (a) completion of the distribution of the Offered Securities within the meaning of the Securities Act and (b) completion of the Restricted Period referred to in Section 2.

 

(q)            Each Written Testing-the-Waters Communication, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Offered Securities, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement, the Time of Sale Prospectus and the Prospectus. If at any time following the distribution of any Written Testing-the-Waters Communication there occurred or occurs an event or development as a result of which such Written Testing-the-Waters Communication conflicted or would conflict with the information then contained in the Registration Statement, the Time of Sale Prospectus or the Prospectus, or as a result of which such Written Testing-the-Waters Communication included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, to promptly notify the Representatives and will promptly amend or supplement, at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue statement or omission.

 

(r)            To comply with the terms of the Deposit Agreement so that the ADSs will be issued by the Depositary and delivered to each Underwriter’s participant account in DTC, pursuant to this Agreement on the Closing Date and each applicable Option Closing Date.

 

(s)            (i) To not attempt to avoid any judgment in connection with this Agreement obtained by it, applied to it, or denied to it in a court of competent jurisdiction outside the Cayman Islands; (ii) following the consummation of the offering, to use its best efforts to obtain and maintain all approvals required in the Cayman Islands to pay and remit outside the Cayman Islands all dividends declared by the Company and payable on the Ordinary Shares, if any; and (iii) to use its best efforts to obtain and maintain all approvals, if any, required in the Cayman Islands for the Company to acquire sufficient foreign exchange for the payment of dividends and all other relevant purposes.

 

(t)            To comply with the PRC Overseas Investment and Listing Regulations, and to use its reasonable efforts to cause holders of its Ordinary Shares that are, or that are directly or indirectly owned or controlled by, Chinese residents or Chinese citizens, to comply with the PRC Overseas Investment and Listing Regulations applicable to them, including, without limitation, requesting each such shareholder to complete any registration and other procedures required under applicable PRC Overseas Investment and Listing Regulations (including any applicable rules and regulations of the State Administration of Foreign Exchange).

 

 

(u)            To comply with applicable laws (including, without limitation, the CSRC Archive Rules) in connection with (A) the establishment and maintenance of adequate and effective internal control measures and internal systems for maintenance of data protection, confidentiality and archive administration; (B) the relevant requirements and approval and filing procedures in connection with its handling, disclosure, transfer and retention of transfer of state secrets and working secrets of government agencies or any other documents or materials that would otherwise be detrimental to national securities or public interest (the “Relevant Information”); and (C) the maintenance of confidentiality of any Relevant Information.

 

(v)            Where any material information shall be reported to the CSRC pursuant to applicable laws (including, without limitation, the CSRC Rules), promptly notify the CSRC or the relevant Governmental Entity and provide it with such material information in accordance with applicable laws, and promptly notify the Representatives (for themselves and on behalf of the Underwriters) of such material information to the extent permitted by applicable laws.

 

(w)            To use its best efforts to have the ADSs accepted for listing on the [NASDAQ Global Market] and maintain the listing of the ADSs on the [NASDAQ Global Market] for at least three (3) years after the date hereof, unless such listing is terminated as a result of a transaction approved by the holders of a majority of the voting securities of the Company.

 

(x)            Upon request of any Underwriter, to furnish, or cause to be furnished, to such Underwriter an electronic version of the Company’s trademarks, service marks and corporate logo for use on the website, if any, operated by such Underwriter for the purpose of facilitating the offering of the Offered Securities.

 

(y)            To use its best efforts to comply with and will use its best efforts to require the Company’s directors and executive officers, in their capacities as such, to comply with all applicable laws, rules and regulations, including, without limitation, the Sarbanes-Oxley Act.

 

(z)            That all sums payable by the Company under this Agreement shall be paid free and clear of and without deductions or withholdings of any present or future taxes or duties, unless the deduction or withholding is required by law, in which case the Company shall pay such additional amount as will result in the receipt by each Underwriter of the full amount that would have been received had no deduction or withholding been made, except to the extent of (i) any such taxes that are imposed on any Underwriter by reason of a present or former connection between the Underwriter and the jurisdiction imposing such taxes (other than a connection that would not have arisen but for (i) the execution or delivery of this Agreement, (ii) the enforcement of such Underwriter's rights hereunder or (iii) the transactions contemplated by this Agreement) and (ii) any such taxes that would not have been imposed but for the failure of such Underwriter to, upon the timely written request of the Company, use its reasonable efforts to provide any form, certificate, document or other information that would have reduced or eliminated the withholding or deduction of any such taxes.

 

 

(aa)           That all sums payable to an Underwriter shall be considered exclusive of any value added or similar taxes. Where the Company is obliged to pay value added or similar tax on any amount payable hereunder to an Underwriter, upon receipt of value added or similar tax receipts, the Company shall in addition to the sum payable hereunder pay an amount equal to any applicable value added or similar tax.

 

7.            Expenses. Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, the Company agrees to pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including: (i) the fees, disbursements and expenses of the Company’s counsel, the Company’s accountants in connection with the registration and delivery of the Offered Securities and Class A ordinary shares represented thereby under the Securities Act and all other fees or expenses in connection with the preparation and filing of the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, any free writing prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoing, including all printing costs associated therewith, and the mailing and delivering of copies thereof to the Underwriters and dealers, in the quantities hereinabove specified, (ii) all costs and expenses related to the transfer and delivery of the Offered Securities to the Underwriters, including any transfer or other similar taxes payable thereon, (iii) the cost of printing or producing any Blue Sky or Legal Investment memorandum in connection with the offer and sale of the Offered Securities under state securities laws and all expenses in connection with the qualification of the Offered Securities for offer and sale under state securities laws as provided in Section 6(k) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky or Legal Investment memorandum, (iv) all filing fees and the reasonable fees and disbursements of counsel to the Underwriters incurred in connection with the review and qualification of the offering of the Offered Securities by the Financial Industry Regulatory Authority, (v) all fees and expenses in connection with the preparation and filing of the Form 8-A Registration Statement relating to the Class A ordinary shares, par value US$0.00001 per share, of the Company and all costs and expenses incident to listing the ADSs on the [NASDAQ Global Market], (vi) the cost of printing certificates representing the ADSs or Class A ordinary shares represented thereby, (vii) the costs and charges of any transfer agent, registrar or depositary, (viii) the costs and expenses of the Company relating to investor presentations on any “road show” as defined in Rule 433(h) under the Securities Act (a “road show”) undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic road show, expenses associated with the production of road show slides and graphics, expenses associated with hosting investor meetings or luncheons, fees and expenses of any consultants engaged in connection with the road show presentations and travel, meals and lodging expenses of any such consultants and the Company’s representatives, and the cost of any aircraft chartered in connection with the road show, (ix) the document production charges and expenses associated with printing this Agreement, and (xi) all other costs and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section. It is understood, however, that except as provided in paragraphs (o), (z) and (aa) of Section 6, this Section 7, Section 9 entitled “Indemnity and Contribution” and the last paragraph of Section 12 below, the Underwriters will pay all of their costs and expenses, including fees and disbursements of their counsel, share transfer taxes payable on resale of any of the Offered Securities by them and any advertising expenses connected with any offers they may make.

 

 

8.            Covenants of the Underwriters. Each Underwriter severally covenants with the Company not to take any action that would result in the Company being required to file with the Commission under Rule 433(d) a free writing prospectus prepared by or on behalf of such Underwriter that otherwise would not be required to be filed by the Company thereunder, but for the action of the Underwriter.

 

9.            Indemnity and Contribution. (a) The Company agrees to indemnify and hold harmless each Underwriter, its directors, officers, employees, agents and each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each affiliate of any Underwriter within the meaning of Rule 405 under the Securities Act, and each of their respective directors, officers and employees, as follows:

 

(i)            from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim), joint or several, that arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus, the Time of Sale Prospectus or any amendment or supplement thereto, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Securities Act, any “road show”, or the Prospectus or any amendment or supplement thereto, or any Testing-the-Waters Communication or arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities arise out of or are based upon any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein, it being understood and agreed that the only such information is that described in Section 9(b);

 

 

(ii)            from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim), joint or several, that arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any CSRC Filings or arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading;

 

(b)            Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) that arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus, the Time of Sale Prospectus or any amendment or supplement thereto, or any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, or arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only with reference to information relating to such Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, any issuer free writing prospectus, road show, or the Prospectus or any amendment or supplement thereto, it being understood and agreed that the only such information furnished by any Underwriter through the Representatives consists of the name and address of each Underwriter.

 

 

(c)            In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 9(a) or 9(b), such person (the “indemnified party”) shall promptly notify the person against whom such indemnity may be sought (the “indemnifying party”) in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding; provided that the failure to notify the indemnifying party shall not relieve it from any liability that it may have under the preceding paragraphs of this Section 9 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under the preceding paragraphs of this Section 9. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for (i) the fees and expenses of more than one separate firm (in addition to any local counsel) for all Underwriters and all persons, if any, who control any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act or who are affiliates of any Underwriter within the meaning of Rule 405 under the Securities Act, (ii) the fees and expenses of more than one separate firm (in addition to any local counsel) for the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either such Section, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Underwriters and such control persons and affiliates of any Underwriters, such firm shall be designated in writing by the Representatives. In the case of any such separate firm for the Company, and such directors, officers and control persons of the Company, such firm shall be designated in writing by the Company. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement (x) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and (y) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.

 

 

(d)            To the extent the indemnification provided for in Section 9(a) or 9(b) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party or parties on the other hand from the offering of the Offered Securities or (ii) if the allocation provided by clause 8(d)(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 8(d)(i) above but also the relative fault of the indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Offered Securities shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Offered Securities (before deducting expenses) received by the Company on the one hand and the total underwriting discounts and commissions received by the Underwriters on the other hand, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate Public Offering Price of the Offered Securities. The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Underwriters’ respective obligations to contribute pursuant to this Section 9 are several in proportion to the respective number of Offered Securities they have purchased hereunder, and not joint.

 

(e)            The Company and the Underwriters agree that it would not be just or equitable if contribution pursuant to this Section 9 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in Section 9(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to in Section 9(d) shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 9, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 9 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.

 

 

(f)            The indemnity and contribution provisions contained in this Section 9 and the representations, warranties and other statements of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter, any person controlling any Underwriter or any affiliate of any Underwriter or the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Offered Securities.

 

10.           Termination. The Underwriters may terminate this Agreement by notice given by the Representatives to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on, or by, as the case may be, any of the New York Stock Exchange, the NYSE MKT, the [NASDAQ Global Market], the Stock Exchange of Hong Kong Limited, the London Stock Exchange, the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) a material disruption in securities settlement, payment or clearance services in the United States, the PRC, Hong Kong, the Cayman Islands or other relevant jurisdiction shall have occurred, (iv) any moratorium on commercial banking activities shall have been declared by Federal, New York State, Hong Kong, London, PRC, Cayman Islands or other relevant authorities or (v) there shall have occurred any outbreak or escalation of hostilities, outbreak of diseases or epidemics, or any change in financial markets, currency exchange rates or controls or any calamity or crisis that, in the judgment of the Representatives, is material and adverse and which, singly or together with any other event specified in this clause (v), makes it, in the judgment of the Representatives, impracticable or inadvisable to proceed with the offer, sale or delivery of the Offered Securities on the terms and in the manner contemplated in the Time of Sale Prospectus or the Prospectus.

 

11.           Representations, Warranties and Agreements to Survive. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or its affiliates or selling agents, any person controlling any Underwriter, its officers or directors, any person controlling the Company and (ii) delivery of and payment for the Offered Securities.

 

12.           Effectiveness; Defaulting Underwriters. This Agreement shall become effective upon the execution and delivery hereof by the parties hereto.

 

 

If, on the Closing Date or an Option Closing Date, as the case may be, any one or more of the Underwriters shall fail or refuse to purchase Offered Securities that it has or they have agreed to purchase hereunder on such date, and the aggregate number of Offered Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate number of the Offered Securities to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the number of Firm ADSs set forth opposite their respective names in Schedule I bears to the aggregate number of Firm ADSs set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as the Representatives may specify, to purchase the Offered Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the number of Offered Securities that any Underwriter has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 12 by an amount in excess of one-ninth of such number of Offered Securities without the written consent of such Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Firm ADSs and the aggregate number of Firm ADSs with respect to which such default occurs is more than one-tenth of the aggregate number of Firm ADSs to be purchased on such date, and arrangements satisfactory to the Representatives and the Company for the purchase of such Firm ADSs are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or the Company. In any such case either the Representatives or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement, in the Time of Sale Prospectus, in the Prospectus or in any other documents or arrangements may be effected. If, on an Option Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Additional ADSs and the aggregate number of Additional ADSs with respect to which such default occurs is more than one-tenth of the aggregate number of Additional ADSs to be purchased on such Option Closing Date, the non-defaulting Underwriters shall have the option to (i) terminate their obligation hereunder to purchase the Additional ADSs to be sold on such Option Closing Date or (ii) purchase not less than the number of Additional ADSs that such non-defaulting Underwriters would have been obligated to purchase in the absence of such default. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.

 

If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Underwriters in connection with this Agreement or the offering contemplated hereunder.

 

13.            Entire Agreement. (a) This Agreement, together with any contemporaneous written agreements and any prior written agreements (to the extent not superseded by this Agreement) that relate to the offering of the Offered Securities, represents the entire agreement between the Company, on the one hand, and the Underwriters, on the other, with respect to the preparation of any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, the conduct of the offering, and the purchase and sale of the Offered Securities.

 

 

(b)            the Company acknowledges that in connection with the offering of the Offered Securities: (i) the Underwriters have acted at arms’ length, and each Underwriter is acting solely as a principal and not the agent or fiduciary of, the Company or any other person, (ii) no Underwriter has assumed an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company on other matters) or any other obligation to the Company except the obligations expressly set forth in this Agreement, if any, and (iii) the Underwriters may have interests that differ from those of the Company. The Underwriters have not provided any legal, accounting, regulatory, investment or tax advice with respect to the offering of the Offered Securities, the Company has consulted its own respective legal, accounting, financial, regulatory and tax advisors to the extent it deemed appropriate, and none of the activities of the Underwriters in connection with the transactions contemplated herein constitutes a recommendation, investment advice or solicitation of any action by the Underwriters with respect to any entity or natural person. The Company waives to the full extent permitted by applicable law any claims it may have against the Underwriters for breach of fiduciary duty or an alleged breach of fiduciary duty and agrees that the Underwriters shall have no liability (whether direct or indirect) to the Company in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of the Company, including shareholders, employees or creditors of the Company.

 

14.           Trial by Jury. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its shareholders and affiliates) and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

15.           Counterparts. This Agreement may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

16.           Applicable Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York.

 

17.           Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement.

 

18.           Notices. All communications hereunder shall be in writing and effective only upon receipt and if to the Underwriters shall be delivered, mailed or sent to the Representatives, at:

 

 

US Tiger Securities, Inc.

437 Madison Avenue, 27^th Floor

New York, NY 10022

United States of America

Attention: [ · ]

 

Huatai Securities (USA), Inc.

21 Floor East, 280 Park Avenue

New York, NY 10017

United States of America

Attention: [ · ]

 

if to the Company shall be delivered, mailed or sent to XCHG Limited, No. 12 Shuang Yang Road, Da Xing District, Beijing, China, 100023

Attention: Yifei Hou, Xiaoling Song.

 

19.            Submission to Jurisdiction; Appointment of Agents for Service.

 

(a)            The Company hereby submits to the exclusive jurisdiction of any New York State or United States Federal court sitting in Borough of Manhattan in The City of New York (the “Specified Courts”) over any suit, action or proceeding arising out of or relating to this Agreement, the Prospectus, the Registration Statement or the offering of the Offered Securities (each, a “Related Proceeding”). The Company irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any Related Proceeding brought in such a court and any claim that any such Related Proceeding brought in such a court has been brought in an inconvenient forum. To the extent that the Company has or hereafter may acquire any immunity (on the grounds of sovereignty or otherwise) from the jurisdiction of any court or from any legal process with respect to itself or its property, the Company irrevocably waives, to the fullest extent permitted by law, such immunity in respect of any such suit, action or proceeding. The Company hereby irrevocably appoints Cogency Global Inc. as its agent for service of process in any Related Proceeding and agrees that service of process in any such Related Proceeding may be made upon it at the office of such agent. The Company represents and warrants that such agent has agreed to act as the Company’s agent for service of process, and the Company agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect.

 

20.            Judgment Currency. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder into any currency other than United States dollars, the parties hereto agree, to the fullest extent permitted by law, that the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Underwriters could purchase United States dollars with such other currency in The City of New York on the business day preceding that on which final judgment is given. The obligation of the Company with respect to any sum due from it to any Underwriter or any person controlling any Underwriter shall, notwithstanding any judgment in a currency other than United States dollars, not be discharged until the first business day following receipt by such Underwriter or controlling person of any sum in such other currency, and only to the extent that such Underwriter or controlling person may in accordance with normal banking procedures purchase United States dollars with such other currency. If the United States dollars so purchased are less than the sum originally due to such Underwriter or controlling person hereunder, the Company agrees as a separate obligation and notwithstanding any such judgment, to indemnify such Underwriter or controlling person against such loss. If the United States dollars so purchased are greater than the sum originally due to such Underwriter or controlling person hereunder, such Underwriter or controlling person agrees to pay to the Company an amount equal to the excess of the dollars so purchased over the sum originally due to such Underwriter or controlling person hereunder.

 

 

21.            Representatives. The Representatives will act for the several Underwriters in connection with the transactions contemplated by this Agreement, and any action under this Agreement taken by the Representatives jointly will be binding upon all the Underwriters.

 

22.            Recognition of the U.S. Special Resolution Regimes. In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

 

In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.

 

For purposes of this Section 22: (A) a “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k); (B) “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b); (C) “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and (D) “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

 

 

	Very truly yours,
	XCHG Limited
	By:
		Name:	Yifei Hou
		Title:	CEO

 

 

Accepted as of the date hereof

 

US Tiger Securities, Inc.

Huatai Securities (USA), Inc.

 

Acting severally on behalf of themselves and the
several Underwriters named in Schedule I hereto

 

By:	US Tiger Securities, Inc.
By:
	Name:
	Title:

 

 

By:	Huatai Securities (USA), Inc.
By:
	Name:
	Title:

 

 

Schedule I

 

Underwriter		Number of Firm ADSs To Be Purchased
US Tiger Securities, Inc.
Huatai Securities (USA), Inc.
Total:

 

 

Schedule II

 

Time of Sale Prospectus

 

1.

Preliminary Prospectus issued [date]

 

2.

[identify all free writing prospectuses filed by the Company under Rule 433(d) of the Securities Act]

 

3.

[free writing prospectus containing a description of terms that does not reflect final terms, if the Time of Sale Prospectus does not include a final term sheet]

 

4.

[orally communicated pricing information such as price per share and size of offering if a Rule 134 pricing term sheet is used at the time of sale instead of a pricing term sheet filed by the Company under Rule 433(d) as a free writing prospectus]

 

 

Schedule III

 

Written Testing-the-Waters Communications

 

All written communications presented to potential investors in reliance on Section 5(d) of the U.S. Securities Act of 1933, as amended, and submitted to the U.S. Securities and Exchange Commission.

 

 

EXHIBIT A

 

FORM OF LOCK-UP LETTER

 

____________, 20__

 

US Tiger Securities, Inc.

Huatai Securities (USA), Inc.

 

c/o US Tiger Securities, Inc.

437 Madison Avenue, 27^th Floor

New York, NY 10022

United States of America

 

c/o Huatai Securities (USA), Inc.

21 Floor East, 280 Park Avenue

New York, NY 10017

United States of America

 

Ladies and Gentlemen:

 

The undersigned understands that US Tiger Securities, Inc. and Huatai Securities (USA), Inc. (the “Representatives”) propose to enter into an Underwriting Agreement (the “Underwriting Agreement”) with XCHG Limited, an exempted company incorporated in the Cayman Islands (the “Company”), providing for the public offering (the “Public Offering”) by the several Underwriters, including the Representatives (the “Underwriters”), of American Depositary Shares (“ADSs”) representing Class A ordinary shares, par value US$0.00001 per share, of the Company (the “Ordinary Shares”).

 

 

To induce the Underwriters that may participate in the Public Offering to continue their efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent of the Representatives on behalf of the Underwriters, it will not, during the period commencing on the date hereof and ending 180 days after the date of the final prospectus (the “Restricted Period)” relating to the Public Offering (the “Prospectus”), (1) offer, pledge, sell, 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, lend, or otherwise transfer or dispose of, directly or indirectly, any ADSs or Ordinary Shares or any other securities so owned convertible into or exercisable or exchangeable for ADSs or Ordinary Shares or (2) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of ADSs or Ordinary Shares, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of ADSs, Ordinary Shares or such other securities, in cash or otherwise. The foregoing sentence shall not apply to (a) transactions relating to ADSs, Ordinary Shares or other securities acquired in open market transactions after the completion of the Public Offering, provided that no filing under the Exchange Act or other public announcement shall be required or shall be voluntarily made in connection with subsequent sales of ADSs, Ordinary Shares or other securities acquired in such open market transactions, (b) transfers of ADSs, Ordinary Shares or any security convertible into ADSs or Ordinary Shares as a bona fide gift, (c) transfers of ADSs, Ordinary Shares or any security convertible into ADSs or Ordinary Shares through will or intestacy, or to immediate family members, to any trust for the direct or indirect benefit of the undersigned or his or her immediate family members, or to any entity beneficially owned and controlled by the undersigned (or if the undersigned is a trust, to a trustor or beneficiary of the trust or to the estate of a beneficiary of such trust; for purposes of this letter, “immediate family” shall mean any relationship by blood, current or former marriage, domestic partnership or adoption, not more remote than first cousin); (d) if the undersigned is a corporation, partnership, limited liability company, trust or other business entity, distributions of ADSs or Ordinary Shares or any security convertible into ADSs or Ordinary Shares to limited partners or shareholders of the undersigned; provided that in the case of any transfer or distribution pursuant to clause (b) through (d), (i) each donee, transferee or distributee shall sign and deliver a lock-up letter substantially in the form of this letter, (ii) no filing under the Exchange Act or other public announcement, reporting a reduction in beneficial ownership of ADSs or Ordinary Shares, shall be required or shall be voluntarily made during the Restricted Period, and (iii) any such transfer or distribution shall not involve a disposition for value; (e) the exercise of the undersigned’s rights to acquire ADSs or Ordinary Shares upon the exercise of options that were granted pursuant to an agreement or equity awards granted under a stock incentive plan, each such agreement or plan which is described in the Prospectus, provided that any such Ordinary Shares received upon such exercise shall be subject to the terms of this letter; (f) the transfer of ADSs or Ordinary Shares to the Company in connection with the vesting, settlement, or exercise of restricted stock units, options, warrants or other rights to purchase shares of Ordinary Shares (including, in each case, by way of “net” or “cashless” exercise), including for the payment of exercise price and tax and remittance payments due as a result of the vesting, settlement, or exercise of such restricted stock units, options, warrants or rights, provided that any such Ordinary Shares received upon such exercise, vesting or settlement shall be subject to the terms of this letter, and provided further that any such restricted stock units, options, warrants or rights are held by the undersigned pursuant to an agreement or equity awards granted under a share incentive plan or other equity award plan which is described in the Prospectus; or (g) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of ADSs or Ordinary Shares, provided that (i) such plan does not provide for the transfer of ADSs or Ordinary Shares during the Restricted Period and (ii) no public announcement or filing under the Exchange Act is required of or voluntarily made by or on behalf of the undersigned or the Company regarding the establishment of such plan. In addition, the undersigned agrees that, without the prior written consent of the Representatives on behalf of the Underwriters, it will not, during the Restricted Period, make any demand for or exercise any right with respect to, the registration of any shares of ADSs or Ordinary Shares or any security convertible into or exercisable or exchangeable for ADSs or Ordinary Shares. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s ADSs or Ordinary Shares except in compliance with the foregoing restrictions.

 

 

[If the undersigned is an officer or director of the Company, (i) the Representatives agree that, at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of shares of Common Stock, the Representatives will notify the Company of the impending release or waiver, and (ii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted by the Representatives hereunder to any such officer or director shall only be effective two business days after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described in this letter to the extent and for the duration that such terms remain in effect at the time of the transfer.]

 

The undersigned understands that the Company and the Underwriters are relying upon this letter in proceeding toward consummation of the Public Offering. The undersigned further understands that this letter is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns.

 

The undersigned hereby submits to the exclusive jurisdiction of any New York State or United States Federal court sitting in Borough of Manhattan in The City of New York over any suit, action or proceeding arising out of or relating to this letter (each, a “Related Proceeding”). The undersigned irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any Related Proceeding brought in such a court and any claim that any such Related Proceeding brought in such a court has been brought in an inconvenient forum.

 

This letter agreement shall automatically terminate and be of no further force and effect on the earlier of (i) the date that the Company advises the Representatives in writing, prior to the execution of the Underwriting Agreement, that it has determined not to proceed with the Public Offering, (ii) subsequent to signing the Underwriting Agreement, the Underwriting Agreement (other than the provisions thereof which survive termination) is terminated prior to payment for and delivery of the ADSs to be sold thereunder, (iii) September 30, 2024 if the Public Offering has not been completed by or before such date, (iv) the expiration of the Restricted Period, or (v) the withdrawal of the registration statement filed with the U.S. Securities and Exchange Commission with respect to the Public Offering.

 

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

 

 

Whether or not the Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Underwriters.

 

	Very truly yours,
	(Name)
	(Address)

 

 

EXHIBIT B

 

FORM OF WAIVER OF LOCK-UP

 

_____________, 20__

 

[Name and Address of
Officer or Director
Requesting Waiver]

 

Dear Mr./Ms. [Name]:

 

This letter is being delivered to you in connection with the offering by XCHG Limited (the “Company”) of _____American Depositary Shares (the “ADSs”), representing Class A ordinary shares, US$0.00001 par value, of the Company and the lock-up letter dated ____, 2024 (the “Lock-up Letter”), executed by you in connection with such offering, and your request for a [waiver] [release] dated ____, 20__, with respect to ____ ADSs.

 

The undersigned hereby agree[s] to [waive] [release] the transfer restrictions set forth in the Lock-up Letter, but only with respect to the ADSs, effective _____, 20__; provided, however, that such [waiver] [release] is conditioned on the Company announcing the impending [waiver] [release] by press release through a major news service at least two business days before effectiveness of such [waiver] [release]. This letter will serve as notice to the Company of the impending [waiver] [release].

 

Except as expressly [waived] [released] hereby, the Lock-up Letter shall remain in full force and effect.

 

Very truly yours,

 

	US Tiger Securities, Inc.
	Huatai Securities (USA), Inc.

 

 

	Acting severally on behalf of themselves and the several Underwriters named in Schedule I hereto
	By:
		Name:
		Title:

 

cc: Company

 

 

FORM OF PRESS RELEASE

 

XCHG Limited

 

[Date]

 

XCHG Limited (the “Company”) announced today that US Tiger Securities, Inc. and Huatai Securities (USA), Inc., the lead book-running managers in the Company’s recent public sale of _____ American Depositary Shares (the “ADSs”), representing _____ Class A ordinary shares, are [waiving][releasing] a lock-up restriction with respect to ____ ADSs, representing _____ Class A ordinary shares, held by [certain officers or directors] [an officer or director] of the Company. The [waiver][release] will take effect on ____, 20__, and the ADSs may be sold on or after such date.

 

This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.

 

 

 

 

Exhibit 3.2

 

THE COMPANIES ACT (AS REVISED)

 

OF THE CAYMAN ISLANDS

 

EXEMPTED COMPANY LIMITED BY SHARES

 

THIRD AMENDED AND RESTATED MEMORANDUM AND ARTICLES OF ASSOCIATION

 

OF

 

 

XCHG LIMITED

 

 

(adopted by a special resolution passed on July 22, 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 REVISED)

 

OF THE CAYMAN ISLANDS

 

COMPANY LIMITED BY SHARES

 

THIRD AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION

 

OF

 

XCHG LIMITED

 

(adopted by a special resolution passed on July 22, 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 XCHG Limited.

 

2.	The Registered Office of the Company shall be at the offices of ICS Corporate Services (Cayman) Limited, 3-212 Governors Square, 23 Lime Tree Bay Avenue, P.O. Box 30746, Seven Mile Beach, Grand Cayman KY1-1203, 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 Revised) or as the same may be revised from time to time, or any other law of the Cayman Islands.

 

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

 

5.

The authorized share capital of the Company is US$50,000 divided into 5,000,000,000 ordinary shares of par value of US$0.00001 each, comprising (a) 4,258,745,553 Class A Ordinary Shares of par value of US$0.00001 each, and (b) 741,254,447 Class B Ordinary Shares of par value of US$0.00001 each. 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.

 

6.	The Company has 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.

 

7.	Capitalized 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 REVISED)

 

OF THE CAYMAN ISLANDS

 

COMPANY LIMITED BY SHARES

 

THIRD AMENDED AND RESTATED ARTICLES OF ASSOCIATION

 

OF

 

XCHG LIMITED

 

(adopted by a special resolution passed on July 22, 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, with respect to a Person, any other Person that, directly or indirectly, Controls, is Controlled by or is under common Control with such Person or any Family Member of such Person.
“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 United States, Germany, the PRC, the Hong Kong Special Administrative Region 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 US$0.00001 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 US$0.00001 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 XCHG LIMITED, 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 Revised) 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 children, 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.

 

 

“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.
“IPO”	means the initial public offering of the Company’s ADSs representing its Class A Ordinary Shares.
“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.
“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, calculated on a fully converted basis, 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 governmental or regulatory 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”	means a Members resolution expressed to be a special resolution and 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 two thirds (2/3) of all votes, calculated on a fully converted basis, 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 specifying the intention to propose the resolution as a special resolution has been duly given).
“Statute”	means the Companies Act (As Revised) 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 (on an as-if converted basis) 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”, 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 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 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

 

1.

The authorized share capital of the Company is US$50,000 divided into 5,000,000,000 ordinary shares of par value of US$0.00001 each, comprising (a) 4,258,745,553 Class A Ordinary Shares of par value of US$0.00001 each, and (b) 741,254,447 Class B Ordinary Shares of par value of US$0.00001 each; subject to any alteration of share capital effected pursuant to Articles 54 to 56.

 

2.

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

 

3.

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 preference, 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.

 

4.

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 a Special Resolution. The Directors may issue from time to time, out of the authorized share capital of the Company, preference shares with such preference 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 preference shares of any such series are issued, the Board may by resolution of Directors determine, with respect to any series of preference shares, the terms and rights of that series, including:

 

(a).

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

 

(b).

whether the preference 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 preference 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 preference 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 preference 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 preference shares of such series for retirement or other corporate purposes and the terms and provisions relative to the operation thereof;

 

(g).

whether the preference shares of such series shall be convertible into, or exchangeable for, shares of any other Class or any other series of preference 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 preference 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 preference 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 preference 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.

 

5.

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 preference shares, no vote of the holders of preference shares or ordinary shares shall be a prerequisite to the issuance of any shares of any Class or series of the preference shares authorized by and complying with the conditions of the Memorandum and these Articles.

 

 

6.	The Company shall not issue Shares to bearer.

 

7.

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.

 

8.	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

 

9.

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

 

10.	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

 

11.

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.

 

12.

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.

 

 

13.

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

 

14.

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.

 

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

 

16.

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.

 

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

 

18.

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.

 

19.

(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.

 

 

20.

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

 

21.	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.

 

22.	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.

 

23.	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.

 

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

 

TREASURY SHARES

 

25.

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

 

26.

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

 

27.

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.

 

28.

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.

 

29.

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.

 

30.

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

 

31.

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.

 

 

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

 

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

 

34.

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.

 

35.

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.

 

36.	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.

 

37.

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

 

38.

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.

 

 

39.

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.

 

40.	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.

 

41.

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.

 

42.

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.

 

43.

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

 

44.	The Company shall be entitled to charge a fee not exceeding US$1.00 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

 

45.

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.

 

 

46.

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.

 

47.

Subject to Article 48, 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.

 

48.	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.

 

 

49.

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.

 

50.

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

 

51.

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.

 

52.

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.

 

53.	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

 

54.	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 preference, 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.

 

55.

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.

 

 

56.	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

 

57.	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 (include extraordinary general meetings) of the Company. Holders of Class A Ordinary Shares and Class B 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 and special 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 (include 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)

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 such holder, 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 the holders of such Ordinary Shares 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 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 the relevant Member 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 a beneficial owner of Class B Ordinary Shares 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 by means of the re-designation and re-classification 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

 

58.

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) 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.

 

59.

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.

 

60.

Subject to the provisions of these Articles, the rights conferred upon the holders of the Shares of any Class issued with preference 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 preference or other rights including, without limitation, the creation of Shares with enhanced or weighted voting rights.

 

REGISTERED OFFICE

 

61.

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

 

GENERAL MEETINGS

 

62.

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

 

63.

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.

 

 

64.

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.

 

65.

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.

 

66.

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.

 

67.

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.

 

68.

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

 

69.

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 the day on which the general meeting is proposed to be held 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 by all the Members (or their proxies) entitled to attend and vote thereat.

 

70.

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

 

71.

No business shall be transacted at any general meeting unless a quorum is present at the time when the meeting proceeds to business and unless such business has been specified in the notice of the general meeting in accordance with these Articles. 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.

 

72.

A Person may participate at a general meeting by telephone 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.

 

73.

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.

 

74.

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.

 

 

75.

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 ten (10) 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.

 

76.

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.

 

77.

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

 

78.

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.

 

79.

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

 

VOTES OF MEMBERS

 

80.

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 a general or special 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.

 

81.

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.

 

82.

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.

 

83.

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.

 

 

84.

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.

 

85.

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.

 

86.

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

 

87.

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.

 

88.

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.

 

89.

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.

 

90.

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

 

91.

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 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

 

92.

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

 

93.

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

 

94.

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.

 

95.

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.

 

96.

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

 

97.

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.

 

 

98.

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.

 

99.

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.

 

100.

A Director may be removed from office by Ordinary Resolution of the Company or the affirmative vote of a simple majority of the other Directors present and voting at a Board meeting, 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.

 

101.

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.

 

102.

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.

 

103.

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

 

104.

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.

 

 

105.

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.

 

106.

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.

 

107.

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.

 

108.

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.

 

	109.	(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.

 

 

110.

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.

 

111.

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.

 

112.

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

 

113.

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

 

114.

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

 

115.

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 summon a meeting of the Directors.

 

116.

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.

 

117.

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.

 

118.

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.

 

119.

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.

 

 

120.

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.

 

121.

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.

 

122.

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.

 

123.

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.

 

124.

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.

 

125.

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

 

126.

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

 

127.

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 these Articles;

 

(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.

 

 

128.

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 129 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.

 

129.

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.

 

130.

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

 

131.

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.

 

132.

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

 

133.

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.

 

134.

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.

 

135.

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

 

136.

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.

 

137.

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

 

138.

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

 

139.

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

 

140.

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.

 

141.

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.

 

142.

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

 

143.

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.

 

144.

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.

 

145.

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.

 

146.

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.

 

 

147.

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 three 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.

 

148.

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.

 

149.

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

 

150.

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

 

151.

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 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 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.

 

152.

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

 

153.

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.

 

154.

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

 

155.

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.

 

156.

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

 

157.

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.

 

 

158.

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.

 

159.

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.

 

160.

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

 

161.

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.

 

162.

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

 

163.

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 address provided by such Member), or by placing it on the Company's Website.

 

164.

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.

 

 

165.

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.

 

166.

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 as of 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.

 

167.

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.

 

168.

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.

 

 

169.

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.

 

170.

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

 

171.

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.

 

172.

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 and transfer books of the Company.

 

WINDING UP

 

173.

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 species 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.

 

174.

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

 

175.

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

 

176.

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

 

177.

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 and books of the Company.

 

TRANSFER BY WAY OF CONTINUATION

 

178.

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

 

179.

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

 

 

XCHG LIMITED

 

AND

 

THE BANK OF NEW YORK MELLON

 

As Depositary

 

AND

 

OWNERS AND HOLDERS OF AMERICAN DEPOSITARY SHARES

 

Deposit Agreement

 

__________, 2024

 

 

 

 

	TABLE OF CONTENTS
ARTICLE 1.		DEFINITIONS		1
	SECTION 1.1.		American Depositary Shares	1
	SECTION 1.2.		Commission	2
	SECTION 1.3.		Company	2
	SECTION 1.4.		Custodian	2
	SECTION 1.5.		Deliver; Surrender	2
	SECTION 1.6.		Deposit Agreement	3
	SECTION 1.7.		Depositary; Depositary’s Office	3
	SECTION 1.8.		Deposited Securities	3
	SECTION 1.9.		Disseminate	3
	SECTION 1.10.		Dollars	3
	SECTION 1.11.		DTC	4
	SECTION 1.12.		Foreign Registrar	4
	SECTION 1.13.		Holder	4
	SECTION 1.14.		Owner	4
	SECTION 1.15.		Receipts	4
	SECTION 1.16.		Registrar	4
	SECTION 1.17.		Replacement	4
	SECTION 1.18.		Restricted Securities	5
	SECTION 1.19.		Securities Act of 1933	5
	SECTION 1.20.		Shares	5
	SECTION 1.21.		SWIFT	5
	SECTION 1.22.		Termination Option Event	5
ARTICLE 2.		FORM OF RECEIPTS, DEPOSIT OF SHARES, DELIVERY, TRANSFER AND SURRENDER OF AMERICAN DEPOSITARY SHARES		6
	SECTION 2.1.		Form of Receipts; Registration and Transferability of American Depositary Shares	6
	SECTION 2.2.		Deposit of Shares	7
	SECTION 2.3.		Delivery of American Depositary Shares	8
	SECTION 2.4.		Registration of Transfer of American Depositary Shares; Combination and Split-up of Receipts; Interchange of Certificated and Uncertificated American Depositary Shares	9
	SECTION 2.5.		Surrender of American Depositary Shares and Withdrawal of Deposited Securities	10
	SECTION 2.6.		Limitations on Delivery, Registration of Transfer and Surrender of American Depositary Shares	11
	SECTION 2.7.		Lost Receipts, etc.	11

 

 

	SECTION 2.8.		Cancellation and Destruction of Surrendered Receipts	12
	SECTION 2.9.		DTC Direct Registration System and Profile Modification System	12
ARTICLE 3.		CERTAIN OBLIGATIONS OF OWNERS AND HOLDERS OF AMERICAN DEPOSITARY SHARES		13
	SECTION 3.1.		Filing Proofs, Certificates and Other Information	13
	SECTION 3.2.		Liability of Owner for Taxes	13
	SECTION 3.3.		Warranties on Deposit of Shares	14
	SECTION 3.4.		Disclosure of Interests	14
ARTICLE 4.		THE DEPOSITED SECURITIES		14
	SECTION 4.1.		Cash Distributions	14
	SECTION 4.2.		Distributions Other Than Cash, Shares or Rights	15
	SECTION 4.3.		Distributions in Shares	16
	SECTION 4.4.		Rights	17
	SECTION 4.5.		Conversion of Foreign Currency	18
	SECTION 4.6.		Fixing of Record Date	20
	SECTION 4.7.		Voting of Deposited Shares	20
	SECTION 4.8.		Tender and Exchange Offers; Redemption, Replacement or Cancellation of Deposited Securities	21
	SECTION 4.9.		Reports	23
	SECTION 4.10.		Lists of Owners	23
	SECTION 4.11.		Withholding	23
ARTICLE 5.		THE DEPOSITARY, THE CUSTODIANS AND THE COMPANY		24
	SECTION 5.1.		Maintenance of Office and Register by the Depositary	24
	SECTION 5.2.		Prevention or Delay of Performance by the Company or the Depositary	25
	SECTION 5.3.		Obligations of the Depositary and the Company	26
	SECTION 5.4.		Resignation and Removal of the Depositary	27
	SECTION 5.5.		The Custodians	28
	SECTION 5.6.		Notices and Reports	28
	SECTION 5.7.		Distribution of Additional Shares, Rights, etc.	29
	SECTION 5.8.		Indemnification	29
	SECTION 5.9.		Charges of Depositary	30
	SECTION 5.10.		Retention of Depositary Documents	31
	SECTION 5.11.		Exclusivity	31
	SECTION 5.12.		Information for Regulatory Compliance	31

 

 

ARTICLE 6.		AMENDMENT AND TERMINATION		31
	SECTION 6.1.		Amendment	31
	SECTION 6.2.		Termination	32
ARTICLE 7.		MISCELLANEOUS		33
	SECTION 7.1.		Counterparts; Signatures; Delivery; Electronic Records	33
	SECTION 7.2.		No Third Party Beneficiaries	33
	SECTION 7.3.		Severability	33
	SECTION 7.4.		Owners and Holders as Parties; Binding Effect	34
	SECTION 7.5.		Notices	34
	SECTION 7.6.		Arbitration; Settlement of Disputes	35
	SECTION 7.7.		Appointment of Agent for Service of Process; Submission to Jurisdiction; Jury Trial Waiver	35
	SECTION 7.8.		Waiver of Immunities	36
	SECTION 7.9.		Governing Law	37

 

 

DEPOSIT AGREEMENT

 

DEPOSIT AGREEMENT dated as of __________, 2024 among XCHG Limited, a company incorporated under the laws of the Cayman Islands (herein called the Company), THE BANK OF NEW YORK MELLON, a New York banking corporation (herein called the Depositary), and all Owners and Holders (each as hereinafter defined) from time to time of American Depositary Shares issued hereunder.

 

W I T N E S S E T H:

 

WHEREAS, the Company desires to provide, as set forth in this Deposit Agreement, for the deposit of Shares (as hereinafter defined) of the Company from time to time with the Depositary or with the Custodian (as hereinafter defined) under this Deposit Agreement, for the creation of American Depositary Shares representing the Shares so deposited and for the execution and delivery of American Depositary Receipts evidencing the American Depositary Shares; and

 

WHEREAS, the American Depositary Receipts are to be substantially in the form of Exhibit A annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as set forth in this Deposit Agreement;

 

NOW, THEREFORE, in consideration of the premises, it is agreed by and between the parties hereto as follows:

 

ARTICLE 1.      DEFINITIONS

 

The following definitions shall for all purposes, unless otherwise clearly indicated, apply to the respective terms used in this Deposit Agreement:

 

SECTION 1.1.      American Depositary Shares.

 

The term “American Depositary Shares” shall mean the securities created under this Deposit Agreement representing rights with respect to the Deposited Securities. American Depositary Shares may be certificated securities evidenced by Receipts or uncertificated securities. The form of Receipt annexed as Exhibit A to this Deposit Agreement shall be the prospectus required under the Securities Act of 1933 for sales of both certificated and uncertificated American Depositary Shares. Except for those provisions of this Deposit Agreement that refer specifically to Receipts, all the provisions of this Deposit Agreement shall apply to both certificated and uncertificated American Depositary Shares.

 

Each American Depositary Share shall represent the number of Shares specified in Exhibit A to this Deposit Agreement, except that, if there is a distribution upon Deposited Securities covered by Section 4.3, a change in Deposited Securities covered by Section 4.8 with respect to which additional American Depositary Shares are not delivered or a sale of Deposited Securities under Section 3.2 or 4.8, each American Depositary Share shall thereafter represent the amount of Shares or other Deposited Securities that are then on deposit per American Depositary Share after giving effect to that distribution, change or sale.

 

 

SECTION 1.2.      Commission.

 

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

 

SECTION 1.3.      Company.

 

The term “Company” shall mean XCHG Limited, a company incorporated under the laws of the Cayman Islands, and its successors.

 

SECTION 1.4.      Custodian.

 

The term “Custodian” shall mean The Hongkong and Shanghai Banking Corporation Limited, as custodian for the Depositary in Hong Kong for the purposes of this Deposit Agreement, and any other firm or corporation the Depositary appoints under Section 5.5 as a substitute or additional custodian under this Deposit Agreement, and shall also mean all of them collectively.

 

SECTION 1.5.      Deliver; Surrender.

 

(a)        The term “deliver”, or its noun form, when used with respect to Shares or other Deposited Securities, shall mean (i) book-entry transfer of those Shares or other Deposited Securities to an account maintained by an institution authorized under applicable law to effect transfers of such securities designated by the person entitled to that delivery or (ii) physical transfer of certificates evidencing those Shares or other Deposited Securities registered in the name of, or duly endorsed or accompanied by proper instruments of transfer to, the person entitled to that delivery.

 

(b)        The term “deliver”, or its noun form, when used with respect to American Depositary Shares, shall mean (i) registration of those American Depositary Shares in the name of DTC or its nominee and book-entry transfer of those American Depositary Shares to an account at DTC designated by the person entitled to that delivery, (ii) registration of those American Depositary Shares not evidenced by a Receipt on the books of the Depositary in the name requested by the person entitled to that delivery and mailing to that person of a statement confirming that registration or (iii) if requested by the person entitled to that delivery, execution and delivery at the Depositary’s Office to the person entitled to that delivery of one or more Receipts evidencing those American Depositary Shares registered in the name requested by that person.

 

 

(c)        The term “surrender”, when used with respect to American Depositary Shares, shall mean (i) one or more book-entry transfers of American Depositary Shares to the DTC account of the Depositary, (ii) delivery to the Depositary at its Office of an instruction to surrender American Depositary Shares not evidenced by a Receipt or (iii) surrender to the Depositary at its Office of one or more Receipts evidencing American Depositary Shares.

 

SECTION 1.6.      Deposit Agreement.

 

The term “Deposit Agreement” shall mean this Deposit Agreement, as it may be amended from time to time in accordance with the provisions of this Deposit Agreement.

 

SECTION 1.7.      Depositary; Depositary’s Office.

 

The term “Depositary” shall mean The Bank of New York Mellon, a New York banking corporation, and any successor as depositary under this Deposit Agreement. The term “Office”, when used with respect to the Depositary, shall mean the office at which its depositary receipts business is administered, which, at the date of this Deposit Agreement, is located at 240 Greenwich Street, New York, New York 10286.

 

SECTION 1.8.      Deposited Securities.

 

The term “Deposited Securities” as of any time shall mean Shares at such time deposited or deemed to be deposited under this Deposit Agreement, including without limitation, Shares that have not been successfully delivered upon surrender of American Depositary Shares, and any and all other securities, property and cash received by the Depositary or the Custodian in respect of Deposited Securities and at that time held under this Deposit Agreement.

 

SECTION 1.9.      Disseminate.

 

The term “Disseminate,” when referring to a notice or other information to be sent by the Depositary to Owners, shall mean (i) sending that information to Owners in paper form by mail or another means or (ii) with the consent of Owners, another procedure that has the effect of making the information available to Owners, which may include (A) sending the information by electronic mail or electronic messaging or (B) sending in paper form or by electronic mail or messaging a statement that the information is available and may be accessed by the Owner on an Internet website and that it will be sent in paper form upon request by the Owner, when that information is so available and is sent in paper form as promptly as practicable upon request.

 

SECTION 1.10.    Dollars.

 

The term “Dollars” shall mean United States dollars.

 

 

SECTION 1.11.    DTC.

 

The term “DTC” shall mean The Depository Trust Company or its successor.

 

SECTION 1.12.    Foreign Registrar.

 

The term “Foreign Registrar” shall mean the entity that carries out the duties of registrar for the Shares and any other agent of the Company for the transfer and registration of Shares, including, without limitation, any securities depository for the Shares.

 

SECTION 1.13.      Holder.

 

The term “Holder” shall mean any person holding a Receipt or a security entitlement or other interest in American Depositary Shares, whether for its own account or for the account of another person, but that is not the Owner of that Receipt or those American Depositary Shares.

 

SECTION 1.14.    Owner.

 

The term “Owner” shall mean the person in whose name American Depositary Shares are registered on the books of the Depositary maintained for that purpose.

 

SECTION 1.15.    Receipts.

 

The term “Receipts” shall mean the American Depositary Receipts issued under this Deposit Agreement evidencing certificated American Depositary Shares, as the same may be amended from time to time in accordance with the provisions of this Deposit Agreement.

 

SECTION 1.16.    Registrar.

 

The term “Registrar” shall mean any corporation or other entity that is appointed by the Depositary to register American Depositary Shares and transfers of American Depositary Shares as provided in this Deposit Agreement.

 

SECTION 1.17.    Replacement.

 

The term “Replacement” shall have the meaning assigned to it in Section 4.8.

 

 

SECTION 1.18.    Restricted Securities.

 

The term “Restricted Securities” shall mean Shares that (i) are “restricted securities,” as defined in Rule 144 under the Securities Act of 1933, except for Shares that could be resold in reliance on Rule 144 without any conditions, (ii) are beneficially owned by an officer, director (or person performing similar functions) or other affiliate of the Company, (iii) otherwise would require registration under the Securities Act of 1933 in connection with the public offer and sale thereof in the United States or (iv) are subject to other restrictions on sale or deposit under the laws of the Cayman Islands, a shareholder agreement or the articles of association or similar document of the Company.

 

SECTION 1.19.    Securities Act of 1933.

 

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

 

SECTION 1.20.    Shares.

 

The term “Shares” shall mean Class A ordinary shares of the Company that are validly issued and outstanding, fully paid and nonassessable and that were not issued in violation of any pre-emptive or similar rights of the holders of outstanding securities of the Company; provided, however, that, if there shall occur any change in nominal or par value, a split-up or consolidation or any other reclassification or, upon the occurrence of an event described in Section 4.8, an exchange or conversion in respect of the Shares of the Company, the term “Shares” shall thereafter also mean the successor securities resulting from such change in nominal value, split-up or consolidation or such other reclassification or such exchange or conversion.

 

SECTION 1.21.    SWIFT.

 

The term “SWIFT” shall mean the financial messaging network operated by the Society for Worldwide Interbank Financial Telecommunication, or its successor.

 

SECTION 1.22.    Termination Option Event.

 

The term “Termination Option Event” shall mean any of the following events or conditions:

 

(i)         the Company institutes proceedings to be adjudicated as bankrupt or insolvent, consents to the institution of bankruptcy or insolvency proceedings against it, files a petition or answer or consent seeking reorganization or relief under any applicable law in respect of bankruptcy or insolvency, consents to the filing of any petition of that kind or to the appointment of a receiver, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of it or any substantial part of its property or makes an assignment for the benefit of creditors, or if information becomes publicly available indicating that unsecured claims against the Company are not expected to be paid;

 

 

(ii)        the Shares are delisted, or the Company announces its intention to delist the Shares, from a stock exchange outside the United States, and the Company has not applied to list the Shares on any other stock exchange outside the United States;

 

(iii)       the American Depositary Shares are delisted from a stock exchange in the United States on which the American Depositary Shares were listed and, 30 days after that delisting, the American Depositary Shares have not been listed on another stock exchange in the United States, nor is there a symbol available for over-the-counter trading of the American Depositary Shares in the United States;

 

(iv)      the Depositary has received notice of facts that indicate, or otherwise has reason to believe, that the American Depositary Shares have become, or with the passage of time will become, ineligible for registration on Form F-6 under the Securities Act of 1933; or

 

(v)       an event or condition that is defined as a Termination Option Event in Section 4.1, 4.2 or 4.8.

 

ARTICLE 2. FORM OF RECEIPTS, DEPOSIT OF SHARES, DELIVERY, TRANSFER AND SURRENDER OF AMERICAN DEPOSITARY SHARES

 

SECTION 2.1.      Form of Receipts; Registration and Transferability of American Depositary Shares.

 

Definitive Receipts shall be substantially in the form set forth in Exhibit A to this Deposit Agreement, with appropriate insertions, modifications and omissions, as permitted under this Deposit Agreement. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose, unless that Receipt has been (i) executed by the Depositary by the manual signature of a duly authorized officer of the Depositary or (ii) executed by the facsimile signature of a duly authorized officer of the Depositary and countersigned by the manual signature of a duly authorized signatory of the Depositary or the Registrar or a co-registrar. The Depositary shall maintain books on which (x) each Receipt so executed and delivered as provided in this Deposit Agreement and each transfer of that Receipt and (y) all American Depositary Shares delivered as provided in this Deposit Agreement and all registrations of transfer of American Depositary Shares, shall be registered. A Receipt bearing the facsimile signature of a person that was at any time a proper officer of the Depositary shall, subject to the other provisions of this paragraph, bind the Depositary, even if that person was not a proper officer of the Depositary on the date of issuance of that Receipt.

 

The Receipts and statements confirming registration of American Depositary Shares may have incorporated in or attached to them such legends or recitals or modifications not inconsistent with the provisions of this Deposit Agreement as may be required by the Depositary or required to comply with any applicable law or regulations thereunder or with the rules and regulations of any securities exchange upon which American Depositary Shares may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts and American Depositary Shares are subject by reason of the date of issuance of the underlying Deposited Securities or otherwise.

 

 

American Depositary Shares evidenced by a Receipt, when the Receipt is properly endorsed or accompanied by proper instruments of transfer, shall be transferable as certificated registered securities under the laws of the State of New York. American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registered securities under the laws of the State of New York. The Depositary, notwithstanding any notice to the contrary, may treat the Owner of American Depositary Shares 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 shall have any obligation or be subject to any liability under this Deposit Agreement to any Holder of American Depositary Shares (but only to the Owner of those American Depositary Shares).

 

SECTION 2.2.      Deposit of Shares.

 

Subject to the terms and conditions of this Deposit Agreement, Shares or evidence of rights to receive Shares may be deposited under this Deposit Agreement by delivery thereof to any Custodian, accompanied by any appropriate instruments or instructions for transfer, or endorsement, in form satisfactory to the Custodian.

 

As conditions of accepting Shares for deposit, the Depositary may require (i) any certification required by the Depositary or the Custodian in accordance with the provisions of this Deposit Agreement, (ii) a written order directing the Depositary to deliver to, or upon the written order of, the person or persons stated in that order American Depositary Shares representing those deposited Shares, (iii) evidence satisfactory to the Depositary that those Shares have been re-registered in the books of the Company or the Foreign Registrar in the name of the Depositary, a Custodian or a nominee of the Depositary or a Custodian, (iv) evidence satisfactory to the Depositary that any necessary approval for the transfer or deposit has been granted by any governmental body in each applicable jurisdiction and (v) an agreement or assignment, or other instrument satisfactory to the Depositary, that provides for the prompt transfer to the Custodian of any dividend, or right to subscribe for additional Shares or to receive other property, that any person in whose name those Shares are or have been recorded may thereafter receive upon or in respect of those Shares, or, in lieu thereof, such agreement of indemnity or other agreement as shall be satisfactory to the Depositary.

 

 

The Depositary shall refuse, and shall instruct the Custodian to refuse, to accept Shares for deposit if the Depositary has received a notice from the Company that the Company has restricted transfer of those Shares under the Company’s articles of association or any applicable laws or that the deposit would result in any violation of the Company’s articles of association or any applicable laws.

 

At the request and risk and expense of a person proposing to deposit Shares, and for the account of that person, the Depositary may receive certificates for Shares to be deposited, together with the other instruments specified in this Section, for the purpose of forwarding those Share certificates to the Custodian for deposit under this Deposit Agreement.

 

The Depositary shall instruct each Custodian that, upon each delivery to a Custodian of a certificate or certificates for Shares to be deposited under this Deposit Agreement, together with the other documents specified in this Section, that Custodian shall, as soon as transfer and recordation can be accomplished, present that certificate or those certificates to the Company or the Foreign Registrar, if applicable, for transfer and recordation of the Shares being deposited in the name of the Depositary or its nominee or that Custodian or its nominee.

 

Deposited Securities shall be held by the Depositary or by a Custodian for the account and to the order of the Depositary or at such other place or places as the Depositary shall determine.

 

SECTION 2.3.      Delivery of American Depositary Shares.

 

The Depositary shall instruct each Custodian that, upon receipt by that Custodian of any deposit pursuant to Section 2.2, together with the other documents or evidence required under that Section, that Custodian shall notify the Depositary of that deposit and the person or persons to whom or upon whose written order American Depositary Shares are deliverable in respect thereof. Upon receiving a notice of a deposit from a Custodian, or upon the receipt of Shares or evidence of the right to receive Shares by the Depositary, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall deliver, to or upon the order of the person or persons entitled thereto, the number of American Depositary Shares issuable in respect of that deposit, but only upon payment to the Depositary of the fees and expenses of the Depositary for the delivery of those American Depositary Shares as provided in Section 5.9, and of all taxes and governmental charges and fees payable in connection with that deposit and the transfer of the deposited Shares. However, the Depositary shall deliver only whole numbers of American Depositary Shares.

 

 

SECTION 2.4.      Registration of Transfer of American Depositary Shares; Combination and Split-up of Receipts; Interchange of Certificated and Uncertificated American Depositary Shares.

 

The Depositary, subject to the terms and conditions of this Deposit Agreement, shall register a transfer of American Depositary Shares on its transfer books upon (i) in the case of certificated American Depositary Shares, surrender of the Receipt evidencing those American Depositary Shares, by the Owner or by a duly authorized attorney, properly endorsed or accompanied by proper instruments of transfer or (ii) in the case of uncertificated American Depositary Shares, receipt from the Owner of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.9), and, in either case, duly stamped as may be required by the laws of the State of New York and of the United States of America. Upon registration of a transfer, the Depositary shall deliver the transferred American Depositary Shares to or upon the order of the person entitled thereto.

 

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, 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.

 

The Depositary, upon surrender of certificated American Depositary Shares for the purpose of exchanging for uncertificated American Depositary Shares, shall cancel the Receipt evidencing those certificated American Depositary Shares and send the Owner a statement confirming that the Owner is the owner of the same number of uncertificated American Depositary Shares. The Depositary, upon receipt of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.9) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging for certificated American Depositary Shares, shall cancel those uncertificated American Depositary Shares and register and deliver to the Owner a Receipt evidencing the same number of certificated American Depositary Shares.

 

The Depositary may appoint one or more co-transfer agents for the purpose of effecting registration of transfers of American Depositary Shares and 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 Owners or persons entitled to American Depositary Shares and will be entitled to protection and indemnity to the same extent as the Depositary.

 

 

SECTION 2.5.      Surrender of American Depositary Shares and Withdrawal of Deposited Securities.

 

Upon surrender of American Depositary Shares for the purpose of withdrawal of the Deposited Securities represented thereby and payment of the fee of the Depositary for the surrender of American Depositary Shares as provided in Section 5.9 and payment of all taxes and governmental charges payable in connection with that surrender and withdrawal of the Deposited Securities, and subject to the terms and conditions of this Deposit Agreement, the Owner of those American Depositary Shares shall be entitled to delivery (to the extent delivery can then be lawfully and practicably made), to or as instructed by that Owner, of the amount of Deposited Securities at the time represented by those American Depositary Shares, but not any money or other property as to which a record date for distribution to Owners has passed (since money or other property of that kind will be delivered or paid on the scheduled payment date to the Owner as of that record date), and except that the Depositary shall not be required to accept surrender of American Depositary Shares for the purpose of withdrawal to the extent it would require delivery of a fraction of a Deposited Security. That delivery shall be made, as provided in this Section, without unreasonable delay.

 

As a condition of accepting a surrender of American Depositary Shares for the purpose of withdrawal of Deposited Securities, the Depositary may require (i) that each surrendered Receipt be properly endorsed in blank or accompanied by proper instruments of transfer in blank and (ii) that the surrendering Owner 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 that order.

 

Thereupon, the Depositary shall direct the Custodian to deliver, subject to Sections 2.6, 3.1 and 3.2, the other terms and conditions of this Deposit Agreement and local market rules and practices, to the surrendering Owner or to or upon the written order of the person or persons designated in the order delivered to the Depositary as above provided, the amount of Deposited Securities represented by the surrendered American Depositary Shares, and the Depositary may charge the surrendering Owner a fee and its expenses for giving that direction by cable (including SWIFT) or facsimile transmission. The Company agrees not to prevent, hinder or unreasonably delay any lawful delivery or registration of transfer of Deposited Securities upon surrender of American Depositary Shares for the purpose of withdrawal.

 

If Deposited Securities are delivered physically upon surrender of American Depositary Shares for the purpose of withdrawal, that delivery will be made at the Custodian’s office, except that, at the request, risk and expense of an Owner surrendering American Depositary Shares for withdrawal of Deposited Securities, and for the account of that Owner, the Depositary shall direct the Custodian to forward any cash or other property comprising, and forward a certificate or certificates, if applicable, and other proper documents of title, if any, for, the Deposited Securities represented by the surrendered American Depositary Shares to the Depositary for delivery at the Depositary’s Office or to another address specified in the order received from the surrendering Owner.

 

 

SECTION 2.6.      Limitations on Delivery, Registration of Transfer and Surrender of American Depositary Shares.

 

As a condition precedent to the delivery, registration of transfer or surrender of any American Depositary Shares or split-up or combination of any Receipt or withdrawal of any Deposited Securities, the Depositary, Custodian or Registrar may require payment from the depositor of Shares or the presenter of the Receipt or instruction for registration of transfer or surrender of American Depositary Shares not evidenced by a 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 as provided in this Deposit Agreement, may require the production of proof satisfactory to it as to the identity and genuineness of any signature and may also require compliance with any regulations the Depositary may establish consistent with the provisions of this Deposit Agreement, including, without limitation, this Section 2.6.

 

The Depositary may refuse to accept deposits of Shares for delivery of American Depositary Shares or to register transfers of American Depositary Shares in particular instances, or may suspend deposits of Shares or registration of transfer generally, whenever it or the Company considers it necessary or advisable to do so. The Depositary may refuse surrenders of American Depositary Shares for the purpose of withdrawal of Deposited Securities in particular instances, or may suspend surrenders for the purpose of withdrawal generally, but, notwithstanding anything to the contrary in this Deposit Agreement, only for (i) temporary delays caused by closing of the Depositary’s register or the register of holders of Shares maintained by the Company or the Foreign Registrar, or the deposit of Shares, in connection with voting at a shareholders’ meeting or the payment of dividends, (ii) the payment of fees, taxes and similar charges, (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the American Depositary Shares or to the withdrawal of the Deposited Securities or (iv) any other reason that, at the time, is permitted under paragraph I(A)(1) of the General Instructions to Form F-6 under the Securities Act of 1933 or any successor to that provision.

 

The Depositary shall not knowingly accept for deposit under this Deposit Agreement any Shares that, at the time of deposit, are Restricted Securities.

 

SECTION 2.7.      Lost Receipts, etc.

 

If a Receipt is mutilated, destroyed, lost or stolen, the Depositary shall deliver to the Owner the American Depositary Shares evidenced by that Receipt in uncertificated form or, if requested by the Owner, execute and deliver a new Receipt of like tenor in exchange and substitution for such mutilated Receipt, upon surrender and cancellation of that mutilated Receipt, or in lieu of and in substitution for that destroyed, lost or stolen Receipt. However, before the Depositary will deliver American Depositary Shares in uncertificated form or execute and deliver a new Receipt, in substitution for a destroyed, lost or stolen Receipt, the Owner must (a) file with the Depositary (i) a request for that replacement before the Depositary has notice that the Receipt has been acquired by a bona fide purchaser and (ii) a sufficient indemnity bond and (b) satisfy any other reasonable requirements imposed by the Depositary.

 

 

SECTION 2.8.      Cancellation and Destruction of Surrendered Receipts.

 

The Depositary shall cancel all Receipts surrendered to it and is authorized to destroy Receipts so cancelled.

 

SECTION 2.9.      DTC Direct Registration System and Profile Modification System.

 

(a)       Notwithstanding the provisions of Section 2.4, the parties acknowledge that DTC’s Direct Registration System (“DRS”) and Profile Modification System (“Profile”) apply to the American Depositary Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC that facilitates interchange between registered holding of uncertificated securities and holding of security entitlements in those securities through DTC and a DTC participant. Profile is a required feature of DRS that allows a DTC participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of prior authorization from the Owner to register that transfer.

 

(b)       In connection with DRS/Profile, the parties acknowledge that the Depositary will not determine whether the DTC participant that is claiming to be acting on behalf of an Owner in requesting a registration of transfer and delivery as described in paragraph (a) above has the actual authority to act on behalf of that Owner (notwithstanding any requirements under the Uniform Commercial Code). For the avoidance of doubt, the provisions of Sections 5.3 and 5.8 apply to the matters arising from the use of the DRS/Profile. The parties agree that the Depositary’s reliance on and compliance with instructions received by the Depositary through the DRS/Profile system and otherwise in accordance with this Deposit Agreement shall not constitute negligence or bad faith on the part of the Depositary.

 

 

ARTICLE 3. CERTAIN OBLIGATIONS OF OWNERS AND HOLDERS OF AMERICAN DEPOSITARY SHARES

 

SECTION 3.1.      Filing Proofs, Certificates and Other Information.

 

Any person presenting Shares for deposit or any Owner or Holder may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, or such information relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to execute such certificates and to make such representations and warranties, as the Depositary may deem necessary or proper, or as the Company may reasonably require by written request to the Depositary. The Depositary may withhold the delivery or registration of transfer of American Depositary Shares, the distribution of any dividend or other distribution or of the proceeds thereof or the delivery of any Deposited Securities until that proof or other information is filed or those certificates are executed or those representations and warranties are made. The Depositary shall provide the Company, upon the Company's written request and at the Company's expense, as promptly as practicable, with copies of any information or other materials that the Depositary receives pursuant to this Section, to the extent that the requested disclosure is permitted under applicable law.

 

SECTION 3.2.      Liability of Owner for Taxes.

 

If any tax or other governmental charge shall become payable by the Custodian or the Depositary with respect to or in connection with any American Depositary Shares or any Deposited Securities represented by any American Depositary Shares or in connection with a transaction to which Section 4.8 applies, that tax or other governmental charge shall be payable by the Owner of those American Depositary Shares to the Depositary. The Depositary may refuse to register any transfer of those American Depositary Shares or any withdrawal of Deposited Securities represented by those American Depositary Shares until that payment is made, and may withhold any dividends or other distributions or the proceeds thereof, or may sell for the account of the Owner any part or all of the Deposited Securities represented by those American Depositary Shares and apply those dividends or other distributions or the net proceeds of any sale of that kind in payment of that tax or other governmental charge but, even after a sale of that kind, the Owner of those American Depositary Shares shall remain liable for any deficiency. The Depositary shall distribute any net proceeds of a sale made under this Section that are not used to pay taxes or governmental charges to the Owners entitled to them in accordance with Section 4.1. If the number of Shares represented by each American Depositary Share decreases as a result of a sale of Deposited Securities under this Section, the Depositary may call for surrender of the American Depositary Shares to be exchanged on a mandatory basis for a lesser number of American Depositary Shares and may sell American Depositary Shares to the extent necessary to avoid distributing fractions of American Depositary Shares in that exchange and distribute the net proceeds of that sale to the Owners entitled to them.

 

 

SECTION 3.3.      Warranties on Deposit of Shares.

 

Every person depositing Shares under this Deposit Agreement shall be deemed thereby to represent and warrant that those Shares and each certificate therefor, if applicable, are validly issued, fully paid and nonassessable and were not issued in violation of any preemptive or similar rights of the holders of outstanding securities of the Company and that the person making that deposit is duly authorized so to do. Every depositing person shall also be deemed to represent that the Shares, at the time of deposit, are not Restricted Securities. All representations and warranties deemed made under this Section shall survive the deposit of Shares and delivery of American Depositary Shares.

 

SECTION 3.4.      Disclosure of Interests.

 

When required in order to comply with applicable laws and regulations or the articles of association or similar document of the Company, the Company may from time to time request each Owner and Holder to provide to the Depositary information relating to: (a) the capacity in which it holds American Depositary Shares, (b) the identity of any Holders or other persons or entities then or previously interested in those American Depositary Shares and the nature of those interests and (c) any other matter where disclosure of such matter is required for that compliance.   Each Owner and Holder agrees to provide all information known to it in response to a request made pursuant to this Section.  Each Holder consents to the disclosure by the Depositary and the Owner or any other Holder through which it holds American Depositary Shares, directly or indirectly, of all information responsive to a request made pursuant to this Section relating to that Holder that is known to that Owner or other Holder.  The Depositary agrees to use reasonable efforts to comply with written instructions requesting that the Depositary forward any request authorized under this Section to the Owners and to forward to the Company any responses it receives in response to that request. The Depositary may charge the Company a fee and its expenses for complying with requests under this Section 3.4.

 

ARTICLE 4.      THE DEPOSITED SECURITIES

 

SECTION 4.1.      Cash Distributions.

 

Whenever the Depositary receives any cash dividend or other cash distribution on Deposited Securities, the Depositary shall, subject to the provisions of Section 4.5, convert that dividend or other distribution into Dollars and distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Section 5.9) to the Owners entitled thereto, in proportion to the number of American Depositary Shares representing those Deposited Securities held by them respectively; provided, however, that if the Custodian or the Depositary shall be required to withhold and does withhold from that cash dividend or other cash distribution an amount on account of taxes or other governmental charges, the amount distributed to the Owners of the American Depositary Shares representing those Deposited Securities shall be reduced accordingly. However, the Depositary will not pay any Owner a fraction of one cent, but will round each Owner’s entitlement to the nearest whole cent.

 

 

The Company or its agent will remit to the appropriate governmental agency in each applicable jurisdiction all amounts withheld and owing to such agency.

 

If a cash distribution would represent a return of all or substantially all the value of the Deposited Securities underlying American Depositary Shares, the Depositary may:

 

(i)  require payment of or deduct the fee for surrender of American Depositary Shares (whether or not it is also requiring surrender of American Depositary Shares) as a condition of making that cash distribution; or

 

(ii)  sell all Deposited Securities other than the subject cash distribution and add any net cash proceeds of that sale to the cash distribution, call for surrender of all those American Depositary Shares and require that surrender as a condition of making that cash distribution.

 

If the Depositary acts under this paragraph, that action shall also be a Termination Option Event.

 

SECTION 4.2.      Distributions Other Than Cash, Shares or Rights.

 

Subject to the provisions of Sections 4.11 and 5.9, whenever the Depositary receives any distribution other than a distribution described in Section 4.1, 4.3 or 4.4 on Deposited Securities (but not in exchange for or in conversion or in lieu of Deposited Securities), the Depositary shall cause the securities or property received by it to be distributed to the Owners entitled thereto, after deduction or upon payment of any fees and expenses of the Depositary and any taxes or other governmental charges, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively, in any manner that the Depositary deems equitable and practicable for accomplishing that distribution (which may be a distribution of depositary shares representing the securities received); provided, however, that if in the opinion of the Depositary such distribution cannot be made proportionately among the Owners entitled thereto, or if for any other reason (including, but not limited to, any requirement that the Company or the Depositary withhold an amount on account of taxes or other governmental charges or that securities received must be registered under the Securities Act of 1933 in order to be distributed to Owners or Holders) the Depositary deems such distribution not to be lawful and feasible, the Depositary, after consultation with the Company to the extent practicable, may adopt such other method as it may deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, the public or private sale of the securities or property thus received, or any part thereof, and distribution of the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Section 5.9) to the Owners entitled thereto, all in the manner and subject to the conditions set forth in Section 4.1. The Depositary may withhold any distribution of securities under this Section 4.2 if it has not received satisfactory assurances from the Company that the distribution does not require registration under the Securities Act of 1933. The Depositary may sell, by public or private sale, an amount of securities or other property it would otherwise distribute under this Section 4.2 that is sufficient to pay its fees and expenses in respect of that distribution.

 

 

If a distribution to be made under this Section 4.2 would represent a return of all or substantially all the value of the Deposited Securities underlying American Depositary Shares, the Depositary may:

 

(i)  require payment of or deduct the fee for surrender of American Depositary Shares (whether or not it is also requiring surrender of American Depositary Shares) as a condition of making that distribution; or

 

(ii)  sell all Deposited Securities other than the subject distribution and add any net cash proceeds of that sale to the distribution, call for surrender of all those American Depositary Shares and require that surrender as a condition of making that distribution.

 

If the Depositary acts under this paragraph, that action shall also be a Termination Option Event.

 

SECTION 4.3.      Distributions in Shares.

 

Whenever the Depositary receives any distribution on Deposited Securities consisting of a dividend in, or free distribution of, Shares, the Depositary may deliver to the Owners entitled thereto, in proportion to the number of American Depositary Shares representing those Deposited Securities held by them respectively, an aggregate number of American Depositary Shares representing the amount of Shares received as that dividend or free distribution, subject to the terms and conditions of this Deposit Agreement with respect to the deposit of Shares and issuance of American Depositary Shares, including withholding of any tax or governmental charge as provided in Section 4.11 and payment of the fees and expenses of the Depositary as provided in Section 5.9 (and the Depositary may sell, by public or private sale, an amount of the Shares received (or American Depositary Shares representing those Shares) sufficient to pay its fees and expenses in respect of that distribution). In lieu of delivering fractional American Depositary Shares, the Depositary may sell the amount of Shares represented by the aggregate of those fractions (or American Depositary Shares representing those Shares) and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.1. If and to the extent that additional American Depositary Shares are not delivered and Shares or American Depositary Shares are not sold, each American Depositary Share shall thenceforth also represent the additional Shares distributed on the Deposited Securities represented thereby.

 

 

If the Company declares a distribution in which holders of Deposited Securities have a right to elect whether to receive cash, Shares or other securities or a combination of those things, or a right to elect to have a distribution sold on their behalf, the Depositary may, after consultation with the Company, make that right of election available for exercise by Owners in any manner the Depositary considers to be lawful and practical. As a condition of making a distribution election right available to Owners, the Depositary may require satisfactory assurances from the Company that doing so does not require registration of any securities under the Securities Act of 1933 that has not been effected.

 

SECTION 4.4.      Rights.

 

(a)        If rights are granted to the Depositary in respect of deposited Shares to purchase additional Shares or other securities, the Company and the Depositary shall endeavor to consult as to the actions, if any, the Depositary should take in connection with that grant of rights. The Depositary may, to the extent deemed by it to be lawful and practical (i) if requested in writing by the Company, grant to all or certain Owners rights to instruct the Depositary to purchase the securities to which the rights relate and deliver those securities or American Depositary Shares representing those securities to Owners, (ii) if requested in writing by the Company, deliver the rights to or to the order of certain Owners, or (iii) sell the rights to the extent practicable and distribute the net proceeds of that sale to Owners entitled to those proceeds. To the extent rights are not exercised, delivered or disposed of under (i), (ii) or (iii) above, the Depositary shall permit the rights to lapse unexercised.

 

(b)       If the Depositary will act under (a)(i) above, the Company and the Depositary will enter into a separate agreement setting forth the conditions and procedures applicable to the particular offering. Upon instruction from an applicable Owner in the form the Depositary specified and upon payment by that Owner to the Depositary of an amount equal to the purchase price of the securities to be received upon the exercise of the rights, the Depositary shall, on behalf of that Owner, exercise the rights and purchase the securities. The purchased securities shall be delivered to, or as instructed by, the Depositary. The Depositary shall (i) deposit the purchased Shares under this Deposit Agreement and deliver American Depositary Shares representing those Shares to that Owner or (ii) deliver or cause the purchased Shares or other securities to be delivered to or to the order of that Owner. The Depositary will not act under (a)(i) above unless the offer and sale of the securities to which the rights relate are registered under the Securities Act of 1933 or the Depositary has received an opinion of United States counsel that is satisfactory to it to the effect that those securities may be sold and delivered to the applicable Owners without registration under the Securities Act of 1933. For the avoidance of doubt, nothing in this Deposit Agreement shall create any obligation on the part of the Company to file a registration statement with respect to rights or the underlying securities or to endeavor to have such a registration statement declared effective.

 

 

(c)        If the Depositary will act under (a)(ii) above, the Company and the Depositary will enter into a separate agreement setting forth the conditions and procedures applicable to the particular offering. Upon (i) the request of an applicable Owner to deliver the rights allocable to the American Depositary Shares of that Owner to an account specified by that Owner to which the rights can be delivered and (ii) receipt of such documents as the Company and the Depositary agreed to require to comply with applicable law, the Depositary will deliver those rights as requested by that Owner.

 

(d)       If the Depositary will act under (a)(iii) above, the Depositary will use reasonable efforts to sell the rights in proportion to the number of American Depositary Shares held by the applicable Owners and pay the net proceeds to the Owners otherwise entitled to the rights that were sold, upon an averaged or other practical basis without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of any American Depositary Shares or otherwise.

 

(e)       Payment or deduction of the fees of the Depositary as provided in Section 5.9 and payment or deduction of the expenses of the Depositary and any applicable taxes or other governmental charges shall be conditions of any delivery of securities or payment of cash proceeds under this Section 4.4.

 

(f)        The Depositary shall not be responsible for any failure to determine that it may be lawful or feasible to make rights available to or exercise rights on behalf of Owners in general or any Owner in particular, or to sell rights.

 

SECTION 4.5.      Conversion of Foreign Currency.

 

Whenever the Depositary or the Custodian receives foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis into Dollars and the resulting Dollars transferred to the United States, the Depositary or one of its agents or affiliates or the Custodian shall convert or cause to be converted by sale or in any other manner that it may determine that foreign currency into Dollars, and those Dollars shall be distributed to the Owners entitled thereto.  A cash distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Owners based on exchange restrictions, the date of delivery of any American Depositary Shares or otherwise and shall be net of any expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.9.

 

If a conversion of foreign currency or the repatriation or distribution of Dollars can be effected only with the approval or license of any government or agency thereof, the Depositary may, but will not be required to, file an application for that approval or license.

 

 

If the Depositary determines that in its judgment any foreign currency received by the Depositary or the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any approval or license of any government or agency thereof that is required for such conversion is not filed or sought by the Depositary or is not obtained within a reasonable period as determined by the Depositary, the Depositary may distribute the foreign currency received by the Depositary to, or in its discretion may hold such foreign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled to receive the same.

 

If any conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the Owners entitled thereto, the Depositary may in its discretion make that conversion and distribution in Dollars to the extent practicable and permissible to the Owners entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold that balance uninvested and without liability for interest thereon for the account of, the Owners entitled thereto.

 

The Depositary may convert currency itself or through any of its affiliates, or the Custodian or the Company may convert currency and pay Dollars to the Depositary. Where the Depositary converts currency itself or through any of its affiliates, the Depositary acts as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation, transaction spreads, that it will retain for its own account.  The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion made under this Deposit Agreement and the rate that the Depositary or its affiliate receives when buying or selling foreign currency for its own account.  The Depositary makes no representation that the exchange rate used or obtained by it or its affiliate in any currency conversion under this Deposit Agreement will be the most favorable rate that could be obtained at the time or that the method by which that rate will be determined will be the most favorable to Owners, subject to the Depositary’s obligations under Section 5.3.  The methodology used to determine exchange rates used in currency conversions made by the Depositary is available upon request. Where the Custodian converts currency, the Custodian has no obligation to obtain the most favorable rate that could be obtained at the time or to ensure that the method by which that rate will be determined will be the most favorable to Owners, and the Depositary makes no representation that the rate is the most favorable rate and will not be liable for any direct or indirect losses associated with the rate.  In certain instances, the Depositary may receive dividends or other distributions from the Company in Dollars that represent the proceeds of a conversion of foreign currency or translation from foreign currency at a rate that was obtained or determined by or on behalf of the Company and, in such cases, the Depositary will not engage in, or be responsible for, any foreign currency transactions and neither it nor the Company makes any representation that the rate obtained or determined by the Company is the most favorable rate and neither it nor the Company will be liable for any direct or indirect losses associated with the rate.

 

 

SECTION 4.6.      Fixing of Record Date.

 

Whenever a cash dividend, cash distribution or any other distribution is made on Deposited Securities or rights to purchase Shares or other securities are issued with respect to Deposited Securities (which rights will be delivered to or exercised or sold on behalf of Owners in accordance with Section 4.4) or the Depositary receives notice that a distribution or issuance of that kind will be made, or whenever the Depositary receives notice that a meeting of holders of Shares will be held in respect of which the Company has requested the Depositary to send a notice under Section 4.7, or whenever the Depositary will assess a fee or charge against the Owners, or whenever the Depositary causes a change in the number of Shares that are represented by each American Depositary Share, or whenever the Depositary otherwise finds it necessary or convenient, the Depositary shall fix a record date, which shall be the same as, or as near as practicable to, any corresponding record date set by the Company with respect to Shares, (a) for the determination of the Owners (i) who shall be entitled to receive the benefit of that dividend or other distribution or those rights, (ii) who shall be entitled to give instructions for the exercise of voting rights at that meeting, (iii) who shall be responsible for that fee or charge or (iv) for any other purpose for which the record date was set, or (b) on or after which each American Depositary Share will represent the changed number of Shares. Subject to the provisions of Sections 4.1 through 4.5 and to the other terms and conditions of this Deposit Agreement, the Owners on a record date fixed by the Depositary shall be entitled to receive the amount distributable by the Depositary with respect to that dividend or other distribution or those rights or the net proceeds of sale thereof in proportion to the number of American Depositary Shares held by them respectively, to give voting instructions or to act in respect of the other matter for which that record date was fixed, or be responsible for that fee or charge, as the case may be.

 

SECTION 4.7.      Voting of Deposited Shares.

 

(a)        Upon receipt of notice of any meeting of holders of Shares at which holders of Shares will be entitled to vote, if requested in writing by the Company, the Depositary shall, as soon as practicable thereafter, Disseminate to the Owners a notice, the form of which shall be in the sole discretion of the Depositary, that shall contain (i) the information contained in the notice of meeting received by the Depositary, (ii) a statement that the Owners as of the close of business on a specified record date will be entitled, subject to any applicable provision of Cayman Islands law and of the articles of association or similar documents of the Company, to instruct the Depositary as to the exercise of the voting rights pertaining to the amount of Shares represented by their respective American Depositary Shares, (iii) a statement as to the manner in which those instructions may be given and (iv) the last date on which the Depositary will accept instructions (the “Instruction Cutoff Date”).

 

 

(b)       Upon the written request of an Owner of American Depositary Shares, as of the date of the request or, if a record date was specified by the Depositary, as of that record date, received on or before any Instruction Cutoff Date established by the Depositary, the Depositary may, and if the Depositary sent a notice under the preceding paragraph shall, endeavor, in so far as practicable, to vote or cause to be voted the amount of deposited Shares represented by those American Depositary Shares in accordance with the instructions set forth in that request. The Depositary shall not vote or attempt to exercise the right to vote that attaches to the deposited Shares other than in accordance with instructions given by Owners and received by the Depositary or as provided in the following sentence. If

 

(i) the Company instructed the Depositary to Disseminate a notice under paragraph (a) above and complied with the paragraph (d) below,

 

(ii) no instructions are received by the Depositary from an Owner with respect to a matter and an amount of American Depositary Shares of that Owner on or before the Instruction Cutoff Date and

 

(iii) the Depositary has received from the Company, by the business day following the Instruction Cutoff Date, a written confirmation that, as of the Instruction Cutoff Date, (x) the Company wishes a proxy to be given under this sentence, (y) the Company reasonably does not know of any substantial opposition to the matters and (z) the matters are not materially adverse to the interests of shareholders,

 

then, the Depositary shall deem that Owner to have instructed the Depositary to give a discretionary proxy to a person designated by the Company with respect to that matter and the amount of deposited Shares represented by that amount of American Depositary Shares and the Depositary shall give a discretionary proxy to a person designated by the Company to vote that amount of deposited Shares as to that matter.

 

(c)        There can be no assurance that Owners generally or any Owner in particular will receive the notice described in paragraph (a) above in time to enable Owners to give instructions to the Depositary prior to the Instruction Cutoff Date.

 

(d)       In order to give Owners a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Shares, if the Company will request the Depositary to Disseminate a notice under paragraph (a) above, the Company shall give the Depositary notice of the meeting, details concerning the matters to be voted upon and copies of materials to be made available to holders of Shares in connection with the meeting not less than 30 days prior to the meeting date.

 

SECTION 4.8.      Tender and Exchange Offers; Redemption, Replacement or Cancellation of Deposited Securities.

 

(a)        The Depositary shall not tender any Deposited Securities in response to any voluntary cash tender offer, exchange offer or similar offer made to holders of Deposited Securities (a “Voluntary Offer”), except when instructed in writing to do so by an Owner surrendering American Depositary Shares and subject to any conditions or procedures the Depositary may require.

 

 

(b)       If the Depositary receives a written notice that Deposited Securities have been redeemed for cash or otherwise purchased for cash in a transaction that is mandatory and binding on the Depositary as a holder of those Deposited Securities (a “Redemption”), the Depositary, at the expense of the Company, shall (i) if required, surrender Deposited Securities that have been redeemed to the issuer of those securities or its agent on the redemption date, (ii) Disseminate a notice to Owners (A) notifying them of that Redemption, (B) calling for surrender of a corresponding number of American Depositary Shares and (C) notifying them that the called American Depositary Shares have been converted into a right only to receive the money received by the Depositary upon that Redemption and those net proceeds shall be the Deposited Securities to which Owners of those converted American Depositary Shares shall be entitled upon surrenders of those American Depositary Shares in accordance with Section 2.5 or 6.2 and (iii) distribute the money received upon that Redemption to the Owners entitled to it upon surrender by them of called American Depositary Shares in accordance with Section 2.5 (and, for the avoidance of doubt, Owners shall not be entitled to receive that money under Section 4.1). If the Redemption affects less than all the Deposited Securities, the Depositary shall call for surrender a corresponding portion of the outstanding American Depositary Shares and only those American Depositary Shares will automatically be converted into a right to receive the net proceeds of the Redemption. The Depositary shall allocate the American Depositary Shares converted under the preceding sentence among the Owners pro-rata to their respective holdings of American Depositary Shares immediately prior to the Redemption, except that the allocations may be adjusted so that no fraction of a converted American Depositary Share is allocated to any Owner. A Redemption of all or substantially all of the Deposited Securities shall be a Termination Option Event.

 

(c)        If the Depositary is notified of or there occurs any change in nominal value or any subdivision, combination or any other reclassification of the Deposited Securities or any recapitalization, reorganization, sale of assets substantially as an entirety, merger or consolidation affecting the issuer of the Deposited Securities or to which it is a party that is mandatory and binding on the Depositary as a holder of Deposited Securities and, as a result, securities or other property have been or will be delivered in exchange, conversion, replacement or in lieu of, Deposited Securities (a “Replacement”), the Depositary shall, if required, surrender the old Deposited Securities affected by that Replacement of Shares and hold, as new Deposited Securities under this Deposit Agreement, the new securities or other property delivered to it in that Replacement. However, the Depositary may elect to sell those new Deposited Securities if in the opinion of the Depositary it is not lawful or not practical for it to hold those new Deposited Securities under this Deposit Agreement because those new Deposited Securities may not be distributed to Owners without registration under the Securities Act of 1933 or for any other reason, at public or private sale, at such places and on such terms as it deems proper and proceed as if those new Deposited Securities had been Redeemed under paragraph (b) above. A Replacement shall be a Termination Option Event.

 

 

(d)       In the case of a Replacement where the new Deposited Securities will continue to be held under this Deposit Agreement, the Depositary may call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing the new Deposited Securities and the number of those new Deposited Securities represented by each American Depositary Share. If the number of Shares represented by each American Depositary Share decreases as a result of a Replacement, the Depositary may call for surrender of the American Depositary Shares to be exchanged on a mandatory basis for a lesser number of American Depositary Shares and may sell American Depositary Shares to the extent necessary to avoid distributing fractions of American Depositary Shares in that exchange and distribute the net proceeds of that sale to the Owners entitled to them.

 

(e)        If there are no Deposited Securities with respect to American Depositary Shares, including if the Deposited Securities are cancelled, or the Deposited Securities with respect to American Depositary Shares have become apparently worthless, the Depositary may call for surrender of those American Depositary Shares or may cancel those American Depositary Shares, upon notice to Owners, and that condition shall be a Termination Option Event.

 

SECTION 4.9.      Reports.

 

The Depositary shall make available for inspection by Owners at its Office any reports and communications, including any proxy solicitation material, received from the Company which are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to the holders of those Deposited Securities by the Company. The Company shall furnish reports and communications, including any proxy soliciting material to which this Section applies, to the Depositary in English, to the extent those materials are required to be translated into English pursuant to any regulations of the Commission.

 

SECTION 4.10.    Lists of Owners.

 

As promptly as practicable 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 American Depositary Share holdings of all Owners.

 

SECTION 4.11.    Withholding.

 

If the Depositary determines that any distribution received or to be made by the Depositary (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charge that the Depositary is obligated to withhold, the Depositary may sell, by public or private sale, all or a portion of the distributed property (including Shares and rights to subscribe therefor) in the amounts and manner the Depositary deems necessary and practicable to pay those taxes or charges, and the Depositary shall distribute the net proceeds of that sale, after deduction of those taxes or charges, to the Owners entitled thereto in proportion to the number of American Depositary Shares held by them respectively.

 

 

Services for Owners and Holders that may permit them to obtain reduced rates of tax withholding at source or reclaim excess tax withheld, and the fees and costs associated with using services of that kind, are not provided under, and are outside the scope of, this Deposit Agreement.

 

Each Owner and Holder agrees to indemnify the Company, the Depositary, the Custodian and their respective directors, employees, agents and affiliates for, and hold each of them harmless against, any claim by any governmental authority with respect to taxes, additions to tax, penalties or interest arising out of any refund of taxes, reduced withholding at source or other tax benefit received by it.

 

ARTICLE 5.      THE DEPOSITARY, THE CUSTODIANS AND THE COMPANY

 

SECTION 5.1.      Maintenance of Office and Register by the Depositary.

 

Until termination of this Deposit Agreement in accordance with its terms, the Depositary shall maintain facilities for the delivery, registration of transfers and surrender of American Depositary Shares in accordance with the provisions of this Deposit Agreement.

 

The Depositary shall keep a register of all Owners and all outstanding American Depositary Shares, which shall be open for inspection by the Owners at the Depositary’s Office during regular business hours, but only for the purpose of communicating with Owners regarding the business of the Company or a matter related to this Deposit Agreement or the American Depositary Shares.

 

The Depositary may close the register for delivery, registration of transfer or surrender for the purpose of withdrawal from time to time as provided in Section 2.6.

 

If any American Depositary Shares are listed on one or more stock exchanges, the Depositary shall act as Registrar or appoint a Registrar or one or more co-registrars for registration of those American Depositary Shares in accordance with any requirements of that exchange or those exchanges.

 

The Company shall have the right, at all reasonable times, upon written request, to inspect the transfer and registration records of the Depositary, the Registrar and any co-transfer agents or co-registrars and to require them to supply, at the Company's expense (unless otherwise agreed in writing between the Company and the Depositary), copies of such portion of their records as the Company may reasonably request.

 

 

SECTION 5.2.      Prevention or Delay of Performance by the Company or the Depositary.

 

Neither the Depositary nor the Company nor any of their respective directors, employees, agents or affiliates shall incur any liability to any Owner or Holder:

 

(i) if by reason of (A) any provision of any present or future law or regulation or other act or action of the government of the United States, any State of the United States or any other state or jurisdiction, or of any governmental or regulatory authority or stock exchange; (B) (in the case of the Depositary only) any provision, present or future, of the articles of association or similar document of the Company, or any provision of any securities issued or distributed by the Company, or any offering or distribution thereof; or (C) any event or circumstance, whether natural or caused by a person or persons, that is beyond the ability of the Depositary or the Company, as the case may be, to prevent or counteract by reasonable care or effort (including, but not limited to, earthquakes, floods, severe storms, fires, explosions, war, terrorism, civil unrest, labor disputes, criminal acts or outbreaks of infectious disease; interruptions or malfunctions of utility services, Internet or other communications lines or systems; unauthorized access to or attacks on computer systems or websites; or other failures or malfunctions of computer hardware or software or other systems or equipment), the Depositary or the Company is, directly or indirectly, prevented from, forbidden to or delayed in, or could be subject to any civil or criminal penalty on account of doing or performing and therefore does not do or perform, any act or thing that, by the terms of this Deposit Agreement or the Deposited Securities, it is provided shall be done or performed;

 

(ii) for any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement (including any determination by the Depositary or the Company to take, or not take, any action that this Deposit Agreement provides the Depositary or the Company, as the case may be, may take);

 

(iii) for the inability of any Owner or Holder to benefit from any distribution, offering, right or other benefit that is made available to holders of Deposited Securities but is not, under the terms of this Deposit Agreement, made available to Owners or Holders; or

 

(iv) for any special, consequential or punitive damages for any breach of the terms of this Deposit Agreement.

 

Where, by the terms of a distribution to which Section 4.1, 4.2 or 4.3 applies, or an offering to which Section 4.4 applies, or for any other reason, that distribution or offering may not be made available to Owners, and the Depositary may not dispose of that distribution or offering on behalf of Owners and make the net proceeds available to Owners, then the Depositary shall not make that distribution or offering available to Owners, and shall allow any rights, if applicable, to lapse.

 

 

SECTION 5.3.      Obligations of the Depositary and the Company.

 

The Company assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to any Owner or Holder, except that the Company agrees to perform its obligations specifically set forth in this Deposit Agreement without negligence or bad faith.

 

The Depositary assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to any Owner or Holder (including, without limitation, liability with respect to the validity or worth of the Deposited Securities), except that the Depositary agrees to perform its obligations specifically set forth in this Deposit Agreement without negligence or bad faith, and the Depositary shall not be a fiduciary or have any fiduciary duty to Owners or Holders.

 

Neither the Depositary nor the Company 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 American Depositary Shares on behalf of any Owner or Holder or any other person.

 

Each of the Depositary and the Company may rely, and shall be protected in relying upon, any written notice, request, direction or other document believed by it to be genuine and to have been signed or presented by the proper party or parties.

 

Neither the Depositary nor the Company shall be liable for any action or non-action by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Owner or any other person believed by it in good faith to be competent to give such advice or information.

 

The Depositary 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 negligence or bad faith while it acted as Depositary.

 

The Depositary shall not be liable for the acts or omissions of any securities depository, clearing agency or settlement system in connection with or arising out of book-entry settlement of American Depositary Shares or Deposited Securities or otherwise.

 

In the absence of bad faith on its part, the Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any such vote is cast or the effect of any such vote.

 

 

The Depositary shall have no duty to make any determination or provide any information as to the tax status of the Company. Neither the Depositary nor the Company shall have any liability for any tax consequences that may be incurred by Owners or Holders as a result of owning or holding American Depositary Shares. Neither the Depositary nor the Company shall be liable for the inability or failure of an Owner or Holder to obtain the benefit of a foreign tax credit, reduced rate of withholding or refund of amounts withheld in respect of tax or any other tax benefit.

 

SECTION 5.4.      Resignation and Removal of the Depositary.

 

The Depositary may at any time resign as Depositary hereunder by written notice of its election so to do delivered to the Company, to become effective upon the appointment of a successor depositary and its acceptance of that appointment as provided in this Section. The effect of resignation if a successor depositary is not appointed is provided for in Section 6.2.

 

The Depositary may at any time be removed by the Company by 90 days’ prior written notice of that removal, to become effective upon the later of (i) the 90th day after delivery of the notice to the Depositary and (ii) the appointment of a successor depositary and its acceptance of its appointment as provided in this Section.

 

If the Depositary resigns or is 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 execute and deliver to the Company an instrument in writing accepting its appointment under this Deposit Agreement. If the Depositary receives notice from the Company that a successor depositary has been appointed following its resignation or removal, the Depositary, upon payment of all sums due it from the Company, shall deliver to its successor a register listing all the Owners and their respective holdings of outstanding American Depositary Shares and shall deliver the Deposited Securities to or to the order of its successor. When the Depositary has taken the actions specified in the preceding sentence (i) the successor shall become the Depositary and shall have all the rights and shall assume all the duties of the Depositary under this Deposit Agreement and (ii) the predecessor depositary shall cease to be the Depositary and shall be discharged and released from all obligations under this Deposit Agreement, except for its duties under Section 5.8 with respect to the time before that discharge. A successor Depositary shall notify the Owners of its appointment as soon as practical after assuming the duties of Depositary.

 

Any corporation or other entity 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.

 

 

SECTION 5.5.      The Custodians.

 

The Custodian shall be subject at all times and in all respects to the directions of the Depositary and shall be responsible solely to it. The Depositary in its discretion may at any time appoint a substitute or additional custodian or custodians, each of which shall thereafter be one of the Custodians under this Deposit Agreement. If the Depositary receives notice that a Custodian is resigning and, upon the effectiveness of that resignation there would be no Custodian acting under this Deposit Agreement, the Depositary shall, as promptly as practicable after receiving that notice, appoint a substitute custodian or custodians, each of which shall thereafter be a Custodian under this Deposit Agreement. The Depositary shall notify the Company of the appointment of a substitute or additional Custodian as promptly as practicable. The Depositary shall require any Custodian that resigns or is removed to deliver all Deposited Securities held by it to another Custodian.

 

SECTION 5.6.      Notices and Reports.

 

If the Company takes or decides to take any corporate action of a kind that is addressed in Sections 4.1 to 4.4, or 4.6 to 4.8, or that effects or will effect a change of the name or legal structure of the Company, or that effects or will effect a change to the Shares, the Company shall notify the Depositary and the Custodian of that action or decision as soon as it is lawful and practical to give that notice.  The notice shall be in English and shall include all details that the Company is required to include in any notice to any governmental or regulatory authority or securities exchange or is required to make available generally to holders of Shares by publication or otherwise.

 

The Company will arrange for the translation into English, if not already in English, to the extent required pursuant to any regulations of the Commission, and the prompt transmittal by the Company to the Depositary and the Custodian of all notices and any other reports and communications which are made generally available by the Company to holders of its Shares. If requested in writing by the Company, the Depositary will Disseminate, at the Company’s expense, those notices, reports and communications to all Owners or otherwise make them available to Owners in a manner that the Company specifies as substantially equivalent to the manner in which those communications are made available to holders of Shares and compliant with the requirements of any securities exchange on which the American Depositary Shares are listed. 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 that Dissemination.

 

The Company represents, as of the date of this Deposit Agreement, that the statements in Article 11 of the form of Receipt appearing as Exhibit A to this Deposit Agreement or, if applicable, most recently filed with the Commission pursuant to Rule 424(b) under the Securities Act of 1933 with respect to the Company’s obligation to file periodic reports under the United States Securities Exchange Act of 1934, as amended, or its qualification for exemption from registration under that Act pursuant to Rule 12g3-2(b) under that Act, as the case may be, are true and correct. The Company agrees to promptly notify the Depositary upon becoming aware of any change in the truth of any of those statements or if there is any change in the Company’s status regarding those reporting obligations or that qualification.

 

 

 

SECTION 5.7.      Distribution of Additional Shares, Rights, etc.

 

If the Company or any affiliate of the Company determines to make any issuance or distribution of (1) additional Shares, (2) rights to subscribe for Shares, (3) securities convertible into Shares, or (4) rights to subscribe for such securities (each a “Distribution”), the Company shall notify the Depositary in writing in English as promptly as practicable and in any event before the Distribution starts and, if reasonably requested in writing by the Depositary, the Company shall promptly furnish to the Depositary either (i) evidence satisfactory to the Depositary that the Distribution is registered under the Securities Act of 1933 or (ii) a written opinion from U.S. counsel for the Company that is reasonably satisfactory to the Depositary, stating that the Distribution does not require, or, if made in the United States, would not require, registration under the Securities Act of 1933.

 

The Company agrees with the Depositary that neither the Company nor any company controlled by, controlling or under common control with the Company will at any time deposit any Shares that, at the time of deposit, are Restricted Securities.

 

SECTION 5.8.      Indemnification.

 

The Company agrees to indemnify the Depositary, its directors, employees, agents and affiliates and each Custodian against, and hold each of them harmless from, any liability or expense (including, but not limited to any documented fees and expenses incurred in seeking, enforcing or collecting such indemnity and the documented and reasonable fees and expenses of counsel) that may arise out of or in connection with (a) any registration with the Commission of American Depositary Shares or Deposited Securities or the offer or sale thereof or (b) acts performed or omitted, pursuant to the provisions of or in connection with this Deposit Agreement and the American Depositary Shares, as the same may be amended, modified or supplemented from time to time, (i) by either the Depositary or a Custodian or their respective directors, employees, agents and affiliates, except for any liability or expense arising out of the negligence or bad faith of either of them, or (ii) by the Company or any of its directors, employees, agents and affiliates.

 

The Depositary agrees to indemnify the Company, its directors, employees, agents and affiliates and hold them harmless from any liability or expense that may arise out of acts performed or omitted by the Depositary or any Custodian or their respective directors, employees, agents and affiliates due to their negligence or bad faith.

 

 

SECTION 5.9.      Charges of Depositary.

 

The following charges shall be incurred by any party depositing or withdrawing Shares or by any party surrendering American Depositary Shares or to whom American Depositary Shares are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the American Depositary Shares or Deposited Securities or a delivery of American Depositary Shares pursuant to Section 4.3), or by Owners, as applicable: (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of Shares generally on the Share register of the Company or Foreign Registrar and applicable to transfers of Shares to or from the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals hereunder, (3) such cable (including SWIFT) and facsimile transmission fees and expenses as are expressly provided in this Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign currency pursuant to Section 4.5, (5) a fee of $5.00 or less per 100 American Depositary Shares (or portion thereof) for the delivery of American Depositary Shares pursuant to Section 2.3, 4.3 or 4.4 and the surrender of American Depositary Shares pursuant to Section 2.5 or 6.2, (6) a fee of $.05 or less per American Depositary Share (or portion thereof) for any cash distribution made pursuant to this Deposit Agreement, including, but not limited to Sections 4.1 through 4.4 and Section 4.8, (7) a fee for the distribution of securities pursuant to Section 4.2 or of rights pursuant to Section 4.4 (where the Depositary will not exercise or sell those rights on behalf of Owners), such fee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred to above which would have been charged as a result of the deposit of such securities under this Deposit Agreement (for purposes of this item 7 treating all such securities as if they were Shares) but which securities are instead distributed by the Depositary to Owners, (8) in addition to any fee charged under item 6 above, a fee of $.05 or less per American Depositary Share (or portion thereof) per annum for depositary services, which will be payable as provided in item 9 below, and (9) any other charges payable by the Depositary or the Custodian, any of the Depositary's or Custodian’s agents or the agents of the Depositary's or Custodian’s agents, in connection with the servicing of Shares or other Deposited Securities (which charges shall be assessed against Owners as of the date or dates set by the Depositary in accordance with Section 4.6 and shall be payable at the sole discretion of the Depositary by billing those Owners for those charges or by deducting those charges from one or more cash dividends or other cash distributions).

 

The Depositary may collect any of its fees by deduction from any cash distribution payable, or by selling a portion of any securities to be distributed, to Owners that are obligated to pay those fees.

 

In performing its duties under this Deposit Agreement, the Depositary may use brokers, dealers, foreign currency dealers or other service providers that are owned by or affiliated with the Depositary and that may earn or share fees, spreads or commissions.

 

The Depositary may own and deal in any class of securities of the Company and its affiliates and in American Depositary Shares.

 

 

SECTION 5.10.      Retention of Depositary Documents.

 

The Depositary is authorized to destroy those documents, records, bills and other data compiled during the term of this Deposit Agreement at the times permitted by the laws or regulations governing the Depositary, unless the Company, at the Company’s expense, requests reasonably prior to such destruction that those papers be retained for a longer period or turned over to the Company.

 

SECTION 5.11.      Exclusivity.

 

Without prejudice to the Company’s rights under Section 5.4, the Company agrees not to appoint any other depositary for issuance of depositary shares, depositary receipts or any similar securities or instruments so long as The Bank of New York Mellon is acting as Depositary under this Deposit Agreement.

 

SECTION 5.12.      Information for Regulatory Compliance.

 

Each of the Company and the Depositary shall provide to the other, as promptly as practicable, information from its records or otherwise available to it that is reasonably requested by the other to permit the other to comply with applicable law or requirements of governmental or regulatory authorities.

 

ARTICLE 6.      AMENDMENT AND TERMINATION

 

SECTION 6.1.      Amendment.

 

The form of the Receipts and any provisions of this Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of Owners or Holders in any respect that they may deem necessary or desirable. Any amendment that would impose or increase any fees or charges (other than taxes and other governmental charges, registration fees, cable (including SWIFT) or facsimile transmission costs, delivery costs or other such expenses), or that would otherwise prejudice any substantial existing right of Owners, shall, however, not become effective as to outstanding American Depositary Shares until the expiration of 30 days after notice of that amendment has been Disseminated to the Owners of outstanding American Depositary Shares. Every Owner and Holder, at the time any amendment so becomes effective, shall be deemed, by continuing to hold American Depositary Shares or any interest therein, to consent and agree to that amendment and to be bound by this Deposit Agreement as amended thereby. Upon the effectiveness of an amendment to the form of Receipt, including a change in the number of Shares represented by each American Depositary Share, the Depositary may call for surrender of Receipts to be replaced with new Receipts in the amended form or call for surrender of American Depositary Shares to effect that change of ratio. In no event shall any amendment impair the right of the Owner to surrender American Depositary Shares and receive delivery of the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law.

 

 

SECTION 6.2.      Termination.

 

(a)       The Company may initiate termination of this Deposit Agreement by notice to the Depositary. The Depositary may initiate termination of this Deposit Agreement if (i) at any time 60 days shall have expired after the Depositary delivered to the Company a written resignation notice and a successor depositary has not been appointed and accepted its appointment as provided in Section 5.4 or (ii) a Termination Option Event has occurred. If termination of this Deposit Agreement is initiated, the Depositary shall Disseminate a notice of termination to the Owners of all American Depositary Shares then outstanding setting a date for termination (the “Termination Date”), which shall be at least 90 days after the date of that notice, and this Deposit Agreement shall terminate on that Termination Date.

 

(b)       After the Termination Date, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary under Sections 5.8 and 5.9.

 

(c)        At any time after the Termination Date, the Depositary may sell the Deposited Securities then held under this Deposit Agreement and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it hereunder, unsegregated and without liability for interest, for the pro rata benefit of the Owners of American Depositary Shares that remain outstanding, and those Owners will be general creditors of the Depositary with respect to those net proceeds and that other cash. After making that sale, the Depositary shall be discharged from all obligations under this Deposit Agreement, except (i) to account for the net proceeds and other cash (after deducting, in each case, the fee of the Depositary for the surrender of American Depositary Shares, any expenses for the account of the Owner of such American Depositary Shares in accordance with the terms and conditions of this Deposit Agreement and any applicable taxes or governmental charges) and (ii) for its obligations under Section 5.8 and (iii) to act as provided in paragraph (d) below.

 

(d)       After the Termination Date, the Depositary shall continue to receive dividends and other distributions pertaining to Deposited Securities (that have not been sold), may sell rights and other property as provided in this Deposit Agreement and shall deliver Deposited Securities (or sale proceeds) upon surrender of American Depositary Shares (after payment or upon deduction, in each case, of the fee of the Depositary for the surrender of American Depositary Shares, any expenses for the account of the Owner of those American Depositary Shares in accordance with the terms and conditions of this Deposit Agreement and any applicable taxes or governmental charges). After the Termination Date, the Depositary shall not accept deposits of Shares or deliver American Depositary Shares. After the Termination Date, (i) the Depositary may refuse to accept surrenders of American Depositary Shares for the purpose of withdrawal of Deposited Securities (that have not been sold) or reverse previously accepted surrenders of that kind that have not settled if in its judgment the requested withdrawal would interfere with its efforts to sell the Deposited Securities, (ii) the Depositary will not be required to deliver cash proceeds of the sale of Deposited Securities until all Deposited Securities have been sold and (iii) the Depositary may discontinue the registration of transfers of American Depositary Shares and suspend the distribution of dividends and other distributions on Deposited Securities to the Owners and need not give any further notices or perform any further acts under this Deposit Agreement except as provided in this Section.

 

 

ARTICLE 7.      MISCELLANEOUS

 

SECTION 7.1.      Counterparts; Signatures; Delivery; Electronic Records.

 

This Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of those counterparts shall constitute one and the same instrument. Copies of this Deposit Agreement shall be filed with the Depositary and shall be open to inspection by any Owner or Holder during regular business hours.

 

This Deposit Agreement may be executed by manual or electronic signatures, including images of manually executed signatures, DocuSign, AdobeSign or a similar agreed-upon electronic signature system, and may be delivered by exchange of copies of this Deposit Agreement by facsimile or email including a pdf or similar bit-mapped image of the signature pages. The parties to this Deposit Agreement represent and agree that if it has been executed or delivered electronically as provided in the preceding sentence or subsequently stored in and retrieved from an electronic record-keeping system, it shall have the same legal effect, validity and enforceability as a manually executed agreement maintained in a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, and that they shall not argue to the contrary.

 

SECTION 7.2.      No Third Party Beneficiaries.

 

This Deposit Agreement is for the exclusive benefit of the Company, the Depositary, the Owners and the Holders and their respective successors and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person.

 

SECTION 7.3.      Severability.

 

In case any one or more of the provisions contained in this Deposit Agreement or in a Receipt should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained in this Deposit Agreement or that Receipt shall in no way be affected, prejudiced or disturbed thereby.

 

 

SECTION 7.4.      Owners and Holders as Parties; Binding Effect.

 

The Owners and Holders from time to time shall be parties to this Deposit Agreement and shall be bound by all of the terms and conditions of this Deposit Agreement and of the Receipts by acceptance of American Depositary Shares or any interest therein.

 

SECTION 7.5.      Notices.

 

Any and all notices to be given to the Company shall be in writing and shall be deemed to have been duly given if personally delivered or sent by domestic first class or international air mail or air courier or sent by facsimile transmission or email attaching a pdf or similar bit-mapped image of a signed writing, addressed to XCHG Limited, _________________________________________, Attention: _____________, or any other place to which the Company may have transferred its principal office with notice to the Depositary.

 

Any and all notices to be given to the Depositary shall be in writing and shall be deemed to have been duly given if in English and personally delivered or sent by first class domestic or international air mail or air courier or sent by facsimile transmission or email attaching a pdf or similar bit-mapped image of a signed writing, addressed to The Bank of New York Mellon, 240 Greenwich Street, New York, New York 10286, Attention: Depositary Receipt Administration, email: bnymdepositarynotices@bnymellon.com or any other place to which the Depositary may have transferred its Office with notice to the Company.

 

Delivery of a notice to the Company or Depositary by mail or air courier shall be deemed effected when deposited, postage prepaid, in a post-office letter box or received by an air courier service. Delivery of a notice to the Company or Depositary sent by facsimile transmission or email shall be deemed effected when the recipient acknowledges receipt of that notice.

 

A notice to be given to an Owner shall be deemed to have been duly given when Disseminated to that Owner. Dissemination in paper form will be effective when personally delivered or sent by first class domestic or international air mail or air courier, addressed to that Owner at the address of that Owner as it appears on the transfer books for American Depositary Shares of the Depositary, or, if that Owner has filed with the Depositary a written request that notices intended for that Owner be mailed to some other address, at the address designated in that request. Dissemination in electronic form will be effective when sent in the manner consented to by the Owner to the electronic address most recently provided by the Owner for that purpose.

 

 

SECTION 7.6.      Arbitration; Settlement of Disputes.

 

Any controversy, claim or cause of action brought by any party hereto against the Company arising out of or relating to the Shares or other Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement, or the breach hereof or thereof, if so elected by the claimant, shall be settled by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

 

The place of the arbitration shall be The City of New York, State of New York, United States of America, and the language of the arbitration shall be English.

 

The number of arbitrators shall be three, each of whom shall be disinterested in the dispute or controversy, shall have no connection with any party thereto, and shall be an attorney experienced in international securities transactions. Each party shall appoint one arbitrator and the two arbitrators shall select a third arbitrator who shall serve as chairperson of the tribunal. If a dispute, controversy or cause of action shall involve more than two parties, the parties shall attempt to align themselves in two sides (i.e., claimant(s) and respondent(s)), each of which shall appoint one arbitrator as if there were only two parties to such dispute, controversy or cause of action. If such alignment and appointment shall not have occurred within thirty (30) calendar days after the initiating party serves the arbitration demand, the American Arbitration Association shall appoint the three arbitrators, each of whom shall have the qualifications described above. The parties and the American Arbitration Association may appoint from among the nationals of any country, whether or not a party is a national of that country.

 

The arbitral tribunal shall have no authority to award any consequential, special or punitive damages or other damages not measured by the prevailing party’s actual damages and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of this Deposit Agreement.

 

SECTION 7.7.      Appointment of Agent for Service of Process; Submission to Jurisdiction; Jury Trial Waiver.

 

The Company hereby (i) designates and appoints the person named in Exhibit A to this Deposit Agreement as the Company's authorized agent in the United States upon which process may be served in any suit or proceeding (including any arbitration proceeding) arising out of or relating to the Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement (a “Proceeding”), (ii) consents and submits to the jurisdiction of any state or federal court in the State of New York in which any Proceeding may be instituted and (iii) agrees that service of process upon said authorized agent shall be deemed in every respect effective service of process upon the Company in any Proceeding. The Company agrees to deliver to the Depositary, upon the execution and delivery of this Deposit Agreement, a written acceptance by the agent named in Exhibit A to this Deposit Agreement of its appointment as process agent. The Company further agrees to take any and all action, including the filing of any and all such documents and instruments, as may be necessary to continue that designation and appointment in full force and effect, or to appoint and maintain the appointment of another process agent located in the United States as required above, and to deliver to the Depositary a written acceptance by that agent of that appointment, for so long as any American Depositary Shares or Receipts remain outstanding or this Deposit Agreement remains in force. In the event the Company fails to maintain the designation and appointment of a process agent in the United States in full force and effect, the Company hereby waives personal service of process upon it and consents that a service of process in connection with a Proceeding may be made by certified or registered mail, return receipt requested, directed to the Company at its address last specified for notices under this Deposit Agreement, and service so made shall be deemed completed five (5) days after the same shall have been so mailed.

 

 

EACH PARTY TO THIS DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH OWNER AND HOLDER) 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 COMPANY AND/OR THE DEPOSITARY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE AMERICAN DEPOSITARY SHARES OR THE RECEIPTS, THIS DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF, INCLUDING, WITHOUT LIMITATION, ANY QUESTION REGARDING EXISTENCE, VALIDITY OR TERMINATION (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY) AND ANY CLAIM BASED ON U.S. FEDERAL SECURITIES LAWS.

 

No disclaimer of liability under the United States federal securities laws or the rules and regulations thereunder is intended by any provision of this Deposit Agreement, inasmuch as no person is able to effectively waive the duty of any other person to comply with its obligations under those laws, rules and regulations.

 

SECTION 7.8.      Waiver of Immunities.

 

To the extent that the Company or any of its properties, assets or revenues may have or may hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any duty of performance under this Deposit Agreement, claim, legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with the Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any immunity of that kind and consents to relief and enforcement as provided above.

 

 

SECTION 7.9.      Governing Law.

 

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.

 

 

IN WITNESS WHEREOF, XCHG Limited and THE BANK OF NEW YORK MELLON have duly executed this Deposit Agreement as of the day and year first set forth above and all Owners and Holders shall become parties hereto upon acceptance by them of American Depositary Shares or any interest therein.

 

 

	XCHG LIMITED
	By:
		Name:
		Title:
	THE BANK OF NEW YORK MELLON,
		as Depositary
	By:
		Name:
		Title:

 

 

 

EXHIBIT A

 

	AMERICAN DEPOSITARY SHARES
	(Each American Depositary Share represents
	40 deposited Shares)

 

THE BANK OF NEW YORK MELLON 

AMERICAN DEPOSITARY RECEIPT 

FOR CLASS A ORDINARY SHARES OF 

XCHG LIMITED (INCORPORATED UNDER THE LAWS OF THE CAYMAN ISLANDS)

 

The Bank of New York Mellon, as depositary (hereinafter called the “Depositary”), hereby certifies that_________________________________________, or registered assigns IS THE OWNER OF _____________________________

 

AMERICAN DEPOSITARY SHARES

 

representing deposited Class A ordinary shares (herein called “Shares”) of XCHG Limited, incorporated under the laws of the Cayman Islands (herein called the “Company”). At the date hereof, each American Depositary Share represents 40 Shares deposited or subject to deposit under the Deposit Agreement (as such term is hereinafter defined) with a custodian for the Depositary (herein called the “Custodian”) that, as of the date of the Deposit Agreement, was The Hongkong and Shanghai Banking Corporation Limited located in the Cayman Islands. The Depositary's Office and its principal executive office are located at 240 Greenwich Street, New York, N.Y. 10286.

 

THE DEPOSITARY'S OFFICE ADDRESS IS 

240 GREENWICH STREET, NEW YORK, N.Y. 10286

 

 

1.	THE DEPOSIT AGREEMENT.

 

This American Depositary Receipt is one of an issue (herein called “Receipts”), all issued and to be issued upon the terms and conditions set forth in the Deposit Agreement dated as of __________, 2024 (herein called the “Deposit Agreement”) among the Company, the Depositary, and all Owners and Holders from time to time of American Depositary Shares issued thereunder, each of whom by accepting American Depositary Shares agrees to become a party thereto and become bound by all the terms and conditions thereof. The Deposit Agreement sets forth the rights of Owners and Holders 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 those Shares and held thereunder (those Shares, securities, property, and cash are herein called “Deposited Securities”). Copies of the Deposit Agreement are on file at the Depositary's Office in New York City and at the office of the Custodian.

 

The statements made on the face and reverse of this Receipt are summaries of certain provisions of the Deposit Agreement and are qualified by and subject to the detailed provisions of the Deposit Agreement, to which reference is hereby made. Capitalized terms defined in the Deposit Agreement and not defined herein shall have the meanings set forth in the Deposit Agreement.

 

2.	SURRENDER OF AMERICAN DEPOSITARY SHARES AND WITHDRAWAL OF SHARES.

 

Upon surrender of American Depositary Shares for the purpose of withdrawal of the Deposited Securities represented thereby and payment of the fee of the Depositary for the surrender of American Depositary Shares as provided in Section 5.9 of the Deposit Agreement and payment of all taxes and governmental charges payable in connection with that surrender and withdrawal of the Deposited Securities, and subject to the terms and conditions of the Deposit Agreement, the Owner of those American Depositary Shares shall be entitled to delivery (to the extent delivery can then be lawfully and practicably made), to or as instructed by that Owner, of the amount of Deposited Securities at the time represented by those American Depositary Shares, but not any money or other property as to which a record date for distribution to Owners has passed (since money or other property of that kind will be delivered or paid on the scheduled payment date to the Owner as of that record date), and except that the Depositary shall not be required to accept surrender of American Depositary Shares for the purpose of withdrawal to the extent it would require delivery of a fraction of a Deposited Security. The Depositary shall direct the Custodian with respect to delivery of Deposited Securities and may charge the surrendering Owner a fee and its expenses for giving that direction by cable (including SWIFT) or facsimile transmission. The Company agrees not to prevent, hinder or unreasonably delay any lawful delivery or registration of transfer of Deposited Securities upon surrender of American Depositary Shares for the purpose of withdrawal. If Deposited Securities are delivered physically upon surrender of American Depositary Shares for the purpose of withdrawal, that delivery will be made at the Custodian’s office, except that, at the request, risk and expense of the surrendering Owner, and for the account of that Owner, the Depositary shall direct the Custodian to forward any cash or other property comprising, and forward a certificate or certificates, if applicable, and other proper documents of title, if any, for, the Deposited Securities represented by the surrendered American Depositary Shares to the Depositary for delivery at the Depositary’s Office or to another address specified in the order received from the surrendering Owner.

 

 

3.	REGISTRATION OF TRANSFER OF AMERICAN DEPOSITARY SHARES; COMBINATION AND SPLIT-UP OF RECEIPTS; INTERCHANGE OF CERTIFICATED AND UNCERTIFICATED AMERICAN DEPOSITARY SHARES.

 

The Depositary, subject to the terms and conditions of the Deposit Agreement, shall register a transfer of American Depositary Shares on its transfer books upon (i) in the case of certificated American Depositary Shares, surrender of the Receipt evidencing those American Depositary Shares, by the Owner or by a duly authorized attorney, properly endorsed or accompanied by proper instruments of transfer or (ii) in the case of uncertificated American Depositary Shares, receipt from the Owner of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.9 of that Agreement), and, in either case, duly stamped as may be required by the laws of the State of New York and of the United States of America. Upon registration of a transfer, the Depositary shall deliver the transferred American Depositary Shares to or upon the order of the person entitled thereto.

 

The Depositary, subject to the terms and conditions of the 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, 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.

 

The Depositary, upon surrender of certificated American Depositary Shares for the purpose of exchanging for uncertificated American Depositary Shares, shall cancel the Receipt evidencing those certificated American Depositary Shares and send the Owner a statement confirming that the Owner is the owner of the same number of uncertificated American Depositary Shares. The Depositary, upon receipt of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.9 of the Deposit Agreement) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging for certificated American Depositary Shares, shall cancel those uncertificated American Depositary Shares and register and deliver to the Owner a Receipt evidencing the same number of certificated American Depositary Shares.

 

 

As a condition precedent to the delivery, registration of transfer, or surrender of any American Depositary Shares or split-up or combination of any Receipt or withdrawal of any Deposited Securities, the Depositary, the Custodian, or Registrar may require payment from the depositor of the Shares or the presenter of the Receipt or instruction for registration of transfer or surrender of American Depositary Shares not evidenced by a 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 as provided in the Deposit Agreement, may require the production of proof satisfactory to it as to the identity and genuineness of any signature and may also require compliance with any regulations the Depositary may establish consistent with the provisions of the Deposit Agreement.

 

The Depositary may refuse to accept deposits of Shares for delivery of American Depositary Shares or to register transfers of American Depositary Shares in particular instances, or may suspend deposits of Shares or registration of transfer generally, whenever it or the Company considers it necessary or advisable to do so. The Depositary may refuse surrenders of American Depositary Shares for the purpose of withdrawal of Deposited Securities in particular instances, or may suspend surrenders for the purpose of withdrawal generally, but, notwithstanding anything to the contrary in the Deposit Agreement, only for (i) temporary delays caused by closing of the Depositary’s register or the register of holders of Shares maintained by the Company or the Foreign Registrar, or the deposit of Shares, in connection with voting at a shareholders’ meeting or the payment of dividends, (ii) the payment of fees, taxes and similar charges, (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the American Depositary Shares or to the withdrawal of the Deposited Securities or (iv) any other reason that, at the time, is permitted under paragraph I(A)(1) of the General Instructions to Form F-6 under the Securities Act of 1933 or any successor to that provision.

 

The Depositary shall not knowingly accept for deposit under the Deposit Agreement any Shares that, at the time of deposit, are Restricted Securities.

 

4.	LIABILITY OF OWNER FOR TAXES.

 

If any tax or other governmental charge shall become payable by the Custodian or the Depositary with respect to or in connection with any American Depositary Shares or any Deposited Securities represented by any American Depositary Shares or in connection with a transaction to which Section 4.8 of the Deposit Agreement applies, that tax or other governmental charge shall be payable by the Owner of those American Depositary Shares to the Depositary. The Depositary may refuse to register any transfer of those American Depositary Shares or any withdrawal of Deposited Securities represented by those American Depositary Shares until that payment is made, and may withhold any dividends or other distributions or the proceeds thereof, or may sell for the account of the Owner any part or all of the Deposited Securities represented by those American Depositary Shares, and may apply those dividends or other distributions or the net proceeds of any sale of that kind in payment of that tax or other governmental charge but, even after a sale of that kind, the Owner shall remain liable for any deficiency. The Depositary shall distribute any net proceeds of a sale made under Section 3.2 of the Deposit Agreement that are not used to pay taxes or governmental charges to the Owners entitled to them in accordance with Section 4.1 of the Deposit Agreement. If the number of Shares represented by each American Depositary Share decreases as a result of a sale of Deposited Securities under Section 3.2 of the Deposit Agreement, the Depositary may call for surrender of the American Depositary Shares to be exchanged on a mandatory basis for a lesser number of American Depositary Shares and may sell American Depositary Shares to the extent necessary to avoid distributing fractions of American Depositary Shares in that exchange and distribute the net proceeds of that sale to the Owners entitled to them.

 

 

5.	WARRANTIES ON DEPOSIT OF SHARES.

 

Every person depositing Shares under the Deposit Agreement shall be deemed thereby to represent and warrant that those Shares and each certificate therefor, if applicable, are validly issued, fully paid and nonassessable and were not issued in violation of any preemptive or similar rights of the holders of outstanding securities of the Company and that the person making that deposit is duly authorized so to do. Every depositing person shall also be deemed to represent that the Shares, at the time of deposit, are not Restricted Securities. All representations and warranties deemed made under Section 3.3 of the Deposit Agreement shall survive the deposit of Shares and delivery of American Depositary Shares.

 

6.	FILING PROOFS, CERTIFICATES, AND OTHER INFORMATION.

 

Any person presenting Shares for deposit or any Owner or Holder may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, or such information relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to execute such certificates and to make such representations and warranties, as the Depositary may deem necessary or proper or as the Company may reasonably require by written request to the Depositary. The Depositary may withhold the delivery or registration of transfer of any American Depositary Shares, the distribution of any dividend or other distribution or of the proceeds thereof or the delivery of any Deposited Securities until that proof or other information is filed or those certificates are executed or those representations and warranties are made. As conditions of accepting Shares for deposit, the Depositary may require (i) any certification required by the Depositary or the Custodian in accordance with the provisions of the Deposit Agreement, (ii) a written order directing the Depositary to deliver to, or upon the written order of, the person or persons stated in that order, the number of American Depositary Shares representing those Deposited Shares, (iii) evidence satisfactory to the Depositary that those Shares have been re-registered in the books of the Company or the Foreign Registrar in the name of the Depositary, a Custodian or a nominee of the Depositary or a Custodian, (iv) evidence satisfactory to the Depositary that any necessary approval has been granted by any governmental body in each applicable jurisdiction and (v) an agreement or assignment, or other instrument satisfactory to the Depositary, that provides for the prompt transfer to the Custodian of any dividend, or right to subscribe for additional Shares or to receive other property, that any person in whose name those Shares are or have been recorded may thereafter receive upon or in respect of those Shares, or, in lieu thereof, such agreement of indemnity or other agreement as shall be satisfactory to the Depositary. The Depositary shall refuse, and shall instruct the Custodian to refuse, to accept Shares for deposit if the Depositary has received a notice from the Company that the Company has restricted transfer of those Shares under the Company’s articles of association or any applicable laws or that the deposit would result in any violation of the Company’s articles of association or any applicable laws. The Depositary shall provide the Company, upon the Company’s written request and at the Company’s expense, as promptly as practicable, with copies of any information or other materials which the Depositary receives pursuant to Section 3.4 of the Deposit Agreement, to the extent that the requested disclosure is permitted under applicable law.

 

 

7.	CHARGES OF DEPOSITARY.

 

The following charges shall be incurred by any party depositing or withdrawing Shares or by any party surrendering American Depositary Shares or to whom American Depositary Shares are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the American Depositary Shares or Deposited Securities or a delivery of American Depositary Shares pursuant to Section 4.3 of the Deposit Agreement), or by Owners, as applicable: (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of Shares generally on the Share register of the Company or Foreign Registrar and applicable to transfers of Shares to or from the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals hereunder, (3) such cable (including SWIFT) and facsimile transmission fees and expenses as are expressly provided in the Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign currency pursuant to Section 4.5 of the Deposit Agreement, (5) a fee of $5.00 or less per 100 American Depositary Shares (or portion thereof) for the delivery of American Depositary Shares pursuant to Section 2.3, 4.3 or 4.4 of the Deposit Agreement and the surrender of American Depositary Shares pursuant to Section 2.5 or 6.2 of the Deposit Agreement, (6) a fee of $.05 or less per American Depositary Share (or portion thereof) for any cash distribution made pursuant to the Deposit Agreement, including, but not limited to Sections 4.1 through 4.4 and 4.8 of the Deposit Agreement, (7) a fee for the distribution of securities pursuant to Section 4.2 of the Deposit Agreement or of rights pursuant to Section 4.4 of that Agreement (where the Depositary will not exercise or sell those rights on behalf of Owners), such fee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred to above which would have been charged as a result of the deposit of such securities under the Deposit Agreement (for purposes of this item 7 treating all such securities as if they were Shares) but which securities are instead distributed by the Depositary to Owners, (8) in addition to any fee charged under item 6, a fee of $.05 or less per American Depositary Share (or portion thereof) per annum for depositary services, which will be payable as provided in item 9 below, and (9) any other charges payable by the Depositary or the Custodian, any of the Depositary's or Custodian’s agents or the agents of the Depositary's or Custodian’s agents, in connection with the servicing of Shares or other Deposited Securities (which charges shall be assessed against Owners as of the date or dates set by the Depositary in accordance with Section 4.6 of the Deposit Agreement and shall be payable at the sole discretion of the Depositary by billing those Owners for those charges or by deducting those charges from one or more cash dividends or other cash distributions).

 

 

The Depositary may collect any of its fees by deduction from any cash distribution payable, or by selling a portion of any securities to be distributed, to Owners that are obligated to pay those fees.

 

The Depositary may own and deal in any class of securities of the Company and its affiliates and in American Depositary Shares.

 

From time to time, the Depositary may make payments to the Company to reimburse the Company for costs and expenses generally arising out of establishment and maintenance of the American Depositary Shares program, waive fees and expenses for services provided by the Depositary or share revenue from the fees collected from Owners or Holders. In performing its duties under the Deposit Agreement, the Depositary may use brokers, dealers, foreign currency dealers or other service providers that are owned by or affiliated with the Depositary and that may earn or share fees, spreads or commissions.

 

8.	DISCLOSURE OF INTERESTS.

 

When required in order to comply with applicable laws and regulations or the articles of association or similar document of the Company, the Company may from time to time request each Owner and Holder to provide to the Depositary information relating to: (a) the capacity in which it holds American Depositary Shares, (b) the identity of any Holders or other persons or entities then or previously interested in those American Depositary Shares and the nature of those interests and (c) any other matter where disclosure of such matter is required for that compliance.   Each Owner and Holder agrees to provide all information known to it in response to a request made pursuant to Section 3.4 of the Deposit Agreement.  Each Holder consents to the disclosure by the Depositary and the Owner or other Holder through which it holds American Depositary Shares, directly or indirectly, of all information responsive to a request made pursuant to that Section relating to that Holder that is known to that Owner or other Holder.

 

9.	TITLE TO AMERICAN DEPOSITARY SHARES.

 

It is a condition of the American Depositary Shares, and every successive Owner and Holder of American Depositary Shares, by accepting or holding the same, consents and agrees that American Depositary Shares evidenced by a Receipt, when the Receipt is properly endorsed or accompanied by proper instruments of transfer, shall be transferable as certificated registered securities under the laws of the State of New York, and that American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registered securities under the laws of the State of New York. The Depositary, notwithstanding any notice to the contrary, may treat the Owner of American Depositary Shares 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 the Deposit Agreement and for all other purposes, and neither the Depositary nor the Company shall have any obligation or be subject to any liability under the Deposit Agreement to any Holder of American Depositary Shares, but only to the Owner.

 

 

10.	VALIDITY OF RECEIPT.

 

This Receipt shall not be entitled to any benefits under the Deposit Agreement or be valid or obligatory for any purpose, unless this Receipt shall have been (i) executed by the Depositary by the manual signature of a duly authorized officer of the Depositary or (ii) executed by the facsimile signature of a duly authorized officer of the Depositary and countersigned by the manual signature of a duly authorized signatory of the Depositary or the Registrar or a co-registrar.

 

11.	REPORTS; INSPECTION OF TRANSFER BOOKS.

 

The Company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934 and, accordingly, files certain reports with the Securities and Exchange Commission. Those reports will be available for inspection and copying through the Commission's EDGAR system or at public reference facilities maintained by the Commission in Washington, D.C.

 

The Depositary will make available for inspection by Owners at its Office any reports, notices and other communications, including any proxy soliciting material, received from the Company which are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to the holders of those Deposited Securities by the Company. The Company shall furnish reports and communications, including any proxy soliciting material to which Section 4.9 of the Deposit Agreement applies, to the Depositary in English, to the extent such materials are required to be translated into English pursuant to any regulations of the Commission.

 

The Depositary will maintain a register of American Depositary Shares and transfers of American Depositary Shares, which shall be open for inspection by the Owners at the Depositary’s Office during regular business hours, but only for the purpose of communicating with Owners regarding the business of the Company or a matter related to the Deposit Agreement or the American Depositary Shares.

 

 

12.	DIVIDENDS AND DISTRIBUTIONS.

 

Whenever the Depositary receives any cash dividend or other cash distribution on Deposited Securities, the Depositary will, if at the time of receipt thereof any amounts received in a foreign currency can in the judgment of the Depositary be converted on a reasonable basis into Dollars transferable to the United States, and subject to the Deposit Agreement, convert that dividend or other cash distribution into Dollars and distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Article 7 hereof and Section 5.9 of the Deposit Agreement) to the Owners entitled thereto; provided, however, that if the Custodian or the Depositary is required to withhold and does withhold from that cash dividend or other cash distribution an amount on account of taxes or other governmental charges, the amount distributed to the Owners of the American Depositary Shares representing those Deposited Securities shall be reduced accordingly.

 

If a cash distribution would represent a return of all or substantially all the value of the Deposited Securities underlying American Depositary Shares, the Depositary may:

 

(i)  require payment of or deduct the fee for surrender of American Depositary Shares (whether or not it is also requiring surrender of American Depositary Shares) as a condition of making that cash distribution; or

 

(ii)  sell all Deposited Securities other than the subject cash distribution and add any net cash proceeds of that sale to the cash distribution, call for surrender of all those American Depositary Shares and require that surrender as a condition of making that cash distribution.

 

If the Depositary acts under this paragraph, that action shall also be a Termination Option Event.

 

Subject to the provisions of Section 4.11 and 5.9 of the Deposit Agreement, whenever the Depositary receives any distribution other than a distribution described in Section 4.1, 4.3 or 4.4 of the Deposit Agreement on Deposited Securities (but not in exchange for or in conversion or in lieu of Deposited Securities), the Depositary will cause the securities or property received by it to be distributed to the Owners entitled thereto, after deduction or upon payment of any fees and expenses of the Depositary and any taxes or other governmental charges, in any manner that the Depositary deems equitable and practicable for accomplishing that distribution (which may be a distribution of depositary shares representing the securities received); provided, however, that if in the opinion of the Depositary such distribution cannot be made proportionately among the Owners entitled thereto, or if for any other reason the Depositary deems such distribution not to be lawful and feasible, the Depositary may adopt such other method as it may deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, the public or private sale of the securities or property thus received, or any part thereof, and distribution of the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Article 7 hereof and Section 5.9 of the Deposit Agreement) to the Owners entitled thereto all in the manner and subject to the conditions set forth in Section 4.1 of the Deposit Agreement. The Depositary may withhold any distribution of securities under Section 4.2 of the Deposit Agreement if it has not received satisfactory assurances from the Company that the distribution does not require registration under the Securities Act of 1933. The Depositary may sell, by public or private sale, an amount of securities or other property it would otherwise distribute under this Article that is sufficient to pay its fees and expenses in respect of that distribution.

 

 

If a distribution to be made under Section 4.2 of the Deposit Agreement would represent a return of all or substantially all the value of the Deposited Securities underlying American Depositary Shares, the Depositary may:

 

(i)  require payment of or deduct the fee for surrender of American Depositary Shares (whether or not it is also requiring surrender of American Depositary Shares) as a condition of making that distribution; or

 

(ii)  sell all Deposited Securities other than the subject distribution and add any net cash proceeds of that sale to the distribution, call for surrender of all those American Depositary Shares and require that surrender as a condition of making that distribution.

 

If the Depositary acts under this paragraph, that action shall also be a Termination Option Event.

 

Whenever the Depositary receives any distribution consisting of a dividend in, or free distribution of, Shares, the Depositary may deliver to the Owners entitled thereto, an aggregate number of American Depositary Shares representing the amount of Shares received as that dividend or free distribution, subject to the terms and conditions of the Deposit Agreement with respect to the deposit of Shares and issuance of American Depositary Shares, including the withholding of any tax or other governmental charge as provided in Section 4.11 of the Deposit Agreement and the payment of the fees and expenses of the Depositary as provided in Article 7 hereof and Section 5.9 of the Deposit Agreement (and the Depositary may sell, by public or private sale, an amount of Shares received (or American Depositary Shares representing those Shares) sufficient to pay its fees and expenses in respect of that distribution). In lieu of delivering fractional American Depositary Shares, the Depositary may sell the amount of Shares represented by the aggregate of those fractions (or American Depositary Shares representing those Shares) and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.1 of the Deposit Agreement. If and to the extent that additional American Depositary Shares are not delivered and Shares or American Depositary Shares are not sold, each American Depositary Share shall thenceforth also represent the additional Shares distributed on the Deposited Securities represented thereby.

 

If the Company declares a distribution in which holders of Deposited Securities have a right to elect whether to receive cash, Shares or other securities or a combination of those things, or a right to elect to have a distribution sold on their behalf, the Depositary may, after consultation with the Company, make that right of election available for exercise by Owners in any manner the Depositary considers to be lawful and practical. As a condition of making a distribution election right available to Owners, the Depositary may require satisfactory assurances from the Company that doing so does not require registration of any securities under the Securities Act of 1933 that has not been effected.

 

 

If the Depositary determines that any distribution received or to be made by the Depositary (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charge that the Depositary is obligated to withhold, the Depositary may sell, by public or private sale, all or a portion of the distributed property (including Shares and rights to subscribe therefor) in the amounts and manner the Depositary deems necessary and practicable to pay those taxes or charges, and the Depositary shall distribute the net proceeds of that sale, after deduction of those taxes or charges, to the Owners entitled thereto in proportion to the number of American Depositary Shares held by them respectively.

 

Each Owner and Holder agrees to indemnify the Company, the Depositary, the Custodian and their respective directors, employees, agents and affiliates for, and hold each of them harmless against, any claim by any governmental authority with respect to taxes, additions to tax, penalties or interest arising out of any refund of taxes, reduced withholding at source or other tax benefit received by it. Services for Owners and Holders that may permit them to obtain reduced rates of tax withholding at source or reclaim excess tax withheld, and the fees and costs associated with using services of that kind, are not provided under, and are outside the scope of, the Deposit Agreement.

 

13.

RIGHTS.

 

(a)        If rights are granted to the Depositary in respect of deposited Shares to purchase additional Shares or other securities, the Company and the Depositary shall endeavor to consult as to the actions, if any, the Depositary should take in connection with that grant of rights. The Depositary may, to the extent deemed by it to be lawful and practical (i) if requested in writing by the Company, grant to all or certain Owners rights to instruct the Depositary to purchase the securities to which the rights relate and deliver those securities or American Depositary Shares representing those securities to Owners, (ii) if requested in writing by the Company, deliver the rights to or to the order of certain Owners, or (iii) sell the rights to the extent practicable and distribute the net proceeds of that sale to Owners entitled to those proceeds. To the extent rights are not exercised, delivered or disposed of under (i), (ii) or (iii) above, the Depositary shall permit the rights to lapse unexercised.

 

(b)        If the Depositary will act under (a)(i) above, the Company and the Depositary will enter into a separate agreement setting forth the conditions and procedures applicable to the particular offering. Upon instruction from an applicable Owner in the form the Depositary specified and upon payment by that Owner to the Depositary of an amount equal to the purchase price of the securities to be received upon the exercise of the rights, the Depositary shall, on behalf of that Owner, exercise the rights and purchase the securities. The purchased securities shall be delivered to, or as instructed by, the Depositary. The Depositary shall (i) deposit the purchased Shares under the Deposit Agreement and deliver American Depositary Shares representing those Shares to that Owner or (ii) deliver or cause the purchased Shares or other securities to be delivered to or to the order of that Owner. The Depositary will not act under (a)(i) above unless the offer and sale of the securities to which the rights relate are registered under the Securities Act of 1933 or the Depositary has received an opinion of United States counsel that is satisfactory to it to the effect that those securities may be sold and delivered to the applicable Owners without registration under the Securities Act of 1933.

 

 

(c)       If the Depositary will act under (a)(ii) above, the Company and the Depositary will enter into a separate agreement setting forth the conditions and procedures applicable to the particular offering. Upon (i) the request of an applicable Owner to deliver the rights allocable to the American Depositary Shares of that Owner to an account specified by that Owner to which the rights can be delivered and (ii) receipt of such documents as the Company and the Depositary agreed to require to comply with applicable law, the Depositary will deliver those rights as requested by that Owner.

 

(d)      If the Depositary will act under (a)(iii) above, the Depositary will use reasonable efforts to sell the rights in proportion to the number of American Depositary Shares held by the applicable Owners and pay the net proceeds to the Owners otherwise entitled to the rights that were sold, upon an averaged or other practical basis without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of any American Depositary Shares or otherwise.

 

(e)       Payment or deduction of the fees of the Depositary as provided in Section 5.9 of the Deposit Agreement and payment or deduction of the expenses of the Depositary and any applicable taxes or other governmental charges shall be conditions of any delivery of securities or payment of cash proceeds under Section 4.4 of the Deposit Agreement.

 

(f)       The Depositary shall not be responsible for any failure to determine that it may be lawful or feasible to make rights available to or exercise rights on behalf of Owners in general or any Owner in particular , or to sell rights.

 

14.	CONVERSION OF FOREIGN CURRENCY.

 

Whenever the Depositary or the Custodian receives foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis into Dollars and the resulting Dollars transferred to the United States, the Depositary or one of its agents or affiliates or the Custodian shall convert or cause to be converted by sale or in any other manner that it may determine that foreign currency into Dollars, and those Dollars shall be distributed to the Owners entitled thereto.  A cash distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Owners based on exchange restrictions, the date of delivery of any American Depositary Shares or otherwise and shall be net of any expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.9 of the Deposit Agreement.

 

 

If a conversion of foreign currency or the repatriation or distribution of Dollars can be effected only with the approval or license of any government or agency thereof, the Depositary may, but will not be required to, file an application for that approval or license.

 

If the Depositary determines that in its judgment any foreign currency received by the Depositary or the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any approval or license of any government or agency thereof that is required for such conversion is not filed or sought by the Depositary or is not obtained within a reasonable period as determined by the Depositary, the Depositary may distribute the foreign currency received by the Depositary to, or in its discretion may hold such foreign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled to receive the same.

 

If any conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the Owners entitled thereto, the Depositary may in its discretion make that conversion and distribution in Dollars to the extent practicable and permissible to the Owners entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold that balance uninvested and without liability for interest thereon for the account of, the Owners entitled thereto.

 

The Depositary may convert currency itself or through any of its affiliates, or the Custodian or the Company may convert currency and pay Dollars to the Depositary. Where the Depositary converts currency itself or through any of its affiliates, the Depositary acts as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation, transaction spreads, that it will retain for its own account.  The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion made under the Deposit Agreement and the rate that the Depositary or its affiliate receives when buying or selling foreign currency for its own account.  The Depositary makes no representation that the exchange rate used or obtained by it or its affiliate in any currency conversion under the Deposit Agreement will be the most favorable rate that could be obtained at the time or that the method by which that rate will be determined will be the most favorable to Owners, subject to the Depositary’s obligations under Section 5.3 of that Agreement.  The methodology used to determine exchange rates used in currency conversions made by the Depositary is available upon request. Where the Custodian converts currency, the Custodian has no obligation to obtain the most favorable rate that could be obtained at the time or to ensure that the method by which that rate will be determined will be the most favorable to Owners, and the Depositary makes no representation that the rate is the most favorable rate and will not be liable for any direct or indirect losses associated with the rate.  In certain instances, the Depositary may receive dividends or other distributions from the Company in Dollars that represent the proceeds of a conversion of foreign currency or translation from foreign currency at a rate that was obtained or determined by or on behalf of the Company and, in such cases, the Depositary will not engage in, or be responsible for, any foreign currency transactions and neither it nor the Company makes any representation that the rate obtained or determined by the Company is the most favorable rate and neither it nor the Company will be liable for any direct or indirect losses associated with the rate.

 

 

15.	RECORD DATES.

 

Whenever a cash dividend, cash distribution or any other distribution is made on Deposited Securities or rights to purchase Shares or other securities are issued with respect to Deposited Securities (which rights will be delivered to or exercised or sold on behalf of Owners in accordance with Section 4.4 of the Deposit Agreement) or the Depositary receives notice that a distribution or issuance of that kind will be made, or whenever the Depositary receives notice that a meeting of holders of Shares will be held in respect of which the Company has requested the Depositary to send a notice under Section 4.7 of the Deposit Agreement, or whenever the Depositary will assess a fee or charge against the Owners, or whenever the Depositary causes a change in the number of Shares that are represented by each American Depositary Share, or whenever the Depositary otherwise finds it necessary or convenient, the Depositary shall fix a record date, which shall be the same as, or as near as practicable to, any corresponding record date set by the Company with respect to Shares, (a) for the determination of the Owners (i) who shall be entitled to receive the benefit of that dividend or other distribution or those rights, (ii) who shall be entitled to give instructions for the exercise of voting rights at that meeting, (iii) who shall be responsible for that fee or charge or (iv) for any other purpose for which the record date was set, or (b) on or after which each American Depositary Share will represent the changed number of Shares. Subject to the provisions of Sections 4.1 through 4.5 of the Deposit Agreement and to the other terms and conditions of the Deposit Agreement, the Owners on a record date fixed by the Depositary shall be entitled to receive the amount distributable by the Depositary with respect to that dividend or other distribution or those rights or the net proceeds of sale thereof in proportion to the number of American Depositary Shares held by them respectively, to give voting instructions or to act in respect of the other matter for which that record date was fixed, or be responsible for that fee or charge, as the case may be.

 

16.	VOTING OF DEPOSITED SHARES.

 

(a)       Upon receipt of notice of any meeting of holders of Shares at which holders of Shares will be entitled to vote, if requested in writing by the Company, the Depositary shall, as soon as practicable thereafter, Disseminate to the Owners a notice, the form of which shall be in the sole discretion of the Depositary, that shall contain (i) the information contained in the notice of meeting received by the Depositary, (ii) a statement that the Owners as of the close of business on a specified record date will be entitled, subject to any applicable provision of Cayman Islands law and of the articles of association or similar documents of the Company, to instruct the Depositary as to the exercise of the voting rights pertaining to the amount of Shares represented by their respective American Depositary Shares, (iii) a statement as to the manner in which those instructions may be given and (iv) the last date on which the Depositary will accept instructions (the “Instruction Cutoff Date”).

 

 

(b)       Upon the written request of an Owner of American Depositary Shares, as of the date of the request or, if a record date was specified by the Depositary, as of that record date, received on or before any Instruction Cutoff Date established by the Depositary, the Depositary may, and if the Depositary sent a notice under the preceding paragraph shall, endeavor, in so far as practicable, to vote or cause to be voted the amount of deposited Shares represented by those American Depositary Shares in accordance with the instructions set forth in that request. The Depositary shall not vote or attempt to exercise the right to vote that attaches to the deposited Shares other than in accordance with instructions given by Owners and received by the Depositary or as provided in the following sentence. If

 

(i) the Company instructed the Depositary to Disseminate a notice under paragraph (a) above and complied with the paragraph (d) below,

 

(ii) no instructions are received by the Depositary from an Owner with respect to a matter and an amount of American Depositary Shares of that Owner on or before the Instruction Cutoff Date and

 

(iii) the Depositary has received from the Company, by the business day following the Instruction Cutoff Date, a written confirmation that, as of the Instruction Cutoff Date, (x) the Company wishes a proxy to be given under this sentence, (y) the Company reasonably does not know of any substantial opposition to the matters and (z) the matters are not materially adverse to the interests of shareholders,

 

then, the Depositary shall deem that Owner to have instructed the Depositary to give a discretionary proxy to a person designated by the Company with respect to that matter and the amount of deposited Shares represented by that amount of American Depositary Shares and the Depositary shall give a discretionary proxy to a person designated by the Company to vote that amount of deposited Shares as to that matter..

 

(c)       There can be no assurance that Owners generally or any Owner in particular will receive the notice described in paragraph (a) above in time to enable Owners to give instructions to the Depositary prior to the Instruction Cutoff Date.

 

(d)       In order to give Owners a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Shares, if the Company will request the Depositary to Disseminate a notice under paragraph (a) above, the Company shall give the Depositary notice of the meeting, details concerning the matters to be voted upon and copies of materials to be made available to holders of Shares in connection with the meeting not less than 30 days prior to the meeting date.

 

 

17.

TENDER AND EXCHANGE OFFERS; REDEMPTION, REPLACEMENT OR CANCELLATION OF DEPOSITED SECURITIES.

 

(a)       The Depositary shall not tender any Deposited Securities in response to any voluntary cash tender offer, exchange offer or similar offer made to holders of Deposited Securities (a “Voluntary Offer”), except when instructed in writing to do so by an Owner surrendering American Depositary Shares and subject to any conditions or procedures the Depositary may require.

 

(b)       If the Depositary receives a written notice that Deposited Securities have been redeemed for cash or otherwise purchased for cash in a transaction that is mandatory and binding on the Depositary as a holder of those Deposited Securities (a “Redemption”), the Depositary, at the expense of the Company, shall (i) if required, surrender Deposited Securities that have been redeemed to the issuer of those securities or its agent on the redemption date, (ii) Disseminate a notice to Owners (A) notifying them of that Redemption, (B) calling for surrender of a corresponding number of American Depositary Shares and (C) notifying them that the called American Depositary Shares have been converted into a right only to receive the money received by the Depositary upon that Redemption and those net proceeds shall be the Deposited Securities to which Owners of those converted American Depositary Shares shall be entitled upon surrenders of those American Depositary Shares in accordance with Section 2.5 or 6.2 of the Deposit Agreement and (iii) distribute the money received upon that Redemption to the Owners entitled to it upon surrender by them of called American Depositary Shares in accordance with Section 2.5 of that Agreement (and, for the avoidance of doubt, Owners shall not be entitled to receive that money under Section 4.1 of that Agreement). If the Redemption affects less than all the Deposited Securities, the Depositary shall call for surrender a corresponding portion of the outstanding American Depositary Shares and only those American Depositary Shares will automatically be converted into a right to receive the net proceeds of the Redemption. The Depositary shall allocate the American Depositary Shares converted under the preceding sentence among the Owners pro-rata to their respective holdings of American Depositary Shares immediately prior to the Redemption, except that the allocations may be adjusted so that no fraction of a converted American Depositary Share is allocated to any Owner. A Redemption of all or substantially all of the Deposited Securities shall be a Termination Option Event.

 

(c)        If the Depositary is notified of or there occurs any change in nominal value or any subdivision, combination or any other reclassification of the Deposited Securities or any recapitalization, reorganization, sale of assets substantially as an entirety, merger or consolidation affecting the issuer of the Deposited Securities or to which it is a party that is mandatory and binding on the Depositary as a holder of Deposited Securities and, as a result, securities or other property have been or will be delivered in exchange, conversion, replacement or in lieu of, Deposited Securities (a “Replacement”), the Depositary shall, if required, surrender the old Deposited Securities affected by that Replacement of Shares and hold, as new Deposited Securities under the Deposit Agreement, the new securities or other property delivered to it in that Replacement. However, the Depositary may elect to sell those new Deposited Securities if in the opinion of the Depositary it is not lawful or not practical for it to hold those new Deposited Securities under the Deposit Agreement because those new Deposited Securities may not be distributed to Owners without registration under the Securities Act of 1933 or for any other reason, at public or private sale, at such places and on such terms as it deems proper and proceed as if those new Deposited Securities had been Redeemed under paragraph (b) above. A Replacement shall be a Termination Option Event.

 

 

(d)       In the case of a Replacement where the new Deposited Securities will continue to be held under the Deposit Agreement, the Depositary may call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing the new Deposited Securities and the number of those new Deposited Securities represented by each American Depositary Share. If the number of Shares represented by each American Depositary Share decreases as a result of a Replacement, the Depositary may call for surrender of the American Depositary Shares to be exchanged on a mandatory basis for a lesser number of American Depositary Shares and may sell American Depositary Shares to the extent necessary to avoid distributing fractions of American Depositary Shares in that exchange and distribute the net proceeds of that sale to the Owners entitled to them.

 

(e)       If there are no Deposited Securities with respect to American Depositary Shares, including if the Deposited Securities are cancelled, or the Deposited Securities with respect to American Depositary Shares have become apparently worthless, the Depositary may call for surrender of those American Depositary Shares or may cancel those American Depositary Shares, upon notice to Owners, and that condition shall be a Termination Option Event.

 

18.	LIABILITY OF THE COMPANY AND DEPOSITARY.

 

Neither the Depositary nor the Company nor any of their respective directors, employees, agents or affiliates shall incur any liability to any Owner or Holder:

 

(i) if by reason of (A) any provision of any present or future law or regulation or other act or action of the government of the United States, any State of the United States or any other state or jurisdiction, or of any governmental or regulatory authority or stock exchange; (B) (in the case of the Depositary only) any provision, present or future, of the articles of association or similar document of the Company, or by reason of any provision of any securities issued or distributed by the Company, or any offering or distribution thereof; or (C) any event or circumstance, whether natural or caused by a person or persons, that is beyond the ability of the Depositary or the Company, as the case may be, to prevent or counteract by reasonable care or effort (including, but not limited to earthquakes, floods, severe storms, fires, explosions, war, terrorism, civil unrest, labor disputes, criminal acts or outbreaks of infectious disease; interruptions or malfunctions of utility services, Internet or other communications lines or systems; unauthorized access to or attacks on computer systems or websites; or other failures or malfunctions of computer hardware or software or other systems or equipment), the Depositary or the Company is, directly or indirectly, prevented from, forbidden to or delayed in, or could be subject to any civil or criminal penalty on account of doing or performing and therefore does not do or perform, any act or thing that, by the terms of the Deposit Agreement or the Deposited Securities, it is provided shall be done or performed;

 

 

(ii) for any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement (including any determination by the Depositary or the Company to take, or not take, any action that the Deposit Agreement provides the Depositary or the Company, as the case may be, may take);

 

(iii) for the inability of any Owner or Holder to benefit from any distribution, offering, right or other benefit that is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Owners or Holders; or

 

(iv) for any special, consequential or punitive damages for any breach of the terms of the Deposit Agreement.

 

Where, by the terms of a distribution to which Section 4.1, 4.2 or 4.3 of the Deposit Agreement applies, or an offering to which Section 4.4 of that Agreement applies, or for any other reason, that distribution or offering may not be made available to Owners, and the Depositary may not dispose of that distribution or offering on behalf of Owners and make the net proceeds available to Owners, then the Depositary shall not make that distribution or offering available to Owners, and shall allow any rights, if applicable, to lapse.

 

Neither the Company nor the Depositary assumes any obligation or shall be subject to any liability under the Deposit Agreement to Owners or Holders, except that they agree to perform their obligations specifically set forth in the Deposit Agreement without negligence or bad faith. The Depositary shall not be a fiduciary or have any fiduciary duty to Owners or Holders. The Depositary shall not be subject to any liability with respect to the validity or worth of the Deposited Securities. Neither the Depositary nor the Company 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 American Depositary Shares, on behalf of any Owner or Holder or other person. Neither the Depositary nor the Company shall be liable for any action or non-action by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Owner or Holder, or any other person believed by it in good faith to be competent to give such advice or information. Each of the Depositary and the Company may rely, and shall be protected in relying upon, any written notice, request, direction or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Depositary 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 a 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 negligence or bad faith while it acted as Depositary. The Depositary shall not be liable for the acts or omissions of any securities depository, clearing agency or settlement system in connection with or arising out of book-entry settlement of American Depositary Shares or Deposited Securities or otherwise. In the absence of bad faith on its part, the Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities or for the manner in which any such vote is cast or the effect of any such vote. The Depositary shall have no duty to make any determination or provide any information as to the tax status of the Company. Neither the Depositary nor the Company shall have any liability for any tax consequences that may be incurred by Owners or Holders as a result of owning or holding American Depositary Shares. Neither the Depositary nor the Company shall be liable for the inability or failure of an Owner or Holder to obtain the benefit of a foreign tax credit, reduced rate of withholding or refund of amounts withheld in respect of tax or any other tax benefit.

 

 

19.	RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSOR CUSTODIAN.

 

The Depositary may at any time resign as Depositary under the Deposit Agreement by written notice of its election so to do delivered to the Company, to become effective upon the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may at any time be removed by the Company by 90 days’ prior written notice of that removal, to become effective upon the later of (i) the 90th day after delivery of the notice to the Depositary and (ii) the appointment of a successor depositary and its acceptance of its appointment as provided in the Deposit Agreement. The Depositary in its discretion may at any time appoint a substitute or additional custodian or custodians.

 

20.	AMENDMENT.

 

The form of the Receipts and any provisions of the Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of Owners or Holders in any respect which they may deem necessary or desirable. Any amendment that would impose or increase any fees or charges (other than taxes and other governmental charges, registration fees, cable (including SWIFT) or facsimile transmission costs, delivery costs or other such expenses), or that would otherwise prejudice any substantial existing right of Owners, shall, however, not become effective as to outstanding American Depositary Shares until the expiration of 30 days after notice of that amendment has been Disseminated to the Owners of outstanding American Depositary Shares. Every Owner and Holder, at the time any amendment so becomes effective, shall be deemed, by continuing to hold American Depositary Shares or any interest therein, to consent and agree to that amendment and to be bound by the Deposit Agreement as amended thereby. Upon the effectiveness of an amendment to the form of Receipt, including a change in the number of Shares represented by each American Depositary Share, the Depositary may call for surrender of Receipts to be replaced with new Receipts in the amended form or call for surrender of American Depositary Shares to effect that change of ratio. In no event shall any amendment impair the right of the Owner to surrender American Depositary Shares and receive delivery of the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law.

 

 

21.	TERMINATION OF DEPOSIT AGREEMENT.

 

(a)       The Company may initiate termination of the Deposit Agreement by notice to the Depositary. The Depositary may initiate termination of the Deposit Agreement if (i) at any time 60 days shall have expired after the Depositary delivered to the Company a written resignation notice and a successor depositary has not been appointed and accepted its appointment as provided in Section 5.4 of that Agreement or (ii) a Termination Option Event has occurred. If termination of the Deposit Agreement is initiated, the Depositary shall Disseminate a notice of termination to the Owners of all American Depositary Shares then outstanding setting a date for termination (the “Termination Date”), which shall be at least 90 days after the date of that notice, and the Deposit Agreement shall terminate on that Termination Date.

 

(b)       After the Termination Date, the Company shall be discharged from all obligations under the Deposit Agreement except for its obligations to the Depositary under Sections 5.8 and 5.9 of that Agreement.

 

(c)       At any time after the Termination Date, the Depositary may sell the Deposited Securities then held under the Deposit Agreement and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it hereunder, unsegregated and without liability for interest, for the pro rata benefit of the Owners of American Depositary Shares that remain outstanding, and those Owners will be general creditors of the Depositary with respect to those net proceeds and that other cash. After making that sale, the Depositary shall be discharged from all obligations under the Deposit Agreement, except (i) to account for the net proceeds and other cash (after deducting, in each case, the fee of the Depositary for the surrender of American Depositary Shares, any expenses for the account of the Owner of such American Depositary Shares in accordance with the terms and conditions of the Deposit Agreement and any applicable taxes or governmental charges), (ii) for its obligations under Section 5.8 of that Agreement and (iii) to act as provided in paragraph (d) below.

 

 

(d)       After the Termination Date, the Depositary shall continue to receive dividends and other distributions pertaining to Deposited Securities (that have not been sold), may sell rights and other property as provided in the Deposit Agreement and shall deliver Deposited Securities (or sale proceeds) upon surrender of American Depositary Shares (after payment or upon deduction, in each case, of the fee of the Depositary for the surrender of American Depositary Shares, any expenses for the account of the Owner of those American Depositary Shares in accordance with the terms and conditions of the Deposit Agreement and any applicable taxes or governmental charges). After the Termination Date, the Depositary shall not accept deposits of Shares or deliver American Depositary Shares. After the Termination Date, (i) the Depositary may refuse to accept surrenders of American Depositary Shares for the purpose of withdrawal of Deposited Securities (that have not been sold) or reverse previously accepted surrenders of that kind that have not settled if in its judgment the requested withdrawal would interfere with its efforts to sell the Deposited Securities, (ii) the Depositary will not be required to deliver cash proceeds of the sale of Deposited Securities until all Deposited Securities have been sold and (iii) the Depositary may discontinue the registration of transfers of American Depositary Shares and suspend the distribution of dividends and other distributions on Deposited Securities to the Owners and need not give any further notices or perform any further acts under the Deposit Agreement except as provided in Section 6.2 of that Agreement.

 

22.	DTC DIRECT REGISTRATION SYSTEM AND PROFILE MODIFICATION SYSTEM.

 

(a)       Notwithstanding the provisions of Section 2.4 of the Deposit Agreement, the parties acknowledge that DTC’s Direct Registration System (“DRS”) and Profile Modification System (“Profile”) apply to the American Depositary Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC that facilitates interchange between registered holding of uncertificated securities and holding of security entitlements in those securities through DTC and a DTC participant. Profile is a required feature of DRS that allows a DTC participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of prior authorization from the Owner to register that transfer.

 

(b)       In connection with DRS/Profile, the parties acknowledge that the Depositary will not determine whether the DTC participant that is claiming to be acting on behalf of an Owner in requesting registration of transfer and delivery as described in paragraph (a) above has the actual authority to act on behalf of that Owner (notwithstanding any requirements under the Uniform Commercial Code). For the avoidance of doubt, the provisions of Sections 5.3 and 5.8 of the Deposit Agreement apply to the matters arising from the use of the DRS/Profile. The parties agree that the Depositary’s reliance on and compliance with instructions received by the Depositary through the DRS/Profile system and otherwise in accordance with the Deposit Agreement, shall not constitute negligence or bad faith on the part of the Depositary.

 

 

23.

ARBITRATION; SETTLEMENT OF DISPUTES.

 

Any controversy, claim or cause of action brought by any party to the Deposit Agreement and hereto against the Company arising out of or relating to the Shares or other Deposited Securities, the American Depositary Shares, the Receipts or the Deposit Agreement, or the breach hereof or thereof, if so elected by the claimant, shall be settled by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

 

The place of the arbitration shall be The City of New York, State of New York, United States of America, and the language of the arbitration shall be English.

 

The number of arbitrators shall be three, each of whom shall be disinterested in the dispute or controversy, shall have no connection with any party thereto, and shall be an attorney experienced in international securities transactions. Each party shall appoint one arbitrator and the two arbitrators shall select a third arbitrator who shall serve as chairperson of the tribunal. If a dispute, controversy or cause of action shall involve more than two parties, the parties shall attempt to align themselves in two sides (i.e., claimant(s) and respondent(s)), each of which shall appoint one arbitrator as if there were only two parties to such dispute, controversy or cause of action. If such alignment and appointment shall not have occurred within thirty (30) calendar days after the initiating party serves the arbitration demand, the American Arbitration Association shall appoint the three arbitrators, each of whom shall have the qualifications described above. The parties and the American Arbitration Association may appoint from among the nationals of any country, whether or not a party is a national of that country.

 

The arbitral tribunal shall have no authority to award any consequential, special or punitive damages or other damages not measured by the prevailing party’s actual damages and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of the Deposit Agreement.

 

24.

APPOINTMENT OF AGENT FOR SERVICE OF PROCESS; SUBMISSION TO JURISDICTION; JURY TRIAL WAIVER; WAIVER OF IMMUNITIES.

 

The Company has (i) appointed Cogency Global Inc., 122 E. 42^nd Street, 18^th Floor, New York, New York 10168 as the Company's authorized agent in the United States upon which process may be served in any suit or proceeding (including any arbitration proceeding) arising out of or relating to the Shares or Deposited Securities, the American Depositary Shares, the Receipts or the Deposit Agreement, (ii) consented and submitted to the jurisdiction of any state or federal court in the State of New York in which any such suit or proceeding may be instituted, and (iii) agreed that service of process upon said authorized agent shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding.

 

 

EACH PARTY TO THE DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH OWNER AND HOLDER) THEREBY 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 COMPANY AND/OR THE DEPOSITARY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE AMERICAN DEPOSITARY SHARES OR THE RECEIPTS, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF, INCLUDING, WITHOUT LIMITATION, ANY QUESTION REGARDING EXISTENCE, VALIDITY OR TERMINATION (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY) AND ANY CLAIM BASED ON U.S. FEDERAL SECURITIES LAWS.

 

No disclaimer of liability under the United States federal securities laws or the rules and regulations thereunder is intended by any provision of the Deposit Agreement, inasmuch as no person is able to effectively waive the duty of any other person to comply with its obligations under those laws, rules and regulations.

 

To the extent that the Company or any of its properties, assets or revenues may have or hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any duty of performance under the Deposit Agreement, claim, legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with the Shares or Deposited Securities, the American Depositary Shares, the Receipts or the Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement.

 

 

 

Exhibit 5.1

 

 

 

Our ref       JVZ/816789-000001/28671598v4

 

XCHG Limited

ICS Corporate Services (Cayman) Limited

3-212 Governors Square, 23 Lime Tree Bay Avenue

P.O. Box 30746, Seven Mile Beach, Grand Cayman KY1-1203

Cayman Islands

 

29 July 2024

 

Dear Sirs and/or Madams

 

XCHG Limited

 

We have acted as Cayman Islands legal advisers to XCHG Limited (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 (the “Commission”) under the U.S. Securities Act of 1933, as amended to date, relating to the offering by the Company of certain American depositary shares (the "ADSs") representing the Company's Class A ordinary shares of par value US$0.00001 each (the "Shares").

 

We are furnishing this opinion as Exhibits 5.1, 8.1 and 23.2 to the Registration Statement.

 

1	Documents Reviewed

 

For the purposes of this opinion, we have reviewed only originals, copies or final drafts of the following documents:

 

1.1	The certificate of incorporation of the Company dated 16 December 2021 and the certificate of incorporation on change of name dated 10 January 2022 issued by the Registrar of Companies.

 

1.2	The second amended and restated memorandum and articles of association of the Company adopted by a special resolution dated 7 August 2023 (the "Pre-IPO Memorandum and Articles").

 

1.3	The third amended and restated memorandum and articles of association of the Company adopted by a special resolution passed on 22 July 2024 and effective immediately prior to the completion of the Company’s initial public offering of ADSs representing its Shares (the "IPO Memorandum and Articles").

 

1.4	The written resolutions of the directors of the Company dated 31 January 2024 (the "Board Resolutions").

 

 

1.5	The written resolutions of the shareholders of the Company dated 22 July 2024 (the "Shareholders' Resolutions").

 

1.6	A certificate from a director of the Company, a copy of which is attached hereto (the "Director's Certificate").

 

1.7	A certificate of good standing dated 10 July 2024, issued by the Registrar of Companies in the Cayman Islands (the "Certificate of Good Standing").

 

1.8	The Registration Statement.

 

2	Assumptions

 

The following opinions are given only as to, and based on, circumstances and matters of fact existing and known to us on the date of this opinion letter. These opinions only relate to the laws of the Cayman Islands which are in force on the date of this opinion letter. In giving these opinions we have relied (without further verification) upon the completeness and accuracy, as of the date of this opinion letter, of the Director's Certificate and the Certificate of Good Standing. We have also relied upon the following assumptions, which we have not independently verified:

 

2.1	Copies of documents, conformed copies or drafts of documents provided to us are true and complete copies of, or in the final forms of, the originals.

 

2.2	All signatures, initials and seals are genuine.

 

2.3	There is nothing under any law (other than the law of the Cayman Islands), which would or might affect the opinions set out below.

 

3

Opinion

 

Based upon the foregoing and subject to the qualifications set out below and having regard to such legal considerations as we deem relevant, we are of the opinion that:

 

3.1	The Company has been duly incorporated as an exempted company with limited liability and is validly existing and in good standing with the Registrar of Companies under the laws of the Cayman Islands.

 

3.2

The authorised share capital of the Company, with effect immediately prior to the completion of the Company's initial public offering of the ADSs representing the Shares, will be US$50,000 divided into 5,000,000,000 ordinary shares of par value of US$0.00001 each, comprising (a) 4,258,745,553 Class A ordinary shares of par value of US$0.00001 each, and (b) 741,254,447 Class B ordinary shares of par value of US$0.00001 each.

 

3.3

The issue and allotment of the Shares have been duly authorised and when allotted, issued and paid for as contemplated in the Registration Statement, the Shares will be legally issued and allotted, fully paid and non-assessable. As a matter of Cayman law, a share is only issued when it has been entered in the register of members (shareholders).

 

3.4	The statements under the caption "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 and that such statements constitute our opinion.

 

 

4	Qualifications

 

In this opinion the phrase "non-assessable" means, with respect to shares in the Company, that a shareholder shall not, solely by virtue of its status as a shareholder, be liable for additional assessments or calls on shares by the Company or its creditors (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).

 

Except as specifically stated herein, we make no comment with respect to any representations and warranties which may be made by or with respect to the Company in any of the documents or instruments cited in this opinion or otherwise with respect to the commercial terms of the transactions, which are the subject of this opinion.

 

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our name under the headings "Enforceability of Civil Liabilities", "Taxation" and "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.

 

Yours faithfully

 

/s/ Maples and Calder (Hong Kong) LLP

Maples and Calder (Hong Kong) LLP

 

 

 

Exhibit 10.6

 

***Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(a)(6). Such excluded information is not material and is the type the registrant treats as private or confidential. Such omitted information is indicated by brackets (“[***]”) in this exhibit.***

 

CONVERTIBLE NOTE PURCHASE AGREEMENT

 

This Convertible Note Purchase Agreement (the “Agreement”) is made on June 20, 2023 by and among:

 

1

XCHG Limited, an exempted company incorporated with limited liability under the Laws of Cayman Islands (the “Company”) with a registered address at the offices of ICS Corporate Services (Cayman) Limited, 3-212 Governors Square, 23 Lime Tree Bay Avenue, P.O. Box 30746, Seven Mile Beach, Grand Cayman KY1-1203, Cayman Islands;

 

2

The individuals set forth in Schedule 2 (collectively the “Founders” and each a “Founder”); and

 

3

Mobility Innovation Fund, LLC (the “Purchaser”).

 

Each of the Company, the Founders and the Purchaser shall be referred to individually as a “Party” and collectively as the “Parties”.

 

Capitalized terms used herein shall have the meaning defined in the main body of this Agreement or set forth in Schedule 1 attached hereto.

 

RECITALS

 

The Company desires to issue and sell, and the Purchaser desires to purchase, a convertible promissory note in substantially the form attached to this Agreement as Exhibit A (the “Note”) which shall be convertible into shares or equity interests of the Company pursuant to the terms and conditions set forth in the Note Documents (as defined below). The shares or equity interests issuable upon conversion thereof are collectively referred to herein as the “Securities”.

 

AGREEMENT

 

In consideration of the premises, the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:

 

1.             Purchase and Sale of Note.

 

(a)             Sale and Issuance of Note. Subject to the terms and conditions of this Agreement, the Purchaser agrees to purchase at the Closing (as defined below) and the Company agrees to sell and issue to the Purchaser the Note in the principal amount of US$2,000,000. The purchase price of the Note shall be equal to 100% of the principal amount of such Note (the “Purchase Price”).

 

 

(b)             Closing; Delivery.

 

Within five (5) Business Days (“Confirmation Period”) after the Company has provided the Purchaser with evidence (which is required to be provided by the Company) that all the conditions to the Closing as set forth in Section 6 (other than conditions that by their nature are to be satisfied at the Closing or that have been waived by the Purchaser in writing) have been satisfied, the Purchaser shall send written confirmation to the Company to the effect that all the conditions to the Closing as set forth in Section 6 (other than conditions that by their nature are to be satisfied at the Closing) have been satisfied or waived; provided that if the Purchaser has reasonable grounds to believe that any of the aforementioned conditions to the Closing has not been satisfied or waived, the Purchaser may give written notice to the Company within the Confirmation Period stating such facts and requesting the Company to provide further evidence of satisfaction of aforementioned conditions to the Closing, in which case the Confirmation Period shall be postponed to the end of three (3) days following the provision of such further evidence. In the event that the Purchaser fails to send the aforementioned written confirmation within the Confirmation Period (or the postponed Confirmation Period, as the case may be), such written confirmation shall be deemed to have been duly provided. On condition that the Lead Investor and each of the Onshore Co-Investors have sent written confirmation to the Beijing Entity that all conditions to the closings under the Convertible Loan Investment Agreement have been satisfied or waived (other than conditions that by their nature are to be satisfied at the Closing), the purchase and sale of the Note shall take place remotely via the exchange of documents and signatures within fifteen (15) Business Days after all the conditions to the Closing as set forth in Section 6 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions) have been satisfied or waived, or at such other time and place as the Company and the Purchaser mutually agree upon, orally or in writing (which time and place are designated as the “Closing”); provided that the Closing shall in principle take place concurrently with the closing under the Convertible Loan Investment Agreement with respect to the Lead Investor and the Onshore Co-Investors unless otherwise agreed by the Company and the Purchaser; provided that the closings with respect to the Purchaser, the Lead Investor and the Onshore Co-Investors shall be several and independent, and none of the Investors (as defined below) shall be liable for any breach by any other Investor.

 

At the Closing, subject to the terms and conditions hereof, the Purchaser shall pay the Purchase Price of the Note by wire transfer to a bank account designated by the Company; provided that, the Company shall designate the bank account as set forth in a wire instruction in the form attached hereto as Exhibit B to the Purchaser in writing at least five (5) Business Days prior to the Closing. Once the Purchaser pays the Purchase Price to the bank account designated by the Company, such Purchase Price shall be deemed to be fully paid to the Company. Each Warrantor shall deliver to the Purchaser the executed signature pages to this Agreement and the Note.

 

At or around the date of this Agreement, the Beijing Entity may enter into certain Convertible Loan Investment Agreement (the “Convertible Loan Investment Agreement”) with certain other investor (the “Lead Investor”) and co-investors (the “Onshore Co-Investors”; together with the Purchaser and the Lead Investor, the “Investors”) for such Lead Investor and Onshore Co-Investors to extend convertible loans to the Beijing Entity. The Closing shall in principle take place concurrently with the closing under the Convertible Loan Investment Agreement with respect to the Lead Investor and Onshore Co-Investors.

 

2.             Share Purchase Agreement. Each party hereto understands and agrees that the conversion of the Note into Securities of the Company (the “Conversion”) shall be subject to applicable laws and will require such party’s execution of certain agreements relating to the purchase and sale of such Securities as well as any rights relating to such Securities.

  

 

3.             Representations and Warranties of the Warrantors. Each of the Warrantors hereby, jointly and severally, represents and warrants to the Purchaser that:

 

(a)             Organization, Good Standing and Qualification. Each Group Company is a corporation duly organized, validly existing and in good standing under the Laws of the applicable jurisdiction and has all requisite corporate power and authority to carry on its business as now conducted. Each Group Company is duly qualified to transact business and is in good standing in each jurisdiction.

 

(b)             Authorization. All corporate action on the part of each Group Company, its directors and its shareholders necessary for the authorization of this Agreement, the Note and all other documents contemplated by the aforementioned documents (the “Note Documents”) and the execution, delivery and performance of all obligations under the Note Documents, including the issuance and delivery of the Note and the reservation of the Securities issuable upon conversion of the Note has been taken or will be taken prior to the issuance of such Securities. The Note Documents, when executed and delivered by the Warrantors, shall constitute valid and legally binding obligations of the Warrantors, enforceable against the Warrantors in accordance with their respective terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other Laws of general application affecting enforcement of creditors’ rights generally, and as limited by Laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

 

(c)             Valid Issuance of Securities. The Note and the Securities issuable upon conversion of the Note, when issued, sold and delivered in accordance with the terms hereof for the consideration expressed herein, will be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement, the Series B+ Financing Documents, applicable securities laws and liens or encumbrances created by or imposed by the Purchaser. The Note and the Securities issuable upon conversion of the Note will be issued in compliance with all applicable securities laws.

 

(d)             No Conflicts. The execution, delivery and performance of this Agreement and each Note Document by each Warrantor or other Group Company as a party thereto (other than the Purchaser) do not, and the consummation by such Warrantor or Group Company of the transactions contemplated thereby will not result in any material violation of, be in material conflict with, or constitute a material default under any Governmental Order, any provision of the constitutional documents of any Group Company, or any applicable Laws.

 

(e)             Compliance. Each of the Warrantors is and at all times has been in compliance with all Laws applicable to it or its business, properties or assets in all material aspects and no event has occurred or could be reasonably be expected and no circumstance exists or could reasonably be expected that, with or without notice or lapse of time or both, would reasonably be expected to result in material violation by any Warrantor of, or a material failure on the part of such Warrantor to comply with, any Law. Each of the Group Companies has obtained the approvals which are necessary for its respective business and operations as now conducted in all material aspects and each of such approvals is valid and in full force and effect.

 

 

4.             Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company that:

 

(a)             Organization, Good Standing and Qualification. The Purchaser is an entity duly organized, validly existing and in good standing under the laws of the applicable jurisdiction.

 

(b)             Authorization. The Purchaser has full power and authority to enter into this Agreement and the Note Documents. Each of this Agreement and the Note Documents, when executed and delivered by the Purchaser, will constitute a valid and legally binding obligation of the Purchaser, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other Laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of a specific performance, injunctive relief, or other equitable remedies.

 

(c)             No Conflict. The execution, delivery and performance of this Agreement and each Note Document by the Purchaser as a party thereto do not, and the consummation by the Purchaser of the transactions contemplated thereby will not result in any material violation of, be in material conflict with, or constitute a material default under any Governmental Order, any provision of the constitutional documents of the Purchaser, or any applicable Laws.

 

(d)             Purchase for Own Account. The Purchaser is, or will be conducting the transactions hereof and acquiring the Securities for its own account, not as a nominee or agent, and not with a view to or in connection with the sale or distribution of any part thereof. The source of the Purchase Price to be paid by the Purchaser will be lawful and in compliance with all applicable Laws.

 

(e)             Status of Investor. The Purchaser is (i) not a U.S. person within the meaning of Rule 902 of Regulation S under the Securities Act or purchasing the Conversion Shares outside the United States in compliance with Regulation S under the Securities Act and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction, or (ii) an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act.

 

5.             Covenants.

 

(a)             Series B+ Financing Documents. For purpose of the Conversion, the Parties agree to enter into an amended and restated Investors’ Rights Agreement of the Company and other ancillary documents, and cause the Company to adopt an amended and restated Memorandum and Articles of Association (the above documents and the Note Documents are collectively referred to as the “Series B+ Financing Documents”), under which, unless otherwise agreed by the Company and the Purchaser, the rights that the Purchaser enjoys with respect to the Securities shall be substantially same as the rights that the Lead Investor and Onshore Co-Investors enjoy with respect to its Series B+ Preferred Shares of the Company (excluding the right of the Lead Investor to appoint a director of the Company), and shall be substantially no less favorable than the rights that the series B investors enjoy with respect to the registered capital they hold in the Beijing Entity as a result of the series B financing of the Beijing Entity as set forth in the Shareholders Agreement of the Beijing Entity dated June 1, 2021 by and among the Beijing Entity, the Founders and other parties thereto (excluding the priority of壳牌资本有限公司in the pre-emptive rights and the right to appoint directors of the Company).

 

 

(b)             Authorization of Conversion Shares. In the event of Conversion, the Warrantors shall take all actions to cause the Company to authorize sufficient shares to enable the conversion of the Notes in accordance with the terms of the Note on or prior to the date of Conversion. When issued, all such shares shall be duly authorized, fully paid and non-assessable, and validly issued in accordance with Memorandum and Articles of Association and any relevant securities laws.

 

(c)             Waiver. The Warrantors shall cause all the shareholders of the Company to waive their respective pre-emption rights or other similar rights existing in any forms under any documents in respect any of the Securities.

 

(d)             Executory Period Covenants. From the date of the Closing and the earliest of (i) the Conversion, (ii) the repayment by the Company of entire principal amount and accrued interest under the Note, or (iii) the termination of this Agreement pursuant to Section 9, except as the Purchaser otherwise agrees in writing, as permitted or contemplated by the transactions contemplated under the Series B+ Financing Documents, the Restructuring Agreement, the Convertible Loan Investment Agreement or other documents relevant to the financing of the Company, or as required to conduct the business of the Group Companies in the ordinary course, none of the Group Companies shall (and the Warrantors shall not permit any of the Group Companies to) (aa) conduct any merger, split, dissolution, or liquidation, (bb) sell, purchase, assign, lease, transfer, pledge, encumber or otherwise dispose of all or substantially all assets of the Group Companies, (cc) issue, sell or grant any Equity Security, (dd) declare, issue, make or pay any dividend or other distribution with respect to any Equity Security, or (ee) authorize, approve or agree to any of the foregoing.

 

6.             Conditions to the Purchaser’s Obligations at Closing. The obligations of the Purchaser to the Company under this Agreement are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Purchaser:

 

(a)             Note Documents. Each of the parties to the Note Documents, other than the Purchaser, shall have executed and delivered the Note Documents to the Purchaser.

 

(b)             Representations and Warranties; Performance. The representations and warranties of the Warrantors contained in Section 3 shall be true, correct, complete and not misleading in material aspects on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the date of the Closing. Each Warrantor shall have performed and complied with all agreements, obligations and conditions contained in the Note Documents that are required to be performed or complied with by them, on or before the Closing without any action of breach.

 

(c)             Proceedings and Documents. All corporate and other proceedings in connection with the transactions to be completed at the Closing and all documents incident thereto with respect to this Agreement and the other Note Documents and the transactions contemplated hereby and thereby, shall have been completed in form and substance reasonably satisfactory to the Purchaser, and the Purchaser shall have received all such counterpart original or other copies of such documents as it may reasonably request. The Warrantors shall have obtained any and all permits, third party consents and waivers necessary or appropriate for consummation (without adverse effect) of the transactions contemplated by each Note Document, including without limitation any waiver of preemptive right by then existing shareholders of the Company relating to the transactions contemplated by each Note Document (including the Conversion).

 

  

(d)             Rui Ding Loan. The board of the Beijing Entity shall have adopted a resolution to approve and ratify the loan in the amount of RMB1,700,000 provided by the Beijing Entity for Rui Ding (丁锐).

 

(e)             Key Employees. Each of the Founders and Key Employees (as set forth in Schedule 3) shall have entered into an employment agreement, IP assignment agreement, confidentiality agreement and non-compete agreement acknowledged by the Purchaser with the Beijing Entity.

 

(f)             No Material Adverse Effect. There shall not have occurred a Material Adverse Effect from the date hereof until the Closing. The term “Material Adverse Effect” used in this Agreement shall mean, unless caused or reasonably expected to be caused by any event provided in the Restructuring Agreement, any (A) commencement of any proceedings of bankruptcy, liquidation, dissolution, reorganization or debt restructuring or disposal of major assets of any of the Warrantors, (B) forfeiture of any important permit, license or certificate necessitated by the operation of any Group Company; or (C) any condition, change or effect that, either alone or together with other condition, change or effect, directly or indirectly, (i) has had or could reasonably be expected to have a material adverse effect on the existing, business, assets, intellectual property, liabilities (including without limitation contingent liabilities), financial condition, results of operation or prospects of operation of any Group Company, (ii) has had or could reasonably be expected to have a material adverse effect on the licenses, permits or capabilities necessitated by the operation of any Group Company, or (iii) would impair the validity, binding effect or enforceability of the Note Documents such that has had or could reasonably be expected to have a material adverse effect on any Group Company or the initial public offering of the Company.

 

(g)             No Restraints. There shall have been no injunction, restraining order or other order or any other legal or regulatory restraint or prohibition having been issued or made by any court of competent jurisdiction or any governmental authority in effect precluding or prohibiting consummation of any part of the transactions contemplated hereby and under the other Note Documents.

 

(h)             No Litigation. No action shall have been instituted or threatened or claim or demand made against any Group Company or any Founder seeking to restrain or prohibit, or to obtain substantial damages with respect to, the consummation of the transactions contemplated by this Agreement or any other Note Document, and there shall not be in effect any order by a governmental authority of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by this Agreement or any other Note Document.

 

(i)             No Material Change. From the date hereof until the Closing, there shall have not occurred with respect to any Group Company (aa) any material adverse change in the shareholding, corporate governance, business operation or financial condition, or any material legal disputes or change in personnel (in each case other than for the purpose of Restructuring); or (bb) any material change in the capability of performance of the obligations under the Note Documents by the Company and/or the Founders (other than for the purpose of Restructuring).

 

 

(j)             No Transfer. From the date hereof until the Closing, there shall have not been any transfer or creation of liens of or upon any or all shares of the Company held by any Founder (other than for the purpose of Restructuring).

  

(k)             No Violation; No Lien or Debt. From the date hereof until the Closing, there shall have not been any material violation of laws or regulations, disposal of or creation of liens upon the major assets, or incurrence of material debts (other than in the ordinary course of business) with respect to or by the Group Companies as continuously operating entities.

 

(l)             Approval of Investment. The investment committee or similar decision making body of the Purchaser shall have approved the transactions contemplated hereunder.

 

(m)             Restructuring Agreement; Capital Reduction. The Restructuring Agreement has been duly executed by the parties thereto. The Beijing Entity has made the announcement for its registered capital reduction in accordance with the Restructuring Agreement and the documents necessary therefore have been executed.

 

(n)             Closing Certificate. The Warrantors shall have executed and delivered to the Purchaser at the Closing a certificate dated as of the Closing stating that the conditions specified in this Section 6 have been fulfilled as of the Closing.

 

7.             Guarantee.

 

(a)             Guarantee. In consideration of the Purchaser entering into this Agreement and the Note and completing the transactions contemplated hereby or thereby, the Founders (the “Guarantors”) hereby, jointly and severally guarantee, the full and punctual payment of the principal amount and the accrued interest of the Note by the Company under the Note Documents in accordance with the terms and conditions thereof (if applicable). In the event that the Company fails to repay the entire principal amount and the accrued interest of the Note on time (if applicable), the Guarantors shall be jointly and severally liable for and pay any monetary damages claimed by the Purchaser.

 

(b)             Limitations. Notwithstanding anything to the contrary herein, the maximum aggregate liability of any Founder under this Agreement and any of the other Note Documents shall not exceed the fair realizable value of the Equity Securities of the Group Companies then held, directly or indirectly, by such Founder.

 

8.             Indemnity.

 

In the event of (i) any material breach or violation by the Warrantors of, or material inaccuracy or misrepresentation in, any representation or warranty made by the Warrantors contained herein or any of the other Note Documents; (ii) any material breach or violation by the Warrantors of any of the covenants under Section 5 hereof or any of the other Note Documents (each of (i) and (ii), a “Breach”), each of the Warrantors shall, and shall cause other Warrantors to, cure such Breach (to the extent that such Breach is curable) to the reasonable satisfaction of the Purchaser. The Warrantors shall also indemnify the Purchaser and its directors, officers, and Affiliates (the “Indemnitee”) for any and all direct losses, liabilities, damages, claims, obligations, penalties, settlements, deficiencies, costs and expenses, including without limitation, reasonable advisor’s fees and other reasonable expenses of investigation, defense and resolution of any Breach paid, suffered, sustained or incurred by the Indemnitee resulting from, or arising out of, or due to, any Breach.

 

 

9.             Termination.

 

(a)             Termination of this Agreement. This Agreement may be terminated before the Closing (i) by mutual written consent of the Parties, (ii) by the Purchaser, by written notice to the Company if there has been a material misrepresentation or material breach of a covenant or agreement contained in this Agreement on the part of any of the Warrantors, and such breach, if curable, has not been cured within thirty (30) days of such notice, (iii) by the Company, by written notice to the Purchaser if there has been a material misrepresentation or material breach of a covenant or agreement contained in this Agreement on the part of the Purchaser, and such breach, if curable, has not been cured within thirty (30) days of such notice, (iv) by any Party if, due to change of applicable Laws, the consummation of the transactions contemplated hereunder would become prohibited under applicable Laws, or (v) by the Company or the Purchaser, if the Closing fails to occur within forty-five (45) days after the date hereof (but if such failure to close results from the Company or the Purchaser’s (as the case may be) breach, such Party shall not be entitled to terminate the agreement) .

 

(b)             Effect of Termination. In the event that this Agreement is validly terminated pursuant to Section 9(a), the Parties shall be relieved of their duties and obligations arising under this Agreement after the termination date and such termination shall be without liability to any of the terminating parties; provided that no such termination shall relieve any Party hereto from liability for any breach thereby of this Agreement. The provisions of this Section 9, Section 8, Section 10(b), Section 10(c), Section 10(d), Section 10(e) and Section 10(h) hereof shall survive any termination of this Agreement.

 

10.             Miscellaneous.

 

(a)             Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the Parties. This Agreement is not assignable by either Party without the express prior written consent of all other Parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

(b)             Confidentiality.

 

(i)             Disclosure of Terms. The terms and conditions of this Agreement, the Note Documents and the Series B+ Financing Documents, all exhibits and schedules attached hereto and thereto, and the transactions contemplated hereby and thereby (collectively, the “Transaction Terms”), including their existence, shall be considered confidential information and shall not be disclosed by any Party hereto to any third party except as permitted in accordance with the provisions set forth below.

 

(ii)             Permitted Disclosures. Notwithstanding the foregoing, the Company may disclose the existence of the investment or the Transaction Terms to any person or entity to which disclosure is approved in writing by the Purchaser. Each Party may disclose (x) the existence of the investment and the Transaction Terms to any of its Affiliate, employee, accountant, legal counsel, partner, limited partner, former partner, potential partner or potential limited partner or other third parties, in each case where such Persons have executed or are otherwise bound by appropriate non-disclosure obligations, and (y) the fact of the investment to the public, provided that any disclosure to the public shall be subject to the prior written consent from the Company. Any party hereto may also provide disclosure in order to comply with applicable Laws, as set forth in Section 10(b)(iii) below.

 

  

(iii)             Legally Compelled Disclosure. In the event that any Party is requested or becomes legally compelled (including without limitation, pursuant to any applicable Tax, securities, or other Laws and regulations of any jurisdiction) to disclose the existence of this Agreement or content of any of the Transaction Terms, such Party (the “Disclosing Party”) shall provide the other Parties with prompt written notice of that fact and shall consult with the other Parties regarding such disclosure. At the request of another Party, the Disclosing Party shall, to the extent reasonably possible and with the cooperation and reasonable efforts of the other Parties, seek a protective order, confidential treatment or other appropriate remedy. In any event, the Disclosing Party shall furnish only that portion of the information that is legally required and shall exercise reasonable efforts to obtain reliable assurance that confidential treatment will be accorded such information.

 

(iv)             Other Exceptions. Notwithstanding any other provision of this Section 10(b), the confidentiality obligations of the Parties shall not apply to: (i) information which a restricted party learns from a third party having the right to make the disclosure, provided the restricted party complies with any restrictions imposed by the third party; (ii) information which is rightfully in the restricted party’s possession prior to the time of disclosure by the protected party and not acquired by the restricted party under a confidentiality obligation; or (iii) information which becomes publicly known without breach of confidentiality by the restricted party.

 

(v)             Press Releases, Etc. No announcements regarding the Purchaser’s investment in the Company may be made by any party hereto in any press conference, professional or trade publication, marketing materials or otherwise to the public without the prior written consent of the Purchaser and the Company, provided, that any such announcement made by any partner, limited partner, bona fide potential partner or bona fide potential limited partner of the Purchaser shall not be subject to the consent of the Company if disclosure of the same by any Party has already been approved.

 

(vi)             Other Information. The provisions of this Section 10(b) shall terminate and supersede the provisions of any separate nondisclosure agreement (if any) executed by any of the Parties with respect to the transactions contemplated hereby.

 

(c)             Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the Laws of the Hong Kong, without giving effect to principles of conflicts of law.

 

 

(d)             Dispute Resolution. The Parties hereto agree to use reasonable efforts to resolve any disputes arising out of or relating to this Agreement through consultation. In the event that the Parties are unable to resolve a dispute arising hereunder within thirty (30) days after the issuance of notice with respect to the aforementioned consultation by any Party hereof to any other Party, such dispute (including any dispute relating to the existence, validity, interpretation, performance, breach or termination of this Agreement or any dispute regarding non-contractual obligations arising out of or relating to this Agreement) shall be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre (“HKIAC”) under the HKIAC Administered Arbitration Rules in force when the notice of arbitration is submitted. The seat of arbitration shall be Hong Kong. The number of arbitrators shall be three (3). The arbitration proceedings shall be conducted in English. The governing law of this arbitration clause shall be the Laws of Hong Kong. The parties hereto agree that any award rendered by the arbitral tribunal may be enforced by any court having jurisdiction over the parties or over the parties’ assets wherever the same may be located. All fees, costs and expenses (including attorney’s fees and expenses) incurred by any Party in connection with the arbitration shall be borne by the losing Party, or the Party as designated by the tribunal. To the extent that any Party has or hereafter may acquire any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction or any court or from set-off or any legal process (whether service or notice, attachment prior to judgment, execution of judgment or otherwise) with respect to itself or any of its assets, whether or not held for its own account, such Party hereby irrevocably and unconditionally waives and agrees not to plead or claim such immunity in any disputes arising out of or relating to this Agreement. Nothing in this Section 10(d) shall be construed as preventing any Party from seeking an injunction, temporary restraining order or other equitable relief in any court of competent jurisdiction pursuant to Section 10(d).

  

(e)             Fees and Expenses. Each Party shall bear its own fees and expenses incurred for the transaction.

 

(f)             Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Facsimile and e-mailed copies of signatures shall be deemed to be originals for purposes of the effectiveness of this Agreement.

 

(g)             Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

(h)             Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by email, courier, overnight delivery service or confirmed facsimile, or 48 hours after being deposited in the mail as certified or registered mail with postage prepaid, if such notice is addressed to the party to be notified at such party’s address or facsimile number as set forth on the signature page below or as subsequently modified by written notice.

 

(i)             Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the Parties. Any amendment or waiver effected in accordance with this Section 10(j) shall be binding upon the Purchaser and each transferee of the Securities, each future holder of all such Securities, and the Company.

 

(j)             Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable Law, the Parties agree to renegotiate such provision in good faith, in order to maintain the economic position enjoyed by each Party as close as possible to that under the provision rendered unenforceable. In the event that the Parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of this Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of this Agreement shall be enforceable in accordance with its terms.

 

 

(k)             Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement between the Parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements existing between the Parties hereto are expressly canceled.

  

[Signature Page Follows]

 

  

The Parties have executed this Convertible Note Purchase Agreement as of the date first written above.

 

XCHG Limited

 

/s/ Yifei Hou

Name: Yifei Hou (侯亦飞)

Title: Director

 

Address: [***]

Attn: [***]

Tel: [***]

Email: [***]

 

Yifei Hou (侯亦飞) 

 

/s/ Yifei Hou

 

Address: [***]

Attn: [***]

Tel: [***]

Email: [***]

 

Rui Ding (丁锐)

 

/s/ Rui Ding

 

Address: [***]

Attn: [***]

Tel: [***]

Email: [***]

 

SIGNATURE PAGE TO CONVERTIBLE NOTE PURCHASE AGREEMENT

 

 

The Parties have executed this Convertible Note Purchase Agreement as of the date first written above.

 

Mobility Innovation Fund, LLC

 

/s/ Wenhua Huang

Name: Wenhua Huang 

Title: Managing Partner

 

/s/ Pin Ni

Name: Pin Ni

Title: Managing Partner

 

Address: [***]

Attn: [***]

Tel: [***]

Email: [***]

 

SIGNATURE PAGE TO CONVERTIBLE NOTE PURCHASE AGREEMENT

 

 

 

SCHEDULE 1

 

DEFINITIONS

 

 

SCHEDULE 2

 

LIST OF founders

 

  

SCHEDULE 3

 

LIST OF KEY EMPLOYEES

 

 

EXHIBIT A

 

FORM OF CONVERTIBLE PROMISSORY NOtE

 

 

EXHIBIT B

 

FORM OF WIRE INSTRUCTION

 

 

Exhibit 10.7

 

***Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(a)(6). Such excluded information is not material and is the type the registrant treats as private or confidential. Such omitted information is indicated by brackets (“[***]”) in this exhibit.***

 

Convertible Loan Investment Agreement

  

in Relation to

 

Beijing X-Charge Technology Co., Ltd.

 

by and among

 

Beijing X-Charge Technology Co., Ltd.

 

XCHG Limited

 

XCharge Europe GmbH

 

Rui Ding

 

Yifei Hou

 

Wuxi Shenqi Leye Private Equity Funds Partnership L.P.

 

Shell Ventures Company Limited

 

Dated June 20, 2023

 

 

Contents

 

Chapter 1	Convertible Loan Arrangement	2
Chapter 2	Conditions Precedent to Closing	12
Chapter 3	Representations and Warranties	13
Chapter 4	Undertakings	13
Chapter 5	Coming into Force, Supplement, Amendment, Alteration and Termination	19
Chapter 6	Liabilities for Breach of Contract	22
Chapter 7	Confidentiality	22
Chapter 8	Notice	23
Chapter 9	Governing Law and Dispute Resolution	24
Chapter 10	Miscellaneous	24

 

Appendices and Exhibits

 

Appendix A	Definitions
Appendix B	Registered Capital and Percentage of Shares To Which Shareholders are Entitled as at the Date of This Agreement
Appendix C-1	Representations and Warranties of Guarantors
Appendix C-2	Representations and Warranties of Investors
Appendix D	Contact Details
Appendix E	List of Core Employees
Exhibit I	Confirmation of Satisfaction of Conditions Precedent to Closing
Exhibit II	[Reserved]
Exhibit III	Transitional Shareholders’ and Convertible Loan Investors’ Rights Agreement
Exhibit IV	Restructuring Framework Agreement
Exhibit V	Key Operating Data of Group Company

 

 

 

Convertible Loan Investment Agreement

 

This Convertible Loan Investment Agreement (this “Agreement”) is made and entered into in Beijing of China on June 20, 2023 by and among:

  

A.

Beijing X-Charge Technology Co., Ltd., a limited liability company incorporated and validly existing under the PRC Law with registered address at 1147, No. 01, 1/F, Building 2, No. 9 Anningzhuang West Road, Haidian District, Beijing (the “Target Company”);

 

B.

XCHG Limited, a company incorporated under the laws of the Cayman Islands with limited liability with registration number 384991 (“Cayman Co”);

 

C.

XCharge Europe GmbH, a company with limited liability incorporated under the laws of Germany (the “German Subsidiary”);

 

D.

Rui Ding, a Chinese natural person with ID number of [***]

 

E.

Yifei Hou, a Chinese natural person with ID number of [***] (together with Rui Ding, the “Founders” and each a “Founder”);

 

F.

Wuxi Shenqi Leye Private Equity Funds Partnership L.P., a limited partnership legally established and validly existing under the PRC Law, with its registered address at Room 1922-2, No. 5, Zhihui Road, Huishan Economic Development Zone, Wuxi (the “Investor 1”); and

 

G.

Shell Ventures Company Limited, a company with limited liability duly incorporated and validly existing under the PRC Law, with its registered address at 8/F, Building 1, No. 818 Shenchang Road, Minhang District, Shanghai (the “Investor 2”);

 

The signatories above are referred to individually as a “Party” and collectively as the “Parties”. In this Agreement, unless the context otherwise requires, the terms used herein shall have the meanings set forth in Appendix A.

 

RECITALS

 

WHEREAS, the Target Company is a company with limited liability incorporated and validly existing under the PRC Law. As of the date of this Agreement, the registered capital of the Target Company subscribed for by its existing shareholders amounted to thirteen million, eighty-two thousand, fifty-two point ninety-five U.S. dollars (USD13,082,052.95) and the registered capital paid up by them amounted to twelve million, four hundred and twenty-seven thousand, nine hundred and fifty-two point ninety-five U.S. dollars (USD12,427,952.95). As of the date of this Agreement, pursuant to the Restructuring Framework Agreement (as defined below), each shareholder of the Target Company shall effectively enjoy and exercise the shareholder’s rights in proportion to the registered capital and corresponding equity interest in the Target Company as set out in Appendix B.

 

 

WHEREAS, the Target Company is principally engaged in the research and development and enhancement of technologies related to smart charging equipment for EV; charging-related services; and sales of charging equipment, mechanical equipment or their parts (the “Principal Business”).

 

WHEREAS, for the purpose of the development of the Principal Business and subsequent financing and listing, the Target Company, Cayman Co, the Founders and the existing shareholders of the Target Company and other interested parties have entered into a restructuring framework agreement (the “Restructuring Framework Agreement”) as set out in Exhibit IV. The Target Company and its existing shareholders intend to restructure the red chip in accordance with the terms and conditions set out in the Restructuring Framework Agreement with a view to ultimately establishing Cayman Co as the entity of the Group to receive financing and to be listed and then reflecting the entire interests of other Group Company within the Group in Cayman Co by way of consolidated statements (the said restructuring referred to as “Red Chip Restructuring”).

 

WHEREAS, the Investors intend to invest in the Group in this round of equity investment, and in order to facilitate the Red Chip Restructuring, the Investors intend to make such investment in the form of convertible loan in accordance with this Agreement.

  

WHEREAS, one or more offshore co-investor(s) involved in this round (the “Offshore Co-investors”) intend to make equity investments in the Group Company, and in order to facilitate the Red Chip Restructuring, the Offshore Co-investors will provide the convertible loans to Cayman Co in accordance with their Convertible Note Purchase Agreement with Cayman Co and the convertible loans issued by Cayman Co to the Offshore Co-investors (collectively, the “Offshore Co-investor Note Agreement”). Such convertible loan (the “Offshore Co-investor CN Loan”) will be automatically converted into series B+ preferred shares of Cayman Co on the terms and conditions of the Offshore Co-investor Note Agreement.

 

 

NOW, THEREFORE, the Parties, through friendly negotiations following the principles of equality and mutual benefits, hereby agree as follows:

 

Chapter 1      Convertible Loan Arrangement

 

Article 1.1           Amount of Convertible Loan

 

Pursuant to the terms and conditions of this Agreement, (1) Investor 1 provides a convertible loan in the principal amount of fifty million Chinese yuan (RMB50,000,000) to the Target Company (the “Investor 1 Note”); and (2) Investor 2 provides a convertible loan in the principal amount of fifteen million Chinese yuan (RMB15,000,000) to the Target Company (the “Investor 2 Note”, together with Investor 1 Note, collectively or generally “Convertible Loan” or “Note”), subject to the satisfaction of all Conditions Precedent to Closing as set forth in Article 2.1 hereof and applicable to the Investor or waiver thereof by the Investor in writing.

  

 

Article 1.2           Issuance of Convertible Loan

 

The Investors shall, within five (5) business days after the date on which the Target Company provides each Investor with the documents that must be provided by the Target Company evidencing that all of the Conditions Precedent to Closing set out in Article 2.1 hereof have been satisfied (other than those which can only be satisfied on the Closing Date or are waived by such Investor in writing) (the “Timelimit for Confirmation of Conditions Precedent to Closing”), provide the Target Company with a written confirmation that all of the Conditions Precedent to Closing set out in Article 2.1 hereof (other than those which can only be satisfied on the Closing Date) have been satisfied or waived by such Investor; provided that if the Investor has justifiable reasons to prove that any of the Conditions Precedent to Closing (other than those which can only be satisfied on the Closing Date) is neither satisfied nor waived, the Investor has the right to serve a written notice to the Company within the Timelimit for Confirmation of Conditions Precedent to Closing to require the Company to provide additional documents reasonably required by the Investor to prove that such Condition Precedent to Closing is satisfied, in which case the Timelimit for Confirmation of Conditions Precedent to Closing shall be extended by up to three (3) days after the date of the Company providing such additional documents. If, within the Timelimit for Confirmation of Conditions Precedent to Closing (or, for the avoidance of doubt, the extended Timelimit for Confirmation of Conditions Precedent to Closing if the timelimit is extended in accordance with the foregoing), the Investor fails to make a written reply to the Company as to whether the Conditions Precedent to Closing (other than those which can only be satisfied on the Closing Date) have been satisfied, the Investor shall be deemed to have confirmed in writing that all Conditions Precedent to Closing (other than those which can only be satisfied on the Closing Date) as set out in Article 2.1 hereof have been satisfied on the expiry date of the Timelimit for Confirmation of Conditions Precedent to Closing (or, for the avoidance of doubt, the extended Timelimit for Confirmation of Conditions Precedent to Closing if the timelimit is extended in accordance with the foregoing).

 

Subject to the terms and conditions of this Agreement, and provided that the Offshore Co-investors have confirmed to the Target Company that the Conditions Precedent to Closing (other than those which can only be satisfied on the Closing Date) under the Offshore Co-investor Note Agreement have been satisfied or waived by the Offshore Co-investor (unless the Investor agrees to waive such conditions) and that the Company has provided the Investor with relevant supporting documents in respect thereof, each of the Investors shall pay the Convertible Loan into the account designated by the Target Company within fifteen (15) business days after the date on which the Conditions Precedent to Closing set forth in Article 2.1 hereof are either fully satisfied or waived by the Investor in writing or on the date as agreed by the Parties hereto in writing (with respect to the Investor, the date on which such Investor remits the amount of its notes into an account designated by the Target Company shall be the “Closing Date” for such Investor, and the completion of the payment of the notes by such Investor shall be referred to as the “Closing”). In principle, the Investors and the Offshore Co-investors shall complete their Closing simultaneously, provided that the closing arrangement of the Investors hereunder and the closing arrangement of the Offshore Co-investors under the Offshore Co-investor Note Agreement shall be separate and independent, and that any of the Investors shall not be liable toward the rights, obligations and breaches on the part of other Investors or the Offshore Co-investors under this Agreement or the Offshore Co-investor Note Agreement (as the case may be).

 

 

Article 1.3           Use of Convertible Loan

 

The Guarantors (as defined below) undertake that the Convertible Loan shall be used for the Group’s business expansion, research and development, production and capital replenishment in relation to the Principal Business and the Red Chip Restructuring in accordance with the terms of the Transaction Documents. Unless otherwise agreed herein, without the prior written consent of the Investors, the Target Company shall not use any part of the Convertible Loan for any other purposes, including but not limited to the repayment of debts (other than the repayment of the Convertible Loan hereunder) or the provision of loans or guarantees to any person.

  

Article 1.4           Interest on Convertible Loan

 

1.4.1

The principal of the Convertible Loan shall bear interest at a simple rate of ten percent (10%) per annum, and the interest shall be calculated based on the actual number of days of issuance of the Convertible Loan (accrued on daily basis, and based on the actual number of days elapsed in a year of 365 days). In case of overdue repayment, the principal of the overdue note shall bear interest at a simple rate of twelve percent (12%) per annum from the date on which such note becomes overdue.

 

1.4.2

Notwithstanding the foregoing, unless Investor 1 opts not to convert Investor 1 Note II into Overseas Shares of Cayman Co (as defined below) or the equity interest in the Target Company within the Offshore Optional Conversion Timelimit in accordance with paragraph 1.7.2 hereof, in which case the interest on Investor 1 Note II shall not be waived, interest on the outstanding note shall be automatically waived if part or all of such Convertible Loan is not converted into equity upon the expiry of the Convertible Loan Term (as defined below) for any reason attributable to the Investor to which such Convertible Loan is related. For the purpose of this paragraph 1.4.2, “reason attributable to the Investor” means that (i) the Investor fails to provide the materials required for the ODI formalities in a timely manner, or (ii) the Investor fails to provide the materials required for the registration of the register of members and the register of directors of Cayman Co as required by the registered office provider of Cayman Co in a timely manner (for the avoidance of doubt, unless provision of those materials is delayed due to the delayed provision of the list of required materials by the registered office provider of Cayman Co).

   

 

 

1.4.3

If any Convertible Loan of any Investor is converted into equity pursuant to Article 1.7 hereof, the interest on such note shall be calculated up to the date of completion of the corresponding conversion, and the Target Company shall repay such interest to the corresponding Investor on the twentieth (20th) business day after the date of completion of such conversion. For the avoidance of doubt, the Investor shall not be entitled to convert any note interest into equity.

 

Article 1.5            Term and Repayment of Convertible Loan

 

1.5.1

Unless otherwise agreed herein, the term of convertible loan hereunder (the “Convertible Loan Term”, subject to adjustment as otherwise agreed herein) shall commence on the Closing Date and end on the (1) the date of expiry of nine (9) months or (2) the date of termination of the Restructuring Framework Agreement, whichever is earlier. If part or all of the Convertible Loan is not converted into Overseas Shares of Cayman Co or equity interest in the Target Company in accordance with Article 1.7 hereof, the Target Company shall repay the principal of the then outstanding Convertible Loan and interest accrued thereon (excluding, for the avoidance of doubt, the portion of such note already converted into equity) to the Investor on the date of expiry of the Convertible LoanTerm.

  

1.5.2

Notwithstanding the paragraph 1.5.1 above:

 

(1)

If the Completion of Red Chip Restructuring (as defined below) does not take place by the expiry of the ninth (9th) month after the Closing Date, or the ODI formalities under Article 1.8 hereof have not been completed with reasonable cooperation of the Investor, each Investor has the right to unilaterally extend its corresponding Convertible Loan Term (which is not subject to the date of termination of the Restructuring Framework Agreement) by giving a written notice to the Target Company or to extend the Convertible Loan Term corresponding to such Investor upon mutual agreement between such Investor and the Target Company by then;

 

(2)

If an Offshore Automatic Conversion (as defined below) occurs within the Convertible Loan Term, the term of Investor 1 Note I (as defined below) and the term of the Investor 2 Note shall be extended automatically, and the Target Company shall fully settle the principal of Investor 1 Note I and the Investor 2 Note in accordance with Article 1.9 hereof, while paying the corresponding interest accrued thereon under paragraph 1.4.3 hereof, and Investor 1 and the Investor 2 (or their respective designated affiliates) shall pay their respective subscription price in relation to the Overseas Shares I of Investor 1 and the Overseas Shares of Investor 2 (as defined below) in accordance with Article 1.9 hereof;

 

(3)

Provided that all the Offshore Optional Conversion Conditions (as defined below) are satisfied on the part of Investor 1 within the Convertible Loan Term, (a) if Investor 1 exercises its right of Offshore Optional Conversion, the term of Investor 1 Note II shall be automatically extended, and the Target Company shall fully settle the principal of Investor 1 Note II in accordance with Article 1.9 hereof and pay the corresponding interest accrued thereon in accordance with paragraph 1.4.3 hereof, and Investor 1 (or its designated affiliate) shall pay the subscription price in relation to the Overseas Shares II of Investor 1 (as defined below) in accordance with Article 1.9 hereof; and (b) if Investor 1 fails to exercise its right of Offshore Optional Conversion within the Offshore Optional Conversion Timeframe, the term of Investor 1 Note II shall expire automatically in advance on the date of expiry of the Offshore Optional Conversion Timeframe (the “Automatic Maturity Date of Note II”), and the Target Company shall repay the principal of Investor 1 Note II and interest accrued thereon within fifteen (15) business days after the Automatic Maturity Date of Note II;

 

(4)

In the event that any repurchase trigger event that is applicable to any Investor as long as such Investor becomes a shareholder of the Target Company as agreed under the Transition Agreement occurs during the Convertible Loan Term, such Investor has the right (but is not obliged) to notify the Target Company in writing of the early maturity of its outstanding note, and the Target Company shall repay the principal of the corresponding portion of the Convertible Loan and interest accrued thereon to such Investor within fifteen (15) business days upon receipt of such notice.

  

For the purpose of this Agreement, “Completion of Red Chip Restructuring” means the fulfilment of all of the following conditions: (1) Cayman Co has issued shares to all of the existing shareholders of the Target Company (or its affiliates, but excluding Beijing X-Charge Management Consulting Center (Limited Partnership) (“X-Charge Management”)) pursuant to the Restructuring Framework Agreement, all of the existing shareholders of the Target Company (or its affiliates, but excluding X-Charge Management) have been registered in the register of members of Cayman Co, and their shareholding ratios in Cayman Co (on a fully diluted basis) is identical to the shareholding ratios in respect of which they (or their affiliates) are actually entitled to shareholders’ rights in the Target Company and the shareholding ratios in the Target Company as agreed in the paragraph 5.2.1 of the Transition Agreement (for the avoidance of doubt, the shareholding ratios of the existing shareholders (or their affiliates) in Cayman Co excluding incentive shares reserved, issued and enlarged by Cayman Co/shares diluted by options under the Restructuring Framework Agreement); and (2) other Group Company within the Group over which Cayman Co has direct or indirect control (other than XCHARGE Energy USA Inc. (“US Co”)), including but not limited to Xcharge HK Limited (“HK Co”), have been registered as the sole shareholder of the Target Company in the register of members and with the competent market supervision and administration authority for the Target Company.

 

 

1.5.3

The Target Company shall not make early repayment without the prior written consent of the Investor.

 

1.5.4

If, during the Convertible Loan Term, any Investor or Offshore Co-investor requests the Group to repay its Convertible Loan in advance as long as such Investor or Offshore Co-investor is entitled to request so (for the avoidance of doubt, except where the Convertible Loan has to be repaid as a result of the conversion), other Investors have the right (but are not obliged) to request the Target Company to repay the principal of their notes and interest accrued thereon in advance. Upon written request of such Investor, the Group shall repay such Investor the principal of the Convertible Loan such investor requests the Group to repay and interest accrued thereon, together with principal of the Convertible Loans of those other investors or Offshore Co-investor requesting such repayment, and interest accrued thereon. If the assets of the Group available for debt servicing are not sufficient to repay all the payables, the Group shall, to the extent that such assets are available for debt servicing, and on a pari-passu and concurrent basis, fulfill its repayment obligation to such Investor and other Investors or Offshore Co-investors requesting such repayment in proportion to the principal of the then Convertible Loans to be repaid as requested by such Investor and other Investors or Offshore Co-investors. For the avoidance of doubt, if early repayment by the Group occurs only due to the non-cooperation of the Investors established in China in the ODI formalities, other Investors are not entitled to request for concurrent repayment under this paragraph 1.5.4.

  

Article 1.6           Guarantee for Convertible Loan

 

Without prejudice to the generality of Chapter 6 of this Agreement, the Founders, Cayman Co and the German Subsidiary severally and jointly agree to provide irrevocable joint and several guarantee in respect of the repayment obligations of the Target Company, including but not limited to the principal of the Convertible Loan and interest accrued thereon, and all liquidated damages, late fees, damages and other expenses in connection with the failure of timely repayment of the Convertible Loan (whether based on any repayment required for conversion or any repayment caused by the failure of conversion of the Convertible Loan upon maturity) hereunder (all of the forgoing, collectively “Secured Obligations”). The aforesaid guarantee shall take effect on the effective date of this Agreement. Notwithstanding any other provision of this Agreement, all obligations of the Founders to the Investors hereunder (including but not limited to the Secured Obligations under this Article 1.6) shall be limited to the fair value of the entire equity interest in the Group Company then held directly and indirectly by the Founders.

  

Article 1.7           Conversion

 

Subject to the terms and conditions of this Agreement, the Investors shall have the right to convert principal of their Convertible Loans into overseas shares of Cayman Co or equity interest in the Target Company based on the corresponding appraised value, in particular:

  

1.7.1

Investor 1 Note I conversion and Investor 2 conversion

 

(1)

On the fifth (5th) day immediately after the following conditions precedent (the “Offshore Automatic Conversion Conditions”) applicable to an Investor (the condition precedent (c) below not applicable to Investor 2) are fully satisfied or waived by such Investor in writing (the conditions precedent (a) to (c) below applicable with respect to Investor 1; and the conditions precedent (a) to (b) below applicable with respect to Investor 2) and the Offshore Automatic Conversion Conditions are waived jointly by the Investor and the Target Company (applicable to the condition precedent set out in (d) below) or on any such other date as the Investor and the Target Company agree upon in writing (the “Automatic Conversion Date”), (a) the principal of Investor 1 Note equivalent to thirty million Chinese yuan (RMB30,000,000) (the “Investor 1 Note I”) shall be automatically converted into the corresponding number of series B+ preferred shares of Cayman Co (the “Overseas Shares I of Investor 1”) on basis that then fully-diluted pre-money valuation of Cayman Co is RMB900,000,000 (“Pre-money Valuation of Investor 1 Conversion I”, and for the avoidance of doubt, the calculation of such fully-diluted pre-money valuation shall include the incentive shares/options (including the First Tranche Reserved Incentive Shares (as defined below), but for the avoidance of doubt, excluding the Reserved Incentive Shares II (as defined below)) reserved, issued and enlarged by Cayman Co under the Restructuring Framework Agreement, and ordinary shares issued by Cayman Co to the Founders or their wholly-owned holding entity or trust established by them); and (b) the Investor 2 Note shall be automatically converted into the corresponding number of series B+ preferred shares of Cayman Co (the “Overseas Shares of Investor 2”, together with Overseas Shares I of Investor 1, collectively the “First Tranche Overseas Shares”; and the corresponding conversions collectively referred to as the “Offshore Automatic Conversion” ) on basis that the then fully-diluted pre-money valuation of Cayman Co is RMB1,000,000,000 (for the avoidance of doubt, the calculation of such fully-diluted pre-money valuation shall include the incentive shares/options (including the First Tranche Reserved Incentive Shares (as defined below), but for the avoidance of doubt, excluding the Reserved Incentive Shares II (as defined below)) reserved, issued and enlarged by Cayman Co under the Restructuring Framework Agreement, and ordinary shares issued by Cayman Co to the Founders or their wholly-owned holding entity or trust established by them). Cayman Co shall issue the First Tranche Overseas Shares to the aforementioned Investors (or their designated affiliates) on the Automatic Conversion Date, and shall provide those Investors with a scanned copy of the register of members, which shall specify such Investors (or their designated affiliates) as the holders of the corresponding First Tranche Overseas Shares and shall be certified by the registered office provider of Cayman Co, and shall also provide a scanned copy of the share certificate duly executed and affixed with the common seal of Cayman Co (the original share certificate shall be provided to the aforementioned Investors within fifteen (15) days after the Automatic Conversion Date):

 

 

(a)

pursuant to the Restructuring Framework Agreement, the Group has completed the Red Chip Restructuring and Cayman Co has completed the reservation of 150,000,000 ordinary shares (corresponding to the equity interest in the Target Company held in China by X-Charge Management as of the execution date of this Agreement, which, together with the Reserved Incentive Shares I (as defined below), are referred to as the “First Tranche Reserved Incentive Shares”); and no circumstance specified in paragraph 5.4.3 hereof occur;

 

(b)

Cayman Co, all of its then shareholders (including all existing shareholders of the Target Company other than X-Charge Management or its designated overseas affiliates), the Investors (or their designated affiliates), and the Offshore Investors (or their designated affiliates) have executed the Amended and Restated Investors' Rights Agreement of Cayman Co and the general meeting of Cayman Co has duly resolved to pass the Amended and Restated Memorandum and Articles, provided that these two documents shall reflect that the shareholders’ rights are substantially identical to the rights of the Investors in the Target Company under the Transition Agreement (including the rights of the Convertible Loan Investor and rights of shareholders (if applicable)), and shall include the shareholders’ rights such as registration right and conversion right which are customary for overseas entities, and these two documents have been provided to the Investors;

 

(c)

with respect to Investor 1, a scanned copy of the register of members of Cayman Co as certified by the registered office provider of Cayman Co have been submitted to Investor 1, which shall show that one (1) director nominated by Investor 1 (or its designated affiliate) has been appointed as a director of Cayman Co, and Cayman Co has executed the director indemnification agreement to be signed by Cayman Co, Investor 1 (or its designated affiliate) and the director appointed by Investor 1 (or its designated affiliate), and such documents have been provided to Investor 1; and

 

(d)

with respect to each Investor, the Investor has completed the ODI formalities in relation to its subscription for the corresponding First Tranche Overseas Shares in accordance with applicable laws, unless the Investor designates its affiliate to subscribe for the corresponding First Tranche Overseas Shares and such affiliate has completed all the required formalities in accordance with applicable laws (if any) in relation to its subscription for such First Tranche Overseas Shares.

 

(2)

In the event that (a) the Group Company has completed the Red Chip Restructuring, but the Offshore Automatic Conversion Conditions are not fully satisfied prior to the expiry of the Convertible Loan Term due to the failure of Cayman Co or the Target Company to fulfill conditions set forth in points (a) to (c) of paragraph 1.7.1 (1) hereof (if applicable), and such Offshore Automatic Conversion Conditions have not been waived by the Investor in writing; or (b) the Group has not completed the Red Chip Restructuring prior to the expiry of the Convertible Loan Term, then: (i) Investor 1 has the right (but is not obliged) to request to convert the outstanding principal of Investor 1 Note I into equity in the Target Company on the basis that the pre-money valuation of Investor 1 Conversion I represents the pre-money valuation of the Target Company (the “Investor 1 Onshore Conversion I”), (ii) Investor 2 shall have the right (but not be obliged) to request to convert the outstanding principal of Investor 2 Note into equity in the Target Company on basis that the pre-money valuation of the Target Company is RMB 1,000,000,000 (the “Investor 2 Onshore Conversion”, together with Investor 1 Onshore Conversion I, collectively the “First Tranche Onshore Conversion”), and the Target Company shall register such Investor as a shareholder with respect to the aforesaid equity interest in its register of members on the date of receipt of such notice, cause the relevant documents such as the shareholders’ agreement and articles of association of the Target Company to be amended to reflect the foregoing arrangements, and shall, within thirty (30) business days thereafter, complete the registration and filing formalities with its competent company registration authority in connection with the aforementioned onshore conversion and the appointment of a directors by Investor 1.

  

 

(3)

For the avoidance of doubt, if, prior to the occurrence of an Offshore Automatic Conversion, the conversion unit price of the Convertible Loan to which the First Tranche Onshore Conversion is related is changed to the adjusted unit price of the investment contemplated hereunder pursuant to paragraph 5.8.3 of the Transition Agreement, the conversion unit price for the Offshore Automatic Conversion shall be adjusted accordingly pursuant to Article 5.8 of the Transition Agreement so that the corresponding Investors are entitled to anti-dilution protection at Cayman Co level substantially identical to that at the Target Company level.

 

1.7.2

Investor 1 Note II conversion

 

(1)

Within fifteen (15) business days after all of the following conditions (the “Offshore Optional Conversion Conditions”) are satisfied or waived by Investor 1 in writing (applicable to the conditions precedent (a) to (b) below) and jointly waived by Investor 1 and the Target Company (applicable to the condition precedent (c) below) (or such later period as Investor 1 and the Target Company shall then otherwise agree) (the “Offshore Optional Conversion Time Limit”), Investor 1 has the right (but is not the obliged) to give a written notice to Cayman Co (the “Offshore Optional Conversion Notice”) requiring the conversion of the remaining notes (corresponding to the principal amount of the Convertible Loan of twenty million Chinese yuan (RMB 20,000,000), the “Investor 1 Note II”) into a corresponding number of series B + preference shares of Cayman Co at the conversion unit price of the Overseas Share II of Investor 1. Notwithstanding the foregoing, if, prior to the occurrence of the Offshore Optional Conversion, a new round of financing occurs to Cayman Co, in which the unit price per additional share is lower than the conversion unit price of the Overseas Share II of Investor 1 calculated on basis that the consolidated pre-money valuation (see the calculation formula below) is equal to RMB1 billion (except for the Red Chip Restructuring as agreed under the Restructuring Framework Agreement and the conversion following provision of loan by the Offshore Co-investors to the Group Company under this Agreement and the Offshore Co-investor Note Agreement, the “New Financing of Cayman Co”), Investor 1 has the right to request converting Investor 1 Note II into the corresponding number of the preferred share class issued under the New Financing of Cayman Co whenever Investor 1 conducts the Offshore Optional Conversion at the conversion unit price of the Overseas Share II of Investor 1 defined in the point (b) of paragraph 1.7.2(2) in accordance with paragraph 1.7.2(2) (the aforesaid conversion shares referred to as “Overseas Share II of Investor 1”, and together with the First Tranche Overseas Shares, collectively or individually “Overseas Share”; and these conversions referred to as “Offshore Optional Conversion”, and together with Offshore Automatic Conversion, collectively or individually “Offshore Conversion”):

  

(a)

Offshore Automatic Conversion has occurred, and Investor 1 (or its designated affiliate) has been registered as the holder of the relevant First Tranche Overseas Shares in the register of members of Cayman Co;

 

(b)

The Group has submitted to the Investor the consolidated financial statements of the Group for the one (1) month immediately before the date of automatic conversion and the key operation data of the Group as set out in Exhibit V. If there is a material adjustment to the Principal Business of the Group, Investor 1 shall have the right to request the Group to update the key operation data set out in Exhibit V from time to time; and

 

(c)

Investor 1 has completed the ODI formalities in relation to its subscription for Overseas Shares II of Investor 1 in accordance with the applicable laws, unless Investor 1 designates its affiliate recognized by the Target Company to subscribe for Overseas Shares II of Investor 1 and such affiliate has completed all required formalities (if any) for such subscription in accordance with applicable laws.

 

(2)

For the purposes of this Agreement, the “Conversion Unit Price of Overseas Shares II of Investor 1” means: (a) the conversion unit price per Overseas Shares II of Investor 1 that is such calculated that the consolidated pre-money valuation under two investments made by Investor 1 constituting the Offshore Automatic Conversion and Offshore Optional Conversion (see calculation formula below); or (b) 90% of unit price per share under a New Financing of Cayman Co if such new financing occurs prior to or concurrently with the Offshore Conversion, whichever is lower.

 

(3)

For the purposes of this Agreement, the “Consolidated Pre-money Valuation” shall be calculated according to the following formula: Consolidated pre-money valuation = (Total principal of Investor 1 notes + Number of shares held by the Investor in Cayman Co immediately after the Offshore Optional Conversion) X Total number of shares issued and reserved by Cayman Co on a fully-diluted basis immediately before the Offshore Automatic Conversion (including the First Tranche Reserved Incentive Shares, but excluding, for the avoidance of doubt, the Reserved Incentive Shares II).

 

 

(4)

Within ten (10) business days after the date of receipt of the Notice of Offshore Optional Conversion of Investor 1,

 

(a)

Cayman Co shall issue the Overseas Shares II of Investor 1 to Investor 1 (or its designated affiliate) and provide Investor 1 with a scanned copy of the register of members which specifies Investor 1 (or its designated affiliate) as a holder of the Overseas Shares II of Investor 1 and is certified by the registered office provider of Cayman Co and a scanned copy of the share certificate duly executed and affixed with the common seal of Cayman Co (the original copy of the share certificate shall be provided to Investor 1 within thirty (30) days after the date on which Cayman Co receives the Notice of Offshore Optional Conversion of Investor 1); and

 

(b)

Cayman Co, all of its then shareholders (including all existing shareholders of the Target Company other than X-Charge Management or its designated overseas affiliates), the Investors (or their designated affiliates), and the Offshore Investors shall have executed the Amended and Restated Investors' Rights Agreement of Cayman Co and the general meeting of Cayman Co has duly resolved to pass the Amended and Restated Memorandum and Articles, provided that these two documents shall reflect that the shareholders’ rights are substantially identical to the rights of Investor 1 in the Target Company under the Transition Agreement (including the rights of the Convertible Loan Investor and rights of shareholders (if applicable)), and shall include the shareholders’ rights such as registration right and conversion right which are customary for overseas entities, and these two documents have been provided to Investor 1.

  

(5)

In the event that (a) the Group Company has completed the Red Chip Restructuring, but the Offshore Optional Conversion Conditions are fully satisfied prior to expiry of the Convertible Loan Term due to the failure of Cayman Co or the Target Company to fulfill the conditions set forth in points (a) to (b) of paragraph 1.7.2 (1) hereof, and such Offshore Optional Conversion Conditions have not been waived by Investor 1 in writing, or (b) the Group Company has not completed the Red Chip Restructuring prior to the expiry of the Convertible Loan Term, Investor 1 has the right (but is not obliged) to request to convert the outstanding Investor 1 Note II into the equity interest in the Target Company (the “Investor 1 Onshore Conversion II”, and together with the First Tranche Onshore Conversion, collectively the “Onshore Conversion”; and the Offshore Conversion and the Onshore Conversion collectively referred to as the “Conversion”) based on the conversion unit price of the Overseas Shares II of Investor 1, and the Target Company shall register Investor 1 as a shareholder with respect to the aforesaid equity interest in its register of members on the date of receipt of such notice from Investor 1, cause the relevant documents such as the shareholders’ agreement and articles of association of the Target Company to be amended to reflect such Investor 1 Onshore Conversion II, and shall, within thirty (30) business days thereafter, complete the registration and filing formalities with its competent company registration authority in connection with Investor 1 Onshore Conversion II.

 

 

1.7.3

The Parties agree that, for the purpose of the Offshore Equity Incentive Plan, Cayman Co intends to complete the reservation of 890,397,900 ordinary shares pursuant to the Restructuring Framework Agreement and such reservation will become effective in two tranches as follows: (1) reservation of 445,198,950 ordinary shares (the “Reserved Incentive Shares I”) will come into effect upon the completion of the corresponding Offshore Automatic Conversion by any Investor or the completion of the conversion by any Offshore Co-investor under the Offshore Co-investor Note Agreement; and (2) reservation of 445,198,950 ordinary shares (the “Reserved Incentive Shares II”) will come into effect upon the successful initial public offering of Cayman Co if the market capitalization of Cayman Co calculated at the formal issue price determined on the basis of the finalized prospectus is higher than RMB2.6 billion (market capitalization of Cayman Co = issue price X the number of issued shares of Cayman Co immediately after the completion of offering, and the aforesaid information to be determined in accordance with the finalized prospectus).

 

Article 1.8           ODI Formalities

 

After the Closing, each of the Guarantors shall act as the lead party to coordinate and promote required ODI (overseas direct investment) formalities for subscription for the Overseas Shares by the Investors hereunder, and in order to achieve such purpose, the Parties shall actively provide all necessary assistance for ODI formalities and shall execute all necessary documents in connection therewith.

 

Article 1.9           Fund Flow

 

1.9.1

Unless otherwise agreed herein, the relevant Investor shall give a written notice of any Offshore Conversion to the Target Company, and the Target Company shall, within fifteen (15) business days upon receipt of the notice (or such period as the Investor and the Target Company shall otherwise agree), repay the principal of the Convertible Loan corresponding in full to the Overseas Shares underlying such Offshore Conversion to the relevant Investor, and such Investor (or its designated affiliate) shall, within fifteen (15) business days after receiving the aforesaid repayment of the principal of the Convertible Loan (or such period as the Investor and the Target Company shall otherwise agree), pay to Cayman Co the corresponding subscription amount for the Overseas Shares. Notwithstanding the foregoing, if such Investor (or its designated affiliate) fails to pay within the aforementioned period due to bank control or foreign exchange control policies, such Investor shall not be deemed to be in breach of this Agreement, and such payment term shall be automatically extended accordingly. For the avoidance of doubt, the Parties agree that the Overseas Shares Subscription Price to be paid by the Investor (or its designated affiliate) to Cayman Co at that time shall be equivalent to the amount of USD derived from the translation of the principal of the Convertible Loan to be received by the Investor from the Target Company at the RMB : USD exchange rate applicable to the commercial bank undertaking such translation and from deduction of necessary bank fees (unless otherwise then agreed by the Investor and the Target Company in writing), and such amount of USD shall be deemed as the full payment of the Overseas Shares Subscription Price.

  

 

1.9.2

If the Target Company does not have sufficient funds to pay the full amount of the principal of the Convertible Loan to the Investor in one lump sum, the Target Company may pay the principal of the Convertible Loan to the Investor by installments, in which case the Overseas Shares Subscription Price to be paid by the Investor (or its designated affiliate) to Cayman Co shall also be paid in the same installments, and the amount paid in each installment shall represent repayment received by the Investor from the Target Company for the current period. Notwithstanding the foregoing, upon repayment of the first installment of the principal of the Convertible Loan, the remaining installments of the principal of the Convertible Loan shall be repaid within fifteen (15) business days (or such other period as agreed by the Investor and the Target Company) after Cayman Co receives from the Investor (or its designated affiliate) the previous installment of the Overseas Shares Subscription Price, and the total number of installments shall not exceed two installments (or such other number of installments as agreed by the Investor and the Target Company).

  

Article 1.10         Seniority of Convertible Loan

 

Subject to the applicable laws, the seniority of the Convertible Loan hereunder shall be no less favorable than the seniority of the Offshore Co-investor CN Loan under the Offshore Co-investor Note Agreement, and the Convertible Loan hereunder shall be repaid with precedence over the debts owed by each of the Guarantors to other parties and/or the debts owed by the Target Company to its existing shareholders as a result of their exercise of the repurchase rights under the Transition Agreement.

  

Article 1.11         Equal Treatment

 

The Guarantors undertake that the Offshore Co-investor CN Loan provided by the Offshore Co-investors shall be subject to the conversion mechanism which is substantially identical to or no more favorable than the Automatic Overseas Conversions under Article 1.7.1 hereof (provided that if the conversion unit price of the Offshore Co-investors is lower than the unit price of the Automatic Overseas Conversions solely due to exchange rate, it shall not be deemed as a violation of the aforesaid provision). If any Offshore Co-investor enjoys rights that are more favorable or preferential than those of the Investor under its Convertible Loan documents, the Investor shall be automatically entitled to such more preferential rights, and the Parties hereto shall provide all necessary cooperation in connection therewith, including but not limited to amending the relevant Transaction Documents, so as to enable the Investor to enjoy the above favorable or preferential rights.

  

 

Chapter 2       Conditions Precedent to Closing

 

Article 2.1           Conditions Precedent to Closing

 

The payment of the Convertible Loan by each Investor to the Target Company in accordance with Article 1.2 hereof shall be conditional upon all of the following conditions (the “Conditions Precedent to Closing”) being satisfied or waived in writing by such Investor in advance:

 

2.1.1

the Transaction Documents have been duly executed and delivered by the Parties other than such Investor;

 

2.1.2

the representations and warranties made by the Guarantors in Article 3.1 hereof shall remain true, accurate, complete and not misleading from the date of this Agreement to the Closing Date; and the Guarantors have performed or complied with their undertakings, obligations and covenants that are required to perform or complied with under the Transaction Documents on or before the Closing Date, and the Guarantors do not commit any violation of the provisions of the Transaction Documents;

 

2.1.3

the board of directors and shareholders of the Target Company have approved the Transaction and the execution and performance of the Transaction Documents, which shall also include the following matters: (1) approving the execution and performance of the Restructuring Framework Agreement; and (2) the existing shareholders of the Target Company having agreed in writing to waive any pre-emptive rights in relation to the Transaction (including the conversion); and (3) one (1) director nominated by Investor 1 has been appointed as a director of the Company;

 

2.1.4

the board of directors of the Target Company has resolved to approve and ratify the borrowing of RMB1.7 million from the Target Company by Rui Ding (“Rui Ding Related Loan”);

 

2.1.5

the Founders and the Core Employees have entered into a labor contract, an IP ownership and a confidentiality agreement and non-competition agreement with the Target Company as recognized by the Investor;

 

2.1.6

as of the Closing Date, there were no events, facts, conditions, changes or other circumstances that had or could be reasonably expected to have a material adverse effect on the Group’s assets, financial structure, liabilities, technology, earnings prospects and normal operations;

 

2.1.7

no government authority has issued, promulgated, implemented, formulated or enforced any laws that would or might result in the Transaction being unlawful, or that restrict or prohibit the Transaction;

 

2.1.8

the Group and the Founders are not involved in any pending litigations, arbitrations, disputes, investigations or other legal proceedings or pending matters that prohibit, have material adverse effect on, invalidate or result in impossibility of performance of the Transaction Documents;

 

2.1.9

from the date of this Agreement to the Closing Date, there was no material adverse change in the shareholding, corporate governance, business operations or financial condition of any Group Company, and no material legal dispute or material personnel change occurred (except for those for the purpose of the Red Chip Restructuring); and there was no material adverse change in the Target Company’s and/or the Founders’ ability to perform their obligations under the Transaction Documents (except for those for the purpose of the Red Chip Restructuring);

 

2.1.10

from the date of this Agreement to the Closing Date, none of the Founders has transferred part or all of their equity interest in the Target Company to any third party or created any encumbrance thereon (except for those for the purpose of the Red Chip Restructuring);

 

2.1.11

from the execution date of this Agreement to the Closing Date, the Group, as an entity operating as a going concern, neither engaged in nor was involved in any material violations of laws and regulations, and the Group neither disposed of its substantial assets or created guarantees thereon, nor has it incurred or assumed any material debts (other than disposal or liabilities in the ordinary and usual course of business);

 

2.1.12

the Investor has completed its due diligence on the Group (including but not limited to financial, business and legal due diligence) and the Investor is satisfied with the results of such due diligence;

 

2.1.13

the Investor has obtained approval from its internal decision-making body or investment committee in respect of the Transaction;

 

2.1.14

the Target Company entered into the Restructuring Framework Agreement with each of its existing shareholders and other interested parties, and the Target Company has published a capital reduction announcement pursuant to the Restructuring Framework Agreement, and the capital reduction documents (as defined in the Restructuring Framework Agreement) have been executed; and

 

 

2.1.15

the Guarantors have executed and issued to the Investor a confirmation letter on the satisfaction of the closing conditions (the format and contents shall be substantially consistent with Exhibit I) in respect of the Transaction, confirming that all the closing conditions under this Article 2.1 have been satisfied.

 

Article 2.2            Waived Conditions Precedent to Closing

 

If any of the Investors waives any of the Conditions Precedent to Closing based on the undertakings of the Guarantors, such undertakings shall be deemed as obligations to be performed by the Guarantors in a timely manner after the Closing, and shall be performed by the Guarantors within the time limit then agreed upon by the Guarantor and such Investor.

 

Chapter 3       Representations and Warranties

 

Article 3.1            Representations and Warranties of Guarantors

 

The Target Company, Cayman Co, the German Subsidiary and the Founders (collectively, the “Guarantors”, and each a “Guarantor”) shall severally and jointly make representations and warranties to the Investor as set out in Appendix C-1 hereto (other than the representations and warranties provided under the Restructuring Framework Agreement) and warrant that such representations and warranties are true, complete and accurate from the date of this Agreement to the Closing Date.

 

Article 3.2            Representations and Warranties of Investors

 

From the execution date of this Agreement to the Closing Date, the Investors shall severally, but not jointly, make representations and warranties as set out in Appendix C-2 hereto to the other Parties, respectively.

 

Chapter 4       Undertakings

 

Article 4.1           Transitional Undertakings

 

The Guarantors undertake to the Investor, jointly and severally, that, from the date of this Agreement to the date of completion of the conversion or the date of termination of this Agreement (whichever is earlier), except with the prior written consent of the Investor or otherwise expressly provided herein, or otherwise in accordance with the terms of the Restructuring Framework Agreement:

 

4.1.1

the Guarantors shall not engage in, permit or procure any act or omission which would constitute or render any of the representations, warranties or undertakings made under Article 3.1 hereof and this Chapter 4 being untrue, inaccurate or violated in any material respect;

 

 

4.1.2

the Guarantors shall take all reasonable measures to preserve and protect the Group’s assets, operate the Principal Business of the Group and maintain the relationship with suppliers, partners, customers and employees in the normal course of business in a manner consistent with the past practices and prudent business practices to ensure the normal operation of the Group, and ensure that there will be no material adverse changes in the Group’s goodwill and operations;

 

4.1.3

the Guarantors shall make optimal efforts to procure the transactions hereunder, and shall not take any act or omission which obstructs or unduly delays the transactions hereunder. The Guarantors shall take all necessary actions and execute all necessary documents and instruments in order to perform any of the provisions of this Agreement (including but not limited to the satisfaction of the Conditions Precedent to Closing as stipulated in Article 2.1);

 

4.1.4

the Guarantors shall give the Investor (and its designated third-party intermediary) the right to access the Group’s creditors, customers, partners, financial advisers, accountants and other advisers and shall assist the Investor in obtaining such information as it reasonably requires in connection with any aspect of the Group such as finance, operations and/or business. In addition, the Guarantors shall immediately notify the Investor of any material litigation, arbitration or administrative proceedings which have occurred or which to its knowledge may occur in relation to the Group or its assets, business and/or revenues. Neither the right of access provided to the Investor hereunder nor the review of the information provided by the Investor shall in any way affect or limit any representations and warranties made by any of the Guarantors hereunder;

 

4.1.5

Unless the Investor has given the prior written consent, the Guarantors and any of its affiliates, officers, directors, representatives or agents shall not: (1) solicit, initiate, consider, encourage or accept any proposal or offer from any person in relation to (a) new financing conducted by the Group Company which may adversely affect the Transaction during the period from the date of this Agreement to the Closing Date or the date of termination of this Agreement, whichever is earlier; or (b) any transaction relating to the purchase or otherwise acquisition of all or any part of the equity interest or assets of the Group; or (c) entering into of any merger, consolidation or other business combination with the Group; and (2) participate in any discussions, conversations, negotiations and other communications relating to the foregoing, or provide any information to any other person relating to the foregoing, or cooperate, assist or participate in any other way, facilitate or encourage any effort or attempt by any other person to provide any information relating to the foregoing; provided that the relevant activities for the purpose of the restructuring of the Group Company under the Restructuring Framework Agreement, the preparation for the listing of the Group Company and the provision of the Offshore Co-investor CN Loan to the Group Company by the Offshore Co-investors are not subject to this provision. The Guarantors shall immediately cease and shall procure the termination of all existing discussions, conversations, negotiations and other exchanges with any person in relation to any of the foregoing conducted prior to this Agreement. The Guarantors shall immediately notify the Investor if it makes or receives any such proposal or offer, or makes any inquiry or other contact with any person in relation to the foregoing;

 

 

4.1.6

Without the prior written consent of the Investor, each Group Company shall not (for the purposes of this paragraph 4.1.6, the definition of “Company” shall include the Target Company and other Group Company) take the following actions, unless otherwise provided for under the Restructuring Framework Agreement or otherwise expressly provided herein:

 

(1)

merger, division, dissolution, liquidation or change of corporate form, any merger, acquisition, consolidation or other conversion, restructuring or reorganization or reorganization of the Company, or any transaction that results in a change of control of the Company;

 

(2)

amendment to the Articles of Association;

 

(3)

increasing or decreasing the registered capital of the Company (including any grant or issue of any options or subscription rights which may result in the issue of new shares by the Company in the future or the dilution or reduction of the effective equity interest of the Investors in the Company), and increasing or decreasing the registered capital as a result of share incentive;

 

(4)

creating or authorizing the creation of any convertible or exercisable securities by the Company, which, upon conversion or exercise, shall bear more preferred or equal rights or privileges over the equity interest in the Company held by the Investors after the debt-to-equity swap, except for convertible or exercisable securities that are created or authorized to be created under the Offshore Co-investor Note Agreement;

 

(5)

the distribution of dividends and profits by the Company to its shareholders;

 

(6)

share repurchase by the Company for any reason (except for any share repurchase pursuant to the Employee Incentive Scheme);

 

 

(7)

changes in the number of members of the board of directors or the appointment of executive directors;

 

(8)

sales, mortgage, pledge, lease, transfer or otherwise disposal of any assets and/or business of the Company (except for disposal as part of the ordinary and usual course of business);

 

(9)

declaration of bankruptcy of the Company or appointment of receiver, liquidator, legal management personnel or similar officer for the company.

 

Article 4.2           Post-closing Undertakings

 

Unless the acts conducted in accordance with this Agreement, the matters provided under the Restructuring Framework Agreement or with the prior written consent of the Investor, the Guarantors separately and jointly undertake to the Investor that: upon Closing,

 

4.2.1

the Group shall comply with all applicable laws (including but not limited to the anti-corruption law and the trade control law) to ensure that each Group Company shall continue to operate legally, and obtain and maintain all governmental approvals, permits, filings and other permits and consents required for its operations, and shall use its best endeavors to obtain licenses, authorizations, approvals or filings required for its operation within the required period or such longer period as agreed upon by the Investors when the laws or governmental authorities of China expressly require the Group to obtain such licenses, authorizations, approvals or filings;

 

4.2.2

the Group shall take all necessary measures to protect and maintain the intellectual property rights it owns and use any intellectual property rights (including but not limited to trade name, trademark, domain name, integrated circuit layout design, patent, and office software) in a legal manner, including but not limited to: (1) submitting applications to competent authorities in a timely manner for trade name, trademark, and new technology for which the Group Company reasonably determines that intellectual property rights can be applied for; (2) consulting trademark attorney and/or agent in a timely manner for the trademarks that will continue to be used in future business operations and take reasonable measures to obtain corresponding trademark rights protection thereafter; and (3) adopting other reasonable and effective solutions for intellectual property rights for which the Group’s applications are finally rejected (for trademarks, including but not limited to submitting review applications or trademark administrative proceedings, submitting corresponding alternative trademarks for registration, acquiring trademarks from holders of earlier registered trademarks, or changing the corresponding brand name for trademarks for which the application for intellectual property rights ultimately fails), to ensure that the Group does not infringe on third-party intellectual property rights in the course of business operation, and shall take all effective measures to protect the Group’s intellectual property rights;

 

 

4.2.3

any intellectual property right acquired by any of the Founders or the Group in connection with the Group’s business after the date of this Agreement, and any licenses or rights to such intellectual property rights shall be held by the Group as the sole owner or right holder. The Group shall complete all necessary or feasible registrations for such intellectual property rights as soon as practicable, and the Founders shall actively provide all necessary assistance in connection therewith;

 

4.2.4

the Group and the Founders shall take all reasonable measures to preserve and protect the assets of the Group, operate the Principal Business and maintain the relationship with suppliers, partners, customers and employees in the normal course of business in a manner consistent with the previous practice and prudent business practice to ensure the normal operation of the Group, and ensure that there will be no material adverse change in the goodwill or operation of the Group;

 

4.2.5

the Group shall continuously pay social insurance and contributions to the housing provident fund in full and on time for all employees in accordance with the standards stipulated by laws, and withhold and pay individual income tax in full and on time in accordance with the laws;

 

4.2.6

the Group shall prepare and submit the national and local tax returns in accordance with applicable laws and regulations and the requirements of competent Governmental Authority on a timely basis. The Group shall, either before or after the Closing Date, pay taxes due in accordance with applicable laws, regulations and tax returns;

 

4.2.7

the Group and the Founders shall promptly notify the Investors in writing of any event, fact, condition, change or other circumstance that has or may have a material adverse effect on the Group;

 

4.2.8

the Group and the Founders agree and undertake that the transactions (if any) between the Group and its existing shareholders and their affiliates shall be based on fair market prices and conditions in the same industry;

 

4.2.9

if any Group Company intends to engage in a business for which a value-added telecommunications business license is required, such Group Company shall carry out the relevant business after obtaining the relevant value-added telecommunications business license. If the Group suffers any penalties or other losses as a result of the failure of such Group Company to obtain the value-added telecommunications business license, the Founders shall make up consequential losses of the Group and shall be liable for the consequential losses of the Investors (if any);

 

 

4.2.10

the Group undertakes that it shall strictly comply with the relevant provisions of the Cybersecurity Law. If the Group is subject to any penalties or losses due to its violation of the Cybersecurity Law (including but not limited to the provisions on the collection and use of personal information), the Founders shall make up the consequential losses of the Target Company in favor of the Group, and shall be liable for consequential losses of the Investors (if any);

 

4.2.11

if the Target Company is subject to any penalties or other measures due to any non-compliance in respect to social security or provident fund, the Founders shall make up the consequential losses of the Target Company in favor of the Target Company, and shall be liable for consequential losses of the Investors (if any);

 

4.2.12

in the event that any Group Company suffers penalties or other losses due to unauthorized operation of business in any place other than its domicile address, the Founders shall make up the consequential losses in favor of the Group, and shall be liable for consequential losses of the Investors (if any), in which case the Group undertakes that it will rectify such unauthorized operation of business prior to the listing to ensure that the listing would not be affected thereby;

 

4.2.13

the Group shall enter into full-time labor contracts or employment contracts with all employees in accordance with applicable laws, and enters into confidentiality agreements and non-competition agreements containing a clause on intellectual property rights ownership with its senior management, technical and R&D personnel;

 

4.2.14

unless otherwise agreed in writing by the Investors, during the period from the Closing Date to first (1st) anniversary of the Qualified IPO, the Founders shall work in the Group on a full-time basis, continue and fully engage in the business of the Group and use their best endeavors to develop the business of the Group, and protect the interests of the Group, and shall not engage in or participate in any other business materially waste their working hours (whether or not such business is in competition with the business of the Group);

 

4.2.15

the Group shall complete the Red Chip Restructuring as soon as possible in accordance with the Restructuring Framework Agreement. The Guarantors shall also notify the Investors of each milestone of the Red Chip Restructuring in writing. and promptly provide the Investors with such documents and information relating to the Red Chip Restructuring as they may reasonably request from time to time;

 

 

4.2.16

the Group Company shall ensure that the Founders and the employees of the Company will not violate any contract to which they are a party or any undertaking binding on them (including but not limited to confidentiality obligations and non-competition obligations) or violate the legal rights of their former employers or other holders of intellectual property rights;

 

4.2.17

Cayman Co shall complete a wholly-owned acquisition of US Co before the date falling six (6) months after the Closing or the date on which the Group completes the formal filing of the initial public offering, whichever is earlier;

 

4.2.18

Rui Ding Related Loan shall be repaid in full before the date falling six (6) months after the Closing or the date on which the Group completes the formal filing of the initial public offering, whichever is earlier;

 

4.2.19

the Target Company shall, before the date falling three (3) months after the Closing or the date on which the Group completes the formal filing of the initial public offering, whichever is earlier, but not earlier than the date on which HK Co completes the acquisition of the entire equity interest in the Target Company pursuant to the Restructuring Framework Agreement, transfer its entire equity interest in the German Subsidiary to Cayman Co and cancel its overseas investment certificate; and

 

4.2.20

the Group has the right to adjust the shareholding structure of the German Subsidiary for the purpose of the Red Chip Restructuring, provided that the Group shall ensure that the German Subsidiary remains wholly owned by the Target Company or Cayman Co directly or indirectly.

 

Chapter 5       Coming into Force, Supplement, Amendment, Alteration and Termination

 

Article 5.1           Coming into Force

 

This Agreement shall become effective after being signed by the Parties or their legal representatives and being affixed with common seals by the Parties (other than natural persons).

 

Article 5.2           Supplement

 

The Parties shall otherwise enter into supplemental agreements for matters not mentioned herein, and any such supplemental agreement shall have the same legal effect as this Agreement.

 

Article 5.3           Amendment and Alteration

 

This Agreement may be amended or altered through mutual agreement of the Parties hereto. Any amendment to or alteration of this Agreement shall not come into force unless it is made in writing, signed by the Parties hereto or their legal representatives and affixed with common seals by the Parties (other than natural persons).

 

 

Article 5.4           Termination

 

This Agreement may be terminated, if:

 

5.4.1

with respect to any investor, the Company and the Investor mutually agree in writing to terminate this Agreement and determine when such termination takes effect;

 

5.4.2

any Investor may terminate the parts of this Agreement related to such Investor by giving a written notice to the other Parties, stating the effective date of such termination (such termination shall not, for the avoidance of doubt, affect the rights and obligations of the other Investors hereunder and the rights and obligations of the Company and other Parties in relation thereto) if any of the following circumstances occurs prior to the Closing Date:

 

(1)

the representations or warranties of any of the Guarantors (but not limited to the representations and warranties set out in Appendix C-1) were materially untrue or materially omitted at the time they were made or at the Closing Date;

 

(2)

any of the Guarantors is in breach of the covenants, undertakings (including but not limited to the undertakings set out in Chapter 4) and obligations hereunder, and fails to take effective remedial measures within 30 days after the date of receipt of the written notice from the Investor requesting rectification;

 

(3)

Closing does not occur within forty-five (45) days after the date of this Agreement.

 

5.4.3

any of the Investors may terminate this Agreement by giving a written notice to the other Parties, stating the effective date of such termination (for the avoidance of doubt, such termination shall not affect the rights and obligations of the other Investors hereunder and the rights and obligations of the Company and other Parties in relation thereto) if any of the following circumstances occurs (unless due to the matters provided under the Restructuring Framework Agreement) from the Closing Date to the completion of the conversion:

 

(1)

the representations or warranties of any of the Guarantors (including but not limited to the representations and warranties set out in Appendix C-1) are untrue, inaccurate, or misleading or contain omissions in any material respect at the time they were made or prior to the completion of the conversion;

 

(2)

any of the Guarantors is in breach of the covenants, undertakings (including but not limited to the undertakings set out in Chapter 4) and obligations under the Transaction Documents, and fails to take effective remedial measures within thirty (30) days after the date of receipt of the written notice from the Investor requesting rectification;

 

 

(3)

any existing shareholder requests to exercise the repurchase rights pursuant to Article 5.9 of the Transition Agreement;

 

(4)

the Target Company is closed down, dissolved, liquidated, has its business license revoked, has entered into any voluntary or compulsory bankruptcy proceedings, or has been declared bankrupt by the court or other Governmental Authority, or engages in other circumstances that seriously affect or may seriously affect its operation capacity and business reputation; or

 

(5)

the combination or merger or acquisition of the Target Company with or into any other entity occurs, as a result of which all shareholders of the Target Company before such combination, merger or acquisition transactions hold less than fifty percent (50%) of equity interest in the surviving entity after such transactions; or the Target Company sells, transfers, charges, pledges or otherwise dispose of all or substantially all of assets of the Group (including the sale or exclusive licensing of all or substantially all of the Group’s intellectual property rights to third parties).

 

5.4.4

If a Party or its affiliate: (i) becomes a restricted party; (ii) is included in the Restricted Parties List; or (iii) violates the anti-corruption law as a result of the Transaction before the Closing Date or from the Closing Date to the completion of the conversion, any other Investor not affected by the foregoing events may terminate this Agreement by giving written notice to other Parties, specifying the effective date of such termination (for the avoidance of doubt, such termination shall not affect the rights and obligations of other Investors hereunder and the rights and obligations of the Company and other Parties in relation thereto).

 

Article 5.5           Effect of Termination

 

5.5.1

Upon the termination of this Agreement by the relevant Party hereto in accordance with Article 5.4 above, and unless then otherwise agreed by other Parties, such terminating Party shall return the consideration hereunder received from the other Party on a fair, reasonable and good-faith basis and do its best to restore the Transaction to the state when this Agreement is signed. In particular, if this Agreement is terminated in accordance with paragraph 5.4.3 above, the Convertible Loan Term corresponding to the Investor who exercises the right of termination will expire early, and the Target Company shall immediately repay to such Investor the principal of the Convertible Loan and interest accrued thereon.

  

5.5.2

Upon termination of this Agreement in accordance with Article 5.4 above, all rights and obligations of each terminating Party hereunder shall cease among the terminating Parties, and each of the aforesaid Parties shall have no other right of claim against the other Parties under or in connection with the termination of this Agreement without prejudice to the liabilities already accrued prior to such termination. Article 5.5, and Chapter 6 to Chapter 10 hereof shall survive after termination of this Agreement.

 

 

Chapter 6       Liabilities for Breach of Contract

 

Article 6.1           General Indemnity

 

The Guarantors shall be severally and jointly liable for any direct or indirect loss of the Investor as a consequence of violation by any Guarantor of its representations, warranties, undertakings, obligations or any other covenants hereunder, and shall take corresponding measures to hold the Investor harmless from any further loss.

 

Article 6.2           Special Indemnity

 

Notwithstanding any other provision of this agreement, in the event that (a) Cayman Co fails to complete the wholly-owned acquisition of US Co in accordance with paragraph 4.2.17 hereof, or (b) the PRC-based Group Company fails to make social insurance and housing provident fund contributions for its employees in accordance with the laws prior to the Closing, or (c) any of the Guarantors breaches the representations and warranties made pursuant to Article 3.1 hereof in respect of any of the following matters, and any losses are incurred directly or indirectly by the Investor as a result of the foregoing, whether or not disclosed to the Investor, the Guarantors shall severally and jointly be liable to the Investor for any such loss, and shall take corresponding measures to hold the Investor harmless from any further losses: (1) disputes between any of the Founders and their former employers; (2) disputes over any intellectual property right of the Group Company; or (3) the Group Company fails to settle the debts (if any) that have fall overdue as of the Closing Date.

 

Article 6.3           Limit of Indemnity

 

The Parties acknowledge and agree that, whether or not otherwise agreed herein, all liabilities of the Founders hereunder (including but not limited to the joint liability guarantee for the repayment of the Convertible Loan by the Target Company, and the indemnity liabilities under Articles 6.1 and 6.2 hereof) shall be limited to the then fair value of the entire equity interest in the Group Company directly and indirectly held by the Founders.

  

Chapter 7       Confidentiality

 

Article 7.1           Confidential Information

 

Each Party undertakes to the other Parties that it will not disclose confidential information to any third party without the prior written consent of the relevant party, and each Party shall procure its respective directors, officers, employees, agents, consultants, professional advisers and affiliates and their respective directors, officers, employees, agents, consultants and professional advisers, to comply with the foregoing provision.

 

 

Article 7.2           Publicity

 

After the Closing of the Transaction, if any Party intends to disclose the Transaction to the public at a press conference, industry or professional media, marketing materials or by other means, it shall negotiate with the Investor in advance to confirm the publicity plan (including but not limited to the scope of the disclosable information, and the content of the press release, etc.). Without the prior written consent of the Investor, neither Party shall disclose the Transaction beyond the publicity plan confirmed by the Investor.

 

Article 7.3           Exceptions

 

The information disclosed shall not be subject to the restrictions set out in Chapter 7 above if: (1) any information is required to be disclosed or used by the laws or any regulatory authority of the PRC, or is required to be disclosed or used by any judicial proceedings arising from this Agreement or any other agreement entered into hereunder, or is reasonably disclosed to the tax authority, provided that the disclosing party shall discuss with other parties about the disclosure and submission of the information within a reasonable time prior to such disclosure or submission, and shall, if any other Party requests to disclose or submit such information, request the receiving party to treat the disclosed or submitted information in confidence as strictly as possible; (2) any information is in the public domain for reasons not attributable to the Parties hereto; (3) any Party discloses the Transaction to its affiliates, investors, partners, fund managers, investment banks, lenders, accountants, legal advisers, and bona fide potential investors, provided that the individuals or institutions coming to knowledge of the information shall agree to assume the obligations of confidential information not less favorable than those stipulated in this Chapter 7; and (4) any information is disclosed or used with prior written consent of all other Parties.

 

Chapter 8       Notice

 

Article 8.1           Means of Notification

 

Any notice or other communication to be given by one Party to other Parties in connection with this Agreement (the “Notice”) shall be in writing. For the purpose of serving the notice, the contact details of the Parties are set forth in Appendix D hereto.

 

Article 8.2           Service

 

Notices given in any written communications specified in Article 8.1 hereof shall be deemed to have been served as follows: (1) any notice by hand shall be deemed to have been served when it is receipted for by the recipient, otherwise it shall not be deemed to have been validly served; (2) any notice that may be sent by post shall be sent by registered mail or express courier, and shall be deemed to have been served on the seventh (7th) day after the posting; and (3) any notice given by electronic mail shall be deemed to have been served when it is delivered to the recipient

 

 

Article 8.3           Change of Address

 

If the mailing address or number of a Party changes (the "Changing Party"), it shall notify other Parties within seven (7) days after the occurrence of such change. If the Changing Party fails to do so in a timely manner, the notice sent by other Parties to the Changing Party at the original address shall be deemed to have been served.

 

Chapter 9       Governing Law and Dispute Resolution

 

Article 9.1           Governing Law

 

The conclusion, validity, performance, interpretation and dispute resolution of this Agreement shall be governed by and construed in accordance with the PRC Law. If the PRC Law in force do not provide for specific matters relating to this Agreement, such matter shall be addressed with reference to general international business practices, to the extent permitted by the PRC Law.

 

Article 9.2           Dispute Resolution

 

Any dispute arising out of or in connection with this Agreement (the “Dispute”) shall be referred by any Party hereto to the China International Economic and Trade Arbitration Commission (the “CIETAC”) for arbitration in Beijing in accordance with the arbitration rules of CIETAC in force at the time of the application for arbitration. The arbitration tribunal shall consist of three arbitrators. The claimant and the respondent shall have the right to appoint one arbitrator respectively, and the remaining arbitrator shall be determined in accordance with the then prevailing arbitration rules. An arbitration award is final and binding on all parties to the arbitration. The Parties shall remain entitled to their respective other rights hereunder, and shall continue to perform their respective obligations hereunder in the course of dispute resolution.

 

Chapter 10       Miscellaneous

 

Article 10.1         Name and Brand of Investor

 

No other Party shall use, publish or reproduce the name, trade name, trademark, logo and/or brand of the Investor and its affiliates, or purport to be a partner of the Investor or an affiliate of the Investor, or make a similar statement, or declare that any product or service provided by it has been endorsed or supported by the Investor or any of its affiliates, or make a similar statement, without the written consent of the Investor, whether or not the Investor is a then shareholder of the Target Company. Without the written approval of the Investor, no other Party shall procure a third party to be aware of the Investor’s investment in the Target Company by way of press release, announcement or other disclosure.

 

 

Article 10.2         Entire Agreement and Validity

 

Exhibits hereto form an integral part of this Agreement and are complementary to and have the same legal effects as the body of this Agreement. This Agreement, other Transaction Documents and exhibits hereto and thereto constitute the entire agreement of the Parties with respect to the Transaction and supersede any prior agreement, letter of intent, memorandum of understanding, representation or other obligation (whether in writing or orally, including various forms of communication) of the Parties with respect to the Transaction, and this Agreement (as altered, supplemented or amended) and other Transaction Documents contain the sole and entire agreements of the Parties in respect of the subject matter hereunder. If any provision of this Agreement is or becomes invalid or unenforceable due to the PRC Law applicable to it, such provision shall be deemed not to exist from the beginning, and shall not affect the validity of the other provisions of this Agreement, and the Parties hereto shall, to the extent permitted by laws, negotiate and conclude a new provision to ensure that the intention of the original provision is achieved to the greatest extent possible.

 

Article 10.3         Assignment of Rights and Obligations

 

This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Parties. The investor has the right to assign and transfer its rights, interests and obligations hereunder to its affiliates. Save as aforesaid, neither party shall assign or transfer any of its rights or obligations hereunder without the prior written consent of other Parties.

 

Article 10.4         No Waiver

 

Unless otherwise provided herein, the failure or delay by a Party in exercising its rights, powers or privileges hereunder shall not constitute a waiver of such rights, powers and privileges, and the exercise of such rights, powers and privileges, whether in whole or in part, shall not preclude the exercise of any other rights, powers and privileges.

 

Article 10.5         Assumption of Expenses

 

If Investor 1 completes the Closing, or Investor 1 fails to complete the Closing for any reason attributable to any Guarantor, the Target Company shall bear the expenses of Investor 1’s external audit and lawyers for business due diligence and evaluation, legal due diligence and drafting of investment documents and other activities for the purpose of the transactions hereunder, provided that the Target Company shall bear the expenses of Investor 1 in aggregate not exceeding three hundred thousand Chinese yuan (RMB300, 000) in accordance with this provision, In addition, each Party shall bear its own costs and expenses incurred in connection with the transactions hereunder.

 

Article 10.6         Use of Name of Group Company

 

After the Closing Date, each Group Company hereby grants the Investor and its affiliates a license to use company name, trade name, trademark, product or service name, domain name, pattern mark, marking or/and logo of Group Companies in their respective marketing materials, provided that such use by the Investor and its affiliates shall be limited to the purpose of disclosing investment of Investor 1 in the Group Company.

 

Article 10.7         Language and Counterpart

 

This Agreement is written in the Chinese language in seven (7) counterparts with each Party holding one (1) counterpart. Each counterpart shall have the same effect.

 

(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

 

 

 

IN WITNESS WHEREOF, this Convertible Loan Investment Agreement has been duly executed by the undersigned or their duly authorized representatives as of the date first written above.

  

	Beijing X-Charge Technology Co., Ltd.
	Beijing X-Charge Technology Co., Ltd. (seal)
	Signature:	/s/ Rui Ding
	Name: Rui Ding
	Title: Legal representative
	XCHG Limited
	Signature:	/s/ Yifei Hou
	Name: Yifei Hou
	Title: Director
	XCharge Europe GmbH
	Signature:	/s/ Yifei Hou
	Name: Yifei Hou
	Title: Managing Director

 

Beijing X-Charge Technology Co., Ltd.

Execution page of the Convertible Loan Investment Agreement

 

 

IN WITNESS WHEREOF, this Convertible Loan Investment Agreement has been duly executed by the undersigned or their duly authorized representatives as of the date first written above.

 

 

	Rui Ding
	Signature:	/s/ Rui Ding
	Yifei Hou
	Signature:	/s/ Yifei Hou

 

Beijing X-Charge Technology Co., Ltd.

Execution page of the Convertible Loan Investment Agreement

 

 

IN WITNESS WHEREOF, this Convertible Loan Investment Agreement has been duly executed by the undersigned or their duly authorized representatives as of the date first written above.

 

	Wuxi Shenqi Leye Private Equity Funds Partnership L.P.
	(Seal)
	Wuxi Shenqi Leye Private Equity Funds Partnership L.P. (seal)

 

	Signature:	/s/ Lihua Fu
	Name: Lihua Fu
	Position: Representative of Executive Partner

 

Beijing X-Charge Technology Co., Ltd.

Execution page of the Convertible Loan Investment Agreement

 

 

IN WITNESS WHEREOF, this Convertible Loan Investment Agreement has been duly executed by the undersigned or their duly authorized representatives as of the date first written above.

 

	Shell Ventures Company Limited (Seal)
	Signature:	/s/ Qi Ren
	Name: Qi Ren
	Position: Legal representative

 

Beijing X-Charge Technology Co., Ltd.

Execution page of the Convertible Loan Investment Agreement

 

 

Appendix A       Definitions

 

“ODI Formalities”	means the filing and cross-currency exchange formalities for overseas investments by domestic institutions, including but not limited to the filing, registration or approval formalities with the NDRC, the commerce authority, the foreign exchange administration authority and/or the designated foreign exchange banks.
“Confidential Information”	means (a) the following confidential or proprietary information relating to any Group Company or other Party: organization, business, technology, finance, customers, suppliers, transactions or affairs, or their respective directors, officers or employees (whether or not such information is provided in writing, orally or otherwise prior to, on or after the date of this Agreement); (b) all information relating to the Transaction, including the terms of the Transaction Documents, and the identities of the parties to the Transaction and their respective affiliates; and (c) information or materials prepared by or on behalf of a Party that contain or otherwise reflect confidential information or derived from confidential information.
“Transaction”	means the provision of the Convertible Loan by the Investor to the Target Company in accordance with this Agreement, and the performance of all the debt-to-equity swaps in accordance with the terms, conditions and procedures stipulated in this Agreement.
“on a fully diluted basis” or “fully-diluted”	means the number of equity interests then issued or committed and reserved by Cayman Co, all equity interests, option arrangements (if any), warrant arrangements (if any), various arrangements (if any) convertible into equity interests and the effect of anti-dilution provisions (if any) that may be contained in the previous financing (excluding, for the avoidance of doubt, the Reserved Incentive Shares II, etc.).
“Laws”	means the national, international, state, provincial, local or similar statutes, laws, decrees, regulations, rules, standards, orders, directives, administrative regulations and the rules for the issuance and trading of securities on the relevant stock exchanges of China or other countries outside China.
“Anti-Corruption Law”	means (a) the principles stipulated in the Convention on Combating Bribery of Foreign Public Officials in International Business Transaction of the Organization for Economic Co-operation and Development, as well as the explanatory notes to the Convention, and (b) the laws of the countries where places of incorporation, principal places of business, and the places of registration of issues of securities of the Parties are located, and laws of the countries where places of incorporation, principal places of business, and the places of registration of issues of securities of the ultimate parent companies of the Parties are located that prohibit tax evasion, money laundering or other proceeds from criminal or bribery, or provide illegal remuneration, facilitation payments or other benefits to government officials or other personnel.

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

 

“Liabilities”	means all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, due or outstanding, ascertained or unascertained, including liabilities arising under any law, demand or government order and those arising under any contract, agreement, promise or undertaking.
“Business Day”	means any day other than Saturday, Sunday or other day on which banks in China are required or authorized by the laws of China to close.
“Transition Agreement”	means the shareholders’ and convertible loan investors’ rights agreement entered into by the Target Company, each of the existing shareholders, the Investors and other interested parties on the same day as the execution date of this Agreement, the form and content of which are set out in Exhibit III.
“Affiliate”	means, with respect to any person, any other person, directly or indirectly, controlling or controlled by or under common control with such person; and, for the avoidance of doubt: (a) in relation to any person who is a natural person, affiliate also includes his/her spouse, parents, children and their spouses, siblings and their spouses, parents of the spouse, siblings of the spouse, parents of the children’s spouses, trustees of any trust of which such natural person or his/her immediate family members are beneficiaries or discretionary objects, or any person controlled by the above persons shall also be deemed as an affiliate; (b) in relation to the Investor, affiliates shall include: (i) shareholders of the Investor; (ii) any entity or individual (including, where applicable, any general partner or limited partner) who has a direct or indirect interest in the Investor or any of its fund managers; (iii) any entity or individual that directly or indirectly controls, is controlled by, is under common control with, or is managed by, the Investor or its fund manager; (iv) a relative of any natural person referred to in (i) above; and (v) any trust controlled by or for the benefit of such individuals.
“Related-party Transaction”	means transactions between any Group Company and the following persons (other than transactions between each Group Company): (a) any shareholder, de facto controller, director, supervisor or senior management of any Group Company; and (b) affiliates of the persons referred to in (a) and directors, supervisors or senior management of these affiliates.

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

 

“Qualified IPO”	as defined in Article 5.10.1 of the Transitional Agreement.
“Core Employee”	means employees as shown in Appendix E hereto.
“Group”	means all Group Companies.
“Group Company”	means the Target Company, Cayman Co, Xcar Limited, Xcharge HK Limited, Xcharge Europe GmbH, US Co, Shaanxi Yuefeng Ruijia Construction Engineering Co., Ltd., Beijing Yichong Technology Co., Ltd. and other persons (if any) directly or indirectly controlled by the aforementioned entities in the future.
“Transaction Document”	means this Agreement, the Transition Agreement and other legal documents in relation to the closing of the convertible loans (for the avoidance of doubt, excluding any documents such as the shareholders’ agreement or articles of association of Cayman Co in relation to the debt-to-equity swap) as provided in this Agreement and all amendments to such documents.
“Control”	means, with respect to the relationship between or among two or more persons, the possession, whether or not actually exercised, directly, indirectly, or as trustee or executor, of the power to direct or cause the direction of business, affairs, management or decision-making of a person,  whether through the ownership of equity, voting right or voting securities, or as trustee or executor, and whether by contract, agreements, arrangements, trust arrangements or otherwise, including but not limited to: (a) the direct or indirect ownership of 50 per cent (50%) or more of the issued shares or equity interests of such person; (b) the direct or indirect ownership of 50 per cent (50%) or more of the voting rights of such person; or (c) the direct or indirect right to appoint a majority of the members of the board of directors or similar governing body of such person. “Controlled by” and “under common control with” shall be interpreted accordingly.

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

 

“Trade Control Law”	means applicable trade or economic sanctions or embargoes, restricted parties lists, trade control laws relating to the import and export of goods, re-export, transfer or trade in goods, services or technology, anti-boycott laws and other similar regulations, rules, restrictions, orders or requirements relating to the foregoing, including but not limited to laws, regulations or requirements of EU, the United Kingdom, the United States or other governments applicable to this Agreement or to a party involved in the performance of this Agreement.
“Restricted Party”	means (i) an individual, entity or organization subject to national, regional or multilateral trade or economic sanctions under the trade control law; or (ii) an individual, legal person, entity or organization, including its/her/his affiliates, directors, officers or employees, directly or indirectly owned or controlled by, or acting on behalf of, such individual, entity or organization.
“US Dollars” or “USD”	means the lawful currency of the United States.
“Encumbrance”	means any security interest, pledge, charge, lien (including but not limited to tax preference, right of withdrawal and subrogation), lease, license, debt burden, priority arrangement, restrictive undertaking, condition or restriction of any kind, including but not limited to any restriction on the use, voting, transfer, gain or other exercise of any interest in the ownership.
“Renminbi” or “RMB”	means the lawful currency of the PRC.
“Person”	means any individual, partnership, company, limited liability company, joint stock limited company, association, trust, cooperative organization, governmental department, unincorporated organization, other foundation, corporation aggregate, unincorporated organization, or other entity.
“Trade Secret”	means trade secrets, know-how, and other confidential or proprietary technologies, businesses and other information, including business processes, business models, manufacturing and production processes and know-how, research and development information, technologies, drawings, specifications, designs, plans, solutions, technical data, financial, marketing and business data, pricing and cost information, business and marketing plans, customer and supplier directories and information, and all rights to restrict the use or disclosure of the foregoing in any jurisdiction.
“Restricted Party”	means (i) an individual, entity or organization subject to national, regional or multilateral trade or economic sanctions under the trade control law; or (ii) an individual, legal person, entity or organization, including its/her/his affiliates, directors, officers or employees, directly or indirectly owned or controlled by, or acting on behalf of, such individual, entity or organization.

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

 

“Tax”	means any and all taxes, fees, levies, duties and other charges of any kind levied by the tax authorities or other similar government authorities (together with any and all late fees, fines or penalties, surcharges and additional sums received as a result thereof), including but not limited to taxes or other charges levied on income, royalties, incidental income or other profits, gross income, property, sales, use, wages, employment, social security, unemployment compensation or net worth;  taxes or other charges that are of the nature of consumption tax, withholding tax, transfer tax, VAT or business tax;  license, registration and documentation fees;  and duties, taxes and similar charges.
“Tax Authority”	means any national, international, state, provincial or local government authority having jurisdiction over the administration, assessment, determination, collection or other levies of taxes inside and outside China.
“Loss”	means liabilities, losses, damages, claims, fees and expenses, interest, penalties and taxes.
“Knowledge”	means the maximum extent of knowledge acquired by a person after due investigation.
“Claim”	means any claim, legal proceeding, demand, audit, inquiry, investigation, request, hearing, violation notice, litigation, action, proceeding or arbitration, whether civil, criminal, administrative or otherwise.
“Governmental Authority”	means any international, national, state, provincial, local or other similar government, or governmental, regulatory or executive organ or commission exercising administrative functions or similar governmental authority or any court, tribunal or judicial or arbitration institution in or outside the PRC.
“Governmental Official”	means an officer or employee of any government or government agency (at any level) , ministry or department; any individual exercising official functions of the government regardless of rank or position;  officials or employees of companies wholly or partly controlled by the government (such as state-owned oil companies), a political party or any official of a political party;  a candidate for any political office, or an officer or employee of any international public organization, such as the United Nations or the World Bank;  and the immediate family members (i.e. spouse, dependent children, siblings, parents or family members) of any of the above.

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

 

“Government Order”	means any order, writ, judgment, injunction, decree, ruling, decision, verdict or award made, issued or entered by or with any Governmental Authority.
“Intellectual Property Right”	means all rights derived from or relating to the following in the world, whether protected, created or derived under the PRC law or other foreign law: (a) inventions, whether patentable or not, actually used or not or application for patent submitted or not; (b) patents, patent applications, registration of inventions or any improvements thereof; (c) trademarks, service marks, trade descriptions, trade names, company names or goodwill, whether registered or not; (d) copyright (whether registered or not), copyright registration or copyright registration application; (e) software and official account for social media software; (f) trade secrets, business information (whether confidential or not), proprietary technology or non-patented technology; (g) industrial design, whether registered or not; (h) database and data; (i) domain name; (j) any form of carrier of any of the foregoing; (k) any right to acquire or apply for patent rights or registered trademark rights, copyrights and domain names; and (l) the right to claim damages, costs or attorneys’ fees in connection with infringement or abuse of any of the foregoing.
“PRC”	means the People’s Republic of China, and for the purposes of this Agreement, excluding the Hong Kong Special Administrative Region of the People’s Republic of China, the Macau Special Administrative Region of the People’s Republic of China, and the Taiwan region.
“PRC Law”	means all laws, administrative regulations, rules, regulations, policy documents, and regulations, decisions, and policy documents of the local government or authorities thereof then in force in the PRC.

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

 

“Material Adverse Effect”

means, other than those caused by or reasonably expected to be caused by the matters stipulated under the Restructuring Framework Agreement, (a) any guarantor enters bankruptcy proceedings, conducts liquidation, winding-up, restructuring or debt restructuring, and sells material assets; or (b) any Group Company loses any material permits, qualifications, certificates or licenses required for carrying on its business activities; or (c) any circumstances, changes or effects involving any of the Guarantors occurs, which, individually, aggregately, directly or indirectly: (i) have or could reasonably be expected to have a material adverse effect on the existence, business, assets, intellectual property, liabilities (including but not limited to contingent liabilities), financial position, operating results or trading prospects of any Group Company; or (ii) have or could reasonably be expected to have a material adverse effect on the qualification, license or ability of any Group Company to carry on its current business; or (iii) have or could reasonably be expected to have a material adverse effect on the validity, binding effect, and performance of the Transaction Documents or on the Qualified IPO of any Group Company.

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

 

Appendix B       Registered Capital and Percentage of Shares To Which Shareholders are Entitled as at the Date of This Agreement

 

Shareholder		Capital commitment (USD)				Paid-up registered capital (USD)				Capital contribution ratio
Rui Ding			1,399,900				1,399,900				20.21	%
Yifei Hou			787,435				787,435				11.37	%
Beijing X-Charge Management Consulting Center (Limited Partnership)			500,000				500,000				7.22	%
Suzhou Eastern Bell III Investment Center (Limited Partnership)			125,000				125,000				1.80	%
Suzhou Eastern Bell Longyu Investment Center (Limited Partnership)			125,000				125,000				1.80	%
Zhen Partners IV (HK) Limited			530,753				530,753				7.66	%
Foshan Hygoal Zhixing XIV Equity Investment Center (Limited Partnership)			291,750				291,750				4.21	%
GGV (Xcharge) Limited			863,452				863,452				12.47	%
Xiamen Jiyuan Ronghui Investment Management Partnership (Limited Partnership)			294,118				294,118				4.25	%
Beijing Foreign Economic and Trade Development Guidance Fund(Limited Partnership)			867,268				867,268				12.52	%
Shell Ventures Company Limited			661,476				661,476				9.55	%
Beijing China-US Green Investment Center (L.P.)			185,176				185,176				2.67	%
Chengdu Peikun Jingrong Venture Capital Partnership (Limited Partnership)			220,492				220,492				3.18	%
Chengdu Peikun Songfu Technology Partnership (Limited Partnership)			73,497				73,497				1.06	%
Total			6,925,317				6,925,317				100.00	%

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

 

Appendix C-1      Representations and Warranties of Guarantors

 

Unless otherwise expressly provided in this Exhibit or the context otherwise requires, the terms used in this Exhibit shall have the same meanings as in this Appendix A. However, for the purposes of this Exhibit, unless otherwise expressly stated, the definition of “Company” shall include the Target Company and other Group Company (if any).

 

1.

The Company is a limited liability company duly incorporated under the laws of the place of incorporation. As of the date of this Agreement, the registered capital of the Target Company of USD Twelve Million, Four Hundred and Twenty-Seven Thousand, Nine Hundred and Fifty-Two and Point Ninety-Five (USD12,427,952.95) has been legally paid up.

 

2.

The Founders are Chinese citizens. The Company and the Founders have civil rights and civil capacity to execute this Agreement and other Transaction Documents to which they are parties and perform their obligations thereunder in accordance with applicable laws.

 

3.

The Company and the Founders have validly executed this Agreement and, if executed, other Transaction Documents to which they are parties. As of the Closing Date, the Company and the Founders have obtained all necessary authorizations, permits and approvals (including but not limited to the internal authorization of the Company) for the execution, delivery and performance of the above documents and the rights and obligations thereunder. The Company and the Founders are legally able to enter into this Agreement and other Transaction Documents to which they are parties and perform their obligations thereunder. The obligations and liabilities of the Company and the Founders under this Agreement and other Transaction Documents are legal, valid and enforceable.

 

4.

The execution and performance by the Company and the Founders of this Agreement and other Transaction Documents to which they are parties do not violate the PRC Law; do not contravene articles of associations or other constitutional documents of the Company; and are not in breach of any judgment, ruling, award of arbitration tribunal, administrative decision or order of a court binding on or applicable to the Company or the Founders. Any such execution or performance does not violate any document, contract or agreement to which the Company or any of the Founders is a party or which is binding on the Company or any of the Founders or its assets; and will neither result in a breach of any conditions in relation to the grant and/or continuation of any approval granted to the Company nor result in the termination of, revocation of or additional conditions upon any approval granted to the Company.

 

5.

The Company has all the necessary approvals of Governmental Authority and any third party for the Principal Business. These approvals are in full force and binding and the Company has successfully passed various tests such as annual inspections required for such approvals and there are no circumstances that could result in the revocation, cancellation, restriction, non-renewal or invalidity of such approvals. The Company has been in compliance with the requirements of such approvals and has never engaged in violation of such approvals in any respect. The Company has never received any written or verbal notice from any Governmental Authority that it has violated any of the requirements under any such approval. The Company has never engaged in any business activities without proper approval. In particular, the Company and the Founders acknowledge that the business currently engaged by the Company does not involve any value-added telecommunications business and does not require the application for a value-added telecommunications business license.

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

 

6.

There is no mortgage, pledge or other encumbrance over the equity interest in the Company. Save as agreed in the Transition Agreement or the Restructuring Framework Agreement, there are no pre-emptive rights, convertible securities, or other outstanding rights, or additional equity commitments in respect of any registered capital of the Company, which would or might subject the Founders or the Company to obligations to dispose of or increase any registered capital of the Company. There is no existing or potential legal dispute or dispute regarding the equity interest in the Company and the property share of Beijing X-Charge Management Consulting Center (Limited Partnership). Save for the Articles of Association, the Transition Agreement, the Restructuring Framework Agreement and other relevant documents signed for the purpose of the Red Chip Restructuring, no legal documents concerning the shareholding or shareholders’ rights of the Company were entered into or made between the Founders or between the Founders and third parties.

 

7.

The Company has no branch other than the Group Company, X-Charge Technology (Shenzhen) Co., Ltd. and Beijing X-Charge New Energy Technology Co., Ltd., and does not directly or indirectly own any shares, equity or other interests in any entity (meaning any enterprise, commercial bank, company, limited liability company, partnership, trust, body, joint venture, organization, government agency or any other entity of any kind), or has any other investment or investment commitments.

 

8.

The Company’s account books and records are complete. The Founders and the Company has provided to the Investor the consolidated financial statements of the Target Company (the “Financial Statements”) for the period from the incorporation of the Target Company up to October 31, 2022 (the “Balance Sheet Date”), which have been prepared in accordance with the PRC Accounting Standards, and contain all relevant and substantive financial information of the Target Company at the consolidation level. The financial information of the Target Company disclosed in the financial statements as at their respective dates is true, accurate and complete in all respects and does not contain any false or misleading statements, and is in compliance with the accounting standards generally accepted in the PRC. The Company does not have any unrecorded funds, assets or liabilities, and there are no off-balance sheet charges or expenses, and the accumulation and/or utilization of all funds of the Target Company are fully and properly reflected in the financial statements. The balance sheet included in the financial statements (the “Balance Sheet”) includes a complete and accurate description of all loans, debts, liabilities, guarantees and other contingent liabilities of the Target Company that have occurred or are reasonably expected to occur as of the balance sheet date. Except for the debts reflected in the balance sheet, the Target Company does not have any debt of any nature, whether incurred, ascertained or contingent, and whether or not due or to be due. The Company does not have any contingent liabilities other than those reflected in the financial statements, and neither serves as the guarantor, indemnifier, warrantor or other obligor for any liabilities of the Founders or any other third party, nor provides any guarantee for the debts or benefits of any of the Founders or any other third party. From the balance sheet date to the Closing Date, the Company did not incur any loans, debts, liabilities, guarantees or other contingent liabilities (other than those arising in the ordinary course of business and due to the Restructuring Framework Agreement).

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

 

9.

Except for the Transaction as provided in this Agreement, the Company has not experienced any of the following circumstances other than events provided in the Restructuring Framework Agreement since the balance sheet date:

 

(a)

any changes in the assets, liabilities, financial position or operating results of the Company as reflected in the financial statements, except for changes arising in the ordinary course of business and having no material adverse effects;

 

(b)

any damage or loss, whether insured or not, that would cause a material adverse effect on the Company;

 

(c)

any waiver or exemption by the Company of its valuable rights or of its material claims;

 

(d)

any discharge or release of any encumbrances, rights, or restrictions on rights or payment obligations of the Company, except for those arising in the ordinary course of business and having no material adverse effect;

 

(e)

sales, exchange or otherwise disposal of any of operational assets by the Company, except for changes that arise in the normal course of business and do not have a material adverse effect;

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

(f)

significant changes in contracts or agreements binding on or against the Company or its assets, except for changes arising in the ordinary course of business and having no material adverse effect;

 

(g)

any material change in the remuneration arrangements or agreements of the management team, directors or shareholders;

 

(h)

the resignation of or termination of employment with any Core Employee;

 

(i)

any pledge, charge, transfer or guarantee or lien of any material property or assets of the Company, except for changes arising in the ordinary course of business and having no material adverse effects;

 

(j)

any prepayment made by the Company to its employees, management team, directors or affiliates of the foregoing, and provision of loans or guarantee by the Company to the foregoing, except for the payment of traveling expenses and other expenses in the ordinary course of business;

 

(k)

any dividend, reservation, contribution or other distribution of the Company’s registered capital, or any direct or indirect redemption, purchase, acquisition, increase or reduction of the company’s equity;

 

(l)

any sale or transfer of the Company’s assets which is reasonably expected to have a material adverse effect;

 

(m)

any other event or circumstance of whatever nature reasonably expected to have a material adverse effect on the Company.

 

10.

The Company has legally entered into lease contracts in respect of all the leased real properties. The lease contracts are legal, valid, binding and enforceable, and there is no breach of contract.

 

11.

The Company legally owns all tangible movable properties necessary for its Principal Business, including all tangible movable properties as reflected in the financial statements, and is able to operate its tangible movable properties independently. The Company has ownership of such tangible movable properties and all tangible movable properties are free from any encumbrance and are in good condition for efficient use. There are no contracts, agreements, undertakings, documents or laws and regulations, governmental regulations, governmental rules, measures, litigation or other legal proceedings that may affect the Company’s legal and complete ownership or use of its tangible movable properties. The Company’s use or utilization of tangible movable properties for its operations is in compliance with applicable laws and does not infringe on the rights and interests of any third party.

 

 

12.

Intellectual property and information security

 

(a)

The Company legally owns the ownership, interests and rights of all intellectual property rights necessary for its Principal Business, and these intellectual property rights does not conflict with or infringe on the intellectual property rights or other rights of any other party, and they are free from encumbrance. No products or services provided by the Company in the course of its operations have been, and will infringe on intellectual property or other rights of any third party.

 

(b)

The Founders or the Company has not received any notice alleging that it has infringed, or that the business it operates would infringe, on all intellectual property rights or any other rights of any other party. It is not necessary for the Company to use any invention by any employee (or by any person currently proposed to be employed by the Company) prior to employment with the Company. Each employee at the supervisor level or above has signed an agreement with the Company to transfer any intellectual property developed by such employee during his/her work in the Company to the Company and such employees are restricted from disclosing any confidential information of the Company. Any such employee does not or did not exclude his/her inventions or results from the inventions he/she transfers/transferred to the Company. There is no violation of the provisions of these agreements on the part of the employees.

 

(c)

There are no pending legal proceedings or allegations by the Company that any third party is infringing on or hindering its intellectual property rights, and the Company has no plan to institute such proceedings or allegations. There are also no pending allegations or proceedings by any third party alleging that the Company or any of the Founders is infringing on or hindering its intellectual property rights, and there are no such allegations or proceedings against the Company, any of the Founders or assets owned by them.

 

(d)

The Company has taken commercially prudent safety measures to protect the value of its intellectual property rights. The collection, use and storage of user information and data by the Company do not violate the PRC Law (including but not limited to the Cybersecurity Law), and the Company has legal and valid rights, titles and interests in such user information and data.

 

13.

The Company is engaged in the Principal Business; and it does not engage in any other business or operational activities. The Founders and their affiliates (other than the Group) neither hold or possess any assets (including real properties, tangible movable properties, intellectual property or other assets) or contracts related to the Principal Business, nor does they employ any personnel engaged in the Principal Business.

 

 

14.

The Company has been and is in full compliance with all the PRC Laws applicable to its business conduct or operations, and the ownership, management and use of any of its assets and properties or other applicable legal provisions in other jurisdictions (including but not limited to relevant provisions on overseas investment, and taxation, etc.). There has not been any event, circumstance or situation which might reasonably be expected to constitute or directly/indirectly lead to a violation of any of the foregoing laws. Since the date of incorporation of the Company, it has been complying with the applicable laws in relation to all environmental aspects of its business operations, and it does not commit any violation of any such applicable laws.

 

15.

No litigation, arbitration, administrative investigation or other legal or administrative proceedings against the Company or affecting the Company or the properties, rights, rights of license, operations or businesses of the Company is pending or threatened or is likely to be instituted to the knowledge of any of the Founders or the Company; and there is t any event, situation or circumstance that may directly or indirectly result in commencement of any such legal or administrative proceeding or provide a basis for any such legal or administrative proceeding. There is neither order, request, application, decision, ruling, resolution, or other action requiring the Company to be dissolved, bankrupt, closed down, or liquidated or to be in similar position, nor any mortgage, enforcement of judgment or subpoena against assets of the Company. The Company is not insolvent or unable to repay debts.

 

16.

In compliance with various tax regulations, the Company has declared all taxable income in a correct, complete and timely manner in accordance with the provisions of the national and local tax authorities of the PRC or local department competent for tax, and paid all taxes due and payable accordingly. The Company has withheld and paid all taxes that should be withheld and paid by the Company. The Company is neither required to pay any additional taxes nor subject to penalty due to its violation of the relevant tax laws, regulations and rules. The Company has made any provision related to tax payment in its financial statements in accordance with applicable accounting standards; and as of the balance sheet date, the amounts shown on the balance sheets for tax purposes have fully covered all taxes incurred payable by the Company. The Company has not received any notice from the Tax Authority or any other competent authority reminding the Company of paying the unpaid taxes or the tax deficit or requesting the Company to submit any tax return for inspection or audit. There is no outstanding audit, measure, procedure, investigation, dispute or claim, and there is no tax claim that may be made by the Tax Authority or other competent authority against the Company.

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

 

17.

The material contracts to which the Company is a party are legal, valid, binding and enforceable to the parties thereto, and there is no breach of contract by the Company or other parties to the material contracts in the performance. The Transaction will not cause all material contracts to be subject to the consent or approval of any governmental authorities, institutions, organizations or individuals to maintain their continuous legal validity. In this Agreement, “material contracts” means all contracts, agreements, memoranda, letters of intent or other legal documents which are material to the survival, development, finance or business of the Company or which constitute material restrictions on the Company, or the absence of which would have a material adverse effect on the Company’s existence, development, financial position or business, whether or not such contracts or agreements are entered into in the ordinary course of business, including but not limited to: (i) any contracts with a transaction amount exceeding one million Chinese yuan (RMB1,000,000), (ii) contracts concerning the transfer, sale, licensing, purchase or disposal of material property or material intellectual property rights of the Company, (iii) exclusive contracts or contracts that restrict the Company’s competitiveness, (iv) business contracts with the Company’s top ten partners, suppliers and customers, (v) contracts involving equity sales, equity acquisitions, investments, financing, joint ventures, mergers and acquisitions, reorganizations, voting rights arrangements, profit sharing or transfer of control, (vi) contracts creating encumbrance on the Company’s equity or material property, etc., and (vii) contracts or agreements with governmental authorities.

 

18.

Labor and social insurance

 

(a)

Except that the Target Company has not paid social insurance and contributions to the housing provident fund for all employees in accordance with the statutory standards, all PRC companies have been registered with the authorities for social insurance and housing provident fund in accordance with the PRC Law and paid social insurance and contributions to the housing provident fund for all employees in accordance with the statutory standards. The Company does not commit any violation of applicable PRC Laws on labor (including but not limited to labor contracts, wages, working hours, social insurance and housing provident fund contributions, etc.) or any liabilities, contingent liabilities or unpaid fees as required by applicable PRC Laws on labor. The Company has paid the withholding tax for the employees to the relevant Governmental Authority, or has withheld or retained the outstanding amount payable by the employees of the Company (if necessary) for such Governmental Authority. The Company does not have any unpaid wages, taxes, penalties or any amount resulting from the violation of the aforesaid obligations. The Company has no outstanding obligation to pay any payable but not paid monetary compensation, service pay or other similar compensations in connection with the employment.

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

 

(b)

None of the Core Employees has proposed to terminate their employment with the Company, and none of them is in a position that they cannot continue to be the employees of the Company. At present, the Company has no intention to terminate the employment with any Core Employees. Unless otherwise required by the PRC Law, there is no outstanding compensation or other payment after the termination of the employment between the Company and its employees.

 

(c)

Except as otherwise provided by the applicable laws (including but not limited to social insurance and housing provident fund as provided by China laws), the Company has not participated in, and is not subject to, any other pension, retirement, profit sharing, deferred compensation, bonus, incentive or other employee benefits plans, arrangements, agreements or understandings, and there is no other pension, retirement, profit sharing, deferred compensation, bonus, incentive or other employee benefits plans, arrangements, agreements or understandings to which any employee or former employee who has left the Company (or the beneficiary thereof, if any) is entitled. All companies based in the PRC have been making contributions to social insurance and housing provident funds for their employees in accordance with the PRC Law.

 

(d)

There is neither outstanding labor dispute or controversy nor any potential labor dispute or controversy between the Company and its existing employees or its former employees (if any) .

 

(e)

To the best knowledge of the Guarantors, the Founders and the employees of the Company do not undertake any non-competition obligations to his/her former employer or any other entity. Therefore, there is no existing or potential breach of any agreement with his/her former employer, and there is no existing or potential dispute with his/her former employer, including but not limited to infringement of the intellectual property or trade secrets of his/her former employer. They do not violate any non-competition restrictions with his/her former employer and no inducement to his/her former employer’s employees.

 

(f)

The Core Employees of the Company are not subject to any contract (including license, undertaking or other obligations) or any order, judgment or order of any Governmental Authority or court other than the contract signed between the Core Employees and the Company, which materially affects the Core Employees’ ability to serve the interests of the Company or will be in conflict with the business of the Company.

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

 

(g)

Any Founder and Core Employees do not directly or indirectly hold any proportion or number of equity or shares in any other business entity that is the same as, similar to or in any other competitive relationship with the Company’s Principal Business (except for holdings of up to 1°% equity interest in a listed company), and does not hold any position in any business entity other than the Company and its subsidiaries that is the same as, similar to or in any other competitive relationship with the Company’s Principal Business. In the past three (3) years, none of the Core Employees: (i) has been convicted or is in the process of trial (excluding traffic violations); (ii) has been permanently or temporarily prohibited from acting as the legal representative, senior management or director of any other target company pursuant to any order, judgment or decree of any court of competent jurisdiction (which has not been revoked or suspended); (iii) has been rendered a judgment by a competent court or other competent authority in contravention of any securities law, trade law or unfair trade law and such judgment or ruling has not been revoked or suspended.

 

(h)

None of the Founders and, to the best knowledge of the Company, the Core Employees, directly or indirectly, holds any equity interest in any person other than the Company, and they are not employed by any person other than the Company, or hold any position in or provide any services to them.

 

19.

Any transactions (if any) between the Company and any affiliates (including but not limited to the Founders and their affiliates), current or former employees, directors, consultants or affiliates of any of the foregoing (collectively “Related Person”) since the incorporation of the Company are fair, and there is no unfair or illegal related transactions between any Related Person and the Company by taking advantage of their affiliate status. As of the Closing Date, save for Rui Ding Related Loan, the Company neither had any contracts, agreements or other transactions with any Related Person that were still in force or had not been completed, nor did it had any claims, liabilities and other receivables (excluding, for the avoidance of doubt, any contracts, agreements, transactions, claims, liabilities or any other receivables payable related to labor).

 

20.

None of the Founders and their affiliates directly or indirectly operates, participates in or owns any business which is the same as, similar to or in any other competitive relationship with the Principal Business; and none of the Founders and their affiliates directly or indirectly holds any tangible or intangible assets that are necessary for the Company to conduct its Principal Business. None of the Founders directly or indirectly holds any proportion or number of equity, shares or related interests in any other business entity that is the same as, similar to or in any other competitive relationship with the Company’s Principal Business (except for holding not more than 1% equity interest in a listed company).

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

 

21.

In the past five (5) years, none of the Founders as natural persons: (i) has been convicted or is in the process of trial (excluding traffic violations); (ii) has been permanently or temporarily prohibited from acting as the legal representative, senior management or director of any company pursuant to any order, judgment or decree of any court of competent jurisdiction (which has not been revoked or suspended); (iii) has been rendered a judgment by a competent court or other competent authority in contravention of any securities law, trade law or unfair trade law and such judgment or ruling has not been revoked or suspended.

 

22.

The Guarantors represent and warrant to the Investor that, in connection with the Transaction,

 

(a)

no payment, gift, promise or other benefit has been paid, offered or authorized to be given, directly or through any other person or entity, by any officer, agent or employee engaged by or acting on behalf of the Guarantor to any Governmental Official or entity or other person, which would violate the Anti-Corruption Law or any other applicable law, or cause another party to violate the Anti-Corruption Law;

 

(b)

no officer, agent or employee engaged by or acting on behalf of the Guarantor has requested, agreed to receive or accepted, directly or through any other person or entity, any payment, gift, promise or other benefit that is in violation of the Anti-Corruption Laws or any other applicable laws;

 

(c)

the Guarantor does not violate any trade control laws and is not a Restricted Party;

 

(d)

neither the Guarantor nor any of officers, agents or employees engaged by the Guarantor or acting on behalf of the Guarantor is or has been involved in any formal investigation or other action taken by the relevant authorities in connection with any alleged violation of the Trade Control Law or the Anti-Corruption Law;

 

(e)

unless otherwise notified in writing to the other party, to the best of his knowledge through reasonable care, none of the officers, agents or employees engaged by the Guarantor or acting on behalf of the Guarantor is a Governmental Official;

 

(f)

the information provided by each party to the other party about the ultimate beneficial ownership of each party is accurate;

 

(g)

the Guarantor (and any person acting on behalf of the Guarantor) carries on its business in accordance with the Anti-Corruption Law and the Trade Control Law, and has not engaged in any act or action that violates the Trade Control Law or is prohibited by any Trade Control Law;

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

 

(h)

to the best of its knowledge, the Guarantor has disclosed to the Investor any internal or external investigations conducted by the relevant authorities in respect of potential or actual violations of the Anti-corruption Law or Trade Control Law in relation to the business;

 

(i)

As of the Closing Date, the Company and its business operations have maintained sufficient written policies and procedures to ensure compliance with the Anti-Corruption Law and the Trade Control Law;

 

(j)

As of the Closing Date, the Company and its business operations have always maintained sufficient internal control, including but not limited to using reasonable efforts to ensure that all transactions are accurately recorded and reported in the books and records to reflect their relevant activities, such as the purpose of the transaction, the counterparty, the transaction partner or the transaction subjects.

 

23.

Beijing Dingchong Technology Co., Ltd. has not actually commenced business operation after its incorporation, therefore it does not pose horizontal competition to the Company.

 

24.

From the date of this Agreement to the Closing Date, there were no events, facts, conditions, changes or other circumstances which have or may reasonably be expected to have a material adverse effect on the assets, liabilities, earnings prospects and normal operations of the Company.

 

25.

The Founders and the Company have truthfully and completely disclosed to the Investor all the information, documents and materials required by the Investor, the information, documents and materials that are substantially related to the performance of this Agreement by the Founders and the Company, and the information, documents and materials that have a substantial impact on the willingness of the Investor to execute this Agreement. The information, documents and materials disclosed by the Founders and the Company to the Investor are true, accurate and complete, and do not contain untrue or misleading statements. The Founders and the Company have notified the Investor at any time after the execution of this Agreement of any circumstances that come to their knowledge and would render the representations, undertakings or warranties they made under this Agreement untrue, incorrect or incomplete, and have taken such steps as may be reasonably required by the Investor to remedy or announce such circumstance. The Founders and the Company do not knowingly or willfully omit or refuse to provide the Investors with any information that the Founders and the Company reasonably believe will affect the Investors’ willingness to proceed with the Transaction in accordance with the terms of this Agreement.

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

 

Appendix C-2       Representations and Warranties of Investors

 

1.

The Investor is an entity duly incorporated under the PRC Law and is validly existing. The Investor has the capacity for civil rights and civil conduct under the PRC Law to execute this Agreement and other Transaction Documents to which it is a party and to perform its obligations thereunder.

 

2.

The Investor has validly executed this Agreement and other Transaction Documents to which it is a party (if executed). As of the Closing Date, the Investor has obtained all necessary authorizations, permits and approvals (including but not limited to internal authorizations) for its execution, delivery and performance of the above documents and the rights and obligations thereunder.

 

3.

The source of funds for the Transaction is in compliance with laws and regulations. The Investor participated in the Transaction for its own investment purpose, and it has no arrangement for any form of shareholding entrustment with any third party.

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

 

Appendix D      Contact Details

 

 

Appendix E       List of Core Employees

  

 

Exhibit I      Confirmation of Satisfaction of Conditions Precedent to Closing

 

 

Exhibit II       [Reserved]

 

Beijing X-Charge Technology Co., Ltd.

Appendix to the Convertible Loan Investment Agreement

 

 

Exhibit III      Transitional Shareholders’ and Convertible Loan Investors’ Rights Agreement

 

 

Exhibit IV      Restructuring Framework Agreement

 

 

Exhibit V      Key Operating Data of Group Company

 

 

 

 Exhibit 10.9

 

Strictly confidential

 

***Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(a)(6). Such excluded information is not material and is the type the registrant treats as private or confidential. Such omitted information is indicated by brackets (“[***]”) in this exhibit.***

 

Adjustment Agreement on the Convertible Loan Investment

  

This Adjustment Agreement on the Convertible Loan Investment (the “Agreement”) is made and entered into as of May 27, 2024 (the “Execution Date”) by and among the following parties in Beijing, China:

  

A.

Beijing X-Charge Technology Co., Ltd., a limited liability company incorporated and validly existing under the laws of China with its registered address at Room 1147, No 1, 1F, Building 2, Yard 9, An Ning Zhuang West Road, Haidian District,. Beijing China (the “Target Company”);

 

B.

XCHG Limited, a limited liability company established under the laws of the Cayman Islands, with its registration number: 384991 (the “Cayman Company”);

 

C.

XCharge Europe GmbH, a limited liability company established under the laws of Germany;

 

D.

Rui Ding, a natural person with Chinese citizenship, ID Card No.: [***]

 

E.

Yifei Hou, a natural person with Chinese citizenship, ID Card No.: [***] and

 

F.

Shell Ventures Company Limited, a limited liability company established and validly existing under the laws of China with its registered address at Floor 8, Building 1, 818 Shenchang Road, Minhang District, Shanghai (the “Shell Ventures”).

 

The above parties are hereinafter individually referred to as a “Party” or collectively as “Parties”.

 

Recital

 

WHEREAS, the Parties and other relevant parties entered into a Convertible Loan Investment Agreement (the “Convertible Loan Investment Agreement”) on June 20, 2023, pursuant to which Shell Ventures shall provide a convertible loan to the Target Company in the principal amount of RMB15,000,000 (the “Shell Ventures Convertible Loan”) subject to the terms and conditions of the Convertible Loan Investment Agreement, and the Shell Ventures Convertible Loan will be converted into shares of the Cayman Company or the Target Company pursuant to the terms and conditions of the Convertible Loan Investment Agreement.

  

WHEREAS, Shell Ventures provided the Shell Ventures Convertible Loan to the Target Company on July 7, 2023 (the “Convertible Bond Delivery Date”).

  

WHEREAS, the Parties wish to further agree upon certain arrangements with respect to the Shell Ventures Convertible Loan.

  

NOW, THEREFORE, in the spirit of mutual benefit and friendly negotiation, the Parties hereby agree as follows:

 

 

Adjustment Agreement on the Convertible

 

Chapter 1     Adjustment Arrangement on the Convertible Loan Investment

  

Article 1.1      Adjustment Arrangement on the Convertible Loan Investment

  

Notwithstanding anything to the contrary in the Convertible Loan Investment Agreement or any other document relating to the Shell Ventures Convertible Loan, the Parties agree that the following adjustments shall be made to the arrangements with respect to the Shell Ventures Convertible Loan and shall be binding on the Parties from April 7, 2024 (the “Effective Date”):

 

(1)

The Parties agree that, effective as of the Effective Date, the repayment arrangements for the Shell Ventures Convertible Loan shall be adjusted as follows:

  

The Target Company shall repay to Shell Ventures the full amount of the principal and interest of the Shell Ventures Convertible Loan in a lump sum on the repayment date as determined in accordance with items (a) or (b) below (as applicable), where the principal is RMB15,000,000 and the interest is RMB1,126,027 (calculated at a simple annual interest rate of ten percent (10%), accruing daily and calculated based on the actual number of days in a year (365 days)), from the Convertible Bond Delivery Date to the end of the 9th month after the Convertible Bond Delivery Date) (collectively, the “Shell Ventures Convertible Bond Principal and Interest”). Once the Target Company has made such payment of the Shell Ventures Convertible Bond Principal and Interest to Shell Ventures, it shall be deemed that the Target Company has fully repaid all principal and interest due on the Shell Ventures Convertible Loan.

 

a.

If the Cayman Company completes its Qualified Initial Public Offering (having the meaning of “Qualified IPO” in the IRA (as defined below)) no later than September 30, 2024, and the amount raised in such Qualified Initial Public Offering is not less than USD20,000,000, the Target Company shall repay the Shell Ventures Convertible Loan Principal and Interest to Shell Ventures on the one hundred and eightieth (180th) day from the date on which the Cayman Company completes its Qualified Initial Public Offering (or on such other date as may be mutually agreed in writing by the Target Company and Shell Ventures); or

 

b.

If the Cayman Company fails to satisfy all the conditions set forth in item (a) above by September 30, 2024, the Target Company shall repay the Shell Ventures Convertible Loan Principal and Interest to Shell Ventures on October 15, 2024 (or on such other date as may be mutually agreed in writing by the Target Company and Shell Ventures).

 

In the event of a late repayment, a simple annual interest rate of twelve percent (12%) shall be charged on the overdue principal amount of the Convertible Loan from the date of the late repayment.

 

(2)

The Parties agree that, effective as of the Effective Date, Shell Ventures shall not be entitled to, nor shall it be obliged to, convert any or all of the principal and/or interest of the Shell Ventures Convertible Loan into shares or equity of the Cayman Company or the Target Company, and the Cayman Company or the Target Company shall have no obligation to issue any shares or equity to Shell Ventures in respect of the Shell Ventures Convertible Loan or to take any action or execute any document in connection therewith. The Parties agree that the Warrant to Purchase Series B+ Preference Shares (the “Shell Ventures Warrant”) issued to Shell Ventures by the Cayman Company in respect of the Shell Ventures Convertible Loan prior to the signing of the Agreement shall terminate on April 7, 2024.

  

 

(3)

The Parties agree that, effective as of the Effective Date, in light of the Shell Ventures' lack of right (and obligation) to convert any or all of the principal and/or interest of the Shell Ventures Convertible Loan into shares or equity of the Cayman Company or the Target Company, Shell Ventures shall not be entitled to any rights, privileges or preferences as a holder of the Shell Ventures Warrant in connection with the Shell Ventures Convertible Loan in the Cayman Company or any other group company (having the same meaning as in the Convertible Loan Investment Agreement) or any other priority, consent rights, or other rights or privileges as a convertible bond investor in connection with the Shell Ventures Convertible Loan (including but not limited to rights as a “Warrant Holder” or “Series B+ Warrant Holder” under the Cayman Company's Amended and Restated Investors’ Rights Agreement (the “IRA”) and its Second Amended and Restated Memorandum and Articles of Association, as well as the consent rights under Sections 4.1 (Transition Period Commitment) and 4.2 (Post-delivery Commitment) of the Convertible Loan Investment Agreement). For the avoidance of doubt, Shell Ventures’ right to demand repayment of the Shell Ventures Convertible Bond Principal and Interest in accordance with the terms of the Agreement shall not be affected.

 

 

(4)

The Parties agree that, effective as of the Effective Date, the repayment arrangements for the Shell Ventures Convertible Bond Principal and Interest and the arrangements regarding conversion shall be governed by the provisions of items (1) to (3) above of this Article 1.1, and Shell Ventures shall have no right to demand that the Target Company, and the Target Company shall have no obligation to, repay to Shell Ventures the principal and/or interest of the Shell Ventures Convertible Loan in accordance with the terms of the Convertible Loan Investment Agreement, and such adjustments shall not be deemed to constitute a breach by any Party, and no other Party shall be entitled to claim payment of any late interest, damages or other liabilities for breach of contract in respect thereof.

  

(5)

The Parties agree that, to effect the provisions set forth in this Article 1.1, the Parties shall cooperate with each other in taking all necessary actions and executing all necessary documents, including but not limited to, cooperation between Shell Ventures and the Cayman Company in signing a termination agreement for the Shell Ventures Warrant.

  

Article 1.2     Termination of Convertible Loan Investment Agreement on the Part of Shell Ventures

 

The Parties agree that the Convertible Loan Investment Agreement shall be terminated only on the part of Shell Ventures upon full repayment of the Shell Ventures Convertible Bond Principal and Interest by the Target Company to Shell Ventures, and no other Parties shall have any obligation to bear any responsibility for Shell Ventures arising from the termination of the Convertible Loan Investment Agreement. Upon termination of the Convertible Loan Investment Agreement on the part of Shell Ventures, all rights and obligations of Shell Ventures under the Convertible Loan Investment Agreement shall terminate. Furthermore, the rights and obligations of each Party under the Convertible Loan Investment Agreement to the Shell Ventures shall terminate, except for the liabilities already incurred under the Convertible Loan Investment Agreement prior to its termination. Upon the termination of the Convertible Loan Investment Agreement on the part of Shell Ventures, Article 5.5 and Chapters 6 to 10 of the Convertible Loan Investment Agreement shall continue to be valid for the Parties.

  

 

Chapter 2     Effectiveness, Supplement, Amendment, Modification, and Termination of the Agreement

 

Article 2.1     Effectiveness of the Agreement

 

The Agreement shall enter into effect retroactively from the Effective Date upon execution by the Parties or their duly authorized representatives.

 

Article 2.2     Supplement of the Agreement

 

For any matters not covered by the Agreement, the Parties shall enter into a supplemental agreement after mutual consultation. Any supplemental agreement shall have the same legal effect as the Agreement.

 

Article 2.3     Amendment and Modification of the Agreement

 

The Agreement may be amended or modified with the mutual consent of the Parties. Any amendment or modification shall be made in writing and shall enter into effect upon execution by the Parties or their duly authorized representatives.

 

Article 2.4     Termination of the Agreement

 

The Agreement may be terminated by mutual written consent of the Parties. Upon termination, all rights and obligations of the Parties under the Agreement shall cease to exist, but this shall not affect any liabilities already incurred before termination. This Article and Chapters 3 to 4 of the Agreement shall survive the termination of the Agreement.

 

Chapter 3     Governing Law and Dispute Resolution

 

Article 3.1     Governing Law

 

The entering into, effect, performance, interpretation, and dispute resolution hereof shall be governed by and construed in accordance with the laws of China. However, if the effective laws of China do not provide for specific matters related to the Agreement, general international business practices shall be referred to within the scope permitted by laws of China.

 

Article 3.2     Dispute Resolution

 

Any dispute arising out of or in connection with the Agreement (the “Dispute”) may be submitted by any Party to the China International Economic and Trade Arbitration Commission (CIETAC) for arbitration in Beijing in accordance with the CIETAC's arbitration rules in effect at the time of application for arbitration. The arbitration tribunal shall consist of three arbitrators, with the applicant and respondent each having the right to appoint one arbitrator, and the other arbitrator being appointed according to the arbitration rules in effect at that time. The arbitration award shall be final and binding on the parties to the arbitration. During the Dispute resolution process, each Party shall continue to hold its other rights under the Agreement and shall continue to perform its relevant obligations under the Agreement.

 

 

Chapter 4     Other Matters

 

Article 4.1     Entirety and Validity

 

The Agreement constitutes the entire agreement between the Parties with respect to the matters set forth herein (including, but not limited to, the repayment of Shell Ventures Convertible Bond Principal and Interest and the arrangements regarding the conversion of the Convertible Loan), and supersedes any prior agreements, letters of intent, memorandums of understanding, representations or other obligations (whether written or oral, including all forms of communication) among the Parties with respect to such matters. In the event of any conflict between any provisions of the Agreement and the Convertible Loan Investment Agreement with respect to Shell Ventures and/or Shell Ventures Convertible Loan, the Agreement shall prevail.

  

If any provision of the Agreement is held to be invalid or unenforceable under the laws of China applicable to such provision, then such provision shall be deemed to be severed and shall not affect the validity of the remaining provisions of the Agreement. The Parties shall negotiate in good faith to replace such provision with a valid and enforceable provision that achieves, to the greatest extent possible, the original intent of the severed provision.

 

Article 4.2     Assignment of Rights and Obligations

 

The Agreement shall be binding upon and inure to the benefit of the successors and assigns of each Party hereto, provided that no party may assign or transfer any of its rights or obligations hereunder without the prior written consent of the other Parties.

 

Article 4.3     Language and Copies

 

The Agreement is made in Chinese and in six (6) counterparts, with each Party holding one (1) copy, and each copy shall have the same effect.

 

Article 4.4     Other Provisions

 

Chapter 7 (Confidentiality) and Chapter 8 (Notice) of the Convertible Loan Investment Agreement shall apply to the Agreement after appropriate adjustments, except that the contact information for Shell Ventures shall be modified as follows:

  

Shell Ventures:

 

Address: [***]

 

Attn: [***]

 

Tel.: [***]

 

E-mail: [***]

 

 

IN WITNESS WHEREOF, the Parties hereto have executed the Adjustment Agreement on the Convertible Loan Investment or have caused the same to be executed by their respective duly authorized representatives as of the date first written above.

  

Beijing X-Charge Technology Co., Ltd. (seal)

 

 

Signed by:

/s/ Rui Ding

 

	Name: Rui Ding
	Title: Legal representative
	XCHG Limited

 

Signed by:

/s/ Yifei Hou

 

	Name: Yifei Hou
	Title: Director
	XCharge Europe GmbH

 

Signed by:

/s/ Rui Ding

 

	Name: Rui Ding
	Title: Director

 

Beijing X-Charge Technology Co., Ltd.

Signature page for the Convertible Loan Investment Adjustment Agreement

 

 

IN WITNESS WHEREOF, the Parties hereto have executed the Adjustment Agreement on the Convertible Loan Investment or have caused the same to be executed by their respective duly authorized representatives as of the date first written above.

  

Rui Ding

 

Signed by:

/s/ Rui Ding

 

Yifei Hou

 

Signed by:

/s/ Yifei Hou

 

Beijing X-Charge Technology Co., Ltd. 

Signature page for the Convertible Loan Investment Adjustment Agreement

 

  

IN WITNESS WHEREOF, the Parties hereto have executed the Adjustment Agreement on the Convertible Loan Investment or have caused the same to be executed by their respective duly authorized representatives as of the date first written above.

  

	Shell Ventures Company Limited (seal)

 

 

Signed by:

/s/ Sandra Zhou

 

	Name: Sandra Zhou
	Title: Director

 

Beijing X-Charge Technology Co., Ltd. 

Signature page for the Convertible Loan Investment Adjustment Agreement

 

 

 

Exhibit 10.10

 

PRIVATE AND CONFIDENTIAL

 

***Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(a)(6). Such excluded information is not material and is the type the registrant treats as private or confidential. Such omitted information is indicated by brackets (“[***]”) in this exhibit.***

 

WARRANT TERMINATION AGREEMENT

 

This Warrant Termination Agreement (this “Agreement”) is entered into as of May 27, 2024 (the “Execution Date”) by and between the following parties:

 

A.            XCHG Limited, an exempted company incorporated with limited liability under the laws of Cayman Islands (the “Company”); and

 

B.            Shell Ventures Company Limited (壳牌资本有限公司), a limited liability company incorporated under the laws of the People’s Republic of China (“Shell”).

 

The Company and Shell are collectively referred to as the “Parties”, and each, a “Party”.

 

RECITALS

 

WHEREAS, the Parties and certain other parties have executed a Convertible Loan Investment Agreement (可转债投资协议) on June 20, 2023 (the “CB Agreement”), pursuant to which, Shell provided Beijing X-Charge Technology Co., Ltd. (北京智充科技有限公司) with a convertible loan in a total principal amount of RMB15,000,000 (the “Shell Convertible Loan”).

 

WHEREAS, pursuant to the CB Agreement, the Parties and certain other parties have executed a Warrant Subscription Agreement on August 4, 2023 (the “WSA”). Pursuant to the CB Agreement and the WSA, the Company has issued to Shell a Warrant to Purchase Series B+ Preference Shares on August 7, 2023 (the “Warrant”).

 

WHEREAS, the Parties intend to adjust certain arrangements relating to the Shell Convertible Loan and to execute an Adjustment Agreement on the Convertible Loan Investment (《关于可转债投资的调整协议》) accordingly on or about the Execution Date (the “Adjustment Agreement on the Convertible Loan Investment”).

 

WHEREAS, the Parties intend to terminate the Warrant effective from April 7, 2024 (the “Effective Date”).

 

Capitalized terms used herein without definition shall have the meanings ascribed to them in the Warrant.

 

 

AGREEMENT

 

NOW, THEREFORE, the Parties hereby agree as follows:

 

1.

Termination of Warrant

 

Notwithstanding anything to the contrary in the Warrant, the CB Agreement, the WSA, or any other agreements and documents in connection with the Shell Convertible Loan (collectively, the “Transaction Documents”), effective as of the Effective Date, the Parties hereby agree as follows:

 

(a)            The Parties agree that, effective as of the Effective Date, Shell is not entitled or obliged to convert all or a portion of the principal amount or the interests of the Shell Convertible Loan into any shares of the Company.

 

(b)            The Parties agree that, the Warrant shall, effective as of the Effective Date, be hereby unconditionally and irrevocably terminated in its entirety without any compensation whatsoever to Shell. Upon termination, the Warrant shall be of no further force or effect whatsoever upon Shell or the Company, and neither Shell nor the Company shall have any further rights, obligations, or liabilities under the Warrant.

 

(c)            Each Party agrees that the termination of the Warrant shall not be deemed to be a breach of any Transaction Documents by the other Party. Shell agrees that it is not entitled to require the Company to, and the Company is not obligated to, issue any warrant with respect to the Shell Convertible Loan. Each Party agrees to release, acquit and discharge the other Party from any and all claims, liabilities, actions or losses of any nature whatsoever arising out of or relating to the termination of the Warrant or the failure to exercise the Warrant.

 

(d)            The Parties agree that, effective as of the Effective Date, Shell shall not be entitled to any rights, privileges or preferences as a holder of the Warrant or any other rights, privileges or preferences in connection with the Warrant or the Warrant Shares, including without limitation, any rights, privileges or preferences of a “Warrant Holder” or a “Series B+ Warrant Holder” under the Amended and Restated Investors’ Rights Agreement of the Company and the Second Amended and Restated Memorandum and Articles of Association of the Company.

 

2.            Effectiveness. This Agreement shall become effective from the Effective Date upon execution of this Agreement by the Parties.

 

3.            Termination of this Agreement. This Agreement may be terminated by mutual written consents of the Parties.

 

4.            Transfer. This Agreement and any rights or obligations hereunder of any Party shall not be transferred without the written consent of the other Party.

 

5.            Amendments and Waivers. Any term of this Agreement may be amended or waived only with the mutual written consents of the Parties.

 

6.            Entire Agreement. This Agreement and the Adjustment Agreement on the Convertible Loan Investment, constitute the entire understanding and agreement between the Parties with regard to the subjects hereof, and shall supersede any and all prior negotiations, correspondence, agreements, understandings, duties or obligations between the Parties respecting the subject matter hereof; provided, however, that nothing in this Agreement shall be deemed to terminate or supersede the provisions of confidentiality and non-disclosure agreements entered into prior to the date of this Agreement, and such confidentiality and non-disclosure agreements shall continue in full force and effect until terminated in accordance with its terms contained therein.

 

7.            Governing Law. This Agreement shall be governed by and construed under the laws of Hong Kong, without regard to principles of conflict of laws thereunder.

 

 

8.            Dispute Resolution. The parties hereto agree to use reasonable efforts to resolve any disputes arising out of or relating to this Agreement through consultation. In the event that the parties are unable to resolve a dispute arising hereunder within thirty (30) days after the issuance of notice with respect to the aforementioned consultation by any party hereof to any other party, such dispute (including any dispute relating to the existence, validity, interpretation, performance, breach or termination of this Agreement or any dispute regarding non-contractual obligations arising out of or relating to this Agreement) shall be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre (“HKIAC”) under the HKIAC Administered Arbitration Rules in force when the notice of arbitration is submitted. The seat of arbitration shall be Hong Kong. The number of arbitrators shall be three (3). The arbitration proceedings shall be conducted in English. The governing law of this arbitration clause shall be the Laws of Hong Kong. The parties hereto agree that any award rendered by the arbitral tribunal may be enforced by any court having jurisdiction over the parties or over the parties’ assets wherever the same may be located. All fees, costs and expenses (including attorney’s fees and expenses) incurred by any party in connection with the arbitration shall be borne by the losing party, or the party as designated by the tribunal. To the extent that any party has or hereafter may acquire any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction or any court or from set-off or any legal process (whether service or notice, attachment prior to judgment, execution of judgment or otherwise) with respect to itself or any of its assets, whether or not held for its own account, such party hereby irrevocably and unconditionally waives and agrees not to plead or claim such immunity in any disputes arising out of or relating to this Agreement. Nothing in this Section 8 shall be construed as preventing any party from seeking an injunction, temporary restraining order or other equitable relief in any court of competent jurisdiction pursuant to Section 8.

 

9.            Miscellaneous

 

(a)            Each Party agrees that it shall cooperate with the other Party on taking all necessary actions and executing all necessary documents to consummate and make effective the transactions contemplated by this Agreement, including without limitation that each Party shall cooperate with the other Party on executing the Adjustment Agreement on the Convertible Loan Investment.

 

(b)            Section 7.3 (Confidentiality and Non-Disclosure) of the WSA and Sections 10 (Successors and Assigns), 12 (Notices), 14 (Severability) and 15 (Counterparts; Facsimile) of the Warrant shall apply to this Agreement mutatis mutandis, provided that the address of Shell shall be amended as follows:

 

If to Shell:

 

Address:

[***]

 

Attention:

[***]

 

Phone:

[***]

 

Email:

[***]

 

[Remainder of Page Intentionally Left Blank]

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.

 

	THE COMPANY:
	XCHG Limited
	By:	/s/ Yifei Hou
	Name:	Yifei Hou (侯亦飞)
	Title:	Director

 

SIGNATURE PAGE TO THE WARRANT TERMINATION AGREEMENT

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.

 

	By:	/s/ Sandra Zhou
	Name:	Sandra Zhou
	Title:	Director

 

SIGNATURE PAGE TO THE WARRANT TERMINATION AGREEMENT

 

 

 

 

 

Exhibit 23.1

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the use of our report dated June 10, 2024, with respect to the consolidated financial statements of XCHG Limited, included herein and to the reference to our firm under the heading “Experts” in the prospectus.

 

/s/ KPMG Huazhen LLP

 

Beijing, China

July 29, 2024

 

 

 

Exhibit 99.1

 

XCHG Limited (the “Company”)

 

Code of Business Conduct and Ethics

 

Adopted July 22, 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 general counsel or an officer with similar duties and responsibilities of the Company (the “General Counsel”).

 

In order to avoid conflicts of interests, senior executive officers and directors must disclose to the General Counsel any material transaction or relationship that reasonably could be expected to give rise to such a conflict, and the General Counsel shall notify the Audit Committee of the Board (the “Audit Committee”) of any such disclosure. Conflicts of interests involving the General Counsel and directors shall be disclosed to the Audit Committee.

 

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, and the Company has established a Disclosure Committee consisting of senior management to assist in monitoring such disclosures.

 

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 supervisor or the General Counsel or, in the case of accounting, internal accounting controls or auditing matters, the Audit Committee. 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 General Counsel, and the General Counsel shall notify the Audit Committee of any such violation. Any such concerns involving the General Counsel should be reported to the Audit Committee. 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 General Counsel of the Company will have primary authority and responsibility for the enforcement of this Code, subject to the supervision of the Audit Committee, and the Company will devote the necessary resources to enable the General Counsel 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 General Counsel.

 

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 employee 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.

 

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.

 

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 Policy Against Insider Trading, copies of which are distributed to all employees, officers and directors and are available from the General Counsel. You should contact the General Counsel 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 General Counsel.

 

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 General Counsel 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.

 

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 General Counsel.

 

 

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 General Counsel 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 General Counsel.

 

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 Wexin 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.

 

Government Inquiries

 

The Company cooperates with government agencies and authorities. Forward all requests for information, other than routine requests, to the General Counsel 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 107

 

EX-FILING FEES

 

Calculation of Filing Fee Tables

 

Form F-1 

(Form Type)

 

XCHG Limited 

(Exact Name of Registrant as Specified in its Charter)

 

Newly Registered Securities

 

	Security Type	Security Class Title (1)	Fee Calculation or Carry Forward Rule	Amount Registered	Proposed Maximum Offering Price Per Unit	Maximum Aggregate Offering Price	Fee Rate	Amount of Registration Fee
Fees to Be Paid	Equity	Class A ordinary shares, par value US$0.00001 per share	Rule 457(a)	144,900,000	US$0.20	US$28,980,000 (2)(3)	US$0.00014760	US$4,277.45
Fees Previously Paid	Equity	Class A ordinary shares, par value US$0.00001 per share	Rule 457(o)			US$50,000,000 (4)		US$7,380.00
	Total Offering Amount					US$28,980,000		US$4,277.45
	Total Fees Previously Paid							US$7,380.00
	Total Fee Offsets							N/A
	Net Fee Due							-

 

(1)

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 40 Class A ordinary shares.

 

(2)

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.

 

(3)

Estimated solely for the purpose of determining the amount of registration fee in accordance with Rule 457(a) under the Securities Act of 1933, as amended.

 

(4)

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.