EX-4.4

EX-4.4 5 d715092dex44.htm EX-4.4 EX-4.4

Exhibit 4.4

THIRD AMENDED AND RESTATED SHAREHOLDERS’ AGREEMENT

THIS THIRD AMENDED AND RESTATED SHAREHOLDERS’ AGREEMENT (this “Agreement”) is entered into on June 3, 2019 by and among:

(1)	Q&K INTERNATIONAL GROUP LIMITED, an exempted company duly incorporated with limited liability and validly existing under the Laws of the Cayman Islands (the “Company”),

(2)	the parties listed on Part I of Exhibit A attached hereto (the “Series A Shareholders”, and each a “Series A Shareholder”),

(3)	the parties listed on Part II of Exhibit A attached hereto (the “Series B Shareholders”, and each a “Series B Shareholder”),

(4)	the party listed on Part III of Exhibit A attached hereto (the “Series C Shareholder”),

(5)	the party listed on Part IV of Exhibit A attached hereto (the “Series C-1 Shareholder “),

(6)	the parties listed on Part V of Exhibit A attached hereto (the “Series C-2 Shareholders”),

(7)	the parties listed on Part VI of Exhibit A attached hereto (the “Founder Parties”, and each a “Founder Party”),

(8)	the parties listed on Part VII of Exhibit A attached hereto (the “Subsidiaries”, and each a “Subsidiary”).

Each of the forgoing parties is referred to herein individually as a “Party” and collectively as the “Parties”.

RECITALS

The Series C-2 Shareholders have agreed to subscribe from the Company, and the Company has agreed to allot and issue to the Series C-2 Shareholders, certain Series C-2 Shares (as defined below) of the Company on the terms and conditions set forth in the Series C-2 Preferred Share Subscription Agreement dated January 30, 2019 by and among the Company, the Series C-2 Shareholders (as applicable), the Founder Parties and the Subsidiaries (the “Share Subscription Agreement”).

B.	The Share Subscription Agreement requires that the Parties enter into this Agreement as a condition to the consummation of transactions contemplated therein.

C.	The Parties intend to enter into this Agreement and make the respective representations, warranties, covenants and agreements set forth herein on the terms and conditions set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1.	DEFINITIONS

Unless otherwise defined in this Agreement, capitalized terms used in this Agreement shall have the meanings set forth in Exhibit B.

2.	CORPORATE GOVERNANCE

2.1	Board of Directors.

(a) Board Composition. Immediately upon the Closing, the Company shall have a board of directors (the “Board”) consisting of ten (10) directors and shall be constituted as follows:

(i)

the Series C-1 Majority shall be entitled to appoint one (1) director of the Board (the “Series C-1 Director”)

(ii)

the Series C Majority shall be entitled to appoint one (1) director of the Board (the “Series C Director”);

(iii)

SAIF shall be entitled to appoint one (1) director of the Board, and Youzhen shall be entitled to appoint one (1) director of the Board (collectively, the “Series B Directors”);

(iv)

The Series A-1 Majority shall be entitled to appoint one (1) director of the Board (the “Series A-1 Director”);;

(v)

The Series A-3 Majority shall be entitled to appoint one (1) director of the Board (together with the Series A-1 Director, the “Series A Directors”, and each a “Series A Director”); and

(vi)

The Ordinary Majority shall be entitled to appoint four (4) directors of the Board.

(b) Removal and Replacement. Any Shareholder or group of Shareholders entitled to designate any individual to be elected as a director of the Board pursuant to Section 2.1(a) shall have the right to remove any such director occupying such position and to fill any vacancy caused by the death, disability, retirement, resignation or removal of any director occupying such position. If a vacancy is created on the Board at any time by the death, disability, retirement, resignation or removal of any director designated pursuant to Section 2.1(a), the replacement to fill such vacancy shall be designated in the same manner as the director who is being replaced in accordance with Section 2.1(a).

(c) Subsidiary Board. (a) Each of the BVI Subsidiary, the US Subsidiary, the HK Subsidiary and the WFOE shall, and the Group Companies and the Warrantors shall cause the BVI Subsidiary, the US Subsidiary, the HK Subsidiary the WFOE and any other subsidiaries to, (A) have a board of directors or similar governing body (the “Subsidiary Board”), (B) maintain the authorized size of each Subsidiary Board at all times same as the authorized size of the Board, and (C) ensure each Subsidiary Board to be recomposed such that the Preferred Shareholders shall at all times be entitled to appoint such number of director(s) to each Subsidiary Board as they are entitled to appoint to the Board under Section 2.1(a) above; (b) Each of the Domestic Company and its subsidiaries (each an “Operation Company” and collectively the “Operation Companies”) shall, and the Warrantors shall cause each such Operation Company to maintain the same board composition as the one before the date of this Agreement provided, however, that any and all matters that are subject to the approval of the board of any Operation Company shall be subject to the prior approval of the Board.

(d) Audit and Compensation Committees. The Board shall establish an audit committee, a compensation committee and any other committees when necessary as determined by the Board. Each of the audit committee, the compensation committee and any other committees of the Board shall include both Series B Directors, at least two Series A Directors, the Series C Director and the Series C-1 Director. The Board may determine or amend from time to time the procedures and functions of such committees but for the avoidance of doubt, may not change the composition of such committees as set out in this Section 2.1(d). All decisions of each committee shall be made by a majority of the members of such committee, including the affirmative vote from both Series B Directors, the Series C Director and the Series C-1 Director.

(e) Board Meetings. The Board shall meet at least once every quarter unless postponed or waived by written consent of a quorum of the Board. For those acts listed in Part II of Exhibit C, a quorum for a Board meeting shall consist of at least six (6) directors, including both Series B Directors, the Series C Director, the Series C-1 Director and one (1) director appointed by the Ordinary Majority; for any other acts not included in Part II of Exhibit C, a quorum for a Board meeting shall consist of at least six (6) directors, including the director appointed by SAIF, the Series C Director, the Series C-1 Director, and one (1) director appointed by the Ordinary Majority. Each director shall have one (1) vote on any matter submitted for approval of the Board. Each director shall be entitled to appoint an alternate to serve at any board meeting (or the meeting of a committee formed by the Board), and such alternate shall be permitted to attend all Board meetings and vote on such director’s behalf.

(f) Reimbursement, Insurance and Indemnity. Each of the directors of the Company shall be entitled to reimbursement from the Company for all reasonable out-of-pocket expenses (including without limitation, business class flight tickets and reasonable lodging expenses) related to all Board, Subsidiary Board or board committee activities. The Company shall obtain, and thereafter maintain, a directors’ and officers’ liability insurance policy in accordance with Section 7.7. The Company shall indemnify the directors to the maximum extent permitted by applicable Laws. In addition, the Company shall indemnify each Preferred Shareholder to the maximum extent permitted by applicable Laws for any claims brought against such Preferred Shareholder by any third party (including any other Shareholder of the Company) as a result of the appointment of any directors by such Preferred Shareholder in the Company.

2.2	Protective Provisions.

(a) For so long as any Preferred Share remains outstanding, none of the Group Companies shall, and each of the Warrantors shall procure that no Group Company shall, directly or indirectly, take any of the actions listed in Part I(A) of Exhibit C attached hereto without the prior affirmative vote or written consent of the Series C-2 Majority, the Series C-1 Majority, the Series C Majority, the Series B Majority and the Series A Majority, each voting as a separate class.

(b) For so long as any Preferred Share remains outstanding, none of the Group Companies shall, and each of the Warrantors shall procure that no Group Company shall, directly or indirectly, take any of the actions listed in Part I(B) of Exhibit C attached hereto without the prior affirmative vote or written consent of holders of at least 85% of the Preferred Shares (on an as-converted basis).

(c) For so long as the Series C-1 Director, the Series C Director, any Series B Director or any Series A Director holds office in the Board, none of the Group Companies shall, and each of the Warrantors shall procure that no Group Company shall, directly or indirectly, take any of the actions listed in Part II(A) of Exhibit C attached hereto without the prior affirmative vote or written consent of the Series C-1 Director, the Series C Director, both Series B Directors and two Series A Directors.

(d) For so long as the Series C-1 Director, the Series C Director, any Series B Director or any Series A Director holds office in the Board, none of the Group Companies shall, and each of the Warrantors shall procure that no Group Company shall, directly or indirectly, take any of the actions listed in Part II(B) of Exhibit C attached hereto without the prior affirmative vote or written consent of six (6) Preferred Directors.

(e) Notwithstanding anything to the contrary contained herein, where any act listed in Part I(A) of Exhibit C requires the approval of the Shareholders in accordance with the Statute, and if the Shareholders vote in favour of such act but the approval of the Series C-2 Majority, the Series C-1 Majority, the Series C Majority, the Series B Majority or the Series A Majority has not yet been obtained, the relevant majority of the Preferred Shareholders who vote against such act at a meeting of the Shareholders in aggregate shall have the voting rights equal to the aggregate voting power of all the Shareholders who voted in favour of such act plus one (1).

(f) Notwithstanding anything to the contrary contained herein, where any act listed in Part I(B) of Exhibit C requires the approval of the Shareholders in accordance with the Statute, and if the Shareholders vote in favour of such act but the approval of the holders of at least 85% of the Preferred Shares (on an as-converted basis) has not yet been obtained, the relevant majority of the Preferred Shareholders who vote against such act at a meeting of the Shareholders in aggregate shall have the voting rights equal to the aggregate voting power of all the Shareholders who voted in favour of such act plus one (1).

2.3	Information and Inspection Rights.

(a) Information. The Group Companies shall, and each Warrantor shall cause the Group Companies to, deliver, as soon as practicable (but in any event within the timeframe specified below), to the Preferred Shareholders the following documents or reports:

(i)

within sixty (60) days after the end of each fiscal year, the unaudited consolidated annual financial statements of the Group Companies for such fiscal year;

(ii)

within ninety (90) days after the end of each fiscal year, the operational report and the audited consolidated annual financial statements of the Group Companies for such fiscal year, audited by a Big-Four Accounting Firm or another reputable accounting firm approved by the Preferred Shareholders;

(iii)

within thirty (30) days after the end of each fiscal quarter, the unaudited consolidated quarterly financial statements of the Group Companies for such fiscal quarter;

(iv)

within thirty (30) days after the end of each fiscal month, the unaudited consolidated monthly financial statements and monthly bank statements of each Group Company for such fiscal month;

(v)

no later than thirty (30) days before the beginning of such fiscal year, an annual operational plan and an annual budget for the next fiscal year as approved by the Board;

(vi)

as soon as practicable, any penalties, injunctions, and other important litigation or contentious matters of the Group Companies;

(vii)

any other financial and business information as any Preferred Shareholder may reasonably request from time to time; and

(viii)

any other information provided to any other Shareholder from time to time.

The documents to be delivered pursuant to this Section 2.3 shall be prepared in a form reasonably satisfactory to the Preferred Shareholders. All the financial statements to be provided to the Preferred Shareholders, including without limitation the income statement, the balance sheet and the cash flow statement, shall be prepared in either English or Chinese in accordance with the PRC GAAP, or, at the election of the Series C-2 Majority, the Series C-1 Majority, the Series C Majority or the Series B Majority or for the purpose of a QIPO, US GAAP or other international accounting standard, consistently applied and in the case of consolidated financial statement, shall consolidate all of the financial results of the Group Companies.

(b) Information relating to tax matters. The Group Companies shall, and each Warrantor shall cause the Group Companies to:

(i)

prepare or furnish to each Preferred Shareholder the following information relating to tax matters on or before the dates indicated below:

(1)

no later than February 15 of each year (or the first Business Day thereafter), a final statement of the Company’s taxable income, based on US tax principles and translated into US dollars, covering the prior taxable year, and all other information as will enable the Preferred Shareholder to timely satisfy its tax reporting obligations to its members in connection with the preparation of their own federal, state, and local income tax returns;

(2)

no later than February 15 of each year (or the first Business Day thereafter), tax receipts and any other relevant documents substantiating tax payments to non-US jurisdictions; and

(3)

no later than February 15 of each year (or on the first Business Day thereafter), an income statement, balance sheet, and information with respect to any non-US entities that are treated as disregarded foreign entities from a US federal income tax perspective.

(ii)

provide quarterly updates during the calendar year of any change to the structure of the Company and its subsidiaries’ during the preceding quarter in question, including but not limited to new subsidiary formations or acquisitions, joint venture arrangements, refinancing of third party or internal debt, internal restructurings, disposals, dissolutions, and liquidations (such obligation on the part of the Company to be discharged by the electronic and/or physical delivery to each Preferred Shareholder of a summary description that includes relevant entity names, dates, and (where applicable) percentage shareholdings, and by making available such personnel as are able to answer any reasonable requests a Preferred Shareholder may have for further details in order to comply with its US tax reporting obligations with respect to the Company).

(iii)

fully and timely cooperate to provide all information reasonably requested by a Preferred Shareholder relating to its obligations under any Foreign Account Tax Compliant Act Agreement and any Treasury Regulations (the “FATCA provisions”), or similar legislation, regulations, or other guidance enacted in any other jurisdictions, which seeks to implement similar tax reporting and/or withholding tax regimes, including those implemented under the OECD Common Reporting Standards.

(iv)

provide to each Preferred Shareholder and/or their respective appointed advisers, as soon as reasonably practicable, all information, documentation and assistance a Preferred Shareholder may reasonably request in relation to the tax affairs of the Group, including, for the avoidance of doubt, drafts and/or copies of the annual tax returns. Where relevant, the Company shall in good faith incorporate, or cause to be incorporated, all reasonable comments and amendments made by each Preferred Shareholder and/or their respective advisers in relation to any annual tax returns before the due date for submission of such annual tax returns to the relevant tax authorities.

(v)

prepare and/or furnish to each Preferred Shareholder (or as requested by any adviser of a Preferred Shareholder) all tax receipts and any other documents (copies will suffice where appropriate) substantiating tax payments made during the prior taxable year by any Group Company to any relevant non-US tax authority as soon as reasonable practicable.

(vi)

attend periodic meetings with each Preferred Shareholder and/or their respective advisers, together with the tax return preparer where appropriate, and as requested by such Preferred Shareholder, to discuss inter alia, the tax affairs and tax processes of the Group Company, positions taken in the annual tax returns and any other tax related matters on an annual basis (or more frequently as required by such Preferred Shareholder).

(c) Inspection. For so long as a Preferred Shareholder remains a Shareholder, each Warrantor shall cause each Group Company to permit such Preferred Shareholder or its duly designated representatives, upon reasonable prior written notice, during normal business hours to visit and inspect such Group Company, and to examine the facilities, books of account and records of such Group Company, and to discuss the businesses, operations and conditions of such Group Company with the directors, officers, advisers, independent accountants, legal counsel and investment bankers of such Group Company.

(d) Termination. The information right and the inspection right of the Preferred Shareholders shall terminate upon the closing of a QIPO.

2.4

Group Structure. The Parties hereto shall maintain the corporate structure of the Group, and the Parties hereto shall cause that the shareholding structure of each Group Company will not be changed without the prior consent of the Series C-2 Majority, the Series C-1 Majority, the Series C Majority, the Series B Majority and the Series A Majority.

2.5

Voting Agreement. Each Shareholder agrees that it shall vote all of its Shares (or give shareholders’ consent) in such manner that gives effect to the provisions of this Agreement, including without limitation to cause the Board to be constituted in accordance with Section 2.1(a). Without limiting the generality of the foregoing, in the event that the Board, the Series A Majority, the Series B Majority, the Series C Majority, the Series C-1 Majority and the Series C-2 Majority have approved an initial public offering of the Equity Securities of any Group Company pursuant to Exhibit C attached hereto, each Shareholder shall grant any and all of the consents or approvals reasonably determined by the Board (including the Series C-1 Director, the Series C Director, a Series B Director and a Series A Director) to be necessary in order to effect such public offering, provided that in no event shall a Preferred Shareholder be required to consent to any amendment or termination of any provision of this Agreement or the Restated Articles or to convert any of its Preferred Shares other than in accordance with the Restated Articles.

3.	RIGHTS AND RESTRICTIONS IN RESPECT OF SHARE ISSUANCE AND TRANSFER

3.1

Transfer Restriction of Founder Parties. At any time prior to the QIPO, each of the Founder Parties shall not Transfer any Shares directly or indirectly owned by them without the prior written consent of the Series C-2 Majority, the Series C-1 Majority, the Series C Majority, the Series B Majority and the Series A Majority, other than any Transfer of Shares pursuant to the enforcement of the Founder Share Charge and the Holding Company Share Charge (each as defined in the Series C SSA).

3.2	Rights in Respect of Share Issuance or Transfer.

(a) Preemptive Right. Each Preferred Shareholder (a “PR Holder”) shall have the Preemptive Right as set forth on Exhibit D.

(b) Preferred Right of First Refusal. Each Preferred Shareholder (a “Preferred ROFR Holder”) shall have the Preferred Right of First Refusal as set forth on Exhibit D.

(d) Right of Co-Sale. Each Preferred Shareholder (a “ROCS Holder”) shall have the Right of Co-Sale as set forth on Exhibit D.

(e) Transfer by Preferred Shareholder. Each Preferred Shareholder shall have the right to transfer its shares in the Company to any Affiliate or any third party (other than to a Competitor). None of the holders of Preferred Shares or their Affiliates shall transfer any Preferred Shares or Ordinary Shares (as the case may be) held by such holder to a Competitor, without the prior written consent of the Founder.

3.3

Transfer Defined. For the purpose of this Agreement, the term “Transfer” or “transfer” shall include any direct or indirect transfer, sale, assignment or any other disposal (including creation of any encumbrance), and its verb form and the terms of “transferor” and “transferee” shall have the meaning correlative to the foregoing. In the case that any Share is held by its ultimate beneficial owner through one or more level of holding companies, any transfer, repurchase, or new issuance of the shares of such holding companies or similar transactions that have the effect of change the beneficial ownership of such Share shall be deemed as an indirect transfer of such Shares. The Parties agree that the restrictions on the transfer of the Shares held by the Founder Parties contained in this Agreement shall apply to such indirect transfer and shall not be circumvented by means any indirect transfer of the Shares.

3.4

New Shareholders. Unless otherwise approved by the Series C-2 Majority, the Series C-1 Majority, the Series C Majority, the Series B Majority and the Series A Majority, any new shareholder of the Company who is not already a Party to this Agreement shall, not later than the time that it becomes a shareholder of the Company, agree in writing that it adheres to, and will be bound by, the terms of this Agreement as a Party to this Agreement. Any Shareholder Transferring any Share shall cause the transferee to execute and deliver a deed of adherence substantially in the form set forth in Exhibit F, prior to such Transfer becoming effective.

3.5	Prohibited Issuance or Transfer Void. The Company agrees that any issuance or transfer of Shares not made in compliance with this Agreement shall be null and void as against the Company, shall not be recorded on the register of members of the Company and shall not be recognized by the Company.

ESOP

4.1

ESOP.

(a) All options issued or granted under the ESOP shall be subject to a four-year vesting schedule: 25% of the options in respect of any eligible employee will vest on the first anniversary of the commencement date of such employee’s employment with a Group Company, and the remaining 75% of the options granted to such employee will vest yearly in equal installments over the next thirty-six (36) months. The exercise price thereof shall be determined by the Board (with the affirmative vote of the Series C-1 Director, the Series C Director, both Series B Directors and two Series A Directors).

(b) The power and authority to administer the ESOP and grant any option thereunder shall be vested to the Board or the compensation committee (upon its establishment) and any decision of the Board or the compensation committee with respect to the administration of the ESOP or grant of any option thereunder shall be made by a majority of the members of the Board or the compensation committee, including the affirmative vote of the Series C-1 Director, the Series C Director, both Series B Directors and two Series A Directors. Any Shareholder holding equal to or more than 5% of the Company’s issued share capital immediately after the Closing (on a fully diluted and as-converted basis) or its Affiliates shall not be eligible to be granted with any option under the ESOP.

5.	DRAG-ALONG RIGHTS

5.1

Drag-Along Rights of Series C-2 Shareholders. If (a) a QIPO is not completed by 30 June 2021, (b) the Series C-2 Redemption Price and the Series C-2 Put Option Price have not been paid in accordance with the Restated Articles and this Agreement, respectively, and (c) the Series C-2 Majority (the “Series C-2 Drag-Along Shareholders”) proposes a sale of the Company by merger, sale of all or substantially all of the assets or business of the Group Companies, a sale of all the Shares or otherwise (the “Series C-2 Approved Sale”) to a third-party potential purchaser (the “Potential Purchaser”), then upon written notice from the Series C-2 Drag-Along Shareholders, each of the other Shareholders of the Company (the “Series C-2 Dragged Shareholders”) shall (i) vote, or give its written consent with respect to, all the Shares held by them in favor of such proposed Series C-2 Approved Sale and in opposition of any proposal that could reasonably be expected to delay or impair the consummation of any such proposed Series C-2 Approved Sale; (ii) sell, transfer, and/or exchange, as the case may be, all of their Shares in such Series C-2 Approved Sale to such purchaser; (iii) refrain from exercising any dissenters’ rights or rights of appraisal under applicable Law at any time with respect to or in connection with such proposed Series C-2 Approved Sale; and (iv) take all actions reasonably necessary to consummate the proposed Series C-2 Approved Sale. If any Series C-2 Dragged Shareholder does not elect to vote, or give its written consent with respect to, all the Shares held by them in favor of such proposed Series C-2 Approved Sale, upon the request of the Series C-2 Drag-Along Shareholders, such Series C-2 Dragged Shareholder shall be obliged to purchase all the Shares held by the Series C-2 Drag-Along Shareholders, at the price and terms offered by the Potential Purchaser. Notwithstanding any provision to the contrary, the share transfer restrictions of Section 3 of this Agreement shall not apply to any transfers made pursuant to this Section 5.

5.2

Drag-Along Rights of Series C-1 Shareholder. If (a) a QIPO is not completed by 30 June 2021, (b) the Series C-1 Redemption Price and the Series C-1 Put Option Price have not been paid in accordance with the Restated Articles and this Agreement, respectively, and (c) the Series C-1 Majority (the “Series C-1 Drag-Along Shareholder”) proposes a sale of the Company by merger, sale of all or substantially all of the assets or business of the Group Companies, a sale of all the Shares or otherwise (the “Series C-1 Approved Sale”) to a Potential Purchaser, then, subject to the prior written consent of the Series C-2 Majority, upon written notice from the Series C-1 Drag-Along Shareholder, each of the other Shareholders of the Company (the “Series C-1 Dragged Shareholders”) shall (i) vote, or give its written consent with respect to, all the Shares held by them in favor of such proposed Series C-1 Approved Sale and in opposition of any proposal that could reasonably be expected to delay or impair the consummation of any such proposed Series C-1 Approved Sale; (ii) sell, transfer, and/or exchange, as the case may be, all of their Shares in such Series C-1 Approved Sale to such purchaser; (iii) refrain from exercising any dissenters’ rights or rights of appraisal under applicable Law at any time with respect to or in connection with such proposed Series C-1 Approved Sale; and (iv) take all actions reasonably necessary to consummate the proposed Series C-1 Approved Sale. If any Series C-1 Dragged Shareholder does not elect to vote, or give its written consent with respect to, all the Shares held by them in favor of such proposed Series C-1 Approved Sale, upon the request of the Series C-1 Drag-Along Shareholder, such Series C-1 Dragged Shareholder shall be obliged to purchase all the Shares held by the Series C-1 Drag-Along Shareholder, at the price and terms offered by the Potential Purchaser. Notwithstanding any provision to the contrary, the share transfer restrictions of Section 3 of this Agreement shall not apply to any transfers made pursuant to this Section 5.

5.3

Drag-Along Rights of Series C Shareholder. If (a) a QIPO is not completed by the earlier of the 4^th anniversary of the Series C Shares Issue Date and 30 June 2021, (b) the Series C Redemption Price and the Series C Put Option Price have not been paid in accordance with the Restated Articles and this Agreement, respectively, and (c) the Series C Majority (the “Series C Drag-Along Shareholder”) proposes a sale of the Company by merger, sale of all or substantially all of the assets or business of the Group Companies, a sale of all the Shares or otherwise (the “Series C Approved Sale”) to a Potential Purchaser, then, subject to the prior written consent of the Series C-2 Majority and the Series C-1 Majority, upon written notice from the Series C Drag-Along Shareholder, each of the other Shareholders of the Company (the “Series C Dragged Shareholders”) shall (i) vote, or give its written consent with respect to, all the Shares held by them in favor of such proposed Series C Approved Sale and in opposition of any proposal that could reasonably be expected to delay or impair the consummation of any such proposed Series C Approved Sale; (ii) sell, transfer, and/or exchange, as the case may be, all of their Shares in such Series C Approved Sale to such purchaser; (iii) refrain from exercising any dissenters’ rights or rights of appraisal under applicable Law at any time with respect to or in connection with such proposed Series C Approved Sale; and (iv) take all actions reasonably necessary to consummate the proposed Series C Approved Sale. If any Series C Dragged Shareholder does not elect to vote, or give its written consent with respect to, all the Shares held by them in favor of such proposed Series C Approved Sale, upon the request of the Series C Drag-Along Shareholder, such Series C Dragged Shareholder shall be obliged to purchase all the Shares held by the Series C Drag-Along Shareholder, at the price and terms offered by the Potential Purchaser. Notwithstanding any provision to the contrary, the share transfer restrictions of Section 3 of this Agreement shall not apply to any transfers made pursuant to this Section 5.

5.4

Drag-Along Rights of Series B Shareholders and Holding Company. At any time after the Closing, if the Series B Majority and the Holding Company (the “Series B Drag-Along Shareholders”) consent to an acquisition or a sale of the Company by merger, sale of more than fifty percent (50%) of the outstanding Shares, sales of all or substantially all of the assets or business of the Group Companies, a sale of all the Shares or otherwise (the “Series B Approved Sale”) to a Potential Purchaser, then, subject to the prior written consent of the Series C-2 Majority, the Series C-1 Majority and the Series C Majority, upon written notice from the Series B Drag-Along Shareholders, each of the other Shareholders of the Company (the “Series B Dragged Shareholders”) shall (i) vote, or give its written consent with respect to, all the Shares held by them in favor of such proposed Series B Approved Sale and in opposition of any proposal that could reasonably be expected to delay or impair the consummation of any such proposed Series B Approved Sale; (ii) sell, transfer, and/or exchange, as the case may be, all of their Shares in such Series B Approved Sale to such purchaser; (iii) refrain from exercising any dissenters’ rights or rights of appraisal under applicable Law at any time with respect to or in connection with such proposed Series B Approved Sale; and (iv) take all actions reasonably necessary to consummate the proposed Series B Approved Sale. If any Series B Dragged Shareholder does not elect to vote, or give its written consent with respect to, all the Shares held by them in favor of such proposed Series B Approved Sale, upon the request of the Series B Drag-Along Shareholders, such Series B Dragged Shareholder shall be obliged to purchase all the Shares held by the Series B Drag-Along Shareholders, at the price and terms offered by the Potential Purchaser. Notwithstanding any provision to the contrary, the share transfer restrictions of Section 3 of this Agreement shall not apply to any transfers made pursuant to this Section 5.

5.5

Representation and Undertaking. Any such sale or disposition by the Dragged Shareholders, in each applicable case, shall be on the terms and conditions of the Approved Sale as proposed by the Potential Purchaser. Such Dragged Shareholders shall be required to make severally customary and usual representations and warranties in connection with the Approved Sale, including, without limitation, as to their ownership and authority to sell, free of all liens, claims and encumbrances of any kind, the shares proposed to be transferred or sold by such Persons or entities; and any violation or breach of or default under (with or without the giving of notice or the lapse of time or both) any Law or regulation applicable to such Dragged Shareholders or any material contract to which such Dragged Shareholders are a party or by which they are bound and shall severally indemnify and hold harmless to the full extent permitted by Law, the purchasers against all actual cost, damages, or other liabilities, arising out of, in connection with or related to any breach or alleged breach of any representation or warranty made by, or agreements, understandings or covenants of such Dragged Shareholders, respectively as the case may be, under the terms of the agreements relating to such Approved Sale, provided that no Shareholder shall be obligated in connection with such Approved Sale to pay any amount with respect to any liabilities arising from the representations, warranties and indemnities given by it in excess of its share of the total consideration paid by the Potential Purchaser. Each of the Group Companies undertakes to obtain all consents, permits, approvals, orders, authorizations or registrations, qualifications, designations, declarations or filings with any governmental authority or any third party, which are required to be obtained or made by them in connection with the Approved Sale. Each Dragged Shareholder undertakes to pay its pro rata share of expenses incurred in connection with such proposed Approved Sale based on its share of the total consideration paid by the Potential Purchaser relative to each other.

5.6

Drag-Along Notice. Prior to making any Approved Sale in which the Drag-Along Shareholder wishes to exercise its rights under this Section 5, the Drag-Along Shareholders shall provide the Company and the Dragged Shareholders with written notice (the “Drag-Along Notice”) not less than thirty (30) days prior to the proposed closing date of the Approved Sale (the “Approved Sale Date”). The Drag-Along Notice shall set forth: (a) the name and address of the Potential Purchaser; (b) the proposed amount and form of consideration to be paid, and the terms and conditions of payment offered by the Potential Purchaser; (c) the Approved Sale Date; (d) the number of Shares held on record by the Drag-Along Shareholder on the date of the Drag-Along Notice which (if applicable) form the subject to be transferred, sold or otherwise disposed of by the Drag-Along Shareholder; and (e) the number of Shares of the Dragged Shareholders to be included in the Approved Sale (if applicable).

5.7

Transfer Certificate. On the Approved Sale Date, each of the Drag-Along Shareholders and the Dragged Shareholders shall deliver or cause to be delivered an instrument of transfer and a certificate or certificates evidencing its Shares to be included in the Approved Sale, duly endorsed for transfer and duly executed, to such third party purchasers in the manner and at the address indicated in the Drag-Along Notice. The register of the Company shall be updated to reflect the share transfers as a result of the exercise of the Drag-Along Rights exercised by the Drag-Along Shareholders.

5.8

Payment. If the Approved Sale is a sale of Shares, if the Drag-Along Shareholder or the Dragged Shareholders receive the purchase price for their shares or such purchase price is made available to them as part of an Approved Sale and, in either case they fail to deliver a duly executed instrument of transfer or certificates evidencing their Shares as described in this Section 5, they shall for all purposes be deemed no longer to be a Shareholder of the Company (with the record books of the Company updated to reflect such status), shall have no voting rights, shall not be entitled to any dividends or other distributions with respect to any Shares held by them, shall have no other rights or privileges as a Shareholder of the Company. In addition, the Company shall stop any subsequent transfer of any such Shares held by such Shareholders. All proceeds received by or are made available to the Shareholders for an Approved Sale shall be distributed among the Shareholders in accordance with Section 1 of Schedule A of the Restated Articles.

6.	PUT OPTION

6.1	Put Option of the Series C-2 Shareholders.

If (i) a QIPO is not completed by 30 June 2021, or (ii) a material breach occurs by any Warrantor of any of its representations, warranties, covenants or undertakings under the Transaction Documents, and such breach has not been cured within thirty (30) days after issuance of a written notice by any Series C-2 Shareholder to the Company, or (iii) a Series C-1 Put Notice (as defined below) or a Series C-1 Redemption Notice (as defined in the Restated Articles) or a Series C Put Notice (as defined below) or a Series C Redemption Notice (as defined in the Restated Articles) or a Series B Redemption Notice (as defined in the Restated Articles) has been delivered to the Company, each Series C-2 Shareholder shall be entitled to, by delivery of a written notice (the “Series C-2 Put Notice”) by the Series C-2 Shareholder to the Founder Parties, require the Founder Parties, and the Founder Parties shall be obliged, jointly and severally, to purchase from the Series C-2 Shareholder all (but not less than all) of the Series C-2 Shares held by the Series C-2 Shareholder at the Series C-2 Put Option Price (the “Series C-2 Put Option”).

6.2	Put Option of the Series C-1 Shareholder.

If (i) a QIPO is not completed by 30 June 2021, or (ii) a material breach occurs by any Warrantor of any of its representations, warranties, covenants or undertakings under the Transaction Documents, and such breach has not been cured within thirty (30) days after issuance of a written notice by any Series C-1 Shareholder to the Company, or (iii) a Series C Put Notice (as defined below) or a Series C Redemption Notice (as defined in the Restated Articles) or a Series B Redemption Notice (as defined in the Restated Articles) has been delivered to the Company, each Series C-1 Shareholder shall be entitled to, by delivery of a written notice (the “Series C-1 Put Notice”) by the Series C-1 Shareholder to the Founder Parties, require the Founder Parties, and the Founder Parties shall be obliged, jointly and severally, to purchase from the Series C-1 Shareholder all (but not less than all) of the Series C-1 Shares held by the Series C-1 Shareholder at the Series C-1 Put Option Price (the “Series C-1 Put Option”).

6.3	Put Option of the Series C Shareholder.

If (i) a QIPO is not completed by the earlier of the fourth (4^th) anniversary of the Series C Shares Issue Date and 30 June 2021, or (ii) a material breach occurs by any Warrantor of any of its representations, warranties, covenants or undertakings under the Transaction Documents, and such breach has not been cured within thirty (30) days after issuance of a written notice by any Series C Shareholder to the Company, or (iii) a Series B Redemption Notice (as defined in the Restated Articles) has been delivered to the Company, each Series C Shareholder shall be entitled to, by delivery of a written notice (the “Series C Put Notice”) by the Series C Shareholder to the Founder Parties, require the Founder Parties, and the Founder Parties shall be obliged, jointly and severally, to purchase from the Series C Shareholder all (but not less than all) of the Series C Shares held by the Series C Shareholder at the Series C Put Option Price (the “Series C Put Option”).

6.4	Procedure.

(a) Prior and in preference to any payment of the Series C-1 Put Option Price and the Series C Put Option Price, the funds legally available to the Founder Parties shall be first applied to payment for the Series C-2 Put Option Price on a pari passu basis.

(b) After payment in full of the Series C-2 Put Option Price pursuant to Section 6.4(a) above, if the funds legally available to the Founder Parties are insufficient to permit the full payment of the Series C-1 Put Option Price and the Series C Put Option Price in respect of each Series C-1 Share and Series C Share required to be purchased, then the Founder Parties’ available funds shall be allocated so that 45% of such funds are apportioned to purchase Series C Shares, and 55% are apportioned to purchase Series C-1 Shares, with respect to which the Put Option has been exercised, and in each case deeming the Series C Shares and the Series C-1 Shares respectively as a single class.

(c) Without limiting any rights of the Series C-2 Shareholders, the Series C-1 Shareholder and the Series C Shareholder which are set forth in this Agreement and the Restated Articles, or are otherwise available under law, the Series C-2 Shareholders, the Series C-1 Shareholder and the Series C Shareholder shall continue to be entitled to all the powers, designations, preferences and relative participating, optional, and other special rights (including, without limitation, rights to accrue dividends) of the balance of any Series C-2 Shares, Series C-1 Shares or Series C Shares subject to the Put Option hereunder with respect to which the Founder Parties have become obligated to pay the Put Option Price but which they have not paid in full, until the Put Option Price have been paid in full with respect to such Series C-2 Shares, Series C-1 Shares and Series C Shares.

6.5

Completion. The Put Option shall be completed no later than sixty (60) days following the delivery of the Put Notice by the relevant Series C-2 Shareholders and/or Series C-1 Shareholder and/or Series C Shareholder (each, a “PO Shareholder”) to the Founder Parties. At completion, subject to Section 6.4 above, the Founder Parties shall, jointly and severally, pay the Put Option Price to the relevant PO Shareholder by wire transfer of immediately available funds to an account designated in writing by the relevant PO Shareholder and the relevant PO Shareholder shall deliver an instrument of transfer and a share certificate in respect of the Series C-2 Shares and/or the Series C-1 Shares and/or the Series C Shares against such payment by the Founder Parties of the Put Option Price. The register of the Company shall be updated to reflect the share transfers as a result of the exercise of the Put Option by any PO Shareholder.

6.6	No prejudice. The exercise by any PO Shareholder of the Put Option will not prejudice it in relation to any other rights or remedies it may have under this Agreement or the other Transaction Documents.

7.	ADDITIONAL AGREEMENTS

7.1	Registration Rights. The Company hereby grants to the Preferred Shareholders such registration rights as set forth on Exhibit E.

7.2

Founder’s Commitment; Non-Competition. The Founder hereby undertakes to the Preferred Shareholders that, he (a) will provide full-time service in the Group Companies until the third (3^rd) anniversary of the closing of the QIPO; (b) shall devote all his working time to the development of the business of the Group Companies, and such devotion shall not be interfered by any other activities engaged in or to be engaged in by the Founder outside his working time; (c) shall not, without the prior written consent of the Preferred Shareholders, either on his own account or through any of his Affiliates, or in conjunction with or on behalf of any other Person, directly or indirectly invest or otherwise have interest in any business directly or indirectly in competition with the business conducted by any Group Company, or provide service of any form to any Person engaged in any business directly or indirectly competing with the business of any Group Company; or (d) shall not solicit or entice away or attempt to solicit or entice away to a competitor from any Group Company, any employee, consultant, supplier, customer, client, representative, or agent of such Group Company. The non-competition obligations of the Founder under this Section 7.2 shall not cease until the second (2^nd) anniversary after the later of (i) such Founder and his Affiliates no longer hold any Shares in the Company, (ii) such Founder and his Affiliates are no longer a director, officer or employee of any Group Company. The Founder shall cause each of the Key Employees of any Group Company to enter into an employment contract and non-compete, confidentiality and invention agreement undertaking the same as the Founder undertakes in this Section 7.2, the form and substance of which shall be satisfactory to the Preferred Shareholders.

7.3	Tax Matters.

(a) The Group Companies shall, and each Warrantor shall cause the Group Companies to, comply with the applicable Tax Laws and all record-keeping, reporting, and other requirements necessary for a Preferred Shareholder’s compliance with any applicable Tax Laws. The Group Companies shall, and each Warrantor shall cause the Group Companies to, avoid adverse Tax status (including without limitation PRC resident enterprise) for any Group Company organized outside the PRC under the PRC Tax Laws, or CFC or PFIC under the U.S. Tax Laws.

(b) The Group Companies shall, and each Warrantor shall cause the Group Companies to, ensure that each Group Company uses reasonable best efforts, to maintain sufficient commercial substance and ensure that they are otherwise properly managed in a manner that ensures that they are treated as a tax resident only in its jurisdiction of incorporation. In this regard, each of the Company and the other Group Companies shall ensure that its central management and control, and in particular, the place where its directors meet to conduct its business is in its jurisdiction of incorporation.

(c) Within forty-five (45) days from the end of each taxable year of the Company, the Company shall determine, in consultation with a reputable accounting firm, whether the Company or any of its subsidiaries was a PFIC in such taxable year (including whether any exception to PFIC status may apply). If the Company determines that the Company or any of its subsidiaries was a PFIC in such taxable year (or if a Governmental Authority or any Preferred Shareholder informs the Company that it has so determined), it shall, within sixty (60) days from the end of such taxable year, provide the following information to each Preferred Shareholder that is a United States Person a “Direct US Investor”) and each United States Person that holds either direct or indirect interest in such Preferred Shareholder (an “Indirect US Investor”) (hereinafter, collectively referred to as a “PFIC Shareholder”): (i) all information reasonably available to the Company to permit such PFIC Shareholder to (A) timely file and maintain a “qualified electing fund” election in the US with respect to the Company and/or such other Group Company, as the case may be, (B) accurately prepare its US tax returns and comply with any other reporting requirements, if any, arising from its investment in the Company and relating to the Company or any of its subsidiaries’ classification as a PFIC and (C) make any election (including, without limitation, a “qualified electing fund” election under Section 1295 of the Code), with respect to the Company (or any of its subsidiaries); and (ii) a completed “PFIC Annual Information Statement” as described under Treasury Regulation Section 1.1295-1(g). The Company shall be required to provide the information described above to an Indirect US Investor only if the relevant Preferred Shareholder requests in writing that the Company provide such information to such Indirect US Investor. All costs and expenses incurred by the Company in connection with the provision of information pursuant to this Section shall be borne by the Company.

(d) Each of the Founder Parties represents that such Person is not a United States Person and such Person is not owned, wholly or in part, directly or indirectly, by any United States Person. The Founder Parties shall provide prompt written notice to the Company of any subsequent change in its United States Person status. The Company shall use its best efforts to avoid future status of the Company or any of its subsidiaries as a CFC. Upon written request of any Preferred Shareholder from time to time, the Company will promptly provide in writing such information concerning its shareholders and the direct and indirect interest holders in each shareholder sufficient for such Preferred Shareholder to determine whether the Company is a CFC in order for such Preferred Shareholder to timely comply with applicable U.S. Tax Laws and any related requirements. In the event that the Company does not have in its possession all the information necessary for the Preferred Shareholders to make such determination, the Company shall use its commercially reasonable efforts to promptly procure such information from its shareholders. The Company shall, (i) upon written request of any Preferred Shareholder, furnish on a timely basis all information reasonably requested by such Preferred Shareholder and its permitted transferees and any other US shareholders to satisfy its (or any Indirect US Investor’s) US federal income tax return filing requirements, if any, arising from its investment in the Company and relating to the Company or any of its subsidiaries’ classification as a CFC. All costs and expenses incurred by the Company in connection with the provision of information pursuant to this Section shall be borne by the Company. The Company and each of its subsidiaries shall use their best efforts to avoid generating for any taxable year in which the Company or any of its subsidiaries is a CFC, income that would be includible in the income of such Preferred Shareholder (or any Indirect US Investor) pursuant to Section 951 of the Code.

(e) At the request of the Series C-2 Shareholders, the Series C-1 Shareholder or the Series C Shareholder, the Shareholders shall cooperate and shall cause the Company and its subsidiaries to cooperate with the Series C-2 Shareholders, the Series C-1 Shareholder or the Series C Shareholder (as the case may be) in (i) the prompt preparation and filing of ‘check the box’ elections effective at least 2 days prior to closing of the Share Subscription Agreement to specify the US tax classification of the Company and/or any such subsidiary, (ii) the prompt conversion of the Company and/or any subsidiary that is not currently eligible to make a check the box election into a company form which is eligible to make such an election, and (iii) taking any other action that is reasonably requested to enhance, rationalize, and/or simplify the US tax treatment of the Company and its subsidiaries, it being understood that (x) no check the box election shall have any bearing on the tax treatment or legal status of the subject entity for non-US purposes, (y) no conversion or action shall be undertaken as described above if it is determined that doing so would have an adverse impact on either the Company or the Shareholders, and (z) the reasonable costs and expenses incurred in this connection shall be promptly paid or reimbursed by the Series C-2 Shareholders, the Series C-1 Shareholder or the Series C Shareholder (as the case may be). The Shareholders shall cooperate in the timely adoption of resolutions, if and when necessary, and the execution and filing of such forms and other documentation as the Series C-2 Shareholders, the Series C-1 Shareholder or the Series C Shareholder (as the case may be) may request in this respect.

7.4	Anti-Corruption.

(a) For the purposes of paragraphs (c), (d) and Section 7.6 below:

“Government Official” means an official or employee of any government department, agency, or instrumentality, any government-owned or controlled enterprise, any public international organization, or any political party, as well as any candidate for political office.

“Relevant Person” means any owner, director, officer, employee, or agent of any Warrantor (collectively, “Relevant Persons”).

(b) Books and Records and Internal Controls.

(i)

Each Warrantor shall make and keep books, records, and accounts which, in reasonable detail, accurately and fairly reflect its transactions and dispositions of assets.

(ii)

Each Warrantor (other than the Founder) shall devise and maintain a system of internal accounting controls in accordance with sound business practices and the international standards of good practice and is satisfactory to the Preferred Shareholders to provide assurance that (1) transactions are executed and access to assets is permitted only in accordance with management’s general or specific authorization, (2) transactions by it are recorded as necessary to permit preparation of financial statements in conformity with the PRC GAAP, or, at the election of the Series C-2 Majority, the Series C-1 Majority or the Series C Majority and for the purpose of a QIPO, US GAAP or other accounting standard and to maintain asset accountability, (3) if applicable, the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences, (4) segregating duties for cash deposits, cash reconciliation, cash payment, proper approval is established, and (5) no personal assets or bank accounts of the employees, directors, officers are mingled with the corporate assets or corporate bank account, and no Warrantor uses any personal bank accounts of any employees, directors, officers thereof during the operation of the business.

(i)

Each Warrantor shall, and shall procure that each Relevant Person to, use only legitimate business practices in compliance with applicable Laws in commercial operations and in dealing with government agencies.

(ii)

No Warrantor shall, and each Warrantor shall procure that the Relevant Persons shall not, make or offer any payments or transfers of value which have the purpose or effect of public or commercial bribery, or acceptance of or acquiescence in kickbacks or other unlawful or improper means of obtaining business.

(iii)

No Warrantor shall, and each Warrantor shall procure that the Relevant Persons shall not, offer, pay, promise to pay, or authorized or will authorize the payment of any money or anything else of value, whether directly or through another Person or entity, to any Government Official or political party in order to (1) influence any act or decision of such official or party or (2) induce such official or party to use his or its influence with a government or instrumentality thereof.

(d) Absence of Government Official Economic Interest. Each of the Warrantors and the Group Companies shall procure that none of the Government Officials in any country or region and no close relative or family member of such an official (i) will hold an ownership or other economic interest, direct or indirect, in the Holding Company or any Group Company other than holding interests in the Holding Company or any Group Company that are acquired through open market purchases or (ii) will serve as an officer, director, or employee of the Holding Company or any Group Company.

(e) OFAC Sanctions. The Warrantors shall not, and each Warrantor shall cause the Holding Company and the Group Companies not to:

(i)

be owned or controlled by an individual or entity, and each director, officer or employee shall not be an individual which is:

(1)

a Prohibited Person; or

(2)

located, organized or resident in a country or territory that is the subject of Sanctions (currently, including, without limitation, Cuba, Iran, North Korea, Syria and the Crimea region of Ukraine).

(ii)

engage in, any dealings or transactions with any Prohibited Person, or in any country or territory that at the time of the dealing or transaction is the subject of Sanctions. Each Warrantor shall adopt and implement written policies and procedures designed to achieve, and which are reasonably expected to continue to achieve, compliance with Sanctions and the obligations under this Section. All Founder Parties agree to cooperate with this undertaking and not to take any action (or engage in inaction) that would cause any Warrantor or any Preferred Shareholder to be in violation of those policies and procedures or of any Sanctions.

(iii)

“Sanction” means any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the United Nations Security Council, the European Union or Her Majesty’s Treasury.

(iv)

“Prohibited Person” means (i) an entity or individual with whom U.S. companies and nationals are precluded from doing business under any U.S. sanctions or export regimes administered or enforced by the OFAC, the U.S. State Department, the U.S. Commerce Department or other U.S. agencies, including (a) the OFAC’s List of Specially Designated Nationals and Blocked Persons and (b) the OFAC’s sanctions programs targeted against Cuba, Iran, Sudan, Syria, Myanmar/Burma, the Crimea region of Ukraine or North Korea; or (ii) an entity or individual that is on any list of sanctioned or designated Persons administered or maintained by the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.

(f) Anti-money Laundering. Each of the Warrantors and the Group Companies shall, and shall procure the Holding Company and the Group Companies to, comply with applicable anti-money laundering statutes of all jurisdictions, including, without limitation, all applicable jurisdiction and U.S. anti-money laundering laws, the rule and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental or regulatory agency (collectively, the “Money Laundering Laws”); and no action, suit or proceeding by or before any court or governmental or regulatory agency, authority or body or any arbitrator involving the Holding Company or the Group Companies with respect to the Money Laundering Laws is pending or, so far as the Founder Parties are aware, threatened.

7.5

Restated Articles. In the event of any conflict or inconsistency between any of the terms of this Agreement and any of the terms of the Restated Articles, subject to any applicable law, the terms of this Agreement shall prevail in all respects as regards the Parties (other than the Company), the Parties (other than the Company) shall give full effect to and act in accordance with the provisions of this Agreement over the provisions of the Restated Articles, and the Parties (other than the Company) hereto shall exercise all voting and other rights and powers (including to procure any required alteration to the Restated Articles to resolve such conflict or inconsistency) to make the provisions of this Agreement effective.

7.6

Most Favored Nation Treatment. The Warrantors jointly and severally undertake to the Series C Shareholder, the Series C-1 Shareholder and the Series C-2 Shareholders that in the event any Group Company grants, issues or provides any Person any right, privilege or protection more favorable than those granted to the Series C Shareholder and/or the Series C-1 Shareholder and/or the Series C-2 Shareholders, the Series C Shareholder and/or the Series C-1 Shareholder and/or the Series C-2 Shareholders shall have the right to require that such Group Company concurrently grants, issues or provides the same rights, privileges or protections to the Series C Shareholder and/or the Series C-1 Shareholder and/or the Series C-2 Shareholders pari passu with such Person.

7.7

Directors and Officers Liability Insurance. The Company shall obtain and maintain, in full force and effect, directors and officers liability insurance for each of the Company’s directors and officers for the term of this Agreement. The directors and officers liability insurance shall be in an insured amount of not less than the equivalent of US$15 million, on an individual or aggregate claim basis. The cost of the directors and officers liability insurance will be borne by the Company. If written on a claims made basis, the directors and officers liability insurance shall be maintained for no less than six (6) years after the termination of this Agreement or, for such extended period as may be agreed between the Preferred Shareholders and the Company. In addition, the Preferred Shareholders may require the Company to obtain and maintain additional types of insurance, such insurance policies to be commercially reasonable taking into account the business of the Group Companies. All insurance policies shall be placed with insurers with a minimum financial strength rating by Standard & Poor’s or Moody’s of “A”, A. M Best of “A-” or a similar rating.

QIPO

This Agreement and all rights and covenants contained herein, except for obligations set forth in Sections 7.1, 7.2, 7.4, 8, and 9, shall terminate on the closing of a QIPO. If for the purpose of a QIPO and as approved by the Series C-2 Majority, the Series C-1 Majority, the Series C Majority, the Series B Majority and the Series A Majority, the Company is required or advised by counsel to conduct reorganization, the Preferred Shareholders may elect to waive any or all of their preferred or special rights hereunder, effective as of the completion of such reorganization; provided that, in the event that the QIPO does not occur within twelve (12) months after the completion of such reorganization, the Warrantors shall take all such actions as necessary or desirable to restore all the rights and privileges of the Preferred Shareholders contained herein, including without limitation (i) causing the Company to amend the Restated Articles, (ii) causing the Company to issue to Preferred Shareholders applicable class and number of shares of the Company, and (iii) entering into agreements containing substantially the same terms and conditions hereof. After the completion of the QIPO, except as otherwise approved by the Preferred Shareholders in writing, no Founder Party shall directly or indirectly Transfer or dispose of any Share held by it after the expiration of the relevant lock-up period as provided in the applicable Laws or required by the relevant stock exchange or Governmental Authorities.

9.	MISCELLANEOUS

9.1

Governing Law. This Agreement shall be governed by and construed exclusively in accordance with the Laws of Hong Kong without giving effect to any choice of law rule that would cause the application of the Laws of any jurisdiction other than the Laws of Hong Kong to the rights and duties of the Parties hereunder.

9.2

Dispute Resolution. The Parties agree to negotiate in good faith to resolve any dispute between them regarding this Agreement. If the negotiations do not resolve the dispute to the satisfaction of the Parties to the dispute within thirty (30) days after the commencement of the negotiation, any Party to the dispute shall have the right to refer such dispute to be finally settled by arbitration at Hong Kong International Arbitration Centre (“HKIAC”). The arbitration shall be conducted in Hong Kong and shall be administered by the HKIAC in accordance with the HKIAC Administered Arbitration Rules in force at the time of the commencement of the arbitration. However, if such rules are in conflict with the provisions of this Section 9.2, the provisions of this Section 9.2 shall prevail. The dispute shall be referred to an arbitration tribunal consisting of three (3) arbitrators appointed in accordance with the HKIAC Administered Arbitration Rules. The decision of the tribunal shall be final and binding on the Parties, and the prevailing Party may apply to a court of competent jurisdiction for enforcement of such award. The costs and expenses of the arbitration, including the fees of the arbitral tribunal, shall be borne and paid by the Parties in such proportions as the arbitral tribunal shall determine. The language of the arbitration shall be English.

9.3

Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by an internationally recognized overnight courier service, by facsimile or registered or certified mail (postage prepaid, return receipt requested) or electronic mail to the respective Parties at the addresses specified on Part VII of Exhibit A (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 9.3).

Where a notice is sent by next-day or second-day courier service, service of the notice shall be deemed to be effected by properly addressing, pre-paying and sending by next-day or second-day service through an internationally-recognized courier a letter containing the notice, with a written confirmation of delivery, and to have been effected at the earlier of (i) delivery (or when delivery is refused) and (ii) expiration of two (2) Business Days after the letter containing the same is sent as aforesaid. Where a notice is sent by facsimile or electronic mail, service of the notice shall be deemed to be effected by properly addressing, and sending such notice through a transmitting organization, with a written confirmation of delivery, and to have been effected on the day the same is sent as aforesaid, if such day is a Business Day and if sent during normal business hours of the recipient, otherwise the next Business Day. Notwithstanding the foregoing, to the extent a “with a copy to” address is designated, notice must also be given to such address in the manner above for such notice, request, consent or other communication hereunder to be effective.

9.4

Successors and Assigns. Except as otherwise provided herein, 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 whose rights or obligations hereunder are affected by such terms and conditions. This Agreement, and the rights and obligations hereunder, shall not be assigned without the mutual written consents of the Preferred Shareholders and the Company; provided that any Preferred Shareholder may assign its rights and obligations to an Affiliate of it or third party without consent of the other Parties under this Agreement and the assignee shall execute and deliver such documents and take such other actions as may be necessary for such assignee to join in and be bound by the terms of this Agreement as an “Preferred Shareholder” (if not already a Party hereto) upon and after such assignment.

9.5

Severability. In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected thereby. If, however, any provision of this Agreement shall be invalid, illegal, or unenforceable under any such applicable Laws in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such Law.

9.6

Waiver and Amendment. This Agreement may only be amended or modified by an instrument in writing signed by the Company, the Preferred Shareholders and the Ordinary Majority; provided that any Party may, for itself only, (a) extend the time for the performance of any of the obligations or other acts of another Party, (b) waive any inaccuracies in the representations and warranties of another Party contained herein or in any document delivered by another Party pursuant hereto or (c) waive compliance with any of the agreements of another Party or conditions to such Party’s obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Party to be bound thereby and shall be valid as against such Party giving the extension or waiver only. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of any Party to assert any of its rights hereunder shall not constitute a waiver of any of such rights.

9.7

Interpretation. For all purposes of this Agreement, except as otherwise expressly provided, (a) the defined terms shall have the meanings assigned to them in its definition and include the plural as well as the singular, and pronouns of either gender or neuter shall include, as appropriate, the other pronoun forms; (b) all references in this Agreement to designated “Sections” and other subdivisions are to the designated Sections and other subdivisions of the body of this Agreement unless explicitly stated otherwise, and all references in this Agreement to designated exhibits are to the exhibits attached to this Agreement unless explicitly stated otherwise, (c) the words “herein”, “hereof”, and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision, (d) the word “knowledge” means, with respect to a Person’s “knowledge”, the actual knowledge of such Person and that knowledge which should have been acquired by it after making due inquiry, (e) the titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement, (f) any reference in this Agreement to any “Party” or any other Person shall be construed so as to include its successors in title, permitted assigns and transferees, (g) any reference in this Agreement to any agreement or instrument is a reference to that agreement or instrument as amended or novated, (h) this Agreement is jointly prepared by the Parties and should not be interpreted against any Party by reason of authorship, and (i) in calculations of share numbers, (1) references to a “fully diluted basis” mean that the calculation is to be made assuming that all outstanding options, warrants and other Equity Securities convertible into or exercisable or exchangeable for Ordinary Shares (whether or not by their terms then currently convertible, exercisable or exchangeable) have been so converted, exercised or exchanged, (2) references to a “non-diluted basis” mean that the calculation is to be made taking into account only Ordinary Shares then in issue and (3) references to an “as converted basis” mean that the calculation is to be made assuming that all Preferred Shares in issue have been converted into Ordinary Shares. All calculations shall be deemed to be on a fully diluted basis unless otherwise specified. Any share number referred to in this Agreement shall be appropriately adjusted to take into account any bonus share issue, share subdivision, share combination, share split, recapitalization, reclassification or similar event affecting the Ordinary Shares after the date of this Agreement.

9.8

Entire Agreement. This Agreement and other Transaction Documents constitute the entire agreement of the Parties with respect to the subject matter hereof and thereof, and supersede all prior agreements and undertakings, both written and oral, among the Parties with respect to the subject matter hereof and thereof.

9.9

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

9.10	Confidentiality and Non-Disclosure.

(a) Disclosure of Terms. The terms and conditions of this Agreement and the Transaction Documents and all exhibits and schedules attached to such agreements, including their existence, and any information relating to the business, financial or other matters of the Group Companies obtained by the Preferred Shareholders (collectively, the “Confidential Information”), shall be considered confidential information and shall not be disclosed by any Party hereto to any third party except in accordance with the provisions set forth below; provided that such Confidential Information shall not include any information that is in the public domain other than caused by the breach of the confidentiality obligations hereunder.

(b) Press Releases, etc. Any press release issued by the Company shall not disclose any of the Confidential Information and the final form of such press release shall be approved in advance in writing by the Preferred Shareholders. No other announcement regarding any of the Confidential Information in a press release, conference, advertisement, announcement, professional or trade publication, mass marketing materials or otherwise to the general public may be made without the prior written consent of the Preferred Shareholders.

(c) Permitted Disclosures. Notwithstanding the foregoing, any Party may disclose any of the Confidential Information to its current or bona fide prospective investors, employees, investment bankers, lenders, potential and actual transferees, partners, accountants and attorneys, in each case only where such Persons or entities are under appropriate nondisclosure obligations. Without limiting the generality of the foregoing, the Preferred Shareholders shall be entitled to disclose the Confidential Information for the purposes of fund reporting or inter-fund reporting or to its fund manager, other funds managed by its Affiliates, fund manager and their respective auditors, counsel, directors, officers, employees, shareholders or investors.

(d) Legally Compelled Disclosure. In the event that any Party is requested or becomes legally compelled (including without limitation, pursuant to securities laws and regulations or by a regulator with competent jurisdiction) to disclose the existence of this Agreement, other Transaction Documents, any of the exhibits and schedules attached to such agreements, or any of the Confidential Information in contravention of the provisions of this Section 9.10, such Party (the “Disclosing Party”) shall, to the extent legally permissible and reasonably practicable, provide the other Parties (the “Non-Disclosing Parties”) with prompt written notice of that fact and use all reasonable efforts to seek (with the cooperation and reasonable efforts of the other Parties) a protective order, confidential treatment or other appropriate remedy. In such event, the Disclosing Party shall furnish only that portion of the information which is legally required to be disclosed and shall exercise reasonable efforts to keep confidential such information to the extent reasonably requested by any Non-Disclosing Party.

(e) Other Information. The provisions of this Section 9.10 shall be in addition to, and not in substitution for, the provisions of any separate nondisclosure agreement executed by any of the Parties with respect to the transactions contemplated hereby.

(f) Affiliates. Each Party shall cause each of its Affiliates to comply with all of the restrictions, limitations and obligations set forth in this Section 9.10 as if it were a party hereto.

9.11	Termination. The rights and obligations of any Shareholder hereunder shall cease when it or he no longer holds any Equity Securities in the Company.

9.12

Termination of Prior Shareholders Agreements and Waiver of Claims under the Previous Financing Documents. The Parties acknowledge and agree that the Prior Shareholders Agreement shall be deemed to have been terminated and superseded by this Agreement, and each of the Parties hereby acknowledges that it is not aware of any claims that it may have against each other Party under the Previous Financing Documents prior to the date of this Agreement. Each of SAIF IV Consumer (BVI) Limited and Youzhen Inc. acknowledges and agrees, in their capacity as the holders of the Series B Shares, to waive all claims against the Warrantors (as defined in the Series B SSA) for the failure to comply with any covenant set forth in Section 6 thereof. North Haven Private Equity Asia Harbor Company Limited, acknowledges and agrees, in its capacity as the holder of the Series C Shares, to waive all claims as of the date of this Agreement against the Warrantors (as defined in the Series C SSA) for the failure to comply with any covenant set forth in Section 7 thereof.

9.13

Share Charge Amendment. The Founder, the Holding Company, the Company and North Haven Private Equity Asia Harbor Company Limited hereby acknowledge and agree that the Founder Share Charge and the Holding Company Share Charge (each as defined in the Series C SSA) shall be amended to the extent as set forth in Exhibit G hereof.

9.14	No Valuation Adjustment in D Round Financing. The Parties acknowledge and agree that in the Company’s future D round financing, there shall be no valuation adjustment mechanism or any agreement or scheme of similar nature.

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IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Agreement as of the date and year first above written.


THE COMPANY:

Q&K INTERNATIONAL GROUP LIMITED

By:		/s/ Guangjie Jin
Name:		Guangjie Jin (金光杰)
Title:		Chief Executive Officer

THE BVI SUBSIDIARY:

QK365.com INC.

By:		/s/ Guangjie Jin
Name:		Guangjie Jin (金光杰)
Title:		Sole Director

THE US SUBSIDIARY:

QK365.com, INC.

By:		/s/ Guangjie Jin
Name:		Guangjie Jin (金光杰)
Title:		Sole Director

THE HK SUBSIDIARY:

QINGKE (CHINA) LIMITED

By:		/s/ Guangjie Jin
Name:		Guangjie Jin (金光杰)
Title:		Sole Director