|
Cayman Islands
|
| |
3569
|
| |
Not Applicable
|
|
|
(State or other jurisdiction of
incorporation or organization) |
| |
(Primary Standard Industrial
Classification Code Number) |
| |
(I.R.S. Employer
Identification Number) |
|
|
Z. Julie Gao, Esq.
Shu Du, Esq. Skadden, Arps, Slate, Meagher & Flom LLP c/o 42/F, Edinburgh Tower, The Landmark 15 Queen’s Road Central Hong Kong +852 3740-4700 |
| |
Allen Wang, Esq.
Latham & Watkins LLP 18th Floor, One Exchange Square 8 Connaught Place, Central Hong Kong +852 2912 2500 |
|
| | ||||||||||||||
Title of each class of securities
to be registered |
| | |
Proposed maximum aggregate
offering price(2)(3) |
| | |
Amount of
registration fee |
| ||||||
Class B Ordinary Shares, par value US$0.0001 per share(1)
|
| | | | US$ | | | | | | US$ | | |
| | | | | 1 | | | |
| | | | | 15 | | | |
| | | | | 17 | | | |
| | | | | 20 | | | |
| | | | | 66 | | | |
| | | | | 68 | | | |
| | | | | 69 | | | |
| | | | | 70 | | | |
| | | | | 71 | | | |
| | | | | 73 | | | |
| | | | | 75 | | | |
| | | | | 76 | | | |
| | | | | 79 | | | |
| | | | | 100 | | | |
| | | | | 109 | | | |
| | | | | 132 | | | |
| | | | | 145 | | | |
| | | | | 151 | | | |
| | | | | 154 | | | |
| | | | | 155 | | | |
| | | | | 167 | | | |
| | | | | 177 | | | |
| | | | | 179 | | | |
| | | | | 185 | | | |
| | | | | 195 | | | |
| | | | | 196 | | | |
| | | | | 197 | | | |
| | | | | 198 | | | |
| | | | | F-1 | | |
|
Elements of LiDAR
|
| |
Definition
|
|
| Performance | | | The explicit specifications of a LiDAR unit that directly reflect its performance, including detection range (for example, 200 meters or longer at 10% reflectivity), point density (number of points generated per second, which is horizontal resolution times vertical resolution, multiplied by frame rate), distance accuracy and precision, reflectivity accuracy, and interference rejection, among others. | |
| Quality | | |
The implicit aspects of a LiDAR unit that represent its ability to perform consistently under a variety of circumstances over time, including robustness under extreme operating temperatures, different levels of humidity, waterproof levels, and mechanical shocks and stresses. Quality also represents a product’s manufacturing consistency, functional safety (typically ASIL-B), and viability as an automotive-grade component.
|
|
| Cost | | | The per unit price for each LiDAR unit. Customers of LiDAR units for different applications and industries have varying levels of cost sensitivity, which is usually influenced by factors such as timeline for mass adoption, operating scale, and the business models of the target application, among others. | |
| | |
For the Year Ended December 31,
|
| |
For the Six Months Ended June 30,
|
| ||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2020
|
| |
2021
|
| ||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
US$
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| ||||||||||||||||||
| | |
(in thousands, except for share amount and per share data)
|
| |||||||||||||||||||||||||||||||||
Summary Combined and Consolidated Statements
of Operations and Comprehensive Loss: |
| | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Net revenues
|
| | |
|
348,084
|
| | | |
|
415,514
|
| | | |
|
64,355
|
| | | |
|
81,350
|
| | | |
|
234,998
|
| | | |
|
36,397
|
| |
Cost of revenues
|
| | | | 103,377 | | | | | | 176,600 | | | | | | 27,352 | | | | | | 44,040 | | | | | | 100,482 | | | | | | 15,563 | | |
Gross profit
|
| | |
|
244,707
|
| | | |
|
238,914
|
| | | |
|
37,003
|
| | | |
|
37,310
|
| | | |
|
134,516
|
| | | |
|
20,834
|
| |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Research and development expenses
|
| | | | 149,817 | | | | | | 229,653 | | | | | | 35,569 | | | | | | 91,104 | | | | | | 120,139 | | | | | | 18,607 | | |
General and administrative expenses
|
| | | | 55,112 | | | | | | 76,553 | | | | | | 11,857 | | | | | | 35,034 | | | | | | 212,523 | | | | | | 32,916 | | |
Sales and marketing expenses
|
| | | | 38,740 | | | | | | 49,904 | | | | | | 7,729 | | | | | | 21,518 | | | | | | 24,129 | | | | | | 3,737 | | |
Other operating expenses/(income), net
|
| | | | 149,089 | | | | | | (15,384) | | | | | | (2,383) | | | | | | (3,004) | | | | | | (13,347) | | | | | | (2,067) | | |
Total operating expenses
|
| | |
|
392,758
|
| | | |
|
340,726
|
| | | |
|
52,772
|
| | | |
|
144,652
|
| | | |
|
343,444
|
| | | |
|
53,193
|
| |
Loss from operations
|
| | |
|
(148,051)
|
| | | |
|
(101,812)
|
| | | |
|
(15,769)
|
| | | |
|
(107,342)
|
| | | |
|
(208,928)
|
| | | |
|
(32,359)
|
| |
Interest income
|
| | | | 19,107 | | | | | | 20,925 | | | | | | 3,241 | | | | | | 12,208 | | | | | | 5,759 | | | | | | 892 | | |
Foreign exchange gain/(loss)
|
| | | | 9,619 | | | | | | (25,696) | | | | | | (3,980) | | | | | | 6,829 | | | | | | (9,350) | | | | | | (1,448) | | |
Other income/(loss), net
|
| | | | 31 | | | | | | (832) | | | | | | (129) | | | | | | (262) | | | | | | (990) | | | | | | (153) | | |
Net loss before income tax
|
| | |
|
(119,294)
|
| | | |
|
(107,415)
|
| | | |
|
(16,637)
|
| | | |
|
(88,567)
|
| | | |
|
(213,509)
|
| | | |
|
(33,068)
|
| |
Income tax (expenses)/benefit
|
| | | | (930) | | | | | | 199 | | | | | | 31 | | | | | | 147 | | | | | | 35 | | | | | | 5 | | |
Net loss
|
| | |
|
(120,224)
|
| | | |
|
(107,216)
|
| | | |
|
(16,606)
|
| | | |
|
(88,420)
|
| | | |
|
(213,474)
|
| | | |
|
(33,063)
|
| |
| | |
For the Year Ended December 31,
|
| |
For the Six Months Ended June 30,
|
| ||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2020
|
| |
2021
|
| ||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
US$
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| ||||||||||||||||||
| | |
(in thousands, except for share amount and per share data)
|
| |||||||||||||||||||||||||||||||||
Change in redemption value of preferred equity
|
| | | | (55,247) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Net loss attributable to ordinary
shareholders |
| | | | (175,471) | | | | | | (107,216) | | | | | | (16,606) | | | | | | (88,420) | | | | | | (213,474) | | | | | | (33,063) | | |
Net loss per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | (2.20) | | | | | | (1.19) | | | | | | (0.18) | | | | | | (1.00) | | | | | | (2.21) | | | | | | (0.34) | | |
Weighted average shares used in
calculating net loss per ordinary share: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | 79,899,201 | | | | | | 89,895,471 | | | | | | 89,895,471 | | | | | | 88,533,588 | | | | | | 96,465,785 | | | | | | 96,465,785 | | |
Pro forma net loss per share(1): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | (2.34) | | | | | | (1.47) | | | | | | (0.23) | | | | | | (1.17) | | | | | | (2.65) | | | | | | (0.41) | | |
Pro forma weighted average
shares used in calculating net loss per ordinary share(1): |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | 79,899,201 | | | | | | 89,895,471 | | | | | | 89,895,471 | | | | | | 88,533,588 | | | | | | 96,465,785 | | | | | | 96,465,785 | | |
| | |
As of December 31,
|
| |
As of June 30,
|
| ||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
US$
|
| |
RMB
|
| |
US$
|
| |||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||
Summary Combined and Consolidated Balance Sheets Data:
|
| | | | | | | | | | | | | | | | | | | | | ||||||||||
Cash and cash equivalents
|
| | | | 112,737 | | | | | | 256,688 | | | | | | 39,756 | | | | | | 2,293,022 | | | | | | 355,144 | | |
Short-term investments
|
| | | | 910,972 | | | | | | 638,981 | | | | | | 98,966 | | | | | | 382,383 | | | | | | 59,224 | | |
Accounts receivable (net of allowance for doubtful accounts of RMB2,257, RMB5,270 and RMB5,346 as of December 31, 2019 and 2020 and June 30, 2021, respectively)
|
| | | | 36,511 | | | | | | 56,319 | | | | | | 8,723 | | | | | | 66,390 | | | | | | 10,283 | | |
Inventories
|
| | | | 70,243 | | | | | | 149,925 | | | | | | 23,220 | | | | | | 257,819 | | | | | | 39,931 | | |
Prepayments and other current assets
|
| | | | 31,835 | | | | | | 40,658 | | | | | | 6,297 | | | | | | 93,718 | | | | | | 14,515 | | |
Total current assets
|
| | |
|
1,170,260
|
| | | |
|
1,209,239
|
| | | |
|
187,288
|
| | | |
|
3,142,823
|
| | | |
|
486,762
|
| |
Total assets
|
| | |
|
1,242,362
|
| | | |
|
1,312,125
|
| | | |
|
203,224
|
| | | |
|
3,322,366
|
| | | |
|
514,570
|
| |
Accounts payable
|
| | | | 18,608 | | | | | | 55,437 | | | | | | 8,586 | | | | | | 69,813 | | | | | | 10,813 | | |
Accrued expenses and other current liabilities
|
| | | | 229,091 | | | | | | 91,895 | | | | | | 14,235 | | | | | | 174,888 | | | | | | 27,088 | | |
Total current liabilities
|
| | |
|
271,168
|
| | | |
|
166,740
|
| | | |
|
25,826
|
| | | |
|
796,192
|
| | | |
|
123,316
|
| |
Total liabilities
|
| | |
|
313,150
|
| | | |
|
174,932
|
| | | |
|
27,095
|
| | | |
|
804,344
|
| | | |
|
124,578
|
| |
Redeemable preferred equity
|
| | | | 1,098,639 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total shareholders’ (deficit)/equity
|
| | | | (169,427) | | | | | | 1,137,193 | | | | | | 176,129 | | | | | | 2,518,022 | | | | | | 389,992 | | |
Total liabilities, redeemable preferred equity and shareholders’ (deficit)/equity
|
| | | | 1,242,362 | | | | | | 1,312,125 | | | | | | 203,224 | | | | | | 3,322,366 | | | | | | 514,570 | | |
| | |
For the Year Ended December 31,
|
| |
For the Six Months Ended June 30,
|
| ||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2020
|
| |
2021
|
| ||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
US$
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| ||||||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
Summary Combined and Consolidated Cash Flows Data:
|
| | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Net cash provided by/(used in) operating activities
|
| | | | 46,166 | | | | | | (352,015) | | | | | | (54,520) | | | | | | (88,058) | | | | | | (78,153) | | | | | | (12,103) | | |
Net cash (used in)/provided by investing activities
|
| | | | (779,497) | | | | | | 179,027 | | | | | | 27,727 | | | | | | 484,741 | | | | | | 168,340 | | | | | | 26,073 | | |
Net cash provided by financing activities
|
| | | | 739,741 | | | | | | 323,437 | | | | | | 50,095 | | | | | | — | | | | | | 1,933,486 | | | | | | 299,459 | | |
Net increase in cash and cash equivalents
|
| | | | 6,410 | | | | | | 150,449 | | | | | | 23,302 | | | | | | 396,683 | | | | | | 2,023,673 | | | | | | 313,429 | | |
Cash and cash equivalents at the beginning of the year/period
|
| | | | 104,336 | | | | | | 112,737 | | | | | | 17,461 | | | | | | 112,737 | | | | | | 256,688 | | | | | | 39,756 | | |
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
| | | | 1,991 | | | | | | (6,498) | | | | | | (1,007) | | | | | | (840) | | | | | | 12,661 | | | | | | 1,959 | | |
Cash and cash equivalents at the end of the year/period
|
| | | | 112,737 | | | | | | 256,688 | | | | | | 39,756 | | | | | | 508,580 | | | | | | 2,293,022 | | | | | | 355,144 | | |
| | |
As of June 30, 2021
|
| |||||||||||||||||||||||||||
| | |
Actual
|
| |
Pro forma
|
| |
Pro forma
as adjusted(1) |
| |||||||||||||||||||||
| | |
RMB
|
| |
US$
|
| |
RMB
|
| |
US$
|
| |
RMB
|
| |
US$
|
| ||||||||||||
Convertible loans
|
| | | | 12,920 | | | | | | 2,000 | | | | | | — | | | | | | — | | | | | | | | |
Shareholders’ equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Class A ordinary shares (US$0.0001 par value, 35,000,000 shares authorized, 30,033,379 shares issued and outstanding as of June 30, 2021)
|
| | | | 19 | | | | | | 3 | | | | | | 19 | | | | | | 3 | | | | | | | | |
Class B ordinary shares (US$0.0001 par value, 150,000,000 shares authorized, 81,137,578 shares issued and outstanding as of June 30, 2021)
|
| | | | 52 | | | | | | 8 | | | | | | 55 | | | | | | 9 | | | | | | | | |
Additional paid-in capital(2)
|
| | | | 3,131,204 | | | | | | 484,961 | | | | | | 3,598,099 | | | | | | 557,274 | | | | | | | | |
Subscription receivables
|
| | | | (356,045) | | | | | | (55,144) | | | | | | (356,045) | | | | | | (55,144) | | | | | | | | |
Accumulated deficit
|
| | | | (269,520) | | | | | | (41,743) | | | | | | (269,520) | | | | | | (41,744) | | | | | | | | |
Accumulated other comprehensive income
|
| | | | 12,312 | | | | | | 1,907 | | | | | | 12,312 | | | | | | 1,907 | | | | | | | | |
Total Shareholders’ equity(2)
|
| | | | 2,518,022 | | | | | | 389,992 | | | | | | 2,984,920 | | | | | | 462,305 | | | | | | | | |
Total Capitalization(2)
|
| | | | 2,530,942 | | | | | | 391,992 | | | | | | 2,984,920 | | | | | | 462,305 | | | | | | | | |
| | |
Per Ordinary Share
|
| |
Per ADS
|
|
Assumed initial public offering price
|
| | US$ | | | US$ | |
Net tangible book value as of June 30, 2021
|
| | US$3.42 | | | US$ | |
As adjusted net tangible book value after giving effect to this offering
|
| | US$ | | | US$ | |
Amount of dilution in net tangible book value to new investors in this
offering |
| | US$ | | | US$ | |
| | |
Ordinary Shares
Purchased |
| |
Total Consideration
|
| |
Average
Price Per Ordinary Share |
| |
Average
Price Per ADS |
| |||||||||||||||||||||
| | |
Number
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| |||||||||||||||||||||
Existing shareholders
|
| | | | | | | | | | | | | | US$ | | | | | % | | | | | US$ | | | | | | US$ | | | |
New investors
|
| | | | | | | | | | | | US$ | | | | | % | | | | | US$ | | | | | | US$ | | | | ||
Total
|
| | | | | | | | | | | | | | US$ | | | | | 100.0% | | | | | | | | | | | | | | |
| | |
For the Year Ended December 31,
|
| |
For the Six Months Ended June 30,
|
| ||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2020
|
| |
2021
|
| ||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
US$
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| ||||||||||||||||||
| | |
(in thousands, except for share amount and per share data)
|
| |||||||||||||||||||||||||||||||||
Selected Combined and Consolidated
Statements of Operations and Comprehensive Loss: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net revenues
|
| | | | 348,084 | | | | | | 415,514 | | | | | | 64,355 | | | | | | 81,350 | | | | | | 234,998 | | | | | | 36,397 | | |
Cost of revenues
|
| | | | 103,377 | | | | | | 176,600 | | | | | | 27,352 | | | | | | 44,040 | | | | | | 100,482 | | | | | | 15,563 | | |
Gross profit
|
| | | | 244,707 | | | | | | 238,914 | | | | | | 37,003 | | | | | | 37,310 | | | | | | 134,516 | | | | | | 20,834 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Research and development expenses
|
| | | | 149,817 | | | | | | 229,653 | | | | | | 35,569 | | | | | | 91,104 | | | | | | 120,139 | | | | | | 18,607 | | |
General and administrative
expenses |
| | | | 55,112 | | | | | | 76,553 | | | | | | 11,857 | | | | | | 35,034 | | | | | | 212,523 | | | | | | 32,916 | | |
Sales and marketing expenses
|
| | | | 38,740 | | | | | | 49,904 | | | | | | 7,729 | | | | | | 21,518 | | | | | | 24,129 | | | | | | 3,737 | | |
Other operating expenses/(income), net
|
| | | | 149,089 | | | | | | (15,384) | | | | | | (2,383) | | | | | | (3,004) | | | | | | (13,347) | | | | | | (2,067) | | |
Total operating expenses
|
| | |
|
392,758
|
| | | |
|
340,726
|
| | | |
|
52,772
|
| | | |
|
144,652
|
| | | |
|
343,444
|
| | | |
|
53,193
|
| |
Loss from operations
|
| | |
|
(148,051)
|
| | | |
|
(101,812)
|
| | | |
|
(15,769)
|
| | | |
|
(107,342)
|
| | | |
|
(208,928)
|
| | | |
|
(32,359)
|
| |
Interest income
|
| | | | 19,107 | | | | | | 20,925 | | | | | | 3,241 | | | | | | 12,208 | | | | | | 5,759 | | | | | | 892 | | |
Foreign exchange gain/
(loss), net |
| | | | 9,619 | | | | | | (25,696) | | | | | | (3,980) | | | | | | 6,829 | | | | | | (9,350) | | | | | | (1,448) | | |
Other income/(loss), net
|
| | | | 31 | | | | | | (832) | | | | | | (129) | | | | | | (262) | | | | | | (990) | | | | | | (153) | | |
Net loss before income tax
|
| | |
|
(119,294)
|
| | | |
|
(107,415)
|
| | | |
|
(16,637)
|
| | | |
|
(88,567)
|
| | | |
|
(213,509)
|
| | | |
|
(33,068)
|
| |
Income tax (expenses)/benefit
|
| | | | (930) | | | | | | 199 | | | | | | 31 | | | | | | 147 | | | | | | 35 | | | | | | 5 | | |
Net loss
|
| | |
|
(120,224)
|
| | | |
|
(107,216)
|
| | | |
|
(16,606)
|
| | | |
|
(88,420)
|
| | | |
|
(213,474)
|
| | | |
|
(33,063)
|
| |
Change in redemption value of preferred
equity |
| | | | (55,247) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Net loss attributable to ordinary shareholders
|
| | |
|
(175,471)
|
| | | |
|
(107,216)
|
| | | |
|
(16,606)
|
| | | |
|
(88,420)
|
| | | |
|
(213,474)
|
| | | |
|
(33,063)
|
| |
Net loss per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | (2.20) | | | | | | (1.19) | | | | | | (0.18) | | | | | | (1.00) | | | | | | (2.21) | | | | | | (0.34) | | |
Weighted average shares used in calculating net
loss per ordinary share: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | 79,899,201 | | | | | | 89,895,471 | | | | | | 89,895,471 | | | | | | 88,533,588 | | | | | | 96,465,785 | | | | | | 96,465,785 | | |
| | |
As of December 31,
|
| |
As of June 30,
|
| | ||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| | |||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
US$
|
| |
RMB
|
| |
US$
|
| | |||||||||||||||||
| | |
(in thousands)
|
| | | | |||||||||||||||||||||||||||
Selected Combined and Consolidated Balance Sheets Data:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Cash and cash equivalents
|
| | | | 112,737 | | | | | | 256,688 | | | | | | 39,756 | | | | | | 2,293,022 | | | | | | 355,144 | | | | ||
Short-term investments
|
| | | | 910,972 | | | | | | 638,981 | | | | | | 98,966 | | | | | | 382,383 | | | | | | 59,224 | | | | ||
Accounts receivable (net of allowance for doubtful accounts of RMB2,257, RMB5,270 and RMB5,346 as of December 31, 2019 and 2020 and June 30, 2021, respectively)
|
| | | | 36,511 | | | | | | 56,319 | | | | | | 8,723 | | | | | | 66,390 | | | | | | 10,283 | | | | ||
Inventories
|
| | | | 70,243 | | | | | | 149,925 | | | | | | 23,220 | | | | | | 257,819 | | | | | | 39,931 | | | | ||
Prepayments and other current assets
|
| | | | 31,835 | | | | | | 40,658 | | | | | | 6,297 | | | | | | 93,718 | | | | | | 14,515 | | | | ||
Total current assets
|
| | |
|
1,170,260
|
| | | |
|
1,209,239
|
| | | |
|
187,288
|
| | | |
|
3,142,823
|
| | | |
|
486,762
|
| | | ||
Total assets
|
| | |
|
1,242,362
|
| | | |
|
1,312,125
|
| | | |
|
203,224
|
| | | |
|
3,322,366
|
| | | |
|
514,570
|
| | | ||
Accounts payable
|
| | | | 18,608 | | | | | | 55,437 | | | | | | 8,586 | | | | | | 69,813 | | | | | | 10,813 | | | | ||
Accrued expenses and other current liabilities
|
| | | | 229,091 | | | | | | 91,895 | | | | | | 14,235 | | | | | | 174,888 | | | | | | 27,088 | | | | ||
Total current liabilities
|
| | | | 271,168 | | | | | | 166,740 | | | | | | 25,826 | | | | | | 796,192 | | | | | | 123,316 | | | | ||
Total liabilities
|
| | | | 313,150 | | | | | | 174,932 | | | | | | 27,095 | | | | | | 804,344 | | | | | | 124,578 | | | | ||
Redeemable preferred equity
|
| | |
|
1,098,639
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | ||
Total shareholders’ (deficit)/equity
|
| | | | (169,427) | | | | | | 1,137,193 | | | | | | 176,129 | | | | | | 2,518,022 | | | | | | 389,992 | | | | ||
Total liabilities, redeemable preferred equity and shareholders’ (deficit)/equity
|
| | | | 1,242,362 | | | | | | 1,312,125 | | | | | | 203,224 | | | | | | 3,322,366 | | | | | | 514,570 | | | |
| | |
For the Year Ended December 31,
|
| |
For the Six Months Ended June 30,
|
| ||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2020
|
| |
2021
|
| ||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
US$
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| ||||||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
Selected Combined and Consolidated Cash Flows Data:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net cash provided by/(used in) operating
activities |
| | | | 46,166 | | | | | | (352,015) | | | | | | (54,520) | | | | | | (88,058) | | | | | | (78,153) | | | | | | (12,103) | | |
Net cash (used in)/provided by investing
activities |
| | | | (779,497) | | | | | | 179,027 | | | | | | 27,727 | | | | | | 484,741 | | | | | | 168,340 | | | | | | 26,073 | | |
Net cash provided by financing activities
|
| | | | 739,741 | | | | | | 323,437 | | | | | | 50,095 | | | | | | — | | | | | | 1,933,486 | | | | | | 299,459 | | |
Net increase in cash and cash equivalents
|
| | | | 6,410 | | | | | | 150,449 | | | | | | 23,302 | | | | | | 396,683 | | | | | | 2,023,673 | | | | | | 313,429 | | |
Cash and cash equivalents at the beginning of the year/period
|
| | | | 104,336 | | | | | | 112,737 | | | | | | 17,461 | | | | | | 112,737 | | | | | | 256,688 | | | | | | 39,756 | | |
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
| | | | 1,991 | | | | | | (6,498) | | | | | | (1,007) | | | | | | (840) | | | | | | 12,661 | | | | | | 1,959 | | |
Cash and cash equivalents at the end of the year/period
|
| | | | 112,737 | | | | | | 256,688 | | | | | | 39,756 | | | | | | 508,580 | | | | | | 2,293,022 | | | | | | 355,144 | | |
| | |
For the Year Ended December 31,
|
| |
For the Six Months Ended June 30,
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2020
|
| |
2021
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
| | |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| ||||||||||||||||||||||||||||||
| | |
(in thousands, except for percentages)
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||
− Revenue from LiDAR
products |
| | | | 328,064 | | | | | | 94.2 | | | | | | 346,068 | | | | | | 53,599 | | | | | | 83.3 | | | | | | 67,963 | | | | | | 83.5 | | | | | | 218,383 | | | | | | 33,824 | | | | | | 93.0 | | |
− Revenue from gas detection products
|
| | | | 19,532 | | | | | | 5.6 | | | | | | 68,599 | | | | | | 10,625 | | | | | | 16.5 | | | | | | 13,186 | | | | | | 16.2 | | | | | | 8,426 | | | | | | 1,305 | | | | | | 3.6 | | |
− Other revenue
|
| | | | 488 | | | | | | 0.2 | | | | | | 847 | | | | | | 131 | | | | | | 0.2 | | | | | | 201 | | | | | | 0.3 | | | | | | 570 | | | | | | 88 | | | | | | 0.2 | | |
Non-recurring engineering
service revenue |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,619 | | | | | | 1,180 | | | | | | 3.2 | | |
Net revenues
|
| | |
|
348,084
|
| | | |
|
100.0
|
| | | |
|
415,514
|
| | | |
|
64,355
|
| | | |
|
100.0
|
| | | |
|
81,350
|
| | | |
|
100.0
|
| | | |
|
234,998
|
| | | |
|
36,397
|
| | | |
|
100.0
|
| |
| | |
For the Year Ended December 31,
|
| |
For the Six Months Ended June 30,
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2020
|
| |
2021
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
| | |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| ||||||||||||||||||||||||||||||
| | |
(in thousands, except for percentages)
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||
Material and component
cost |
| | | | 46,115 | | | | | | 13.2 | | | | | | 64,838 | | | | | | 10,042 | | | | | | 15.6 | | | | | | 14,178 | | | | | | 17.4 | | | | | | 46,615 | | | | | | 7,220 | | | | | | 19.8 | | |
Manufacturing cost
|
| | | | 16,003 | | | | | | 4.6 | | | | | | 31,981 | | | | | | 4,953 | | | | | | 7.7 | | | | | | 7,248 | | | | | | 8.9 | | | | | | 18,423 | | | | | | 2,853 | | | | | | 7.8 | | |
Labor cost
|
| | | | 18,321 | | | | | | 5.3 | | | | | | 20,302 | | | | | | 3,144 | | | | | | 4.9 | | | | | | 6,969 | | | | | | 8.6 | | | | | | 10,687 | | | | | | 1,655 | | | | | | 4.6 | | |
Other cost(1)
|
| | | | 22,938 | | | | | | 6.6 | | | | | | 59,479 | | | | | | 9,213 | | | | | | 14.3 | | | | | | 15,645 | | | | | | 19.2 | | | | | | 24,757 | | | | | | 3,835 | | | | | | 10.6 | | |
Total cost of revenues
|
| | | | 103,377 | | | | | | 29.7 | | | | | | 176,600 | | | | | | 27,352 | | | | | | 42.5 | | | | | | 44,040 | | | | | | 54.1 | | | | | | 100,482 | | | | | | 15,563 | | | | | | 42.8 | | |
| | |
For the Year Ended December 31,
|
| |
For the Six Months Ended June 30,
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2020
|
| |
2021
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
| | |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| ||||||||||||||||||||||||||||||
| | |
(in thousands, except for percentages)
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||
Research and development
expenses |
| | | | 149,817 | | | | | | 43.0 | | | | | | 229,653 | | | | | | 35,569 | | | | | | 55.3 | | | | | | 91,104 | | | | | | 112.0 | | | | | | 120,139 | | | | | | 18,607 | | | | | | 51.1 | | |
General and
administrative expenses |
| | | | 55,112 | | | | | | 15.8 | | | | | | 76,553 | | | | | | 11,857 | | | | | | 18.4 | | | | | | 35,034 | | | | | | 43.1 | | | | | | 212,523 | | | | | | 32,916 | | | | | | 90.4 | | |
Sales and marketing expenses
|
| | | | 38,740 | | | | | | 11.1 | | | | | | 49,904 | | | | | | 7,729 | | | | | | 12.0 | | | | | | 21,518 | | | | | | 26.5 | | | | | | 24,129 | | | | | | 3,737 | | | | | | 10.3 | | |
Other operating expenses (income), net
|
| | | | 149,089 | | | | | | 42.9 | | | | | | (15,384) | | | | | | (2,383) | | | | | | (3.7) | | | | | | (3,004) | | | | | | (3.7) | | | | | | (13,347) | | | | | | (2,067) | | | | | | (5.7) | | |
Total operating expenses
|
| | |
|
392,758
|
| | | |
|
112.8
|
| | | |
|
340,726
|
| | | |
|
52,772
|
| | | |
|
82.0
|
| | | |
|
144,652
|
| | | |
|
177.9
|
| | | |
|
343,444
|
| | | |
|
53,193
|
| | | |
|
146.1
|
| |
| | |
For the Year Ended December 31,
|
| |
For the Six Months Ended June 30,
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2020
|
| |
2021
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
| | |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| ||||||||||||||||||||||||||||||
| | |
(in thousands, except for percentages)
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Research and development expenses:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||
Payroll expenses
|
| | | | 68,585 | | | | | | 19.7 | | | | | | 113,014 | | | | | | 17,504 | | | | | | 27.2 | | | | | | 42,849 | | | | | | 52.7 | | | | | | 71,889 | | | | | | 11,134 | | | | | | 30.6 | | |
Material expenses
|
| | | | 45,759 | | | | | | 13.1 | | | | | | 46,383 | | | | | | 7,184 | | | | | | 11.2 | | | | | | 21,185 | | | | | | 26.0 | | | | | | 22,345 | | | | | | 3,461 | | | | | | 9.5 | | |
Others
|
| | | | 35,473 | | | | | | 10.2 | | | | | | 70,256 | | | | | | 10,881 | | | | | | 16.9 | | | | | | 27,070 | | | | | | 33.3 | | | | | | 25,905 | | | | | | 4,012 | | | | | | 11.0 | | |
Total
|
| | |
|
149,817
|
| | | |
|
43.0
|
| | | |
|
229,653
|
| | | |
|
35,569
|
| | | |
|
55.3
|
| | | |
|
91,104
|
| | | |
|
112.0
|
| | | |
|
120,139
|
| | | |
|
18,607
|
| | | |
|
51.1
|
| |
| | |
For the Year Ended December 31,
|
| |
For the Six Months Ended June 30,
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2020
|
| |
2021
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
| | |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| ||||||||||||||||||||||||||||||
| | |
(in thousands, except for percentage data)
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net revenues
|
| | |
|
348,084
|
| | | |
|
100.0
|
| | | |
|
415,514
|
| | | |
|
64,355
|
| | | |
|
100.0
|
| | | |
|
81,350
|
| | | |
|
100.0
|
| | | |
|
234,998
|
| | | |
|
36,397
|
| | | |
|
100.0
|
| |
Cost of revenues
|
| | | | (103,377) | | | | | | (29.7) | | | | | | (176,600) | | | | | | (27,352) | | | | | | (42.5) | | | | | | (44,040) | | | | | | (54.1) | | | | | | (100,482) | | | | | | (15,563) | | | | | | (42.8) | | |
Gross profit
|
| | |
|
244,707
|
| | | |
|
70.3
|
| | | |
|
238,914
|
| | | |
|
37,003
|
| | | |
|
57.5
|
| | | |
|
37,310
|
| | | |
|
45.9
|
| | | |
|
134,516
|
| | | |
|
20,834
|
| | | |
|
57.2
|
| |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||
Research and development
expenses |
| | | | (149,817) | | | | | | (43.0) | | | | | | (229,653) | | | | | | (35,569) | | | | | | (55.3) | | | | | | (91,104) | | | | | | (112.0) | | | | | | (120,139) | | | | | | (18,607) | | | | | | (51.1) | | |
General and administrative expenses
|
| | | | (55,112) | | | | | | (15.8) | | | | | | (76,553) | | | | | | (11,857) | | | | | | (18.4) | | | | | | (35,034) | | | | | | (43.1) | | | | | | (212,523) | | | | | | (32,916) | | | | | | (90.4) | | |
Sales and marketing expenses
|
| | | | (38,740) | | | | | | (11.1) | | | | | | (49,904) | | | | | | (7,729) | | | | | | (12.0) | | | | | | (21,518) | | | | | | (26.5) | | | | | | (24,129) | | | | | | (3,737) | | | | | | (10.3) | | |
Other operating expenses (income), net
|
| | | | (149,089) | | | | | | (42.9) | | | | | | 15,384 | | | | | | 2,383 | | | | | | 3.7 | | | | | | 3,004 | | | | | | 3.7 | | | | | | 13,347 | | | | | | 2,067 | | | | | | 5.7 | | |
Total operating expenses
|
| | | | (392,758) | | | | | | (112.8) | | | | | | (340,726) | | | | | | (52,772) | | | | | | (82.0) | | | | | | (144,652) | | | | | | (177.9) | | | | | | (343,444) | | | | | | (53,193) | | | | | | (146.1) | | |
Loss from operations
|
| | | | (148,051) | | | | | | (42.5) | | | | | | (101,812) | | | | | | (15,769) | | | | | | (24.5) | | | | | | (107,342) | | | | | | (132.0) | | | | | | (208,928) | | | | | | (32,359) | | | | | | (88.9) | | |
Interest income
|
| | | | 19,107 | | | | | | 5.5 | | | | | | 20,925 | | | | | | 3,241 | | | | | | 5.0 | | | | | | 12,208 | | | | | | 15.0 | | | | | | 5,759 | | | | | | 892 | | | | | | 2.5 | | |
Foreign exchange gain (loss)
|
| | | | 9,619 | | | | | | 2.8 | | | | | | (25,696) | | | | | | (3,980) | | | | | | (6.2) | | | | | | 6,829 | | | | | | 8.4 | | | | | | (9,350) | | | | | | (1,448) | | | | | | (4.0) | | |
Other income (loss), net
|
| | | | 31 | | | | | | 0.0 | | | | | | (832) | | | | | | (129) | | | | | | (0.2) | | | | | | (262) | | | | | | (0.3) | | | | | | (990) | | | | | | (153) | | | | | | (0.4) | | |
Net loss before income tax
|
| | | | (119,294) | | | | | | (34.2) | | | | | | (107,415) | | | | | | (16,637) | | | | | | (25.9) | | | | | | (88,567) | | | | | | (108.9) | | | | | | (213,509) | | | | | | (33,068) | | | | | | (90.8) | | |
Income tax (expenses)/benefit
|
| | | | (930) | | | | | | (0.3) | | | | | | 199 | | | | | | 31 | | | | | | 0.0 | | | | | | 147 | | | | | | 0.2 | | | | | | 35 | | | | | | 5 | | | | | | 0.0 | | |
Net loss
|
| | | | (120,224) | | | | | | (34.5) | | | | | | (107,216) | | | | | | (16,606) | | | | | | (25.9) | | | | | | (88,420) | | | | | | (108.7) | | | | | | (213,474) | | | | | | (33,063) | | | | | | (90.8) | | |
| | |
For the Year Ended December 31,
|
| |
For the Six Months Ended June 30,
|
| ||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2020
|
| |
2021
|
| ||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
US$
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| ||||||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
Net loss
|
| | | | (120,224) | | | | | | (107,216) | | | | | | (16,606) | | | | | | (88,420) | | | | | | (213,474) | | | | | | (33,063) | | |
Add (less):
|
| | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Interest income
|
| | | | (19,107) | | | | | | (20,925) | | | | | | (3,241) | | | | | | (12,208) | | | | | | (5,759) | | | | | | (892) | | |
Income tax expenses
|
| | | | 930 | | | | | | (199) | | | | | | (31) | | | | | | (147) | | | | | | (35) | | | | | | (5) | | |
Depreciation of property and
equipment |
| | | | 8,611 | | | | | | 15,435 | | | | | | 2,391 | | | | | | 6,696 | | | | | | 9,369 | | | | | | 1,451 | | |
Amortization of intangible assets
|
| | | | 1,113 | | | | | | 3,780 | | | | | | 585 | | | | | | 1,434 | | | | | | 3,016 | | | | | | 467 | | |
EBITDA
|
| | |
|
(128,677)
|
| | | |
|
(109,125)
|
| | | |
|
(16,902)
|
| | | |
|
(92,645)
|
| | | |
|
(206,883)
|
| | | |
|
(32,042)
|
| |
| | |
For the Year Ended December 31,
|
| |
For the Six Months Ended June 30,
|
| ||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2020
|
| |
2021
|
| ||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
US$
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| ||||||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
Selected combined and Consolidated Cash
Flows Data: |
| | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Net cash provided by/ (used in) operating
activities |
| | | | 46,166 | | | | | | (352,015) | | | | | | (54,520) | | | | | | (88,058) | | | | | | (78,153) | | | | | | (12,103) | | |
Net cash (used in)/ provided by investing
activities |
| | | | (779,497) | | | | | | 179,027 | | | | | | 27,727 | | | | | | 484,741 | | | | | | 168,340 | | | | | | 26,073 | | |
Net cash provided by financing activities
|
| | | | 739,741 | | | | | | 323,437 | | | | | | 50,095 | | | | | | — | | | | | | 1,933,486 | | | | | | 299,459 | | |
Net increase in cash and cash equivalents
|
| | | | 6,410 | | | | | | 150,449 | | | | | | 23,302 | | | | | | 396,683 | | | | | | 2,023,673 | | | | | | 313,429 | | |
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
| | | | 1,991 | | | | | | (6,498) | | | | | | (1,007) | | | | | | (840) | | | | | | 12,661 | | | | | | 1,959 | | |
Cash and cash equivalents at the beginning of the year/period
|
| | | | 104,336 | | | | | | 112,737 | | | | | | 17,461 | | | | | | 112,737 | | | | | | 256,688 | | | | | | 39,756 | | |
Cash and cash equivalents at the end of the year/period
|
| | | | 112,737 | | | | | | 256,688 | | | | | | 39,756 | | | | | | 508,580 | | | | | | 2,293,022 | | | | | | 355,144 | | |
| | |
Payment due by December 31,
|
| |||||||||||||||||||||||||||||||||
| | |
Total
|
| |
2021
|
| |
2022
|
| |
2023
|
| |
2024
|
| |
After
|
| ||||||||||||||||||
| | |
(RMB in thousands)
|
| |||||||||||||||||||||||||||||||||
Operating lease commitments
|
| | | | 18,070 | | | | | | 18,070 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | |
For the Year Ended
December 31, 2019 |
|
Expected volatility
|
| |
51.00% – 53.00%
|
|
Risk-free interest rate (per annum)
|
| |
2.73% – 2.94%
|
|
Expected dividend yield
|
| |
0.00%
|
|
Employee forfeiture rate (per annum)
|
| |
3.80%
|
|
Exercise multiples
|
| |
2.50
|
|
Contractual life
|
| |
3.00
|
|
Fair value of underlying ordinary share of Shanghai Hesai
|
| |
RMB5.41 – 6.71
|
|
Fair value of option to subscribe 1 underlying ordinary share of Shanghai Hesai
|
| |
RMB4.88 – 5.95
|
|
| | |
For the Year Ended
December 31, 2020 |
|
Expected volatility
|
| |
49.00% – 52.00%
|
|
Risk-free interest rate (per annum)
|
| |
2.70% – 2.88%
|
|
Expected dividend yield
|
| |
0.00%
|
|
Employee forfeiture rate (per annum)
|
| |
3.80%
|
|
Exercise multiples
|
| |
2.50
|
|
Contractual life
|
| |
1.93 – 3.93
|
|
Fair value per ordinary share of Shanghai Hesai
|
| |
RMB20.33
|
|
Fair value of option to subscribe 1 ordinary share of Shanghai Hesai
|
| |
RMB17.16 – 17.41
|
|
| | | |
Legacy Approach
|
| |
Minimum Channel
Approach (MEMS-based) |
| |
Minimum Channel
Approach (1550nm Wavelengths-based) |
| |
Line-flash ASIC
Approach |
| |
Hesai’s Approach
(AT series as an example) |
|
|
LiDAR architecture
|
| |
•
Discrete architecture —
large number of channels using discrete components
|
| |
•
Integrated architecture —
small number of channels
•
High speed MEMS beam scanning system
|
| |
•
Integrated architecture – small number of channels
•
High speed scanning mirror system
•
1550nm wavelengths
|
| |
•
ASIC-based
•
Integrated architecture —
large number of channels integrated at a single circuit board
•
Firing all lasers at the same time to form a line flash in vertical direction
•
Using a low-speed scanner in horizonal direction
|
| |
•
ASIC-based
•
Integrated architecture — large number of channels integrated at a single circuit board
•
Firing lasers at each channel sequentially to form a solid-state electronic scanning in vertical direction
•
Using a low-speed scanning mirror horizontal direction
|
|
|
Performance
|
| |
•
Difficult to enhance performance given complexity increases exponentially
|
| |
•
Limited range performance for MEMS due to small apertures
•
Limited field of view unless using multiple TX/RX systems
|
| |
•
High power consumption
•
Limited point density
•
Low receiver sensitivity
|
| |
•
Low performance in range and point cloud quality since power at each channel is limited
•
High power consumption
•
Severe channel crosstalk
|
| |
•
High performance in range and point cloud quality
•
Low power consumption
|
|
|
Quality
|
| |
•
Low product consistency due to large number of discrete components
|
| |
•
Concerns on reliability as the high-speed mechanical beam steering system has not been automotive grade proven
|
| |
•
Concerns on reliability as high-speed scanning mirror system has not been automotive grade proven
•
Requires many other non-automotive-grade components
|
| |
•
High product consistency as components are integrated on a single circuit board
•
Automotive grade proven scanning system
|
| |
•
High product consistency as components are integrated on a single circuit board
•
Automotive grade proven scanning system
|
|
|
Cost
|
| |
•
Complex manufacturing process
•
High cost
|
| |
•
Multiple TX/RX systems increase manufacturing complexity and cost
|
| |
•
High cost of fiber laser
|
| |
•
Low manufacturing complexity
•
Low-cost silicon-based components
|
| |
•
Low manufacturing complexity
•
Low-cost silicon-based components
|
|
Elements of
LiDAR |
| |
Definition
|
|
Performance | | |
The explicit specifications of a LiDAR unit that directly reflect its performance, including detection range (for example, 200 meters or longer at 10% reflectivity), point density (number of points generated per second, which is horizontal resolution times vertical resolution, multiplied by frame rate), distance accuracy and precision, reflectivity accuracy, and interference rejection, among others.
|
|
Quality | | |
The implicit aspects of a LiDAR unit that represent its ability to perform consistently under a variety of circumstances over time, including robustness under extreme operating temperatures, different levels of humidity, waterproof levels, and mechanical shocks and stresses. Quality also represents a product’s manufacturing consistency, functional safety (typically ASIL-B), and viability as an automotive-grade component.
|
|
Cost | | |
The per unit price for each LiDAR unit. Customers of LiDAR units for different applications and industries have varying levels of cost sensitivity, which is usually influenced by factors such as timeline for mass adoption, operating scale, and the business models of the target application, among others.
|
|
| | |
Pandar128
|
| |
QT128
|
| |
XT32
|
| |
AT128(1)
|
|
| | |
![]() |
| |
![]() |
| |
![]() |
| |
![]() |
|
Application
|
| |
Autonomous Mobility – long-range detection
|
| |
Autonomous Mobility – blind-spot detection
|
| | Robotics | | | ADAS | |
Operating principle
|
| |
Time of Flight (ToF)
|
| | ToF | | | ToF | | | ToF | |
Scanning method (vertical)
|
| | Electronic scanning | | | Electronic scanning | | | Electronic scanning | | | Electronic scanning | |
Scanning method (horizontal)
|
| | Mechanical rotation | | | Mechanical rotation | | | Mechanical rotation | | | Scanning mirror | |
Channel
|
| | 128 | | | 128 | | | 32 | | | 128 | |
Range
|
| |
up to 200 m at 10% reflectivity(2)
|
| |
up to 20 m at 10% reflectivity
|
| |
up to 80 m at 10% reflectivity
|
| |
up to 200 m at 10% reflectivity
|
|
FOV (vertical)
|
| | 40° | | | 105.2° | | | 31° | | | 25.4° | |
FOV (horizontal)
|
| | 360° | | | 360° | | | 360° | | | 120° | |
Resolution (vertical)
|
| | 0.125° finest | | | 0.4° finest | | | 1° | | | 0.2° | |
Resolution (horizontal)
|
| |
0.1° finest (10 Hz frame rate)
|
| |
0.4° finest (10 Hz frame rate)
|
| |
0.18° (10 Hz frame rate)
|
| |
0.1° (10 Hz frame rate)
|
|
Interference rejection
|
| | Yes | | | Yes | | | Yes | | | Yes | |
Power consumption
|
| | 27 W | | | 10 W | | | 10 W | | | 18 W | |
|
Field of View
|
| | |
Mechanical vs. Solid-State
|
| | |
Beam Steering Mechanisms
|
|
| Surrounding View (360 degrees) | | | |
Mechanical — TX/RX is physically rotated by a motor
|
| | |
•
Full rotation of TX/RX
|
|
|
Directional View (less than 180 degrees)
|
| | |
Hybrid Solid-State — TX/RX is static, but is complemented by one or more moving scanners in the LiDAR
|
| | |
•
Two-dimensional scanning MEMS mirror
•
One-dimensional scanning polygon mirror
•
One-dimensional scanning galvo mirror
|
|
| Full Solid-State — no moving parts | | | |
•
Optical phased array (OPA)
•
Electronic scanning (one-dimensional or two-dimensional)
|
|
|
Category
|
| |
Subjects of Related Patents
|
|
| TX/RX System | | | | |
|
Proprietary customized ASICs for LiDAR
|
| | The key aspects of the laser driver ASICs and receiver front-end ASICs | |
|
Proprietary SoC ASICs for LiDAR
|
| |
The key aspects of the monolithic integrated receiver, front-end circuit, waveform digitization and waveform algorithm processing
|
|
|
Proprietary optoelectronic and micro-optical devices
|
| |
The key aspects of optoelectronic devices that enables integration of micro-optoelectronic devices into small packages
|
|
|
Hardware system design
|
| | The key aspects of the TX/RX architecture | |
| Scanning Mechanisms | | | | |
|
360-degree mechanical rotation solution
|
| |
The key aspects of the overall structure, integration and working mode of the 360-degree mechanical rotation LiDAR
|
|
|
Scanning mirror solution
|
| |
The key aspects of the overall structure, integration and working mode of the LiDAR using scanning mirror
|
|
|
Electronic scanning solution
|
| |
The key aspects of the overall structure, integration and working mode of the electronic scanning technology
|
|
| System-level Know-how | | | | |
|
Interference rejection technique
|
| |
The key aspects of the technology to mitigate the interference from other LiDARs and the crosstalk of distinct channels of the same LiDAR
|
|
|
Close-range enhancement technology
|
| |
The key aspects of the technology to enhance the range measurement precision at short ranges of a non-coaxial LiDAR system
|
|
|
Waveform processing algorithms
|
| | The key aspects of the waveform processing, digital signal processing for LiDAR | |
|
Advanced physical design
|
| |
The key aspects of the design of dynamic balancing, heat dissipation, microstructure, and shock-proof of the LiDAR system
|
|
|
Non-uniform distribution technology
|
| |
The key aspects of the resolution improvement of by using non-uniform distribution of laser and receiver channels on the TX and RX board
|
|
|
Functional safety, cybersecurity and vehicle regulation design
|
| |
The key aspects of the fault diagnosis, reliability, electromagnetic compatibility, environmental adaptability of LiDAR
|
|
|
Detection algorithms and multi-sensor fusion technology
|
| |
The key aspects of the detection algorithms and multi-sensor fusion algorithms for the combination of LiDARs and cameras
|
|
|
Automated Calibration, Assembly and Mass Production Testing
|
| |
The key aspects of the calibration method, calibration device, automatic adjustment, test methods, and devices
|
|
Function
|
| |
Number of Employees
|
| |||
Research and development | | | | | 283 | | |
Production and supply chain | | | | | 118 | | |
Management | | | | | 64 | | |
Sales and marketing | | | | | 44 | | |
Others | | | | | 64 | | |
Total | | | | | 573 | | |
Location
|
| |
Space
(square feet) |
| |
Use
|
| |
Lease Term
|
| |||
Shanghai, China | | | | | 382,044 | | | |
Office space and manufacturing facility
|
| |
One to three years
|
|
Silicon Valley, California the United States
|
| | | | 12,647 | | | | Office space | | |
Four years
|
|
Directors and Executive Officers
|
| |
Age
|
| |
Position/Title
|
|
Yifan Li | | |
35
|
| | Co-Founder, Director and Chief Executive Officer | |
Kai Sun | | |
36
|
| | Co-Founder, Director and Chief Scientist | |
Shaoqing Xiang | | |
36
|
| | Co-Founder, Director and Chief Technology Officer | |
Louis T. Hsieh | | |
56
|
| | Director and Global Chief Financial Officer | |
Cailian Yang | | |
30
|
| | Director and Vice President of Operations | |
Name
|
| |
Class B Ordinary
Shares Underlying Options |
| |
Exercise Price
(US$/Share) |
| |
Date of Grant
|
| |
Date of
Expiration |
| ||||||
Louis T. Hsieh
|
| | | | 2,000,000 | | | | | | 1.05 | | | |
July 19, 2021
|
| |
July 19, 2028
|
|
Cailian Yang
|
| | | | * | | | | | | 2.1 | | | |
July 3, 2021
|
| |
July 3, 2028
|
|
Total
|
| | | | 2,323,517 | | | | | | — | | | |
—
|
| |
—
|
|
| | |
Ordinary Shares Beneficially Owned Prior
to This Offering |
| |
[Class B
Ordinary Shares Being Sold in This Offering] |
| |
Ordinary Shares Beneficially Owned
After This Offering |
| |||||||||||||||||||||||||||||||||
| | |
Class A
Ordinary shares |
| |
Class B
Ordinary Shares |
| |
% of Total
Ordinary Shares on An As- converted Basis† |
| |
% of
Aggregate Voting Power*** |
| |
Number
|
| |
%
|
| |
Class A
Ordinary shares |
| |
Class B
Ordinary Shares |
| |
% of
Total Ordinary Shares on An As- converted Basis |
| |
% of
Aggregate Voting Power |
| ||||||||||||
Directors and Executive Officers**:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Yifan Li(1)
|
| | | | 9,899,374 | | | | | | — | | | | | | 8.6 | | | | | | 25.7 | | | | | | | | | | | | | | | | | | | | |
Kai Sun(2)
|
| | | | 10,234,631 | | | | | | — | | | | | | 8.9 | | | | | | 26.5 | | | | | | |
|
| | | | | | | | | | | | |
Shaoqing Xiang(3)
|
| | | | 9,899,374 | | | | | | — | | | | | | 8.6 | | | | | | 25.7 | | | | | | | | | | | | | | | | | | | | |
Louis T. Hsieh
|
| | | | — | | | | | | * | | | | | | * | | | | | | * | | | | | | | | | | | | | | | | | | | | |
Cailian Yang
|
| | | | — | | | | | | * | | | | | | * | | | | | | * | | | | | | | | | | | | | | | | | | | | |
All Directors and Executive Officers as a Group
|
| | | | 30,033,379 | | | | | | 1,073,517 | | | | | | 26.7 | | | | | | 77.9 | | | | | | | | | | | | | | | | | | | | |
Principal [and Selling] Shareholders:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ALBJ Limited(1)
|
| | | | 9,899,374 | | | | | | — | | | | | | 8.6 | | | | | | 25.7 | | | | | | | | | | | | | | | | | | | | |
Fermat Star Limited(2)
|
| | | | 10,234,631 | | | | | | — | | | | | | 8.9 | | | | | | 26.5 | | | | | | | | | | | | | | | | | | | | |
Galbadia Limited(3)
|
| | | | 9,899,374 | | | | | | — | | | | | | 8.6 | | | | | | 25.7 | | | | | | | | | | | | | | | | | | | | |
Lightspeed Opportunity(4)
|
| | | | — | | | | | | 10,688,294 | | | | | | 9.3 | | | | | | 2.8 | | | | | | | | | | | | | | | | | | | | |
Lightspeed China Partners(5)
|
| | | | — | | | | | | 9,523,412 | | | | | | 8.2 | | | | | | 2.5 | | | | | | | | | | | | | | | | | | | | |
Baidu Holdings(6)
|
| | | | — | | | | | | 7,881,155 | | | | | | 6.8 | | | | | | 2.0 | | | | | | | | | | | | | | | | | | | | |
Bosch(7) | | | | | — | | | | | | 7,653,252 | | | | | | 6.6 | | | | | | 2.0 | | | | | | | | | | | | | | | | | | | | |
Xiaomi (8)
|
| | | | — | | | | | | 7,272,727 | | | | | | 6.3 | | | | | | 1.9 | | | | | | | | | ||||||||||||
Yuanzhan(9)
|
| | | | — | | | | | | 6,777,885 | | | | | | 5.9 | | | | | | 1.8 | | | | | | | | | | | | | | | | | | | | |
Name
|
| |
Number of ADSs
|
| |||
[Goldman Sachs (Asia) L.L.C.
|
| |
|
| |||
Morgan Stanley & Co. LLC
|
| |
|
| |||
Credit Suisse Securities (USA) LLC]
|
| |
|
| |||
Total:
|
| | | | | |
| | | | | | | | |
Total
|
| |||||||||
| | |
Per
ADS |
| |
No
Exercise |
| |
Full
Exercise |
| |||||||||
Public offering price
|
| | | US$ | | | | | US$ | | | | | US$ | | | |||
Underwriting discounts and commissions to be paid by us:
|
| | | US$ | | | | | US$ | | | | | US$ | | | |||
[The selling shareholders Proceeds, before expenses, to us
|
| | | US$ | | | | | US$ | | | | | US$ | ] | | | ||
[Proceeds, before expenses, to selling shareholders
|
| | | US$ | | | | | US$ | | | | | US$ | ] | | |
|
SEC Registration Fee
|
| | | US$ | | | |
|
FINRA Filing Fee
|
| | | | | | |
|
Stock Exchange Market Entry and Listing Fee
|
| | | | | | |
|
Printing and Engraving Expenses
|
| | | | | | |
|
Legal Fees and Expenses
|
| | | | | | |
|
Accounting Fees and Expenses
|
| | | | | | |
|
Miscellaneous
|
| | | | | | |
| Total | | | | US$ | | |
| | |
Page
|
| |||
| | | | F-2 | | | |
| | | | F-3 | | | |
| | | | F-4 | | | |
| | | | F-5 | | | |
| | | | F-6 | | | |
| | | | F-7 | | | |
| | | | F-35 | | | |
Index to the Unaudited Condensed Combined and Consolidated Financial Statements for the Six Months Ended June 30, 2020 and 2021
|
| | |||||
| | | | F-39 | | | |
| | | | F-40 | | | |
| | | | F-41 | | | |
| | | | F-42 | | | |
| | | | F-43 | | |
| | |
As of December 31,
|
| |||||||||||||||
|
2019
|
| |
2020
|
| ||||||||||||||
|
RMB
|
| |
RMB
|
| |
USD
|
| |||||||||||
| | | | | | | | | | | | |
(Note 2)
|
| |||||
ASSETS | | | | | | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | 112,737 | | | | | | 256,688 | | | | | | 39,756 | | |
Short-term investments
|
| | | | 910,972 | | | | | | 638,981 | | | | | | 98,966 | | |
Accounts receivable (net of allowance for doubtful accounts of RMB2,257 and RMB5,270 as
of December 31, 2019 and 2020, respectively) |
| | | | 36,511 | | | | | | 56,319 | | | | | | 8,723 | | |
Contract assets (net of allowance for doubtful accounts of nil and RMB687 as of December 31, 2019 and 2020, respectively)
|
| | | | — | | | | | | 38,337 | | | | | | 5,938 | | |
Amounts due from related parties (net of allowance for doubtful accounts of RMB31 and RMB504 as of December 31, 2019 and 2020, respectively)
|
| | | | 7,962 | | | | | | 28,331 | | | | | | 4,388 | | |
Inventories
|
| | | | 70,243 | | | | | | 149,925 | | | | | | 23,220 | | |
Prepayments and other current assets
|
| | | | 31,835 | | | | | | 40,658 | | | | | | 6,297 | | |
Total current assets
|
| | |
|
1,170,260
|
| | | |
|
1,209,239
|
| | | |
|
187,288
|
| |
Property and equipment, net
|
| | | | 47,409 | | | | | | 63,837 | | | | | | 9,887 | | |
Investment in equity method investee
|
| | | | 1,990 | | | | | | 1,986 | | | | | | 308 | | |
Intangible assets, net
|
| | | | 9,060 | | | | | | 14,260 | | | | | | 2,209 | | |
Goodwill
|
| | | | 3,893 | | | | | | 3,640 | | | | | | 564 | | |
Other non-current assets
|
| | | | 9,750 | | | | | | 19,163 | | | | | | 2,968 | | |
Total non-current assets
|
| | |
|
72,102
|
| | | |
|
102,886
|
| | | |
|
15,936
|
| |
TOTAL ASSETS
|
| | |
|
1,242,362
|
| | | |
|
1,312,125
|
| | | |
|
203,224
|
| |
LIABILITIES, REDEEMABLE PREFERRED EQUITY AND SHAREHOLDERS’ EQUITY
(DEFICIT) |
| | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | | 18,608 | | | | | | 55,437 | | | | | | 8,586 | | |
Contract liabilities
|
| | | | 11,843 | | | | | | 9,357 | | | | | | 1,449 | | |
Amounts due to related parties
|
| | | | 2,906 | | | | | | — | | | | | | — | | |
Income tax payable
|
| | | | 1,263 | | | | | | 9 | | | | | | 1 | | |
Accrued warranty liability
|
| | | | 7,457 | | | | | | 10,042 | | | | | | 1,555 | | |
Accrued expenses and other current liabilities
|
| | | | 229,091 | | | | | | 91,895 | | | | | | 14,235 | | |
Total current liabilities
|
| | | | 271,168 | | | | | | 166,740 | | | | | | 25,826 | | |
Deferred tax liabilities
|
| | | | 693 | | | | | | 578 | | | | | | 90 | | |
Other non-current liabilities
|
| | | | 41,289 | | | | | | 7,614 | | | | | | 1,179 | | |
Total non-current liabilities
|
| | | | 41,982 | | | | | | 8,192 | | | | | | 1,269 | | |
TOTAL LIABILITIES
|
| | | | 313,150 | | | | | | 174,932 | | | | | | 27,095 | | |
Commitments and contingencies (Note 20) | | | | | |||||||||||||||
Redeemable preferred equity
|
| | | | 1,098,639 | | | | | | — | | | | | | — | | |
Shareholders’ (deficit) equity
|
| | | | | | | | | | | | | | | | | | |
Class A Ordinary shares (US$0.0001 par value, nil, and nil share authorized, issued and outstanding as of December 31, 2019 and 2020, respectively)
|
| | | | — | | | | | | — | | | | | | — | | |
Class B Ordinary shares (US$0.0001 par value, nil, and nil share authorized, issued and outstanding as of December 31, 2019 and 2020, respectively)
|
| | | | — | | | | | | — | | | | | | — | | |
Additional paid-in capital
|
| | | | — | | | | | | 1,193,857 | | | | | | 184,905 | | |
Accumulated other comprehensive income (loss)
|
| | | | 1,332 | | | | | | (618) | | | | | | (96) | | |
Accumulated deficit
|
| | | | (170,759) | | | | | | (56,046) | | | | | | (8,680) | | |
Total shareholders’ (deficit) equity
|
| | |
|
(169,427)
|
| | | |
|
1,137,193
|
| | | |
|
176,129
|
| |
TOTAL LIABILITIES, REDEEMABLE EQUITY AND SHAREHOLDERS’ (DEFICIT) EQUITY
|
| | | | 1,242,362 | | | | | | 1,312,125 | | | | | | 203,224 | | |
| | |
Year ended December 31,
|
| |||||||||||||||
|
2019
|
| |
2020
|
| ||||||||||||||
|
RMB
|
| |
RMB
|
| |
USD
|
| |||||||||||
| | | | | | | | | | | | |
(Note 2)
|
| |||||
Net revenues (including related party revenues of RMB47,852 and RMB41,765 for the years ended December 31, 2019 and 2020, respectively)
|
| | | | 348,084 | | | | | | 415,514 | | | | | | 64,355 | | |
Cost of revenues
|
| | | | 103,377 | | | | | | 176,600 | | | | | | 27,352 | | |
Gross Profit
|
| | |
|
244,707
|
| | | |
|
238,914
|
| | | |
|
37,003
|
| |
Operating expenses: | | | | | | | | | | | | | | | | | | | |
Sales and marketing expenses
|
| | | | 38,740 | | | | | | 49,904 | | | | | | 7,729 | | |
General and administrative expenses
|
| | | | 55,112 | | | | | | 76,553 | | | | | | 11,857 | | |
Research and development expenses
|
| | | | 149,817 | | | | | | 229,653 | | | | | | 35,569 | | |
Other operating expenses (income), net
|
| | | | 149,089 | | | | | | (15,384) | | | | | | (2,383) | | |
Total operating expenses
|
| | |
|
392,758
|
| | | |
|
340,726
|
| | | |
|
52,772
|
| |
Loss from operations
|
| | |
|
(148,051)
|
| | | |
|
(101,812)
|
| | | |
|
(15,769)
|
| |
Interest income
|
| | | | 19,107 | | | | | | 20,925 | | | | | | 3,241 | | |
Foreign exchange gain (loss), net
|
| | | | 9,619 | | | | | | (25,696) | | | | | | (3,980) | | |
Other income (loss), net
|
| | | | 31 | | | | | | (832) | | | | | | (129) | | |
Net loss before income tax
|
| | |
|
(119,294)
|
| | | |
|
(107,415)
|
| | | |
|
(16,637)
|
| |
Income tax expense (benefit)
|
| | | | 930 | | | | | | (199) | | | | | | (31) | | |
Net Loss
|
| | |
|
(120,224)
|
| | | |
|
(107,216)
|
| | | |
|
(16,606)
|
| |
Change in redemption value of preferred equity
|
| | | | (55,247) | | | | | | — | | | | | | — | | |
Net loss attributable to ordinary shareholders of the Company
|
| | | | (175,471) | | | | | | (107,216) | | | | | | (16,606) | | |
Net loss per share: | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | (2.20) | | | | | | (1.19) | | | | | | (0.18) | | |
Weighted average shares used in calculating net loss per share: | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | 79,899,201 | | | | | | 89,895,471 | | | | | | 89,895,471 | | |
Net loss
|
| | |
|
(120,224)
|
| | | |
|
(107,216)
|
| | | |
|
(16,606)
|
| |
Other comprehensive income (loss), net of tax of nil: | | | | | | | | | | | | | | | | | | | |
Foreign currency translation adjustments
|
| | | | 1,332 | | | | | | (1,950) | | | | | | (302) | | |
Comprehensive loss, net of tax of nil
|
| | | | (118,892) | | | | | | (109,166) | | | | | | (16,908) | | |
| | |
Class A Ordinary shares
|
| |
Class B Ordinary shares
|
| |
Additional
Paid-in capital |
| |
Accumulated
deficit |
| |
Accumulated
other comprehensive income (loss) |
| |
Total
shareholders’ (deficit) equity |
| ||||||||||||||||||||||||||||||
| | |
Number
|
| |
RMB
|
| |
Number
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| ||||||||||||||||||||||||
Balance as of January 1, 2019
|
| | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
9,817
|
| | | |
|
(5,105)
|
| | | |
|
—
|
| | | |
|
4,712
|
| |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (120,224) | | | | | | — | | | | | | (120,224) | | |
Change in redemption value of preferred equity
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (9,817) | | | | | | (45,430) | | | | | | — | | | | | | (55,247) | | |
Foreign currency translation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,332 | | | | | | 1,332 | | |
Balance as of December 31,
2019 |
| | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
(170,759)
|
| | | |
|
1,332
|
| | | |
|
(169,427)
|
| |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (107,216) | | | | | | — | | | | | | (107,216) | | |
Foreign currency translation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,950) | | | | | | (1,950) | | |
Conversion to joint stock company as part of 2020 Reorganization (Note 12)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (221,929) | | | | | | 221,929 | | | | | | — | | | | | | — | | |
Conversion of redeemable preferred shares to ordinary shares
as part of the 2020 Reorganization (Note12) |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,098,639 | | | | | | — | | | | | | — | | | | | | 1,098,639 | | |
Issuance of ordinary shares to new investors
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 317,147 | | | | | | — | | | | | | — | | | | | | 317,147 | | |
Balance as of December 31,
2020 |
| | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
1,193,857
|
| | | |
|
(56,046)
|
| | | |
|
(618)
|
| | | |
|
1,137,193
|
| |
| | |
Year ended December 31,
|
| |||||||||||||||
|
2019
|
| |
2020
|
| ||||||||||||||
|
RMB
|
| |
RMB
|
| |
USD
|
| |||||||||||
| | | | | | | | | | | | |
(Note 2)
|
| |||||
Cash flows from operating activities: | | | | | | | | | | | | | | | | | | | |
Net loss
|
| | |
|
(120,224)
|
| | | |
|
(107,216)
|
| | | |
|
(16,606)
|
| |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 9,724 | | | | | | 19,215 | | | | | | 2,976 | | |
Allowance for doubtful accounts
|
| | | | 91 | | | | | | 4,174 | | | | | | 646 | | |
Loss from disposal of property and equipment
|
| | | | — | | | | | | 28 | | | | | | 4 | | |
Share of loss in equity method investees.
|
| | | | 10 | | | | | | 4 | | | | | | 1 | | |
Foreign exchange (gain) loss
|
| | | | (10,404) | | | | | | 21,503 | | | | | | 3,330 | | |
Inventory write-down
|
| | | | 4,195 | | | | | | 7,060 | | | | | | 1,093 | | |
Changes in operating assets and liabilities: | | | | | | | | | | | | | | | | | | | |
Accounts receivable
|
| | | | 6,963 | | | | | | (22,578) | | | | | | (3,497) | | |
Contract assets
|
| | | | — | | | | | | (39,024) | | | | | | (6,044) | | |
Inventories
|
| | | | (32,387) | | | | | | (83,607) | | | | | | (12,949) | | |
Prepayments and other current assets
|
| | | | (13,037) | | | | | | (8,790) | | | | | | (1,361) | | |
Amounts due from related parties
|
| | | | (1,817) | | | | | | (20,842) | | | | | | (3,228) | | |
Non-current assets
|
| | | | 1,000 | | | | | | (4,100) | | | | | | (635) | | |
Amounts due to related parties
|
| | | | (719) | | | | | | (2,906) | | | | | | (450) | | |
Contract liabilities
|
| | | | 8,192 | | | | | | (2,569) | | | | | | (398) | | |
Deferred tax liabilities
|
| | | | (325) | | | | | | (156) | | | | | | (24) | | |
Accounts payable
|
| | | | (8,480) | | | | | | 36,258 | | | | | | 5,616 | | |
Income tax payable
|
| | | | 1,255 | | | | | | (1,268) | | | | | | (196) | | |
Accrued expenses and other current liabilities
|
| | | | 205,646 | | | | | | (143,526) | | | | | | (22,229) | | |
Other non-current liabilities
|
| | | | (3,517) | | | | | | (3,675) | | | | | | (569) | | |
Net cash provided by (used in) operating activities
|
| | |
|
46,166
|
| | | |
|
(352,015)
|
| | | |
|
(54,520)
|
| |
Cash flows from investing activities: | | | | | | | | | | | | | | | | | | | |
Purchases of short-term investments
|
| | | | (1,845,438) | | | | | | (2,001,137) | | | | | | (309,937) | | |
Maturity of short-term investments
|
| | | | 1,120,447 | | | | | | 2,256,724 | | | | | | 349,522 | | |
Payment for business acquisition, net of cash RMB613 acquired
|
| | | | (12,930) | | | | | | — | | | | | | — | | |
Payment for investment in equity investee
|
| | | | (2,000) | | | | | | — | | | | | | — | | |
Proceeds from disposals of property and equipment
|
| | | | — | | | | | | 19 | | | | | | 3 | | |
Purchases of property and equipment
|
| | | | (32,420) | | | | | | (66,000) | | | | | | (10,222) | | |
Purchases of intangible assets
|
| | | | (7,156) | | | | | | (10,579) | | | | | | (1,639) | | |
Net cash (used in) provided by investing activities
|
| | |
|
(779,497)
|
| | | |
|
179,027
|
| | | |
|
27,727
|
| |
Cash flows from financing activities: | | | | | | | | | | | | | | | | | | | |
Proceeds from issuance of redeemable preferred equity.
|
| | | | 739,741 | | | | | | — | | | | | | — | | |
Proceeds received exercise of share-based award.
|
| | | | — | | | | | | 6,290 | | | | | | 974 | | |
Proceeds from issuance of ordinary shares
|
| | | | — | | | | | | 317,147 | | | | | | 49,121 | | |
Net cash provided by financing activities.
|
| | |
|
739,741
|
| | | |
|
323,437
|
| | | |
|
50,095
|
| |
Net increase in cash and cash equivalents
|
| | |
|
6,410
|
| | | |
|
150,449
|
| | | |
|
23,302
|
| |
Cash and cash equivalents, beginning of the year.
|
| | |
|
104,336
|
| | | |
|
112,737
|
| | | |
|
17,461
|
| |
Effect of foreign exchange rate changes on cash and cash
equivalents |
| | | | 1,991 | | | | | | (6,498) | | | | | | (1,007) | | |
Cash and cash equivalents, end of the year
|
| | |
|
112,737
|
| | | |
|
256,688
|
| | | |
|
39,756
|
| |
Supplemental disclosure of cash flow information: | | | | | | | | | | | | | | | | | | | |
Income taxes paid (refund).
|
| | | | 8,662 | | | | | | (8,662) | | | | | | (1,342) | | |
Supplemental disclosure of non-cash investing and financing activities: | | | | | | | | | | | | | | | | | | | |
Payables for purchases of property and equipment.
|
| | | | 3,919 | | | | | | 3,823 | | | | | | 592 | | |
Deferred government subsidy applied to purchases of property and equipment
|
| | | | — | | | | | | 30,000 | | | | | | 4,646 | | |
|
Electronic equipment
|
| | 3 – 5 years | |
|
Machinery and equipment
|
| | 10 years | |
|
Furniture and fixture
|
| | 5 years | |
|
Transportation vehicles
|
| | 4 years | |
|
Leasehold improvements
|
| |
Over the shorter of the lease term or expected useful lives
|
|
|
Software
|
| | 3 – 5 years | |
|
Acquired technology
|
| | 3 – 5 years | |
| | |
For the Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2020
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Balance as of the beginning of the year
|
| | | | 2,780 | | | | | | 7,457 | | |
Warranty provision
|
| | | | 8,354 | | | | | | 8,752 | | |
Consumption
|
| | | | (3,677) | | | | | | (6,167) | | |
Balance as of the end of the year
|
| | |
|
7,457
|
| | | |
|
10,042
|
| |
| | |
For the Year ended
December 31, |
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
Customer A
|
| | | | * | | | | | | 11.6% | | |
Customer B
|
| | | | 23.6% | | | | | | * | | |
| | |
As of December 31,
|
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
Customer B
|
| | |
|
*
|
| | | | | 31.8% | | |
Customer C
|
| | | | * | | | | | | 17.5% | | |
Customer D
|
| | | | 15.7% | | | | | | * | | |
Customer E
|
| | | | 14.6% | | | | | | * | | |
| | |
As of December 31,
|
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
Supplier A
|
| | | | 11.5% | | | | | | 14.0% | | |
| | |
RMB
|
| |||
Total cash consideration
|
| | |
|
13,543
|
| |
Recognized amounts of identifiable assets acquired and liabilities assumed | | | | | | | |
Cash and cash equivalents
|
| | | | 613 | | |
Accounts receivable
|
| | | | 1,721 | | |
Inventories
|
| | | | 3,310 | | |
Intangible assets
|
| | | | 2,424 | | |
Other non-current assets
|
| | | | 2,169 | | |
Prepayments and other current assets
|
| | | | 875 | | |
Total assets acquired
|
| | | | 11,112 | | |
Accounts payable
|
| | | | 279 | | |
Deferred tax liabilities
|
| | | | 985 | | |
Accrued expenses and other current liabilities
|
| | | | 62 | | |
Total liabilities assumed
|
| | | | 1,326 | | |
Net assets acquired
|
| | | | 9,786 | | |
Goodwill
|
| | |
|
3,757
|
| |
| | | | | 13,543 | | |
| | |
For the Year ended
December 31, 2019 |
| |||
|
RMB
|
| |||||
Pro forma net revenues
|
| | | | 350,536 | | |
Pro forma loss from operations
|
| | | | (120,016) | | |
Pro forma net loss attributable to ordinary shareholders
|
| | | | (175,263) | | |
| | |
As of December 31,
|
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Structured bank financial products
|
| | | | 454,455 | | | | | | 246,612 | | |
Time deposits
|
| | | | 456,517 | | | | | | 392,369 | | |
Total short-term investments
|
| | | | 910,972 | | | | | | 638,981 | | |
| | |
As of December 31,
|
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Accounts receivable
|
| | | | 38,768 | | | | | | 61,589 | | |
Less: allowance for expected credit losses
|
| | | | (2,257) | | | | | | (5,270) | | |
Total Accounts receivable, net
|
| | | | 36,511 | | | | | | 56,319 | | |
| | |
For the Year ended
December 31, |
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Balance at beginning of the year
|
| | | | 2,197 | | | | | | 2,257 | | |
Provision for expected credit losses
|
| | | | 60 | | | | | | 3,015 | | |
Write-off
|
| | | | — | | | | | | (2) | | |
Balance at end of the year
|
| | | | 2,257 | | | | | | 5,270 | | |
| | |
As of December 31,
|
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Raw materials
|
| | | | 28,305 | | | | | | 61,609 | | |
Work-in-process
|
| | | | 36,236 | | | | | | 81,104 | | |
Finished goods
|
| | | | 5,702 | | | | | | 7,212 | | |
Inventories | | | | | 70,243 | | | | | | 149,925 | | |
| | |
As of December 31,
|
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Advances to suppliers
|
| | | | 9,400 | | | | | | 18,307 | | |
Deposits
|
| | | | 7,214 | | | | | | 7,024 | | |
Prepaid expenses
|
| | | | 6,112 | | | | | | 8,295 | | |
Value-added tax recoverable
|
| | | | 8,662 | | | | | | 5,937 | | |
Others
|
| | | | 447 | | | | | | 1,095 | | |
Total | | | | | 31,835 | | | | | | 40,658 | | |
| | |
As of December 31,
|
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Cost | | | | | | | | | | | | | |
Electronic equipment
|
| | | | 23,179 | | | | | | 29,651 | | |
Leasehold improvements
|
| | | | 20,645 | | | | | | 32,488 | | |
Machinery and equipment
|
| | | | 14,682 | | | | | | 11,602 | | |
Furniture and fixture
|
| | | | 1,869 | | | | | | 4,452 | | |
Transportation vehicles
|
| | | | 382 | | | | | | 382 | | |
Total cost
|
| | | | 60,757 | | | | | | 78,575 | | |
Less: Accumulated depreciation
|
| | | | (13,348) | | | | | | (19,793) | | |
Property and equipment, net
|
| | | | 47,409 | | | | | | 58,782 | | |
Construction in progress
|
| | | | — | | | | | | 5,055 | | |
Total | | | | | 47,409 | | | | | | 63,837 | | |
| | |
As of December 31,
|
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Suzhou Kunjie Phototonics Technology Co., Ltd
|
| | | | 1,990 | | | | | | 1,986 | | |
Total | | | | | 1,990 | | | | | | 1,986 | | |
| | |
As of December 31,
|
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Software
|
| | | | 2,627 | | | | | | 11,080 | | |
Technology
|
| | | | 8,044 | | | | | | 7,667 | | |
Total cost
|
| | | | 10,671 | | | | | | 18,747 | | |
Less: accumulated amortization
|
| | | | (1,611) | | | | | | (4,487) | | |
Intangible assets, net
|
| | | | 9,060 | | | | | | 14,260 | | |
| | |
As of December 31,
|
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Salaries and welfare payables
|
| | | | 35,902 | | | | | | 61,576 | | |
Advances from employee
|
| | | | — | | | | | | 6,290 | | |
Payables for purchase of property and equipment
|
| | | | 3,919 | | | | | | 3,823 | | |
Withholding social security and housing funds
|
| | | | 983 | | | | | | 1,789 | | |
VAT and other tax payables
|
| | | | 1,055 | | | | | | 1,490 | | |
Professional service fees
|
| | | | 18,917 | | | | | | 717 | | |
Accrued litigation settlement cost
|
| | | | 160,098 | | | | | | — | | |
Others
|
| | | | 8,217 | | | | | | 16,210 | | |
Total | | | | | 229,091 | | | | | | 91,895 | | |
Series
|
| |
Issuance
Date |
| |
As
percent of equity at issuance date |
| |
Proceeds
from issuance, net of issuance cost |
| |
January 1,
2019 Carrying Amount |
| |
Change in
redemption value |
| |
December 31,
2019 Carrying Amount |
| |
August 1,
2020 Carrying Amount |
| |
Upon
Completion of the 2020 Reorganization Amount |
| |
December 31,
2020 Carrying Amount |
| ||||||||||||||||||||||||
| | | | | | | | | | | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| | | | | | | ||||||||||||||||||
Series A+
|
| |
March 2017
|
| | | | 10.9% | | | | | | 75,750 | | | | | | 86,827 | | | | | | 6,946 | | | | | | 93,773 | | | | | | 93,773 | | | | | | (93,773) | | | | | | — | | |
Series B
|
| |
November 2017
|
| | | | 10.9% | | | | | | 104,611 | | | | | | 115,412 | | | | | | 9,233 | | | | | | 124,645 | | | | | | 124,645 | | | | | | (124,645) | | | | | | — | | |
Series B+
|
| |
June 2018
|
| | | | 6.0% | | | | | | 96,316 | | | | | | 101,412 | | | | | | 8,113 | | | | | | 109,525 | | | | | | 109,525 | | | | | | (109,525) | | | | | | — | | |
Series C-1
|
| |
May 2019
|
| | | | 7.8% | | | | | | 261,635 | | | | | | — | | | | | | 11,868 | | | | | | 273,503 | | | | | | 273,503 | | | | | | (273,503) | | | | | | — | | |
Series C-2
|
| |
June 2019
|
| | | | 7.0% | | | | | | 254,052 | | | | | | — | | | | | | 11,008 | | | | | | 265,060 | | | | | | 265,060 | | | | | | (265,060) | | | | | | — | | |
Series C-3
|
| |
July 2019
|
| | | | 5.8% | | | | | | 224,054 | | | | | | — | | | | | | 8,079 | | | | | | 232,133 | | | | | | 232,133 | | | | | | (232,133) | | | | | | — | | |
Total
|
| | | | | | | | | | | | | 1,016,418 | | | | | | 303,651 | | | | | | 55,247 | | | | | | 1,098,639 | | | | | | 1,098,639 | | | | | | (1,098,639) | | | | | | — | | |
| | |
For the Year ended
December 31, |
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Product revenues | | | | | | | | | | | | | |
Revenue from LiDAR products
|
| | | | 328,064 | | | | | | 346,068 | | |
Revenue from gas detection products
|
| | | | 19,532 | | | | | | 68,599 | | |
Other revenues
|
| | | | 488 | | | | | | 847 | | |
Net revenues
|
| | | | 348,084 | | | | | | 415,514 | | |
| | |
For the Year ended
December 31, |
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Product Revenue by geographic location | | | | | | | | | | | | | |
North America
|
| | | | 150,477 | | | | | | 201,194 | | |
Mainland China
|
| | | | 125,704 | | | | | | 185,516 | | |
Europe
|
| | | | 64,491 | | | | | | 16,589 | | |
Other regions
|
| | | | 7,412 | | | | | | 12,215 | | |
Net revenues
|
| | | | 348,084 | | | | | | 415,514 | | |
| | |
Accounts
Receivable |
| |
Contract
assets |
| |
Contract
liabilities |
| |||||||||
|
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||||
Opening Balance as of January 1, 2019
|
| | | | 47,846 | | | | | | — | | | | | | 3,772 | | |
(Decrease)/increase, net
|
| | | | (11,335) | | | | | | — | | | | | | 8,071 | | |
Ending Balance as of December 31, 2019
|
| | | | 36,511 | | | | | | — | | | | | | 11,843 | | |
Increase/(decrease), net
|
| | | | 19,808 | | | | | | 38,337 | | | | | | (2,486) | | |
Ending Balance as of December 31, 2020
|
| | | | 56,319 | | | | | | 38,337 | | | | | | 9,357 | | |
| | |
For the Year ended
December 31, |
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Current tax expenses
|
| | | | 1,255 | | | | | | — | | |
Over-provision in prior year
|
| | | | — | | | | | | (125) | | |
Deferred tax benefits
|
| | | | (325) | | | | | | (74) | | |
Income tax expenses (benefits)
|
| | | | 930 | | | | | | (199) | | |
| | |
For the Year ended
December 31, |
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Net loss before income tax from PRC operations
|
| | | | (119,205) | | | | | | (104,524) | | |
Net loss before income tax from non-PRC operations
|
| | | | (89) | | | | | | (2,891) | | |
Total net loss before income tax
|
| | | | (119,294) | | | | | | (107,415) | | |
| | |
For the Year ended
December 31, |
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
Statutory income tax rate
|
| | | | 25.00% | | | | | | 25.00% | | |
Effect of different tax rate of different jurisdictions
|
| | | | 0.02% | | | | | | 0.10% | | |
Effect of non-deductible expenses
|
| | | | (1.61)% | | | | | | (0.30)% | | |
Effect of super deduction on R&D expenses
|
| | | | 23.39% | | | | | | 38.83% | | |
Effect of change of valuation allowance
|
| | | | (47.58)% | | | | | | (63.56)% | | |
Over provision for prior years
|
| | | | — | | | | | | 0.12% | | |
Income tax expenses
|
| | | | (0.78)% | | | | | | 0.19% | | |
| | |
For the Year ended
December 31, |
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Deferred tax assets | | | | | | | | | | | | | |
– Net operating loss carry forwards
|
| | | | 11,935 | | | | | | 119,354 | | |
– Deductible temporary differences
|
| | | | 45,728 | | | | | | 7,637 | | |
– Deferred revenue
|
| | | | 10,322 | | | | | | 9,278 | | |
Less: valuation allowance
|
| | | | (67,985) | | | | | | (136,269) | | |
Net deferred tax assets
|
| | | | — | | | | | | — | | |
Deferred tax liabilities | | | | | | | | | | | | | |
– Identifiable intangible assets from business combination.
|
| | | | 693 | | | | | | 578 | | |
Total deferred tax liabilities
|
| | | | 693 | | | | | | 578 | | |
| | |
For the Year ended
December 31, |
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Balance at beginning of the year
|
| | | | 11,478 | | | | | | 67,985 | | |
Addition
|
| | | | 56,507 | | | | | | 68,284 | | |
Total | | | | | 67,985 | | | | | | 136,269 | | |
| | |
For the year ended
December 31, 2019 |
|
Expected volatility
|
| |
51.00% – 53.00%
|
|
Risk-free interest rate (per annum)
|
| |
2.73% – 2.94%
|
|
Expected dividend yield
|
| |
0.00%
|
|
Employee forfeiture rate (per annum)
|
| |
3.80%
|
|
Exercise multiples
|
| |
2.50
|
|
Contractual life
|
| |
3.00
|
|
Fair value of underlying ordinary share of Shanghai Hesai
|
| |
RMB5.41 – 6.71
|
|
Fair value of option to subscribe 1 ordinary share of Shanghai Hesai
|
| |
RMB4.88 – 5.95
|
|
| | |
For the year ended
December 31, 2020 |
|
Expected volatility
|
| |
49.00% – 52.00%
|
|
Risk-free interest rate (per annum)
|
| |
2.70% – 2.88%
|
|
Expected dividend yield
|
| |
0.00%
|
|
Employee forfeiture rate (per annum)
|
| |
3.80%
|
|
Exercise multiples
|
| |
2.50
|
|
Contractual life
|
| |
1.93 – 3.93
|
|
Fair value per ordinary share of Shanghai Hesai
|
| |
RMB20.33
|
|
Fair value of option to subscribe one ordinary share of Shanghai Hesai
|
| |
RMB17.16 – 17.41
|
|
| | |
Number
of options of Shanghai Hesai |
| |
Weighted
average exercise price |
| |
Weighted
average remaining contract life |
| |
Weighted
average grant date fair value |
| |
Aggregate
intrinsic value |
| |||||||||||||||
| | | | | | | | | RMB | | | | | | Years | | | | | | RMB | | | | | | RMB | | | ||
Outstanding at December 31, 2019
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Granted
|
| | | | 5,054,138 | | | | | | 3.25 | | | | | | 2.93 | | | | | | 17.29 | | | | | | 86,302 | | |
Forfeited
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Exercised
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Outstanding at December 31, 2020
|
| | |
|
5,054,138
|
| | | |
|
3.25
|
| | | |
|
2.93
|
| | | |
|
17.29
|
| | | |
|
86,302
|
| |
Vested and expected to vest as of December 31, 2020
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Exercisable as of December 31, 2020
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | |
Relationship
|
|
Name of the related parties | | | | |
Suzhou Kunjie Phototonics Technology Co., Ltd | | | An equity method investee of the Group | |
Robert Bosch Gesellschaft mit Beschraenkter Haftung | | | An affiliate of the shareholder of the Group | |
Robert Bosch Kft. | | | An affiliate of the shareholder of the Group | |
Robert Bosch Ltd | | | An affiliate of the shareholder of the Group | |
Robert Bosch France | | | An affiliate of the shareholder of the Group | |
Bosch Automotive Products (Suzhou) Co., Ltd.
|
| | An affiliate of the shareholder of the Group | |
Baidu USA LLC | | | An affiliate of the shareholder of the Group | |
Beijing Baidu Netcom Technology Co., Ltd. | | | An affiliate of the shareholder of the Group | |
Apollo Intelligent Transportation Technology (Guangzhou) Co., Ltd. | | | An affiliate of the shareholder of the Group | |
Baidu Smart Travel Information Technology (Chongqing) Co., Ltd. | | | An affiliate of the shareholder of the Group | |
Apollo Intelligent Transportation Technology (Hefei) Co., Ltd. | | | An affiliate of the shareholder of the Group | |
| | |
For year ended
December 31, |
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Revenue from sale of LiDAR products | | | | | | | | | | | | | |
Affiliates of the shareholders of the Group
|
| | | | 47,852 | | | | | | 41,765 | | |
Total | | | | | 47,852 | | | | | | 41,765 | | |
| | |
For year ended
December 31, |
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Research and development expenses | | | | | | | | | | | | | |
An equity method investee of the Group
|
| | | | 485 | | | | | | 900 | | |
Total | | | | | 485 | | | | | | 900 | | |
| | |
For year ended
December 31, |
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Purchases of raw materials | | | | | | | | | | | | | |
An equity method investee of the Group
|
| | |
|
—
|
| | | | | 83 | | |
Total | | | | | — | | | | | | 83 | | |
| | |
As of December 31,
|
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Amounts due from related parties, net of allowance | | | | | | | | | | | | | |
Affiliates of the shareholder of the Group
|
| | | | 6,946 | | | | | | 28,088 | | |
An equity method investee of the Group
|
| | | | 960 | | | | | | — | | |
Total | | | | | 7,906 | | | | | | 28,088 | | |
| | |
For the year ended
December 31, |
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Numerator | | | | | | | | | | | | | |
Net loss
|
| | | | (120,224) | | | | | | (107,216) | | |
Change in redemption value of redeemable preferred equity
|
| | | | (55,247) | | | | | | — | | |
Net loss attributable to ordinary shareholders
|
| | | | (175,471) | | | | | | (107,216) | | |
Denominator | | | | | | | | | | | | | |
Weighted average number of ordinary shares outstanding-basic and diluted
|
| | | | 79,899,201 | | | | | | 89,895,471 | | |
Basic and diluted net loss per share attributable to ordinary shareholders
|
| | | | (2.20) | | | | | | (1.19) | | |
| | |
For the year ended
December 31, |
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
Number
|
| |
Number
|
| ||||||||
Shares issuable upon exercise of share options
|
| | | | 4,176,093 | | | | | | 5,490,261 | | |
| | |
Year ended December 31,
|
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
LiDAR segment | | | | | | | | | | | | | |
LiDAR product revenues
|
| | | | 328,552 | | | | | | 346,915 | | |
Cost of Revenues
|
| | | | 97,358 | | | | | | 155,986 | | |
Segment profit
|
| | | | 231,194 | | | | | | 190,929 | | |
Gas detection segment | | | | | | | | | | | | | |
Gas detection product revenues
|
| | | | 19,532 | | | | | | 68,599 | | |
Cost of products sold
|
| | | | 6,019 | | | | | | 20,614 | | |
Segment profit
|
| | | | 13,513 | | | | | | 47,985 | | |
Total segment profit
|
| | | | 244,707 | | | | | | 238,914 | | |
| | |
Year ended December 31,
|
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
Total profit for reportable segments
|
| | | | 244,707 | | | | | | 238,914 | | |
Unallocated amounts* | | | | | | | | | | | | | |
Sales and marketing expenses
|
| | | | (38,740) | | | | | | (49,904) | | |
General and administrative expenses
|
| | | | (55,112) | | | | | | (76,553) | | |
Research and development expenses
|
| | | | (149,817) | | | | | | (229,653) | | |
Other operating expenses (income), net
|
| | | | (149,089) | | | | | | 15,384 | | |
Interest income
|
| | | | 19,107 | | | | | | 20,925 | | |
Foreign exchange gains (loss)
|
| | | | 9,619 | | | | | | (25,696) | | |
Other income, net
|
| | | | 31 | | | | | | (832) | | |
Loss before income tax
|
| | | | (119,294) | | | | | | (107,415) | | |
| | |
Year ended December 31,
|
| |||||||||
|
2019
|
| |
2020
|
| ||||||||
|
RMB
|
| |
RMB
|
| ||||||||
LiDAR segment
|
| | | | 1,364 | | | | | | 2,528 | | |
Gas detection segment
|
| | | | 81 | | | | | | 500 | | |
| | | | | 1,445 | | | | | | 3,028 | | |
| | |
As of December 31,
2020 |
| |||
|
RMB
|
| |||||
2021
|
| | | | 18,070 | | |
Total | | | | | 18,070 | | |
| | |
As of December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| ||||||||||||
| | |
RMB
|
| |
RMB
|
| |
USD
(Note 4) |
| |||||||||
ASSETS | | | | | | | | | | | | | | | | | | | |
Investments in subsidiaries
|
| | | | 929,212 | | | | | | 1,137,193 | | | | | | 176,129 | | |
TOTAL ASSETS
|
| | | | 929,212 | | | | | | 1,137,193 | | | | | | 176,129 | | |
SHAREHOLDERS’ EQUITY (DEFICIT)
|
| | | | | | | | | | | | | | | | | | |
Class A Ordinary shares (US$0.0001 par value, nil and nil share authorized, issued and outstanding as of December 31, 2019 and 2020, respectively)
|
| | | | — | | | | | | — | | | | | | — | | |
Class B Ordinary shares (US$0.0001 par value, nil and nil share authorized, issued and outstanding as of December 31, 2019 and 2020, respectively)
|
| | | | — | | | | | | — | | | | | | — | | |
Additional paid-in capital
|
| | | | 1,098,639 | | | | | | 1,193,857 | | | | | | 184,905 | | |
Accumulated other comprehensive income (loss)
|
| | | | 1,332 | | | | | | (618) | | | | | | (96) | | |
Accumulated deficit
|
| | | | (170,759) | | | | | | (56,046) | | | | | | (8,680) | | |
Total Shareholders’ Equity
|
| | | | 929,212 | | | | | | 1,137,193 | | | | | | 176,129 | | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
| | | | 929,212 | | | | | | 1,137,193 | | | | | | 176,129 | | |
| | |
Year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| ||||||||||||
| | |
RMB
|
| |
RMB
|
| |
USD
(Note 4) |
| |||||||||
Net revenues
|
| | | | — | | | | | | — | | | | | | — | | |
Cost of revenues
|
| | | | — | | | | | | — | | | | | | — | | |
Equity in deficit of subsidiaries
|
| | | | (120,224) | | | | | | (107,216) | | | | | | (16,606) | | |
Net Loss
|
| | | | (120,224) | | | | | | (107,216) | | | | | | (16,606) | | |
Other comprehensive income (loss), net of tax of nil: | | | | | | | | | | | | | | | | | | | |
Foreign currency translation adjustments
|
| | | | 1,332 | | | | | | (1,950) | | | | | | (302) | | |
Comprehensive loss, net of tax of nil
|
| | | | (118,892) | | | | | | (109,166) | | | | | | (16,908) | | |
| | |
Year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| ||||||||||||
| | |
RMB
|
| |
RMB
|
| |
USD
(Note 4) |
| |||||||||
Cash flows from operating activities: | | | | | | | | | | | | | | | | | | | |
Net loss
|
| | | | (120,224) | | | | | | (107,216) | | | | | | (16,606) | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | | | | | | | |
Loss from equity in earnings of subsidiaries
|
| | | | 120,224 | | | | | | 107,216 | | | | | | 16,606 | | |
Net cash provided by operating activities
|
| | | | — | | | | | | — | | | | | | — | | |
Net cash provided by investing activities
|
| | | | — | | | | | | — | | | | | | — | | |
Net cash provided by financing activities
|
| | | | — | | | | | | — | | | | | | — | | |
Net increase in cash and cash equivalents
|
| | | | — | | | | | | — | | | | | | — | | |
Cash and cash equivalents, beginning of the year
|
| | | | — | | | | | | — | | | | | | — | | |
Effect of foreign exchange rate changes on cash and cash equivalents
|
| | | | — | | | | | | — | | | | | | — | | |
Cash and cash equivalents, end of the year
|
| | | | — | | | | | | — | | | | | | — | | |
| | |
As of December 31,
|
| |
As of June 30,
|
| ||||||||||||
| | |
2020
|
| |
2021
|
| ||||||||||||
| | |
RMB
|
| |
RMB
|
| |
USD
|
| |||||||||
| | | | | | | | | | | | | | |
(Note 2)
|
| |||
ASSETS | | | | | | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | 256,688 | | | | | | 2,293,022 | | | | | | 355,144 | | |
Short-term investments
|
| | | | 638,981 | | | | | | 382,383 | | | | | | 59,224 | | |
Accounts receivable (net of allowance for doubtful accounts of RMB5,270 and RMB5,346 as of December 31, 2020 and June 30, 2021, respectively)
|
| | | | 56,319 | | | | | | 66,390 | | | | | | 10,283 | | |
Contract assets (net of allowance for doubtful accounts of RMB687 and RMB726 as of December 31, 2020 and June 30, 2021, respectively)
|
| | | | 38,337 | | | | | | 41,502 | | | | | | 6,428 | | |
Amounts due from related parties (net of allowance for doubtful accounts of RMB504 and RMB69 as of December 31, 2020 and June 30, 2021, respectively)
|
| | | | 28,331 | | | | | | 7,989 | | | | | | 1,237 | | |
Inventories
|
| | | | 149,925 | | | | | | 257,819 | | | | | | 39,931 | | |
Prepayments and other current assets
|
| | | | 40,658 | | | | | | 93,718 | | | | | | 14,515 | | |
Total current assets
|
| | | | 1,209,239 | | | | | | 3,142,823 | | | | | | 486,762 | | |
Property and equipment, net
|
| | | | 63,837 | | | | | | 99,513 | | | | | | 15,413 | | |
Investment in equity method investee
|
| | | | 1,986 | | | | | | 1,924 | | | | | | 298 | | |
Intangible assets, net
|
| | | | 14,260 | | | | | | 15,022 | | | | | | 2,327 | | |
Land-use rights, net
|
| | | | — | | | | | | 43,188 | | | | | | 6,689 | | |
Goodwill
|
| | | | 3,640 | | | | | | 3,605 | | | | | | 558 | | |
Other non-current assets
|
| | | | 19,163 | | | | | | 16,291 | | | | | | 2,523 | | |
Total non-current assets
|
| | | | 102,886 | | | | | | 179,543 | | | | | | 27,808 | | |
TOTAL ASSETS
|
| | | | 1,312,125 | | | | | | 3,322,366 | | | | | | 514,570 | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | | 55,437 | | | | | | 69,813 | | | | | | 10,813 | | |
Contract liabilities
|
| | | | 9,357 | | | | | | 105,491 | | | | | | 16,339 | | |
Amounts due to related parties
|
| | | | — | | | | | | 349,594 | | | | | | 54,145 | | |
Income tax payable
|
| | | | 9 | | | | | | — | | | | | | — | | |
Accrued warranty liability
|
| | | | 10,042 | | | | | | 9,527 | | | | | | 1,476 | | |
Derivative liability
|
| | | | — | | | | | | 73,959 | | | | | | 11,455 | | |
Convertible loans
|
| | | | — | | | | | | 12,920 | | | | | | 2,000 | | |
Accrued expenses and other current liabilities
|
| | | | 91,895 | | | | | | 174,888 | | | | | | 27,088 | | |
Total current liabilities
|
| | |
|
166,740
|
| | | |
|
796,192
|
| | | |
|
123,316
|
| |
Deferred tax liabilities
|
| | | | 578 | | | | | | 538 | | | | | | 83 | | |
Other non-current liabilities
|
| | | | 7,614 | | | | | | 7,614 | | | | | | 1,179 | | |
Total non-current liabilities
|
| | | | 8,192 | | | | | | 8,152 | | | | | | 1,262 | | |
TOTAL LIABILITIES
|
| | |
|
174,932
|
| | | |
|
804,344
|
| | | |
|
124,578
|
| |
Commitments and contingencies (Note 17) | | | | | |||||||||||||||
Shareholders’ Equity | | | | | | | | | | | | | | | | | | | |
Class A Ordinary shares (USD0.0001 par value, nil share authorized, issued and outstanding as of December 31, 2020; 35,000,000 shares authorized, 30,033,379 shares issued and outstanding as of June 30, 2021)
|
| | | | — | | | | | | 19 | | | | | | 3 | | |
Class B Ordinary shares (USD0.0001 par value, nil share authorized, issued and
outstanding as of December 31, 2020; 150,000,000 shares authorized, 81,137,578 shares issued and outstanding as of June 30, 2021) |
| | | | — | | | | | | 52 | | | | | | 8 | | |
Additional paid-in capital
|
| | | | 1,193,857 | | | | | | 3,131,204 | | | | | | 484,961 | | |
Subscription receivables
|
| | | | — | | | | | | (356,045) | | | | | | (55,144) | | |
Accumulated other comprehensive (loss) income
|
| | | | (618) | | | | | | 12,312 | | | | | | 1,907 | | |
Accumulated deficit
|
| | | | (56,046) | | | | | | (269,520) | | | | | | (41,743) | | |
Total Shareholders’ Equity
|
| | |
|
1,137,193
|
| | | |
|
2,518,022
|
| | | |
|
389,992
|
| |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
| | | | 1,312,125 | | | | | | 3,322,366 | | | | | | 514,570 | | |
| | |
Six months ended June 30,
|
| |||||||||||||||
| | |
2020
|
| |
2021
|
| ||||||||||||
| | |
RMB
|
| |
RMB
|
| |
USD
|
| |||||||||
| | | | | | | | | | | | | | |
(Note 2)
|
| |||
Net revenues (including related party revenues of RMB3,596 and RMB15,655 for the six months ended June 30, 2020 and 2021, respectively)
|
| | | | 81,350 | | | | | | 234,998 | | | | | | 36,397 | | |
Cost of revenues
|
| | | | 44,040 | | | | | | 100,482 | | | | | | 15,563 | | |
Gross Profit
|
| | |
|
37,310
|
| | | |
|
134,516
|
| | | |
|
20,834
|
| |
Operating expenses: | | | | | | | | | | | | | | | | | | | |
Sales and marketing expenses
|
| | | | 21,518 | | | | | | 24,129 | | | | | | 3,737 | | |
General and administrative expenses
|
| | | | 35,034 | | | | | | 212,523 | | | | | | 32,916 | | |
Research and development expenses
|
| | | | 91,104 | | | | | | 120,139 | | | | | | 18,607 | | |
Other operating income, net
|
| | | | (3,004) | | | | | | (13,347) | | | | | | (2,067) | | |
Total operating expenses
|
| | |
|
144,652
|
| | | |
|
343,444
|
| | | |
|
53,193
|
| |
Loss from operations
|
| | |
|
(107,342)
|
| | | |
|
(208,928)
|
| | | |
|
(32,359)
|
| |
Interest income
|
| | | | 12,208 | | | | | | 5,759 | | | | | | 892 | | |
Foreign exchange gain (loss), net
|
| | | | 6,829 | | | | | | (9,350) | | | | | | (1,448) | | |
Other (loss) income, net
|
| | | | (262) | | | | | | (990) | | | | | | (153) | | |
Net loss before income tax
|
| | |
|
(88,567)
|
| | | |
|
(213,509)
|
| | | |
|
(33,068)
|
| |
Income tax benefit
|
| | | | 147 | | | | | | 35 | | | | | | 5 | | |
Net loss
|
| | |
|
(88,420)
|
| | | |
|
(213,474)
|
| | | |
|
(33,063)
|
| |
Net loss attributable to ordinary shareholders of the
Company |
| | |
|
(88,420)
|
| | | |
|
(213,474)
|
| | | |
|
(33,063)
|
| |
Net loss per share attributable to ordinary shareholders: | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | (1.00) | | | | | | (2.21) | | | | | | (0.34) | | |
Weighted average shares used in calculating net loss per share: | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | 88,533,588 | | | | | | 96,465,785 | | | | | | 96,465,785 | | |
Net loss
|
| | |
|
(88,420)
|
| | | |
|
(213,474)
|
| | | |
|
(33,063)
|
| |
Other comprehensive income (loss), net of tax of nil:
|
| | | | | | | | | | | | | | | | | | |
Foreign currency translation adjustments
|
| | | | 348 | | | | | | 12,930 | | | | | | 2,002 | | |
Comprehensive loss, net of tax of nil
|
| | |
|
(88,072)
|
| | | |
|
(200,544)
|
| | | |
|
(31,061)
|
| |
| | |
Ordinary Shares
Class A |
| |
Ordinary Shares
Class B |
| |
Additional
Paid-in capital |
| |
Subscription
Receivables |
| |
Accumulated
deficit |
| |
Accumulated
other comprehensive income (loss) |
| |
Total
Shareholders’ Equity |
| |||||||||||||||||||||||||||||||||
| | |
Number
|
| |
RMB
|
| |
Number
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||||||||||||||||||||
Balance as of January 1, 2020
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | |
|
(170,759)
|
| | | |
|
1,332
|
| | | |
|
(169,427)
|
| |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (88,420) | | | | | | — | | | | | | (88,420) | | |
Foreign currency translation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 348 | | | | | | 348 | | |
Balance as of June 30, 2020
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | |
|
(259,179)
|
| | | |
|
1,680
|
| | | |
|
(257,499)
|
| |
Balance as of January 1, 2021
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,193,857 | | | | | | — | | | | | | (56,046) | | | | | | (618) | | | | | | 1,137,193 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (213,474) | | | | | | — | | | | | | (213,474) | | |
Foreign currency translation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 12,930 | | | | | | 12,930 | | |
Issuance of ordinary shares in connection with the 2021 Reorganization
|
| | | | 30,033,379 | | | | | | 19 | | | | | | 62,834,548 | | | | | | 40 | | | | | | (59) | | | | | | (356,045) | | | | | | — | | | | | | — | | | | | | (356,045) | | |
Issuance of ordinary shares upon conversion of convertible loans
|
| | | | — | | | | | | — | | | | | | 18,303,030 | | | | | | 12 | | | | | | 1,937,406 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,937,418 | | |
Balance as of June 30, 2021
|
| | |
|
30,033,379
|
| | | |
|
19
|
| | | |
|
81,137,578
|
| | | |
|
52
|
| | | |
|
3,131,204
|
| | | |
|
(356,045)
|
| | | |
|
(269,520)
|
| | | |
|
12,312
|
| | | |
|
2,518,022
|
| |
| | |
Six months ended June 30,
|
| |||||||||||||||
| | |
2020
|
| |
2021
|
| ||||||||||||
| | |
RMB
|
| |
RMB
|
| |
USD
|
| |||||||||
| | | | | | | | | | | | | | |
(Note 2)
|
| |||
Cash flows from operating activities: | | | | | | | | | | | | | | | | | | | |
Net loss
|
| | |
|
(88,420)
|
| | | |
|
(213,474)
|
| | | |
|
(33,063)
|
| |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 8,130 | | | | | | 12,385 | | | | | | 1,918 | | |
Reversal for allowance for doubtful accounts
|
| | | | (550) | | | | | | (319) | | | | | | (49) | | |
Loss from disposal of property and equipment
|
| | | | — | | | | | | 72 | | | | | | 11 | | |
Fair value change of derivative liability (Note 8)
|
| | | | — | | | | | | 1,050 | | | | | | 162 | | |
Recognition of derivative liability
|
| | | | — | | | | | | 72,909 | | | | | | 11,292 | | |
Share of loss in equity method investee
|
| | | | 74 | | | | | | 62 | | | | | | 10 | | |
Foreign exchange (gain) loss, net
|
| | | | (7,361) | | | | | | 694 | | | | | | 108 | | |
Inventory write-down
|
| | | | 969 | | | | | | 3,629 | | | | | | 562 | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | | | | | | | |
Accounts receivable
|
| | | | 5,784 | | | | | | (10,147) | | | | | | (1,572) | | |
Contract assets
|
| | | | — | | | | | | (3,204) | | | | | | (496) | | |
Inventories
|
| | | | (25,232) | | | | | | (112,038) | | | | | | (17,353) | | |
Prepayments and other current assets
|
| | | | 4,786 | | | | | | (57,698) | | | | | | (8,936) | | |
Amounts due from related parties
|
| | | | 7,434 | | | | | | 20,777 | | | | | | 3,218 | | |
Non-current assets
|
| | | | 1,728 | | | | | | 367 | | | | | | 57 | | |
Amounts due to related parties
|
| | | | (85) | | | | | | 10,776 | | | | | | 1,669 | | |
Contract liabilities
|
| | | | 3,062 | | | | | | 96,133 | | | | | | 14,890 | | |
Deferred tax liabilities
|
| | | | (20) | | | | | | (40) | | | | | | (6) | | |
Accounts payable
|
| | | | 962 | | | | | | 14,376 | | | | | | 2,227 | | |
Income tax payable
|
| | | | (1,263) | | | | | | (9) | | | | | | (1) | | |
Accrued expenses and other current liabilities
|
| | | | 1,944 | | | | | | 85,546 | | | | | | 13,249 | | |
Net cash used in operating activities
|
| | |
|
(88,058)
|
| | | |
|
(78,153)
|
| | | |
|
(12,103)
|
| |
Cash flows from investing activities: | | | | | | | | | | | | | | | | | | | |
Purchases of short-term investments
|
| | | | (1,083,353) | | | | | | (386,350) | | | | | | (59,838) | | |
Maturity of short-term investments
|
| | | | 1,594,046 | | | | | | 642,510 | | | | | | 99,512 | | |
Purchases of property and equipment
|
| | | | (25,174) | | | | | | (40,858) | | | | | | (6,328) | | |
Purchases of land-use rights
|
| | | | — | | | | | | (43,188) | | | | | | (6,689) | | |
Purchases of intangible assets
|
| | | | (778) | | | | | | (3,774) | | | | | | (584) | | |
Net cash provided by investing activities
|
| | | | 484,741 | | | | | | 168,340 | | | | | | 26,073 | | |
Cash flows from financing activities: | | | | | | | | | | | | | | | | | | | |
Cash distribution to shareholders of Shanghai Hesai in connection with the 2021 Reorganization
|
| | | | — | | | | | | (479,989) | | | | | | (74,341) | | |
Cash contribution from Shareholders in connection with the 2021 Reorganization
|
| | | | — | | | | | | 463,137 | | | | | | 71,731 | | |
Proceeds from issuance of convertible loans
|
| | | | — | | | | | | 1,950,338 | | | | | | 302,069 | | |
Net cash provided by financing activities
|
| | | | — | | | | | | 1,933,486 | | | | | | 299,459 | | |
Net increase in cash and cash equivalents
|
| | |
|
396,683
|
| | | |
|
2,023,673
|
| | | |
|
313,429
|
| |
Cash and cash equivalents, beginning of the period
|
| | | | 112,737 | | | | | | 256,688 | | | | | | 39,756 | | |
Effect of foreign exchange rate changes on cash and cash equivalents
|
| | | | (840) | | | | | | 12,661 | | | | | | 1,959 | | |
Cash and cash equivalents, end of the period
|
| | | | 508,580 | | | | | | 2,293,022 | | | | | | 355,144 | | |
Supplemental disclosure of cash flow information: | | | | | | | | | | | | | | | | | | | |
Income taxes paid (refund)
|
| | | | 1,154 | | | | | | (1,154) | | | | | | (179) | | |
Supplemental disclosure of non-cash investing and financing activities: | | | | | | | | | | | | | | | | | | | |
Payables for purchases of property and equipment
|
| | | | 3,823 | | | | | | 2,659 | | | | | | 412 | | |
Conversion of convertible loans to Class B ordinary shares
|
| | | | — | | | | | | 1,937,418 | | | | | | 300,069 | | |
| | | | | |
Fair Value Measurements at Reporting Date Using
|
| ||||||||||||||||||||||||
| | |
As of June 30, 2021
|
| |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||||||||
Description
|
| |
Carrying
Value |
| |
Fair
Value |
| ||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||||||||
Short-term investments
|
| | | | 382,383 | | | | | | 382,383 | | | | | | — | | | | | | 382,383 | | | | | | — | | |
Derivative liability
|
| | | | 73,959 | | | | | | 73,959 | | | | | | — | | | | | | — | | | | | | 73,959 | | |
Total
|
| | | | 456,342 | | | | | | 456,342 | | | | | | — | | | | |
|
382,383
|
| | | |
|
73,959
|
| |
| | |
For the Year ended
December 31, |
| |
For the six months
ended June 30, |
| ||||||
| | |
2020
|
| |
2021
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Balance as of the beginning of the year/period
|
| | | | 7,457 | | | | | | 10,042 | | |
Warranty provision
|
| | | | 8,752 | | | | | | 4,581 | | |
Consumption
|
| | | | (6,167) | | | | | | (5,096) | | |
Balance as of the end of the year/period
|
| | | | 10,042 | | | | | | 9,527 | | |
| | |
For the six months ended
June 30, |
| |||||||||
| | |
2020
|
| |
2021
|
| ||||||
Customer F
|
| | | | 11.6% | | | | | | * | | |
| | |
As of
December 31, |
| |
As of
June 30, |
| ||||||
| | |
2020
|
| |
2021
|
| ||||||
Customer B
|
| | | | 31.8% | | | | | | 34.1% | | |
Customer C
|
| | | | 17.5% | | | | | | * | | |
| | |
For the six months ended
June 30, |
| |||||||||
| | |
2020
|
| |
2021
|
| ||||||
Supplier A
|
| | | | 14.0% | | | | | | 16.3% | | |
| | |
As of
December 31, |
| |
As of
June 30, |
| ||||||
| | |
2020
|
| |
2021
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Structured bank financial products
|
| | | | 246,612 | | | | | | 80,558 | | |
Time deposits
|
| | | | 392,369 | | | | | | 301,825 | | |
Total short-term investments
|
| | | | 638,981 | | | | | | 382,383 | | |
| | |
As of
December 31, |
| |
As of
June 30, |
| ||||||
| | |
2020
|
| |
2021
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Accounts receivable
|
| | | | 61,589 | | | | | | 71,736 | | |
Less: allowance for expected credit losses
|
| | | | (5,270) | | | | | | (5,346) | | |
Total Accounts receivable, net
|
| | | | 56,319 | | | | | | 66,390 | | |
| | |
For the Year ended
December 31, |
| |
For the six months
ended June 30, |
| ||||||
| | |
2020
|
| |
2021
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Balance at beginning of year/period
|
| | | | 2,257 | | | | | | 5,270 | | |
Provision for expected credit losses
|
| | | | 3,015 | | | | | | 76 | | |
Write-off
|
| | | | (2) | | | | | | — | | |
Balance at end of year/period
|
| | | | 5,270 | | | | | | 5,346 | | |
| | |
As of
December 31, |
| |
As of
June 30, |
| ||||||
| | |
2020
|
| |
2021
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Raw materials
|
| | | | 61,609 | | | | | | 95,821 | | |
Work-in-process
|
| | | | 81,104 | | | | | | 144,581 | | |
Finished goods
|
| | | | 7,212 | | | | | | 17,417 | | |
Inventories | | | | | 149,925 | | | | | | 257,819 | | |
| | |
As of
December 31, |
| |
As of
June 30, |
| ||||||
| | |
2020
|
| |
2021
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Advances to suppliers
|
| | | | 18,307 | | | | | | 47,284 | | |
Prepaid expenses
|
| | | | 8,295 | | | | | | 21,803 | | |
Deposits
|
| | | | 7,024 | | | | | | 14,383 | | |
Value-added tax recoverable
|
| | | | 5,937 | | | | | | 7,866 | | |
Others
|
| | | | 1,095 | | | | | | 2,382 | | |
Total | | | | | 40,658 | | | | | | 93,718 | | |
| | |
On the date of Issuance
|
|
Fair value of ordinary share
|
| |
USD16.40, USD16.04
|
|
Risk free interest rate
|
| |
0.12%, 0.16%
|
|
Expected volatility
|
| |
48%, 49%
|
|
| | |
Conversion
options |
| |||
| | |
RMB
|
| |||
Balance at January 1, 2021
|
| | | | — | | |
Issuance of the conversion options
|
| | | | 72,909 | | |
Changes in fair value
|
| | | | 1,050 | | |
Balance at June 30, 2021
|
| | | | 73,959 | | |
| | |
As of
December 31, |
| |
As of
June 30, |
| ||||||
| | |
2020
|
| |
2021
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Salaries and welfare payables
|
| | | | 63,365 | | | | | | 37,361 | | |
Advances from employees
|
| | | | 6,290 | | | | | | 6,164 | | |
Payables for purchase of property and equipment
|
| | | | 3,823 | | | | | | 2,659 | | |
VAT and other tax payables
|
| | | | 1,490 | | | | | | 107,438 | | |
Others
|
| | | | 16,927 | | | | | | 21,266 | | |
Total | | | | | 91,895 | | | | | | 174,888 | | |
| | |
For the six months ended
June 30, |
| |||||||||
| | |
2020
|
| |
2021
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Product revenues | | | | | | | | | | | | | |
Revenue from LiDAR products
|
| | | | 67,963 | | | | | | 218,383 | | |
Revenue from gas detection products
|
| | | | 13,186 | | | | | | 8,426 | | |
Other revenues
|
| | | | 201 | | | | | | 570 | | |
Service revenues | | | | | | | | | | | | | |
Service revenue
|
| | | | — | | | | | | 7,619 | | |
Total | | | | | 81,350 | | | | | | 234,998 | | |
| | |
For the six months ended
June 30, |
| |||||||||
| | |
2020
|
| |
2021
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Revenues by geographic location | | | | | | | | | | | | | |
Mainland China
|
| | | | 32,935 | | | | | | 121,964 | | |
North America
|
| | | | 40,591 | | | | | | 74,704 | | |
Europe
|
| | | | 5,653 | | | | | | 28,522 | | |
Other regions
|
| | | | 2,171 | | | | | | 9,808 | | |
Total | | | | | 81,350 | | | | | | 234,998 | | |
| | |
Accounts
Receivable |
| |
Contract
assets |
| |
Contract
liabilities |
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Balance as of January 1, 2020
|
| | | | 36,511 | | | | | | — | | | | | | 11,843 | | |
Increase/(decrease), net
|
| | | | 19,808 | | | | | | 38,337 | | | | | | (2,486) | | |
Balance as of December 31, 2020
|
| | | | 56,319 | | | | | | 38,337 | | | | | | 9,357 | | |
Increase, net
|
| | | | 10,071 | | | | | | 3,165 | | | | | | 96,134 | | |
Ending Balance as of June 30, 2021
|
| | | | 66,390 | | | | | | 41,502 | | | | | | 105,491 | | |
| | |
Number of
options |
| |
Weighted
average exercise price |
| |
Weighted
average remaining contract life |
| |
Weighted
average grant date fair value |
| |
Aggregate
intrinsic value |
| |||||||||||||||
| | | | | | | | |
RMB
|
| |
Years
|
| |
RMB
|
| |
RMB
|
| ||||||||||||
Outstanding at January 1, 2021
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Granted
|
| | | | 5,419,677 | | | | | | 3.87 | | | | | | 6.35 | | | | | | 22.83 | | | | | | 122,364 | | |
Forfeited
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Exercised
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Outstanding at June 30, 2021
|
| | | | 5,419,677 | | | | | | 3.87 | | | | | | 6.35 | | | | | | 22.83 | | | | | | 122,364 | | |
Vested and expected to vest as of June 30, 2021
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Exercisable as of June 30, 2021
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Name of the related parties
|
| |
Relationship
|
|
Mr. Kai Sun, | | |
Founding Shareholders
|
|
Mr. Yifan Li | | |
Founding Shareholders
|
|
Mr. Shaoqing Xiang | | |
Founding Shareholders
|
|
Mr. Xiaoming Hang | | |
Shareholder
|
|
Mr. Min Ai | | |
Shareholder
|
|
Mr. Minglie Hu | | |
Shareholder
|
|
Mr. Deming Zhu | | |
Shareholder
|
|
Suzhou Kunjie Phototonics Technology Co., Ltd. | | |
An equity method investee of the Group
|
|
Shanghai Leyi Technology L.P. | | |
An affiliate of the shareholder of the Group
|
|
Robert Bosch Gesellschaft mit Beschraenkter Haftung | | |
An affiliate of the shareholder of the Group
|
|
Robert Bosch Kft. | | |
An affiliate of the shareholder of the Group
|
|
Robert Bosch Ltd. | | |
An affiliate of the shareholder of the Group
|
|
Robert Bosch France | | |
An affiliate of the shareholder of the Group
|
|
Bosch Automotive Products (Suzhou) Co., Ltd. | | |
An affiliate of the shareholder of the Group
|
|
Baidu USA LLC | | |
An affiliate of the shareholder of the Group
|
|
Beijing Baidu Netcom Technology Co., Ltd. | | |
An affiliate of the shareholder of the Group
|
|
Apollo Intelligent Transportation Technology (Guangzhou) Co., Ltd. | | |
An affiliate of the shareholder of the Group
|
|
Baidu Smart Travel Information Technology (Chongqing) Co., Ltd. | | |
An affiliate of the shareholder of the Group
|
|
Name of the related parties
|
| |
Relationship
|
|
Apollo Intelligent Transportation Technology (Hefei) Co., Ltd. | | |
An affiliate of the shareholder of the Group
|
|
Luobo Yunli (Beijing) Technology Co., Ltd. | | |
An affiliate of the shareholder of the Group
|
|
Apollo Intelligent Transportation Technology (Dalian) Co., Ltd. | | |
An affiliate of the shareholder of the Group
|
|
Apollo Intelligent Technology (Beijing) Co., Ltd. | | |
An affiliate of the shareholder of the Group
|
|
Apollo Intelligent Connection (Beijing) Co., Ltd. | | |
An affiliate of the shareholder of the Group
|
|
| | |
For six months
ended June 30, |
| |||||||||
| | |
2020
|
| |
2021
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Revenues from sale of LiDAR products | | | | | | | | | | | | | |
Affiliates of the shareholders of the Group
|
| | | | 3,596 | | | | | | 15,655 | | |
Total | | | | | 3,596 | | | | | | 15,655 | | |
| | |
As of
December 31, |
| |
As of
June 30, |
| ||||||
| | |
2020
|
| |
2021
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Amounts due from related parties, net of allowance | | | | | | | | | | | | | |
Affiliates of the shareholder of the Group
|
| | | | 28,088 | | | | | | 7,989 | | |
Total | | | | | 28,088 | | | | | | 7,989 | | |
| | |
As of
December 31, |
| |
As of
June 30, |
| ||||||
| | |
2020
|
| |
2021
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Amounts due to related parties | | | | | | | | | | | | | |
Affiliates of the shareholder of the Group
|
| | | | — | | | | | | 10,465 | | |
Total
|
| | |
|
—
|
| | | | | 10,465 | | |
| | |
As of
December 31, |
| |
As of
June 30, |
| ||||||
| | |
2020
|
| |
2021
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Amounts due to related parties | | | | | | | | | | | | | |
Founding Shareholders and certain shareholders (Note)
|
| | | | — | | | | | | 339,129 | | |
Total | | | | | — | | | | | | 339,129 | | |
| | |
For the six months ended
June 30, |
| |||||||||
| | |
2020
|
| |
2021
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Numerator: | | | | | | | | | | | | | |
Net loss
|
| | | | (88,420) | | | | | | (213,474) | | |
Net loss attributable to ordinary shareholders of the Company
|
| | |
|
(88,420)
|
| | | |
|
(213,474)
|
| |
Denominator: | | | | | | | | | | | | | |
Weighted average number of ordinary shares outstanding-basic and diluted
|
| | | | 88,533,588 | | | | | | 96,465,785 | | |
Basic and diluted net loss per share
|
| | |
|
(1.00)
|
| | | |
|
(2.21)
|
| |
| | |
For the six months ended
June 30, |
| |||||||||
| | |
2020
|
| |
2021
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
LiDAR segment | | | | | | | | | | | | | |
LiDAR revenues
|
| | | | 68,164 | | | | | | 226,572 | | |
Cost of revenues
|
| | | | 36,511 | | | | | | 96,964 | | |
Segment profit
|
| | |
|
31,653
|
| | | |
|
129,608
|
| |
Gas detection segment | | | | | | | | | | | | | |
Gas detection revenues
|
| | | | 13,186 | | | | | | 8,426 | | |
Cost of revenues
|
| | | | 7,529 | | | | | | 3,518 | | |
Segment profit
|
| | | | 5,657 | | | | | | 4,908 | | |
Total segment profit
|
| | | | 37,310 | | | | | | 134,516 | | |
| | |
For the six months ended
June 30, |
| |||||||||
| | |
2020
|
| |
2021
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Total profit for reportable segments
|
| | |
|
37,310
|
| | | |
|
134,516
|
| |
Unallocated amounts* | | | | | | | | | | | | | |
Sales and marketing expenses
|
| | | | (21,518) | | | | | | (24,129) | | |
General and administrative expenses
|
| | | | (35,034) | | | | | | (212,523) | | |
Research and development expenses
|
| | | | (91,104) | | | | | | (120,139) | | |
Other operating income, net
|
| | | | 3,004 | | | | | | 13,347 | | |
Interest income
|
| | | | 12,208 | | | | | | 5,759 | | |
Foreign exchange gains (loss), net
|
| | | | 6,829 | | | | | | (9,350) | | |
Other (loss) income, net
|
| | | | (262) | | | | | | (990) | | |
Loss before income tax
|
| | |
|
(88,567)
|
| | | |
|
(213,509)
|
| |
| | |
For the six months ended
June 30, |
| |||||||||
| | |
2020
|
| |
2021
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
LiDAR segment
|
| | | | 907 | | | | | | 1,080 | | |
Gas detection segment
|
| | | | 179 | | | | | | 10 | | |
| | | | | 1,086 | | | | | | 1,090 | | |
| | |
As of June 30,
|
| |||
| | |
2021
|
| |||
| | |
RMB
|
| |||
The remaining of 2021
|
| | | | 14,142 | | |
2022
|
| | | | 16,955 | | |
2023
|
| | | | 1,121 | | |
2024
|
| | | | 654 | | |
Total | | | | | 32,872 | | |
Securities/Purchaser
|
| |
Date of Issuance
|
| |
Number of
Securities |
| |
Consideration
|
|
Class A Ordinary Shares | | | | | | | | | | |
Fermat Star Limited
|
| |
April 21, 2021
|
| |
9,893,855
|
| |
US$989.3855
|
|
ALBJ Limited
|
| |
April 21, 2021
|
| |
9,569,762
|
| |
US$956.9762
|
|
Galbadia Limited
|
| |
April 21, 2021
|
| |
9,569,762
|
| |
US$956.9762
|
|
Fermat Star Limited
|
| |
June 1, 2021
|
| |
340,775
|
| |
US$14,856,826
|
|
ALBJ Limited
|
| |
June 1, 2021
|
| |
329,612
|
| |
US$14,370,160
|
|
Securities/Purchaser
|
| |
Date of Issuance
|
| |
Number of
Securities |
| |
Consideration
|
|
Galbadia Limited
|
| |
June 1, 2021
|
| |
329,612
|
| |
US$14,370,160
|
|
Class B Ordinary Shares | | | | | | | | | | |
Rice No.2 Limited
|
| |
June 1, 2021
|
| |
1,790,797
|
| |
US$2,805,372
|
|
Forward Captain Limited
|
| |
June 1, 2021
|
| |
1,800,370
|
| |
US$2,881,719
|
|
SAIHEYUANXIN INVESTMENT LIMITED
|
| |
June 1, 2021
|
| |
813,663
|
| |
US$1,324,977
|
|
Lighthouse Blossom Limited
|
| |
June 1, 2021
|
| |
1,052,323
|
| |
US$1,886,769
|
|
Forward Sight Investment Limited
|
| |
June 1, 2021
|
| |
3,022,369
|
| |
US$5,418,976
|
|
Baidu Holdings Limited
|
| |
June 1, 2021
|
| |
7,881,155
|
| |
US$14,130,566
|
|
Zhen Partners Fund IV, L.P.
|
| |
June 1, 2021
|
| |
524,127
|
| |
US$939,738
|
|
Lightspeed China Partners III, L.P.
|
| |
June 1, 2021
|
| |
4,857,725
|
| |
US$8,709,688
|
|
Lightspeed China Partners Select I, L.P.
|
| |
June 1, 2021
|
| |
3,431,282
|
| |
US$6,152,139
|
|
Moonstone Investments Limited
|
| |
June 1, 2021
|
| |
1,715,641
|
| |
US$3,076,069
|
|
Knollwood Investment Fund LLC
|
| |
June 1, 2021
|
| |
514,692
|
| |
US$922,820
|
|
AJ5 Ltd
|
| |
June 1, 2021
|
| |
514,692
|
| |
US$922,820
|
|
Qiming Venture Partners VI, L.P.
|
| |
June 1, 2021
|
| |
2,506,031
|
| |
US$4,493,203
|
|
Qiming Managing Directors Fund VI, L.P.
|
| |
June 1, 2021
|
| |
67,432
|
| |
US$120,903
|
|
Robert Bosch GmbH
|
| |
June 1, 2021
|
| |
7,653,252
|
| |
EUR11,288,118.06
|
|
ON Semiconductor Benelux B.V.
|
| |
June 1, 2021
|
| |
171,564
|
| |
US$307,607
|
|
Lightspeed Opportunity Fund, L.P.
|
| |
June 1, 2021
|
| |
7,981,370
|
| |
US$14,310,247
|
|
MC2 (Hong Kong) Limited
|
| |
June 1, 2021
|
| |
956,657
|
| |
US$1,715,244
|
|
Fast Pace Limited
|
| |
June 11, 2021
|
| |
3,030,303
|
| |
US$50,000,000
|
|
GSPR IV Holdings Limited
|
| |
June 11, 2021
|
| |
5,454,545
|
| |
US$90,000,000
|
|
Solid Bit Hong Kong Limited
|
| |
June 11, 2021
|
| |
3,030,303
|
| |
US$50,000,000
|
|
CPandar Investment Limited
|
| |
June 11, 2021
|
| |
3,030,303
|
| |
US$50,000,000
|
|
Lightspeed Opportunity Fund, L.P.
|
| |
June 11, 2021
|
| |
606,061
|
| |
US$10,000,000
|
|
SMRS-TOPE LLC
|
| |
June 11, 2021
|
| |
606,061
|
| |
US$10,000,000
|
|
KGT Strategic Private Investments, LP
|
| |
June 11, 2021
|
| |
303,030
|
| |
US$5,000,000
|
|
Pantheon Access Co-Investment Program, L.P.-Series 151
|
| |
June 11, 2021
|
| |
303,030
|
| |
US$5,000,000
|
|
Moonrise China Partners I LP
|
| |
June 11, 2021
|
| |
242,424
|
| |
US$4,000,000
|
|
Qiming Venture Partners VI, L.P.
|
| |
June 11, 2021
|
| |
472,144
|
| |
US$7,790,376
|
|
Qiming Managing Directors Fund VI, L.P.
|
| |
June 11, 2021
|
| |
12,704
|
| |
US$209,624
|
|
Pagoda Innovation Partners L.P.
|
| |
June 11, 2021
|
| |
606,061
|
| |
US$10,000,000
|
|
HT Global Investment Limited
|
| |
June 11, 2021
|
| |
606,061
|
| |
US$10,000,000
|
|
Yuanzhan Equity Investment Management (Shanghai) Co., Ltd.
|
| |
June 25, 2021
|
| |
1,436,192
|
| |
US$2,575,029
|
|
Shanghai Wenqian Enterprise Management Center L.P.
|
| |
June 25, 2021
|
| |
3,513,909
|
| |
US$5,164,707
|
|
Zhuhai Hengqinruishi Growth Venture Capital Fund L.P.
|
| |
June 25, 2021
|
| |
1,905,016
|
| |
US$2,933,606
|
|
Hangzhou Yuanzhan Huayao Venture Capital L.P.
|
| |
June 25, 2021
|
| |
775,461
|
| |
US$1,388,827
|
|
PANGU VC INC
|
| |
June 25, 2021
|
| |
647,296
|
| |
US$1,160,573
|
|
Guangyi HS Holding Limited
|
| |
June 25, 2021
|
| |
1,234,405
|
| |
US$2,213,234
|
|
SONIC WAY DEVELOPMENTS LIMITED
|
| |
June 25, 2021
|
| |
780,069
|
| |
US$1,398,629
|
|
TALENT CHOICE INTERNATIONAL LIMITED
|
| |
June 25, 2021
|
| |
420,038
|
| |
US$753,109
|
|
Suzhou Detong Hexin Venture Capital L.P.
|
| |
June 25, 2021
|
| |
1,175,691
|
| |
US$2,107,962
|
|
Shanghai Feiyu Xinyan Investment Management L.P.
|
| |
June 25, 2021
|
| |
2,878,171
|
| |
US$5,160,434
|
|
Securities/Purchaser
|
| |
Date of Issuance
|
| |
Number of
Securities |
| |
Consideration
|
|
Chuang Zhi Limited
|
| |
June 25, 2021
|
| |
813,158
|
| |
US$1,457,958
|
|
PANGU VC INC | | |
September 30, 2021
|
| |
121,212
|
| |
US$2,000,000
|
|
Shanghai Ziyue Enterprise Management Consulting Partnership (Limited Partnership) | | |
September 30, 2021
|
| |
4,242,424
|
| |
US$70,000,000
|
|
Convertible Loans | | | | | | | | | | |
Fast Pace Limited
|
| |
May 17, 2021
|
| |
Convertible to 3,030,303 Class B ordinary shares
|
| |
US$50,000,000
|
|
GSPR IV Holdings Limited
|
| |
May 10, 2021
|
| |
Convertible to 5,454,545 Class B ordinary shares
|
| |
US$90,000,000
|
|
Solid Bit Hong Kong Limited
|
| |
May 10, 2021
|
| |
Convertible to 3,030,303 Class B ordinary shares
|
| |
US$50,000,000
|
|
CPandar Investment Limited
|
| |
May 11, 2021
|
| |
Convertible to 3,030,303 Class B ordinary shares
|
| |
US$50,000,000
|
|
Lightspeed Opportunity Fund, L.P.
|
| |
May 19, 2021
|
| |
Convertible to 606,061 Class B ordinary shares
|
| |
US$10,000,000
|
|
SMRS-TOPE LLC
|
| |
May 10, 2021
|
| |
Convertible to 606,061 Class B ordinary shares
|
| |
US$10,000,000
|
|
KGT Strategic Private Investments, LP
|
| |
May 10, 2021
|
| |
Convertible to 303,030 Class B ordinary shares
|
| |
US$5,000,000
|
|
Pantheon Access Co-Investment Program, L.P.-Series 151
|
| |
May 10, 2021
|
| |
Convertible to 303,030 Class B ordinary shares
|
| |
US$5,000,000
|
|
Moonrise China Partners I LP
|
| |
May 10, 2021
|
| |
Convertible to 242,424 Class B ordinary shares
|
| |
US$4,000,000
|
|
Qiming Venture Partners VI, L.P.
|
| |
May 11, 2021
|
| |
Convertible to 472,144 Class B ordinary shares
|
| |
US$7,790,376
|
|
Qiming Managing Directors Fund VI, L.P.
|
| |
May 11, 2021
|
| |
Convertible to 12,704 Class B ordinary shares
|
| |
US$209,624
|
|
Pagoda Innovation Partners L.P.
|
| |
May 11, 2021
|
| |
Convertible to 606,061 Class B ordinary shares
|
| |
US$10,000,000
|
|
HT Global Investment Limited
|
| |
May 10, 2021
|
| |
Convertible to 606,061 Class B ordinary shares
|
| |
US$10,000,000
|
|
PANGU VC INC
|
| |
May 14, 2021
|
| |
Convertible to 121,212 Class B ordinary shares
|
| |
US$2,000,000
|
|
Warrants | | | | | | | | | | |
Yuanzhan Equity Investment Management (Shanghai) Co., Ltd.
|
| |
May 18, 2021
|
| |
1,436,192
|
| |
N/A
|
|
Shanghai Wenqian Enterprise Management Center L.P.
|
| |
May 18, 2021
|
| |
3,513,909
|
| |
N/A
|
|
Zhuhai Hengqinruishi Growth Venture Capital Fund L.P.
|
| |
May 18, 2021
|
| |
1,905,016
|
| |
N/A
|
|
Hangzhou Yuanzhan Huayao Venture Capital L.P.
|
| |
May 18, 2021
|
| |
775,461
|
| |
N/A
|
|
PANGU VC INC
|
| |
May 18, 2021
|
| |
647,296
|
| |
N/A
|
|
Guangyi HS Holding Limited
|
| |
May 18, 2021
|
| |
1,234,405
|
| |
N/A
|
|
SONIC WAY DEVELOPMENTS LIMITED
|
| |
May 18, 2021
|
| |
780,069
|
| |
N/A
|
|
TALENT CHOICE INTERNATIONAL LIMITED
|
| |
May 18, 2021
|
| |
420,038
|
| |
N/A
|
|
Suzhou Detong Hexin Venture Capital L.P.
|
| |
May 18, 2021
|
| |
1,175,691
|
| |
N/A
|
|
Shanghai Feiyu Xinyan Investment Management L.P.
|
| |
May 18, 2021
|
| |
2,878,171
|
| |
N/A
|
|
Chuang Zhi Limited
|
| |
May 18, 2021
|
| |
813,158
|
| |
N/A
|
|
Options | | | | | ||||||
Certain directors and employees
|
| |
Various dates
|
| |
7,485,955
|
| |
Past and future services provided by these individuals to us
|
|
|
Exhibit
Number |
| |
Description of Document
|
|
|
1.1*
|
| | Form of Underwriting Agreement | |
|
3.1
|
| | Amended and Restated Memorandum and Articles of Association of the Registrant, as currently in effect | |
|
3.2*
|
| | Form of Second Amended and Restated Memorandum and Articles of Association of the Registrant, effective immediately prior to the completion of this offering | |
|
4.1*
|
| | Registrant’s Specimen American Depositary Receipt (included in Exhibit 4.3) | |
|
4.2*
|
| | Registrant’s Specimen Certificate for Class B Ordinary Shares | |
|
4.3*
|
| | Form of Deposit Agreement, among the Registrant, the depositary and the holders and beneficial owners of American Depositary Shares issued thereunder | |
|
5.1*
|
| | Opinion of Maples and Calder (Hong Kong) LLP regarding the validity of the Class B ordinary shares being registered and certain Cayman Islands tax matters | |
|
8.1*
|
| | Opinion of Maples and Calder (Hong Kong) LLP regarding certain Cayman Islands tax matters (included in Exhibit 5.1) | |
|
8.2*
|
| | Opinion of Commerce & Finance Law Offices regarding certain PRC tax matters (included in Exhibit 99.2) | |
|
10.1
|
| | 2021 Share Incentive Plan | |
|
10.2*
|
| | Form of Indemnification Agreement between the Registrant and its directors and executive officers | |
|
10.3*
|
| | Form of Employment Agreement between the Registrant and its executive officers | |
|
10.4
|
| | Form of Class B Share Purchase Agreement by and among the Registrant, Hesai Hong Kong Limited, Hesai Technology Co., Ltd., the founders and each investor, and a schedule of all executed Class B Share Purchase Agreements adopting the same form | |
|
10.5
|
| | Form of Agreement by and among the Registrant, Hesai Hong Kong Limited, Hesai Technology Co., Ltd., the founders and each investor, and a schedule of all executed Agreements adopting the same form | |
|
10.6
|
| | Share Purchase Agreement by and between the Registrant and Robert Bosch GmbH dated June 1, 2021 | |
|
10.7†
|
| | English translation of the Cooperation Agreement by and between Beijing Baidu Netcom Science Technology Co., Ltd. and Hesai Photonics Technology Co., Ltd. (currently known as Hesai Technology Co., Ltd.) on March 1, 2020 | |
|
10.8
|
| | Form of Side Letter by and among the Registrant and/or Shanghai Hesai, our founders, and certain original shareholders of Shanghai Hesai, and a schedule of all executed Side Letters adopting the same form | |
|
10.9
|
| | Form of Undertaking Letter by and among Shanghai Hesai, our founders and certain original shareholders of Shanghai Hesai, and a schedule of all executed Undertaking Letters adopting the same form | |
|
21.1*
|
| | Principal Subsidiaries of the Registrant | |
|
23.1*
|
| | Consent of Deloitte Touche Tohmatsu Certified Public Accountants LLP, an independent registered public accounting firm | |
|
23.2*
|
| | Consent of Maples and Calder (Hong Kong) LLP (included in Exhibit 5.1) | |
|
23.3*
|
| | Consent of Commerce & Finance Law Offices (included in Exhibit 99.2) | |
|
24.1*
|
| | Powers of Attorney (included on signature page) | |
|
99.1*
|
| | Code of Business Conduct and Ethics of the Registrant | |
|
Exhibit
Number |
| |
Description of Document
|
|
|
99.2*
|
| | Opinion of Commerce & Finance Law Offices regarding certain PRC law matters | |
|
99.3*
|
| | Consent of Frost & Sullivan | |
|
Signature
|
| |
Title
|
|
|
Yifan Li
|
| |
Director and Chief Executive Officer
(Principal Executive Officer) |
|
|
Kai Sun
|
| |
Director
|
|
|
Shaoqing Xiang
|
| |
Director
|
|
|
Louis T. Hsieh
|
| |
Director and Global Chief Financial Officer
(Principal Financial and Accounting Officer) |
|
|
Cailian Yang
|
| |
Director
|
|
By: |
|
Exhibit 3.1
THE COMPANIES ACT (AS REVISED)
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION
OF
HESAI GROUP
(adopted by a Special Resolution passed on May 18, 2021)
1. | The name of the Company is Hesai Group. |
2. | The Registered Office of the Company will be situated at the offices of Ogier Global (Cayman) Limited, 89 Nexus Way, Camana Bay, Grand Cayman, KY1-9009, Cayman Islands, or at such other location within the Cayman Islands as the Directors may from time to time determine. |
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 or any other law of the Cayman Islands. |
4. | The Company shall have and be capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit as provided by the Companies Act. |
5. | Unless licensed to do so, the Company will not trade in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the Company carried on outside the Cayman Islands; provided that nothing in this section shall be construed as to prevent the Company effecting and concluding contracts in the Cayman Islands, and exercising in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands. |
6. | The liability of each Shareholder is limited to the amount, if any, unpaid on the Shares held by such Shareholder. |
7. | The authorised share capital of the Company is US$50,000 divided into 500,000,000 shares of a par value of US$0.0001 each, comprising of (i) 35,000,000 Class A Ordinary Shares of a par value of US$0.0001 each, (ii) 150,000,000 Class B Ordinary Shares of a par value of US$0.0001 each, and (iii) 315,000,000 shares of a par value of US$0.0001 each of such class or classes (however designated) as the board of directors may determine in accordance with Article 9 of the Articles. Subject to the Companies Act and the Articles, the Company shall have power to redeem or purchase any of its Shares and to increase or reduce its authorised 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. |
8. | The Company has the power contained in the Companies Act to deregister in the Cayman Islands and be registered by way of continuation in some other jurisdiction. |
9. | Capitalised terms that are not defined in this Memorandum of Association bear the same meanings as those given in the Articles of Association of the Company. |
THE COMPANIES ACT (AS REVISED)
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED ARTICLES OF ASSOCIATION
OF
HESAI GROUP
(adopted by a Special Resolution passed on May 18, 2021)
TABLE A
The regulations contained or incorporated in Table “A” in the First Schedule of the Companies Act shall not apply to the Company and the following Articles shall comprise the Articles of Association of the Company.
INTERPRETATION
1. | In these Articles the following defined terms will have the meanings ascribed to them, if not inconsistent with the subject or context: |
“Affiliate” means in respect of a Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person, and without limiting the generality of the foregoing, (i) in the case of a natural person, shall include, without limitation, such person’s spouse, parents, children, siblings, mother-in-law, father-in-law, children-in-law and siblings-in-law and any entity controlled by any of the aforementioned individuals (ii) in the case of an entity, shall include a partnership, a corporation or any other entity or any natural person which directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such entity. The term “control” shall mean the ownership, directly or indirectly, of shares possessing more than fifty per cent (50%) of the voting power of the corporation, partnership or other entity (other than, in the case of a corporation, securities having such power only by reason of the happening of a contingency), or having the power to control the management or elect a majority of members to the board of directors or equivalent decision-making body of such corporation, partnership or other entity.
“Articles” means these articles of association of the Company, as amended or substituted from time to time.
“Board”, “Board of Directors” and “Directors” means the directors of the Company for the time being, or as the case may be, the directors assembled as a board or as a committee thereof.
“Chairman” means the chairman of the Board of Directors.
“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 a par value of US$0.0001 in the capital of the Company and having the rights provided for in these Articles.
“Class B Ordinary Share” means a Class B Ordinary Share of a par value of US$0.0001 in the capital of the Company and having the rights provided for 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.
“Communication Facilities” means video, video-conferencing, internet or online conferencing applications, telephone or tele-conferencing and/or any other video-communications, internet or online conferencing application or telecommunications facilities by means of which all Persons participating in a meeting are capable of hearing and being heard by each other.
“Company” means Hesai Group, a Cayman Islands exempted company.
“Companies Act” means the Companies Act (As Revised) of the Cayman Islands and any statutory amendment or re-enactment thereof.
“electronic” has the meaning given to it in the Electronic Transactions Law and any amendment thereto or re-enactments thereof for the time being in force and includes every other law incorporated therewith or substituted therefor.
“electronic communication” means electronic posting to the Company’s website, transmission to any number, address or internet website or other electronic delivery methods as otherwise decided and approved by the Board.
“Electronic Transactions Act” means the Electronic Transactions Act (As Revised) of the Cayman Islands and any statutory amendment or re-enactment thereof.
“electronic record” has the meaning given to it in the Electronic Transactions Act and any amendment thereto or reenactments thereof for the time being in force and includes every other law incorporated therewith or substituted therefor.
“Founders” means Sun Kai (孙恺), Li Yifan (李一帆) and Xiang Shaoqing (向少卿), and “Founder” means any one of them.
“Founder Affiliate” means (a) each of each Founder’s legal spouse, parents, children and other lineal descendants (each, an “Immediate Family Member”); and (b) any trust for the benefit of a Founder and/or any of the Immediate Family Members as defined under (a), and any corporation, partnership or any other entity ultimately controlled by a Founder and/or any of the Immediate Family Members as defined under (a) through possession of voting power or investment power over Shares held by any such entity. For the avoidance of doubt, the terms “voting power” and “investment power” shall have such meanings as defined under Rule 13d-3 of the U.S. Securities Exchange Act of 1934, as amended.
“Memorandum of Association” means the memorandum of association of the Company, as amended or substituted from time to time.
“Ordinary Resolution” means a resolution:
(a) | passed by a simple majority of the votes cast by such Shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy or, in the case of corporations, by their duly authorized representatives, at a general meeting of the Company held in accordance with these Articles; or |
(b) | approved in writing by all of the Shareholders entitled to vote at a general meeting of the Company in one or more instruments each signed by one or more of the Shareholders and the effective date of the resolution so adopted shall be the date on which the instrument, or the last of such instruments, if more than one, is executed. |
“Ordinary Share” means a Class A Ordinary Share or a Class B Ordinary Share.
“paid up” means paid up as to the par value in respect of the issue of any Shares and includes credited as paid up.
“Person” means any natural person, firm, company, joint venture, partnership, corporation, association or other entity (whether or not having a separate legal personality) or any of them as the context so requires.
“Present” means in respect of any Person, such Person’s presence at a general meeting of Shareholders (or any meeting of the holders of any Class of Shares), which may be satisfied by means of such Person or, if a corporation or other non-natural Person, its duly authorized representative (or, in the case of any Shareholder, a proxy which has been validly appointed by such Shareholder in accordance with these Articles), being: (a) physically present at the meeting; or (b) in the case of any meeting at which Communication Facilities are permitted in accordance with these Articles, including any Virtual Meeting, connected by means of the use of such Communication Facilities.
“Register” means the register of Members of the Company maintained in accordance with the Companies Act.
“Registered Office” means the registered office of the Company as required by the Companies Act.
“Seal” means the common seal of the Company (if adopted) including any facsimile thereof.
“Secretary” means any Person appointed by the Directors to perform any of the duties of the secretary of the Company.
“Securities Act” means the Securities Act of 1933 of the United States of America, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.
“Share” means a share in the share capital of the Company. 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.
“Shareholder” or “Member” means a Person who is registered as the holder of one or more Shares in the Register.
“Share Premium Account” means the share premium account established in accordance with these Articles and the Companies Act.
“Signed” means bearing a signature or representation of a signature affixed by mechanical means or an electronic symbol or process attached to or logically associated with an electronic communication and executed or adopted by a Person with the intent to sign the electronic communication.
“Special Resolution” means a special resolution of the Company passed in accordance with the Companies Act, being a resolution:
(a) | passed by not less than two-thirds of the votes cast by such Shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy or, in the case of corporations, by their duly authorized representatives, at a general meeting of the Company of which notice specifying the intention to propose the resolution as a special resolution has been duly given; or |
(b) | approved in writing by all of the Shareholders entitled to vote at a general meeting of the Company in one or more instruments each signed by one or more of the Shareholders and the effective date of the special resolution so adopted shall be the date on which the instrument or the last of such instruments, if more than one, is executed. |
“Treasury Share” means a Share held in the name of the Company as a treasury share in accordance with the Companies Act.
“United States” means the United States of America, its territories, its possessions and all areas subject to its jurisdiction.
“Virtual Meeting” means any general meeting of the Shareholders (or any meeting of the holders of any Class of Shares) at which the Shareholders (and any other permitted participants of such meeting, including without limitation the chairman of the meeting and any Directors) are permitted to attend and participate solely by means of Communication Facilities.
2. | In these Articles, save where the context requires otherwise: |
(a) | words importing the singular number shall include the plural number and vice versa; |
(b) | words importing the masculine gender only shall include the feminine gender and any Person as the context may require; |
(c) | the word “may” shall be construed as permissive and the word “shall” shall be construed as imperative; |
(d) | reference to a dollar or dollars (or US$) and to a cent or cents is reference to dollars and cents of the United States of America; |
(e) | reference to a statutory enactment shall include reference to any amendment or re-enactment thereof for the time being in force; |
(f) | reference to any determination by the Directors shall be construed as a determination by the Directors in their sole and absolute discretion and shall be applicable either generally or in any particular case; |
(g) | reference to “in writing” shall be construed as written or represented by any means reproducible in writing, including any form of print, lithograph, email, facsimile, photograph or telex or represented by any other substitute or format for storage or transmission for writing including in the form of an electronic record or partly one and partly another; |
(h) | any requirements as to delivery under the Articles include delivery in the form of an electronic record or an electronic communication; |
(i) | any requirements as to execution or signature under the Articles, including the execution of the Articles themselves, can be satisfied in the form of an electronic signature as defined in the Electronic Transaction Act; and |
(j) | Sections 8 and 19(3) of the Electronic Transactions Act shall not apply. |
3. | Subject to the last two preceding Articles, any words defined in the Companies Act shall, if not inconsistent with the subject or context, bear the same meaning in these Articles. |
PRELIMINARY
4. | The business of the Company may be conducted as the Directors see fit. |
5. | The Registered Office shall be at such address in the Cayman Islands as the Directors may from time to time determine. The Company may in addition establish and maintain such other offices and places of business and agencies in such places as the Directors may from time to time determine. |
6. | The expenses incurred in the formation of the Company and in connection with the offer for subscription and issue of Shares shall be paid by the Company. Such expenses may be amortized over such period as the Directors may determine and the amount so paid shall be charged against income and/or capital in the accounts of the Company as the Directors shall determine. |
7. | The Directors shall keep, or cause to be kept, the Register at such place as the Directors may from time to time determine and, in the absence of any such determination, the Register shall be kept at the Registered Office. |
SHARES
8. | Subject to these Articles, all Shares for the time being unissued shall be under the control of the Directors who may, in their absolute discretion with the approval of the holders of majority voting power of Class B Ordinary Shares, cause the Company to: |
(a) | issue, allot and dispose of Shares (including, without limitation, preferred shares) (whether in certificated form or non-certificated form) to such Persons, in such manner, on such terms and having such rights and being subject to such restrictions as they may from time to time determine; |
(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) | grant options with respect to Shares and issue warrants or similar instruments with respect thereto. |
9. | The Directors may authorise the division of Shares into any number of Classes and the different Classes shall be authorised, 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 Directors or by an Ordinary Resolution. The Directors may issue Shares with such preferred or other rights, all or any of which may be greater than the rights of Ordinary Shares, at such time and on such terms as they may think appropriate. Notwithstanding Article 17, the Directors may issue from time to time, out of the authorised share capital of the Company (other than the authorised but unissued Ordinary Shares), series of preferred shares in their absolute discretion with approval of the holders of majority voting power of Class B Ordinary Shares; provided, however, before any preferred shares of any such series are issued, the Directors shall by resolution of Directors determine, with respect to any series of preferred shares, the terms and rights of that series, including: |
(a) | the designation of such series, the number of preferred shares to constitute such series and the subscription price thereof if different from the par value thereof; |
(b) | whether the preferred shares of such series shall have voting rights, in addition to any voting rights provided by law, and, if so, the terms of such voting rights, which may be general or limited; |
(c) | the dividends, if any, payable on such series, whether any such dividends shall be cumulative, and, if so, from what dates, the conditions and dates upon which such dividends shall be payable, and the preference or relation which such dividends shall bear to the dividends payable on any shares of any other class or any other series of shares; |
(d) | whether the preferred shares of such series shall be subject to redemption by the Company, and, if so, the times, prices and other conditions of such redemption; |
(e) | whether the preferred shares of such series shall have any rights to receive any part of the assets available for distribution amongst the Members upon the liquidation of the Company, and, if so, the terms of such liquidation preference, and the relation which such liquidation preference shall bear to the entitlements of the holders of shares of any other class or any other series of shares; |
(f) | whether the preferred shares of such series shall be subject to the operation of a retirement or sinking fund and, if so, the extent to and manner in which any such retirement or sinking fund shall be applied to the purchase or redemption of the preferred shares of such series for retirement or other corporate purposes and the terms and provisions relative to the operation thereof; |
(g) | whether the preferred shares of such series shall be convertible into, or exchangeable for, shares of any other class or any other series of preferred shares or any other securities and, if so, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same, and any other terms and conditions of conversion or exchange; |
(h) | the limitations and restrictions, if any, to be effective while any preferred shares of such series are outstanding upon the payment of dividends or the making of other distributions on, and upon the purchase, redemption or other acquisition by the Company of the existing shares or shares of any other class of shares or any other series of preferred shares; |
(i) | the conditions or restrictions, if any, upon the creation of indebtedness of the Company or upon the issue of any additional shares, including additional shares of such series or of any other class of shares or any other series of preferred shares; and |
(j) | any other powers, preferences and relative, participating, optional and other special rights, and any qualifications, limitations and restrictions thereof; |
and, for such purposes, the Directors may reserve an appropriate number of Shares for the time being unissued. The Company shall not issue Shares to bearer.
10. | The Company may insofar as may be permitted by law, pay a commission to any Person in consideration of his subscribing or agreeing to subscribe whether absolutely or conditionally for any Shares. Such commissions may be satisfied by the payment of cash or the lodgment of fully or partly paid-up Shares or partly in one way and partly in the other. The Company may also pay such brokerage as may be lawful on any issue of Shares. |
11. | 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. |
CLASS A ORDINARY SHARES AND CLASS B ORDINARY SHARES
12. | Holders of Class A Ordinary Shares and Class B Ordinary Shares shall at all times vote together as one class on all resolutions submitted to a vote by the Members. Each Class A Ordinary Share shall entitle the holder thereof to ten (10) votes on all matters subject to vote at general meetings of the Company, and each Class B Ordinary Share shall entitle the holder thereof to one (1) vote on all matters subject to vote at general meetings of the Company. |
13. | Each Class A Ordinary Share is convertible into one (1) Class B Ordinary Share at any time at the option of the holder thereof. The right to convert shall be exercisable by the holder of the Class A Ordinary Share delivering a written notice to the Company that such holder elects to convert a specified number of Class A Ordinary Shares into Class B Ordinary Shares. In no event shall Class B Ordinary Shares be convertible into Class A Ordinary Shares. |
14. | Any conversion of Class A Ordinary Shares into Class B Ordinary Shares pursuant to these Articles shall be effected by means of the re-designation and re-classification of each relevant Class A Ordinary Share as a Class B Ordinary Share. Such conversion shall become effective (i) in the case of any conversion effected pursuant to Article 13, forthwith upon the receipt by the Company of the written notice delivered to the Company as described in Article 13 (or at such later date as may be specified in such notice) and upon entries being made in the Register to record the redesignation and re-classification of the relevant Class A Ordinary Shares as Class B Class Shares, or (ii) in the case of any automatic conversion effected pursuant to Article 15, forthwith upon occurrence of the event specified in Article 15 which triggers such automatic conversion, and upon entries being made in the Register to record the re-designation and re-classification of the relevant Class A Ordinary Shares as Class B Ordinary Shares at the relevant time. |
15. | Upon any sale, transfer, assignment or disposition of any Class A Ordinary Share by a Shareholder to any Person who is not a Founder, an Affiliate of a Founder, or a Founder Affiliate, or upon a change of control of the ultimate beneficial ownership of any Class A Ordinary Share to any Person who is not a Founder, an Affiliate of a Founder, or a Founder Affiliate, such Class A Ordinary Share shall be automatically and immediately converted into the same number of Class B Ordinary Share. 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 its Register; and (ii) the creation of any pledge, charge, encumbrance or other third party right of whatever description on any Class A Ordinary Shares to secure a holder’s 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 holding legal title to the relevant Class A Ordinary Shares, in which case all the related Class A Ordinary Shares shall be automatically converted into the same number of Class B Ordinary Shares. For purpose of this Article 15, beneficial ownership shall have the meaning set forth in Rule 13d-3 under the United States Securities Exchange Act of 1934, as amended. |
16. | Save and except for voting rights and conversion rights as set out in Articles 12 to 15 (inclusive), the Class A Ordinary Shares and the Class B Ordinary Shares shall rank pari passu with one another and shall have the same rights, preferences, privileges and restrictions. |
MODIFICATION OF RIGHTS
17. | Whenever the capital of the Company is divided into different Classes the rights attached to any such Class may, subject to any rights or restrictions for the time being attached to any Class, only be materially and adversely varied with the consent in writing of the holders of at least two-thirds of the issued Shares of that Class or with the sanction of an Special Resolution passed at a separate meeting of the holders of the Shares of that Class. To every such separate meeting all the provisions of these Articles relating to general meetings of the Company or to the proceedings thereat shall, mutatis mutandis, apply, except that the necessary quorum shall be one or more Persons holding or representing by proxy at least one-third in nominal or par value amount of the issued Shares of the relevant Class (but so that if at any adjourned meeting of such holders a quorum as above defined is not Present, those Shareholders who are Present shall form a quorum) and that, subject to any rights or restrictions for the time being attached to the Shares of that Class, every Shareholder of the Class shall on a poll have one vote for each Share of the Class held by him. For the purposes of this Article the Directors may treat all the Classes or any two or more Classes as forming one Class if they consider that all such Classes would be affected in the same way by the proposals under consideration, but in any other case shall treat them as separate Classes. |
18. | The rights conferred upon the holders of the Shares of any Class issued with preferred or other rights shall not, subject to any rights or restrictions for the time being attached to the Shares of that Class, be deemed to be materially and adversely varied by, inter alia, the creation, allotment or issue of further Shares ranking pari passu with or subsequent to them or the redemption or purchase of any Shares of any Class by the Company. The rights of the holders of Shares shall not be deemed to be materially and adversely varied by the creation or issue of Shares with preferred or other rights including, without limitation, the creation of Shares with enhanced or weighted voting rights. |
CERTIFICATES
19. | Every Person whose name is entered as a Member in the Register may, without payment and upon its written request, request a certificate within two calendar months after allotment or lodgment of transfer (or within such other period as the conditions of issue shall provide) in the form determined by the Directors. All certificates shall specify the Share or Shares held by that Person, provided that in respect of a Share or Shares held jointly by several Persons the Company shall not be bound to issue more than one certificate, and delivery of a certificate for a Share to one of several joint holders shall be sufficient delivery to all. All certificates for Shares shall be delivered personally or sent through the post addressed to the Member entitled thereto at the Member’s registered address as appearing in the Register. |
20. | Every share certificate of the Company shall bear legends required under the applicable laws, including the Securities Act. |
21. | Any two or more certificates representing Shares of any one Class held by any Member may at the Member’s request be cancelled and a single new certificate for such Shares issued in lieu on payment (if the Directors shall so require) of one dollar (US$1.00) or such smaller sum as the Directors shall determine. |
22. | If a share certificate shall be damaged or defaced or alleged to have been lost, stolen or destroyed, a new certificate representing the same Shares may be issued to the relevant Member upon request, subject to delivery up of the old certificate or (if alleged to have been lost, stolen or destroyed) compliance with such conditions as to evidence and indemnity and the payment of out-of-pocket expenses of the Company in connection with the request as the Directors may think fit. |
23. | 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. |
FRACTIONAL SHARES
24. | 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 Shareholder such fractions shall be accumulated. |
LIEN
25. | The Company has a first and paramount lien on every Share (whether or not fully paid) for all amounts (whether presently payable or not) payable at a fixed time or called in respect of that Share. The Company also has a first and paramount lien on every Share registered in the name of a Person indebted or under liability to the Company (whether he is the sole registered holder of a Share or one of two or more joint holders) for all amounts owing by him or his estate to the Company (whether or not presently payable). The Directors may at any time declare a Share to be wholly or in part exempt from the provisions of this Article. The Company’s lien on a Share extends to any amount payable in respect of it, including but not limited to dividends. |
26. | The Company may sell, in such manner as the Directors in their absolute discretion think fit, any Share on which the Company has a lien, but no sale shall be made unless an amount in respect of which the lien exists is presently payable nor until the expiration of fourteen (14) calendar days after a notice in writing, 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 for the time being of the Share, or the Persons entitled thereto by reason of his death or bankruptcy. |
27. | For giving effect to any such sale the Directors may authorise a 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 to see to 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. |
28. | The proceeds of the sale after deduction of expenses, fees and commissions 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 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
29. | Subject to the terms of the allotment, the Directors may from time to time make calls upon the Shareholders in respect of any moneys unpaid on their Shares, and each Shareholder shall (subject to receiving at least fourteen (14) calendar days notice specifying the time or times of payment) pay to the Company at the time or times so specified the amount called on such Shares. A call shall be deemed to have been made at the time when the resolution of the Directors authorising such call was passed. |
30. | The joint holders of a Share shall be jointly and severally liable to pay calls in respect thereof. |
31. | If a sum called in respect of a Share is not paid before or on the day appointed for payment thereof the Person from whom the sum is due shall pay interest upon the sum at the rate of eight percent per annum from the day appointed for the payment thereof to the time of the actual payment, but the Directors shall be at liberty to waive payment of that interest wholly or in part. |
32. | The provisions of these Articles as to the liability of joint holders and as to payment of interest 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 amount of the Share, or by way of premium, as if the same had become payable by virtue of a call duly made and notified. |
33. | The Directors may make arrangements with respect to the issue of partly paid Shares for a difference between the Shareholders, or the particular Shares, in the amount of calls to be paid and in the times of payment. |
34. | The Directors may, if they think fit, receive from any Shareholder willing to advance the same all or any part of the moneys uncalled and unpaid upon any partly paid Shares held by him, and upon all or any of the moneys so advanced may (until the same would, but for such advance, become presently payable) pay interest at such rate (not exceeding without the sanction of an Ordinary Resolution, eight percent per annum) as may be agreed upon between the Shareholder paying the sum in advance and the Directors. 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
35. | If a Shareholder fails to pay any call or instalment of a call in respect of partly paid Shares on the day appointed for payment, the Directors may, at any time thereafter during such time as any part of such call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued. |
36. | The notice shall name a further day (not earlier than the expiration of fourteen (14) calendar days from the date 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 the call was made will be liable to be forfeited. |
37. | 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 notice has been made, be forfeited by a resolution of the Directors to that effect. |
38. | A forfeited Share may be sold or otherwise disposed of on such terms and in such manner as the Directors think fit, and at any time before a sale or disposition the forfeiture may be cancelled on such terms as the Directors think fit. |
39. | A Person whose Shares have been forfeited shall cease to be a Shareholder in respect of the forfeited Shares, but shall, notwithstanding, remain liable to pay to the Company all moneys which at the date of forfeiture were payable by him to the Company in respect of the Shares forfeited, but his liability shall cease if and when the Company receives payment in full of the amount unpaid on the Shares forfeited. |
40. | A certificate in writing under the hand of a Director that a Share has been duly forfeited on a date stated in the certificate shall be conclusive evidence of the facts in the declaration as against all Persons claiming to be entitled to the Share. |
41. | The Company may receive the consideration, if any, given for a Share on any sale or disposition thereof pursuant to the provisions of these Articles as to forfeiture and may execute a transfer of the Share in favour of the Person to whom the Share is sold or disposed of and that Person shall be registered as the holder of the Share and shall not be bound to see to the application of the purchase money, if any, nor shall his title to the Shares be affected by any irregularity or invalidity in the proceedings in reference to the disposition or sale. |
42. | 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 due and payable, whether on account of the amount of the Share, or by way of premium, as if the same had been payable by virtue of a call duly made and notified. |
TRANSFER OF SHARES
43. | 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 Shareholder until the name of the transferee is entered in the Register in respect of the relevant Shares. |
44. | (a) 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. |
(b) The Directors may also decline to register any transfer of any Share unless:
(i) | 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; |
(ii) | the instrument of transfer is in respect of only one Class of Shares; |
(iii) | the instrument of transfer is properly stamped, if required; and |
(iv) | 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. |
45. | The registration of transfers may, on ten (10) calendar days’ notice being given by advertisement in such one or more newspapers, by electronic means or by any other means in accordance with the applicable laws and regulations, be suspended and the Register 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 closed for more than thirty (30) calendar days in any calendar year. |
46. | 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 three calendar months after the date on which the transfer was lodged with the Company send notice of the refusal to each of the transferor and the transferee. |
TRANSMISSION OF SHARES
47. | The legal personal representative of a deceased sole holder of a Share shall be the only Person recognised by the Company as having any title to the Share. In the case of a Share registered in the name of two or more holders, the survivors or survivor, or the legal personal representatives of the deceased survivor, shall be the only Person recognised by the Company as having any title to the Share. |
48. | Any Person becoming entitled to a Share in consequence of the death or bankruptcy of a Shareholder shall, upon such evidence being produced as may from time to time be required by the Directors, have the right either to be registered as a Shareholder in respect of the Share or, instead of being registered himself to make such transfer of the Share as the deceased or bankrupt Person could have made; but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the deceased or bankrupt Person before the death or bankruptcy. |
49. | A Person becoming entitled to a Share by reason of the death or bankruptcy of a Shareholder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered Shareholder, except that he shall not, before being registered as a Shareholder in respect of the Share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company, provided however, that the Directors may at any time give notice requiring any such Person to elect either to be registered himself or to transfer the Share, and if the notice is not complied with within ninety (90) calendar days, the Directors may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the Share until the requirements of the notice have been complied with. |
REGISTRATION OF EMPOWERING INSTRUMENTS
50. | The Company shall be entitled to charge a fee not exceeding one dollar (US$1.00) on the registration of every probate, letters of administration, certificate of death or marriage, power of attorney, notice in lieu of distringas, or other instrument. |
ALTERATION OF SHARE CAPITAL
51. | The Company may from time to time by Ordinary Resolution (with a simple majority of the votes cast by the Shareholders of Class B Ordinary Share) increase the share capital by such sum, to be divided into Shares of such Classes and amount, as the resolution shall prescribe. |
52. | The Company may by Ordinary Resolution (with a simple majority of the votes cast by the Shareholders of Class B Ordinary Share): |
(a) | increase its share capital by new Shares of such amount as it thinks expedient; |
(b) | consolidate and divide all or any of its share capital into Shares of a larger amount than its existing Shares; |
(c) | subdivide its Shares, or any of them, into Shares of an amount smaller than that fixed by the Memorandum, provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced Share shall be the same as it was in case of the Share from which the reduced Share is derived; and |
(d) | 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. |
53. | The Company may by Special Resolution (with a simple majority of the votes cast by the Shareholders of Class B Ordinary Share) reduce its share capital and any capital redemption reserve in any manner authorised by the Companies Act. |
REDEMPTION, PURCHASE AND SURRENDER OF SHARES
54. | Subject to the provisions of the Companies Act and these Articles, the Company may: |
(a) | issue Shares that are to be redeemed or are liable to be redeemed at the option of the Shareholder 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 either the Board or by the Shareholders by Ordinary Resolution; |
(b) | purchase its own Shares (including any redeemable Shares) on such terms and in such manner and terms as have been approved by the Board or by the Shareholders by Ordinary Resolution, or are otherwise authorised by these Articles; and |
(c) | make a payment in respect of the redemption or purchase of its own Shares in any manner permitted by the Companies Act, including out of capital. |
55. | 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. |
56. | 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. |
57. | The Directors may accept the surrender for no consideration of any fully paid Share. |
TREASURY SHARES
58. | The Directors may, prior to the purchase, redemption or surrender of any Share, determine that such Share shall be held as a Treasury Share. |
59. | The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms as they think proper (including, without limitation, for nil consideration). |
GENERAL MEETINGS
60. | All general meetings other than annual general meetings shall be called extraordinary general meetings. |
61. | (a) | The Company may (but shall not be obliged to) in each calendar year hold a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it. The annual general meeting shall be held at such time and place as may be determined by the Directors. |
(b) | At these meetings the report of the Directors (if any) shall be presented. |
62. | (a) | The Chairman or the Directors (acting by a resolution of the Board) may call general meetings, and they shall on a Shareholders’ requisition forthwith proceed to convene an extraordinary general meeting of the Company. |
(b) | A Shareholders’ requisition is a requisition of Members holding at the date of deposit of the requisition Shares which carry in aggregate not less than one-third (1/3) of all votes attaching to all issued and outstanding Shares of the Company that as at the date of the deposit carry the right to vote at general meetings of the Company. |
(c) | 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. |
(d) | If there are no Directors as at the date of the deposit of the Shareholders’ requisition, or 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 forty-five (45) calendar days, the requisitionists, or any of them representing more than one-half (1/2) 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 forty-five (45) calendar days. |
(e) | 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
63. | At least five (5) calendar days’ notice shall be given for any general meeting. Every notice shall be exclusive of the day on which it is given or deemed to be given and of the day for which it is given and shall specify the place, the day and the hour of the meeting and the general nature of the business and shall be given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided that a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether or not the provisions of these Articles regarding general meetings have been complied with, be deemed to have been duly convened if it is so agreed: |
(a) | in the case of an annual general meeting, by all the Shareholders (or their proxies) entitled to attend and vote thereat; and |
(b) | in the case of an extraordinary general meeting, by holders of two-thirds (2/3) of the Shareholders having a right to attend and vote at the meeting, Present at the meeting or, in the case of a corporation or other non-natural person, represented by its duly authorised representative or proxy. |
64. | The accidental omission to give notice of a meeting to or the non-receipt of a notice of a meeting by any Shareholder shall not invalidate the proceedings at any meeting. |
PROCEEDINGS AT GENERAL MEETINGS
65. | No business except for the appointment of a chairman for the meeting shall be transacted at any general meeting unless a quorum of Shareholders is Present at the time when the meeting proceeds to business. One or more Shareholders holding Shares which carry in aggregate (or representing by proxy) not less than one-third (1/3) of all votes attaching to all Shares in issue and entitled to vote at such general meeting Present, shall be a quorum for all purposes. |
66. | If within half an hour from the time appointed for the meeting a quorum is not Present, the meeting shall be dissolved. |
67. | If the Directors wish to make this facility available for a specific general meeting or all general meetings of the Company, attendance and participation in any general meeting of the Company may be by means of Communication Facilities. Without limiting the generality of the foregoing, the Directors may determine that any general meeting may be held as a Virtual Meeting. The notice of any general meeting at which Communication Facilities will be utilised (including any Virtual Meeting) must disclose the Communication Facilities that will be used, including the procedures to be followed by any Shareholder or other participant of the meeting who wishes to utilise such Communication Facilities for the purposes of attending and participating in such meeting, including attending and casting any vote thereat. |
68. | The Chairman, if any, shall preside as chairman at every general meeting of the Company. |
69. | If there is no such Chairman, or if at any general meeting he is not Present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as chairman of the meeting, any Director or Person nominated by the Directors shall preside as chairman of that meeting, failing which the Shareholders Present shall choose any Person Present to be chairman of that meeting. |
70. | The chairman of any general meeting (including any Virtual Meeting) shall be entitled to attend and participate at any such general meeting by means of Communication Facilities, and to act as the chairman of such general meeting, in which event the following provisions shall apply: |
(a) | The chairman of the meeting shall be deemed to be Present at the meeting; and |
(b) | If the Communication Facilities are interrupted or fail for any reason to enable the chairman of the meeting to hear and be heard by all other Persons participating in the meeting, then the other Directors Present at the meeting shall choose another Director Present to act as chairman of the meeting for the remainder of the meeting; provided that if no other Director is Present at the meeting, or if all the Directors Present decline to take the chair, then the meeting shall be automatically adjourned to the same day in the next week and at such time and place as shall be decided by the Board of Directors. |
71. | The chairman of any general meeting at which a quorum is Present may with the consent of the meeting (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 meeting, or adjourned meeting, is adjourned for fourteen (14) calendar days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting. |
72. | The Directors may cancel or postpone any duly convened general meeting at any time prior to such meeting, except for general meetings requisitioned by the Shareholders in accordance with these Articles, for any reason or for no reason, upon notice in writing to Shareholders. A postponement may be for a stated period of any length or indefinitely as the Directors may determine. |
73. | At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded by the chairman of the meeting or any Shareholder Present, and unless a poll is so demanded, a declaration by the chairman of the meeting that a resolution has, on a show of hands, been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the book of the proceedings of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favour of or against, that resolution. |
74. | If a poll is duly demanded it shall be taken in such manner as the chairman of the meeting directs, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. |
75. | All questions submitted to a meeting shall be decided by an Ordinary Resolution except where a greater majority is required by these Articles or by the Companies Act. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded, shall be entitled to a second or casting vote. |
76. | A poll demanded on the election of a chairman of the meeting or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the chairman of the meeting directs. |
VOTES OF SHAREHOLDERS
77. | Subject to any rights and restrictions for the time being attached to any Share, on a show of hands every Shareholder Present shall, at a general meeting of the Company, each have one vote and on a poll every Shareholder Present at the meeting shall have ten (10) votes for each Class A Ordinary Share and one (1) vote for each Class B Ordinary Share of which he is the holder. |
78. | In the case of joint holders the vote of the senior who tenders a vote whether in person or by proxy (or, if a corporation or other non-natural person, by its duly authorised 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 stand in the Register. |
79. | Shares carrying the right to vote that are held by a Shareholder of unsound mind, or in respect of whom an order has been made by any court having jurisdiction in lunacy, may be voted, whether on a show of hands or on a poll, by his committee, or other Person in the nature of a committee appointed by that court, and any such committee or other Person may vote in respect of such Shares by proxy. |
80. | Unless otherwise approved by Directors in writing, no Shareholder shall be entitled to vote at any general meeting of the Company unless all calls, if any, or other sums presently payable by him in respect of Shares carrying the right to vote held by him have been paid. |
81. | On a poll votes may be given either personally or by proxy. |
82. | Each Shareholder, other than a recognised clearing house (or its nominee(s)) or depositary (or its nominee(s)), may only appoint one proxy on a show of hand. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under Seal or under the hand of an officer or attorney duly authorised. A proxy need not be a Shareholder. |
83. | An instrument appointing a proxy may be in any usual or common form or such other form as the Directors may approve. |
84. | 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, or in any instrument of proxy sent out by the Company: |
(a) | not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote; or |
(b) | in the case of a poll taken more than 48 hours after it is demanded, be deposited as aforesaid after the poll has been demanded and not less than 24 hours before the time appointed for the taking of the poll; or |
(c) | where the poll is not taken forthwith but is taken not more than 48 hours after it was demanded be delivered at the meeting at which the poll was demanded to the chairman of the meeting or to the secretary or to any Director; |
provided that the Directors may in the notice convening the meeting, or in an instrument of proxy sent out by the Company, direct that the instrument appointing a proxy may be deposited at such other time (no later than the time for holding the meeting or adjourned meeting) at the Registered Office or at such other place as is specified for that purpose in the notice convening the meeting, or in any instrument of proxy sent out by the Company. The chairman of the meeting may in any event at his discretion direct that an instrument of proxy shall be deemed to have been duly deposited. An instrument of proxy that is not deposited in the manner permitted shall be invalid.
85. | The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll. |
86. | A resolution in writing signed by all the Shareholders for the time being entitled to receive notice of and to attend and vote at general meetings of the Company (or being corporations by their duly authorised representatives) shall be as valid and effective as if the same had been passed at a general meeting of the Company duly convened and held. |
CORPORATIONS ACTING BY REPRESENTATIVES AT MEETINGS
87. | Any corporation which is a Shareholder or a Director may by resolution of its directors or other governing body authorise such Person as it thinks fit to act as its representative at any meeting of the Company or of any meeting of holders of a Class or of the Directors or of a committee of Directors, and the Person so authorised 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 Shareholder or Director. |
DEPOSITARY AND CLEARING HOUSES
88. | If a recognised 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, authorise 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 Shareholders provided that, if more than one Person is so authorised, the authorisation shall specify the number and Class of Shares in respect of which each such Person is so authorised. A Person so authorised pursuant to this Article shall be entitled to exercise the same powers on behalf of the recognised clearing house (or its nominee(s)) or depositary (or its nominee(s)) which he represents as that recognised 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 authorisation, including the right to vote individually on a show of hands. |
DIRECTORS
89. | (a) | Unless otherwise determined by the Company in general meeting, the number of Directors shall not be less than three (3) Directors, the exact number of Directors to be determined from time to time by the Board of Directors. |
(b) | The Board of Directors shall elect and appoint a Chairman 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 of Directors. To the extent the Chairman is not present at a meeting of the Board of Directors within fifteen minutes after the time appointed for holding the same, the attending Directors may choose one of their number to be the chairman of the meeting. |
(c) | The Board may, by the affirmative vote of a simple majority of the Directors present and voting at a Board meeting, or the Company may by Ordinary Resolution, appoint any person to be a Director. |
(d) | 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. |
(e) | An appointment of a Director may be on terms that the Director shall automatically retire from office (unless he has sooner vacated office) at the next or a subsequent annual general meeting or upon any specified event or after any specified period in a written agreement between the Company and the Director, if any; but no such term shall be implied in the absence of express provision. Any Director whose term of office expires shall be eligible for re-election at a meeting of the Shareholders or re-appointment by the Board. |
(f) | A Director may be removed from office by the affirmative vote of two-thirds (2/3) of the Directors then in office (except with regard to the removal of the Chairman, who may be removed from office by the affirmative vote of all Directors), or by Ordinary Resolution (except with regard to the removal of the Chairman, who may be removed from office by Special Resolution), notwithstanding anything in these Articles or in any agreement between the Company and such Director (but without prejudice to any claim for damages under such agreement). |
(g) | A vacancy on the Board created by the removal of a Director under the previous clause 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 ten (10) calendar days before the meeting. Such Director is entitled to attend the meeting and be heard on the motion for his removal. |
90. | The Board may, from time to time, and except as required by applicable laws, 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. |
91. | 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. |
92. | The remuneration of the Directors may be determined by the Directors. |
93. | The Directors shall be entitled to be paid for 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. |
ALTERNATE DIRECTOR OR PROXY
94. | Any Director may in writing appoint another Person to be his alternate and, save to the extent provided otherwise in the form of appointment, such alternate shall have authority to sign written resolutions on behalf of the appointing Director, but shall not be required to sign such written resolutions where they have been signed by the appointing director, and to act in such Director’s place at any meeting of the Directors at which the appointing Director is unable to be present. Every such alternate shall be entitled to attend and vote at meetings of the Directors as a Director when the Director appointing him is not personally present and where he is a Director to have a separate vote on behalf of the Director he is representing in addition to his own vote. A Director may at any time in writing revoke the appointment of an alternate appointed by him. Such alternate shall be deemed for all purposes to be a Director of the Company and shall not be deemed to be the agent of the Director appointing him. The remuneration of such alternate shall be payable out of the remuneration of the Director appointing him and the proportion thereof shall be agreed between them. |
95. | Any Director may appoint any Person, whether or not a Director, to be the proxy of that Director to attend and vote on his behalf, in accordance with instructions given by that Director, or in the absence of such instructions at the discretion of the proxy, at a meeting or meetings of the Directors which that Director is unable to attend personally. The instrument appointing the proxy shall be in writing under the hand of the appointing Director and shall be in any usual or common form or such other form as the Directors may approve, and must be lodged with the chairman of the meeting of the Directors at which such proxy is to be used, or first used, prior to the commencement of the meeting. |
POWERS AND DUTIES OF DIRECTORS
96. | Subject to the Companies Act, these Articles and any resolutions passed in a general meeting, the business of the Company shall be managed by the Directors, who may pay all expenses incurred in setting up and registering the Company and may exercise all powers of the Company. 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. |
97. | 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, president, 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. |
98. | The Directors may appoint any natural person or corporation to be a Secretary (and if need be 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. |
99. | The Directors may delegate any of their powers to committees consisting of such member or members of their body as they think fit; any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Directors. |
100. | 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 authorised signatory (any such person being an “Attorney” or “Authorised 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 Authorised Signatory as the Directors may think fit, and may also authorise any such Attorney or Authorised Signatory to delegate all or any of the powers, authorities and discretion vested in him. |
101. | 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. |
102. | 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. |
103. | 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 authorise 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. |
104. | Any such delegates as aforesaid may be authorised 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
105. | The Directors may from time to time at their discretion exercise all the powers of the Company to raise or borrow money and to mortgage or charge its undertaking, property and assets (present and future) and uncalled capital or any part thereof to issue debentures, debenture stock, bonds and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party. |
THE SEAL
106. | The Seal shall not be affixed to any instrument except by the authority of a resolution of the Directors provided always that such authority may be given prior to or after the affixing of the Seal and if given after may be in general form confirming a number of affixing of the Seal. The Seal shall be affixed in the presence of a Director or a Secretary (or an assistant Secretary) or in the presence of any one or more Persons as the Directors may appoint for the purpose and every Person as aforesaid shall sign every instrument to which the Seal is so affixed in their presence. |
107. | The Company may maintain a facsimile of the Seal in such countries or places as the Directors may appoint and such facsimile Seal shall not be affixed to any instrument except by the authority of a resolution of the Directors provided always that such authority may be given prior to or after the affixing of such facsimile Seal and if given after may be in general form confirming a number of affixing of such facsimile Seal. The facsimile Seal shall be affixed in the presence of such Person or Persons as the Directors shall for this purpose appoint and such Person or Persons as aforesaid shall sign every instrument to which the facsimile Seal is so affixed in their presence and such affixing of the facsimile Seal and signing as aforesaid shall have the same meaning and effect as if the Seal had been affixed in the presence of and the instrument signed by a Director or a Secretary (or an assistant Secretary) or in the presence of any one or more Persons as the Directors may appoint for the purpose. |
108. | Notwithstanding the foregoing, a Secretary or any assistant Secretary shall have the authority to affix the Seal, or the facsimile Seal, to any instrument for the purposes of attesting authenticity of the matter contained therein but which does not create any obligation binding on the Company. |
DISQUALIFICATION OF DIRECTORS
109. | The office of Director shall be vacated, if the Director: |
(a) | becomes bankrupt or makes any arrangement or composition with his creditors; |
(b) | dies or is found to be or becomes of unsound mind; |
(c) | resigns his office by notice in writing to the Company; or |
(d) | is removed from office pursuant to any other provision of these Articles. |
PROCEEDINGS OF DIRECTORS
110. | The Directors may meet together (either within or outside of the Cayman Islands) for the despatch of business, adjourn, and otherwise regulate their meetings and proceedings as they think fit. Questions arising at any meeting shall be decided by a majority of votes. At any meeting of the Directors, each Director present in person or represented by his proxy or alternate shall be entitled to one vote. In case of an equality of votes the chairman of the meeting shall have a second or casting vote. 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. |
111. | A Director may participate in any meeting of the Directors, or of any committee appointed by the Directors of which such Director is a member, by means of telephone or similar communication equipment by way of which all Persons participating in such meeting can communicate with each other and such participation shall be deemed to constitute presence in person at the meeting. |
112. | The quorum necessary for the transaction of the business of the Board may be fixed by the Directors, and unless so fixed, the quorum shall be a majority of Directors then in office. 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. |
113. | A Director who is in any way, whether directly or indirectly, interested in a contract or transaction or proposed contract or transaction with the Company shall declare the nature of his interest at a meeting of the Directors. A general notice given to the Directors by any Director to the effect that he is a member of any specified company or firm and is to be regarded as interested in any contract or transaction which may thereafter be made with that company or firm shall be deemed a sufficient declaration of interest in regard to any contract so made or transaction so consummated. Subject to the applicable laws and regulations and disqualification by the chairman of the relevant Board meeting, a Director may vote in respect of any contract or transaction or proposed contract or transaction notwithstanding that he may be interested therein and if he does so his vote shall be counted and he may be counted in the quorum at any meeting of the Directors at which any such contract or transaction or proposed contract or transaction shall come before the meeting for consideration. |
114. | A Director may hold any other office or place of profit under the Company (other than the office of auditor) in conjunction with his office of Director for such period and on such terms (as to remuneration and otherwise) as the Directors may determine and no Director or intending Director shall be disqualified by his office from contracting with the Company either with regard to his tenure of any such other office or place of profit or as vendor, purchaser or otherwise, nor shall any such contract or arrangement entered into by or on behalf of the Company 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 for any profit realised by any such contract or arrangement by reason of such Director holding that office or of the fiduciary relation thereby established. A Director, notwithstanding his interest, may be counted in the quorum present at any meeting of the Directors whereat he or any other Director is appointed to hold any such office or place of profit under the Company or whereat the terms of any such appointment are arranged and he may vote on any such appointment or arrangement. |
115. | Any Director may act by himself or through his firm in a professional capacity for the Company, and he or his firm shall be entitled to remuneration for professional services as if he were not a Director; provided that nothing herein contained shall authorise a Director or his firm to act as auditor to the Company. |
116. | The Directors shall cause minutes to be made for the purpose of recording: |
(a) | all appointments of officers made by the Directors; |
(b) | the names of the Directors present at each meeting of the Directors and of any committee of the Directors; and |
(c) | all resolutions and proceedings at all meetings of the Company, and of the Directors and of committees of Directors. |
117. | 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. |
118. | A resolution in writing signed by all the Directors or all 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 duly called and constituted meeting of Directors or committee of Directors, as the case may be. When signed a resolution may consist of several documents each signed by one or more of the Directors or his duly appointed alternate. |
119. | The continuing Directors may act notwithstanding any vacancy in their body but if and for so long as their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of Directors, the continuing Directors may act for the purpose of increasing the number, or of summoning a general meeting of the Company, but for no other purpose. |
120. | 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 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. |
121. | 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. |
122. | 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. |
PRESUMPTION OF ASSENT
123. | A Director who is present at a meeting of the Board of Directors at which an 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 favour of such action. |
DIVIDENDS
124. | Subject to 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 authorise payment of the same out of the funds of the Company lawfully available therefor. |
125. | Subject to any rights and restrictions for the time being attached to any Shares, the Company by Ordinary Resolution may declare dividends, but no dividend shall exceed the amount recommended by the Directors. |
126. | The Directors may, before recommending or declaring any dividend, set aside out of the funds legally available for distribution such sums as they think proper as a reserve or reserves which shall, in the absolute discretion of the Directors, be applicable for meeting contingencies or for equalising dividends or for any other purpose to which those funds may be properly applied, and pending such application may in the absolute discretion of the Directors, either be employed in the business of the Company or be invested in such investments (other than Shares of the Company) as the Directors may from time to time think fit. |
127. | Any dividend payable in cash to the holder of Shares may be paid in any manner determined by the Directors. If paid by cheque it will be sent by mail addressed to the holder at his address in the Register, or addressed to such person and at such addresses as the holder may direct. Every such cheque or warrant shall, unless the holder or joint holders otherwise direct, be made payable to the order of the holder or, in the case of joint holders, to the order of the holder whose name stands first on the Register in respect of such Shares, and shall be sent at his or their risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to the Company. |
128. | The Directors may determine that a dividend shall be paid wholly or partly by the distribution of specific assets (which may consist of the shares or securities of any other company) and may settle all questions concerning such distribution. Without limiting the generality of the foregoing, the Directors may fix the value of such specific assets, may determine that cash payment shall be made to some Shareholders in lieu of specific assets and may vest any such specific assets in trustees on such terms as the Directors think fit. |
129. | Subject to any rights and restrictions for the time being attached to any Shares, all dividends shall be declared and paid according to the amounts paid up on the Shares, but if and for so long as nothing is paid up on any of the Shares dividends may be declared and paid according to the par value of the Shares. No amount paid on a Share in advance of calls shall, while carrying interest, be treated for the purposes of this Article as paid on the Share. |
130. | 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. |
131. | No dividend shall bear interest against the Company. |
132. | Any dividend unclaimed after a period of six calendar years from the date of declaration of such dividend may be forfeited by the Board of Directors and, if so forfeited, shall revert to the Company. |
ACCOUNTS, AUDIT AND ANNUAL RETURN AND DECLARATION
133. | The books of account relating to the Company’s affairs shall be kept in such manner as may be determined from time to time by the Directors. |
134. | The books of account shall be kept at the Registered Office or at such other place or places as the Directors think fit, and shall always be open to the inspection of the Directors. |
135. | The Directors may 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 the inspection of Shareholders not being Directors, and no Shareholder (not being a Director) shall have any right to inspect any account or book or document of the Company except as conferred by law or authorised by the Directors or by Special Resolution. |
136. | The accounts relating to the Company’s affairs shall be audited in such manner and with such financial year end as may be determined from time to time by the Directors or failing any determination as aforesaid shall not be audited. |
137. | The Directors may appoint an auditor of the Company who shall hold office until removed from office by a resolution of the Directors and may fix his or their remuneration. |
138. | 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 auditors. |
139. | The auditors shall, if so required by the Directors, make a report on the accounts of the Company during then- 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. |
140. | The Directors in each calendar year shall prepare, or cause to be prepared, an annual return and declaration setting forth the particulars required by the Companies Act and deliver a copy thereof to the Registrar of Companies in the Cayman Islands. |
CAPITALISATION OF RESERVES
141. | Subject to the Companies Act, the Directors may: |
(a) | resolve to capitalise an amount standing to the credit of reserves (including a Share Premium Account, capital redemption reserve and profit and loss account), which is available for distribution; |
(b) | appropriate the sum resolved to be capitalised to the Shareholders in proportion to the nominal amount of Shares (whether or not folly 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 Shareholders (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 Shareholders credited as fully paid;
(c) | make any arrangements they think fit to resolve a difficulty arising in the distribution of a capitalised 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) | authorise a Person to enter (on behalf of all the Shareholders concerned) into an agreement with the Company providing for either: |
(i) | the allotment to the Shareholders respectively, credited as fully paid, of Shares or debentures to which they may be entitled on the capitalisation, or |
(ii) | the payment by the Company on behalf of the Shareholders (by the application of their respective proportions of the reserves resolved to be capitalised) 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 Shareholders; and
(e) | generally do all acts and things required to give effect to the resolution. |
142. | Notwithstanding any provisions in these Articles and subject to the Companies Act, the Directors may resolve to capitalise an amount standing to the credit of reserves (including the share premium account, capital redemption reserve and 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; or |
(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. |
SHARE PREMIUM ACCOUNT
143. | The Directors shall in accordance with the Companies Act 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. |
144. | 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 Companies Act, out of capital. |
NOTICES
145. | Except as otherwise provided in these Articles, any notice or document may be served by the Company or by the Person entitled to give notice to any Shareholder either personally, or by posting it by airmail or a recognised courier service in a prepaid letter addressed to such Shareholder at his address as appearing in the Register, or by electronic mail to any electronic mail address such Shareholder may have specified in writing for the purpose of such service of notices, or by facsimile to any facsimile number such Shareholder may have specified in writing for the purpose of such service of notices, or by placing it on the Company’s Website should the Directors deem it appropriate. In the case of joint holders of a Share, all notices shall be given to that one of the joint holders whose name stands first in the Register in respect of the joint holding, and notice so given shall be sufficient notice to all the joint holders. |
146. | Notices sent from one country to another shall be sent or forwarded by prepaid airmail or a recognised courier service. |
147. | Any Shareholder Present 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. |
148. | Any notice or other document, if served by: |
(a) | post, shall be deemed to have been served five (5) calendar days after the time when the letter containing the same is posted; |
(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) | recognised 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; or |
(d) | electronic means, shall be deemed to have been served immediately (i) upon the time of the transmission to the electronic mail address supplied by the Shareholder to the Company or (ii) upon the time of its placement on the Company’s Website. |
In proving service by post or courier service it shall be sufficient to prove that the letter containing the notice or documents was properly addressed and duly posted or delivered to the courier service.
149. | Any notice or document delivered or sent by post to or left at the registered address of any Shareholder in accordance with the terms of these Articles shall notwithstanding that such Shareholder be then dead or bankrupt, and whether or not the Company has notice of his death or bankruptcy, be deemed to have been duly served in respect of any Share registered in the name of such Shareholder as sole or joint holder, unless his name shall at the time of the service of the notice or document have been removed from the Register as the holder of the Share, and such service shall for all purposes be deemed a sufficient service of such notice or document on all Persons interested (whether jointly with or as claiming through or under him) in the Share. |
150. | Notice of every general meeting of the Company shall be given to: |
(a) | all Shareholders holding Shares with the right to receive notice and who have supplied to the Company an address for the giving of notices to them; and |
(b) | every Person entitled to a Share in consequence of the death or bankruptcy of a Shareholder, who 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.
INFORMATION
151. | Subject to the relevant laws, rules and regulations applicable to the Company, 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. |
152. | Subject to due compliance with the relevant laws, rules and regulations applicable to the Company, 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. |
INDEMNITY
153. | Every Director (including for the purposes of this Article any alternate Director appointed pursuant to the provisions of these Articles), Secretary, assistant Secretary, or other officer for the time being and from time to time of the Company (but not including the Company’s auditors) and the personal representatives of the same (each an “Indemnified Person”) shall be indemnified and secured harmless against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such Indemnified Person, other than by reason of such Indemnified Person’s own dishonesty, wilful default or fraud, in or about the conduct of the Company’s business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such Indemnified Person in defending (whether successfully or otherwise) any civil proceedings concerning the Company or its affairs in any court whether in the Cayman Islands or elsewhere. |
154. | No Indemnified Person shall be liable: |
(a) | for the acts, receipts, neglects, defaults or omissions of any other Director or officer or agent of the Company; or |
(b) | for any loss on account of defect of title to any property of the Company; or |
(c) | on account of the insufficiency of any security in or upon which any money of the Company shall be invested; or |
(d) | for any loss incurred through any bank, broker or other similar Person; or |
(e) | for any loss occasioned by any negligence, default, breach of duty, breach of trust, error of judgement or oversight on such Indemnified Person’s part; or |
(f) | for any loss, damage or misfortune whatsoever which may happen in or arise from the execution or discharge of the duties, powers, authorities, or discretions of such Indemnified Person’s office or in relation thereto; |
unless the same shall happen through such Indemnified Person’s own dishonesty, willful default or fraud.
FINANCIAL YEAR
155. | Unless the Directors otherwise prescribe, the financial year of the Company shall end on December 31st in each calendar year and shall begin on January 1st in each calendar year. |
NON-RECOGNITION OF TRUSTS
156. | No Person shall be recognised by the Company as holding any Share upon any trust and the Company shall not, unless required by law, be bound by or be compelled in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any Share or (except only as otherwise provided by these Articles or as the Companies Act requires) any other right in respect of any Share except an absolute right to the entirety thereof in each Shareholder registered in the Register. |
WINDING UP
157. | If the Company shall be wound up the liquidator may, with the sanction of a Special Resolution of the Company and any other sanction required by the Companies Act, 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, subject to Article 158 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 or the acceptance of which would or would threaten to cause regulatory issue (including any violation to the Dodd-Frank Wall Street Reform and Consumer Protection Act, as it may be amended from time to time, and the regulations promulgated thereunder) for such Member. For the avoidance of doubt, to the extent that any distribution to be made by the Company to any Member in a winding-up of the Company or any other similar transaction is in a form other than cash, such Member shall have the right to waive any or all such distribution. |
158. | 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. |
AMENDMENT OF ARTICLES OF ASSOCIATION
159. | Subject to the Companies Act, the Company may at any time and from time to time by Special Resolution alter or amend these Articles in whole or in part. |
CLOSING OF REGISTER OR FIXING RECORD DATE
160. | For the purpose of determining those Shareholders that are entitled to receive notice of, attend or vote at any meeting of Shareholders or any adjournment thereof, or those Shareholders that are entitled to receive payment of any dividend, or in order to make a determination as to who is a Shareholder for any other purpose, the Directors may provide that the Register shall be closed for transfers for a stated period which shall not exceed in any case thirty (30) calendar days in any calendar year. |
161. | In lieu of or apart from closing the Register, the Directors may fix in advance a date as the record date for any such determination of those Shareholders that are entitled to receive notice of attend or vote at a meeting of the Shareholders and for the purpose of determining those Shareholders that are entitled to receive payment of any dividend the Directors may, at or within ninety (90) calendar days prior to the date of declaration of such dividend, fix a subsequent date as the record date for such determination. |
162. | If the Register is not so closed and no record date is fixed for the determination of those Shareholders entitled to receive notice of, attend or vote at a meeting of Shareholders or those Shareholders that are entitled to receive payment of a dividend, the date on which notice of the meeting is posted 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 Shareholders. When a determination of those Shareholders that are entitled to receive notice of attend or vote at a meeting of Shareholders has been made as provided in this Article, such determination shall apply to any adjournment thereof. |
REGISTRATION BY WAY OF CONTINUATION
163. | 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. |
DISCLOSURE
164. | The Directors, or any service providers (including the officers, the Secretary and the Registered Office provider of the Company) specifically authorised by the Directors, shall be entitled to disclose to any regulatory or judicial authority any information regarding the affairs of the Company including without limitation information contained in the Register and books of the Company. |
EXCLUSIVE FORUM
165. | For the avoidance of doubt and without limiting the jurisdiction of the Cayman Courts to hear, settle and/or determine disputes related to the Company, the courts of the Cayman Islands shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any Director, officer or other employee of the Company to the Company or the Members, (iii) any action asserting a claim arising pursuant to any provision of the Companies Act or these Articles including but not limited to any purchase or acquisition of Shares, security or guarantee provided in consideration thereof, or (iv) any action asserting a claim against the Company which if brought in the United States of America would be a claim arising under the internal affairs doctrine (as such concept is recognised under the laws of the United States from time to time). |
Exhibit 10.1
HeSAI GROUP
2021 SHARE INCENTIVE PLAN
Article 1
PURPOSE
The purpose of the Plan is to promote the success and enhance the value of Hesai Group, an exempted company formed under the laws of the Cayman Islands (the “Company”), by linking the personal interests of the Directors, Employees, and Consultants to those of the Company’s shareholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to the Company’s shareholders.
Article 2
DEFINITIONS AND CONSTRUCTION
Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates.
2.1 “Applicable Laws” means the legal requirements relating to the Plan and the Awards under applicable provisions of the corporate, securities, tax and other laws, rules, regulations and government orders, and the rules of any applicable stock exchange or national market system, of any jurisdiction applicable to Awards granted to residents therein.
2.2 “Award” means an Option, a Restricted Share, a Restricted Share Unit or other types of award, in the form of cash or otherwise, approved by the Committee granted to a Participant pursuant to the Plan.
2.3 “Award Agreement” means any written agreement, contract, or other instrument or document evidencing an Award, including through electronic medium.
2.4 “Board” means the Board of Directors of the Company.
2.5 “Cause” with respect to a Participant means (unless otherwise expressly provided in the applicable Award Agreement, or another applicable contract with the Participant that defines such term for purposes of determining the effect that a “for cause” termination has on the Participant’s Awards) a termination of employment or service based upon a finding by the Service Recipient, acting in good faith and based on its reasonable belief at the time, that the Participant:
(a) has been negligent in the discharge of his or her duties to the Service Recipient, has refused to perform stated or assigned duties or is incompetent in or (other than by reason of a disability or analogous condition) incapable of performing those duties;
(b) has been dishonest or committed or engaged in an act of theft, embezzlement or fraud, a breach of confidentiality, an unauthorized disclosure or use of inside information, customer lists, trade secrets or other confidential information;
(c) has breached a fiduciary duty, or willfully and materially violated any other duty, law, rule, regulation or policy of the Service Recipient; or has been convicted of, or plead guilty or nolo contendere to, a felony or misdemeanor (other than minor traffic violations or similar offenses);
(d) has materially breached any of the provisions of any agreement with the Service Recipient;
(e) has engaged in unfair competition with, or otherwise acted intentionally in a manner injurious to the reputation, business or assets of, the Service Recipient; or
(f) has improperly induced a vendor or customer to break or terminate any contract with the Service Recipient or induced a principal for whom the Service Recipient acts as agent to terminate such agency relationship.
A termination for Cause shall be deemed to occur (subject to reinstatement upon a contrary final determination by the Committee) on the date on which the Service Recipient first delivers written notice to the Participant of a finding of termination for Cause.
2.6 “Code” means the Internal Revenue Code of 1986 of the United States, as amended.
2.7 “Committee” means a committee of the Board described in Article 10.
2.8 “Consultant” means any consultant or adviser if: (a) the consultant or adviser renders bona fide services to a Service Recipient; (b) the services rendered by the consultant or adviser are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities; and (c) the consultant or adviser is a natural person who has contracted directly with the Service Recipient to render such services.
2.9 “Corporate Transaction”, unless otherwise defined in an Award Agreement, means any of the following transactions, provided, however, that the Committee shall determine under (d) and (e) whether multiple transactions are related, and its determination shall be final, binding and conclusive:
(a) an amalgamation, arrangement or consolidation or scheme of arrangement (i) in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the jurisdiction in which the Company is incorporated or (ii) following which the holders of the voting securities of the Company do not continue to hold more than 50% of the combined voting power of the voting securities of the surviving entity;
(b) the sale, transfer or other disposition of all or substantially all of the assets of the Company;
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(c) the complete liquidation or dissolution of the Company;
(d) any reverse takeover or series of related transactions culminating in a reverse takeover (including, but not limited to, a tender offer followed by a reverse takeover) in which the Company is the surviving entity but (A) the Company’s equity securities outstanding immediately prior to such takeover are converted or exchanged by virtue of the takeover into other property, whether in the form of securities, cash or otherwise, or (B) in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such takeover or the initial transaction culminating in such takeover, but excluding any such transaction or series of related transactions that the Committee determines shall not be a Corporate Transaction; or
(e) acquisition in a single or series of related transactions by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities but excluding any such transaction or series of related transactions that the Committee determines shall not be a Corporate Transaction.
2.10 “Director” means a member of the Board or a member of the board of directors of any Subsidiary of the Company.
2.11 “Disability” unless otherwise defined in an Award Agreement, means that the Participant qualifies to receive long-term disability payments under the Service Recipient’s long-term disability insurance program, as it may be amended from time to time, to which the Participant provides services regardless of whether the Participant is covered by such policy. If the Service Recipient to which the Participant provides service does not have a long-term disability plan in place, “Disability” means that a Participant is unable to carry out the responsibilities and functions of the position held by the Participant by reason of any medically determinable physical or mental impairment for a period of not less than ninety (90) consecutive days. A Participant will not be considered to have incurred a Disability unless he or she furnishes proof of such impairment sufficient to satisfy the Committee in its discretion.
2.12 “Effective Date” shall have the meaning set forth in Section 11.1.
2.13 “Employee” means any person, including an officer or a Director, who is in the employment of a Service Recipient, subject to the control and direction of the Service Recipient as to both the work to be performed and the manner and method of performance. The payment of a director’s fee by a Service Recipient shall not be sufficient to constitute “employment” by the Service Recipient.
2.14 “Exchange Act” means the Securities Exchange Act of 1934 of the United States, as amended.
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2.15 “Fair Market Value” means, as of any date, the value of Shares determined as follows:
(a) If the Shares are listed on one or more established stock exchanges or national market systems, including without limitation, the New York Stock Exchange or the NASDAQ Stock Market, its Fair Market Value shall be the closing sales price for such Shares (or the closing bid, if no sales were reported) as quoted on the principal exchange or system on which the Shares are listed (as determined by the Committee) on the date of determination (or, if no closing sales price or closing bid was reported on that date, as applicable, on the last trading date such closing sales price or closing bid was reported), as reported on the website maintained by such exchange or market system or such other source as the Committee deems reliable;
(b) If the Shares are regularly quoted on an automated quotation system (including the OTC Bulletin Board) or by a recognized securities dealer, its Fair Market Value shall be the closing sales price for such Shares as quoted on such system or by such securities dealer on the date of determination, but if selling prices are not reported, the Fair Market Value of a Share shall be the mean between the high bid and low asked prices for the Shares on the date of determination (or, if no such prices were reported on that date, on the last date such prices were reported), as reported in The Wall Street Journal or such other source as the Committee deems reliable; or
(c) In the absence of an established market for the Shares of the type described in (a) and (b), above, the Fair Market Value thereof shall be determined by the Committee in good faith and in its discretion by reference to (i) the placing price of the latest private placement of the Shares and the development of the Company’s business operations and the general economic and market conditions since such latest private placement, (ii) other third party transactions involving the Shares and the development of the Company’s business operation and the general economic and market conditions since such transaction, (iii) an independent valuation of the Shares, or (iv) such other methodologies or information as the Committee determines to be indicative of Fair Market Value.
2.16 “Group Entity” means any of the Company and Subsidiaries of the Company.
2.17 “Incentive Share Option” means an Option that is intended to meet the requirements of Section 422 of the Code or any successor provision thereto.
2.18 “Independent Director” means (i) if the Shares or other securities representing the Shares are not listed on a stock exchange, a Director of the Company who is a Non-Employee Director; and (ii) if the Shares or other securities representing the Shares are listed on one or more stock exchange, a Director of the Company who meets the independence standards under the applicable corporate governance rules of the stock exchange(s).
2.19 “Non-Employee Director” means a member of the Board who qualifies as a “Non-Employee Director” as defined in Rule 16b-3(b)(3) of the Exchange Act, or any successor definition adopted by the Board.
2.20 “Non-Qualified Share Option” means an Option that is not intended to be an Incentive Share Option.
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2.21 “Option” means a right granted to a Participant pursuant to Article 5 of the Plan to purchase a specified number of Shares at a specified price during specified time periods. An Option may be either an Incentive Share Option or a Non-Qualified Share Option.
2.22 “Participant” means a person who, as a Director, Consultant or Employee, has been granted an Award pursuant to the Plan.
2.23 “Parent” means a parent corporation under Section 424(e) of the Code.
2.24 “Plan” means the 2021 Share Incentive Plan of Hesai Group, as amended and/or restated from time to time.
2.25 “Related Entity” means any business, corporation, partnership, limited liability company or other entity in which the Company, a Parent or Subsidiary of the Company holds a substantial ownership interest, directly or indirectly, or controls through contractual arrangements and consolidates the financial results according to applicable accounting standards, but which is not a Subsidiary and which the Board designates as a Related Entity for purposes of the Plan.
2.26 “Restricted Share” means a Share awarded to a Participant pursuant to Article 5 that is subject to certain restrictions and may be subject to risk of forfeiture.
2.27 “Restricted Share Unit” means an Award granted pursuant to Article 7.
2.28 “Securities Act” means the Securities Act of 1933 of the United States, as amended.
2.29 “Service Recipient” means the Company or Subsidiary of the Company to which a Participant provides services as an Employee, a Consultant or a Director.
2.30 “Share” means the ordinary shares of the Company, par value US$0.0001 per share, and such other securities of the Company that may be substituted for Shares pursuant to Article 9.
2.31 “Subsidiary” means any corporation or other entity of which a majority of the outstanding voting shares or voting power is beneficially owned directly or indirectly by the Company.
2.32 “Trading Date” means the closing of the first sale to the general public of the Shares pursuant to a registration statement filed with and declared effective by the U.S. Securities and Exchange Commission under the Securities Act.
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Article 3
SHARES SUBJECT TO THE PLAN
3.1 Number of Shares.
(a) Subject to the provisions of Article 9 and Section 3.1(b), the maximum aggregate number of Shares which may be issued pursuant to all Awards (the "Award Pool") shall initially be 16,365,047, plus commencing no earlier than January 1st of the year immediately following the Company's initial public offering and listing on an internationally recognized stock exchange, an increase on the first day of the fiscal year, by an amount decided by the Board, provided that such increase shall not exceed 1.5% of the then total number of Shares issued and outstanding on an as-converted and fully-diluted basis on the last day of the immediately preceding fiscal year.
(b) To the extent that an Award terminates, expires, or lapses for any reason, any Shares subject to the Award shall again be available for the grant of an Award pursuant to the Plan. To the extent permitted by Applicable Laws, Shares issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form or combination by a Group Entity shall not be counted against Shares available for grant pursuant to the Plan. Shares delivered by the Participant or withheld by the Company upon the exercise of any Award under the Plan, in payment of the exercise price thereof or tax withholding thereon, may again be granted or awarded hereunder, subject to the limitations of Section 3.1(a). If any Award is forfeited by the Participant or repurchased by the Company, the Shares underlying such Award may again be granted or awarded hereunder, subject to the limitations of Section 3.1(a).
3.2 Shares Distributed. Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares, treasury Shares (subject to Applicable Laws) or Shares purchased on the open market. Additionally, at the discretion of the Committee, any Shares distributed pursuant to an Award may be represented by American depository shares. If the number of Shares represented by an American depository share is other than on a one-to-one basis, the limitations of Section 3.1 shall be adjusted to reflect the distribution of American depository shares in lieu of Shares.
Article 4
ELIGIBILITY AND PARTICIPATION
4.1 Eligibility. Persons eligible to participate in this Plan include Employees, Consultants, and Directors, as determined by the Committee.
4.2 Participation. Subject to the provisions of the Plan, the Committee may, from time to time, select from among all eligible individuals, those to whom Awards shall be granted and shall determine the nature and amount of each Award. No individual shall have any right to be granted an Award pursuant to this Plan.
4.3 Jurisdictions. In order to assure the viability of Awards granted to Participants employed in various jurisdictions, the Committee may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, or custom applicable in the jurisdiction in which the Participant resides, is employed, operates or is incorporated. Moreover, the Committee may approve such supplements to, or amendments, restatements, or alternative versions of, the Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan as in effect for any other purpose; provided, however, that no such supplements, amendments, restatements, or alternative versions shall increase the share limitations contained in Section 3.1 of the Plan. Notwithstanding the foregoing, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate any Applicable Laws.
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Article 5
OPTIONS
5.1 General. The Committee is authorized to grant Options to Participants on the following terms and conditions:
(a) Exercise Price. The exercise price per Share subject to an Option shall be determined by the Committee and set forth in the Award Agreement which may be a fixed price or a variable price related to the Fair Market Value of the Shares. The exercise price per Share subject to an Option may be amended or adjusted in the absolute discretion of the Committee, the determination of which shall be final, binding and conclusive. For the avoidance of doubt, to the extent not prohibited by Applicable Laws or any exchange rule, a downward adjustment of the exercise prices of Options mentioned in the preceding sentence shall be effective without the approval of the Company’s shareholders or the approval of the affected Participants.
(b) Time and Conditions of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part, including exercise prior to vesting; provided that the exercise term of any Option granted under the Plan shall not exceed the seventh (7th) anniversary of the date on which the vesting of the Option commences, except as otherwise determined by the Committee. The Committee shall also determine any conditions, if any, that must be satisfied before all or part of an Option may be exercised.
(c) Payment. The Committee shall determine the methods by which the exercise price of an Option may be paid, the form of payment, including, without limitation (i) cash or check denominated in U.S. Dollars, (ii) to the extent permissible under the Applicable Laws, cash or check in Chinese Renminbi, (iii) cash or check denominated in any other local currency as approved by the Committee, (iv) Shares held for such period of time as may be required by the Committee in order to avoid adverse financial accounting consequences and having a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof, (v) after the Trading Date, the delivery of a notice that the Participant has placed a market sell order with a broker with respect to Shares then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price; provided that payment of such proceeds is then made to the Company upon settlement of such sale, (vi) other property acceptable to the Committee with a Fair Market Value equal to the exercise price, or (vii) any combination of the foregoing. Notwithstanding any other provision of the Plan to the contrary, no Participant who is a member of the Board or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to pay the exercise price of an Option in any method which would violate Section 13(k) of the Exchange Act.
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5.2 Incentive Share Options. Incentive Share Options may be granted to Employees of the Company or a Subsidiary of the Company. Incentive Share Options may not be granted to employees of a Related Entity or to Independent Directors or Consultants. The terms of any Incentive Share Options granted pursuant to the Plan, in addition to the requirements of Section 5.1, must comply with the following additional provisions of this Section 5.2:
(a) Individual Dollar Limitation. The aggregate Fair Market Value (determined as of the time the Option is granted) of all Shares with respect to which Incentive Share Options are first exercisable by a Participant in any calendar year may not exceed $100,000 or such other limitation as imposed by Section 422(d) of the Code, or any successor provision. To the extent that Incentive Share Options are first exercisable by a Participant in excess of such limitation, the excess shall be considered Non-Qualified Share Options.
(b) Exercise Price. The exercise price of an Incentive Share Option shall be the Fair Market Value at the date of grant. However, the exercise price of any Incentive Share Option granted to any individual who, at the date of grant, owns Shares possessing more than ten percent of the total combined voting power of all classes of shares of the Company or any Parent or Subsidiary of the Company may not be less than 110% of Fair Market Value on the date of grant and such Option may not be exercisable for more than five years from the date of grant.
(c) Transfer Restriction. The Participant shall give the Company prompt notice of any disposition of Shares acquired by exercise of an Incentive Share Option within (i) two years from the date of grant of such Incentive Share Option or (ii) one year after the transfer of such Shares to the Participant.
(d) Expiration of Incentive Share Options. No Award of an Incentive Share Option may be made pursuant to this Plan after the tenth anniversary of the Effective Date.
5.3 Right to Exercise. During a Participant’s lifetime, an Incentive Share Option may be exercised only by the Participant.
Article 6
RESTRICTED SHARES
6.1 Grant of Restricted Shares. The Committee, at any time and from time to time, may grant Restricted Shares to Participants as the Committee, in its sole discretion, shall determine. The Committee, in its sole discretion, shall determine the number of Restricted Shares to be granted to each Participant.
6.2 Restricted Shares Award Agreement. Each Award of Restricted Shares shall be evidenced by an Award Agreement that shall specify the period of restriction, the number of Restricted Shares granted, and such other terms and conditions as the Committee, in its sole discretion, shall determine. Unless the Committee determines otherwise, Restricted Shares shall be held by the Company as escrow agent until the restrictions on such Restricted Shares have lapsed.
6.3 Issuance and Restrictions. Restricted Shares shall be subject to such restrictions on transferability and other restrictions as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Shares or the right to receive dividends on the Restricted Shares). These restrictions may lapse separately or in combination at such times, pursuant to such circumstances, in such installments, or otherwise, as the Committee determines at the time of the grant of the Award or thereafter.
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6.4 Forfeiture/Repurchase. Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon termination of employment or service during the applicable restriction period, Restricted Shares that are at that time subject to restrictions shall be forfeited or repurchased in accordance with the Award Agreement; provided, however, that the Committee may (a) provide in any Restricted Share Award Agreement that restrictions or forfeiture and repurchase conditions relating to Restricted Shares will be waived in whole or in part in the event of terminations resulting from specified causes, and (b) in other cases waive in whole or in part restrictions or forfeiture and repurchase conditions relating to Restricted Shares.
6.5 Certificates for Restricted Shares. Restricted Shares granted pursuant to the Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted Shares are registered in the name of the Participant, certificates must bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Shares, and the Company may, at its discretion, retain physical possession of the certificate until such time as all applicable restrictions lapse.
6.6 Removal of Restrictions. Except as otherwise provided in this Article 5, Restricted Shares granted under the Plan shall be released from escrow as soon as practicable after the last day of the period of restriction. The Committee, in its discretion, may accelerate the time at which any restrictions shall lapse or be removed. After the restrictions have lapsed, the Participant shall be entitled to have any legend or legends under Section 6.5 removed from his or her Share certificate, and the Shares shall be freely transferable by the Participant, subject to applicable legal restrictions. The Committee (in its discretion) may establish procedures regarding the release of Shares from escrow and the removal of legends, as necessary or appropriate to minimize administrative burdens on the Company.
Article 7
RESTRICTED SHARE UNITS
7.1 Grant of Restricted Share Units. The Committee, at any time and from time to time, may grant Restricted Share Units to Participants as the Committee, in its sole discretion, shall determine. The Committee, in its sole discretion, shall determine the number of Restricted Share Units to be granted to each Participant.
7.2 Restricted Share Units Award Agreement. Each Award of Restricted Share Units shall be evidenced by an Award Agreement that shall specify any vesting conditions, the number of Restricted Share Units granted, and such other terms and conditions as the Committee, in its sole discretion, shall determine.
7.3 Form and Timing of Payment of Restricted Share Units. At the time of grant, the Committee shall specify the date or dates on which the Restricted Share Units shall become fully vested and nonforfeitable. Upon vesting, the Committee, in its sole discretion, may pay Restricted Share Units in the form of cash, Shares or a combination thereof.
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7.4 Forfeiture/Repurchase. Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon termination of employment or service during the applicable restriction period, Restricted Share Units that are at that time unvested shall be forfeited or repurchased in accordance with the Award Agreement; provided, however, the Committee may (a) provide in any Restricted Share Unit Award Agreement that restrictions or forfeiture and repurchase conditions relating to Restricted Share Units will be waived in whole or in part in the event of terminations resulting from specified causes, and (b) in other cases waive in whole or in part restrictions or forfeiture and repurchase conditions relating to Restricted Share Units.
Article 8
PROVISIONS APPLICABLE TO AWARDS
8.1 Award Agreement. Awards under the Plan shall be evidenced by Award Agreements that set forth the terms, conditions and limitations for each Award which may include the term of an Award, the provisions applicable in the event the Participant’s employment or service terminates, and the Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an Award.
8.2 No Transferability; Limited Exception to Transfer Restrictions.
8.2.1 | Limits on Transfer. Unless otherwise expressly provided in (or pursuant to) this Section 8.2, by applicable law and by the Award Agreement, as the same may be amended: |
(a) | all Awards are non-transferable and will not be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge; |
(b) | Awards will be exercised only by the Participant; and |
(c) | amounts payable or shares issuable pursuant to an Award will be delivered only to (or for the account of), and, in the case of Shares, registered in the name of, the Participant. |
In addition, the shares shall be subject to the restrictions set forth in the applicable Award Agreement.
8.2.2 | Further Exceptions to Limits on Transfer. The exercise and transfer restrictions in Section 8.2.1 will not apply to: |
(a) | transfers to the Company or a Subsidiary; |
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(b) | transfers by gift to “immediate family” as that term is defined in SEC Rule 16a-1(e) promulgated under the Exchange Act; |
(c) | the designation of a beneficiary to receive benefits if the Participant dies or, if the Participant has died, transfers to or exercises by the Participant’s beneficiary, or, in the absence of a validly designated beneficiary, transfers by will or the laws of descent and distribution; or |
(d) | if the Participant has suffered a disability, permitted transfers or exercises on behalf of the Participant by the Participant’s duly authorized legal representative; or |
(e) | subject to the prior approval of the Committee or an executive officer or director of the Company authorized by the Committee, transfer to one or more natural persons who are the Participant’s family members or entities owned and controlled by the Participant and/or the Participant’s family members, including but not limited to trusts or other entities whose beneficiaries or beneficial owners are the Participant and/or the Participant’s family members, or to such other persons or entities as may be expressly approved by the Committee, pursuant to such conditions and procedures as the Committee or may establish. Any permitted transfer shall be subject to the condition that the Committee receives evidence satisfactory to it that the transfer is being made for estate and/or tax planning purposes and on a basis consistent with the Company’s lawful issue of securities. |
Notwithstanding anything else in this Section 8.2.2 to the contrary, but subject to compliance with all Applicable Laws, Restricted Shares and Restricted Share Units will be subject to any and all transfer restrictions under the Code applicable to such Awards or necessary to maintain the intended tax consequences of such Awards. Notwithstanding clause (b) above but subject to compliance with all Applicable Laws, any contemplated transfer by gift to “immediate family” as referenced in clause (b) above is subject to the condition precedent that the transfer be approved by the Committee in order for it to be effective.
8.3 Beneficiaries. Notwithstanding Section 8.2, a Participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to the Participant, except to the extent the Plan and Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If the Participant is married and resides in a community property state, a designation of a person other than the Participant’s spouse as his or her beneficiary with respect to more than 50% of the Participant’s interest in the Award shall not be effective without the prior written consent of the Participant’s spouse. If no beneficiary has been designated or survives the Participant, payment shall be made to the person entitled thereto pursuant to the Participant’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation is filed with the Committee.
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8.4 Performance Objectives and Other Terms. The Committee, in its discretion, shall set performance objectives or other vesting criteria which, depending on the extent to which they are met, will determine the number or value of the Awards that will be granted or paid out to the Participants.
8.5 Share Certificates.
(a) Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing the Shares pursuant to the exercise of any Award, unless and until the Committee has determined, with advice of counsel, that the issuance and delivery of such certificates is in compliance with all Applicable Laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the Shares are listed or traded. All Share certificates delivered pursuant to the Plan are subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with all Applicable Laws, and the rules of any national securities exchange or automated quotation system on which the Shares are listed, quoted, or traded. The Committee may place legends on any Share certificate to reference restrictions applicable to the Shares. In addition to the terms and conditions provided herein, the Committee may require that a Participant make such reasonable covenants, agreements, and representations as the Committee, in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements. The Committee shall have the right to require any Participant to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation, as may be imposed in the discretion of the Committee.
(b) Notwithstanding anything herein to the contrary, unless otherwise determined by the Committee or required by Applicable Laws, the Company shall not deliver to any Participant certificates evidencing Shares issued in connection with any Award and instead such Shares shall be recorded on the books of the Company or, as applicable, its transfer agent or share plan administrator.
8.6 Paperless Administration. Subject to Applicable Laws, the Committee may make Awards and provide applicable disclosure and procedures for exercise of Awards by an internet website or interactive voice response system for the paperless administration of Awards.
8.7 Foreign Currency. A Participant may be required to provide evidence that any currency used to pay the exercise price of any Award was acquired and taken out of the jurisdiction in which the Participant resides in accordance with Applicable Laws, including foreign exchange control laws and regulations. In the event the exercise price for an Award is paid in Chinese Renminbi or other foreign currency, as permitted by the Committee, the amount payable will be determined by conversion from U.S. dollars at the official rate promulgated by the People’s Bank of China for Chinese Renminbi, or for jurisdictions other than the People’s Republic of China, the exchange rate as selected by the Committee on the date of exercise.
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Article 9
changes in capital structure
9.1 Adjustments. In the event of any dividend, share split, combination or exchange of Shares, amalgamation, arrangement or consolidation, spin-off, recapitalization or other distribution (other than normal cash dividends) of Company assets to its shareholders, or any other change affecting the shares of Shares or the share price of a Share, the Committee shall make such proportionate adjustments, if any, as the Committee in its discretion may deem appropriate to reflect such change with respect to (a) the aggregate number and type of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3.1); (b) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); and (c) the grant or exercise price per share for any outstanding Awards under the Plan.
9.2 Corporate Transactions. Except as may otherwise be provided in any Award Agreement or any other written agreement entered into by and between the Company and a Participant, if the Committee anticipates the occurrence, or upon the occurrence, of a Corporate Transaction, the Committee may, in its sole discretion, provide for (i) any and all Awards outstanding hereunder to terminate at a specific time in the future and shall give each Participant the right to exercise the vested portion of such Awards during a period of time as the Committee shall determine, or (ii) the purchase of any Award for an amount of cash equal to the amount that could have been attained upon the exercise of such Award (and, for the avoidance of doubt, if as of such date the Committee determines in good faith that no amount would have been attained upon the exercise of such Award, then such Award may be terminated by the Company without payment), or (iii) the replacement of such Award with other rights or property selected by the Committee in its sole discretion or the assumption of or substitution of such Award by the successor or surviving corporation, or a Parent or Subsidiary thereof, with appropriate adjustments as to the number and kind of Shares and prices, or (iv) payment of such Award in cash based on the value of Shares on the date of the Corporate Transaction plus reasonable interest on the Award through the date as determined by the Committee when such Award would otherwise be vested or have been paid in accordance with its original terms, if necessary to comply with Section 409A of the Code.
9.3 Outstanding Awards – Other Changes. In the event of any other change in the capitalization of the Company or corporate change other than those specifically referred to in this Article 9, the Committee may, in its absolute discretion, make such adjustments in the number and class of shares subject to Awards outstanding on the date on which such change occurs and in the per share grant or exercise price of each Award as the Committee may consider appropriate to prevent dilution or enlargement of rights.
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9.4 No Other Rights. Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of Shares of any class, the payment of any dividend, any increase or decrease in the number of shares of any class or any dissolution, liquidation, merger, or consolidation of the Company or any other corporation. Except as expressly provided in the Plan or pursuant to action of the Committee under the Plan, and no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of Shares subject to an Award or the grant or exercise price of any Award.
Article 10
ADMINISTRATION
10.1 Committee. The Plan shall be administered by the Board or a committee of one or more members of the Board and/or one or more executive officers of the Company (the “Committee”) to whom the Board shall delegate the authority to grant or amend Awards to Participants other than any of the Committee members, Independent Directors and executive officers of the Company. Reference to the Committee shall refer to the Board in absence of the Committee. Notwithstanding the foregoing, the full Board, acting by majority of its members in office, shall conduct the general administration of the Plan if required by Applicable Laws, and with respect to Awards granted to the Committee members, Independent Directors and executive officers of the Company and for purposes of such Awards the term “Committee” as used in the Plan shall be deemed to refer to the Board. The Committee may further delegate, to the extent permitted by applicable law, to one or more officers of the Company, its powers under this Plan (a) to designate officers, employees and consultants of the Company and its Subsidiaries who will receive grants of Awards under this Plan, and (b) to determine the number of shares subject to, and the other terms and conditions of, such Awards, in each case within the limits established by the Board or the Committee.
10.2 Action by the Committee. A majority of the Committee shall constitute a quorum. The acts of a majority of the members present at any meeting at which a quorum is present, and acts approved unanimously in writing by all members of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of a Group Entity, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.
10.3 Authority of the Committee. Subject to any specific designation in the Plan, the Committee has the exclusive power, authority and discretion to:
(a) designate Participants to receive Awards;
(b) determine the type or types of Awards to be granted to each Participant;
(c) determine the number of Awards to be granted and the number of Shares to which an Award will relate;
(d) determine the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, or purchase price, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, and any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Committee in its sole discretion determines;
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(e) determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in, cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;
(f) prescribe the form of each Award Agreement, which need not be identical for each Participant;
(g) decide all other matters that must be determined in connection with an Award;
(h) establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan;
(i) interpret the terms of, and any matter arising pursuant to, the Plan or any Award Agreement;
(j) amend the terms and conditions of Award Agreements; and
(k) make all other decisions and determinations that may be required pursuant to the Plan or as the Committee deems necessary or advisable to administer the Plan, including design and adopt from time to time new types of Awards that are in compliance with Applicable Laws.
10.4 Decisions Binding. The Committee’s interpretation of the Plan, any Awards granted pursuant to the Plan, any Award Agreement and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties.
Article 11
EFFECTIVE AND EXPIRATION DATE
11.1 Effective Date. The Plan shall become effective as of the date on which the Board adopts the Plan (the “Effective Date”). The Plan shall be ratified by the shareholders of the Company by written resolutions or at a meeting duly held in accordance with the applicable provisions of the Company’s Memorandum of Association and Articles of Association within 12 months of the Effective Date.
11.2 Expiration Date. The Plan will expire on, and no Award may be granted pursuant to the Plan after, the tenth anniversary of the Effective Date. Any Awards that are outstanding on the tenth anniversary of the Effective Date shall remain in force according to the terms of the Plan and the applicable Award Agreement.
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Article 12
AMENDMENT, MODIFICATION, AND TERMINATION
12.1 Amendment, Modification, and Termination. At any time and from time to time, the Board may terminate, amend or modify the Plan; provided, however, that (a) to the extent necessary and desirable to comply with Applicable Laws or stock exchange rules, the Company shall obtain shareholder approval of any Plan amendment in such a manner and to such a degree as required, unless the Company decides to follow home country practice, and (b) unless the Company decides to follow home country practice, shareholder approval is required for any amendment to the Plan that increases the number of Shares available under the Plan (other than any adjustment as provided by Article 9) or permits the Committee to extend the term of the Plan.
12.2 Awards Previously Granted. Except with respect to amendments made pursuant to Section 12.1, no termination, amendment, or modification of the Plan shall adversely affect in any material way any Award previously granted pursuant to the Plan without the prior written consent of the Participant.
Article 13
GENERAL PROVISIONS
13.1 No Rights to Awards. No Participant, employee, or other person shall have any claim to be granted any Award pursuant to the Plan, and neither the Company nor the Committee is obligated to treat Participants, employees, and other persons uniformly.
13.2 No Shareholders Rights. No Award gives the Participant any of the rights of a shareholder of the Company unless and until Shares are in fact issued to such person in connection with such Award.
13.3 Taxes. No Shares shall be delivered under the Plan to any Participant until such Participant has made arrangements acceptable to the Committee for the satisfaction of any income and employment tax withholding obligations under Applicable Laws. The Company or any Subsidiary shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy all applicable taxes (including the Participant’s payroll tax obligations) required or permitted by Applicable Laws to be withheld with respect to any taxable event concerning a Participant arising as a result of this Plan. The Committee may in its discretion and in satisfaction of the foregoing requirement allow a Participant to elect to have the Company withhold Shares otherwise issuable under an Award (or allow the return of Shares) having a Fair Market Value equal to the sums required to be withheld. Notwithstanding any other provision of the Plan, the number of Shares which may be withheld with respect to the issuance, vesting, exercise or payment of any Award (or which may be repurchased from the Participant of such Award after such Shares were acquired by the Participant from the Company) in order to satisfy any income and payroll tax liabilities applicable to the Participant with respect to the issuance, vesting, exercise or payment of the Award shall, unless specifically approved by the Committee, be limited to the number of Shares which have a Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for the applicable income and payroll tax purposes that are applicable to such supplemental taxable income.
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13.4 No Right to Employment or Services. Nothing in the Plan or any Award Agreement shall interfere with or limit in any way the right of the Service Recipient to terminate any Participant’s employment or services at any time, nor confer upon any Participant any right to continue in the employment or services of any Service Recipient.
13.5 Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for incentive compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights that are greater than those of a general creditor of the relevant Group Entity.
13.6 Indemnification. To the extent allowable pursuant to Applicable Laws, each member of the Committee or of the Board shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company’s Memorandum of Association and Articles of Association, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
13.7 Relationship to Other Benefits. No payment pursuant to the Plan shall be taken into account in determining any benefits pursuant to any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of any Group Entity except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.
13.8 Expenses. The expenses of administering the Plan shall be borne by the Group Entities.
13.9 Titles and Headings. The titles and headings of the Sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.
13.10 Fractional Shares. No fractional Shares shall be issued and the Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding up or down as appropriate.
13.11 Limitations Applicable to Section 16 Persons. Notwithstanding anything herein to the contrary, the Plan, and any Award granted or awarded to any Participant who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by the Applicable Laws, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
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13.12 Government and Other Regulations. The obligation of the Company to make payment of awards in Shares or otherwise shall be subject to all Applicable Laws, and to such approvals by government agencies as may be required. The Company shall be under no obligation to register any of the Shares paid pursuant to the Plan under the Securities Act or any other similar law in any applicable jurisdiction. If the Shares paid pursuant to the Plan may in certain circumstances be exempt from registration pursuant to the Securities Act or other Applicable Laws, the Company may restrict the transfer of such Shares in such manner as it deems advisable to ensure the availability of any such exemption.
13.13 Governing Law. The Plan and all Award Agreements shall be construed in accordance with and governed by the laws of the Cayman Islands.
13.14 Section 409A. To the extent that the Committee determines that any Award granted under the Plan is or may become subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code. To the extent applicable, the Plan and the Award Agreements shall be interpreted in accordance with Section 409A of the Code and the U.S. Department of Treasury regulations and other interpretative guidance issued thereunder, including without limitation any such regulation or other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date the Committee determines that any Award may be subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the Effective Date), the Committee may adopt such amendments to the Plan and the applicable Award agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Committee determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and related U.S. Department of Treasury guidance.
13.15 Appendices. Subject to Section 12.1, the Committee may approve such supplements, amendments or appendices to the Plan as it may consider necessary or appropriate for purposes of compliance with Applicable Laws or otherwise and such supplements, amendments or appendices shall be considered a part of the Plan; provided, however, that no such supplements shall increase the share limitation contained in Section 3.1 of the Plan without the approval of the Board.
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Exhibit 10.4
CLASS B ORDINARY SHARE PURCHASE AGREEMENT
This CLASS B ORDINARY SHARE PURCHASE AGREEMENT (this “Agreement”) is entered into on [Execution Date] by and among:
A. Hesai Group, an exempted company duly incorporated with limited liability and validly existing under the Laws of the Cayman Islands (the “Company”);
B. Hesai Hong Kong Limited, a limited liability company duly established and existing under the Laws of Hong Kong (the “HK Company”);
C. Shanghai Hesai Technology Co., Ltd. (上海禾赛科技有限公司), a limited liability company duly established and existing under the Laws of the PRC (“Shanghai Hesai”);
D. The Persons as set forth in Schedule A-1 (each a “Key Party” and together, the “Key Parties”);
E. [Name of investor] (the “PRC Series D Investor”); and
F. [Name of investor] (the “US Series D Investor”, and together with the PRC Series D Investor, the “Series D Investors”).
Each of the foregoing parties is referred to herein individually as a “Party” and collectively as the “Parties”.
RECITALS
A. The Company is in the process of conducting an internal reorganization in accordance with the Reorganization Plan as contemplated in Schedule C attached hereto. The Company holds 100% shares of the HK Company, and the HK Company is contemplating to acquire the 100% Equity Securities of Shanghai Hesai.
B. The Company desires to issue and sell to each of the Series D Investors, and each Series D Investor desires to purchase from the Company, on the terms and conditions set forth in this Agreement, the Class B Ordinary Shares (as defined below) of the Company.
NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions hereinafter set forth, the Parties hereby agree as follows:
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1. DEFINITIONS.
1.1 Certain Defined Terms. As used in this Agreement, the following terms shall have the following respective meanings:
“Action” shall mean any charge, action, complaint, petition, appeal, suit, litigation, grievance, inquiry or other proceeding, claim, arbitration or investigation whether administrative, civil, regulatory or criminal, whether at law or in equity, or otherwise under any applicable Laws, and whether or not before any mediator, arbitrator or Governmental Authority.
“Affiliate” shall mean, in respect of a Person, any other Person that, directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person, and without limiting the generality of the foregoing, (a) in the case of a natural Person, shall include, without limitation, such Person’s spouse, parents, children, siblings, mother-in-law, father-in-law, children-in-law and siblings-in-law and any entity Controlled by any of the aforementioned individuals, (b) in the case of a Series D Investor, shall include (i) any Person who holds Shares as a nominee for such Series D Investor, (ii) any shareholder of such Series D Investor, (iii) any entity or individual which has a direct or indirect interest in such Series D Investor (including, if applicable, any general partner or limited partner) or any fund manager thereof, (iv) any Person that directly or indirectly Controls, is Controlled by, under common Control with, or is managed by such Series D Investor, its shareholder, the general partner or the fund manager of such Series D Investor or its shareholder, (v) the relatives of any individual referred to in (ii), (iii) and (iv) above, and (vi) any trust Controlled by or held for the benefit of such Persons referred to in (i) to (iv) above. For the avoidance of doubt, the Series D Investors shall not be deemed to be an Affiliate of any Group Company.
“Board” shall mean the board of directors of the Company.
“Business Day” shall mean any day other than a public holiday, Saturday, Sunday or a day on which commercial banks are required or authorized by applicable Laws or executive order to be closed in the Cayman Islands, Hong Kong or the PRC by applicable Laws.
“Class A Ordinary Shares” means the class A ordinary shares, par value US$0.0001 per share of the Company, with the rights and privileges as set forth in the Restated M&A (as amended from time to time).
“Class B Ordinary Shares” means the class B ordinary shares, par value US$0.0001 per share of the Company, with the rights and privileges as set forth in the Restated M&A (as amended from time to time).
“Closing” shall have the meaning set forth in Section 2.2(a).
“Company Intellectual Properties” shall have the meaning set forth in Section 9 of the representations and warranties of the Warrantors as attached as Exhibit B hereto.
“Company Registered IP” means all Intellectual Property for which registrations are owned by or held in the name of, or for which applications have been made in the name of, any Group Company.
“Company” shall mean Hesai Group.
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“Consent” shall mean any consent, approval, authorization, release, waiver, permit, grant, franchise, concession, license, exemption or order of, registration, certificate, declaration or filing with, or report or notice to, any Person, including any Governmental Authority.
“Control” shall mean, with respect to any Person, the power or authority, whether exercised or not, to direct the business, management and policies of a Person, directly or indirectly, whether through the ownership of voting securities, contractual arrangement or otherwise, which 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 the board of directors or similar governing body of such Person; and the terms “Controlled” and “Controlling” shall have the meaning correlative to the foregoing.
“Circular 37” shall mean the Circular on Issues Relating to the Administration of Foreign Exchange of Offshore Investment and Financing through Special Purpose Vehicles and Round-Tripping Investment by PRC Resident (《国家外汇管理局关于境内居民通过特殊目的公司境外投融资及返程投资外汇管理有关问题的通知》[汇发(2014)37号]) issued by the SAFE on July 4, 2014 with effect from July 4, 2014, and any implementation, successor rule or regulation under the PRC Laws.
“Disclosing Party” shall have the meaning set forth in Section 9.4.
“ESOP” shall mean the employee share option plan of the Company to be adopted and such other arrangements, contracts, or plans as are recommended by management and approved by the Board of the Company.
“Environmental, Health and Safety Laws” means any and all applicable Laws that: (i) relate to the pollution or protection of the environment (including air; surface water; groundwater and water in pipe, drainage or sewerage systems; land surface or sub-surface strata); (ii) prohibit, regulate, or control any hazardous material or any hazardous material activity; or (iii) relate to the health or safety of employees, workers, occupiers, invitees or other Persons.
“Equity Securities” shall mean, with respect to any Person that is a legal entity, any and all shares of capital stock, membership interests, units, profits interests, ownership interests, equity interests, registered capital, and other equity securities of such Person, and any right, warrant, option, call, commitment, conversion privilege, preemptive right or other right to acquire any of the foregoing, or security convertible into, exchangeable or exercisable for any of the foregoing, or any contract providing for the acquisition of any of the foregoing.
“Financial Statements Date” shall have the meaning set forth in Section 6 of the representations and warranties of the Warrantors as attached as Exhibit B hereto.
“Financial Statements” shall have the meaning set forth in Section 6 of the representations and warranties of the Warrantors as attached as Exhibit B hereto.
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“Founder Holdcos” shall collectively mean Rock Ocean Limited, Asian LBJ Limited, Balamb Limited, Fermat Star Limited, ALBJ Limited and Galbadia Limited, and “Founder Holdco” shall mean any of them.
“Founders” shall mean collectively Mr. Kai Sun, Mr. Yifan Li and Mr. Shaoqing Xiang, and “Founder” shall mean any of them.
“Governmental Authority” shall mean any nation or government, or any federation, province or state or any other political subdivision thereof; any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any government authority, agency, department, board, commission or instrumentality of the Cayman Islands, Hong Kong, the PRC or any other country, or any political subdivision thereof, any court, tribunal or arbitrator, and any self-regulatory organization.
“Group Companies” shall mean the Company, the HK Company, the PRC Companies, the US Companies, together with each Subsidiary of any of the foregoing from time to time (each a “Group Company”), unless the text specifically indicates otherwise.
“HK Company” shall mean Hesai Hong Kong Limited.
“HKIAC” shall have the meaning set forth in Section 10.12(b).
“Hong Kong” shall mean the Hong Kong Special Administrative Region of the PRC.
“Indemnifiable Loss” means, with respect to any Person, any action, claim, cost, damage, disbursement, expense, liability, loss, obligation, penalty, settlement, suit, or Tax of any kind or nature, together with all interest, penalties, legal, accounting and other professional fees and expenses reasonably incurred in the investigation, collection, prosecution and defense of claims and amounts paid in settlement, that may be imposed on or otherwise incurred or suffered by such Person, directly or indirectly.
“Indemnified Parties” shall have the meaning set forth in Section 8.3(i).
“Indemnitee” shall have the meaning set forth in Section 8.2.
“Intellectual Property” means any and all (i) patents, patent rights and applications therefor and reissues, reexaminations, continuations, continuations-in-part, divisions, and patent term extensions thereof, (ii) inventions (whether patentable or not), discoveries, improvements, concepts, innovations and industrial models, (iii) registered and unregistered copyrights, copyright registrations and applications, mask works and registrations and applications therefor, author’s rights and works of authorship (including artwork, software, computer programs, source code, object code and executable code, firmware, development tools, files, records and data, and related documentation), (iv) URLs, web sites, web pages and any part thereof, (v) technical information, know-how, trade secrets, drawings, designs, design protocols, specifications, proprietary data, customer lists, databases, proprietary processes, technology, formulae, and algorithms and other intellectual property, (vi) trade names, trade dress, trademarks, domain names, service marks, logos, business names, and registrations and applications therefor, and (vii) the goodwill symbolized or represented by the foregoing.
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“Key Parties” shall mean collectively all the Founders and the Founder Holdcos, and “Key Party” shall mean each of them.
“Knowledge” means, for each of the Warrantors, the actual knowledge of any of the Warrantors, and any knowledge which should have been acquired by any of such Persons after making such due inquiry and exercising such due diligence as a prudent business person would have made or exercised in the management of their business affairs, including but not limited to due inquiry of all officers, directors, consultants and professional advisers (including attorneys, accountants and auditors) of the Group and of its Affiliates who could reasonably be expected to have knowledge of the matters in question.
“Law” shall mean any and all provisions of any applicable constitution, treaty, statute, law, regulation, ordinance, code, rule, or rule of common law, any governmental approval, concession, grant, franchise, license, agreement, directive, requirement, or other governmental restriction or any similar form of decision of, or determination by, or any formally issued written interpretation or administration of any of the foregoing by, any Governmental Authority, in each case as amended, and any and all applicable governmental orders.
“Liabilities” or “Liability” shall mean, with respect to any Person, all debts, obligations, liabilities owed by such Person of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become due.
“Lien” shall mean any claim, charge, easement, security interest, lien, pledge, rights of others, or restriction (whether on voting, sale, transfer, disposition or otherwise) or other encumbrances, whether imposed by contract, understanding, Law or otherwise.
“Material Adverse Effect” shall mean, any (a) event, occurrence, fact, condition, existing or potential dispute, change or development that has had, has, or could reasonably be expected to have, individually or together with other events, occurrences, facts, conditions, changes or developments, a material adverse effect on the business, properties, operations, results of operations, financial condition, assets or liabilities of the Company or any other Group Company that shall have caused an actual loss in excess of US$5,000,000, (b) material impairment of the ability of any Party (other than the Series D Investor) to perform any of its respective material obligations (including but not limited to the performance of the material obligations of such Party under any Transaction Documents, and the implementation and completion of Reorganization Plan), or (c) material impairment of the validity or enforceability of this Agreement or any other Transaction Document against any Party hereto or thereto (other than the Series D Investor).
“Material Contract” or “Material Contracts” shall have the meaning set forth in Section 10 of the representations and warranties of the Warrantors as attached as Exhibit B hereto.
“Non-Disclosing Parties” shall have the meaning set forth in Section 9.4.
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“Ordinary Shares” shall mean the Class A Ordinary Shares and the Class B Ordinary Shares, with the rights and privileges as set forth in the Restated M&A (as amended from time to time).
“ODI Formalities” shall mean all of the filing and/or approval formalities that are required to be completed by the PRC Series D Investor with the relevant PRC Governmental Authorities and/or the relevant banks in connection with its outbound investment in the Company and the remittance of its Purchase Price.
“ODI Rules and Regulations” shall mean the Administrative Measures for the Outbound Investment of Enterprises (《企业境外投资管理办法》[中华人民共和国国家发展和改革委员会令第11号]) issued by the National Development and Reform Commission (the “NDRC”) on December 26, 2017 with effect from March 1, 2018, the Administrative Measures for Outbound Investment (《境外投资管理办法》 [商务部令2014年第3号]) issued by the Ministry of Commerce (the “MOC”) on September 6, 2014 with effect from October 6, 2014, the Administrative Provisions on Foreign Exchange of the Outbound Direct Investments of Domestic Institutions (《境内机构境外直接投资外汇管理规定》 [汇发[2009]30号]) issued by the SAFE on July 13, 2009 with effect from August 1, 2009, and any implementation, successor rule or regulation under the PRC Laws.
“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 Companies” shall mean collectively Shanghai Hesai and Shanghai Hesai Trading Co., Ltd. (上海禾赛贸易有限公司), and “PRC Company” shall mean either of them.
“PRC” shall mean the People’s Republic of China, but solely for purposes of this Agreement and the other Transaction Documents, excluding the Hong Kong Special Administrative Region, the Macau Special Administrative Region and the Islands of Taiwan.
“Principal Business” means the development and manufacture of LiDAR and remote methane leak detector.
“Restated M&A” shall mean the amended and restated memorandum and articles of association of the Company in the form attached as Exhibit A hereto, as amended from time to time.
“RMB” shall mean the lawful currency of the PRC.
“Reorganization Plan” shall mean the steps and transactions as contemplated in Schedule C attached hereto.
“SAFE” shall mean the State Administration of Foreign Exchange of the PRC (including its local counterpart) or, with respect to any matter to be submitted for examination and approval by or for registration with the State Administration of Foreign Exchange of the PRC, any Governmental Authority which is delegated or authorized by the State Administration of Foreign Exchange of the PRC to examine and approve or to effect the registration of such matter under the Laws of the PRC.
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“SAFE Rules and Regulations” means collectively, the Circular 37 and any other applicable SAFE rules and regulations.
“Securities Act” shall mean the U.S. Securities Act of 1933, as amended from time to time.
“Subsidiary” or “subsidiary” shall mean, with respect to any given Person, any other Person that is Controlled directly or indirectly by such given Person.
“Tax Return” shall mean any return, report or statement showing Taxes, used to pay Taxes, or required to be filed with respect to any Tax (including any elections, declarations, schedules or attachments thereto, and any amendment thereof), including any information return, claim for refund, amended return or declaration of estimated or provisional Tax.
“Tax” shall mean all forms of taxation, deductions, withholdings, duties, imposts, levies, fees, charges and rates imposed, levied, collected, withheld or assessed by competent tax Governmental Authority and any interest, additional taxation, penalty, surcharge or fine in connection therewith.
“Transaction Documents” shall mean this Agreement, the Restated M&A and the exhibits attached to either of the foregoing.
“US Companies” shall mean collectively Hesai Inc. and Oxigraf, Inc., and “US Company” shall mean either of them.
“US$” shall mean the lawful currency of the United States of America.
“Warrantors” shall mean the Key Parties, the Company, the HK Company and Shanghai Hesai, and “Warrantor” means any one of them.
1.2 Exhibits and Schedules. The following annex, schedule and exhibits are a part of this Agreement and hereby are deemed incorporated herein by reference:
Schedule A-1 | Key Parties | |
Schedule A-2 | Series D Investors and Co-Investors | |
Schedule B | Capitalization Table | |
Schedule C | Reorganization Plan | |
Schedule D | Notices | |
Schedule E | Disclosure Schedule | |
Exhibit A | Form of Restated M&A | |
Exhibit B | Representations and Warranties of Warrantors |
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2. AGREEMENT TO PURCHASE AND SELL SHARES AT THE CLOSING.
2.1 Agreement to Purchase and Sell. Subject to and upon the terms and conditions hereof, the Company agrees to issue and sell to each Series D Investor, and each Series D Investor agrees to purchase from the Company, at the Closing (as defined in Section 2.3(b)), that number of Class B Ordinary Shares set forth opposite such Series D Investor’s name under the heading “Number of Ordinary Shares” (the “Purchased Shares”), at an aggregate purchase price set forth opposite such Series D Investor’s name under the heading “Purchase Price” (the “Purchase Price”) in Schedule A-2 attached hereto. If the Purchase Price of US$70,000,000 to be paid by the PRC Series D Investor upon Closing shall be in excess of RMB490,000,000 based on the exchange rate of RMB against US$ applicable to the Closing Date, the Purchase Price payable by the PRC Series D Investor shall be adjusted to the equivalent amount of RMB490,000,000 and the number of Purchased Shares of the PRC Series D Investor shall be adjusted accordingly.
2.2 Convertible Loan. Subject to and upon the terms and conditions hereof, the US Series D Investor agrees to provide the Company with such amount of loan set forth opposite its name under the heading “Convertible Loan” (the “Convertible Loan”) in Schedule A-2 attached hereto, at the CB Closing (as defined in Section 2.3(a)).
2.3 Closing.
(a) The advance of the Convertible Loan by the US Series D Investor pursuant to Section 2.2 (the “CB Closing”) shall take place remotely via the exchange of documents and signatures by electronic transmission in PDF format as soon as practicable but no later than the tenth (10th) Business Day following the date on which all the conditions precedent set forth in Section 5.1 (other than those conditions to be satisfied at the CB Closing, but subject to the satisfaction or waiver thereof at the CB Closing) have been satisfied or waived, or at such other time and places as the Company and the US Series D Investor may mutually agree upon (the “CB Closing Date”).
(b) The consummation of the purchase and sale of the Class B Ordinary Shares to the Series D Investors pursuant to Section 2.1 (the “Closing”) shall take place remotely via the exchange of documents and signatures by electronic transmission in PDF format as soon as practicable but no later than the third (3rd) Business Day following the date on which all of the conditions precedent set forth in Section 5.2 and Section 6 (other than those conditions to be satisfied at the Closing, but subject to the satisfaction or waiver thereof at the Closing) have been satisfied or waived, or at such other time and place as the Company and the Series D Investors may mutually agree upon (the “Closing Date”). For avoidance of any doubt, upon the US Series D Investor receiving each of the documents set forth in Section 2.5 and subject to the satisfaction or waiver of all of the conditions precedent set forth in Section 5.2 and Section 6, the Closing for the transactions of subscribing for Purchased Shares by the US Series D Investor shall be deemed as automatically occurred and the date on which the Closing occurred shall be the Closing Date. The Company’s capitalization table immediately prior to and upon the Closing (on a fully-diluted and as-converted basis) shall be as set forth in Part I and Part II of Schedule B, respectively.
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(c) At the Closing, the Company shall issue to the concerned Series D Investor that number of Class B Ordinary Shares in the amount as set forth opposite to such Series D Investor’s name under the heading “Number of Ordinary Shares” in Schedule A-2.
(d) The obligations and rights of each Series D Investor to consummate the Closing under this Section 2.3 shall be independent from the obligations and rights of the other Series D Investor to consummate the Closing, and shall not be affected by the other Series D Investor’s failure to consummate the Closing pursuant to the terms of this Agreement. Nothing contained herein or in any other Transaction Documents, and no action taken by any Series D Investor pursuant hereto or thereto, shall be or shall be deemed to constitute a partnership, association, joint venture, or joint group with respect to the other Series D Investors. Each Series D Investor agrees that no other Series D Investor has acted as an agent for such Series D Investor in connection with the transactions contemplated hereby.
2.4 Deliveries at the CB Closing. At the CB Closing,
(a) the Company shall deliver the following items to the US Series D Investor: a closing certificate dated as of the CB Closing Date signed by the Founders, the Company and Shanghai Hesai, certifying that all of the conditions set forth in Section 5.1 have been fulfilled, and all supporting documents with respect to the satisfaction of such conditions except for those that have been provided to the US Series D Investor earlier; and
(b) the US Series D Investor shall advance the Convertible Loan set forth opposite the name of the US Series D Investor in Schedule A-2 by wire transfer of immediately available funds in U.S. dollars to a bank account designated in writing by the Company at least five (5) Business Days prior to the CB Closing, and provide the Company with a copy of the remittance receipt or other evidencing document which shows the respective Convertible Loan having been transferred to the bank account designated by the Company in full amount.
2.5 Deliveries at the Closing. At the Closing,
(a) the Company shall deliver the following items to the Series D Investors:
(i) a copy of the register of members of the Company reflecting the issuance of the Class B Ordinary Shares to such Series D Investor pursuant to Section 2.1, certified by the registered agent of the Company to be a true and complete copy thereof;
(ii) a copy of the share certificate to each Series D Investor representing the Class B Ordinary Shares being purchased by such Series D Investor, with the original (duly signed for and on behalf of the Company) to be delivered to such Series D Investor within ten (10) Business Days after the Closing;
(iii) a closing certificate dated as of the Closing Date signed by the Founders, the Company and Shanghai Hesai, certifying that all of the conditions set forth in Section 5.2 have been fulfilled;
(iv) all supporting documents with respect to the satisfaction of the conditions set forth in Section 5.2 except for those that have been provided to such Series D Investor earlier;
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(v) a copy of the new business license of Shanghai Hesai evidencing Shanghai Hesai has been altered into a wholly owned subsidiary of the HK Company;
(vi) a copy of each of the Reorganization Documents (as defined in Schedule C) duly signed by the parties thereto; and
(b) at the Closing,
(i) in respect of the US Series D Investor, the principal amount under the Convertible Loan shall automatically be converted into certain Class B Ordinary Shares as set forth opposite the US Series D Investor’s name under the heading “Number of Ordinary Shares” in Schedule A-2 attached hereto, and the respective Purchase Price payable by the US Series D Investor shall be deemed paid off upon such automatic conversion; and
(ii) in respect of the PRC Series D Investor, the PRC Series D Investor shall pay the Purchase Price set forth opposite the PRC Series D Investor in Schedule A-2 for the Class B Ordinary Shares by wire transfer of immediately available funds in U.S. dollars to a bank account designated in writing by the Company at least five (5) Business Days prior to the Closing, and provide the Company with a copy of the remittance receipt or other evidencing document which shows the Purchase Price has been transferred to the bank account designated by the Company in full amount.
3. REPRESENTATIONS AND WARRANTIES OF THE WARRANTORS.
Except as otherwise disclosed in the Disclosure Schedule attached hereto as Schedule E (“Disclosure Schedule”), the Warrantors hereby jointly and severally represent and warrant to the Series D Investors that the statements contained in Exhibit B attached hereto are true, correct and complete as of the date hereof, the CB Closing Date and the Closing Date.
4. REPRESENTATIONS AND WARRANTIES OF THE SERIES D INVESTORS.
Each Series D Investor hereby severally but not jointly represents and warrants to the Company that the representations and warranties as follows are true, correct and complete as of the date hereof, the CB Closing Date and the Closing Date:
4.1 Organization, Good Standing and Qualification. Such Series D Investor is duly organized, validly existing and in good standing under, and by virtue of, the Laws of the place of its incorporation or establishment.
4.2 Authorization. Such Series D Investor has all requisite power and authority to enter into this Agreement and the other Transaction Documents to which it is a party, and each of the Transaction Documents to which it is a party, when executed and delivered by such Series D Investor, will constitute a valid and legally binding obligation of such Series D Investor, enforceable against it in accordance with its terms, except subject to enforcement of remedies, to applicable bankruptcy, insolvency, moratorium, reorganization and similar Laws affecting creditors’ rights generally and to general equitable principles.
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4.3 Purchase for Own Account. The Class B Ordinary Shares will be acquired for such Series D Investor’s 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.
4.4 Compliance with Applicable Laws. Unless otherwise expressly provided herein, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local Governmental Authority is required on the part of such Series D Investor in connection with the consummation of the transactions contemplated by this Agreement.
5. CONDITIONS TO THE SERIES D INVESTORS’ OBLIGATIONS.
5.1 Conditions to the US Series D Investor’s Obligations at the CB Closing. The obligation of the US Series D Investor to advance the Convertible Loan to the Company at the CB Closing is subject to the satisfaction, on or prior to the CB Closing, of the following conditions, any of which may be waived in writing by the US Series D Investor in its sole discretion:
(a) Representations and Warranties. The representations and warranties made by the Warrantors in Section 3 and Exhibit B hereof shall be true, correct and complete in all material respects (or, if qualified by materiality, true and correct in all respects) as of the date hereof and the CB Closing Date, with the same force and effect as if they had been made on and as of such date, except for those representations and warranties that address matters only as of a particular date, which representations and warranties will have been true, correct and complete in all material respects as of such particular date.
(b) Performance of Obligations. Each Warrantor shall have performed and complied in all material respects with all covenants, agreements, obligations and conditions that are required under the Transaction Documents to be performed or complied with by it on or prior to the CB Closing.
(c) Consents and Authorizations. All Consents, including without limitation permits, consents, approvals, resolutions or authorizations of any competent Governmental Authority that the Company and Shanghai Hesai shall obtain in connection with the consummation of the transactions contemplated on or before the CB Closing under this Agreement and the other Transaction Documents shall have been duly signed, obtained and effective as of the CB Closing.
(d) Proceedings and Documents. All corporate and other proceedings in connection with the execution, delivery and performance of each of the Transaction Documents, the borrowing of the Convertible Loan at the CB Closing, the provision of relevant guarantee by Shanghai Hesai and Founders pursuant to Section 7.2(iii), the issuance and sale of the Class B Ordinary Shares at the Closing, the consummation of transactions contemplated under this Agreement, and the implementation of the Reorganization Plan (including all resolutions of the shareholders and the Board of the Company and the resolutions of the shareholders and the board of directors of Shanghai Hesai) shall have been completed, and the US Series D Investor shall have received all such copies of the resolutions..
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(e) Execution of this Agreement. Each of the parties to this Agreement, other than the Series D Investors, shall have executed and delivered this Agreement to the Series D Investors.
(f) No Prohibition. There shall not be in effect any applicable Law enacted, entered into, promulgated, enforced or otherwise issued or court order or other legal restraint or prohibition restraining, enjoining, preventing or making illegal the consummation of the transactions contemplated under the Transaction Documents and there shall not be any pending or threatened Action by any Governmental Authority seeking to restrain, enjoin, prevent or make illegal the consummation of such transactions.
(g) No Material Adverse Effect. There shall have been no Material Adverse Effect on the business, operation, assets, liabilities, or the financial conditions of the Group Company since the Financial Statements Date.
(h) Pre-CB Closing Steps of Reorganization Plan. The steps of the restructuring specified in the Reorganization Plan which shall be completed on or prior to the CB Closing shall have been completed to the reasonable satisfaction of the Series D Investor, and all supporting documents shall have been provided to the Series D Investor.
5.2 Conditions to the Series D Investors’ Obligations at the Closing. Subject to Section 2.3(b), the obligation of each Series D Investor to purchase the Class B Ordinary Shares at the Closing is subject to the satisfaction, on or prior to the Closing, of the following conditions, any of which may be waived in writing by such Series D Investor in its sole discretion (for the avoidance of doubt, if either Series D Investor does not proceed with the Closing due to the failure of the fulfillment and satisfaction of any condition in Section 5.2, the other Series D Investor shall have the right to waive such condition and proceed with the Closing):
(a) Representations and Warranties. The representations and warranties made by the Warrantors in Section 3 and Exhibit B hereof shall be true, correct and complete in all material respects (or, if qualified by materiality, true and correct in all respects) as of the date hereof and the Closing Date, with the same force and effect as if they had been made on and as of such date, except for those representations and warranties that address matters only as of a particular date, which representations and warranties will have been true, correct and complete in all material respects as of such particular date.
(b) Performance of Obligations. Each Warrantor shall have performed and complied in all material respects with all covenants, agreements, obligations and conditions that are required under the Transaction Documents to be performed or complied with by it on or prior to the Closing.
(c) Consents and Authorizations. All Consents, including without limitation permits, consents, approvals, resolutions or authorizations of any competent Governmental Authority that the Company and Shanghai Hesai shall obtain in connection with the consummation of the transactions contemplated under this Agreement and the other Transaction Documents shall have been duly signed, obtained and effective as of the Closing.
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(d) Restated M&A. The Restated M&A shall have been duly adopted by all necessary actions of the Board and shareholders of the Company.
(e) Transaction Documents. Each of the parties to the Transaction Documents, other than the Series D Investors, shall have executed and delivered such Transaction Documents (as for the Restated M&A, in the form and substance attached as Exhibit A) to the Series D Investors.
(f) Reorganization. Shanghai Hesai shall have been 100% owned by the HK Company pursuant to the Reorganization Plan, and a copy of the new business license of Shanghai Hesai and the registration of alteration of foreign exchange evidencing its alteration into a wholly owned subsidiary of the HK Company shall have been provided to the Series D Investors. Each of the Reorganization Documents shall have been executed to the reasonable satisfaction of the Series D Investors, and the copy of such Reorganization Documents shall have been delivered to the Series D Investors.
(g) No Prohibition. There shall not be in effect any applicable Law enacted, entered into, promulgated, enforced or otherwise issued or court order or other legal restraint or prohibition restraining, enjoining, preventing or making illegal the consummation of the transactions contemplated under the Transaction Documents and there shall not be any pending or threatened Action by any Governmental Authority seeking to restrain, enjoin, prevent or make illegal the consummation of such transactions.
(h) Completion of ODI Formalities. In respect of the transactions of subscribing for Purchased Shares by the PRC Series D Investor only, the PRC Series D Investor shall have completed the ODI Formalities required for its outbound investment in the Company and the remittance of its Purchase Price.
(i) No Material Adverse Effect. There shall have been no Material Adverse Effect on the business, operation, assets, liabilities, or the financial conditions of the Group Company since the Financial Statements Date.
6. CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSING.
The obligation of the Company to issue and sell the Class B Ordinary Shares to each Series D Investor at the Closing is subject to the satisfaction, on or prior to the Closing, of the following conditions, any of which may be waived in writing by the Company in its sole discretion:
6.1 Representations and Warranties. The representations and warranties made by such Series D Investor in Section 4 hereof shall be true, correct and complete in all material respects as of the date hereof and as of the Closing, with the same force and effect as if they had been made on and as of such date, except for those representations and warranties that address matters only as of a particular date, which representations and warranties will have been true, correct and complete in all material respects as of such particular date.
6.2 Performance of Obligations. Such Series D Investor shall have performed and complied with all covenants, agreements, obligations and conditions that are required under the Transaction Documents to be performed or complied with by it on or prior to the Closing.
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6.3 Transaction Documents. Each of the Transaction Documents, to which such Series D Investor is a party, shall have been duly executed and delivered by such Series D Investor.
6.4 Completion of ODI Formalities. In respect of the transactions of subscribing for Purchased Shares by the PRC Series D Investor only, the PRC Series D Investor shall have completed the ODI Formalities required for its outbound investment in the Company and the remittance of its Purchase Price.
7. COVENANTS OF THE WARRANTORS.
7.1 Pre-Closing Covenants.
(i) Satisfaction of Conditions. The Parties shall use their respective commercially reasonable efforts to satisfy (or cause the satisfaction of) all the closing conditions to the consummation of the transactions under this Agreement as soon as practicable after the date of this Agreement.
(ii) Information. From the date hereof until the Closing, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (a) the Group Company shall promptly notify the Series D Investors of any Action commenced or threatened in writing against any Warrantors, and (b) the Group Company shall promptly notify the Series D Investors of any breach, violation or non-compliance by any Warrantors (as the case may be) of any representation, warranty or covenant made by any Warrantors (as the case may be) hereunder.
(iii) Conduct of Business. From the date of this Agreement until the Closing, the Warrantors shall ensure that the Group Companies’ business shall be carried out in the ordinary course consistent with past practice and in substantially the same manner as conducted prior to the date hereof.
7.2 Convertible Loan.
(i) Purchase of the Equity Securities of Shanghai Hesai. Notwithstanding anything to the contrary in this Agreement and other Transaction Documents, if the Closing fails to occur within seventy (70) days after the CB Closing, each Series D Investor shall have the right to issue a written notice (the “Requesting Notice”) to Shanghai Hesai requesting to purchase the equity interests of Shanghai Hesai based on the pre-money valuation of Shanghai Hesai of US$1,650,000,000 (on a fully-diluted and as-converted basis) at the same Purchase Price and upon other terms and conditions as same as those for the transactions contemplated hereby (the “Onshore Share Purchase”). Each Warrantor shall, and shall cause the other existing shareholders of Shanghai Hesai at that time to take or cause to be taken all action, to do or cause to be done, to execute such further instruments and documents, and to assist and cooperate with any other parties in doing, all things necessary, proper or advisable under and in accordance with all applicable Laws or otherwise (i) to issue equity interests of Shanghai Hesai to such Series D Investor (or its Affiliates) pursuant to the Onshore Share Purchase, provided that, in respect of the PRC Series D Investor, the PRC Series D Investor shall have paid the Purchase Price to Shanghai Hesai, (ii) to complete and obtain all Consents, including without limitation permits, consents, approvals, resolutions or authorizations of any competent Governmental Authority that Shanghai Hesai shall obtain in connection with the consummation of the Onshore Share Purchase. All costs, expenses, charges, compensations, indemnifications, tax, fees associated with the Onshore Share Purchase and charged by any Governmental Authority shall be borne by Shanghai Hesai. After the US Series D Investor or its Affiliates being registered as the shareholder of Shanghai Hesai by the competent Governmental Authority regarding its Onshore Share Purchase (the “Registration of Onshore Share Purchase”), the Company shall repay the principal of the Convertible Loan to the US Series D Investor in a lump sum or in installments, provided that the total amount of the principal of such Convertible Loan shall be repaid within twelve (12) months after the Registration of Onshore Share Purchase, and the US Series D Investor (or its Affiliates) shall pay such amount repaid by the Company to Shanghai Hesai as the consideration for the Onshore Share Purchase. Shanghai Hesai shall not request the US Series D Investor, and the US Series D Investor shall not be under any obligation, to make any payment of any purchase price of the Onshore Share Purchase, unless the US Series D Investor has received the equivalent amount repaid by the Company (or by Shanghai Hesai or Founders pursuant to Section 7.2(iii) hereunder) to it.
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(ii) Repayment of the Convertible Loan. If the US Series D Investor (or its Affiliates) fails to be registered as the shareholder of Shanghai Hesai by the competent Governmental Authority in accordance with the aforesaid terms and conditions in Section 7.2(i) due to any reason not attributable to the US Series D Investor and the Group Companies and the US Series D Investor fails to reach an alternative arrangement within two (2) month following the date of the Requesting Notice, the US Series D Investor shall be entitled to choose (a) requesting the immediate repayment of the principal of the Convertible Loan and interest accrued on the Convertible Loan on a daily basis calculated based on a simple rate of 8% per annum from the date of the advancement of the Convertible Loan to its repayment date within thirty (30) days upon receipt of such request of repayment, or (b) requesting the Warrantors to proceed with the consummation of the Onshore Share Purchase (for the avoidance of doubt, if the Onshore Share Purchase has not been consummated within three (3) months after requested by the US Series D Investor, the US Series D Investor shall always be entitled to choose item (a) even if it chooses item (b) in the first place). For avoidance of any doubts, (A) the US Series D Investor shall not request and the Warrantors shall not be liable to the repayment of the Convertible Loan or the interest accrued thereon (if any) except as so provided in this Section 7.2, (B) if the Closing occurs or the Onshore Share Purchase consummates in accordance with the terms and conditions set forth in this Agreement and other Transaction Documents, the Convertible Loan shall bear no interest.
(iii) Guarantee. Shanghai Hesai and the Founders shall guarantee the repayment of the principal of the Convertible Loan set forth in Section 7.2(i) and the repayment of the Convertible Loan and the interest accrued thereon set forth in Section 7.2(ii). For avoidance of any doubts, the US Series D Investor shall first require Shanghai Hesai to take its guarantee liabilities and the Founder shall only take its guarantee liability under the circumstance that Shanghai Hesai fails to repay or fully repay the Convertible Loan and the interest accrued thereon.
7.3 Use of Proceeds. Save as contemplated by this Agreement or otherwise agreed by Parties, the Convertible Loan and/or the proceeds of the sale of the Class B Ordinary Shares shall be used for the business expansion, capital expenditures and general working capital of the Group Companies during the ordinary course of business (including the Principal Business). For the avoidance of doubt, the Parties acknowledge and agree that the Group Companies may use the Convertible Loan and/or the proceeds of the sale of the Class B Ordinary Shares to complete the restructuring as stated in the Reorganization Plan set forth in Schedule C hereto.
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7.4 Compliance with Laws. The Group Companies shall, and the Founders shall cause the Group Companies to, conduct their respective business as currently conducted or proposed to be conducted in compliance with all applicable Laws of each relevant jurisdiction in all material respects and obtain and maintain all approvals, permits and licenses necessary for the business of the Company on a continuing basis.
7.5 Additional Post-Closing Covenants.
(i) Filing of the Restated M&A. The Company shall, and the Founders shall cause the Company to, have the Restated M&A duly filed with and stamped by the Registrar of Companies of the Cayman Islands within ten (10) Business Days after the Closing.
(ii) Option Pool. Immediately upon, or as soon as practicable, after the Closing, the Company shall reserve 9,232,974 Class B Ordinary Shares (as appropriately adjusted for share splits, share dividends, combinations, recapitalizations and similar events) representing 7% of the outstanding shares of the Company (on a fully diluted and as-converted basis) immediately after the Closing for issuance to the officers, directors, employees, consultants or service providers of the Company in accordance with the ESOP to be duly approved by the Board of the Company after the Closing. The Warrantors further agree that, except for the above, the Company shall not reserve, grant or issue any Equity Securities for employee share option plan or other incentive plan without the approval of the holders of majority voting power of all issued and outstanding Class B Ordinary Shares.
7.6 Implementation of Reorganization Plan.
(i) The Warrantors shall, and shall procure their respective Affiliates to, cooperate in good faith and use their best efforts to cause all reorganization steps as contemplated under the Reorganization Plan set forth in Schedule C to occur and complete as soon as practicable and in any event within seventy (70) days after the CB Closing.
(ii) In furtherance of, and without limiting the foregoing, each Warrantor agrees to take or cause to be taken all action, to do or cause to be done, to execute such further instruments, and to assist and cooperate with any other parties in doing, all things necessary, proper or advisable under and in accordance with all applicable Laws (including without limitation, SAFE Rules and Regulations, ODI Rules and Regulations and any other applicable PRC Laws) or otherwise to consummate and make effective, in the most expeditious manner practicable, any reorganization steps as contemplated under the Reorganization Plan, and to obtain all Consent necessary for the Reorganization Plan.
(iii) Each Series D Investor agrees to provide commercially reasonable assistance, to the extent exercising the rights and fulfilling the obligations as the Convertible Loan provider or the shareholder of the Company, to ensure the completion of the Reorganization Plan. For the avoidance of doubt, each Series D Investor agrees to execute necessary documents and take reasonably necessary actions to cooperate with the Company (i) to issue Class B Ordinary Shares to the existing shareholders of Shanghai Hesai (or their Affiliates), amend the register of members of the Company and issue new share certificate(s) so that the Company’s capitalization table immediately after completion of all reorganization steps under the Reorganization Plan shall be as set forth in Part III of Schedule B; and (ii) to amend the register of directors of the Company to reflect the individuals nominated by the Existing Shareholders (if any), respectively, as the directors of the Board of the Company.
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7.7 Share Transfer Restriction. Unless otherwise approved by the holders of majority voting power of all issued and outstanding Class B Ordinary Shares, the Founder or his Founder Holdcos shall not directly or indirectly transfer, assign, pledge or otherwise dispose of (collectively, “Transfer”) any of their Equity Securities in the Company and Shanghai Hesai (except for the purpose of implementing the Reorganization Plan) until the initial public offering of shares of the Company, except for (a) any transfer of Equity Securities among the Founders or their Founder Holdcos, and (b) any transfer to the parents, children or spouse, or to trusts for the benefits of such Founder for bona fide estate planning purposes, provided that, prior to the completion of such Transfer, each transferee mentioned in the above items (a) and (b) shall have executed a deed of adherence to assume the obligations of such Key Party under this Agreement, with respect to the transferred Equity Securities; provided further, that the Key Party shall remain liable for any breach by its transferee under item (b) of any provision under this Agreement.
7.8 Exclusivity. From the date of the execution of this Agreement and until the earlier of the Closing and the termination of this Agreement pursuant to Section 10.13, the Warrantors shall not, and they shall not permit any of their representatives to, directly or indirectly, initiate, solicit, encourage, respond to, or take any other action to facilitate or participate in any negotiations, overtures, or discussions concerning any offer or proposal or enter into any agreement with respect to, any purchase, sale or transfer (whether in the form of merger, consolidation or otherwise) of any Equity Securities in any Group Company, or of all or substantially all of the assets of any Group Company (the “New Financing”), or transaction similar to the transactions contemplated herein with any party other than the Series D Investors without the affirmative prior written approval of the Series D Investors, except for the purchase and sale of up to 22,666,666 Class B Ordinary Shares to be issued to the Series D Investors and other new investors (the “Co-Investors”) set forth in Schedule A-2 attached hereto, provided that, such issuance shall be based on a purchase price per share that is the same with the Purchase Price per share for the transactions contemplated herein (as adjusted in connection with share splits or share consolidation, reclassification or other similar event) and other same terms and conditions for such transactions contemplated herein (the “Exempted Transactions”). The Warrantors represent, jointly and severally, that none of them is a signatory to or bound by any agreement with respect to any transactions or combinations as described in the preceding sentence other than the Exempted Transaction or as contemplated by this Agreement. Except for those related to the Exempted Transaction, the Company shall notify each Series D Investor of such offer or proposal received by the Warrantors after the execution of this Agreement, and shall provide to each Series D Investor (unless prohibited under applicable law or the terms of a binding non-disclosure agreement) copies of any written materials received in connection with such offer or proposal.
7.9 Full Time Commitment. Each Founder hereby covenants and undertakes that he shall devote one hundred percent (100%) of his working time and attention to the business of the Group Companies.
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7.10 Non-Competition. Each of the Founders hereby undertakes to the Series D Investors that he will not, either on his own account or through any of his Affiliates, directly or indirectly:
(a) until two (2) years after the date on which the Founder ceases to be a shareholder (directly or indirectly) or the date on which the Founder ceases to be a director, officer and employee (either a full-time employee or a part-time employee) of the Group Company, whichever is later (the “Restriction Period”), participate, assist, be involved with, engaged or interested in, any business or entity in any manner, directly or indirectly, which is in competition with the business carried on by any Group Company (including the Principal Business) at any time during the Restriction Period;
(b) during the Restriction Period, solicit in any manner any person who is or has been during the Restriction Period a customer or client of any Group Company for the purpose of offering to such person any goods or services similar to or competing with any of the business conducted by any Group Company (including the Principal Business) at any time during the Restriction Period;
(c) during the Restriction Period, solicit or entice away, or endeavour to solicit or entice away, any employee or officer of any Group Company;
(d) at any time disclose to any person (other than the parties hereto), or use for any purpose, any information concerning the business, accounts, finance, transactions or intellectual property rights of any Group Company or any trade secrets or confidential information of or relating to any of the Group Companies.
8. INDEMNITY.
8.1 Survival of Representations and Warranties. Unless otherwise set forth in this Agreement, the representations and warranties of the Warrantors and the Series D Investors contained in or made pursuant to Section 3 and Section 4 in this Agreement shall survive the execution and delivery of this Agreement for a period of twenty-four (24) months after the Closing. Notwithstanding anything contained herein to the contrary, Section 1 through Section 5, Section 13 and Section 15 of Exhibit B (Representations and Warranties of Warrantors) shall survive until the expiration of the relevant statute of limitations for the matters in question and shall not be affected by any due diligence or investigation by the Series D Investors.
8.2 Indemnification by Warrantors. Each Warrantor hereby agrees to, jointly and severally, indemnify and hold harmless each Series D Investor, and its Affiliates, directors, officers, agents and assigns (each, an “Indemnitee”), from and against any and all Indemnifiable Losses, resulting from, or arising out of or due to (i) any breach of any representation or warranty made by any of the Warrantors in or pursuant to this Agreement; and (ii) any failure by the Warrantors to comply with any covenant or agreement contained in this Agreement or any other Transaction Documents.
8.3 Limitation on Indemnification. Notwithstanding anything to the contrary,
(i) no claim for indemnification may be made pursuant to Section 8.2 unless and until the aggregate amount of Indemnifiable Losses of the relevant Party hereto and its Affiliates, directors, officers, agents and assigns (the “Indemnified Parties”) that may be claimed hereunder exceeds US$500,000 (the “Indemnity Basket”), in which event such indemnification shall be required to the full extent of the Indemnifiable Loss, including the Indemnity Basket;
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(ii) (1) the maximum aggregate liabilities of the Warrantors in respect of all relevant claims under this Agreement and other Transaction Documents brought by any of the Indemnitees is limited to its respective Purchase Price paid by such Series D Investor unless otherwise explicitly provided in Section 7.2 of this Agreement, and (2) the aggregate liabilities for each Key Party in respect of all relevant claims under this Agreement and other Transaction Documents brought by any of the Indemnitees (including the guarantee liabilities under Section 7.2) shall be limited to the market value of all Equity Securities of the Group Companies directly or indirectly then held by such Key Party, and any Indemnitee shall nonetheless seek indemnification from each Founder exclusively through raising claims against the Equity Securities of the Group Companies then directly and indirectly owned by such Founder or the market value of such Equity Securities (for avoidance of doubt, not through acquiring/enforcing any other assets or properties of any Founder). For the purpose of this paragraph (ii) of Section 8.3, the “market value” of the Equity Securities of the Group Companies directly or indirectly then owned by the Key Parties shall be the proceeds actually received by a Key Party through disposing such Equity Securities of the Group Companies in good faith and at arm’s length;
(iii) the Warrantors shall not be liable for any claim if the Indemnifiable Loss caused by such claim has been eliminated or prevented by the Warrantors within thirty (30) Business Days after the date on which the notice from such Indemnitee claiming for indemnity is received by the Warrantors;
(iv) the Warrantors shall not be liable to indemnify any Indemnitee in respect of any claims under this Agreement or other Transaction Documents with respect to any non-compliance with applicable Laws of the Warrantors, to the extent that such claims would not have arisen but for a change in any law, regulation or government decrees promulgated after the Closing; and
(v) with respect to each indemnification obligation contained in this Agreement, all Indemnifiable Losses shall be net of any third-party insurance or indemnity, contribution or similar that have been recovered by the Indemnified Party in connection with the facts giving rise to the right of indemnification, less the costs and expenses incurred in obtaining such recovery.
9. CONFIDENTIALITY AND NON-DISCLOSURE.
9.1 Disclosure of Terms. The terms and conditions of this Agreement, the other Transaction Documents, and all exhibits, restatements and amendments hereto and thereto, including their existence, and the communications in connection with the transactions contemplated hereto (collectively, the “Financing Terms”) 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. Each Series D Investor will keep confidential and will not disclose or divulge, any information which such Series D Investor obtains from the Company, pursuant to financial statements, reports, presentations, correspondence, and any other materials provided by the Company (collectively, the “Company Confidential Information”), unless the information is known, or until the information becomes known, to the public through no fault of such Series D Investor, or unless the Company gives its written consent to such Series D Investor’s release of the information.
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9.2 Press Releases. No announcement regarding any confidential information (including the existence of, and terms of, this Agreement) and the transactions contemplated hereby shall be made in a press release, conference, advertisement, announcement, professional or trade publication, mass marketing materials or otherwise to the general public without the mutual written consent of the Company and the Series D Investors.
9.3 Permitted Disclosures.
(a) Notwithstanding anything in the foregoing to the contrary, any Party may disclose any of the Financing Terms and Company Confidential Information to its current shareholders, directors, officers, investment bankers, accountants, auditors, insurers, business or financial advisors and attorneys, in each case strictly on a need-to-know basis and where such persons or entities are under appropriate non-disclosure obligations imposed by professional ethics, law or otherwise. Each Investor may disclose the existence or content of any of the Financing Terms and Company Confidential Information for fund and inter-fund reporting purposes and any information contained in press releases or public announcements of the Company pursuant to Section 9.2.
(b) The confidentiality obligations set out in this Section 9 do not apply to the information which was in the public domain or otherwise known to the relevant Party before it was furnished to it by another Party hereto or, after it was furnished to that Party, entered the public domain otherwise than as a result of (i) a breach by that Party of this Section 9 or (ii) a breach of a confidentiality obligation by the discloser, where the breach was known to that Party.
9.4 Legally Compelled Disclosure. In the event that any Party is requested or becomes legally compelled (including without limitation pursuant to securities Laws) to disclose the existence or any terms or conditions of this Agreement or any of the exhibits or schedules attached thereto in contravention of the provisions of this Section 9, such Party (the “Disclosing Party”) shall provide the other Parties (the “Non-Disclosing Parties”) with prompt written notice of that fact and where reasonably practicable, shall 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 that is legally required and shall exercise reasonable efforts to keep confidential such information to the extent reasonably requested by any Non-Disclosing Parties.
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9.5 Without the prior written consent of each Series D Investor, and whether or not such Series D Investor is then a shareholder of the Company, none of the Group Companies nor any other Warrantors shall use, publish or reproduce the name, trademarks, trade names, domain names, service marks, business names, or logos of such Series D Investor and its Affiliates, including without limitation the name, trademarks or logos of [investor] or any similar name, trademark or logo in any documents and materials, including without limitation their marketing, advertising or promotion materials or otherwise for any marketing, advertising, promotional purposes or other purposes.
10. MISCELLANEOUS.
10.1 Governing Law. This Agreement shall be governed in all respects by the Laws of the Hong Kong without regard to conflicts of law principles.
10.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, permitted assigns, heirs, executors and administrators of the Parties hereto whose rights or obligations hereunder are affected by such amendments. No Warrantor may assign its rights or delegate its obligations under this Agreement without the prior mutual written consent of the Series D Investors. The rights of each Series D Investor hereunder are assignable (together with the related obligations) to its Affiliates without any written consent of the Parties, provided that such Series D Investor has transferred its Class B Ordinary Shares to such transferee and such transferee agrees in writing to be subject to the terms of each of the Transaction Documents.
10.3 Entire Agreement. This Agreement and any other Transaction Documents together with all the schedules and exhibits hereto and thereto, which are hereby expressly incorporated herein by this reference, constitute the entire understanding and agreement between the Parties with regard to the subjects hereof and thereof. The Parties further agree that if any separate share purchase agreement is executed solely for purpose of applying for any Consent with any Governmental Authority with respect to the transactions contemplated under this Agreement and there is any discrepancy between such share purchase agreement and this Agreement, this Agreement and all schedules and exhibits hereto and thereto shall prevail.
10.4 Notices. Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Agreement shall be in writing and shall be conclusively deemed to have been duly given (a) when hand delivered to the other Party, upon delivery; or (b) three (3) Business Days after deposit with an internationally-recognized overnight delivery service, postage prepaid, addressed to the Parties as set forth in Schedule D with next-business-day delivery guaranteed, provided that the sending Party receives a confirmation of delivery from the delivery service provider; or (c) when sent by e-mail if sent to the address set forth in Schedule D.
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The address of each Party is set forth in Schedule D and a Party may change or supplement the addresses given above, or designate additional addresses, for purposes of this Section 10.4 by giving the other Party written notice of the new address in the manner set forth above.
10.5 Amendments and Waivers. This Agreement may only be amended or modified with the prior written consent of the Company, the Founders and the Series D Investors.
10.6 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any Party upon any breach or default of any other Party hereto under this Agreement, shall impair any such right, power or remedy of the aggrieved Party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Party of any breach or default under this Agreement or any waiver on the part of any Party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to the Parties shall be cumulative and not alternative.
10.7 Fees and Expenses. Except as otherwise provided in this Agreement, the Parties will bear their respective expenses incurred in connection with the negotiation, preparation and execution of this Agreement and other Transaction Documents, including fees and expenses of attorneys, accountants, consultants and financial advisors. Except as otherwise provided in this Agreement, any taxes arising from this Agreement and the other Transaction Documents shall be borne by the Parties pursuant to the applicable tax Laws. Notwithstanding anything in the foregoing to the contrary, if the transaction contemplated hereunder is successfully consummated in accordance with this Agreement or in the event that the conditions precedent to the Closing set forth in Section 5 and Section 6 have been fulfilled but the Company refuses to consummate the transaction contemplated hereunder, the Company shall pay the reasonable fees and expenses incurred by the Series D Investors in connection with the transactions contemplated hereby up to an aggregate amount of RMB 500,000 within seven (7) Business Days after its receipt of written invoices for such fees and expenses.
10.8 Interpretation; Titles and Subtitles. This Agreement shall be construed according to its fair language. The rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not be employed in interpreting this Agreement. 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.
10.9 Counterparts. This Agreement may be executed in one or more counterparts and may be delivered by electronic PDF or facsimile transmission, all of which shall be considered one and the same agreement and each of which shall be deemed an original.
10.10 Severability. Should any provision of this Agreement be determined to be illegal or unenforceable, such determination shall not affect the remaining provisions of this Agreement.
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10.11 Pronouns and etc. 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) 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 permitted transferees, and (e) any reference in this Agreement to any agreement or instrument is a reference to that agreement or instrument as amended or novated.
10.12 Dispute Resolution.
(a) Negotiation between Parties. 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 reasonable satisfaction of the relevant Parties, subsection (b) below shall apply.
(b) Arbitration. In the event the Parties are unable to settle a dispute between them regarding this Agreement in accordance with subsection (a) above, such dispute shall be referred to and finally settled by arbitration at the Hong Kong International Arbitration Centre (the “HKIAC”) in accordance with the HKIAC Administered Arbitration Rules in effect, which rules are deemed to be incorporated by reference into this subsection (b), subject to the following: (i) the arbitration tribunal shall consist of three (3) arbitrators; and (ii) the language of the arbitration shall be Chinese. The complainant and the respondent to such dispute shall each select one (1) arbitrator with the third arbitrator jointly selected by complainant and the respondent within thirty (30) days after the initiation of the arbitration. In the event that either party to the arbitration cannot jointly agree on the third arbitrator within such thirty (30) day period, the Chairman of HKIAC shall appoint such arbitrator. The award of the arbitral tribunal shall be final and binding upon the parties thereto.
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10.13 Termination of Agreement.
(a) This Agreement may be terminated prior to the Closing (i) by mutual written consent of the Parties, (ii) by either Series D Investor with respect to such Series D Investor only, if a material breach of any representations or warranties under Section 3 or failure to perform any material covenants or agreement on the part of any Warrantors, which would cause any of the conditions set forth in Section 5 not to be satisfied and remains uncured within fifteen (15) Business Days after receipt of written notice from such Series D Investor, (iii) by the Company with respect to the concerned Series D Investor only, if a material breach of any representation or warranty under Section 4 or failure to perform any material covenant or agreement on the part of either Series D Investor, which would cause any of the conditions set forth in Section 6 not to be satisfied and remains uncured within fifteen (15) Business Days after receipt of written notice from the Company, (iv) by the Company or the Series D Investor, if due to change of applicable Laws, the consummation of the transactions contemplated hereunder would become prohibited under applicable Laws, (v) by either Series D Investor or the Company, with respect to such Series D Investor only, by written notice to the other Parties if the CB Closing has not occurred upon or before the date that is two (2) months after the date of this Agreement, provided that (A) the right to terminate this Agreement pursuant to this subsection (v) shall not be available to the Company, if the failure of any Warrantor to fulfill or breach by any Warrantor of any obligation under this Agreement has resulted in the failure of the CB Closing to occur, and (B) the right to terminate this Agreement pursuant to this subsection (v) shall not be available to either Series D Investors, if the failure of such Series D Investor to fulfill or breach by such Series D Investor of any obligation under this Agreement has resulted in the failure of the CB Closing to occur, or (vi) by the Company, with respect to the PRC Series D Investor only, if the PRC Series D Investor fails to obtain the ODI Formalities within thirty-seven (37) days after the Domestic Shareholders subject to the ODI Rules and Regulations have obtained their ODI Formalities, provided that, the Company shall first discuss with the PRC Series D Investor regarding applicable alternative arrangement in respect of the subscription of the Purchased Shares by the PRC Series D Investor or its Affiliate, provided further that, if the PRC Series D Investor fails to obtain the ODI Formalities and pay up its Purchase Price to the Company within sixty (60) days following the date on which the Company submits the confidential filling for the initial public offering of its shares with U.S. Securities and Exchange Commission, the Company may terminate this Agreement with respect to the PRC Series D Investor only at its sole discretion.
(b) If this Agreement is terminated against any Party pursuant to the provision of Section 10.13, this Agreement will be of no further force or effect with respect to such Party, provided that no Party shall be relieved of any Liability for a breach of this Agreement or for any misrepresentation hereunder, nor shall such termination be deemed to constitute a waiver of any available remedy (including specific performance if available) for any such breach or misrepresentation; provided however, under the circumstance of above item (v) in Section 10.13(a), the Series D Investor shall have the right to issue a written notice to Shanghai Hesai requesting to purchase the equity interests of Shanghai Hesai based on the pre-money valuation of Shanghai Hesai of US$1,650,000,000 (on a fully-diluted and as-converted basis) at the same Purchase Price and upon other terms and conditions as same as those for the transactions contemplated hereby, and each Warrantor shall, and shall cause the other existing shareholders of Shanghai Hesai at that time to take or cause to be taken all action, to do or cause to be done, to execute such further instruments and documents, and to assist and cooperate with any other parties in doing, all things necessary, proper or advisable under and in accordance with all applicable Laws or otherwise to complete such transaction upon the request of the Series D Investor .
10.14 Survival. The provisions of Section 1 (Definitions), Section 8 (Indemnity), Section 9 (Confidentiality and Non-disclosure), Section 10.1 (Governing Law), Section 10.4 (Notice), Section 10.10 (Severability), Section 10.12 (Dispute Resolution), paragraph (b) of Section 10.13 (Termination of Agreement) and Section 10.14 (Survival) shall survive the expiration or early termination of this Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
THE COMPANY: | ||
Hesai Group | ||
By: | /s/ Yifan Li |
Name: Yifan Li | |
Title: Director |
THE HK COMPANY: | ||
Hesai Hong Kong Limited | ||
By: | /s/ Kai Sun |
Name: Kai Sun | |
Title: Director |
[Signature Page to Class B Ordinary Share Purchase Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
SHANGHAI HESAI: | ||
Shanghai Hesai Technology Co., Ltd. (上海禾赛科技有限公司) (Seal) | ||
By: | /s/ Yifan Li |
Name: Yifan Li | |
Title: Legal Representative | |
Company seal: /s/ Shanghai Hesai Technology Co., Ltd. |
[Signature Page to Class B Ordinary Share Purchase Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
THE FOUNDER HOLDCOS: | ||
Rock Ocean Limited | ||
By: | /s/ Kai Sun | |
Name: Kai Sun | ||
Title: Director | ||
Fermat Star Limited | ||
By: | /s/ Kai Sun | |
Name: Kai Sun | ||
Title: Director | ||
Asian LBJ Limited | ||
By: | /s/ Yifan Li | |
Name: Yifan Li | ||
Title: Director | ||
ALBJ Limited | ||
By: | /s/ Yifan Li | |
Name: Yifan Li | ||
Title: Director |
[Signature Page to Class B Ordinary Share Purchase Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
THE FOUNDER HOLDCOS: | ||
Balamb Limited | ||
By: | /s/ Shaoqing Xiang | |
Name: Shaoqing Xiang | ||
Title: Director | ||
Galbadia Limited | ||
By: | /s/ Shaoqing Xiang | |
Name: Shaoqing Xiang | ||
Title: Director | ||
THE FOUNDERS: | ||
/s/ Kai Sun | ||
Name: Kai Sun | ||
/s/ Yifan Li | ||
Name: Yifan Li | ||
/s/ Shaoqing Xiang | ||
Name: Shaoqing Xiang |
[Signature Page to Class B Ordinary Share Purchase Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
THE SERIES D INVESTOR: | ||
[Name of investor] | ||
By: | ||
Name: | ||
Title: |
[Signature Page to Class B Ordinary Share Purchase Agreement]
Schedule A-1
Key Parties
Founder | Founder Holdco | PRC Identity Number of the Funder |
Mr. Kai Sun |
Rock Ocean Limited, a company established and validly existing under the laws of the British Virgin Islands; and
Fermat Star Limited, a company established and validly existing under the laws of the British Virgin Islands
|
[**********] |
Mr. Yifan Li |
Asian LBJ Limited, a company established and validly existing under the laws of the British Virgin Islands; and
ALBJ Limited, a company established and validly existing under the laws of the British Virgin Islands
|
[**********] |
Mr. Shaoqing Xiang |
Balamb Limited, a company established and validly existing under the laws of the British Virgin Islands; and
Galbadia Limited, a company established and validly existing under the laws of the British Virgin Islands
|
[**********] |
Schedule A-1
Schedule A-2
Series D Investor
Schedule A-2
Schedule B
Capitalization Table
Schedule B
Schedule C
Reorganization Plan
Schedule C
Schedule D
Notices
Schedule D
Schedule E
Disclosure Schedule
Schedule E
Exhibit A
Restated M&A of the Company
Exhibit A
Exhibit B
Representations and Warranties of Warrantors
1. Organization, Good Standing and Qualification.
(a) Each of the Company, the HK Company and the US Companies is duly organized, validly existing and in good standing under, and by virtue of, the Laws of the place of its incorporation or establishment and has all requisite power and authority to own its properties and assets and to carry on its business as now conducted and as presently proposed to be conducted.
(b) Each of the PRC Companies is a company duly organized and validly existing and in good standing under the Laws of the PRC, and has all powers and authority to own its properties and assets and all Consents required to carry on its business as now conducted. Copies of the business license, articles of association, and other organizational documents of each of the PRC Companies, as amended to date, have been delivered to the Series D Investor and are true and correct and are in full force and effect.
2. Due Authorization. All corporate action on the part of the Company and Shanghai Hesai, their respective officers, directors and shareholders necessary for the authorization, execution and delivery of each Transaction Document, the authorization, issuance, reservation for issuance and delivery of all of the Class B Ordinary Shares, and, as applicable, the performance of their respective obligations under each Transaction Document and all other agreements, instruments and documents executed and delivered in connection with the transactions contemplated hereby, shall has been taken. The Transaction Documents are valid and binding obligations of each Warrantor and each party to the Transaction Documents, enforceable in accordance with their respective terms, subject as to enforcement of remedies to applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditors’ rights generally and to general equitable principles. The Class B Ordinary Shares are not subject to any preemptive rights, rights of first refusal, or Liens of any kind except for rights imposed under the Transaction Documents.
3. Capitalization of the Company. The authorized share capital of the Company will consist of the following immediately prior to the Closing:
(i) A total of 500,000,000 Ordinary Shares, 29,033,379 of which shares are issued and outstanding, including (a) 35,000,000 Class A Ordinary Shares, 29,033,379 of which are issued and outstanding immediately prior to the Closing, and (b) 150,000,000 Class B Ordinary Shares, none of which are issued and outstanding immediately prior to the Closing.
(ii) Part II of Schedule B sets forth the capitalization of the Company immediately following the Closing, and Part III of Schedule B sets forth the capitalization of the Company immediately following the completion of Reorganization Plan. Except for the securities, rights and privileges described in Schedule B and the Reorganization Plan, there are no other options, warrants, conversion privileges or other rights or agreements outstanding or under which the Company is or may become obligated to issue any securities of any class or series and none of the Company’s outstanding shares, and no shares issuable upon exercise, conversion, or exchange of any outstanding options or other shares issuable by the Company, are subject to any preemptive rights, rights of first refusal, or other rights to purchase such shares (whether in favor of the Company or any other Person), pursuant to any agreement or commitment to which the Company is a party or of which the Company is aware, except for the rights imposed in the Transaction Documents.
Exhibit B - 1
(iii) The registered capital of Shanghai Hesai as of the date hereof and the Closing Date is set forth in the Reorganization Plan, together with an accurate, up-to-date list of the record and beneficial owner of such registered capital. All historical changes to the registered capital of Shanghai Hesai and historical transfers of equity interest in Shanghai Hesai were made in compliance with the applicable Laws.
4. Subsidiaries. Except for the HK Company, the Company does not presently own or control, directly or indirectly, any interest in any other corporation, partnership, trust, joint venture, association, or any other Person. The Company was formed solely to acquire and hold Equity Securities in the HK Company and since its formation it has not engaged in any business and has not incurred any Liability except in the ordinary course of acquiring, managing and disposing of its Equity Securities in the HK Company. The HK Company was formed solely to acquire and hold the Equity Securities in Shanghai Hesai and since its formation it has no other business, except as contemplated by this Agreement, and has not incurred any Liability other than annual filing, maintenance and other standard fees. Except for the US Companies and Shanghai Hesai Trading Co., Ltd. (上海禾赛贸易有限公司), Shanghai Hesai does not presently own or control, directly or indirectly, any interest in any other corporation, partnership, trust, joint venture, association, or any other Person.
5. Valid Issuance of Shares.
(a) The Class B Ordinary Shares, when issued, sold and delivered in accordance with the terms of this Agreement, will be duly authorized and validly issued, fully paid, non-assessable, and free of any Liens.
(b) All presently outstanding Ordinary Shares of the Company are duly and validly issued, fully paid and non-assessable and free of any Liens, and such Ordinary Shares, and all outstanding shares, options and other securities of the Company, have been issued in full compliance with the requirements of all applicable securities Laws, including without limitation the Securities Act.
6. Financial Statements. The Company has provided the audited consolidated balance sheets, cash flow statements and income statements of the Group Companies as of December 31, 2020 (the “Financial Statements Date”) (item (i) and item (ii), collectively, the “Financial Statements”). Such Financial Statements (a) accord with the books and records of the respective Group Company, (b) are true, correct and complete in all material respects and present fairly the financial condition and state of affairs of the respective Group Company at the date or dates therein indicated and the results of operations for the period or periods therein specified, and (c) have been prepared in accordance with applicable accounting standards applied on a consistent basis.
7. Undisclosed Liabilities. Except for liabilities set forth in the Financial Statements or liabilities which have been incurred in the ordinary course of business consistent with its past practice since the Financial Statements Date, none of the Group Companies has any liabilities of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become due.
Exhibit B -2
8. Changes. Since the Financial Statements Date, each of the Group Companies has (a) operated its business (including the Principal Business), in the ordinary course consistent with its past practice, (b) collected receivables and paid payables and similar obligations in the ordinary course of business consistent with past practice, and (c) not engaged in any new line of business. Since the Financial Statements Date, there has not been any Material Adverse Effect or any material adverse change in the way the Group conducts its business (including the Principal Business).
9. Title to Properties and Assets. Each of the Group Companies has good and valid title to, or a valid leasehold interest in, all of the material assets it uses in the conduct of the Principal Business of the Group Companies, whether real, personal or mixed, tangible or intangible (including all such assets reflected in the Financial Statements), free and clear of all Liens and third-party claims, including any creditors’ rights. None of the Key Parties and the Key Parties’ Affiliates has any interest in the foregoing assets or any assets relevant to, or necessary for the operation of, the Principal Business. Except for leased items, no Person other than a Group Company owns any interest in any such assets. All material machinery, vehicles, equipment and other tangible personal property owned or leased by a Group Company are (a) in good condition and repair (reasonable wear and tear excepted) and (b) not obsolete or in need in of renewal or replacement, except for renewal or replacement in the ordinary course of business. There are no facts or conditions affecting any such assets which could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on the current use, occupancy or operation of such assets. All leases of real or personal property to which a Group Company is a party are fully effective and afford such Group Company valid leasehold possession of the real or personal property that is the subject of the lease.
10. Intellectual Property Rights.
(a) Company Intellectual Properties. The Group Company owns or has the sufficient right (including but not limited to the rights of development, modification, maintenance, licensing, utilization and sale) to all Intellectual Properties necessary and sufficient for the conduct of such Group Company’s Principal Business as currently conducted by such Group Company, and as currently contemplated to be conducted (the “Company Intellectual Property”), without any conflict with or infringement of the rights of any other Person.
(b) All Company Registered IP is owned by and registered or applied for solely in the name of a Group Company, is valid and subsisting and has not been abandoned, and all necessary registration, maintenance and renewal fees with respect thereto and currently due have been satisfied. No Group Company or, to the Knowledge of the Warrantors, any of its employees, officers or directors has taken any actions or failed to take any actions that would cause any Company Intellectual Property to be invalid, unenforceable or not subsisting. No funding or facilities of a Governmental Authority or a university, college, other educational institution or research center was used in the development of any Company Intellectual Property. No Company Intellectual Property is the subject of any Lien, license or other contract granting rights therein to any other Person. No Group Company is or has been a member or promoter of, or contributor to, any industry standards bodies, patent pooling organizations or similar organizations that could require or obligate a Group Company to grant or offer to any Person any license or right to any material Company Intellectual Property. Except as disclosed in Section 10 (b) of the Disclosure Schedule, no Company Intellectual Property is subject to any proceeding or outstanding governmental order or settlement agreement or stipulation that (a) restricts in any manner the use, transfer or licensing thereof, or the making, using, sale, or offering for sale of any Group Company’s products or services, by any Group Company or (b) may affect the validity, use or enforceability of such Company Intellectual Property. Except as disclosed in Section 10 (b) of the Disclosure Schedule, no Group Company has (1) transferred or assigned any Company Intellectual Property, other than transferred or assigned among the Group Companies; (2) authorized the joint ownership of, any Company Intellectual Property; or (3) permitted the rights of any Group Company in any Company Intellectual Property to lapse or enter the public domain.
Exhibit B -3
(c) Except as disclosed in Section 10 (c) of the Disclosure Schedule, (i) none of the Company, Shanghai Hesai and other Group Companies has infringed, misappropriated or otherwise violated, or is infringing, misappropriating or otherwise violating any Intellectual Property of any Person; and (ii) no Person has infringed, misappropriated or otherwise violated, or is infringing, misappropriating or otherwise violating any Company Intellectual Property.
(d) Protection of IP. Each Group Company has taken reasonable and appropriate steps to protect, maintain and safeguard Company Intellectual Property and made all applicable filings, registrations and payments of fees in connection with the foregoing. Without limiting the foregoing. To the extent that any Company Intellectual Property has been developed or created independently or jointly by an independent contractor or other third party for any Group Company, or is incorporated into any products or services of any Group Company, such Group Company has a written agreement with such independent contractor or third party and has thereby obtained ownership of, and is the exclusive owner of all such independent contractor’s or third party’s Intellectual Property in such work, material or invention by operation of Laws or valid assignment.
11. Material Contracts.
(a) Material Contracts and Obligations. Each of the following agreements, contracts, indebtedness, Liabilities, arrangements or other obligations (other than purchase orders and invoices in the ordinary course of business), to which any Group Company is a party or by which any of them or the assets of the Group Companies is bound, shall constitute a material contract (each a “Material Contract,” and collectively the “Material Contracts”) (i) having an aggregate value, cost or amount, Liability in excess of RMB 5,000,000 (or an equivalent amount in another currency), (ii) containing exclusivity, non-competition, or similar clauses that impair, restrict or impose conditions on any Group Company’s right to offer or sell products or services in specified areas, during specified periods, or otherwise, (iii) restricting the ability of a Group Company to compete or to conduct or engage in any business or activity or in any territory, (iv) not in the ordinary course of business, (v) involving the establishment, contribution to, or operation of a partnership, joint venture, alliance or similar entity, or involving a sharing of profits or losses, or any investment in, loan to or acquisition or sale of the securities, Equity Securities or assets of any Person, (vi) with a Governmental Authority, state-owned enterprise, or sole-source supplier of any material product or service (other than utilities) and having an aggregate value, cost or amount, or imposing liability or contingent liability on any Group Company, in excess of RMB 5,000,000, (vii) dealing with legal or beneficial ownership of any Equity Security in any Group Company or the voting power in any Group Company, or (viii) the agreement in relation to the settlement of Action and cross-license of patents executed by and among Shanghai Hesai and Velodyne Lidar, Inc. on June 24, 2020.
Exhibit B - 4
(b) Validity and Status. Each Material Contract is a valid and binding agreement of the Group Company that is a party thereto, the performance of which does not and will not violate any applicable Law or governmental order (or cause a Material Adverse Effect to any Group Company as a result), and is in full force and effect and enforceable against the parties thereto. Each Group Company has duly performed all of its obligations under each Material Contract to the extent that such obligations to perform have accrued, and the Group Company or, to the Knowledge of the Warrantors, any other party or obligor with respect thereto has not, or is not in breach or alleged breach of, or default or alleged default under, any Material Contract.
12. Litigation. There is no Action pending or, to the Knowledge of the Warrantors, currently threatened against any Warrantor or Group Company, any Group Company’s activities, properties or assets or against any director of any Group Company in connection with such officer’s, director’s or employee’s relationship with, or actions taken on behalf of, any Group Company. No Group Company is a party to or subject to the provisions of any order, writ, injunction, judgment or decree of any court or Governmental Authority and there is no Action by any Group Company currently pending or, to the Knowledge of the Warrantors, which it intends to initiate. There is no Action, pending or threatened, that questions the validity of any Transaction Document, or the right of any Group Company or Founders to enter into such agreement, or to consummate the transactions contemplated hereby or thereby or that could, individually or in the aggregate, results in a Material Adverse Effect.
13. Compliance with Laws. Each of the Group Companies is, and has been, in compliance with all Laws applicable to it or its business, properties or assets in all material aspects
14. Governmental Consents. All Consents on the part of the Company and Shanghai Hesai required in connection with the execution, delivery and performance of the Transaction Documents and the consummation of the transactions contemplated herein have been obtained and are currently effective and in consummating such transactions. The offer, sale and issuance of the Class B Ordinary Shares, in conformity with the terms of this Agreement, are exempt from the registration and prospectus delivery requirements of the Securities Act and all other applicable securities laws and regulations.
15. Tax Matters. As of the date hereof:
(a) all Tax Returns required to be filed on or prior to the date hereof with respect to each Group Company have been duly and timely filed by such Group Company within the requisite period and completed on a proper basis in accordance with the applicable Laws in all material aspects, and are up to date and correct in all material respects. All Taxes owed by each Group Company (whether or not shown on every Tax Return) have been paid in full or provision for the payment thereof have been made. No deficiencies for any Taxes with respect to any Tax Returns have been asserted in writing by, and no notice of any pending action with respect to such Tax Returns has been received from, any Tax authority, and no dispute relating to any Tax Returns with any such Tax authority is outstanding or contemplated.
Exhibit B - 5
(b) no audit of any Tax Return of each Group Company and no formal investigation with respect to any such Tax Return by any Tax authority is currently in progress. No Group Company has waived any statute of limitations with respect to any Taxes, or agreed to any extension of time with respect to an assessment or deficiency for such Taxes.
(c) no written claim has been received by the Company in a jurisdiction where the Group does not file Tax Returns that any Group Company is or may be subject to taxation by that jurisdiction.
(d) no Group Company has been the subject of any examination or investigation by any Tax authority relating to the conduct of its business or the payment or withholding of Taxes that has not been resolved or is currently the subject of any examination or investigation by any Tax authority relating to the conduct of its business or the payment or withholding of Taxes. No Group Company is responsible for the Taxes of any other Person by reason of contract, successor liability or otherwise.
16. Books and Records. The books of account and other financial records, minute books, stock record books, and other records of the Group Companies are true and complete in all material respects and have been maintained in accordance with sound business practices and the procedures prescribed under applicable Laws in all material respects.
17. Disclosure. No representation or warranty by any Warrantor in this Agreement or in any written statement or certificate furnished or to be furnished to the Series D Investors pursuant to any Transaction Document contains or will contain any untrue statement of a material fact, or omits to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances in which they are made, not misleading. Each of the Warrantors has fully provided the Series D Investors with all material information that the Series D Investors have requested for. Except as set forth in this Agreement or the Disclosure Schedule, there is no fact or document or matter that the Company has not disclosed to the Investors in writing and of which any of its officers, directors or executive employees has knowledge and that has had or would reasonably be expected to have any Material Adverse Effect.
18. Employee Matters.
(a) Each Group Company has complied in all material respects with all applicable employment and labor Laws. Each Group Company has withheld and paid to the appropriate Governmental Authority or is holding for payment not yet due to such Governmental Authority all amounts required to be withheld from the employees of such Group Company, including but not limited to the social insurance, housing fund, income Tax, and etc.
Exhibit B - 6
(b) Each of the officers, employees and consultants of the Group Companies has entered into a valid engagement/employment agreement containing confidentiality, non-competition and non-solicitation, and invention assignment provisions. To the best Knowledge of the Warrantors, none of the directors, officers, employees and consultants currently or previously employed or otherwise engaged by any Group Company is in violation of any current or prior confidentiality, non-competition or non-solicitation or invention assignment obligations to any Group Company or to any other persons, including former employers.
19. Reorganization Plan. The reorganization steps specified in the Reorganization Plan which shall be completed on or prior to the Closing shall have been duly completed pursuant to the Reorganization Plan upon or prior to the Closing and in accordance with all applicable Laws.
20. Related Party Transactions. The Company, Shanghai Hesai and all Group Companies have conducted all related party transactions on an arm's-length basis.
21. Environmental, Health and Safety Laws.
(a) Each Group Company is in compliance with all Environmental, Health and Safety Laws, which compliance includes the possession by each Group Company of all permits and other Governmental Authorities required under applicable Environmental, Health and Safety Laws and compliance with the terms and conditions thereof in all material aspects. No Group Company has received, since their inceptions, any communication from a governmental authority that alleges that it is not in such full compliance.
(b) There is no environmental Action pending or, to the Knowledge of Warrantors, threatened against any Group Company and there are no pending Actions, activities or circumstances related to the release, emission, discharge, or disposal of any hazardous material.
22. No Other Representations or Warranties. Except for the representations and warranties expressly set forth in this Exhibit B, none of the Founders, the Warrantors or any of its respective Affiliates or representatives has made or makes any representation or warranty, expressed or implied, as to the Group Companies, their financial condition, results of operations, future operating or financial results, estimates, projections, forecasts, plans or prospects or the accuracy or completeness of any information regarding the Group Companies furnished or made available to the Series D Investors and its Affiliates and counsels.
Exhibit B - 7
Schedule of Material Differences
One or more entities entered into Share Purchase Agreement with the Registrant, Hesai Hong Kong Limited, Hesai Technology Co., Ltd. and the founders using this form. Pursuant to Instruction ii to Item 601 of Regulation S-K, the Registrant may only file this form as an exhibit with a schedule setting forth the material details in which the executed agreements differ from this form:
Name of Investor | Number of Ordinary Shares | Purchase Price | Convertible Loan | Execution Date | |||||||||||
Hubei Xiaomi Yangtze River Industry Fund, LL.P. (湖北小米长江产业基金合伙企业(有限合伙)) | 4,242,424 | US$ | 70,000,000 | / | May 17, 2021 | ||||||||||
Fast Pace Limited | 3,030,303 | US$ | 50,000,000 | US$ | 50,000,000 | May 17, 2021 | |||||||||
CPandar Investment Limited | 3,030,303 | US$ | 50,000,000 | US$ | 50,000,000 | May 11, 2021 | |||||||||
GSPR IV Holdings Limited | 5,454,545 | US$ | 90,000,000 | US$ | 90,000,000 | May 10, 2021 | |||||||||
Solid Bit Hong Kong limited | 3,030,303 | US$ | 50,000,000 | US$ | 50,000,000 | May 10, 2021 | |||||||||
Lightspeed Opportunity Fund, L.P. | 606,061 | US$ | 10,000,000 | US$ | 10,000,000 | May 19, 2021 | |||||||||
SMRS-TOPE LLC | 606,061 | US$ | 10,000,000 | US$ | 10,000,000 | May 10, 2021 | |||||||||
KGT Strategic Private Investments, LP | 303,030 | US$ | 5,000,000 | US$ | 5,000,000 | May 10, 2021 | |||||||||
Pantheon Access Co-Investment Program, L.P. – Series 151 | 303,030 | US$ | 5,000,000 | US$ | 5,000,000 | May 10, 2021 | |||||||||
Moonrise China Partners I LP | 242,424 | US$ | 4,000,000 | US$ | 4,000,000 | May 10, 2021 | |||||||||
Qiming Venture Partners VI, L.P. | 472,144 | US$ | 7,790,376 | US$ | 7,790,376 | May 11, 2021 | |||||||||
Qiming Managing Directors Fund VI, L.P. | 12,704 | US$ | 209,624 | US$ | 209,624 | May 11, 2021 | |||||||||
Pagoda Innovation Partners L.P. | 606,061 | US$ | 10,000,000 | US$ | 10,000,000 | May 11, 2021 | |||||||||
HT Global Investment Limited | 606,061 | US$ | 10,000,000 | US$ | 10,000,000 | May 10, 2021 | |||||||||
PANGU VC INC | 121,212 | US$ | 2,000,000 | US$ | 2,000,000 | May 14, 2021 |
Exhibit 10.5
Strictly Confidential
AGREEMENT
THIS AGREEMENT (this “Agreement”) is made on [Execution Date] (the “Effective Date”) by and among:
1. | [Name of investor(s)] (the “Investors”); |
2. | Hesai Group, an exempted company duly incorporated with limited liability and validly existing under the Laws of the Cayman Islands (the “Cayman Company”); |
3. | Hesai Hong Kong Limited, a limited liability company duly established and existing under the Laws of Hong Kong (the “HK Company”); |
4. | Shanghai Hesai Technology Co., Ltd. (上海禾赛科技有限公司), a limited liability company incorporated under the Laws of the PRC (the “Shanghai Hesai”); and |
5. | The Persons as set forth in Schedule A (each a “Key Party” and together, the “Key Parties”). |
Cayman Company, HK Company, Shanghai Hesai and the Key Parties are referred to herein collectively as the “Warrantors”. Each of the parties to this Agreement is referred to herein individually as a “Party” and collectively as the “Parties”.
WHEREAS:
A. | Shanghai Hesai and all the existing shareholders of Shanghai Hesai at that time entered into a Joint Venture Contract on July 23, 2020 (the “Original JV Contract”), and Shanghai Hesai and such shareholders terminated the Original JV Contract on August 14, 2020 pursuant to the Promoters Agreement entered into by and among them on August 1, 2020; |
B. | Under the Original JV Contract, shareholders defined as “investors” (the “Prior Investors”) are entitled to certain preferences and rights, including but not limited to preemptive right, anti-dilution right, right to appoint directors, voting right, right of first refusal, co-sale right, redemption right, information right, inspection right, and liquidation preference right (the “Previous Preferences”); |
C. | In order to apply an initial public offering on NYSE, NASDAQ, or other reputable stock exchange approved by the Board of the Cayman Company and the board of directors of Shanghai Hesai (the “Oversea IPO”), the Warrantors intend to implement the Reorganization Plan, after which, (1) Cayman Company will hold 100% interests in Shanghai Hesai through HK Company, and (2) the equity interests of the existing shareholders in Shanghai Hesai will be mirrored in the Cayman Company; |
1
D. | The Parties have entered into CLASS B ORDINARY SHARE PURCHASE AGREEMENT (the “Purchase Agreement”) dated on or around the date of this Agreement. The Investors intend to subscribe for certain Class B Ordinary Shares of the Cayman Company, on the terms and conditions set forth in the Purchase Agreement. |
NOW, THEREAFTER, THE PARTIES AGREED as follows:
1. Interpretation.
Unless specified otherwise, capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Purchase Agreement.
2. rights of THE iNVESTOR
2.1 Registration Rights.
The Cayman Company hereby grants to the Investors the registration rights set forth in Schedule B attached hereto (the “Registration Rights”), and such terms in Schedule B hereto form an integral part of this Agreement and are binding on the Parties as if such terms were set forth in the body of this Agreement.
2.2 Issuance of New Securities and Preemptive Right.
2.2.1 Issuance of New Securities. Unless otherwise approved by the Board, the board of directors of Shanghai Hesai (as applicable) and the holders of majority voting power of Class B Ordinary Shares, Shanghai Hesai and/or Cayman Company shall not issue any New Securities (as defined below) of the Group Companies after the Effective Date.
2.2.2 Shanghai Hesai and Cayman Company hereby grant to the Investors the preemptive right to purchase the Investor’s Preemptive Pro Rata Share (as defined 2.2.3 below), of all (or any part) of any New Securities (as defined below) that the Group Companies may from time to time issue after the Effective Date (the “Preemptive Right”). The Investors shall be entitled to apportion its Preemptive Right hereby granted to it among itself and its Affiliates in such proportions as it deems appropriate.
2.2.3 Preemptive Pro Rata Share. Each Investor’s “Preemptive Pro Rata Share” for purposes of the Preemptive Right under this Section 2.2 shall be equal to (i) the number of the New Securities proposed to be issued, multiplied by (ii) a fraction, the numerator of which shall be the number of ordinary shares (calculated on a fully-diluted and as-converted basis) held by such Investor, and the denominator of which shall be the total number of ordinary shares (calculated on an as-converted and fully-diluted basis) then issued and outstanding of Shanghai Hesai or Cayman Company (as applicable) immediately prior to the issuance of New Securities giving rise to the Preemptive Rights.
2
Strictly Confidential
2.2.4 New Securities. For purposes hereof, “New Securities” shall mean any Equity Securities of the Group Companies issued after the Effective Date, except for:
(i) up to 22,666,667 Class B Ordinary Shares to be issued to the Investors and the Co-Investors in the Exempted Transactions;
(ii) up to 16,365,047 Ordinary Shares (as adjusted in connection with share splits or share consolidation, reclassification or other similar event) and/or options or warrants therefor issued or issuable to officers, directors, employees and consultants of the Group Companies pursuant to the ESOP duly approved by the Board;
(iii) any Equity Securities of the Group Companies issued in connection with any share split, share dividend, reclassification or other similar event; and
(iv) any Ordinary Shares of the Cayman Company issued pursuant to the Reorganization Plan.
2.2.5 Procedure. In the event that Shanghai Hesai and/or Cayman Company propose to undertake an issuance of New Securities (in a single transaction or a series of related transactions), it shall give to the Investors a written notice (“Participation Notice”) of its intention to issue New Securities, describing the amount and type of New Securities, the price and the general terms upon which Shanghai Hesai and/or Cayman Company proposes to issue such New Securities. The Investors shall have twenty (20) days from the date of receipt of any such Participation Notice to agree in writing to purchase up to its Preemptive Pro Rata Share of such New Securities for the price and upon the terms and conditions specified in the Participation Notice by giving written notice to Shanghai Hesai and/or Cayman Company and stating therein the quantity of New Securities to be purchased.
2.2.6 Permitted Issuance to the Potential Subscriber. For a period of sixty (60) days following the expiration of the twenty (20) day period during which each Investor may elect to purchase any Preemptive Pro Rata Share, Shanghai Hesai and/or Cayman Company may issue any New Securities with respect to which the Investor’s Preemptive Right were not exercised, to the potential subscriber identified in the Participation Notice and at a price and upon terms not more favorable than specified in the Participation Notice. In the event Shanghai Hesai and/or Cayman Company has not issued such New Securities within such sixty (60) day period, Shanghai Hesai and/or Cayman Company shall not thereafter issue any New Securities, without first again complying with the terms of the Preemptive Right.
2.2.7 Restriction on the Preemptive Right. To the extent the exercise of the Preemptive Right by either Investor will result the aggregate voting power of all Equity Securities held by such Investor and its Affiliates in Shanghai Hesai and/or Cayman Company exceeding the lower of: (a) 30%, or (b) the aggregate voting power of all Equity Securities directly or indirectly held by the Key Parties (the “Investor’s Shareholding Limitation”), such Investor shall not exercise or fully exercise its Preemptive Right regarding the purchase of the New Securities so that the aggregate voting power of all Equity Securities held by such Investor and its Affiliates in Shanghai Hesai and/or Cayman Company will not exceed the Investor’s Shareholding Limitation.
3
Strictly Confidential
2.3 Restriction on Transfer
None of the Key Parties shall directly or indirectly sell, assign, transfer, pledge, hypothecate, or otherwise encumber or dispose of in any way or otherwise grant any interest or right with respect to (“Transfer”) all or any part of any interest in any Equity Securities of the Group Companies now or hereafter directly or indirectly owned or held by such Key Party, without the prior written consent of the holders of majority voting power of the Class B Ordinary Shares, except for (a) any transfer of Equity Securities among the Founders or their Founder Holdcos, and (b) any transfer to the parents, children or spouse, or to trusts for the benefits of such Founder for bona fide estate planning purposes, provided that, prior to the completion of such Transfer, each transferee mentioned in the above items (a) and (b) shall have executed a deed of adherence to assume the obligations of such Key Party under this Agreement, with respect to the transferred Equity Securities; provided further, that the Key Party shall remain liable for any breach by its transferee under item (b) of any provision under this Agreement.
2.4 Right of First Refusal.
2.4.1 General. Without prejudice to the restriction on transfer as provided in Section 2.3, the Investors shall have a right (the “Right of First Refusal”) to purchase all or any part of its ROFR Pro Rata Share regarding the Equity Securities of Shanghai Hesai or Cayman Company that any Key Party (the “Transferor”) may propose to Transfer (the “Transfer Shares”) to any potential transferee (the “Potential Transferee”), at the same price and subject to the same material terms and conditions proposed in the Transfer Notice (as defined in Section 2.4.3).
2.4.2 ROFR Pro Rata Share. Each Investor’s “ROFR Pro Rata Share” for purposes of the Right of First Refusal under this Section 2.4 shall be the product obtained by multiplying the aggregate number of the Transfer Shares by a fraction, the numerator of which is the number of ordinary shares held by such Investor at the time of the transaction and the denominator of which is the total number of ordinary shares owned by all the shareholders other than the Transferor of Shanghai Hesai or Cayman Company (as applicable).
2.4.3 Procedure. The Transferor shall give the Investors and the Group Company a written notice (the “Transfer Notice”) describing (i) type and number of the Transfer Shares to be transferred, (ii) identity of the Potential Transferee, and (iii) price and other material terms upon which the Transferor proposes to Transfer the Transfer Shares. Each Investor shall have twenty (20) days from the date of receipt of any such Transfer Notice to agree in writing to purchase all or portion of the ROFR Pro Rata Share at a price and upon material terms and conditions not less favorable than as described in the Transfer Notice by notifying the Transferor and the Group Company in writing of the number of Transfer Shares to be purchased.
2.4.4 Permitted Transfer to the Potential Transferee. For a period of sixty (60) days following the expiration of the last period during which the Investors may elect to purchase any Transfer Shares, the Transferor may sell any Transfer Shares with respect to which the Investor’s Right of First Refusal were not exercised, to the Potential Transferee identified in the Transfer Notice and at a price and upon terms not more favorable than specified in the Transfer Notice. In the event that the Transferor has not sold such Transfer Shares within such sixty (60) day period, the Transferor shall not thereafter sell any Equity Securities, without first again complying with the terms of the Right of First Refusal.
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Strictly Confidential
2.4.5 Restriction on the Right of First Refusal. To the extent the exercise of the Right of First Refusal by either Investor will result the aggregate voting power of all Equity Securities held by such Investor and its Affiliates in Shanghai Hesai and/or Cayman Company exceeding the Investor’s Shareholding Limitation, such Investor shall not exercise or fully exercise its Right of First Refusal regarding the purchase of the Transfer Shares so that the aggregate voting power of all Equity Securities held by such Investor and its Affiliates in Shanghai Hesai and/or Cayman Company will not exceed the Investor’s Shareholding Limitation, provided that, this restriction on Investor’s Right of First Refusal shall neither apply to the Transfer of any Equity Securities of the Group Companies by Key Parties which will result in a change of Control of the Cayman Company or Shanghai Hesai, nor apply to any Transfer of any Equity Securities of the Group Companies by Key Parties thereafter.
2.5 Information and Inspection Rights.
2.5.1 Information. So long as the Investor directly or indirectly holds the outstanding Equity Securities of the Cayman Company or Shanghai Hesai representing no less than 2% shareholding in the Cayman Company or Shanghai Hesai (on a fully diluted and as converted basis), the Cayman Company or Shanghai Hesai (as applicable) shall, and each Warrantor shall cause the Group Companies to deliver to the Investor:
(i) within ninety (90) days after the end of each fiscal year, a consolidated annual financial statement for such year, audited and certified by any reputable accounting firm acceptable to the Board;
(ii) within forty-five (45) days after the end of each fiscal quarter, the unaudited quarterly consolidated financial statements, including the balance sheet, the profit and loss statement and the cash flow statement for such fiscal quarter;
(iii) no later than thirty (30) days prior to the end of each fiscal year, an annual budget, including the investment in the fixed assets, the operational budget and the strategic plan for next fiscal year, as approved by the Board; and
(iv) such other business, operational and/or financial data and information as the Investor may reasonably request from time to time.
All the financial statements to be delivered pursuant to this Section 2.5, including without limitation the income statement, the balance sheet and the cash flow statement, shall be prepared in accordance with the accounting standard acceptable to the Board.
2.5.2 Inspection Rights. The Warrantors covenant and agree that, as long as the Investor directly or indirectly holds the outstanding Equity Securities of the Cayman Company or Shanghai Hesai representing no less than 3% shareholding in the Cayman Company or Shanghai Hesai (on a fully diluted and as converted basis), the Investor shall have the right, at its own expense so as not to unreasonably interfere with the normal business operations of the Group Company: (a) to reasonably inspect facilities, properties, records and books of each Group Company at any time during regular working hours on reasonable prior notice to such Group Company, and (b) with the prior consent of the Founders, to discuss the business, operation and conditions of a Group Company with any Group Company’s directors, officers, employees, accounts, legal counsels and investment bankers.
5
2.5.3 Notwithstanding anything contrary in this Agreement but subject to Section 2.8, the Parties further agree that, in the event that the shareholding percentage of the Investor in the Cayman Company or Shanghai Hesai is diluted to less than 2% by the issuance of New Securities of the Group Companies, and the Investor reasonably require the Group Companies to provide financial statements, other necessary information or assistance according to the applicable Laws and regulations, internal control or compliance requirements, or requirements from the applicable Governmental Authorities, the Group Company shall, and each Warrantor shall cause the Group Companies to, upon such reasonable request of the Investor, provide such information and/or assistance to the Investor, on the premise that providing such information and assistance would not interfere with the Company’s normal business operations.
2.6 Anti-dilution
2.6.1 Without prejudice to the Investor’s right as provided in Section 2.2.1, in the event of any issuance of New Securities of the Cayman Company at any time after the Effective Date at a purchase price per share less than the Purchase Price per share of the Class B Ordinary Shares of the Cayman Company purchased by the Investor pursuant to the Purchased Agreement (the “Original Price”, as adjusted for share splits, share consolidations, share dividends, recapitalizations and the similar events), the Investor shall be entitled to request the Cayman Company to, and the Cayman Company shall upon such request, issue New Securities to the Investor so that the Original Price shall effectively be reduced to a price determined in accordance with the following formula:
CP2 = CP1 * (A + B) / (A + C)
For purposes of the foregoing formula, the following definitions shall apply:
(i) CP2 shall mean the Original Price reduced in accordance with this Section 2.6 immediately after the issuance of the New Securities;
(ii) CP1 shall mean the Original Price;
(iii) “A” shall mean the number of Ordinary Shares outstanding immediately prior to such issue of New Securities, treating for this purpose as outstanding all Ordinary Shares issuable upon exercise of ESOP, warrants or other option outstanding immediately prior to such issue;
(iv) “B” shall mean the number of Ordinary Shares that would have been issued if such New Securities had been issued at a price per share equal to CP1 (determined by dividing the aggregate consideration received by the Company in respect of such issue by CP1); and
(v) “C” shall mean the number of such New Securities issued in such transaction.
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Strictly Confidential
2.7 Board Observer
The Investor shall, for so long as it directly or indirectly holds outstanding Equity Securities of the Cayman Company or Shanghai Hesai representing no less than 5% shareholding in the Cayman Company and Shanghai Hesai (provided that, as it pertains to GSPR IV Holdings Limited, the aforementioned shareholding threshold shall be 4%), be entitled to designate a representative (the “Board Observer”) to attend all meetings of the Board (including any committees thereof) of the Cayman Company, or all meetings of the board of directors (including any committees thereof) of Shanghai Hesai (as applicable) in a non-voting observer capacity. The Cayman Company or Shanghai Hesai shall provide each Board Observer with notice of all meetings of the board of directors (including any committees thereof) as well as copies of all notices, minutes, consents, and other material that it provides to members of the board of directors (including any committees thereof), at the same time and in the same manner as they are provided to such members. The Investor may at any time remove its own designated representative from the seat of the Board Observer and fill such vacancy with another representative.
2.8 Competing Business Restriction
Notwithstanding anything provided in contrary in this Agreement, if the Investor (1) is a Strategic Investor, (2) has engaged in autonomous driving industry, 3D sensor industry or LiDAR industry (the “Group’s Business”), (3) has invested in any competitor of the Company, or (4) has any business cooperation with any competitor of the Company, whether directly or indirectly, then (a) the right of such Investor to appoint one (1) Board Observer to the Board as provided in Section 2.7 hereof (if any) shall be void and terminated immediately and automatically, and (b) the information and inspection rights as provided in Section 2.5 hereof shall be no longer available to or applicable to such Investor, provided that (i) such Investor shall still have the right to receive financial statements provided by the Group Companies in accordance with Section 2.5.1(i) and Section 2.5.1(ii) hereof, and (ii) to the extent such Investor is a listed company or an Affiliate of a listed company, the Company shall provide reasonable assistance in respect of any other information as reasonably requested by such Investor for mandatory disclosure purpose. For the purpose of this Agreement, a “Strategic Investor” shall mean a Person engages in, whether directly or indirectly, whether by itself or through its affiliate (for the purpose of this Article 2.8, the “affiliate” shall mean, in respect of a Person, any other Person that, directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person), (i) autonomous driving, (ii) automobile industry, (iii) upstream or downstream industry related to the Group’s Business; or (iv) other business that compete with the Group’s Business.
2.9 For the avoidance of any doubt, if the Investor elects to exercise its rights set forth in Section 2 in this Agreement during the time when it is a provider of Convertible Loan, such rights shall apply to such Convertible Loan on an as-converted basis into ordinary shares of the Cayman Company or Shanghai Hesai (as applicable) pursuant to the terms and conditions in the Purchase Agreement or any other Transaction Documents.
3. arrangement of preferences and rights
3.1 In the event that the Cayman Company fails to complete the Oversea IPO within twelve (12) months following the date hereof, the Ordinary Shares held by the Investors in the Cayman Company shall be redesignated as preferred shares. The preferences and rights granted to such preferred shares (a) shall be at least equal to the Previous Preferences granted to Prior Investors under the Original JV Contract (except for (i) the right to appoint directors, (ii) the rights specifically granted to Baidu or Bosch and (iii) the rights conditioned on shareholding requirement, provided that if the Investor’s shareholding percentage meets such shareholding requirement, then the exception in above item (iii) shall not apply), (b) shall at least include the rights, privileges and protections granted to the Investors under this Agreement; and (c) shall have the liquidation preference right and the redemption right in preference and senior to such rights that the Prior Investors are entitled to under the Original JV Contract in respect of the order of payment of shareholders’ liquidation preference or redemption price. Each Warrantor shall, and shall cause the other existing shareholders of Shanghai Hesai and/or Cayman Company to negotiate in good faith and execute with the Investors the shareholder agreement and/or other further instruments and documents with respect to the restatement of rights and obligations of shareholders.
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Strictly Confidential
3.2 Except for the Registration Rights granted to the Investors in accordance with Section 2.1 of this Agreement, the preferences and rights granted to any Ordinary Shares and/or preferred shares held by the Investors shall terminate upon the completion of the Oversea IPO.
4. Other provisions
4.1 Most Favored Nations. The Warrantors covenants that, except otherwise disclosed to the Investor, the share purchase agreements and side agreements to be entered into by and between the Warrantors and any of the Co-Investors shall be in the forms substantially the same with the Share Purchase Agreement and this Agreement entered into by and between the Warrantors and the Investor. If any Warrantor grants, issues, or provides any Existing Shareholders (as defined in Schedule C of the Purchase Agreement) or any Co-investors (each, a “Relevant Person”) any right, interest, benefit, privilege or protection more favorable than those granted to the Investors (except for (i) the right to appoint directors, (ii) the rights specifically granted to Baidu or Bosch under the Original JV Contract, and (iii) the rights conditioned on shareholding requirement, provided that if the Investor’s shareholding percentage meets such shareholding requirement, then the exception in above item (iii) shall not apply), the Investors shall automatically be granted and have such more favorable rights, interests, benefits, privileges and protections pari passu with such Relevant Person, or if the restrictions that such Relevant Persons are subject to are less restrictive than those that the Investors are subject to, the Investors shall only be subject to such less restrictive restrictions.
4.2 Notwithstanding anything contrary as provided in the Purchase Agreement, including but not limited to Section 10.3 (Entire Agreement), this Agreement shall constitute contractual obligations effective, enforceable and binding among the Parties with respect to the subject matter hereof. If there is any conflict or inconsistency between the provisions of this Agreement and the Transaction Documents, this Agreement shall prevail. The Warrantors further covenant to the Investors that the Investors’ rights and privileges under this Agreement shall not be jeopardized because of the lack of a shareholders agreement among all the shareholders of the Cayman Company and/or Shanghai Hesai and the Warrantors shall ensure the full realization of the Investor’s rights and privileges under this Agreement.
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Strictly Confidential
4.3 Indemnification. Each Warrantor hereby agrees to, jointly and severally, indemnify and hold harmless the Investor, and its Affiliates, directors, officers, agents, employees and assigns, from and against any and all Indemnifiable Losses, resulting from, or arising out of or due to any breach by any Warrantor of any representations, covenants or agreements in this Agreement, provided that Section 8.3 (Limitation on Indemnification) in the Purchase Agreement shall also apply mutatis mutandis to this Agreement as if set out herein, as if references in those clauses to “this Agreement” are references to this Agreement and references in those clauses to “Parties” are references to parties of this Agreement
4.4 Amendment and Modification. Any term of this Agreement may be amended only with the written consent of the Parties and any Party may waive any of its rights hereunder without obtaining the consent of any other Party. Any party may waive compliance by any other party with any term or provision of this Agreement that such other party was or is obligated to comply with or perform for the benefit of such waiving party. Any amendment or waiver effected in accordance with this paragraph shall be binding upon the Parties.
4.5 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 hereto whose rights or obligations hereunder are affected by such terms and conditions. This Agreement and the rights and obligations herein may not be assigned by the Warrantors without the prior written consent of the Investor. This Agreement and the rights and obligations herein may be assigned by the Investors without the prior written consent of the other Parties.
4.6 The parties to this Agreement agree that Sections 9 (Confidentiality and Disclosure), Section 10.1 (Governing Law), Section 10.4 (Notices), Section 10.6 (Delays or Omissions), Section 10.8 (Interpretation; Title and Subtitles), Section 10.9 (Counterparts), Section 10.10 (Severability), Section 10.11 (Pronouns and etc.) and Section 10.12 (Dispute Resolution) in the Purchase Agreement shall apply mutatis mutandis to this Agreement as if set out herein, as if references in those clauses to “this Agreement” are references to this Agreement and references in those clauses to “Parties” are references to parties of this Agreement.
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9
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Agreement on the date and year first above written.
THE CAYMAN COMPANY: | ||
Hesai Group | ||
By: | /s/ Yifan Li | |
Name: Yifan Li | ||
Title: Director |
THE HK COMPANY: | ||
Hesai Hong Kong Limited | ||
By: | /s/ Kai Sun | |
Name: Kai Sun | ||
Title: Director |
[Signature Page to Agreement]
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Agreement on the date and year first above written.
SHANGHAI HESAI:
Shanghai Hesai Technology Co., Ltd.
(上海禾赛科技有限公司)
By: | /s/ Yifan Li | |
Name: Yifan Li | ||
Title: Authorized Signatory | ||
Company seal: /s/ Shanghai Hesai Technology Co., Ltd. |
[Signature Page to Agreement]
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Agreement on the date and year first above written.
THE FOUNDER HOLDCOS:
Rock Ocean Limited
By: | /s/ Kai Sun | |
Name: Kai Sun | ||
Title: Director |
Fermat Star Limited
By: | /s/ Kai Sun | |
Name: Kai Sun | ||
Title: Director |
Asian LBJ Limited
By: | /s/ Yifan Li | |
Name: Yifan Li | ||
Title: Director |
ALBJ Limited
By: | /s/ Yifan Li | |
Name: Yifan Li | ||
Title: Director |
[Signature Page to Agreement]
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Agreement on the date and year first above written.
THE FOUNDER HOLDCOS:
Balamb Limited
By: | /s/ Shaoqing Xiang | |
Name: Shaoqing Xiang | ||
Title: Director |
Galbadia Limited
By: | /s/ Shaoqing Xiang | |
Name: Shaoqing Xiang | ||
Title: Director |
THE FOUNDERS:
/s/ Kai Sun | |
Name: Kai Sun |
/s/ Yifan Li | |
Name: Yifan Li |
/s/ Shaoqing Xiang | |
Name: Shaoqing Xiang |
[Signature Page to Agreement]
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Agreement on the date and year first above written.
INVESTOR:
[Name of investor]
By: | ||
Name: | ||
Title: |
[Signature Page to Agreement]
Schedule A - Key Parties
Founder | Founder Holdcos | PRC Identity Number of the Founder |
Mr. Kai Sun |
Rock Ocean Limited, a company established and validly existing under the laws of the British Virgin Islands; and
Fermat Star Limited, a company established and validly existing under the laws of the British Virgin Islands |
[**********] |
Mr. Yifan Li |
Asian LBJ Limited, a company established and validly existing under the laws of the British Virgin Islands; and
ALBJ Limited, a company established and validly existing under the laws of the British Virgin Islands |
[**********] |
Mr. Shaoqing Xiang |
Balamb Limited, a company established and validly existing under the laws of the British Virgin Islands; and
Galbadia Limited, a company established and validly existing under the laws of the British Virgin Islands |
[**********] |
Schedule A
Schedule B – Registration Rights
1. Definition.
“Applicable Securities Laws” means (i) with respect to any offering of securities in the United States, or any other act or omission within that jurisdiction, the securities laws of the United States, including the Exchange Act and the Securities Act, and any applicable Law of any state of the United States, and (ii) with respect to any offering of securities in any jurisdiction other than the United States, or any related act or omission in that jurisdiction, the applicable Laws of that jurisdiction.
“Commission” means (i) with respect to any offering of securities in the United States, the Securities and Exchange Commission of the United States or any other federal agency at the time administering the Securities Act, and (ii) with respect to any offering of securities in a jurisdiction other than the United States, the regulatory body of the jurisdiction with authority to supervise and regulate the offering or sale of securities in that jurisdiction.
“Exchange Act” means the United States Securities Exchange Act of 1934, as amended from time to time.
“Form F-3” means Form F-3 promulgated by the Commission under the Securities Act or any successor form or substantially similar form then in effect.
“Form S-3” means Form S-3 promulgated by the Commission under the Securities Act or any successor form or substantially similar form then in effect.
“Holders” means the holders of Registrable Securities and their transferees.
“Initiating Holders” means, with respect to a request duly made under Section 2.1 or 2.2 to Register any Registrable Securities, the Holders initiating such request.
“Ordinary Share Equivalents” means any Equity Security which is by its terms convertible into or exchangeable or exercisable for Ordinary Shares or other share capital of the Cayman Company, including without limitation, the preferred shares (if any).
“Registrable Securities” means (i) Class B Ordinary Shares of the Cayman Company purchased by the Investor, (ii) Class B Ordinary Shares of the Cayman Company issued or issuable upon conversion of the Class A Ordinary Shares, and (iii) any Class B Ordinary Shares of the Cayman Company issued as a dividend or other distribution with respect to, in exchange for, or in replacement of the shares referred in item (i) and (ii) herein, for the avoidance of doubt, the Ordinary Shares held by the Key Parties shall not be deemed as the Registrable Securities.
“Registration” means a registration effected by preparing and filing a Registration Statement and the declaration or ordering of the effectiveness of that Registration Statement; and the terms “Register” and “Registered” have meanings concomitant with the foregoing.
“Registration Statement” means a registration statement prepared on Form F-1, F-3, S-1, or S-3 under the Securities Act, or on any comparable form in connection with registration in a jurisdiction other than the United States.
All the capitalized terms used but not defined in this Schedule shall have the meanings as set forth in the Agreement.
Schedule B - 1
2. Demand Registration.
2.1 Registration Other Than on Form F-3 or Form S-3. Subject to the terms of this Agreement, at any time or from time to time after the earlier of (i) the fourth (4th) anniversary of the Effective Date or (ii) the date that is six (6) months after the consummation of the Overseas IPO, Holder(s) holding at least 10% or more of the issued and outstanding Registrable Securities (on an as-converted basis) may request in writing that the Cayman Company effect a Registration for at least 25% of their Registrable Securities on any internationally recognized exchange that is reasonably acceptable to such requesting Holder(s). Upon receipt of such a request, the Cayman Company shall (x) within (10) Business Date of the receipt of such written request give written notice of the proposed Registration to all other Holders and (y) as soon as practicable, use its reasonably best efforts to cause the Registrable Securities specified in the request, together with any Registrable Securities of any Holder who requests in writing to join such Registration within fifteen (15) days after receipt of the written notice from the Cayman Company, to be Registered and/or qualified for sale and distribution in such jurisdiction as the Initiating Holders may request. The Cayman Company shall be obligated to consummate no more than three (3) Registrations pursuant to this Section 2.1 that have been declared and ordered effective; provided that if the Registrable Securities sought to be included in the Registration pursuant to this Section 2.1 are not fully included in the Registration for any reason other than due to the action or inaction of the Holders including Registrable Securities in such Registration, such Registration shall not be deemed to constitute one of the Registration rights granted pursuant to this Section 2.1.
2.2 Registration on Form F-3 or Form S-3. The Cayman Company shall use its reasonably best efforts to qualify for registration on Form F-3 or Form S-3. Subject to the terms of this Agreement, if the Cayman Company qualifies for registration on Form F-3 or Form S-3 (or any comparable form for Registration in a jurisdiction other than the United States), any Holder may request the Cayman Company to file, in any jurisdiction in which the Cayman Company has had a registered underwritten public offering, a Registration Statement on Form F-3 or Form S-3 (or any comparable form for Registration in a jurisdiction other than the United States), including without limitation any registration statement filed under the Securities Act providing for the registration of, and the sale on a continuous or a delayed basis by the Holder of, all of the Registrable Securities pursuant to Rule 415 under the Securities Act and/or any similar rule that may be adopted by the Commission. Upon receipt of such a request, the Cayman Company shall (i) promptly give written notice of the proposed Registration to all other Holders and (ii) as soon as practicable, use its reasonably best efforts to cause the Registrable Securities specified in the request, together with any Registrable Securities of any Holder who requests in writing to join such Registration within fifteen (15) days after the Cayman Company’s delivery of written notice, to be Registered and qualified for sale and distribution in such jurisdiction. The Cayman Company shall be obligated to consummate no more than two (2) Registrations that have been declared and ordered effective within any twelve (12) month period pursuant to this Section 2.2; provided that if the Registrable Securities sought to be included in the Registration pursuant to this Section 2.2 are not fully included in such Registration for any reason other than due to the action or inaction of the Holders including Registrable Securities in such Registration, such Registration shall not be deemed to constitute one of the Registration rights granted pursuant to this Section 2.2.
Schedule B - 2
2.3 Right of Deferral.
(i) The Cayman Company shall not be obligated to Register or qualify Registrable Securities pursuant to this Section 2:
(1) if, within ten (10) days of the receipt of any request of the Holders to Register any Registrable Securities under Section 2.1 or Section 2.2, the Cayman Company gives notice to the Initiating Holders of its bona fide intention to effect the filing for its own account of a Registration Statement of Ordinary Shares within ninety (90) days of receipt of that request; provided, that the Cayman Company is actively employing in good faith its reasonably best efforts to cause that Registration Statement to become effective within ninety (90) days of receipt of that request; provided, further, that the Holders are entitled to join such Registration in accordance with Section 3 (other than an Exempt Registration);
(2) during the period starting with the date of filing by the Cayman Company of, and ending six (6) months following the effective date of any Registration Statement pertaining to Ordinary Shares of the Cayman Company; provided, that the Holders are entitled to join such Registration in accordance with Section 3 other than an Exempt Registration; or
(3) in any jurisdiction in which the Cayman Company would be required to execute a general consent to service of process in effecting such Registration or qualification, unless the Cayman Company is already subject to service of process in such jurisdiction.
(ii) If, after receiving a request from Investor pursuant to Section 2.1 or Section 2.2 hereof, the Cayman Company furnishes to the Holders a certificate signed by the chief executive officer of the Cayman Company stating that, in the good faith judgment of the Board, it would be materially detrimental to the Cayman Company or its members for a Registration Statement to be filed in the near future, then the Cayman Company shall have the right to defer such filing for a period during which such filing would be materially detrimental, provided, that the Cayman Company may not utilize this right for more than ninety (90) days on any one occasion or more than once during any twelve (12) month period; provided, further, that the Cayman Company may not Register any other its securities during such period (except for Exempt Registrations).
2.4 Underwritten Offerings. If, in connection with a request to Register the Registrable Securities under Section 2.1 or Section 2.2, the Initiating Holders seek to distribute such Registrable Securities in an underwritten offering, they shall so advise the Cayman Company as a part of the request, and the Cayman Company shall include such information in the written notice to other Holders described in Section 2.1 and Section 2.2. In such event, the right of any Holder to include its Registrable Securities in such Registration shall be conditioned upon such Holder’s participation in such underwritten offering and the inclusion of such Holder’s Registrable Securities in the underwritten offering (unless otherwise agreed by a majority-in-interest of the Initiating Holders and such Holder, taken together) to the extent provided herein. All Holders proposing to distribute their securities through such underwritten offering shall enter into an underwriting agreement in customary form with the underwriter or underwriters of internationally recognized standing selected for such underwritten offering by the Cayman Company and reasonably acceptable to the Holders of a majority voting power of all Registrable Securities proposed to be included in such Registration. Notwithstanding any other provision of this Agreement, if the managing underwriter advises the Cayman Company that marketing factors (including without limitation the aggregate number of securities requested to be Registered, the general condition of the market, and the status of the Persons proposing to sell securities pursuant to the Registration) require a limitation of the number of Registrable Securities to be underwritten in a Registration pursuant to Section 2.1 or Section 2.2, the underwriters may exclude up to seventy-five percent (75%) of the Registrable Securities requested to be Registered but only after first excluding all other Equity Securities (including the Equity Securities held by employees and directors of the Cayman Company) from the Registration and underwritten offering and so long as the number of Registrable Securities to be included in the Registration is allocated among all Holders in proportion, as nearly as practicable, to the respective amounts of Registrable Securities requested by the Holders to be included; provided that the Holder shall have the right to withdraw its request for Registration from the underwriting by written notice to the Cayman Company and the underwriters delivered at least ten (10) days prior to the effective date of the Registration Statement, and such withdrawal request for Registration shall not be deemed to constitute one of the Registration rights granted pursuant to Section 2.1 or Section 2.2, as the case may be. If any Holder disapproves the terms of any underwriting, such Holder may elect to withdraw therefrom by written notice to the Cayman Company and the underwriters delivered at least ten (10) days prior to the effective date of the Registration Statement. Any Registrable Securities excluded or withdrawn from such underwritten offering shall be withdrawn from the Registration. To facilitate the allocation of shares in accordance with the above provisions, the Cayman Company or the underwriters may round the number of shares allocated to the Investor to the nearest one hundred (100) shares.
Schedule B - 3
3. Piggyback Registrations.
3.1 Registration of the Cayman Company’s Securities. Subject to the terms of this Agreement, if the Cayman Company proposes to Register for its own account any of its Equity Securities, or for the account of any holder (other than a Holder) of Equity Securities any of such holder’s Equity Securities, in connection with the public offering of such securities (except for Exempt Registrations), the Cayman Company shall promptly give each Holder written notice of such Registration and, upon the written request of any Holder given within fifteen (15) days after delivery of such notice, the Cayman Company shall use its reasonably best efforts to include in such Registration any Registrable Securities thereby requested to be Registered by such Holder. If a Holder decides not to include all or any of its Registrable Securities in such Registration by the Cayman Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent Registration Statement or Registration Statements as may be filed by the Cayman Company, all upon the terms and conditions set forth herein.
3.2 Right to Terminate Registration. The Cayman Company shall have the right to terminate or withdraw any Registration initiated by it under Section 3.1 prior to the effectiveness of such Registration, whether or not any Holder has elected to participate therein. The expenses of such withdrawn Registration shall be borne by the Cayman Company in accordance with Section 4.3.
Schedule B - 4
3.3 Underwriting Requirements.
(i) In connection with any offering involving an underwriting of the Cayman Company’s Equity Securities, the Cayman Company shall not be required to Register the Registrable Securities of a Holder under this Section 3 unless such Holder’s Registrable Securities are included in the underwritten offering and such Holder enters into an underwriting agreement in customary form with the underwriter or underwriters of internationally recognized standing selected by the Cayman Company and setting forth such terms for the underwritten offering as have been agreed upon between the Cayman Company and the underwriters. In the event the underwriters advise the Holders seeking Registration of Registrable Securities pursuant to this Section 3 in writing that market factors (including the aggregate number of Registrable Securities requested to be Registered, the general condition of the market, and the status of the Persons proposing to sell securities pursuant to the Registration) require a limitation of the number of Registrable Securities to be underwritten, the underwriters may exclude all of the Registrable Securities requested to be Registered in the IPO and up to seventy-five percent (75%) of the Registrable Securities requested to be Registered in any other public offering, but in any case only after first excluding all other Equity Securities (including the Equity Securities held by employees and directors of the Cayman Company and except for securities sold for the account of the Cayman Company) from the Registration and underwriting and so long as the Registrable Securities to be included in such Registration are allocated among all Holders in proportion, as nearly as practicable, to the respective amounts of Registrable Securities requested by such Holders to be included. To facilitate the allocation of shares in accordance with the above provisions, the Cayman Company or the underwriters may round the number of shares allocated to the Investor to the nearest one hundred (100) shares.
(ii) If any Holder disapproves the terms of any underwriting, such Holder may elect to withdraw therefrom by written notice to the Cayman Company and the underwriters delivered at least ten (10) days prior to the effective date of the Registration Statement. Any Registrable Securities excluded or withdrawn from the underwritten offering shall be withdrawn from the Registration.
3.4 Exempt Registrations. The Cayman Company shall have no obligation to Register any Registrable Securities under this Section 3 in connection with a Registration by the Cayman Company (i) relating solely to the sale of securities to participants in a Cayman Company share incentive plan, (ii) relating to a corporate reorganization or other transaction under Rule 145 of the Securities Act (or comparable provision under the Laws of another jurisdiction, as applicable), (iii) on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities and does not permit secondary sales (collectively, “Exempt Registrations”).
4. Registration Procedures.
4.1 Registration Procedures and Obligations. Whenever required under this Agreement to effect the Registration of any Registrable Securities held by the Investor, the Cayman Company shall, as expeditiously as reasonably possible:
(i) prepare and file with the Commission a Registration Statement with respect to those Registrable Securities and use its reasonably best efforts to cause that Registration Statement to become effective, and, upon the request of the Holders holding a majority of the Registrable Securities Registered thereunder, keep the Registration Statement effective for up to one hundred and twenty (120) days or, if earlier, until the distribution thereunder has been completed; provided, however, that (a) such one hundred and twenty (120) day period shall be extended for a period of time equal to the period any Holder refrains from selling any Registrable Securities included in such Registration at the written request of the underwriter(s) for such Registration, and (b) in the case of any Registration of Registrable Securities on Form F-3 or Form S-3 that are intended to be offered on a continuous or delayed basis, subject to compliance with applicable rules promulgated by the Securities and Exchange Commission, such one hundred and twenty (120) day period shall be extended, if necessary, to keep the Registration Statement or such comparable form, as the case may be, effective until all such Registrable Securities are sold;
Schedule B - 5
(ii) prepare and file with the Commission amendments and supplements to that Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary to comply with the provisions of Applicable Securities Laws with respect to the disposition of all securities covered by the Registration Statement;
(iii) furnish to the Investor the number of copies of a prospectus, including a preliminary prospectus, required by Applicable Securities Laws, and any other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them;
(iv) use its reasonably best efforts to Register and qualify the securities covered by the Registration Statement under the securities Laws of any jurisdiction, as reasonably requested by the Holders, provided, that the Cayman Company shall not be required to qualify to do business or file a general consent to service of process in any such jurisdictions;
(v) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in customary form, with the managing underwriter(s) of the offering;
(vi) promptly notify each Holder of Registrable Securities covered by the Registration Statement at any time when a prospectus relating thereto is required to be delivered under Applicable Securities Laws of (a) the issuance of any stop order by the Commission, or (b) the happening of any event or the existence of any condition as a result of which any prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made, or if in the opinion of counsel for the Cayman Company it is necessary to supplement or amend such prospectus to comply with law, and at the request of such Holder promptly prepare and furnish to such Holder a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include 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 not misleading in light of the circumstances under which they were made or such prospectus, as supplemented or amended, shall comply with law;
Schedule B - 6
(vii) furnish, at the request of any Holder requesting Registration of Registrable Securities pursuant to this Agreement, on the date that such Registrable Securities are delivered for sale in connection with a Registration pursuant to this Agreement, (A) an opinion, dated the date of the sale, of the counsel representing the Cayman Company for the purposes of the Registration, in form and substance as is customarily given to underwriters in an underwritten public offering; and (B) comfort letters dated as of the closing date of the sale of the Registrable Securities, from the independent certified public accountants of the Cayman Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters;
(viii) otherwise comply with all applicable rules and regulations of the Commission to the extent applicable to the applicable Registration Statement and use its reasonably best efforts to make generally available to its security holders (or otherwise provide in accordance with Section 11(a) of the Securities Act) an earnings statement satisfying the provisions of Section 11(a) of the Act, no later than forty-five (45) days after the end of a twelve (12) month period (or ninety (90) days, if such period is a fiscal year) beginning with the first month of the Cayman Company’s first fiscal quarter commencing after the effective date of such registration statement, which statement shall cover such twelve (12) month period, subject to any proper and necessary extensions;
(ix) not, without the written consent of the Holders of at least a majority of voting power of the then issued and outstanding Registrable Securities, make any offer relating to the Securities that would constitute a “free writing prospectus,” as defined in Rule 405 promulgated under the Act;
(x) provide a transfer agent and registrar for all Registrable Securities Registered pursuant to the Registration Statement and, where applicable, a number assigned by the Committee on Uniform Securities Identification Procedures for all those Registrable Securities, in each case not later than the effective date of the Registration; and
(xi) take all reasonable action necessary to list the Registrable Securities on the primary exchange on which the Cayman Company’s securities are then traded or, in connection with an Overseas IPO, the primary exchange on which the Cayman Company’s securities will be traded.
4.2 Information from Holder. It shall be a condition precedent to the obligations of the Cayman Company to take any action pursuant to this Agreement with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Cayman Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be required to effect the Registration of such Holder’s Registrable Securities.
4.3 Expenses of Registration. All expenses, other than the underwriting discounts and selling commissions applicable to the sale of Registrable Securities pursuant to this Agreement (which shall be borne by the Holders requesting Registration on a pro rata basis in proportion to their respective numbers of Registrable Securities sold in such Registration), incurred in connection with Registrations, filings or qualifications pursuant to this Agreement, including (without limitation) all Registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Cayman Company and reasonable fees and disbursement of one counsel for the Investor, and if requested by the Cayman Company, the Cayman Company’s underwriter or underwriters, or any of their counsels, the costs and expenses incurred in connection with any special legal opinion, shall be borne by the Cayman Company. Notwithstanding the foregoing, the Cayman Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 4.3 if (x) the registration request is subsequently withdrawn at the request of the Holder, and (y) such request does not constitute one (1) demand registration as defined under Section 2.1 or Section 2.2. In addition, the Company shall not be required to pay for expense for any special audit conducted for the purpose of such Registration in excess of US$25,000 (in which case, all participating Holders shall bear such excess special audit expense pro rata based upon the number of Registrable Securities to be Registered in such Registration).
Schedule B - 7
5. Registration-Related Indemnification.
5.1 Cayman Company Indemnity.
(i) In the event of a Registration under this Agreement, to the maximum extent permitted by Law, the Cayman Company will indemnify to the fullest extent permitted by Law and the Restated M&A and hold harmless such Holder, such Holder’s partners, officers, directors, employees, shareholders, members, and legal counsel, any underwriter (as defined in the Securities Act) and each Person, if any, who controls (as defined in the Securities Act) such Holder or underwriter, against any losses, claims, damages or liabilities (joint or several) to which they may become subject under Laws which are applicable to the Cayman Company and relate to action or inaction required of the Cayman Company in connection with any Registration, qualification, or compliance, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (each a “Violation”): (a) any untrue statement or alleged untrue statement of a material fact contained in such Registration Statement, on the effective date thereof (including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto), (b) the omission or alleged omission to state in the Registration Statement, on the effective date thereof (including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto), a material fact required to be stated therein or necessary to make the statements therein not misleading, or (c) any violation or alleged violation by the Cayman Company of Applicable Securities Laws, or any rule or regulation promulgated under Applicable Securities Laws. The Cayman Company will reimburse, as incurred, each such Holder, underwriter or Person who controls (as defined in the Securities Act) the Investor or underwriter for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action.
(ii) The indemnity agreement contained in this Section 5.1 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Cayman Company (which consent shall not be unreasonably withheld or delayed), nor shall the Cayman Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises solely out of or is solely based upon a Violation that occurs in reliance upon and in conformity with written information furnished for use in connection with such Registration by any such Holder, such Holder’s partners, officers, directors, and legal counsel, any underwriter (as defined in the Securities Act) and each Person, if any, who controls (as defined in the Securities Act) such Holder or underwriter.
Schedule B - 8
5.2 Holders Indemnity.
(i) In the event of a Registration under this Agreement, to the maximum extent permitted by Law, each selling Holder that has included Registrable Securities in a Registration will, severally and not jointly, indemnify and hold harmless the Cayman Company, its directors and officers, any underwriter (as defined in the Securities Act), any other Holder selling securities in connection with such Registration and each Person, if any, who controls (within the meaning of the Securities Act) the Cayman Company, such underwriter or other Holder, against any losses, claims, damages or liabilities (joint or several) to which any of the foregoing Persons may become subject, under Applicable Securities Laws, or any rule or regulation promulgated under Applicable Securities Laws, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder in a certificate expressly for use in connection with such Registration; and each of such Holders will reimburse, as incurred, any Person intended to be indemnified pursuant to this Section 5.2, for any legal or other expenses reasonably incurred by such Person in connection with investigating or defending any such loss, claim, damage, liability or action. No Holder’s liability under this Section 5.2 (when combined with any amounts paid by such Holder pursuant to Section 5.4) shall exceed the net proceeds received by such Holder from the offering of securities made in connection with that Registration.
(ii) The indemnity contained in this Section 5.2 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder (which consent shall not be unreasonably withheld or delayed).
5.3 Notice of Indemnification Claim. Promptly after receipt by an indemnified party under Section 5.1 or Section 5.2 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under Section 5.1 or Section 5.2, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the indemnifying parties. An indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the reasonably incurred fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver a written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party, to the extent so prejudiced, of any liability to the indemnified party under this Section 5, but the omission to deliver a written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 5.
5.4 Contribution. If any indemnification provided for in Section 5.1 or Section 5.2 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and of the indemnified party, on the other, in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case: (A) a Holder will not be required to contribute any amount (after combined with any amounts paid by the Investor pursuant to Section 5.2) in excess of the net proceeds to such Holder from the sale of all such Registrable Securities offered and sold by such Holder pursuant to such Registration Statement; and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.
Schedule B - 9
5.5 Underwriting Agreement. To the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.
5.6 Survival. The obligations of the Cayman Company and Investor under this Section 5 shall survive the completion of any offering of Registrable Securities in a Registration Statement under this Agreement.
6. Additional Registration-Related Undertakings.
6.1 Reports under the Exchange Act. With a view to making available to the Holders the benefits of Rule 144 promulgated under the Securities Act and any comparable provision of any Applicable Securities Laws that may at any time permit a Holder to sell securities of the Cayman Company to the public without Registration or pursuant to a Registration on Form F-3 or Form S-3 (or any comparable form in a jurisdiction other than the United States), the Cayman Company agrees to:
(i) make and keep public information available, as those terms are understood and defined in Rule 144 (or comparable provision, if any, under Applicable Securities Laws in any jurisdiction where the Cayman Company’s securities are listed), at all times following ninety (90) days after the effective date of the first Registration under the Securities Act filed by the Cayman Company for an offering of its securities to the general public;
(ii) file with the Commission in a timely manner all reports and other documents required of the Cayman Company under all Applicable Securities Laws; and
(iii) at any time following ninety (90) days after the effective date of the first Registration under the Securities Act filed by the Cayman Company for an offering of its securities to the general public by the Cayman Company, promptly furnish to the Holder holding Registrable Securities, upon request (a) a written statement by the Cayman Company that it has complied with the reporting requirements of all Applicable Securities Laws at any time after it has become subject to such reporting requirements or, at any time after so qualified, that it qualifies as a registrant whose securities may be resold pursuant to Form F-3 or Form S-3 (or any form comparable thereto under Applicable Securities Laws of any jurisdiction where the Cayman Company’s securities are listed), (b) a copy of the most recent annual or quarterly report of the Cayman Company and such other reports and documents as filed by the Cayman Company with the Commission, and (c) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the Commission, that permits the selling of any such securities without Registration or pursuant to Form F-3 or Form S-3 (or any form comparable thereto under Applicable Securities Laws of any jurisdiction where the Cayman Company’s Securities are listed).
Schedule B - 10
6.2 Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Cayman Company shall not, without the written consent of the holders of majority voting power of Class B Ordinary Shares, enter into any agreement with any holder or prospective holder of any Equity Securities of the Cayman Company that would allow such holder or prospective holder (i) to include such Equity Securities in any Registration filed under Section 1 or Section 3, unless under the terms of such agreement such holder or prospective holder may include such Equity Securities in any such Registration only to the extent that the inclusion of such Equity Securities will not reduce the amount of the Registrable Securities of the Holders that are included, (ii) to demand Registration of their Equity Securities, or (iii) cause the Cayman Company to include such Equity Securities in any Registration filed under Section 1 or Section 3 hereof on a basis pari passu with or more favorable to such holder or prospective holder than is provided to the Holders of Registrable Securities.
6.3 Termination of Registration Rights. The registration rights set forth in Section 2 and Section 3 of this Agreement shall terminate on the earlier of (i) the date that is five (5) years from the date of closing of a Overseas IPO, (ii) with respect to any Holder, the date on which such Holder may sell all of such Holder’s Registrable Securities under Rule 144 of the Securities Act in any ninety (90)-day period, provided that the Investor has received a special legal opinion issued by a qualified counsel, at the cost of the Group Companies, confirming that the Investor meets the requirements of Rule 144 of the Securities Act (or any rules comparable thereto under Applicable Securities Laws of any jurisdiction where the Cayman Company’s Securities are listed).
6.4 Exercise of Ordinary Share Equivalents. Notwithstanding anything to the contrary provided in this Agreement, the Cayman Company shall have no obligation to Register Registrable Securities which, if constituting Ordinary Share Equivalents, have not been exercised, converted or exchanged, as applicable, for Ordinary Shares as of the effective date of the applicable Registration Statement, but the Cayman Company shall cooperate and facilitate any such exercise, conversion or exchange as requested by the Holder.
6.5 Intent. The terms of Sections 1 through 6 are drafted primarily in contemplation of an offering of securities in the United States of America. The Parties recognize, however, the possibility that securities may be qualified or registered for offering to the public in a jurisdiction other than the United States of America where registration rights have significance or that the Cayman Company might effect an offering in the United States of America in the form of American Depositary Receipts or American Depositary Shares. Accordingly:
(i) it is their intention that, whenever this Agreement refers to a Law, form, process or institution of the United States of America but the Parties wish to effectuate qualification or registration in a different jurisdiction where registration rights have significance, reference in this Agreement to the Laws or institutions of the United States shall be read as referring, mutatis mutandis, to the comparable Laws or institutions of the jurisdiction in question; and
(ii) it is agreed that the Cayman Company will not undertake any listing of American Depositary Receipts, American Depositary Shares or any other security derivative of the Ordinary Shares unless arrangements have been made reasonably satisfactory to a majority-in-interest of the shareholders of the Cayman Company to ensure that the spirit and intent of this Agreement will be realized and that the Cayman Company is committed to take such actions as are necessary such that the shareholders of the Cayman Company will enjoy rights corresponding to the rights hereunder to sell their Registrable Securities in a public offering in the United States of America as if the Cayman Company had listed Ordinary Shares in lieu of such derivative securities.
7. Assignments and Transfers; No Third Party Beneficiaries. Except as otherwise provided herein, this Agreement and the rights and obligations of the Parties hereunder shall inure to the benefit of, and be binding upon, their respective successors, assigns and legal representatives, but shall not otherwise be for the benefit of any third party. The rights of the Investor hereunder (including, without limitation, registration rights) are assignable, and the obligations of the Investor hereunder are transferrable, in each case, to an Affiliate, or to a third party in connection with the transfer of Equity Securities of the Cayman Company held by such Investor to such third party but only to the extent of such transfer. This Agreement and the rights and obligations of each other Party hereunder shall not otherwise be assigned or transferred without the mutual written consent of the other Parties except as expressly provided herein.
Schedule B - 11
Schedule of Material Differences
One or more entities entered into Agreement with the Registrant, Hesai Hong Kong Limited, Hesai Technology Co., Ltd. and the founders using this form. Pursuant to Instruction ii to Item 601 of Regulation S-K, the Registrant may only file this form as an exhibit with a schedule setting forth the material details in which the executed agreements differ from this form:
Name of Investor | Execution Date | |
Hubei Xiaomi Yangtze River Industry Fund, LL.P. (湖北小米长江产业基金合伙企业(有限合伙)) | May 17, 2021 | |
Fast Pace Limited | May 17, 2021 | |
CPandar Investment Limited | May 11, 2021 | |
GSPR IV Holdings Limited | May 10, 2021 | |
Solid Bit Hong Kong limited | May 10, 2021 | |
Lightspeed Opportunity Fund, L.P. | May 19, 2021 | |
SMRS-TOPE LLC | May 10, 2021 | |
KGT Strategic Private Investments, LP | May 10, 2021 | |
Pantheon Access Co-Investment Program, L.P. – Series 151 | May 10, 2021 | |
Moonrise China Partners I LP | May 10, 2021 | |
Qiming Venture Partners VI, L.P. | May 11, 2021 | |
Qiming Managing Directors Fund VI, L.P. | May 11, 2021 | |
Pagoda Innovation Partners L.P. | May 11, 2021 | |
HT Global Investment Limited | May 10, 2021 | |
PANGU VC INC | May 14, 2021 |
Exhibit 10.6
HESAI GROUP
SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (the “Share Purchase Agreement”) is made as of the June 1, 2021, by and between the following parties:
(A) | Hesai Group, an exempted company duly incorporated with limited liability and validly existing under the laws of the Cayman Islands (the “Company”); and |
(B) | Robert Bosch GmbH, a company established under the laws of Germany (“Bosch”). |
WHEREAS,
(A) | the Company, Shanghai Hesai Technology Co., Ltd. (上海禾赛科技有限公司) (“Shanghai Hesai”) and BOSCH (China) Investment Ltd. (“Bosch China”) entered into a Framework Agreement (the “Framework Agreement”) on May 18, 2021; |
(B) | on the date of the Framework Agreement, Bosch China, the Company and Shanghai Hesai also signed an equity transfer agreement (the “Equity Transfer Agreement”); |
(C) | according to the Framework Agreement, Bosch China shall transfer its equity interests in Shanghai Hesai to Hesai Hong Kong Limited (the “HK Company”) and the Company shall issue certain number of Class B Ordinary Shares to Bosch to ensure Bosch China’s equity interests in Shanghai Hesai be mirrored in the Company; |
NOW, THEREFORE, in consideration of the mutual covenants and representations set forth below, the Company and Bosch agree as follows:
1. | Sale, Issuance, and Subscription of the Purchased Shares. Subject to the terms and conditions of this Share Purchase Agreement and the Framework Agreement, the Company agrees to issue and sell to Bosch, and Bosch agrees to purchase from the Company, at the Closing (as defined below), 7,653,252 Class B Ordinary Shares (the “Purchased Shares”) of the Company for a total purchase price which is the EURO equivalent of the received transfer price under the Equity Transfer Agreement (The exchange rate shall be the central parity rate between Euro and RMB published by the People’s Bank of China on the date of the Equity Transfer Agreement) (the “Purchase Price”). “Class B Ordinary Shares” means the class B ordinary shares of the Company, par value US$0.0001 per share of the Company, with the rights and privileges as set forth in the amended and restated memorandum and articles of association of the Company in the form attached as Exhibit A hereto, as amended from time to time. |
SCHEDULE I hereof sets forth the capitalization table of the Company after the equity interests of all the shareholders of Shanghai Hesai have been mirrored in the Company. At the Closing, the Purchased Shares will represent 7.65% of all the issued and outstanding shares of the Company (on a fully diluted and as-converted basis and assuming all the existing shareholders’ equity securities in Shanghai Hesai have been mirrored in the Company). |
2. | Closing. The sale and purchase of the Purchased Shares shall take place within the timeframe specified in Section 1.2.2 of the Framework Agreement (which time and place are designated as the “Closing”). |
3. | Closing Deliverables. |
(A) | At the Closing, the Company shall deliver to Bosch a copy of the updated register of members of the Company, reflecting the issuance of the Purchased Shares in accordance with Section 1, certified by the registered agent of the Company to be a true and complete copy thereof, and a copy of the share certificate to Bosch representing the Class B Ordinary Shares being purchased by Bosch. |
(B) | Within five (5) business days after the receipt of transfer price by Bosch China from the HK Company in accordance with the Framework Agreement, Bosch shall pay the Purchase Price to the Company by wire transfer of immediately available funds to the account designated by the Company at least ten (10) business days in advance. |
(C) | Within ten (10) business days after the Closing, the Company shall deliver to Bosch an original of the share certificate signed by a director of the Company representing the Purchased Shares Bosch purchased from the Company. |
4. | Representations and Warranties. |
The Company hereby represents and warrants to Bosch that the following statements are true, correct and complete as of the date hereof and the date of Closing:
(1) | Each of the Company and the Hong Kong subsidiary of the Company is duly organized, validly existing and in good standing under, and by virtue of, the laws of the place of its incorporation or establishment and has all requisite power and authority to own its properties and assets and to carry on its business as now conducted and as presently proposed to be conducted. |
(2) | Due Authorization. All corporate action on the part of the Company necessary for the authorization, issuance, reservation for issuance and delivery of all of the Purchased Shares shall has been taken. This Share Purchase Agreement constitutes valid and binding obligations of the Company, enforceable in accordance with its terms, subject as to enforcement of remedies to applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditors’ rights generally and to general equitable principles. The Purchased Shares are not subject to any preemptive rights, rights of first refusal, or liens of any kind. |
(3) | As of the date hereof, the authorized share capital of the Company is USD 50,000 divided into 500,000,000 Ordinary shares of par value USD0.0001 each. |
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(4) | Valid Issuance of Shares. |
(a) The Purchased Shares, when issued, sold and delivered in accordance with the terms of this Share Purchase Agreement, will be duly authorized and validly issued, fully paid, non-assessable, and free of any Liens.
(b) All presently outstanding Ordinary Shares of the Company are duly and validly issued, fully paid and non-assessable and free of any liens, and such Ordinary Shares, and all outstanding shares, options and other securities of the Company, have been issued in full compliance with the requirements of all applicable securities laws, including without limitation the Securities Act.
5. | Miscellaneous. |
(A) | Governing Law. This Share Purchase Agreement shall be governed in all respects by the laws of the Hong Kong without regard to conflicts of law principles. |
(B) | Dispute Resolution. In the event the Parties are unable to settle a dispute between them regarding this Agreement, such dispute shall be referred to and finally settled by arbitration at the Hong Kong International Arbitration Centre (the “HKIAC”) in accordance with the HKIAC Administered Arbitration Rules then in effect. |
(C) | Press Releases. No announcement regarding any confidential information (including the existence of, and terms of, this Agreement) and the transactions contemplated hereby shall be made in a press release, conference, advertisement, announcement, professional or trade publication, mass marketing materials or otherwise to the general public without the mutual written consent of the Company and Bosch. |
(D) | Severability. Should any provision of the Share Purchase Agreement be found to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable to the greatest extent permitted by law. |
(E) | Counterparts. The Share Purchase 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. |
[Signature Page Follows]
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IN WITNESS WHEREOF, each undersigned has duly caused the Share Purchase Agreement to be signed in its name and on its behalf by its duly authorized representative as of the date first above written.
THE COMPANY | ||
Hesai Group | ||
By: | /s/ Yifan Li | |
Name: Yifan Li | ||
Title: Authorized Signatory |
IN WITNESS WHEREOF, each undersigned has duly caused the Share Purchase Agreement to be signed in its name and on its behalf by its duly authorized representative as of the date first above written.
Robert Bosch GmbH | ||
By: | /s/ Willy Kiler | |
Name: Dr. Willy Kiler | ||
Title: VP Product Area Lidar |
SCHEDULE I
Capitalization Table
Exhibit A
Restated Memorandum and Articles of Association of the Company
Exhibit 10.7
Cooperation Agreement
Cooperation Agreement*
*: Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed
Contract No.: [ ]
Party A: Beijing Baidu Netcom Science and Technology Co., Ltd.
Address: Baidu Building, No. 10 Shangdi Tenth Street, Haidian District, Beijing
Zip Code: [**********]
Telephone: [**********]
Fax: [**********]
Bank: [**********]
Account Number: [**********]
Contact: [**********]
Party B: Hesai Photonics Technology Co., Ltd.
Address: Building L2-B, Hongqiao World Center, Shanghai
Zip Code: [**********]
Telephone: [**********]
Fax: [**********]
Bank: [**********]
Account Number: [**********]
Contact: [**********]
Article 1 General
1. The Contract is signed by the above-mentioned Party A and Party B through friendly consultation in Beijing in accordance with the Contract Law of the People's Republic of China and other relevant laws and regulations.
2. The Contract is valid for 2 years from March 1, 2020 to February 28, 2022. During the valid duration of the contract, Party A will evaluate the business cooperation between both parties on a regular basis. If the evaluation is not passed, Party A shall be entitled to terminate the Contract at any time upon prior written notice, and Party B shall cooperate with Party A in the transfer of assets. In case of Party B’s losses as a result of Party A's termination of the Contract, Party B shall submit to Party A the compensation breakdown to Party A in writing, and Party A shall have the right to audit and compensate based on audit results.
3. Should the period agreed for period products and service price exceed the Term of the Contract, this Contract will be automatically renewed for such agreed period.
Article 2 Subject of Contract
1. The Parties hereto are legally incorporated and validly existing companies, which are qualified as civil subject under Chinese law and capable of signing external contracts independently and assuming corresponding legal responsibilities. Each party warrants that it has or has obtained all rights, qualifications and authorizations necessary for the execution and performance of the Contract, and that it will independently be liable for the possible consequences and losses arising therefrom and will take all necessary actions for the successful performance hereof.
2. Each party hereto is an independent contractor. The formation of the Contract does not create any agency, joint venture or other legal relationship between Party A and B. Neither party has the right to make legal and other statements on behalf of the other party. Except as permitted by Party A in writing, under no circumstance shall Party B shall use any product or company name and trade mark of Party A or in relation thereto and other logo or mark with Party A’s intellectual property or publicly known in any manner, whether express or implied; Party B shall not conduct commercial activities in the name of Party A for any purpose or any activities that may adversely affect Party A's brand.
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Article 3 Content of Cooperation
1. Both parties agree that if Party A purchases products and related services from Party B based on business needs during the valid duration of the contract, both parties will define the specific products and related services in the form of purchase orders.
2. Purchase orders will be issued through the Supplier Portal System (caigou.baidu.com) and the order form is identified in Annex I. By clicking "Accept Order" at the Supplier Portal, Party B will be deemed to agree and comply with all the terms and conditions in the purchase order which will come into effect. The effective purchase orders shall form an integral part of the Contract and shall have the same legal effect. For any matter not specified in the purchase order, the Contract shall apply.
3. According to the actual business needs, Party A may notify Party B of stock preparation (raw materials, semi-finished products or finished products) in form of email and LOI, etc. prior to issuance of the purchase orders, and Party B shall cooperate.
4. Supplier Portal System (caigou.baidu.com) is the interactive platform between Baidu and its suppliers. Functions are available to Party B on the system such as quotation, order confirmation, shipment and request for payment. Party B accepts all rules of using the system, including but not limited to Registration Instructions to Baidu’s Suppliers, Instructions to Use of Supplier Portal and Convention for Fair and Transparent Workplace of Baidu’s Suppliers. The account of Party B as registered in the system is [Hesai Technology]. All actions performed on the Supplier Portal through this account will be considered to be operated by Party B. In case of damages arisen from loss or improper preservation of the account number or password, Party B shall adduce evidence thereof and be liable for the adverse consequences therefrom.
5. Party B agrees that Party A may resell the products it purchases from Party B to its customers (including, without limitation, sale of the combination thereof with those products self-developed by Party A to its customers ("Product Combinations")) at the prices to be set by Party A. For the resold products, Party B guarantees the end customers (including but not limited to vehicle suppliers, vehicle distributors and vehicle owners) with the same quality assurance, installation and warranty services with those products as agreed herein. In case of damages or liability of Party A as a result of the quality of Party B's products, Party A shall be entitled to claim for and recover compensations from Party B.
6. During the Product Combination, Party B agrees that, if necessary, Party A will combine Party B's products into new products by linking API interfaces. Party B shall not decline to perform its obligations to after-sale services or quality assurance by virtue of such Product Combination actions by Party A. Party B agrees to provide relevant technical consulting services to Party A during Product Combination at no cost to Party A
7. If in the process of cooperation between both parties, Party A designates a supplier to Party B, both parties shall control the supplier in accordance with the division of responsibilities agreed between both parties. The examples are shown below.
Management responsibility division matrix of Baidu’s designated Tier 2 suppliers | |||||||
Price negotiation |
Contract signing |
Payment for shipments |
Delivery tracking |
Quality of shipments at arrival |
Problem analysis |
Review of suppliers | |
Example A | Baidu to be responsible | Tier 1 to be responsible | Tier 1 to be responsible | Tier 1 to be responsible | Tier 1 to be responsible | Tier 1 to be responsible | Tier 1 to be responsible |
Example B | Baidu to be responsible | Baidu to be responsible | Baidu to be responsible | Tier 1 to be responsible | Tier 1 to be responsible | Tier 1 to be responsible | Tier 1 to be responsible |
Example C | Tier 1 to be responsible | Tier 1 to be responsible | Tier 1 to be responsible | Tier 1 to be responsible | Tier 1 to be responsible | Tier 1 to be responsible | Tier 1 to be responsible |
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The above is only for illustration. Actual content and division of responsibilities will be determined depending upon the results of the consultation between both parties. |
8. Within 3 years from the expiration of the Contract, Party B shall ensure the continuous supply of such products and services purchased hereunder by preparing a reasonable amount of inventory or personnel, etc., upon Party A's procurement requirements from time to time or in response to the product replacement or repair requests from Party A, Party A's customers and end customers.
9. Contract Price: None / During the valid duration of the contract, both parties will settle accounts against the unit price of the products agreed in Annex II. If necessary, Party A will give the pricing and quotation template, and Party B shall provide the price breakdown based on the template.
Article 4 Settlement of Payment
1. All costs incurred between Part A and Party B under the Contract shall be settled and paid in RMB.
2. The terms of payment agreed between both parties under the Contract shall be as follows: Party A pays Party B relevant amount in a lump sum within 45 calendar days from Party B's final acceptance of the products and services delivered by Party B and receipt of the VAT special invoice in equivalent amount issued by Party B.
3. Party B shall provide Party A with VAT special invoice in equivalent amount based on the settled amount confirmed by both parties prior to payment. Party A shall be entitled to postpone the payment if the invoice issuance is delayed on the part of Party B. Party B warrants that such postponement will not affect its performance of its contractual obligations.
4. Party A's payment shall be made exclusively by cheque or bank remittance (including Internet banking online payment).
Article 5 Time of Delivery
1. Party B is obliged to cooperate with Party A to minimize delivery cycle upon Party A's request and to complete the delivery of products and related services within the timeframe agreed in the purchase order.
2. Party B shall prepare and submit a reasonable production and shipment plan to Party A for approval based on the time of delivery as specified in the purchase order. Party A has the right to inspect the actual production and shipment progress of Party B as per this plan at any time. In the event of delays in three consecutive milestones, the delivery is considered to be delayed and the Article 5.3 hereof shall apply.
3. If the actual latest delivery date is more than 5 working days from the agreed delivery date as a result of Party B's fault or force majeure, Party A shall be entitled to terminate the Contract upon notice to Party B, and the Contract will be terminated, with effect from the date of such termination notice given by Party A. If Party B is at fault, Party B shall refund the paid amount of the purchase order to Party A within 10 working days from the date of termination, and also pay liquidated damages equivalent to 20% of the total amount of the relevant purchase order. If such liquidated damages are insufficient to cover the loss by Party A, Party B shall be liable for other losses by Party A caused therefrom (including but not limited to litigation expenses and arbitration fees).
Article 6 Terms of Delivery
1. The packaging scheme and marking of the products shall be jointly developed and mutually agreed by both parties. Where Party A does not participate in the development of the packaging scheme, Party B shall take reasonable packaging and protective measures so as to protect the shipment from multiple porterage, handling and long-distance transportation.
2. Party B is responsible for delivering the shipments to the mutually agreed place of delivery, the detailed address of which is set out in the purchase order. Party A shall give prior written notice to Party B if Party A needs to change the place of delivery or the receiver.
3. Ownership to the products and services referenced herein shall pass to Party A upon Party A's acceptance thereof with signature. The risk of damage and loss and the responsibility for preservation of the products and services shall be borne by Party B prior to Party A's acceptance thereof with signature, and shall pass to Party A upon delivery thereof to place of delivery as defined hereunder by Party B and Party A's acceptance thereof with signature.
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Article 7 Product Warranty
1. Party B warrants that the products and services provided are of acceptable quality and comply with environmental requirements; conform to the technical specifications in the purchase order and the provisions in the product manual issued by Party B; and will not cause personal injury and property damage to Party A and its users, of which various indicators comply with laws, regulations, rules as well as national and industrial standards
2. Where Party B undertakes the development responsibility, Party B shall have the capability of technology development and product verification. It shall ensure that the delivered products conform to Party A's technical requirements and are free from process and other defects. Any increase of cost by virtue of Party B's design changes shall be solely borne by Party B. Party B further warrants that it shall promptly notify Party A of the time and technical risks arising during the development stage.
3. If third-party inspection is required for the products, the inspection agency shall be designated by Party A or mutually approved by both parties. Party B shall give Party A prior notice of the inspection time and address as well as items to be inspected, for which the inspection report must be issued at the end of the inspection.
4. Party B warrants that (i) upon delivery to Party A, the product proper or packaging thereof shall be marked with the name of the supplier, product name, product number/lot number, production or inspection date and other relevant information in order to satisfy the requirements of product quality traceability with respect to the abnormality in product quality found during inspection, assembly or use; (ii) upon delivery to Party A, the product proper or packaging thereof have been marked with all identifications imposed by laws, regulations, rules as well as national and industrial standards (including but not limited to compulsory product certification mark, radio transmitting equipment type approval code, network access license mark, electrical and electronic products harmful substances mark, shelf life per environmental requirements); (iii) the products should be supplied by it together with factory inspection reports, purchase order number, product manuals, maintenance and accessory materials, the arrival serial number schedule and other documents or information required by Party A in the purchase order.
5. Party B warrants that it has ownership of the products to be sold to Party A (in case of resale, all the products shall be of qualified quality and ordered from formal and reliable sources and packaging thereof should be original without unpacking) and that such products are free from lien and other encumbrance that may affect Party A's rights. Otherwise, Party A shall have the option to return or replace the products at its sole discretion. If Party A choose to return, Party B shall refund the amount paid by Party A under the purchase order within 5 working days from the date of Party A's request for return; if Party A choose to replace, Party B shall replace the nonconforming products with conforming products and services within 5 working days from the date of Party A's request for replacement; regardless of the return or exchange, Party B shall pay to Party A liquidated damages equivalent to 20% of the total amount of the relevant purchase order, whether return or replace.
6. Party B warrants that all the products and services hereunder are genuine and acquired from formal, reliable and legal sources. If Party A has evidence that all or part of the products and services hereunder are counterfeit, Party A reserves the right to return such products to Party B upon notice. Party B shall retrieve the products within 10 working days from receipt of Party A's notice, and refund the amount paid under the purchase order to Party A, with an additional payment of 50% of the total amount of the purchase order as liquidated damages.
7. Party B warrants that, in respect of the products to be sold to Party A, it shall obtain the license from the owner of the intellectual property rights (including but not limited to trademark, patent and moral rights) therein. Party B shall hold harmless, indemnify and defend Party A from any loss and claim against Party A or its customer arisen from infringement of intellectual property rights or other legal rights and interests of a third party by the products or services provided by Party B by providing relevant documents as required by Party A under active cooperation. In the event of or at imminence of the foregoing claim, Party A shall be entitled to request Party B to take one of the following measures as a remedy:
1) | granting Party A with the right to further use and sell the products in accordance with the Contract; |
2) | repairing or replacing the products and services to ensure non-infringement thereof and compliance thereof as agreement under the Contract; |
3) | Should the measures in 1) and 2) fail, Party B shall retrieve the returned products upon request of Party A and refund the paid amount and pay to Party A liquidated damages equivalent to 100% of total Contract Price; |
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Article 8 Acceptance and Warranty
1. Party B assures compliance with the requirements of national and local laws and regulations on environmental protection, labor, occupational safety and health as well as mandatory certification in the process of product development, production and delivery.
2. Party A shall accept the products and related services with respect to product specifications, materials, functions, and technical indicators in accordance with the Contract within 15 working days upon completion of delivery by Party B.
3. If any the products and related services fail the acceptance by Party A under Section 1 of Article 8 hereof, Party B shall replace them with conforming products and services for Party A within the date agreed by both parties.
4. Warranty period: 12 months, starting from the date of acceptance. If within the warranty period, Party A disassembles the product without permission, Party B will no longer provide free repair or replacement services. Party A’s change of product installation location shall not constitute the disassembly of the product.
5. In case of any product quality defect within the warranty period, Party B shall repair or replace the defective products with conforming products for Party A at its own cost; also Party A reserves the right to hold Party B accountable for breach of contract and damages and the right to re-commence the product and service warranty period.
6. Should Party B fail to conduct such replacement for Party A within the agreed period, Party A shall be entitled to return the nonconforming products and services upon notice to Party B, and Party B shall retrieve these products within 10 working days from receipt of Party A's notice and refund payments for such products and services to Party A and pay to Party A the liquidated damages equivalent to 20% of the amount of the same.
7. During the cooperation period, Party B is obliged to cooperate with the quality improvement activities initiated by Party A on Party B's supply products such as special quality rectification and quality target enhancement, and Party B shall analyze the causes, implement countermeasures and confirm the effects thereof as required.
8. Party B shall be responsible for the product recall in case of failure of Party B’s products to comply with the national or industry standards in respect of personal and property safety or other unreasonable risks jeopardizing personal and property safety for design, manufacture, marking and other reasons in the same batch, model or category of products generally, or if Party B’s products are ordered for a recall by the quality supervision and management department of State Council. If Party A's products or Party A's customers' products built-in with Party B's products are recalled in accordance with the relevant recall procedures due to the problems in Party B's products, Party B shall cooperate with such recall and Party A shall be entitled to recover from Party B related costs incurred by Party A as a result thereof.
9. If Party B is commissioned by Party A to customize products and services in accordance with Party A's design concept or design drawings (hereinafter referred to as "Customized Products and Services"), Party B shall be solely responsible for any legal liability arising from the materials used by Party B (including but not limited to legal liability for infringement of third-party rights and interests). Unless otherwise agreed in writing, the intellectual property rights of the Customized Products and Services shall be attributable to Party A. Party B shall in no way use the relevant customized commodities and patterns for its own purposes in any manner or provide the same to third parties for use. If Party B uses at its discretion or authorizes others to use patterns or logos of the Customized Products and Services, it shall pay 40% of the total Contract Price as liquidated damages with additional compensation to Party A if such liquidated damages are insufficient to cover the loss by Party A.
10. During the valid duration of the contract and within 3 years after the termination of the Contract, Party B shall assign special technical personnel to be subject to telephone consultation by Party A from time to time; upon Party A's prior reasonable request, Party B shall promptly dispatch staff to the site designated by Party A to assist in product warranty or deal with bulk quality problems. In the event of technical rectification of products, major complex and difficult problems and other emergencies, such staff shall arrive at the location designated by Party A within [24] hours.
11. Bulk quality problems mean, with respect of Party B's products, the occurrence of technical rectification, major complex and difficult problems and other and other events in the same failure of the same products during the same period within warranty period which exceeds 20% of the purchased quantity (over 0 sets) or 5 sets or more. In case of such events, Party B shall develop a plan within 3 working days and submit a rectification report to Party A in 8D format. Party A shall have to right to give further rectification comments. The rectification report shall be submitted within following timeframe:
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12. Where the cause of the failure is not clear or determinable for the time being, prior to clarification or determination of the responsibility for such failure, both parties shall fully consult and cooperate with each other to deal with such failure by repair or delivery of components in accordance with the principle of "Customer First, Service First".
13. If Party B's products or Party A's customer's products built in with Party B's products are governed by higher national regulations on repair, replacement and return liability than the requirements herein, Party B's after-sale service obligations shall be performed in accordance with such higher regulations.
14. Where Party B undertakes the development responsibility and the supplied products are required to be verified by test run as a whole, Party B shall assist Party A to deliver such products to the end user and provide the end user with the assembly support on the production line.
Article 9 Force Majeure
1. If either party is prevented from performing the Contract by Force Majeure, such party shall promptly notify and provide the other party with proof of such non-performance within 5 working days from the date of Force Majeure, and the other party may elect to delay performance of, partially perform or cancel the Contract. The affected party shall indemnify the other party from the other party’s loss arisen as a result of affected party's failure to promptly notify the other party.
2. If Force Majeure continues for more than 30 days, either party may terminate the Contract by written notice to the other party, with effect from the date of such notice.
3. If the Contract is terminated by virtue of Force Majeure and Party A has not received the products and services, Party B shall refund the amount paid by Party A.
4. Any Force Majeure event shall not relieve either party’s liability for any breach of contract prior to such event.
Article 10 Liability for Breach of Contract
1. Except as agreed in the Contract, if Party B fails to deliver as scheduled within the period specified herein, Party B shall pay to Party A liquidated damages (starting from the date of overdue) for each day of overdue delivery of products and related services at the rate of 5‰ or RMB 2,000 (whichever is higher shall prevail) of the corresponding amount (or the total Contract Price if the corresponding amount is undeterminable). If overdue delivery exceeds more than seven days, Party A shall have the right to terminate the Contract and request Party B to pay 20% of the total amount of the relevant purchase order as liquidated damages.
2. Except as agreed in the Contract, if Party A fails to pay for the products as scheduled within the period specified herein, Party A shall pay to Party B liquidated damages (starting from the date of overdue) for each day of overdue payment at the rate of 5‰ of overdue amount.
3. If all or part of the products and services hereunder explode, crack or break due to quality defects, causing damage to Party A or personal injury and property damage to third party, Party B shall bear all losses caused to Party A and pay the same liquidated damages equivalent to 20% of the total contract amount; in such case, Party A has the right to cancel the Contract and return all products and services upon notice to Party B. Party B shall retrieve these products within 10 days from receipt of Party A's notice, and refund the paid amount and pay the liquidated damages to Party A.
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Article 11 Dispute Resolution
1. All disputes in performance of the Contract shall be resolved by both parties through negotiation. Should negotiation fail, either party may file a lawsuit with the People's Court of Haidian District, Beijing with jurisdiction.
2. The effectiveness, construction and performance of the Contract and dispute resolution shall be governed by the laws of the People's Republic of China.
Article 12 Confidentiality
1. Without the written consent of a party, the other party shall not disclose the content of the Contract, the content of the RFQ on the Supplier Portal, the content of business communication (such as product design, price information, market information, customer information, etc.) to any third party, and shall not recommend Party A's customized products and service solutions to any third party or carry out business in this way, otherwise the disclosing party shall pay 20% of the total contract amount to the other party; otherwise, the disclosing party shall pay liquidated damages to the other party at 20% of the total Contract Price and be liable for any loss arisen therefrom.
2. Except for disclosure to employees, attorneys, financial advisors, rights authorities, and stock exchanges as required by law, the disclosing party shall cause such recipient to comply with its confidentiality obligations.
3. The confidentiality period of the Contract shall be 5 years after the termination of the Contract, and the confidentiality clause shall not be invalidated by the invalidity, early termination, termination or non-enforceability of the Contract.
Article 13 Effectiveness and Amendment
1. The Contract shall be executed in two counterparts with each party holding one and shall come into effect with signature and seal of the authorized representatives of both parties.
2. In case of any matter not specified in the Contract, both parties shall negotiate and enter into a supplementary agreement, which shall have the same legal effect as the Contract.
3. Any amendment to the terms of the Contract shall be agreed in writing and sealed by the authorized representatives of both parties and shall be in the written form exclusively limited to supplementary agreement, minutes of meeting, fax, letter or e-mail and other legally recognized forms.
Article 14 Notice
1. Any material notice or written communications between both parties must be in Chinese and served via facsimile, e-mail, hand delivery (including express courier) or certified mail.
2. All notices and communications shall be delivered to the address first written on the Contract unless changed by prior written notice.
3. Notices and communications shall be served by facsimile at the exact time shown in the facsimile transmission record, unless the facsimile is sent after 17:00 on that day or the time of the location of the receiving party is not a business day, then the date of receipt shall be the next business day after the time of the location of the receiving party; if served via e-mail, the time when the e-mail enters the e-mail system designated by the receiving party; if served via certified mail, the receipt issued by the post office shall be deemed to be received by the recipient on the 5th working day after the date of sending the document by the sending party.
Article 15 Miscellaneous
1. Under no circumstances shall Party B, without prior written permission from Party A, disclose its contract, agreement or cooperation relationship with Party A in any external communication, publicity, promotion or business cooperation, either expressly or impliedly, or quote the name of "Baidu" or the relevant contents of the contract/agreement with "Baidu" in any written materials or in any contract/agreement with "Baidu".
2. Both parties acknowledge that Party A's Affiliates, including without limitation to Baidu (China) Co., Ltd., Baidu Online Network Technology (Beijing) Co., Ltd., Beijing Baidu Netcom Science and Technology Co., Ltd. and other companies directly or indirectly controlled by Party A, are deemed to be Party A and may have the rights and obligations under the Contract.
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Party A (sealed): Beijing Baidu Netcom Science and Technology Co., Ltd.
Authorized Agent: /s/ Jinghui Zhang
Company seal: /s/ Beijing Baidu Netcom Science and Technology Co., Ltd.
Party B (sealed): Hesai Photonics Technology Co., Ltd.
Authorized Agent: /s/ Peng Yao
Company seal: /s/ Hesai Photonics Technology Co., Ltd.
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Annex I: Template of Purchase Order through Supplier Portal System
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Annex II: Quotation of Period Products and Services
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Exhibit 10.8
Strictly Confidential
SIDE LETTER
THIS SIDE LETTER (this “Side Letter”) is made on [execution date] by and among:
1. | [Name of shareholder], a limited company incorporated under the laws of Hong Kong (the “[Name of shareholder]”); |
2. | [Name of investor], a limited partnership incorporated under the laws of Cayman Islands (the “[Name of investor]”, together with [Name of shareholder], the “Investors” and each an “Investor”); |
3. | Hesai Group, an exempted company incorporated under the laws of the Cayman Islands (the “Cayman Company”); |
4. | Shanghai Hesai Technology Co., Ltd. (上海禾赛科技有限公司), a limited liability company incorporated under the laws of the PRC (the “Company”, together with the Company and their respective subsidiaries, the “Group Companies” and each a “Group Company”); |
5. | LI Yifan (李一帆), a PRC citizen (PRC ID: [***]); |
6. | SUN Kai (孙恺), a PRC citizen (PRC ID: [***]); and |
7. | XIANG Shaoqing ( 向 少 卿 ), a PRC citizen (PRC ID: [***]) (collectively, the “Founders” and each a “Founder”, together with the Group Companies, the “Covenantors” and each a “Covenantor”). |
Each of the parties to this Side Letter is referred to herein individually as a “Party” and collectively as the “Parties”.
WHEREAS:
A. | The Company (formerly known as Shanghai Hesai Photonics Technology Co., Ltd.), [Name of shareholder] and certain shareholders of the Company entered into a Joint Venture Contract on July 23, 2020 (the “Original JV Contract”), and on August 14, 2020, the Company and the concerned shareholders terminated the Original JV Contract; |
B. | [Name of shareholder], as a shareholder of the Company, is entitled to certain preferences and rights under the Original JV Contract (the “Previous Preferences”); |
C. | In order to apply an initial public offering on NYSE, NASDAQ, or other reputable stock exchange approved by the board of the Company (the “Oversea IPO”), the Company intends to carry out a red-chip restructuring, after which, (1) the Cayman Company will hold 100% interests in the Company through a limited company newly established in Hong Kong, and (2) the equity interests of the existing shareholders in the Company will be mirrored in the Cayman Company; |
D. | The Investors intend to participate in the red-chip restructuring of the Group Companies and to subscribe for certain ordinary shares of the Cayman Company so that the equity interests held by [Name of shareholder] in the Company will be mirrored as the ordinary shares held by [Name of investor] in the Cayman Company. |
Strictly Confidential
NOW, THEREAFTER, THE PARTIES AGREED as follows:
1. | RIGHTS OF THE INVESTORS |
1.1 | In the event that the Cayman Company fails to complete the Oversea IPO within twelve months following the date hereof, the ordinary shares held by [Name of investor] in the Cayman Company shall be reclassified and re-designated as preferred shares. The preferences and rights attached to such preferred shares held by [Name of investor] shall be substantially the same as the Previous Preferences enjoyed by [Name of shareholder] under the Original JV Contract and the standard registration rights and conversion rights (the “Investor’s Rights Recovery”). The Covenantors shall and shall procure all the shareholders, directors, and other Group Companies to execute necessary documents and adopt necessary resolutions to ensure the implementation of the Investor’s Rights Recovery. The preferences and rights restored under the Investor’s Rights Recovery shall be retroactive. |
1.2 | This Side Letter shall terminate on the earliest of the following: |
(a) | the completion of the Oversea IPO; |
(b) | the Investors cease to hold any equity interest in the Group Companies; |
(c) | other date otherwise agreed by the Parties. |
1.3 | Notwithstanding anything to the contrary contained herein, the preferences and rights granted to any preferred shares held by [Name of investor] shall terminate on the completion of the Oversea IPO. |
2. | OTHER PROVISIONS |
2.1 | Amendment and Modification. Any term of this Side Letter may be amended only with the written consent of the Parties and any Party may waive any of its rights hereunder without obtaining the consent of any other Party. Any party may waive compliance by any other party with any term or provision of this Side Letter that such other party was or is obligated to comply with or perform for the benefit of such waiving party. Any amendment or waiver effected in accordance with this paragraph shall be binding upon the Parties. |
2.2 | Titles and Subtitles. The titles and subtitles used in this Side Letter are used for convenience only and are not to be considered in construing or interpreting this Side Letter. |
2.3 | Governing Law. This Side Letter shall be governed in all respects by the Laws of Hong Kong without regard to conflicts of law principles. |
Strictly Confidential
2.4 | Dispute Resolution. Any dispute arising from or in connection with this Side Letter shall be submitted to the Hong Kong International Arbitration Centre (“HKIAC”) for arbitration in accordance with the HKIAC Administered Arbitration Rules (the “HKIAC Rules”) in effect. The arbitration tribunal shall consist of three (3) arbitrators appointed according to the HKIAC Rules. The arbitration shall be conducted in English language. The award of the arbitration tribunal shall be final and binding upon the Parties, and the prevailing Party may apply to a court of competent jurisdiction for enforcement of such award. When any dispute occurs and when any dispute is under arbitration, except for the matters in dispute, the Parties shall continue to fulfill their respective obligations and shall be entitled to exercise their rights under this Side Letter. |
[The remainder of this page has been intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Side Letter on the date and year first above written.
Shanghai Hesai Technology Co., Ltd. (Seal) | |
/s/ Yifan LI | |
Name: Yifan LI | |
Hesai Group | |
/s/ Yifan LI | |
Name: Yifan LI |
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Side Letter on the date and year first above written.
Kai SUN | |
/s/ Kai SUN | |
Yifan LI | |
/s/ Yifan LI | |
Shaoqing XIANG | |
/s/ Shaoqing XIANG |
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Side Letter on the date and year first above written.
INVESTOR | |
[Name of shareholder] | |
Name: | |
Title: |
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Side Letter on the date and year first above written.
INVESTOR | |
[Name of investor] | |
Name: | |
Title: |
Schedule of Material Differences
One or more entities entered into Side Letter with the Registrant and/or Shanghai Hesai Technology Co., Ltd. and the founders using this form. Pursuant to Instruction ii to Item 601 of Regulation S-K, the Registrant may only file this form as an exhibit with a schedule setting forth the material details in which the executed agreements differ from this form:
Name of Shareholder/Investor | Execution Date | |
Lightspeed HS (HK) Limited, Lightspeed China Partners III, L.P. | June 1, 2021 | |
Shanghai Guangyi Investment Management Center L.P., Guangyi HS Holding Limited | June 1, 2021 | |
A5J Ltd | June 1, 2021 | |
Lightspeed Opportunity Fund, L.P. | June 1, 2021 | |
MC2 (Hong Kong) Limited | June 1, 2021 | |
Light Select HS HK Limited, Lightspeed China Partners Select I, L.P. | June 1, 2021 |
Exhibit 10.9
UNDERTAKING LETTER
THIS UNDERTAKING LETTER (this “Undertaking Letter”) is made on [execution date] by and between:
1. | [Name of shareholder], a limited liability company incorporated under the laws of the PRC, having its registered address at 3rd Floor, Building #1, No. [address of shareholder] (the “Investor”); |
2. | Hesai Technology Co., Ltd. (上海禾赛科技股份有限公司), a limited company incorporated under the laws of the PRC, having its registered address at Building 2, No. 468 Xinlai Road, Jiading District, Shanghai (the “Company”); |
3. | Mr. Kai SUN, a PRC citizen with ID number of [***]; |
4. | Mr. Yifan LI, a PRC citizen with ID number of [***]; and |
5. | Mr. Shaoqing XIANG, a PRC citizen with ID number of [***] (Shaoqing XIANG, Yifan LI, Kai SUN are hereinafter referred to individually or collectively as the “Founders”). |
WHEREAS:
A. | On July 23, 2020, the Company (Previously known as: Hesai Photonics Technology Co., Ltd. (上海禾赛光电科技有限公司)) signed a Joint Venture Agreement (the “Joint Venture Agreement”) with the Investor and other parties, and approved the Memorandum of Association (the “MA”). Pursuant to the Joint Venture Agreement and the MA, the Investor is granted several preferential/special rights that are different from those of the non-investor (including but not limited to: pre-emptive right, anti-dilution right, right of first refusal, tag-along right, redemption right, information inspection right, special agreements regarding competing parties of the Investor, etc.) (collectively, the “Preferential Rights”). |
B. | The Company intends to actively pursue an overseas initial public offering and listing in the United States or other overseas securities markets (the “Overseas IPO”); |
C. | The Company intends to convert to a limited liability company for the purpose of the Overseas IPO and to undertake a red-chip restructuring (the “Restructuring Plan”), including but not limited to the Company's intention to mirror the share interests of the Investor and other existing shareholders to a newly established Cayman company (the “Cayman Company”), which will indirectly wholly own and control the Company. The Company has made or will make resolutions at the shareholders' meeting and/or the board of directors' meeting to approve the Restructuring Plan, and to require the existing shareholders and/or directors of the Company to execute such other agreements, contracts or documents as may be required (the “Reorganization Documents”); |
D. | In order to protect the rights and interests of the Investor, the Company and the Founders (collectively, the “Promisors”) hereby issue this Undertaking Letter in connection with the termination and reinstatement of the Investor's Preferential Rights; |
E. | The Investor, the Company and the Founders signed a Side Letter (the “Side Letter”) on August 2, 2020. The parties intend to terminate the Side Letter. |
i. | The Promisors hereby undertakes that if the Cayman Company has not completed the Overseas IPO within twelve (12) months from the date of this Undertaking Letter, the Promisors shall be obliged to immediately reinstate the Investor’s Preferential Rights under the Joint Venture Agreement and the MA which have been terminated or required to be terminated; the Promisors shall immediately take all necessary actions and cooperate with the signing of relevant documents to cause the Company or its parent company, subsidiaries and affiliates (the “Group Companies”) to reinstate such Preferential Rights through a valid resolution of a shareholders' meeting and/or the board of directors, and to cause and cooperate with the Company in fulfilling the corresponding external approval/registration/recording procedures to ensure that such reinstatement procedures are legally effective; such reinstatement shall have retroactive effect, i.e. it shall have the practical effect that the Preferential Rights of the Investor have never been terminated. The parties understand that the Investor's temporary waiver of the Preferential Rights is only necessary to facilitate the Company's Overseas IPO; during the period when the Investor’s Preferential Rights are terminated, the Promisors shall not take any action to diminish the Investor's rights and interests, unless with the prior consent of the Investor. For the avoidance of doubt, the termination of the Investor's Preferential Rights under this Undertaking Letter shall not be deemed to be an act of diminution or impairment of the Investor's rights and interests as described in the preceding sentence. |
ii. | This Undertaking Letter will terminate on the earlier of: |
(i) | the completion of the Overseas IPO of the Cayman Company; |
(ii) | for any Investor, as soon as the Investor ceases to hold any equity interest (or shares) in the Cayman Company, the undertaking obligations of the Promisor under this Undertaking Letter shall terminate concurrently; or |
(iii) | such other date as the Company and the Investor may otherwise agree. |
iii. | If any Promisor breaches the Undertaking Letter, all Promisors shall be jointly and severally liable to the Investor for breach of contract. |
iv. | The parties hereby agree that the Side Letter and the confirmation letter shall automatically terminate on the date of this Undertaking Letter and shall be void ab initio. |
v. | The formation, validity, interpretation, performance, and dispute resolution of the Undertaking Letter shall be governed by the laws of the PRC. All disputes arising out of or in connection with the performance of the Undertaking Letter shall be settled by the parties through friendly negotiation. If any dispute cannot be settled through negotiation within thirty (30) days after the occurrence, either party shall have the righ to submit the dispute to Shanghai International Economic and Trade Arbitration Commission for arbitration in Shanghai in accordance with its arbitration procedures and rules then in effect. While any dispute resolution process or related judicial or administrative proceedings are pending, the Promisors shall continue to perform the Undertaking Letter to the fullest extent practicable. |
vi. | The Undertaking Letter shall become effective as of the date of signing (or sealing) by the parties. |
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IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Undertaking Letter on the date and year first above written.
Hesai Technology Co., Ltd. (上海禾赛科技股份有限公司)
By: | /s/ Yifan Li |
Name: Yifan Li
Title: Legal Representative
SIGNATURE PAGE TO UNDERTAKING LETTER
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Undertaking Letter on the date and year first above written.
Kai SUN
/s/ Kai SUN |
Yifan LI
/s/ Yifan LI |
Shaoqing XIANG
/s/ Shaoqing XIANG |
SIGNATURE PAGE TO UNDERTAKING LETTER
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Undertaking Letter on the date and year first above written.
[Name of shareholder]
By: |
Name:
Title:
SIGNATURE PAGE TO UNDERTAKING LETTER
Schedule of Material Differences
One or more entities entered into Undertaking Letter with Hesai Technology Co., Ltd. and the founders using this form. Pursuant to Instruction ii to Item 601 of Regulation S-K, the Registrant may only file this form as an exhibit with a schedule setting forth the material details in which the executed agreements differ from this form:
Name of Shareholder | Execution Date | |
Baidu (China) Co., Ltd. | April 6, 2021 | |
Bosch (China) Investment Co., Ltd. | April 6, 2021 |