Exhibit 10.4

 

 

 

 

 

Exclusive Call Option Agreement

 

 

 

 

 

 

LI Li (李莉)

 

and

 

Shanghai JiuGe Business Management Co. Ltd. (上海九鸽企业管理有限公司)

 

and

 

Shanghai JiuGe Information Technology Co. Ltd. (上海九鸽信息科技有限公司)

 

 

 

 

 

 

 

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  Executive Version

 

 

Contents

 

 

Clause   Page      

1.

Definitions and Interpretation

1

     

2.

Call Option

6

     

3.

Term

6

     

4.

Representation and Warranty

7

     

5.

Undertakings

8

     

6.

Assignees and Successors

8

     

7.

Events of Default

9

     

8.

Termination

9

     

9.

Confidentiality

9

     

10.

Force Majeure

10

     

11.

Governing Law and Dispute Resolution

10

     

12.

Miscellaneous

11

     

Schedule One VIE Structure

14

 

 

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This Exclusive Call Option Agreement (this “Agreement”) is entered into by and
among the following Parties on 16 October 2018 in Shanghai, the PRC:

 

LI Li (李莉), a Chinese citizen with her ID number 310105198005080043 and domicile
at 103 No. 5 Lane 550, Fuquan Road, Changning District, Shanghai
(“Shareholder”);

 

and

 

Shanghai JiuGe Business Management Co. Ltd. (上海九鸽企业管理有限公司), a limited liability
company incorporated under the laws of the PRC with its registered office at
Room 2789, 2/F, No.3 Xuanhua Road, Changning District, Shanghai (“WFOE”);

 

and

 

Shanghai JiuGe Information Technology Co. Ltd. (上海九鸽信息科技有限公司), a limited
liability company incorporated under the laws of the PRC with its registered
office at Room 2762, 2/F, No.3 Xuanhua Road, Changning District, Shanghai (“VIE
Entity”).

 

 

1.

Definitions and Interpretation

 

1.1

Definitions

 

In this Agreement, the following words and expressions shall have the meanings
attributed to them below unless the context otherwise requires:

 

“Agreement”

this Exclusive Call Option Agreement entered into by the Parties;

   

“AIC”

the competent administration for industry and commerce of the PRC;

   

“Business Day”

a day (other than Saturday, Sunday or public holiday) on which licensed banks
are generally open for general banking business in the PRC throughout their
normal business hours;

   

“Call Option”

as defined in Clause 2.1;

     

Entity

   

“Call Option Notice”

as defined in Clause 2.4;

   

“Call Option Period”

a time period during which Shareholder holds equity interests in VIE Entity;

 

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“Call Option Price”

as defined in Clause 2.2;

   

“Change of Control”

any of the following:

 

(1)Shareholder ceases to own directly 100% of the equity interests in VIE
Entity; or

 

(2)any change to the VIE Structure.

   

“CIETAC”

as defined in Clause 11.4;

   

“Closing”

as defined in the Business and Asset Transfer Agreement;

   

“Confidential Information”

all information, documents or materials provided by the Disclosing Party to the
Receiving Party in respect of business, finance, operation, technology,
personnel or any other aspect of the Disclosing Party or its affiliates shall be
deemed as confidential, whether in oral, in written, machine-readable or in any
other form, including, but not limited to electronic media files, contracts,
reports, memos, procedures, formulas, algorithms, projects, photographs, plans,
drawings, concepts, products, specifications, sample ideas, airspeed
measurements, names of customers, dealers and/or distributors, prices and costs,
settings and marketing information, and all information, documents or materials
derived from the foregoing;

   

“Disclosing Party”

any party which discloses Confidential Information;

   

“Event of Default”

as defined in Clause 7;

   

“Exclusive Consultancy Agreement”

the exclusive consultancy agreement entered into by WFOE and VIE Entity
concurrently with this Agreement, pursuant to which VIE Entity engages WFOE as
its exclusive service provider;

 

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“Financial Indebtedness” 

means, with respect to any Party, all kinds of indebtedness which, in accordance
with generally accepted accounting principles in the PRC, will be included in
determining liabilities as shown on the liability side of a balance sheet of
that Party and all indebtedness and liabilities of others assumed or guaranteed
or in respect of which that Party is secondarily or contingently liable (other
than by endorsement of instruments in the course of collection), whether by
reason of any agreement to acquire such indebtedness or to supply or advance
sums or otherwise;

   

“Force Majeure Event”

means any extraordinary event or circumstance that is unforeseeable, unavoidable
and out of control by any Party and that renders due performance of an
obligation under this Agreement illegal or impracticable, including any change
in law, natural disasters, strikes, war, riot, civil commotion, fire, explosion,
sabotage, terrorism or embargo;

   

“Loan Agreement”

means the loan agreement entered into by WFOE and Shareholder pursuant to which
WFOE agrees to make available to Shareholder a facility of RMB10,000,000 for the
purpose of Shareholder’s capital contributions to VIE Entity;

   

“Option Interest”

as defined in Clause 2.1;

   

“Parties” or “Party”

collectively Shareholder, WFOE and VIE Entity, or individually, any of them, as
the context requires;

   

“Power of Attorney”

the power of attorney entered into by Shareholder and WFOE concurrently with
this Agreement, pursuant to which Shareholder authorizes WFOE as its exclusive
agent to exercise all his rights and powers in his capacity as the shareholder
of VIE Entity;

   

“PRC”

the People’s Republic of China and for the purposes of this Agreement, for the
purposes of this Agreement only, excluding Hong Kong Special Administrative
Region, Macau Special Administrative Region and Taiwan;

 

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“Receiving Party”

any party which receives Confidential Information;

   

“Recipient”

as defined in Clause 9.2;

   

“RMB” 

the lawful currency for the time being of the PRC;

   

“Secured Obligations”

as defined in the Share Pledge Agreements;

   

“Senior Management”

Chief executive office, chief operation officer, chief financial officer,
general manager, deputy general manager of VIE Entity and other managerial
positions as defined by VIE Entity’s articles of association;

   

“Share Pledge Agreement”

the share pledge agreement entered into by WFOE, Shareholder and VIE Entity
concurrently with this Agreement, pursuant to which Shareholder pledges 100%
equity interests in VIE Entity held by him in favour of WFOE as security for
full performance and discharge of the Secured Obligations;

   

“Shareholder”

LI Li (李莉), a Chinese citizen with her ID number 310105198005080043 and domicile
at 103 No. 5 Lane 550, Fuquan Road, Changning District, Shanghai, who holds 100%
equity interest in VIE Entity;

   

“Transaction Documents”

(1) the VIE Agreements.

   

“VIE Agreements” 

collectively,

 

(1) the Exclusive Consultancy Agreement; 

 

(2) this Agreement; 

 

(3) the Power of Attorney;

 

(4) the Loan Agreement; and

 

(5) the Share Pledge Agreement.

 

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“VIE Entity”

Shanghai JiuGe Information Technology Co. Ltd. (上海九鸽信息科技有限公司), a limited
liability company incorporated under the laws of the PRC with its registered
office at Room 2762, 2/F, No.3 Xuanhua Road, Changning District, Shanghai; 

   

“VIE Structure” 

the variable interest entities structure as set forth in Schedule One;

   

“WFOE”

Shanghai JiuGe Business Management Co. Ltd. (上海九鸽企业管理有限公司), a limited liability
company incorporated under the laws of the PRC with its registered office at
Room 2789, 2/F, No.3 Xuanhua Road, Changning District, Shanghai.

 

 

1.2

Interpretation

 

 

(a)

Any reference to “Party”, “Shareholder”, “WFOE” and “VIE Entity” shall include
their respective successors and permitted assignees and any persons deriving
title under them;

 

 

(b)

In this Agreement, unless the context requires otherwise, words importing the
singular include the plural and vice versa and words importing one gender
includes both genders and the neuter;

 

 

(c)

References to this Agreement shall be construed as references to this Agreement
as amended or supplemented from time to time;

 

 

(d)

Headings are inserted for reference only and shall not affect the construction
of this Agreement;

 

 

(e)

Words and expressions defined in the other Transaction Documents shall, unless
otherwise specified, have the same meanings when used herein;

 

 

(f)

References herein to statutory provisions shall be construed as references to
those provisions as respectively amended or re-enacted (whether before or after
the date hereof) from time to time.

 

2.

Call Option

 

2.1

Shareholder grants WFOE an exclusive, irrevocable and unconditional right to
purchase or to designate a third party to purchase 100% equity interests held by
Shareholder in VIE Entity (“Option Interest”) during the Call Option Period
(“Call Option”).

 

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2.2

The price for the Option Interest (“Call Option Price”) shall be RMB one dollar
or the lowest amount of consideration permitted under the PRC laws, whichever is
lower, and shall be paid in cash.

 

2.3

The Call Option Price does not include applicable taxes in the PRC and VIE
Entity shall pay such taxes.

 

2.4

WFOE may at its sole discretion exercise the Call Option at any time, in any
manner and in any number of times during the Call Option Period insofar as
permitted by the PRC laws by serving on Shareholder a written notice (“Call
Option Notice”) of WFOE’s wish to exercise the Call Option.

 

2.5

Each Call Option Notice shall specify the percentage of equity interests in VIE
Entity that WFOE wish to acquire.

 

2.6

Within five Business Days upon receipt of Call Option Notice, Shareholder shall
enter into a share transfer agreement with WFOE and perfect filing, registration
and approval requirements under the PRC laws, including without limitation to
registration at AIC.

 

2.7

If for any reason a filing, registration or approval is not obtained for
acquisition of any Option Interest, WFOE shall have the right to revoke the
corresponding Call Option Notice, in which case the Call Option under this
Clause shall continue unaffected and may be exercised by WFOE any time during
the Call Option Period.

 

3.

Term

 

3.1

This Agreement shall become effective upon the date of execution by the Parties
and remain effective during the Call Option Period.

 

4.

Representation and Warranty

 

4.1

WFOE represents and warrants to Shareholder that

 

 

(a)

it is duly incorporated and validly existing under the PRC laws;

 

 

(b)

it has full power and authority to enter into and perform this Agreement;

 

 

(c)

it has taken all requisite corporate actions in respect of execution and
performance of this Agreement;

 

 

(d)

execution and performance of this Agreement will not violate the WFOE’s articles
of association, WFOE’s obligations, contractual or otherwise, and the PRC laws;

 

 

(e)

there are no legal proceedings pending or, to its knowledge, threatened against
WFOE.

 

4.2

Shareholder represents and warrants to WFOE that

 

 

(a)

he is the sole legal and beneficial owner of the Option Interest;

 

 

(b)

he has full power and authority to enter into and perform this Agreement;

 

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(c)

execution and performance of this Agreement reflects his genuine intention;

 

 

(d)

the Option Interest are validly issued and fully paid up;

 

 

(e)

the Option Interest are free of encumbrances of any kind except for the
encumbrances created under the Transaction Documents;

 

 

(f)

the Option Interest is not subject to any option to purchase or pre-emptive
rights except for those created under the Transaction Documents.

 

4.3

VIE Entity represents and warrants to WFOE that

 

 

(a)

it is duly incorporated and validly existing under the PRC laws;

 

 

(b)

it has full power and authority to enter into and perform this Agreement;

 

 

(c)

it has taken all requisite corporate actions in respect of execution and
performance of this Agreement;

 

 

(d)

execution and performance of this Agreement will not violate VIE Entity’s
articles of association, VIE Entity’s obligations (contractual or otherwise) and
the PRC laws;

 

 

(e)

the Option Interest are validly issued and fully paid up;

 

 

(f)

there are no legal proceedings pending or, to its knowledge, threatened against
VIE Entity.

 

5.

Undertakings

 

5.1

Shareholder undertakes that unless having obtained prior written consent of
WFOE, he may not

 

 

(a)

transfer or dispose of the Option Interest in any manner;

 

 

(b)

transfer or dispose of any of VIE Entity’s assets in any manner;

 

 

(c)

create encumbrances of any kind over the Option Interest except for the
encumbrances created under the Transaction Documents;

 

 

(d)

resolve to or procure VIE Entity to

 

 

(i)

change its registered capital;

 

 

(ii)

amend its articles of association;

 

 

(iii)

change any of its shareholders;

 

 

(iv)

appoint, remove or replace its Senior Management;

 

 

(v)

make or receive investment of any kind or merge or consolidate with any entity;

 

 

(vi)

change information filed at the competent authorities in the PRC;

 

 

(vii)

make any lending or borrowing or provide security of any kind;

 

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(viii)

pay, make or declare any dividend, charge, fee or other distribution of any
kind;

 

 

(ix)

incur, create or permit to subsist or have outstanding any Financial
Indebtedness;

 

 

(x)

enter into any agreements which conflict with this Agreement;

 

 

(xi)

do any acts which would adversely impair its ability to perform the obligations
under the Transaction Documents.

 

5.2

Shareholder further undertakes that

 

 

(a)

he shall use his best endeavors to maintain VIE Entity in valid existence in
accordance with the PRC laws;

 

 

(b)

he shall notify WFOE in a timely manner any event or circumstances which would
adversely impair the valid existence, financial conditions, assets or goodwill
of VIE Entity.

 

6.

Assignees and Successors

 

6.1

Neither Shareholder nor VIE Entity may assign any of its rights and obligations
under this Agreement without the prior written consent of WFOE.

 

6.2

WFOE may assign any of its rights and obligations under this Agreement by giving
prior written notice to Shareholder and VIE Entity.

 

6.3

This Agreement shall be binding upon the respective successors and permitted
assignees of and any persons deriving title from Shareholder, WFOE and VIE
Entity.

 

7.

Events of Default

 

7.1

Each of the following events shall be an event of default (“Event of Default”)

 

 

(a)

if Shareholder or VIE Entity fails to perform or observe any of its obligations
under the Transaction Documents;

 

 

(b)

if any representations, warranties or undertakings made by Shareholder or VIE
Entity under the Transaction Documents proves to be untrue or inaccurate in any
material respect and such breach, if capable of remedy, is not cured within ten
Business Days;

 

 

(c)

if Shareholder or VIE Entity fails to perform or observe any of its obligations
under the Transaction Documents;

 

 

(d)

if for any reasons any material obligations under the Transaction Documents
cease to be legal, valid, binding and enforceable;

 

 

(e)

if any Change of Control occurs without WFOE’s prior consent;

 

 

(f)

if any change is made to the VIE Structure or any provisions of the VIE
Agreements without WFOE’s prior consent;

 

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(g)

if any litigation, arbitration, administrative, governmental, regulatory or
other investigation, proceedings or dispute are commenced or threatened against
Shareholder or VIE Entity.

 

7.2

If an Event of Default occurs and is continuing, WFOE may exercise any or all of
its rights, remedies and powers under any of the Transaction Documents.

 

8.

Termination

 

8.1

This Agreement may be terminated at any time with agreement of the Parties.

 

8.2

WFOE may unilaterally terminate this Agreement by giving one-month written
notice to the other Parties without any cost, penalty and/or liability.

 

8.3

Under no circumstances Shareholder or VIE Entity may unilaterally terminate this
Agreement.

 

9.

Confidentiality

 

9.1

During the term of this Agreement and for a period of ten years after the date
of expiry of all the Transaction Documents, the Receiving Party shall:

 

 

(a)

keep Confidential Information in confidence;

 

 

(b)

not disclose Confidential Information to any person other than with the prior
written consent of the Disclosing Party or in accordance with Clauses 9.2 and
9.3; and

 

 

(c)

not use Confidential Information for any purpose other than the performance of
its obligations under the Transaction Documents.

 

9.2

During the term of this Agreement, the Receiving Party may disclose Confidential
Information to any of its directors, employees, agents and professional advisers
(each a “Recipient”) to the extent that such disclosure is reasonably necessary
for the purposes of the Transaction Documents.

 

9.3

The Receiving Party shall procure that each Recipient is made aware of and
complies with all the Receiving Party's obligations of confidentiality under
this Agreement.

 

9.4

The obligations contained in Clauses 9.1 to 9.3 shall not apply to any
Confidential Information which:

 

 

(a)

at the date of this Agreement is in, or at any time after the date of this
Agreement comes into, the public domain other than through breach of this
Agreement by the Receiving Party or any Recipient;

 

 

(b)

was not obtained directly or indirectly from the Disclosing Party and which was
available to the Receiving Party or to a Recipient on a non-confidential basis
from a source other than the Disclosing Party, provided that such source is not
and has not been bound by any obligations of confidentiality with the Disclosing
Party; or

 

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(c)

was required to be disclosed in accordance with applicable laws or regulations
of a stock exchange.

 

10.

Force Majeure

 

10.1

If a Force Majeure Event occurs, to the extent that any obligations of any Party
under this Agreement cannot be performed as a result of such Force Majeure
Event, such obligations shall be suspended so long as such Force Majeure Event
subsists and the due date for performance thereof shall be automatically
extended, without penalty, for a period equal to such suspension.

 

10.2

The Party encountering a Force Majeure Event shall promptly inform the other
Parties in writing and shall furnish proof of such Force Majeure Event.

 

10.3

The Party encountering a Force Majeure Event shall also use all reasonable
endeavours to mitigate the effects of such Force Majeure Event.

 

10.4

If a Force Majeure Event occurs, the Parties shall immediately consult with each
other in order to find a fair and reasonable solution and shall use all
reasonable endeavours to minimize the consequences of such Force Majeure Event.

 

11.

Governing Law and Dispute Resolution

 

11.1

This Agreement shall be governed by and construed in accordance with the PRC
laws.

 

11.2

In the event any dispute arises out of or in connection with this Agreement, the
Parties shall attempt in the first instance to resolve such dispute through
friendly consultations.

 

11.3

If any dispute has not been resolved by friendly consultations within fifteen
Business Days after any Party has served written notice on the other Parties
requesting the commencement of such consultations, then any Party may demand
that the dispute be finally settled by arbitration in accordance with the
following provisions of this Clause 11.

 

11.4

The arbitration shall be submitted to China International Economic and Trade
Arbitration Commission (“CIETAC”) for arbitration in accordance with its
arbitration rules in force at the date of submission of the dispute, which rules
are deemed to be incorporated by reference in this Clause 11.

 

11.5

The place of the arbitration shall be Beijing and the language of the
arbitration shall be English.

 

11.6

The appointing authority shall be CIETAC. There shall be three arbitrators. One
arbitrator shall be nominated by Shareholder and one arbitrator shall be
nominated by WFOE. The two arbitrators so chosen shall select a third
arbitrator, provided that if such two arbitrators shall fail to choose a third
arbitrator within thirty days after such two arbitrators have been selected,
CIETAC, upon the request of any Party, shall appoint a third arbitrator. The
third arbitrator shall be the presiding arbitrator.

 

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11.7

The arbitration shall be conducted in private. The Parties agree that all
documents and evidence submitted in the arbitration (including without
limitation any statements of case and any interim or final award, as well as the
fact that an arbitral award has been made) shall remain confidential both during
and after any final award that is rendered unless the Parties otherwise agree in
writing or unless otherwise required by law.

 

12.

Miscellaneous

 

12.1

Notices

 

 

(a)

Any notice or other communication provided for in this Agreement shall be in
writing in the English language and shall be served on the Parties at the
respective addresses or the facsimile numbers or the email addresses (as the
case may be) below:

 

 

(i)

To WFOE

 

Attention:

 

Address:

 

Telephone:

 

Fax:

 

Email:

 

 

(ii)

To Shareholder

 

Attention:

 

Address:

 

Telephone:

 

Fax:

 

Email:

 

 

(iii)

To VIE Entity

 

Attention:

 

Address:

 

Telephone:

 

Fax:

 

Email:

 

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(b)

A notice delivered personally shall be deemed to be received when delivered and
any notice sent by pre-paid recorded delivery post shall be deemed (in the
absence of evidence of earlier receipt) to be received two Business Days after
posting and in proving the time of dispatch it shall be sufficient to show that
the envelope containing such notice was properly addressed, stamped and, and in
the case of a facsimile message or an electronic mail, shall be deemed to be
received on the date of transmission (in the territory of the recipient). If a
communication would otherwise be deemed to have been delivered outside normal
business hours (being 9:00 a.m. to 5:00 p.m. on a Business Day) in the time zone
of the territory of the recipient under the provisions of this Clause 12.1, it
shall be deemed to have been delivered at the next opening of business in the
territory of the recipient. Any party may change its address for purposes hereof
by not less than five Business Days’ notice as aforesaid to the other Parties.

 

12.2

Entire Agreement

 

This Agreement supersedes any previous agreement between the Parties in relation
to the transaction contemplated by the Transaction Documents.

 

12.3

No Waiver

 

 

(a)

No waiver of any provision of this Agreement shall be effective unless made in a
written instrument signed by the Party waiving such provision;

 

 

(b)

Any failure or delay by any Party to exercise any rights and powers under this
Agreement shall not be deemed to be a waiver of such rights and powers.

 

12.4

Illegality and Severability

 

If at any time any provision of this Agreement is or becomes illegal, invalid or
unenforceable in any respect under the PRC laws, the legality, validity and
enforceability of the remaining provisions shall not in any way be affected or
impaired.

 

12.5

Expenses and Fees

 

Unless agreed otherwise, the Parties agree that each Party shall assume its own
expenses, fees and taxes in connection with preparation, execution and
performance of this Agreement.

 

12.6

Amendment

 

This Agreement may be changed or amended by written agreement signed by all
Parties.

 

12.7

Language

 

This Agreement shall be made in English.

 

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12.8

Counterparts

 

This Agreement may be executed in any number of counterparts and all of which
taken together shall constitute one and the same instrument.

 

 

 

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(Signature Page)

 

 

 

 

 

 

LI Li (李莉)

 

 

 

 

 

Signature:_______________

 

 

 

 

 

 

Shanghai JiuGe Business Management Co. Ltd. (上海九鸽企业管理有限公司)

 

 

 

 

 

Authorized Signature (Stamp):_______________

 

 

 

 

 

 

Shanghai JiuGe Information Technology Co. Ltd. (上海九鸽信息科技有限公司)

 

 

 

 

 

Authorized Signature (Stamp):_______________

 

 

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