Exhibit 10.1

 

Exclusive Business Cooperation Agreement

 

This Exclusive Business Cooperation Agreement (this “agreement”) is made and entered into by and between the following parties in Hangzhou on October 4, 2018:

 

Party A: Hangzhou Yihan Technology Co., Ltd.

Address: Room 410, Floor 4, Building A11, Jiusheng Road 9, Jianggan District, Hangzhou.

 

Party B: Hangzhou Hanyi E-commerce Co., Ltd.

Address: Room 430, Floor 4, Building A13, Jiusheng Road 9, Jianggan District, Hangzhou

 

Each of Party A and Party B shall be hereinafter referred to as a “Party” individually, and as the “Parties” collectively.

 

Whereas,

 

1. Party A is a wholly foreign-owned enterprise established in China with businesses in technological development of computer software and hardware, technological consulting, technological services, clothing, shoes & hats, design of leather goods; wholesales and retailing (including online sales): garment, shoes & hats, leather goods, computer software and hardware, digital and electronic products, cosmetics, articles of daily use, communication equipment, sports equipment and bicycle accessories.

 

2. Party B is a company registered in China with businesses in the following: wholesales and retailing (including online sales), garment, shoes & hats, leather goods, computer software & hardware, digital & electronic products, household appliances, pet supplies, jewelry, kitchenware, cosmetics, articles of daily use, communication equipment, sports equipment, auto accessories, prepackaged foods (validated license), fresh aquatic products, fodder, sanitation supplies and disinfection supplies; services: technological development, technological consulting, technological services and results transferring of computer software & hardware, garment, shoes and hats, design of leather goods, domestic advertisement (excluding internet advertisement); international cargo trade (except items forbidden by national and administrative laws and regulations, business of items that restricted by laws and administrative regulations cannot be started unless license is obtained); all other legitimate business for which no approval is required. All existing businesses of Party B and Party B’s subsidiaries and those during the effective term of this agreement shall be jointly referred to as the “Primary Business”.

 

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3. Party A is willing to provide Party B with exclusive technical service, consulting services and other services (for the specific scope, please refer to the following clauses) during the term of this agreement by utilizing Party A’s advantages over human resource, technology and information, and Party B is willing to accept such services provided by Party A or Party A’s designee(s) (including Party A’s oversea parent company or a subsidiary under its direct or indirect control) according to the provisions herein.

 

Now, therefore, through mutual discussion, the Parties have reached the following agreement:

 

1. Services provided by Party A

 

1.1 Party B hereby appoints Party A as Party B’s exclusive service provider to provide Party B with complete technology support, business support and related consulting services during the term of this agreement, in accordance with the terms and conditions of this agreement. Such services may include all necessary services within the scope of the Principal Business of Party B as may be determined from time to time by Party A, including, but not limited to, the following: technical service, network support, business consulting, intellectual property license, equipment leasing, marketing consultation, system integration, product development and system maintenance, provide management and consulting services related to Party B’s business operation and, from time to time, provide other consultations and services related to the foregoing services and according to Party B’s requests, given that such requests are permitted under PRC laws.

 

1.2 Party B agrees to accept consultations and services provided by Party A. Party B further agrees that Party B shall not accept any consultations and/or services provided by any other party during the term of this agreement and shall not cooperate with any third party. Party A can designate a third party (the third party can sign agreements described under article 1.4 herein in part or full) to provide consultations and/or services herein to Party B.

 

1.3 In order to ensure Party B meets the cash flow required for daily operations and/or to compensate any losses arising from the daily operation, regardless of whether Party B actually suffers from operational losses, Party A can independently decide to provide financial support to Party B (given that it is permitted by PRC laws). Party A can provide financial support for Party B through entrusted loan, for which the Parties shall sign a separate entrusted loan contract.

 

1.4 Service Providing Methodology:

 

(1) The Parties agree that, during the term of this Agreement, Party B may enter into further technology and consulting service agreements with Party A directly or through their respective affiliates and reach an agreement on the contents, methods, personnel and fees of the specified services.

 

(2) To fulfill this agreement, the Parties agree that both Party A and Party B can sign license agreements on intellectual property rights (including but not limited to: software, trademark, patents and technical secrets) directly or through their respective affiliates during the term of this agreement. Such license agreements shall allow Party B or Party B’s affiliates to use the relevant intellectual property rights of Party A at any time according to the business needs of Party B or Party B’s related parties.

 

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(3) To fulfill this agreement, the Parties agree that both Party A and Party B can sign equipment or plant leasing agreements directly or through their respective affiliates during the term of this agreement. Such equipment or plant leasing agreements shall allow Party B or Party B’s affiliates to use the relevant intellectual property rights of Party A at any time according to Party B’s business needs.

 

(4) To fulfill this agreement, the Parties agree that both Party A and Party B can enter into other agreements such that Party A can provide other services to Party B directly or through their respective affiliates during the term of this agreement.

 

(5) Party A can independently decide to subcontract the services to be provided to Party B in part or full herein to a third party with the corresponding business capacity and resource.

 

1.5 For the purpose of providing services in accordance to this agreement, the Parties shall promptly communicate with each other with regards to relevant information about business and/or other customers.

 

The service provided by Party A herein shall be exclusive. Without Party A’s prior written consent during the term of this agreement, Party B shall not enter into any agreement or, in any way, accept any services that are identical or similar to that provided by Party A from any third party. Party B may continue to implement existing service contracts with third parties that involve identical or similar services provided by Party A with the written consent of Party A; If Party A does not approve the existing service contracts with third parties, Party B shall immediately terminate this agreement with the third party and also undertake any expenses and responsibilities for terminating this agreement. Other contracts that Party B is implementing or other legal documents defining Party B’s obligations shall still be implemented by Party B. Without Party A’s prior written consent, Party B shall not change, revise or terminate such contracts or legal documents.

 

1.6 In order to specify the Parties’ rights and obligations and ensure that the foregoing service provisions are actually implemented, the Parties agree to the following, provided that they are permitted under PRC laws:

 

(1) Party B shall carry out its business in accordance the opinions and suggestions provided by Party A under article 1.1 herein.

 

(2) Party B will appoint the nominee recommended by Party A as Party B’s director through the appointment procedures of PRC Laws (including any laws, regulations, rules, notices, interpretations or other documents with binding force issued by the central government, local legislative, administrative or judicial departments before and after the signing of this agreement, hereinafter referred to as “PRC Laws”) and, to the extent permitted by PRC laws, will appoint the senior manager recommended and employed by Party A as Party B’s general manager, chief financial officer and other senior management personnel that are in charge of monitoring Party B’s company business and operation. Except for retirement, resignation, disqualification or death, Party B shall not dismiss the company’s director recommended by Party A under any circumstances without the prior written consent of Party A.

 

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(3) Party B agrees to have Party B’s director and senior manager exercise the powers that they have under the laws, regulations and articles of association based on Party A’s instruction.

 

(4) Party A can establish relevant business departments in Party B’s company. Party A shall pay salary and remunerations to staffs of the relevant business department and also undertake relevant welfare costs and expenditure according to PRC laws.

 

(5) Party A is entitled to conduct business activities related to the provision of services on behalf of Party B. Party B shall provide all necessary support and convenience for Party A to conduct such business activities smoothly, including without limitation, issuing all necessary power of attorney for the provision of services.

 

(6) In cases permitted by PRC Laws, Party A is entitled to check Party B’s accounts periodically and at any time, and Party B shall keep its accounts accurately and in due course, and provide the accounts to Party A upon its request. Party A agrees to coordinate with Party A and Party A’s shareholders (direct or indirect) over auditing (including but not limited to connected transaction auditing and other various auditing contents) and provide related information about Party B’s operation, business, customers, finance and staffs to Party A, Party A’s shareholders (direct or indirect) and/or auditor engaged by Party A during the term of this agreement, and also agree that Party A’s shareholders can disclose such information to satisfy the requirements of the securities regulation.

 

(7) Party B agrees to deliver the relevant certificates and seals which are important to Party B’s daily operation, including Party B’s business license, organizational code certificate (if any), official seal, contract seal, special seal for finance and legal representative’s seal, to Party B’s director, legal representative, general manager, chief financial officer and other senior management personnel recommended by Party A and appointed by Party B according to legal procedures for custody.

 

2. Calculation of Service Fee, Payment Mode, Financial Statements, Auditing and Taxation

 

2.1 With regard to the services provided by Party A according to this agreement and to the extent permitted by PRC Laws, Party B and Party B’s subsidiary shall pay to Party B service fees (hereinafter referred to as “service fees”) equivalent to the net profit of Party B and Party B’s subsidiary after deducting the annual loss of the year before (if necessary), deducting the necessary costs, expenses and taxes within the corresponding fiscal year and appropriating the statutory reserve fund according to the law during the term of this agreement; Party B is entitled to affirm the foregoing deduction items. The amount of such service fees shall be determined by Party A. The calculation and adjustment of the service fees shall take into consideration the following factors without limitation, and Party A is entitled to independently decide to adjust the service fees without obtaining Party B’s consent: (a) the difficulty in technologies provided by Party A and the complexity of technological consulting and other services provided by Party A; (b) the time required by Party A’s technical staffs to provide such software development, technological consulting and other services; (c) specific content and commercial value of software development, technological consulting and other services provided by Party A; (d) market price of the services of the same type. In case that Party A does not adjust the amount or proportion of the foregoing service fees, the amount or proportion determined the last time shall prevail. The service fees shall be calculated annually. Party B shall pay the service fees to Party A’s designated bank account within 10 working days after receiving the bill for the service provided by Party A of the previous fiscal year, and Party B shall send the copy of payment voucher to Party A by mail or fax within 10 days after payment. In case that Party B fails to pay the service fees on time due to the actual business situation of the previous fiscal year, the unpaid service fee of the previous fiscal year can be postponed to the end of next year with Party A’s written permission. Party A is entitled to adjust the frequency in paying the service fees, including without limitation, monthly or quarterly payments, and Party B shall cooperate. Unless otherwise stated herein, if Party B fails to pay the service fees to Party A in full on time according to this clause, Party A is entitled to ask Party B to pay a daily 0.03% delay surcharge of the unpaid balance in addition to paying the service fees.

 

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2.2 Party A agrees that Party will enjoy and undertake all economic interests and risks arising from Party B’s business during the term of this agreement; When Party B suffers from operating loss or faces management difficulties, Party A can choose to provide financial support. In case of the occurrence of foregoing situation, Party A is entitled to decide whether Party B will continue its business operation. Party B shall accept Party A’s decision unconditionally.

 

2.3 Party B shall provide its audited consolidated financial statement to Party A within 90 days of the end of each fiscal year (hereinafter referred to as the “previous fiscal year”). The consolidated financial statement shall be audited and certified by an independent CPA approved by Party A. In case of any insufficient amount paid to Party A by Party B in the previous fiscal year according to the audited consolidated financial statement, Party B shall pay the balance to Party A within 5 working days as of the date when the balance is discovered by Party A or Party B.

 

2.4 Party B shall prepare financial statements required by Party A in accordance with the requirements of applicable laws, generally acknowledged accounting standards and business practice.

 

2.5 After notified by Party A one working day in advance, Party B shall allow Party A and/or Party A’s designated auditor to review Party B’s relevant account books and record and copy necessary partial book accounts and records in the main office location of Party B so as to verify the accuracy in Party B’s income and statements. Party B shall provide related information about Party B’s operation, business, customers, finance and staffs according to Party A’s requirements, and agree that Party A or Party A’s direct or indirect shareholder can disclose or make such information publicly accessible if necessary.

 

2.6 The tax arising from the execution of this agreement shall be undertaken respectively by each party.

 

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3. Intellectual Property Right, Confidentiality and Prohibited Competition

 

3.1 Unless otherwise permitted by Party A, Party A shall have exclusive and proprietary ownership in any rights, ownership, interests and intellectual property right generated or created by Party B and Party B’s subsidiary during the term of this agreement, including without limitation, existing and future total copyrights, patents (including invention patents, utility model patents and appearance design patents), patent applications, trademarks, brands, software, technical secrets, commercial secrets, relevant reputations, domain names and other any similar rights (herein after referred to as “the rights”), whether or not developed by Party A, Party B, or both Parties. Party B shall not claim any such rights from Party A. Party B shall sign all documents and take all actions for Party A to become the owner of the rights. Party B shall guarantee that there is no defects of right for the rights and will compensate any losses to Party A for any defects of rights.

 

3.2 Without Party A’s prior written consent, Party A shall not and shall urge Party B’s subsidiary not to transfer, mortgage, permit or dispose of the rights in other ways.

 

3.3 Upon Party A’s request, Party B shall have the intellectual property right of Party B’s subsidiary transferred to Party A. Party A can use the intellectual property right possessed by Party B and Party B’s subsidiary during the term of this agreement.

 

3.4 Party B shall manage the rights according to Party A’s instruction from time to time, including without limitation, the transferring or authorizing of the rights to Party A or a party designated by Party A to the extent permitted by PRC Laws.

 

3.5 The Parties admit that any oral or written information exchanged between the parties in connection with this agreement are regarded as confidential information. Each party shall maintain confidentiality of all such confidential information, and without written consent of other parties, the Parties shall not disclose any relevant confidential information to any third party, except for information that are: (a) known to the public (not disclosed to the public by the party receiving the information); (b) disclosed according to the requirements of applicable laws or any stock exchange; or (c) required to be disclosed by any Party to its legal or financial consultant to fulfill transactions contemplated hereunder, provided that such legal or financial consultant is also bound by confidentiality obligations similar to those set forth in this article. Disclosure of any confidential information by the employees or institutions employed by any Party shall be deemed as disclosure of such confidential information by such Party, and such Party shall be held liable for breach of this agreement. This article shall survive the termination of this agreement, notwithstanding the reason for the termination.

 

3.6 Party B shall not sign any documents or make relevant commitments that conflicts with the interests provided by the legal documents, such as agreements, signed by Party A, Party B and Party A’s designated staff. Party B shall not cause conflict of interests between Party B, Party A and Party A’s shareholder through action or omission. In case of such conflict of interest (Party A is entitled to decide whether such conflict of interest exists), Party B shall immediately take measures to eliminate it as much as possible, subject to the approval by Party A or Party A’s designated person. However, in case that any measures to eliminate the conflict of interest are rejected, Party A is entitled to execute the purchase option in the “Exclusive Option Agreement” signed by Party A, Party B and Party B’s existing shareholders on October 4, 2018.

 

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3.7 Without Party A’s consent, Party B shall not (directly or indirectly) and shall urge Party B’s subsidiary not to engage in businesses outside the scope permitted by Party B’s business license and/or business certificate, not to engage in businesses that compete against Party A’s business in China directly or indirectly, including investing in the business entities that compete against Party A’s business, and also not to engage in other businesses outside the scope permitted by Party A in writing.

 

3.8 During the term of this agreement, all customer information relating to Party B’s business and provided by Party A and other related information shall be possessed by Party A.

 

3.9 The Parties hereby agree that article 3 shall survive the termination or modification of this agreement.

 

4. Representations and Warranties

 

4.1 Party A hereby represents and warrants as follows:

 

(1) Party A is a company legally registered and validly existing in accordance with PRC Laws, is an independent legal person, possesses complete and independent legal status and capacity, has obtained appropriate authorization to sign, deliver and execute this agreement, and can serve as the subject of litigation independently.

 

(2) Party A signs and executes this agreement in accordance with its legal person qualification and business scope. Party A has taken necessary corporate action, been given appropriate authorization and also has obtained the permission and approval of third party and governmental institutions to fulfill the transactions contemplated hereunder, and will not violate laws or restrictions applicable to Party A.

 

(3) After being signed and delivered, this agreement will constitute Party A’s legal and effective binding obligations and shall be executed compulsorily.

 

(4) There are no existing or threatened litigation, arbitration or other judicial or administrative procedures known to Party A that may affect Party A’s ability to perform the obligations herein.

 

(5) Party A has already disclosed all contracts, government approvals and licenses that may have significant adverse effect on Party A’s ability to fully fulfill the obligations herein or documents that may bind Party A’s assets or businesses. There is no misrepresentation or omission of any major facts in the documents previously provided by Party A to Party B.

 

4.2 Party B hereby represents and warrants as follows:

 

(1) Party B is a company legally registered and validly existing in accordance with PRC Laws, is an independent legal person, has complete and independent legal status and capacity, has obtained appropriate authorization to sign, deliver and execute this agreement, and can serve as the subject of litigation independently.

 

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(2) Party B’s acceptance of the services provided by Party A does not violate any PRC Laws. Party B signs and executes this agreement in accordance with its legal person qualification and business scope. Party B has taken necessary corporate action, been given appropriate authorization and also has obtained the permission and approval of third party and governmental institutions to fulfill the transactions contemplated hereunder, and will not violate laws or restrictions applicable to Party B.

 

(3) After being signed and delivered, this agreement will constitute Party B’s legal and effective obligations with binding force and can be executed compulsorily.

 

(4) There are no existing or threatened litigation, arbitration or other judicial or administrative procedures known to Party B that may affect Party B’s ability to perform the obligations herein. In case of any litigation, arbitration or other judicial or administrative penalty occurring or possibly occurring to Party B’s assets, businesses or income, Party B shall instantly notify Party A after learning of the fact.

 

(5) Party B will obtain the certificates and licenses relating to Party B’s business.

 

(6) Party B has already disclosed all contracts, government approvals and licenses that may have significant adverse effect on Party B’s ability to fully fulfill the obligations herein or documents binding Party B’s assets or businesses. There is no misrepresentation or omission of any major facts in documents provided by Party B to Party A previously.

 

(7) Party B shall pay service fee to Party A in full according to the clauses herein and maintain the continuous validity of related licenses and qualifications of business of Party B and Party B’s subsidiaries, and assist Party A, provide sufficient cooperation with Party A, actively cooperate over the service provided by Party A in all affairs for Party A to effectively execute the responsibilities and obligations herein, and also accept reasonable comments and suggestions from Party A relating to the businesses of Party B and Party B’s subsidiaries.

 

(8) Without Party A’s prior written consent, beginning from the signing date of this agreement, Party B shall not and shall urge Party B’s subsidiary not to sell, transfer, mortgage or dispose in through other ways any assets (except for assets of less than RMB1 million necessary for normal business operation), intellectual property right, certificates, business, right of management and legitimate rights and interests.

 

(9) Without Party A’s prior written consent, Party B shall not pay any expenses to any third party for any reason except for reasonable expenditures in the course of normal business operation, and shall not exempt any third party’s debts or borrow or lend loan to any third party, or provide guarantee or warranty, or allow any third party to place other security interests on Party B’s assets or interests.

 

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(10) Without Party A’s prior written consent, beginning from the signing date of this agreement, Party B shall not and shall urge Party B’s subsidiary not to incur, inherit, guarantee or tolerate any debts (except debt of less than 1 million Yuan necessary for normal business operation).

 

(11) Without Party A’s prior written consent, beginning from the signing date of this agreement, Party B shall not and shall urge Party B’s subsidiary not to sign any major contracts (except the contract of less than 1 million Yuan necessary for normal business operation) or sign any other contracts, agreements or arrangements conflicting with this agreement or possibly damaging Party A’s rights and interests herein.

 

(12) Without Party A’s prior written consent, Party B shall not and shall urge Party B’s subsidiary not to be merged into or constitute a joint entity with any third party, invest in or purchase any third party or be invested in, purchased or controlled, increase or decrease the registered capital, change the corporation form or registered capital structure in other ways or accept the investment and capital increase of existing shareholders or third party in Party B, or liquidate and dissolve as of the signing date herein.

 

(13) To the extent permitted by relevant PRC Laws, Party B will appoint candidates recommended by Party A as Party B’s director; Except for written permission from Party A or legal reasons, Party B shall not refuse to appoint the candidate recommended by Party A by any excuse.

 

(14) Party B shall hold any and all governmental licenses, certificates, authorizations and approvals necessary for starting business during the effective term of the agreement, and also shall ensure all foregoing governmental licenses, certificates, authorizations and approvals are effective and legal during the entire term of this agreement. In case of alteration and/or increase of governmental licenses, certificates, authorizations and approvals for Party B to start business during the term of this agreement, Party B shall implement the alteration and/or supplementation according to the requirements of related local laws.

 

(15) Immediately notify Party A of occurrence or possible occurrence of situations that may have significant adverse effect on Party B’s business and operation, and put forth its best effort to prevent such situation from occurring and/or prevent losses from increasing.

 

(16) Without Party A’s prior written consent, Party B and /or Party B’s subsidiary shall not alter articles of association, change Primary Business, change business scope, model, profit model, marketing strategies, business principles or make major adjustments in customer relations.

 

(17) Without Party A’s prior written consent, Party B and /or Party B’s subsidiary shall not have any arrangement of enter into any partnership or joint venture or profit sharing with any third party, or other arrangements, such as pay usage fees, service fees or consulting fees, to transfer benefits or share profits.

 

(18) Without Party A’s prior written consent, Party B and /or Party B’s subsidiary shall not transfer the rights or obligations herein to any third party.

 

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(19) Upon Party A’s request, Party B shall provide information about Party B’s operation management and financial condition to Party A from time to time.

 

(20) Without Party A’s prior written consent, Party B shall not disclose or distribute profits, dividends or any other interests to other shareholders.

 

(21) Provide any technologies or other information to necessary or useful for Party A to provide services contemplated herein.

 

(22) Without Party A’s prior written consent, Party B shall not alter, change or dismiss Party B’s director and senior manager.

 

4.3 Under the circumstance of death, insolvency, bankruptcy, liquidation, dissolution, termination of Party B’s registered shareholder or occurrence of other situations that may influence Party B’s shares held by Party A, the registered shareholder’s successor or shareholder or transferee of Party B’s equities at that time will be regarded as a party to this agreement and will inherit/undertake all rights and obligations herein.

 

The Parties represents to each other: In the event that PRC laws allow Party A to directly hold Party B’s equities and permits Party A and/or Party A’s subsidiaries (if any) to be engaged in Party B’s business, and if Party A intends to directly hold Party B’s equities, the Parties will terminate this agreement immediately and enter into relevant agreements that will allow Party A to directly or indirectly hold the equities of Party B and Party B’s subsidiaries. When this agreement is terminated, Party B’s shareholders shall return any consideration that Party A’s overseas holding company pays to purchase Party B’s equities to Party A’s overseas holding company.

 

5. Validation and Effective Term

 

This agreement shall take effect as of the signing date. Unless terminated according to article 6.1 herein, this agreement will be valid perpetually.

 

6. Termination

 

6.1 This agreement shall be terminated:

 

(a) on the effective date of Party B’s bankruptcy, liquidation, termination or dissolution in accordance with the law prior to the expiration date of this agreement, ;

 

(b) on the effective date of the transfer of Party B’s equities to Party A or Party A’s designee pursuant to the “Exclusive Option Agreement” signed by the Parties and Party B’s existing shareholder on October 4, 2018;

 

(c) on the date when Party A is officially registered as the Party B’s sole shareholder after Party A is permitted to directly hold Party B’s equities under PRC Laws and Party A and/or Party A’s subsidiaries and branches can legally engage in Party B’s business;

 

(d) On the expiration date of the written notification of terminating this agreement sent by Party A to Party B 30 days in advance at any time within the effective term of this agreement;

 

(e) in advance in accordance with the provisions of article 7 herein.

 

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6.2 Party B shall not terminate this agreement before the expiry of this agreement. Party A shall not undertake the responsibility for breach of this agreement if it terminates this agreement unilaterally in accordance with article 6.1(d).

 

6.3 The rights and obligations of articles 3, 8, 19, 11 and 16.3 shall survive the termination of this agreement.

 

6.4 Each Party’s payment obligations (including but not limited service fee) herein due on the termination date of this agreement or before the expiry date of this agreement will not be exempted and any liability for breach of the contract before the termination of this agreement will also not be exempted when this agreement is terminated in advance or expired for any reason. All payable service fees before the termination and expiry of this agreement shall be paid to Party A within 15 working days as of the termination date of this agreement.

 

7.  Liability for Breach of this Agreement

 

7.1 Unless otherwise specified in other articles herein, if one Party fails to fulfill certain obligations herein or violates this agreement in other ways (the “Defaulting Party”), the other party (the “Damaged Party”) can: (a) notify the Defaulting Party of the nature and scope of the violation in writing and ask the Defaulting Party to remediate at its own expense within a reasonable period of time (hereinafter referred to as “Remediation Period”); and if the Defaulting Party fails to take remedial measures during the Remediation Period, the Damaged Party is entitled to ask the Defaulting Party to undertake all responsibilities for the Defaulting Party’s violation and also compensate all actual economic losses due to the Damaged Party, including without limitation, the legal fees incurred in litigation and arbitration proceedings relating to the violation. The Default Party is also entitled to ask the Default Party to perform its contractual obligations and request the court or the relevant arbitration institution to issue an order of specific performance by the Default Party; (b) terminate this agreement and ask the Defaulting Party to undertake all responsibilities for the Defaulting Party’s violation and also compensate all damages; or (c) place the pledged equity on discount, auction or selling according to the Equity Pledge Agreement signed on October 4, 2018, be entitled to compensation priority in the amount of discount, auction and selling, and ask the Defaulting Party to undertake all losses hereof. While exercising the foregoing remedial right, the Damaged Party is entitled to other remedial rights regulated herein and under the relevant laws and regulations.

 

7.2 The Parties hereby agree and confirm that, subject to the compulsory requirements of PRC laws, if Party B is the Defaulting Party, the Damaged Party is entitled to terminate this agreement unilaterally and ask the Defaulting Party to compensate the losses. However, if Party A is the Defaulting Party, the Damaged Party shall exempt Party A’s obligation of compensating the losses, and unless the law states otherwise, the Damaged Party is not entitled to terminate this agreement under any circumstance.

 

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8. Governing Laws, Dispute Settlement and Modification of Law

 

8.1 The signing, validation, interpretation, implementation, revision and termination of this agreement and settlement of disputes herein shall be governed by PRC Laws.

 

8.2 Any disputes arising from the interpretation and implementation of this agreement shall be firstly solved through the Parties’ friendly negotiations. In case that the consensus on settlement of such disputes is not reached within 30 days after any party asks the other party to reach solution through friendly negotiations, any party can submit the disputes to Shanghai International Economic Trade Arbitration Committee, which gives verdict according to the prevailing arbitration rule at that time. The arbitration shall take place in Shanghai and language for arbitration shall be Chinese. The arbitration award is final and binding on each party. The arbitral tribunal can order Party B to compensate the losses of Party A with Party B’s equity interests, assets or property rights & interests, reach judgment of mandatory relief through mandatory transfer of related business or assets or order Party B to declare bankruptcy. After the arbitration award becomes effective, any party is entitled to apply for the relevant court to execute the arbitration award. If necessary, the arbitral institution is entitled to order the defaulting party to cease the breach of this agreement or refrain from actions that would increase the losses to Party A before making final verdict for the disputes of all parties. The courts in Hong Kong, Cayman Islands, China or other places with right of jurisdiction (including the court in the place of Party B, or the court in the place of main asset of Party A or Party B shall be deemed as the court with right of jurisdiction) similarly are entitled to confer or execute the verdict of the arbitral tribunal and is also entitled to make judgment or execute temporary relief for Party B’s equity or property interests, and give verdict or judgment of providing certain temporary relief for the party instigating the arbitration before the establishment of arbitral tribunal, such as reaching verdict or judgment of ordering the Defaulting Party to cease the breaching of this agreement or not have behaviors of further increasing the losses to Party A.

 

8.3 In the arbitration for any disputes arising from the interpretation and implementation of this agreement, the Parties herein shall continue executing other rights and obligations herein respectively except the matters herein in dispute.

 

8.4 Due to the issuing or alteration of any PRC Laws, rules or regulations or due to the change in interpretation or application of such laws, rules or regulations any time after the signing date, the following agreement shall be applicable: to the extent permitted by PRC Laws, (a) if the alteration of laws or newly issued regulations are more preferential for a Party compared to the relevant laws, decrees, orders or regulations that were in effect on the signing date hereof, each Party shall actively and immediately apply for obtaining the benefits brought by the modification or new regulations and put forth their best effort to obtain the approval for the application; or (b) in case that any party’s economic benefit is directly or indirectly adversely influenced due to the alteration of foregoing laws or newly issued regulations, this agreement shall be continuously executed as scheduled. All parties shall obtain the exemption from the altered or new regulations through legal means. If the negative effect on the economic benefit of any Party cannot be resolved under this agreement, all Parties shall immediately negotiate and make all necessary alterations to this agreement after receiving the notification of the affected Party to safeguard the economic benefit of the affected Party.

 

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9 Force Majeure

 

9.1 “Force majeure” refers to events that cannot be foreseen, avoided and overcome so that the this agreement cannot be executed in part or full. Such events include but are limited to earthquake, typhoon, flood, water disaster, war, strike, turmoil, governmental behavior, changes to legal regulations or their application.

 

9.2 In case of the occurrence of a force majeure event, a Party’s obligation that is being affected by force majeure shall be automatically suspended during the delay caused by force majeure, and the party’s period of implementation of this agreement shall be automatically prolonged. The prolonged period is the period of the suspension, and the party shall not undertake responsibility and suffer from punishment for it. In case of force majeure, all parties shall instantly negotiate with each other to seek a fair solution and try to minimize effect of force majeure by exerting all reasonable efforts.

 

10 Compensations

 

With regard to any litigation and claim for compensation directed at Party A or any losses, damages, responsibilities or expenses incurred  arising from the consultation and services provided by Party A pursuant to Party B’s requests, Party B shall compensate Party A so that Party A is free of damages unless such losses, damages, responsibilities or expenses are incurred due to party A’s grievous fault or intentional misconduct.

 

11 Notices

 

11.1 All notices and other communications required or permitted to be given pursuant to this agreement shall be delivered personally or sent by registered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such parties set forth below. a confirmation copy of each notice shall also be sent by email. The date on which such notices shall be deemed to have been effectively given shall be determined as follows:

 

(1) Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively delivered on the date of receipt or refusal at the address specified for notices;

 

(2) Notices given by facsimile transmission shall be deemed effectively delivered on the date of successful transmission (subject to transmission confirmation information automatically generated).

 

11.2 Any party can change the receiving address, fax and/or e-mail address when notifying other parties in accordance with the article herein.

 

12 Transfer

 

12.1 Without prior written consent of Party A, Party B shall not transfer the rights and obligations herein to any third party.

 

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12.2 Party B agrees that Party A can notify Party B of transferring the rights and obligations herein to any third party in writing in advance without soliciting Party B’s consent.

 

13 Severability

 

In case that one or several of the terms of this agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this agreement shall not be affected or compromised in any respect. All parties shall strive for replacing such invalid, illegal or unenforceable terms with effective ones to the extent permitted by law and in accordance with the expectations of each party, and the economic effect of such effective terms shall be as close as possible to the that of those invalid, illegal or unenforceable terms.

 

14 Revision and supplementation

 

14.1 Any revision and supplementation of this agreement shall be made in writing. Any revision and supplementary agreement signed by the Parties relating to this agreement shall be the inalienable part of this agreement, having the same legal effect.

 

14.2 If revision of this agreement is proposed by Nasdaq or other regulatory institutions, or is required according to securities listing regulations of Nasdaq or related regulations, rules and guiding requirements, this agreement shall be revised by the Parties.

 

15 Text

 

This agreement has two copies with one held by each Party, having the same legal effect.

 

16. Others

 

16.1 Except for revision, alteration and supplementation that are executed after signing of this agreement, this agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to the subject matter hereof, and also shall replace all prior oral and written consultations, representations and contracts reached with respect to the subject matter of this agreement.

 

16.2 This agreement shall have binding force on successors of the Parties and their respective transferees who are approved by the Parties.

 

16.3 A Party’s waiver to another Party’s violation of this agreement under certain situation shall not be regarded as waiver made by the Party in such similar violation of this agreement under other situations.

 

16.4 The titles of this agreement are for convenience in reading only, and shall not be used to interpret, explain or influence the meanings regulated herein.

 

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This agreement is signed by and between the Parties in the place and on the date specified at the beginning of this agreement.

 

Hangzhou Yihan Technology Co., Ltd. (seal)

[Company seal is affixed]

 

	
Signature:
    	
/s/ Sijia CHEN
    	
 
    
	
Name: Sijia CHEN
    	
 
    
	
Position: Legal representative
    	
 
    


 











 

(No text below, the signing page of “Exclusive Business Cooperation Agreement”)

 

Hereby certified, this agreement is signed by and between the Parties in the place and on the date specified at the beginning of the text.

 

Hangzhou Hanyi E-commerce Co., Ltd. (Seal)

[Company seal is affixed]

 

	
Signature:
    	
/s/ Lei SUN
    	
 
    
	
Name: Lei SUN
    	
 
    
	
Position: Legal representative
    	
 
    


 











 

Attachment I

 

For the purpose of notification, the Parties’ specific address is as below:

 

Party A: Hangzhou Yihan Technology Co., Ltd.

Address: Room 410, Floor 4, A11 Building, Jiusheng Road 9, Jianggan District, Hangzhou.

 

Party B: Hangzhou Hanyi E-commerce Co., Ltd.

Address: Room 430, Floor 4, A13 Building, Jiusheng Road 9, Jianggan District, Hangzhou