Document:

Exhibit 10.5

 

Exclusive Option Agreement

 

This Exclusive Option Agreement (this “Agreement”) is executed by and among the following Parties as of the 24th day of May, 2011 in Beijing, China:

 

Party A:          Kutianxia (Beijing) Information Technology Ltd., a limited liability company incorporated and existing under the laws of China, with its address at Room 2407, Bld 31, No.25, Yuetan North Street, Xicheng District, Beijing;

 

Party B:          Rixue Li, a citizen of the People’s Republic of China (“China”) with Identification Card No.: 362201197406073879; and

 

Party C:          Beijing Secoo Trading Limited, a limited liability company incorporated and existing under the laws of China, with its address at Room 2405, Bld 31, No.25, Yuetan North Street, Xicheng District, Beijing.

 

In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the “Parties”.

 

Whereas:

 

Party B holds 90% of the equity interests in Party C;

 

Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:

 

1.                  Sale and Purchase of Equity Interest

 

1.1       Option Granted

 

Party B hereby irrevocably grants Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) to purchase the equity interests in Party C then held by Party B once or at multiple times at any time in part or in whole at Party A’s sole and absolute discretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest Purchase Option”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights with respect to the equity interests held by Party B in Party C. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. The term “person” as used in this Section and this Agreement shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or non-corporate organizations.

 

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1.2       Steps for Exercise of Equity Interest Purchase Option

 

Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a written notice to Party B (the “Equity Interest Purchase Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest Purchase Option; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the Optioned Interests and/or the date for transfer of the Optioned Interests.

 

1.3       Equity Interest Purchase Price

 

Unless an appraisal is required by the laws or regulations of China applicable to the Equity Interest Purchase Option when exercised by Party A, the purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the minimum price permitted by law.

 

1.4       Transfer of Optioned Interests

 

For each exercise of the Equity Interest Purchase Option:

 

1.4.1                    Party B shall cause Party C to promptly convene a shareholders’ meeting, at which a resolution shall be adopted approving Party B’s transfer of the Optioned Interests to Party A and/or the Designee(s);

 

1.4.2                    Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable) (the “Transfer Contract”), in accordance with the provisions of this Agreement and the Equity Interest Purchase Notice regarding the Optioned Interests;

 

1.4.3                    The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses and permits and take all necessary actions to transfer the valid ownership of the Optioned Interests to Party A and/or the Designee(s), unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the Optioned Interests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rights or interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements, but shall be deemed to exclude any security interest created by this Agreement and Party B’s Share Pledge Agreement. “Party B’s Share Pledge Agreement” as used in this Section and this Agreement shall refer to the Share Pledge Agreement (“Share Pledge Agreement”) executed by and among Party B, Party C and Party A as of the date hereof, whereby Party B pledges all of its equity interests in Party C to Party A, in order to guarantee Party C’s performance of its obligations under the

 

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Exclusive Business Cooperation Agreement executed by and between Party C and Party A.

 

2.                  Covenants

 

2.1                     Covenants regarding Party C

 

Party B (as the shareholders of Party C) and Party C hereby covenant as follows:

 

2.1.1                    Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association and bylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in any other manners;

 

2.1.2                    They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudently and effectively operating its business and handling its affairs;

 

2.1.3                    Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or in any other manner dispose of  the legal or beneficial interest in any assets, business or revenues of Party C, or allow the encumbrance thereon of any security interest;

 

2.1.4                    Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i) debts incurred in the ordinary course of business other than through loans, and (ii) debts disclosed to Party A for which Party A’s written consent has been obtained;

 

2.1.5                    They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C and refrain from any action/omission that may affect Party C’s operating status and asset value;

 

2.1.6                    Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in the ordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB100,000 shall be deemed a major contract);

 

2.1.7                    Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;

 

2.1.8                    They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;

 

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2.1.9                    If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrier acceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;

 

2.1.10             Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in any person;

 

2.1.11             Without the prior written consent of Party A, they shall not liquidate, dissolve or deregister Party C.

 

2.1.12             They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedings relating to Party C’s assets, business or revenue;

 

2.1.13             To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;

 

2.1.14             Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to its shareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to its shareholders; and

 

2.1.15             At the request of Party A, they shall appoint any persons designated by Party A as directors of Party C.

 

2.2                     Covenants of Party B

 

Party B hereby covenants as follows:

 

2.2.1                    Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or in any other manner dispose of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except for the pledge placed on these equity interests in accordance with Party B’s Share Pledge Agreement;

 

2.2.2                    Party B shall cause the shareholders’ meeting and/or the board of directors of Party C not to approve the sale, transfer, mortgage or disposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equity interests in accordance with Party B’s Share Pledge Agreement;

 

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2.2.3                    Party B shall cause the shareholders’ meeting or the board of directors of Party C not to approve the merger or consolidation with any person, or the acquisition of or investment in any person, without the prior written consent of Party A;

 

2.2.4                    Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedings relating to the equity interests in Party C held by Party B;

 

2.2.5                    Party B shall cause the shareholders’ meeting or the board of directors of Party C to vote their approval of the transfer of the Optioned Interests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;

 

2.2.6                    To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take all necessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;

 

2.2.7                    Party B shall appoint any designee of Party A as director of Party C, at the request of Party A;

 

2.2.8                    At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A and/or the Designee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of first refusal on the transfer of equity interest by the other existing shareholder of Party C (if any); and

 

2.2.9                    Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B, Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect the effectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject to this Agreement hereunder or under the Share Pledge Agreement among the same parties hereto or under the Power of Attorney Agreement where Party A is designated as a beneficiary, Party B shall not exercise such rights except in accordance with the written instructions of Party A.

 

3.                  Representations and Warranties

 

Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of the Optioned Interests, that:

 

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3.1                     They have the authority to execute and deliver this Agreement and any Transfer Contracts, and to perform their obligations under this Agreement and any Transfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exercise of the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which each of them is a party constitute or will constitute their legal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;

 

3.2                     The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shall not: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizational documents of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, or constitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of any condition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension or revocation of or imposition of additional conditions to any licenses or permits issued to either of them;

 

3.3                     Party B has a good and merchantable title to the equity interests in Party C he holds. Except for Party B’s Share Pledge Agreement, Party B has not placed any security interest on such equity interests;

 

3.4                     Party C has a good and merchantable title to all of its assets, and has not placed any security interest on the aforementioned assets;

 

3.5                     Party C does not have any outstanding debts, except for (i) debt incurred in the ordinary course of business, and (ii) debts disclosed to Party A for which Party A’s written consent has been obtained;

 

3.6                     There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party C or Party C.

 

4.                  Effective Date

 

This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed at Party A’s election.

 

5.                  Governing Law and Resolution of Disputes

 

5.1                     Governing law

 

The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publicly available

 

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laws of China shall be governed by international legal principles and practices.

 

5.2                     Methods of Resolution of Disputes

 

In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute through friendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the other Parties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be held in Beijing, and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.

 

6.                  Taxes and Fees

 

Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China  in connection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactions contemplated under this Agreement and the Transfer Contracts.

 

7.                  Notices

 

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

 

7.1.1                     In the case of notices given by personal delivery, by courier service or by prepaid registered mail, notice shall be deemed to have been effectively given on the date of delivery or refusal to accept delivery at the address specified for notices.

 

7.1.2                     In the case of notices given by facsimile transmission, notice shall be deemed to have been effectively given on the date of such successful transmission (as evidenced by an automatically generated confirmation of transmission).

 

7.2                     For the purpose of notices, the addresses of the Parties are as follows:

 

Party A:

Address:                               Room 2407, Bld 31, No.25 Yuetan North Street, Xicheng District, Beijing

Attn:                                                  Rixue Li

 

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Tel:                                                         010-85894218

 

Party B:

Address:                               Room 2405, Bld 31, No.25, Yuetan North Street, Xicheng District, Beijing

Tel:                                                         010-85894218

 

Party C:

Address:                               Room 2405, Bld 31, No.25, Yuetan North Street, Xicheng District, Beijing

Attn:                                                  Rixue Li

Tel:                                                         010-85894218

 

7.3                     Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.

 

8.                  Confidentiality

 

The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Party shall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevant information to any third parties, except under the following circumstances: (a) such information is or will be in the public domain (provided that this is not the result of a public disclosure by the receiving Party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange; or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and such legal counsel or financial advisor are also bound by confidentiality duties similar to the duties provided in this Section. Disclosure of any confidential information by the staff or agency hired by any Party shall be deemed to be disclosure of such confidential information by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.

 

9.                  Further Warranties

 

The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes of this Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of this Agreement.

 

10.           Miscellaneous

 

10.1                        Amendment, change and supplement

 

Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.

 

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10.2                        Entire agreement

 

Except for the amendments, supplements or changes in writing made after the execution of this Agreement, this Agreement shall constitute the entire agreement between the Parties hereto with respect to the subject matter hereof, and shall supercede all prior consultations, representations and contracts between the Parties with respect to the subject matter of this Agreement, whether oral or written.

 

10.3                        Headings

 

The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of the provisions of this Agreement.

 

10.4                        Language

 

This Agreement is written in Chinese in three copies, each Party having one copy with equal legal validity.

 

10.5                        Severability

 

In the event that one or several of the provisions 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 prejudiced in any respect. The Parties shall negotiate in good faith to try to replace such invalid, illegal or unenforceable provisions with effective provisions to the maximum extent permitted by law and reflecting the intentions of the Parties, provided that the economic effect of such effective provisions is as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.

 

10.6                        Successors

 

This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of such Parties.

 

10.7                        Survival

 

10.7.1             Any obligations that occur or that are due as a result of this Agreement prior to the expiration or early termination of this Agreement shall survive the expiration or early termination thereof.

 

10.7.2             The provisions of Sections 5, 7, 8 and this Section 10.7 shall survive the termination of this Agreement.

 

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10.8                        Waivers

 

Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall be exucted by the Parties. No waiver given by any Party under certain circumstances with respect to a breach by other Parties shall operate as a waiver by such Party with respect to any similar breach under other circumstances.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Option Agreement as of the date first above written.

 

 

	
Party A:  Kutianxia (Beijing)   Information Technology Ltd.
    	
 
    
	
(Company Seal)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Rixue Li
    	
 
    
	
Name:
    	
Rixue   Li
    	
 
    
	
Title:
    	
Legal Representative
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Party B:
    	
Rixue Li
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Rixue Li
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Party C:
    	
Beijing Secoo Trading Limited
    	
 
    
	
(Company Seal)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Rixue Li
    	
 
    
	
Name:
    	
Rixue   Li
    	
 
    
	
Title:
    	
Legal Representative
    	
 
    

 

 

Exclusive Option Agreement

 

This Exclusive Option Agreement (this “Agreement”) is executed by and among the following Parties as of the 24th day of May, 2011 in Beijing, China:

 

Party A:              Kutianxia (Beijing) Information Technology Ltd., a limited liability company incorporated and existing under the laws of China, with its address at Room 2407, Bld 31, No.25, Yuetan North Street, Xicheng District, Beijing;

 

Party B:              Zhaohui Huang, a citizen of the People’s Republic of China (“China”) with Identification Card No.: 362201197407310629; and

 

Party C:              Beijing Secoo Trading Limited, a limited liability company incorporated and existing under the laws of China, with its address at Room 2405, Bld 31, No.25, Yuetan North Street, Xicheng District, Beijing.

 

In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the “Parties”.

 

Whereas:

 

Party B holds 10% of the equity interests in Party C;

 

Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:

 

1.                  Sale and Purchase of Equity Interest

 

1.1       Option Granted

 

Party B hereby irrevocably grants Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) to purchase the equity interests in Party C then held by Party B once or at multiple times at any time in part or in whole at Party A’s sole and absolute discretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest Purchase Option”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights with respect to the equity interests held by Party B in Party C. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. The term “person” as used in this Section and this Agreement shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or non-corporate organizations.

 

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1.2       Steps for Exercise of Equity Interest Purchase Option

 

Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a written notice to Party B (the “Equity Interest Purchase Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest Purchase Option; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the Optioned Interests and/or the date for transfer of the Optioned Interests.

 

1.3       Equity Interest Purchase Price

 

Unless an appraisal is required by the laws or regulations of China applicable to the Equity Interest Purchase Option when exercised by Party A, the purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the minimum price permitted by law.

 

1.4       Transfer of Optioned Interests

 

For each exercise of the Equity Interest Purchase Option:

 

1.4.1                    Party B shall cause Party C to promptly convene a shareholders’ meeting, at which a resolution shall be adopted approving Party B’s transfer of the Optioned Interests to Party A and/or the Designee(s);

 

1.4.2                    Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable) (the “Transfer Contract”), in accordance with the provisions of this Agreement and the Equity Interest Purchase Notice regarding the Optioned Interests;

 

1.4.3                    The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses and permits and take all necessary actions to transfer the valid ownership of the Optioned Interests to Party A and/or the Designee(s), unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the Optioned Interests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rights or interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements, but shall be deemed to exclude any security interest created by this Agreement and Party B’s Share Pledge Agreement. “Party B’s Share Pledge Agreement” as used in this Section and this Agreement shall refer to the Share Pledge Agreement (“Share Pledge Agreement”) executed by and among Party B, Party C and Party A as of the date hereof, whereby Party B pledges all of its equity interests in Party C to Party A, in order to guarantee Party C’s performance of its obligations under the

 

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Exclusive Business Cooperation Agreement executed by and between Party C and Party A.

 

2.                  Covenants

 

2.1                     Covenants regarding Party C

 

Party B (as the shareholders of Party C) and Party C hereby covenant as follows:

 

2.1.1                    Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association and bylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in any other manners;

 

2.1.2                    They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudently and effectively operating its business and handling its affairs;

 

2.1.3                    Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or in any other manner dispose of the legal or beneficial interest in any assets, business or revenues of Party C, or allow the encumbrance thereon of any security interest;

 

2.1.4                    Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i) debts incurred in the ordinary course of business other than through loans, and (ii) debts disclosed to Party A for which Party A’s written consent has been obtained;

 

2.1.5                    They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C and refrain from any action/omission that may affect Party C’s operating status and asset value;

 

2.1.6                    Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in the ordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB100,000 shall be deemed a major contract);

 

2.1.7                    Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;

 

2.1.8                    They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;

 

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2.1.9                    If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrier acceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;

 

2.1.10             Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in any person;

 

2.1.11             Without the prior written consent of Party A, they shall not liquidate, dissolve or deregister Party C.

 

2.1.12             They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedings relating to Party C’s assets, business or revenue;

 

2.1.13             To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;

 

2.1.14             Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to its shareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to its shareholders; and

 

2.1.15             At the request of Party A, they shall appoint any persons designated by Party A as directors of Party C.

 

2.2                     Covenants of Party B

 

Party B hereby covenants as follows:

 

2.2.1                    Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or in any other manner dispose of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except for the pledge placed on these equity interests in accordance with Party B’s Share Pledge Agreement;

 

2.2.2                    Party B shall cause the shareholders’ meeting and/or the board of directors of Party C not to approve the sale, transfer, mortgage or disposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equity interests in accordance with Party B’s Share Pledge Agreement;

 

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2.2.3                    Party B shall cause the shareholders’ meeting or the board of directors of Party C not to approve the merger or consolidation with any person, or the acquisition of or investment in any person, without the prior written consent of Party A;

 

2.2.4                    Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedings relating to the equity interests in Party C held by Party B;

 

2.2.5                    Party B shall cause the shareholders’ meeting or the board of directors of Party C to vote their approval of the transfer of the Optioned Interests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;

 

2.2.6                    To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take all necessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;

 

2.2.7                    Party B shall appoint any designee of Party A as director of Party C, at the request of Party A;

 

2.2.8                    At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A and/or the Designee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of first refusal on the transfer of equity interest by the other existing shareholder of Party C (if any); and

 

2.2.9                    Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B, Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect the effectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject to this Agreement hereunder or under the Share Pledge Agreement among the same parties hereto or under the Power of Attorney Agreement where Party A is designated as a beneficiary, Party B shall not exercise such rights except in accordance with the written instructions of Party A.

 

3.                  Representations and Warranties

 

Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of the Optioned Interests, that:

 

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3.1                     They have the authority to execute and deliver this Agreement and any Transfer Contracts, and to perform their obligations under this Agreement and any Transfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exercise of the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which each of them is a party constitute or will constitute their legal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;

 

3.2                     The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shall not: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizational documents of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, or constitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of any condition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension or revocation of or imposition of additional conditions to any licenses or permits issued to either of them;

 

3.3                     Party B has a good and merchantable title to the equity interests in Party C he holds. Except for Party B’s Share Pledge Agreement, Party B has not placed any security interest on such equity interests;

 

3.4                     Party C has a good and merchantable title to all of its assets, and has not placed any security interest on the aforementioned assets;

 

3.5                     Party C does not have any outstanding debts, except for (i) debt incurred in the ordinary course of business, and (ii) debts disclosed to Party A for which Party A’s written consent has been obtained;

 

3.6                     There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party C or Party C.

 

4.                  Effective Date

 

This Agreement shall become effective upon the date of execution, and remain effective for a term of 10 years, and may be renewed at Party A’s election.

 

5.                  Governing Law and Resolution of Disputes

 

5.1                     Governing law

 

The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publicly available

 

6

 

laws of China shall be governed by international legal principles and practices.

 

5.2                     Methods of Resolution of Disputes

 

In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute through friendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the other Parties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be held in Beijing, and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.

 

6.                  Taxes and Fees

 

Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China in connection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactions contemplated under this Agreement and the Transfer Contracts.

 

7.                  Notices

 

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

 

7.1.1                     In the case of notices given by personal delivery, by courier service or by prepaid registered mail, notice shall be deemed to have been effectively given on the date of delivery or refusal to accept delivery at the address specified for notices.

 

7.1.2                     In the case of notices given by facsimile transmission, notice shall be have been deemed effectively given on the date of such successful transmission (as evidenced by an automatically generated confirmation of transmission).

 

7.2                     For the purpose of notices, the addresses of the Parties are as follows:

 

Party A:

Address:                               Room 2407, Bld 31, No.25, Yuetan North Street, Xicheng District, Beijing

Attn:                                                  Rixue Li

 

7

 

Tel:                                                         010-85894218

 

Party B:

Address:                               Room 2407, Bld 31, No.25, Yuetan North Street, Xicheng District, Beijing

Tel:                                                         010-85894218

 

Party C:

Address:                               Room 2405, Bld 31, No.25, Yuetan North Street, Xicheng District, Beijing

Attn:                                                  Rixue Li

Tel:                                                         010-85894218

 

7.3                     Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.

 

8.                  Confidentiality

 

The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Party shall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevant information to any third parties, except under the following circumstances: (a) such information is or will be in the public domain (provided that this is not the result of a public disclosure by the receiving Party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange; or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and such legal counsel or financial advisor are also bound by confidentiality duties similar to the duties provided in this Section. Disclosure of any confidential information by the staff or agency hired by any Party shall be deemed to be disclosure of such confidential information by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.

 

9.                  Further Warranties

 

The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes of this Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of this Agreement.

 

10.           Miscellaneous

 

10.1                        Amendment, change and supplement

 

Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.

 

8

 

10.2                        Entire agreement

 

Except for the amendments, supplements or changes in writing made after the execution of this Agreement, this Agreement shall constitute the entire agreement between the Parties hereto with respect to the subject matter hereof, and shall supercede all prior consultations, representations and contracts between the Parties with respect to the subject matter of this Agreement, whether oral or written.

 

10.3                        Headings

 

The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of the provisions of this Agreement.

 

10.4                        Language

 

This Agreement is written in Chinese in three copies, each Party having one copy with equal legal validity.

 

10.5                        Severability

 

In the event that one or several of the provisions 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 prejudiced in any respect. The Parties shall negotiate in good faith to try to replace such invalid, illegal or unenforceable provisions with effective provisions to the maximum extent permitted by law and reflecting the intentions of the Parties, provided that the economic effect of such effective provisions is as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.

 

10.6                        Successors

 

This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of such Parties.

 

10.7                        Survival

 

10.7.1             Any obligations that occur or that are due as a result of this Agreement prior to the expiration or early termination of this Agreement shall survive the expiration or early termination thereof.

 

10.7.2             The provisions of Sections 5, 7, 8 and this Section 10.7 shall survive the termination of this Agreement.

 

9

 

10.8                        Waivers

 

Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall be executed by the Parties. No waiver given by any Party under certain circumstances with respect to a breach by other Parties shall operate as a waiver by such Party with respect to any similar breach under other circumstances.

 

[Signature Page Follows]

 

10

 

IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Option Agreement as of the date first above written.

 

 

	
Party A:  Kutianxia   (Beijing) Information Technology Ltd.
    	
 
    
	
(Company Seal)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Rixue Li
    	
 
    
	
Name:
    	
Rixue   Li
    	
 
    
	
Title:
    	
Legal Representative
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Party B:
    	
Zhaohui Huang
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Zhaohui Huang
    	
 
    
	
Name:
    	
Zhaohui Huang
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Party C:
    	
Beijing Secoo Trading Limited
    	
 
    
	
(Company Seal)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Rixue Li
    	
 
    
	
Name:
    	
Rixue   Li
    	
 
    
	
Title:
    	
Legal RepresentativeExhibit 10.6

 

Power of Attorney Agreement

 

This Power of Attorney Agreement (this “Agreement”) is executed by and between the following Parties as of the 24th day of May, 2011 in Beijing, China :

 

Party A:                  Kutianxia (Beijing) Information Technology Ltd., a limited liability company incorporated and existing under the laws of China, with its address at Room 2407, Bld 31, No.25, Yuetan North Street, Xicheng District, Beijing; and

 

Party B:                    Zhaohui Huang, a citizen of the People’s Republic of China (“China”) with Identification Card No.: 362201197407310629.

 

In this Agreement, each of Party A and Party B shall be referred to as a “Party” respectively, and they shall be collectively referred to as the “Parties”.

 

Whereas:

 

Party B holds 10% of the equity interests in Beijing Secoo Trading Limited (“Beijing Secoo”) (“Party B’s Shareholding”).

 

Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:

 

Party B hereby irrevocably authorizes Party A to exercise the following rights relating to Party B’s Shareholding during the term of this Agreement:

 

Party A is hereby authorized to act on behalf of Party B as the exclusive agent and attorney of Party B with respect to all matters concerning Party B’s Shareholding, including without limitation to: 1) attend shareholders’ meetings of Beijing Secoo; 2) exercise all the shareholder’s rights and shareholder’s voting rights Party B is entitled to under the laws of China and Articles of Association of Beijing Secoo, including but not limited to the sale, transfer, pledge or disposition of Party B’s Shareholding in part or in whole; and 3) designate and appoint on behalf of Party B the legal representative (chairperson), the director, supervisor, the chief executive officer and other senior management members of Beijing Secoo.

 

Without limiting the generality of the powers granted hereunder, Party A shall have the power and authority under this Agreement to execute the Transfer Contracts stipulated in Exclusive Option Agreement, to which Party B is required to be a party, on behalf of Party B, and to fulfill the terms of the Share Pledge Agreement and Exclusive Option Agreement, both dated the date hereof, to which Party B is a party.

 

All the actions associated with Party B’s Shareholding conducted by Party A shall be deemed as Party B’s own actions, and all the documents related to Party B’s Shareholding executed by Party A shall be deemed to be executed by Party B himself/herself. Party B hereby acknowledges and ratifies those actions and/or documents by Party A.

 

 

Party A is entitled to re-authorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving prior notice to Party B or obtaining consent of Party B.

 

Party B is entitled to enter into this Agreement and made the authorization hereunder which shall be irrevocable and continuously valid from the date of execution of this Agreement, so long as Party B is a shareholder of Beijing Secoo.

 

During the term of this Agreement, Party B hereby waives all the rights associated with Party B’s Shareholding, which have been authorized to Party A through this Agreement, and shall not exercise such rights by himself/herself.

 

In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute through friendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the other Parties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be held in Beijing, and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.

 

This Agreement is written in Chinese in two copies, each Party having one copy with equal legal validity.

 

IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Power of Attorney Agreement as of the date first above written.

 

 

Party A:            Kutianxia (Beijing) Information Technology Ltd.

(Company Seal)

 

 

	
By:
    	
/s/ Rixue Li
    	
 
    
	
Name:
    	
Rixue   Li
    	
 
    
	
Title:
    	
Legal Representative
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Party   B:
    	
Zhaohui   Huang
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Zhaohui Huang
    	
 
    
	
Name:
    	
Zhaohui Huang
    	
 
    

 

 

Power of Attorney Agreement

 

This Power of Attorney Agreement (this “Agreement”) is executed by and between the following Parties as of the 24th day of May, 2011 in Beijing, China :

 

Party A:                  Kutianxia (Beijing) Information Technology Ltd., a limited liability company incorporated and existing under the laws of China, with its address at Room 2407, Bld 31, No.25, Yuetan North Street, Xicheng District, Beijing; and

 

Party B:                    Rixue Li, a citizen of the People’s Republic of China (“China”) with Identification Card No.: 362201197406073879.

 

In this Agreement, each of Party A and Party B shall be referred to as a “Party” respectively, and they shall be collectively referred to as the “Parties”.

 

Whereas:

 

Party B holds 90% of the equity interests in Beijing Secoo Trading Limited (“Beijing Secoo”) (“Party B’s Shareholding”).

 

Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:

 

Party B hereby irrevocably authorizes Party A to exercise the following rights relating to Party B’s Shareholding during the term of this Agreement:

 

Party A is hereby authorized to act on behalf of Party B as the exclusive agent and attorney of Party B with respect to all matters concerning Party B’s Shareholding, including without limitation to: 1) attend shareholders’ meetings of Beijing Secoo; 2) exercise all the shareholder’s rights and shareholder’s voting rights Party B is entitled to under the laws of China and Articles of Association of Beijing Secoo, including but not limited to the sale, transfer, pledge or disposition of Party B’s Shareholding in part or in whole; and 3) designate and appoint on behalf of Party B the legal representative (chairperson), the director, supervisor, the chief executive officer and other senior management members of Beijing Secoo.

 

Without limiting the generality of the powers granted hereunder, Party A shall have the power and authority under this Agreement to execute the Transfer Contracts stipulated in Exclusive Option Agreement, to which Party B is required to be a party, on behalf of Party B, and to fulfill the terms of the Share Pledge Agreement and Exclusive Option Agreement, both dated the date hereof, to which Party B is a party.

 

All the actions associated with Party B’s Shareholding conducted by Party A shall be deemed as Party B’s own actions, and all the documents related to Party B’s Shareholding executed by Party A shall be deemed to be executed by Party B himself/herself. Party B hereby acknowledges and ratifies those actions and/or documents by Party A.

 

 

Party A is entitled to re-authorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving prior notice to Party B or obtaining consent of Party B.

 

Party B is entitled to enter into this Agreement and made the authorization hereunder which shall be irrevocable and continuously valid from the date of execution of this Agreement, so long as Party B is a shareholder of Beijing Secoo.

 

During the term of this Agreement, Party B hereby waives all the rights associated with Party B’s Shareholding, which have been authorized to Party A through this Agreement, and shall not exercise such rights by himself/herself.

 

In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute through friendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the other Parties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be held in Beijing, and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.

 

This Agreement is written in Chinese in two copies, each Party having one copy with equal legal validity.

 

IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Power of Attorney Agreement as of the date first above written.

 

 

Party A:            Kutianxia (Beijing) Information Technology Ltd.

(Company Seal)

 

 

	
By:
    	
/s/ Rixue Li
    	
 
    
	
Name:
    	
Rixue   Li
    	
 
    
	
Title:
    	
Legal Representative
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Party   B:
    	
Rixue Li
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Rixue Li
    	
 
    
	
Name:
    	
Rixue Li

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