Document:

Exhibit 10.5

 

Share Pledge Agreement

 

This Share Pledge Agreement (this “Agreement”) has been executed by and among the following Parties on this 8th day of May, 2017:

 

	
Party   A:
    	
Kutianxia (Beijing)   Information Technology Ltd. (hereinafter “Pledgee”)
    
	
Address:
    	
Room 2407, Bld 31, No.25, Yuetan North   Street, Xicheng District, Beijing
    
	
 
    	
 
    
	
Party   B:
    	
Rixue Li, ID number: 362201197406073879
    
	
 
    	
Zhaohui Huang, ID   Number:362201197407310629
    
	
 
    	
(hereinafter “Pledgors”)
    
	
 
    	
 
    
	
Party   C:
    	
Beijing   Secoo Trading Limited
    
	
Address:
    	
Room 2405, Bld 31, No.25, Yuetan North   Street, Xicheng District, Beijing
    

 

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

 

Whereas,

 

1.                                      Pledgors are the citizen of the People’s Republic of China (“China”), and hold 100% of the equity interest in Party C. Party C is a limited liability company registered in Beijing, China. Party C carries out the following business: trading of apparels, shoes, hats, accessories, daily necessities, furniture, communication devices, home appliances, electrical hardwares, crafts (excluding antiques), sports goods. Party C acknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and agrees to provide any necessary assistance in registering the Pledge;

 

2.                                      Pledgee is a wholly foreign owned enterprise registered in Beijing, China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement on the 8th day of May, 2017;

 

3.                                      To ensure that Pledgee collects all payments payable by Party C, including without limitation to the consulting and service fees, Pledgors hereby pledge all of the equity interests they hold in Party C as security for Party C’s payment of the consulting and service fees under the Exclusive Business Cooperation Agreement.

 

To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.

 

1.                                      Definitions

 

Unless otherwise provided herein, the terms below shall have the following meanings:

 

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1.1                               “Pledge” shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to be compensated on a preferential basis with the transfer, auction or sales proceeds of the Equity Interest.

 

1.2                               “Equity Interest” shall refer to all of the 100% equity interest lawfully now held by Pledgors in Party C, 10% of which are held by Zhaohui Huang, 90% of which are held by Rixue Li.

 

1.3                               “Term of Pledge” shall refer to the term set forth in Section 3 of this Agreement.

 

1.4                               “Business Cooperation Agreement” shall refer to the Exclusive Business Cooperation Agreement executed by and between Pledgee and Party C on May 24, 2011.

 

1.5                               “Event of Default” shall refer to any of the circumstances set forth in Article 7 of this Agreement.

 

1.6                               “Notice of Default” shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.

 

2.                                      The Pledge

 

As collateral security for the prompt and complete payment and performance  of any or all the payments payable by Party C, including without limitation the consulting and services fees payable to the Pledgee under the Business Cooperation Agreement, when they become due (whether at the specified date of maturity, by prepayment or otherwise), Pledgors hereby pledge to Pledgee the Equity Interest of Party C held by Pledgor.

 

3.                                      Term of Pledge

 

3.1                               The Pledge shall become effective as of the date when the pledge of the Equity Interest is registered with the local administration of industry and commerce (the “Registration Authority”). The Parties agree that, as of the date of this Agreement, Pledgors and Party A shall submit their application for pledge registration to the Registration Authority in accordance with the Measures on Share Pledge Registration with the Administration of Industry and Commerce.  The Parties also agree that within twenty (20) business days as of the Registration Authority officially commences the acceptance of equity pledge application, Pledgors and Party C shall complete the pledge registration procedure, obtain the pledge registration notice and completely and accurately register the Pledge of Equity Interest on the Pledge Registration Book of the Registration Authority.

 

3.2                               The Term of Pledge is 10 years, and such Term shall be extended to the same as the term of the Business Cooperation Agreement, which are secured by this Pledge, has been extended. During the Term of Pledge, in the event Party C 

 

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fails to pay the exclusive consulting or service fees in accordance with the Business Cooperation Agreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.

 

4.                                      Custody of Records for Equity Interest

 

4.1                               During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee’s custody the capital contribution certificate for the Equity Interest and the shareholders’ register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of such items during the entire Term of Pledge set forth in this Agreement.

 

4.2                               Pledgee shall have the right to collect dividends generated by the Equity Interest during the Term of Pledge.

 

5.                                      Representations and Warranties of Pledgors

 

5.1                               Pledgors are the sole legal and beneficial owner of the Equity Interest.

 

5.2                               Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.

 

6.                                      Covenants and Further Agreements of Pledgors

 

6.1                               Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:

 

6.1.1                     not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance that may affect the Pledgee’s rights and interests in the Equity Interest, without the prior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, Pledgee and Party C on May 24, 2011;

 

6.1.2                     promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee’s rights to the Equity Interest or any portion thereof, as well as any event or notice received by Pledgor that may have an impact on any guarantees and other obligations of Pledgor arising out of this Agreement.

 

6.2                               Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed by Pledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.

 

6.3                               Pledgors hereby undertakes to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. In the event of failure or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnify Pledgee 

 

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for all losses resulting therefrom.

 

7.                                      Event of Breach

 

7.1                               Any of the following circumstances shall be deemed an Event of Default:

 

7.1.1                     Party C fails to pay in full any of the consulting and service fees payable under the Business Cooperation Agreement or breaches any other obligations of Party C thereunder;

 

7.1.2                     Any representation or warranty by Pledgor in Article 5 of this Agreement contains material misrepresentations or errors, and/or Pledgors violate any of the warranties in Article 5 of this Agreement;

 

7.1.3                     Pledgor and Party C fail to complete the registration of the Pledge with Registration Authority in accordance with Article 3.1;

 

7.1.4                     Pledgor and Party C breach any provisions of this Agreement;

 

7.1.5                     Except as expressly stipulated in Section 6.1.1, Pledgors transfer or purport to transfer or abandons the Equity Interest pledged or assigns the Equity Interest pledged without the written consent of Pledgee;

 

7.1.6                     Any of Pledgors’ own loans, guarantees, indemnifications, promises or other debt liabilities to any third party or parties (i) become subject to a demand of early repayment or performance due to default on the part of Pledgors; or (ii) become due but can not be repaid or performed in a timely manner;

 

7.1.7                     Any approval, license, permit or authorization of government authorities that makes this Agreement enforceable, legal and effective is withdrawn, terminated, invalidated or substantively changed;

 

7.1.8                     The promulgation of applicable laws renders this Agreement illegal or renders it impossible for Pledgors to continue to perform their obligations under this Agreement;

 

7.1.9                     Adverse changes in properties owned by Pledgors, which lead Pledgee to believe that that Pledgors’ ability to perform its obligations under this Agreement has been affected;

 

7.1.10              The successor or custodian of Party C is capable of only partially performing or refuses to perform the payment obligations under the Business Cooperation Agreement; and

 

7.1.11              Any other circumstances occur where Pledgee is or may become unable to exercise its right with respect to the Pledge.

 

7.2                               Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1, 

 

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Pledgors shall immediately notify Pledgee in writing accordingly.

 

7.3                               Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee’s satisfaction, Pledgee may issue a Notice of Default to Pledgors in writing upon the occurrence of the Event of Default or at any time thereafter and demand that Pledgors immediately pay all outstanding payments due under the Business Cooperation Agreement, and/or dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.

 

8.                                      Exercise of Pledge

 

8.1                               Prior to the full payment of the consulting and service fees described in the Business Cooperation Agreement, without the Pledgee’s written consent, Pledgors shall not assign the Pledge or the Equity Interest in Party C.

 

8.2                               Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.

 

8.3                               Subject to the provisions of Section 7.3, Pledgee may exercise the right to enforce the Pledge concurrently with the issuance of the Notice of Default in accordance with Section 7.2 or at any time after the issuance of the Notice of Default.

 

8.4                               Pledgee is entitled to be compensated on a preferential basis with the transfer, auction or sales proceeds of the Equity Interest pledged hereunder, until the day all outstanding payments due under the Business Cooperation Agreement and all other payments payable to Pledgee is fully repaid.

 

8.5                               When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee to enforce the Pledge in accordance with this Agreement.

 

9.                                      Assignment

 

9.1                               Without Pledgee’s prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.

 

9.2                               This Agreement shall be binding on Pledgors and its successors and permitted assigns, and shall be valid with respect to Pledgee and each of its successors and assigns.

 

9.3                               At any time, Pledgee may assign any and all of its rights and obligations under the Business Cooperation Agreement to its designee(s) (being (a) natural/legal person(s)), in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were the original party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee’s request, Pledgors shall execute relevant agreements or other documents relating to such assignment.

 

9.4                               In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the new pledgee on 

 

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the same terms and conditions as this Agreement.

 

9.5                               Pledgor shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them, including the Exclusive Option Agreement and the Power of Attorney Agreement granted to Pledgee, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgor with respect to the Equity Interest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.

 

10.                               Termination

 

Upon the full payment of the consulting and service fees under the Business Cooperation Agreement and upon termination of Party C’s obligations under the Business Cooperation Agreement, this Agreement shall be terminated, and Pledgee shall then terminate this Agreement as soon as reasonably practicable.

 

11.                               Handling Fees and Other Expenses

 

All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes and fees, shall be borne by Party C. If Applicable Laws requires that Pledgee should bear some related taxes and fees, Pledgors shall cause Party C to fully repay Pledgee the paid taxes and fees.

 

12.                               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 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 agencies 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.

 

13.                               Governing Law and Resolution of Disputes

 

13.1                        The execution, effectiveness, construction, performance, 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 

 

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

 

13.2                       In the event of any dispute with respect to the construction and performance of the provisions of this Agreement, the Parties shall first negotiate in good faith to resolve the dispute. In the event the Parties fail to reach an agreement on the resolution of such a dispute within 30 days after any Party’s request for resolution of the dispute through negotiations, any 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 during arbitration shall be Chinese. The arbitration ruling shall be final and binding on all Parties.

 

13.3                       Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and perform their respective obligations under this Agreement.

 

14.                               Notices

 

14.1                        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, 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:

 

14.1.1              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.

 

14.1.2              In the case 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).

 

14.2                        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

 

Party B:

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

 

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Party C:

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

Attn:                                    Rixue Li

 

14.3                        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.

 

15.                               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.

 

16.                               Attachments

 

The attachments set forth herein shall be an integral part of this Agreement.

 

17.                               Effectiveness

 

17.1                        This Agreement shall become effective upon the date hereof. Any amendments, changes and supplements to this Agreement shall be in writing and shall become effective upon completion of the governmental registration procedures (if applicable) after the affixation of the signatures or seals of the Parties.

 

17.2                        This Agreement is written in Chinese in four copies. Pledgors, Pledgee and Party C shall hold one copy respectively. Each copy of this Agreement shall have equal validity.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Share Pledge 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
    	
 
    
	
 
    	
 
    	
 
    
	
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 Representative
    	
 
    

 

 

Attachments:

 

1.                                      Capital Contribution Certificate

 

2                                          Shareholders’ register of Beijing Secoo Trading Limited

 

 

Attachment 1

 

Capital Contribution Certificate

 

It is hereby certified that Rixue Li (ID Card No.: 362201197406073879) has contributed Renminbi 1,800,000 to hold 90% of the equity interest of Beijing Secoo Trading Limited, and such 90% equity interest has been pledged to Kutianxia (Beijing) Information Technology Ltd..

 

 

	
 
    	
Company:   Beijing   Secoo Trading Limited
    
	
 
    	
(Company Seal)
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By: 
    	
/s/ Rixue Li
    
	
 
    	
 
    	
Name:
    	
Rixue Li
    
	
 
    	
 
    	
Title: 
    	
Legal   Representative
    
	
 
    	
 
    	
Date: 
    	
May 8, 2017
    

 

 

Attachment 1

 

Capital Contribution Certificate

 

It is hereby certified that Zhaohui Huang (ID Card No.: 362201197407310629) has contributed Renminbi 200,000 to hold 10% of the equity interest of Beijing Secoo Trading Limited, and such 10% equity interest has been pledged to Kutianxia (Beijing) Information Technology Ltd..

 

 

	
 
    	
Company:   Beijing   Secoo Trading Limited
    
	
 
    	
(Company Seal)
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By: 
    	
/s/ Rixue Li
    
	
 
    	
 
    	
Name:
    	
Rixue Li
    
	
 
    	
 
    	
Title: 
    	
Legal   Representative
    
	
 
    	
 
    	
Date: 
    	
May 8, 2017
    

 

 

Attachment 2

 

Shareholders’ Register of Beijing Secoo Trading Limited

 

	
Name of
   Shareholder
    	
 
    	
ID Card No.
    	
 
    	
Capital
   Contribution
    	
 
    	
Percentage
   of
   Contribution
    	
 
    	
Share Pledge
    	
 
    
	
Rixue Li
    	
 
    	
362201197406073879
    	
 
    	
RMB
    	
1,800,000
    	
 
    	
90
    	
%
    	
90% equity interests held by Rixue Li are pledged in   favor of Kutianxia (Beijing) Information Technology Ltd..
    	
 
    
	
Zhaohui Huang
    	
 
    	
362201197407310629
    	
 
    	
RMB
    	
200,000
    	
 
    	
10
    	
%
    	
10% equity interests held by Zhaohui Huang are   pledged in favor of Kutianxia (Beijing) Information Technology Ltd..
    	
 
    

 

 

	
 
    	
Company:   Beijing Secoo   Trading Limited
    
	
 
    	
(Company Seal)
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Rixue Li
    
	
 
    	
Name: 
    	
Rixue Li
    
	
 
    	
Title: 
    	
Legal   Representative
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Shareholder: Rixue Li
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Rixue Li
    
	
 
    	
 
    	
 
    
	
 
    	
Shareholder: Zhaohui Huang
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Zhaohui Huang
    
	
 
    	
 
    	
 
    
	
 
    	
Date:   May 8,   2017Exhibit 10.6

 

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:

 

5

 

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

 

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 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

 

7

 

Party B:

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

 

Party C:

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

Attn:                                                  Rixue Li

 

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.

 

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 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]

 

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:
    	
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:

 

5

 

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

 

Party B:

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

 

Party C:

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

Attn:                                                  Rixue Li

 

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 Representative

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