Document:

Exhibit 10.3

 

PHOENIX TREE HOLDINGS LIMITED

 

FORM OF EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement, dated as of                         , 20      (this “Agreement”), is executed by and between Phoenix Tree Holdings Limited, an exempted company with limited liability incorporated and existing under the laws of the Cayman Islands (the “Company”) and                      (holding passport of                          with passport number of                   /PRC Identification Card No.                                             ) (the “Executive”).

 

RECITALS

 

The Company desires to employ the Executive, and the Executive agrees to be employed by the Company, and act as                      of the Company, all pursuant to the terms and conditions of this Agreement;

 

NOW, THEREFORE, the parties hereto agree as follows:

 

1.                                      TERM OF EMPLOYMENT

 

1.1                               The Company shall employ the Executive to take the position as set forth in Article 2 hereof, perform the duties and responsibilities as set forth in Article 2 hereof, and render services to the Company during a term of five (5) years commencing on                       , 20     and ending on                     , 20    (the “Term”) . The Term may be early terminated pursuant to the provisions of Articles 4 and 5 hereof.

 

2.                                      POSITION, DUTIES AND RESPONSIBILITIES

 

2.1                               Position. The Executive shall be employed and act as the                              of the Company with all responsibilities that are customary for such officer, as well as other responsibilities reasonably assigned to the Executive by the Company. The Executive may take position in any Affiliate (as defined in Article 2.2 hereof) of the Company and is hereby appointed as                                of                       , an Affiliate of the Company, subject to the approval of such appointment by the board of directors of such Affiliate, and shall initially work in Shanghai, China. The entity in which the Executive takes position and the location where the Executive works may be appropriately adjusted according to the operative demands of the Company in the future. The Executive shall use his/her best efforts to perform his/her duties and shall comply with all applicable laws, regulations and rules as well as the memorandum and articles of association and corporate and business policies and procedures of the Company. The Executive shall adhere to good business ethics and practices and shall not take advantage of his/her position for personal gains.

 

2.2                               For the purpose of this Agreement, “Affiliate” means any entity directly or indirectly controlled by the Company. For the purpose of this Article, “Control” means the direct or indirect possession of the power to direct or cause to direct the management and policies of such entity, whether through ownership of voting securities, by contract or otherwise, including, without limitation, (a) the direct or indirect ownership of 50% or more of the outstanding stocks or other equity interests issued by such entity, (b) direct or indirect ownership of the 50% or more voting power of such entity, or (c) the power to appoint, directly or indirectly, a majority of the members of the board of directors or other similar decision-making organization of such entity.

 

 

2.3                               Voting Restriction. If the Executive is elected as a director of the Company, the Executive shall refrain from voting, in his/her capacity of a director of the Company, on matters in relation to his/her employment or termination of his/her employment at meetings of the board of directors of the Company.

 

2.4                               Other Activities. Except with the prior written approval of the Company, the Executive shall not render commercial or professional services of any nature to any person or organization, whether or not for compensation; and the Executive will not directly or indirectly engage, participate, invest, finance or otherwise assist in any business activity that is potentially competitive in any manner with the business of the Company or any Affiliate or any business activity that may cause the Executive to be in conflict of interest with the Company or any Affiliate, whether or not for profit.

 

3.                                      COMPENSATION AND BENEFITS

 

As full consideration for the services to be provided by the Executive under this Agreement and as full compensation for the obligations and restrictions to be imposed on the Executive by this Agreement, the Company shall or have its Affiliate in which the Executive holds a position, as the case may be, pay the Executive, and the Executive agrees to accept, the base salary, bonus, share option and other incentive programs, and other benefits as set forth in this Article 3.

 

3.1                               Base salary. The Company shall pay base salaries to the Executive in the amount and by the means as set forth in Part I of Exhibit A hereof.

 

3.2                               Bonus. The Executive may be entitled to the performance-based bonus as set forth in Part II of Exhibit A hereof.

 

3.3                               Share Options and Other Incentive Programs. The Executive shall be eligible to participate in any share option or other incentive program available to officers or employees of the Company as determined by the Company.

 

3.4                               Benefits. The Executive will be eligible to receive any benefit as the Company or the Affiliate with which the Executive works generally provides to its other employees of comparable position in accordance with the benefit plans established and amended from time to time at its sole discretion by the Company or such Affiliate, including without limitation, various mandatory health care, insurance and pension plans required in the jurisdiction where the Company or such Affiliate is located.  The annual paid leave of the Executive shall be [twenty (20)] working days.

 

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4.                                      TERMINATION BY THE COMPANY.

 

4.1                               Termination for Cause. For purposes of this Agreement, unless otherwise provided under applicable laws, “Cause” will exist at any time after the occurrence of one or more of the following events: (a) the Executive commits willful misconduct or gross negligence in performance of his duties hereunder (“Malfeasance”) and fails to correct such Malfeasance within a reasonable period specified by the Company after the Company has sent the Executive a written notice demanding correction within such a period; (b) the Executive has committed Malfeasance and has caused serious losses and damages to the Company; (c) the Executive seriously violates the internal rules of the Company and fails to correct such violation within a reasonable period specified by the Company after the Company has sent the Executive a written notice demanding correction within such a period; (d) the Executive has seriously violated the internal rules of and has caused serious losses and damages to the Company; (e) the Executive is convicted by a court of competent jurisdiction or has pleaded guilty of theft, fraud or other criminal offense; or (f) the Executive seriously breaches his/her duty of loyalty to the Company or an Affiliate under the laws of the Cayman Islands, the PRC or other relevant jurisdictions. The Company may terminate the employment of the Executive for Cause at any time without prior written notice. Upon termination, the Company shall pay all compensation of the Executive accrued up to the date of termination pursuant to Article 3 hereof and severance payments as expressly required by applicable law; provided, however, that the Company may deduct and withhold any amount it is entitled to as damages under applicable laws. Thereafter, all obligations of the Company under this Agreement shall terminate.

 

4.2                               Termination without Cause. The Company may terminate the Executive’s employment by a three-month prior written notice. Upon termination, the Company shall pay all compensation of the Executive accrued up to the date of termination pursuant to Article 3 hereof; provided, however, that the Company may deduct and withhold any amount it is entitled to as damages under applicable laws. Thereafter, all obligations of the Company under this Agreement shall terminate.

 

4.3                               Termination By Reason of Death. The employment of the Executive by the Company shall be automatically ceased upon the death of the Executive. In the event that employment of the Executive by the Company terminates as a result of the Executive’s death, the Executive’s estate or heirs will receive all unpaid compensation accrued as of the date of the termination of the employment as provided in Article 3 hereof; provided that, the Company may deduct and withhold any amount it is entitled to as damages under applicable laws. Thereafter, all obligations of the Company under this Agreement shall terminate. Nothing contained herein shall prevent the estate or heirs of the Executive from being entitled to any interest or other applicable benefits under any life insurance programs (if any). If the death of the Executive occurs during the performance of his/her duties for the Company, the Company shall pay to the appropriate beneficiaries a special compensation at an amount to be determined by the Company which shall not exceed the annual base salary of the Executive as set forth in Article 3.1 hereof.

 

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4.4                               Termination By Reason of Disability. In the event that the Executive is entitled to long-term disability benefits of the Company, or in the event that, in the judgment of the Company, the Executive is not able to perform his/her duties for 90 consecutive days or 120 days or longer in a 12-month period due to his/her physical or psychological problems, the Company may terminate the Executive’s employment, provided that such termination is permitted by the law. Upon termination, the Company shall pay all compensation of the Executive accrued up to the date of termination pursuant to Article 3 hereof; provided, however, that the Company may deduct and withhold any amount it is entitled to as damages under applicable laws. Thereafter, all obligations of the Company under this Agreement shall terminate. The provisions of this Article 4.3 shall not affect the Executive’s rights under any disability program that he/she participates (if any).

 

5.                                      TERMINATION BY THE EXECUTIVE

 

5.1                               The Executive may voluntarily terminate his/her employment with the Company with or without cause by a three-month prior written notice. During such three-month notice period, the Executive shall continue to perform diligently his/her duties and responsibilities under this Agreement. The Company shall have the discretion to terminate its employment with the Executive prior to the last day of such three-month period; provided that the Company shall have paid the Executive all of his/her compensation accrued through the last day of such three-month period pursuant to Article 3 hereof; provided further that the Company may deduct and withhold any amount it is entitled to as damages under applicable laws. Thereafter, the Company’s obligations hereunder shall terminate. In such case, the Company shall not be responsible for paying any severance pay or other benefits to the Executive.

 

6.                                      RESPONSIBILITIES UPON TERMINATION

 

6.1                               Return of Documents. The Executive agrees to promptly return to the Company all documents and materials in any form received by the Executive by virtue of his/her employment with the Company upon or prior to the termination of his/her employment with the Company, including, without limitation, all originals and copies of any Proprietary Information as defined in Article 8 hereof as well as any part thereof, together with all equipment and other tangible or intangible assets of the Company. The Executive agrees not to retain any document or material that contains such Proprietary Information or any copy thereof.

 

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6.2                               Survival. The Executive further agrees that (a) all representations, warranties and obligations under Articles 6, 7, 8, 9, 11 and 14 hereof shall survive the termination or expiration of the Term; (b) all representations, warranties and obligations under Articles 6, 7, 8, 9, 11 and 14 hereof shall also survive the termination of this Agreement; and (c) after termination or expiration of the Term, the Executive shall use his/her best efforts to cooperate with the Company in connection with such surviving obligations, including, without limitation to, completion of outstanding work on behalf of the Company, transfer of his/her assignments to designated employees of the Company, and defense of  the Company against claims raised by any third party in connection with any action or negligence of the Executive during his employment with the Company.

 

7.                                      RESTRICTED ACTIVITIES

 

7.1                               No-use of Proprietary Information. The Executive acknowledges that to conduct any activity restricted in this Article will certainly involve the use or disclosure of Proprietary Information as defined in Article 8 hereof and consequently result in a breach of such Article, and it will be difficult to directly demonstrate a breach of Article 8 hereof.  Therefore, in order to prevent the Executive from using or disclosing the Proprietary Information as defined in Article 8 and as a condition to employing the Executive, the Executive agrees that during his/her employment with the Company and for a period of one year after the termination or expiration of the employment, the Executive shall not, directly or indirectly:

 

(a)                                 refer or attempt to refer to any third party any business in which the Company or its Affiliates currently engage or will likely engage or participate, including, without limitation, solicitation or provision of any business or services that are essentially similar to the business of the Company or its Affiliates on behalf of any individual, company or other entity who was then an existing or prospective customer, supplier or partner of the Company or its Affiliates.

 

(b)                                 seek to solicit the services of any employees who is employed by the Company or its Affiliates on or after the date of the Executive’s termination, or in the year preceding such termination, without the prior written consent of the Company.

 

7.2                               Non-Competition

 

(a)                                 During the Restrictive Period set forth in Article 7.2(b) hereof, the Executive shall not, directly or indirectly, engage in any manner in any business that may compete with the business of the Company anywhere in the world, and without the prior written consent of the Company, the Executive shall not, directly or indirectly, anywhere in the world, own an interest in, manage, operate, join, control, lend money or render financial or other assistance to or participate in or be connected with, as an officer, employee, partner, stockholder, principal, licensor, consultant or otherwise, any person that competes with the Company. During the Restrictive Period, the Executive shall not approach financial institutions, dealers or other persons or entities introduced to the Executive in his or her capacity as a representative of the Company for the purpose of doing business with such persons or entities that will harm the Company’s business relationships with these persons or entities.

 

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(b)                                 In this Article 7.2, “Restricted Period” shall mean the Term of this Agreement and one (1) year after the expiration or early termination thereof.

 

(c)                                  In the event that the Executive is in breach of the provisions of Article 7.2(a) hereof, the Restricted Period shall be extended by the length of the period of such breach.

 

(d)                                 The Executive acknowledges that the compensation to be paid by the Company shall have contained any and all economic consideration for each and all obligations of the Executive under this Article 7.2.

 

7.3                               Enforceability. Each covenant contained in this Article 7 constitutes an independent covenant, and if any covenant in unenforceable, other covenants shall continue to be valid and binding. In the event the term of any restriction or the territorial restriction contained in this Article 7 is finally determined by a competent court to have exceeded the maximum extent deemed reasonable and enforceable by such court, then this Agreement shall be amended as such to adopt the longest term or largest territory deemed by such court to be enforceable.

 

7.4                               Independent Covenant. All covenants contained in this Article 7 shall be interpreted as a separate agreement independent of other provisions of this Agreement. Any lawsuit or claim brought by the Executive against the Company (whether by virtue of this Agreement or any other agreement) shall not constitute a defense against the enforcement of this Article 7 by the Company.

 

8.                                      PROPRIETARY INFORMATION

 

8.1                               The Executive agrees that during his/her employment with the Company and within two (2) years after termination of his/her employment with the Company, he/she will keep in strict confidence all Proprietary Information and, without the prior written consent of the Company, will not use or disclose to any individual, entity or company the Proprietary Information other than the use or disclosure for the purposes of performing his/her duties and responsibilities and in favor of the Company or pursuant to applicable law to the extent necessary.  “Proprietary Information” shall mean any proprietary, confidential or secret information disclosed to the Executive in connection with the Company, the business of the Company, or subsidiaries, Affiliates, customers or business partners of the Company or their respective businesses, or any third party to which the Company has confidentiality obligation (the “Related Party”) or its business. Such Proprietary Information shall include, without limitation, trade secrets, manuals, hardware, customers’ personal information, terms of business agreements and contracts, research materials, business strategies, personnel information, market information, technical materials, forecasts, promotion, financial and other business information of the Company or the Related Parties, no matter such information is directly or indirectly disclosed to the Executive in writing, orally, in the form of image or object or otherwise. The Executive understands that the Proprietary Information does not include any of the foregoing that has become known to the public other than as a result of disclosure by the Executive in breach hereof.

 

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9.                                      INTELLECTUAL PROPERTY

 

9.1                               Inventions Retained and Licensed. Exhibit B of this Agreement sets forth all inventions which were made by the Executive prior to his/her employment with the Company (collectively, the “Prior Inventions”), including all processes, inventions, technology, original works of authorship, developments, improvements, formulas, patents, discoveries, copyrights and trade secrets. Such Prior Inventions, which belong to the Executive and are related to the Company’s proposed business, products or research and development, are not assigned to the Company hereunder. In case that there is no Prior Invention listed in Exhibit B hereof, the Executive hereby confirms that no Prior Invention exist. If in the course of his/her employment with the Company, the Executive incorporates into a Company product, process, machine or other project a Prior Invention owned by the Executive or in which the Executive has an interest, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use, sell and engage in other actions with respect to such Prior Invention as part of or in connection with such product, process or machine.

 

9.2                               Assignment of Inventions. The Executive agrees that he/she will promptly make full written disclosure to the Company in confidence, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, without further compensation, all his/her right, title, and interest in and to any and all inventions, designs, original works of authorship, developments, concepts, improvements or trade secrets, whether or not patentable or registrable under copyright or similar laws, which the Executive may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time the Executive is in the employment of the Company and within twelve (12) months after the termination or expiration of the employment (collectively referred to as “Inventions”), except as provided in Article 9.3 below. The Executive further agrees to use best efforts to assist the Company in obtaining and enforcing patents, copyrights and other legal rights for these Inventions. The Executive further agrees that all patentable and copyrightable works which are made by the Executive (solely or jointly with others) within the scope of and during the period of his/her employment with the Company, are “works made for hire” and the Executive hereby assigns all proprietary rights, including patent and copyright, in these works to the Company without further compensation.

 

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9.3                               Unrelated Inventions. Inventions as referenced to in Article 9.2 hereof does not include inventions which the Executive can demonstrate to be developed entirely on his/her own time without using the Company’s equipment, supplies, facilities or trade secret information (the “Unrelated Inventions”), unless those inventions that are either (i) related at the time of conception or reduction to practice of the invention to the Company’s business, or actual or demonstrably anticipated research or development of the Company, or (ii) result from any work performed by Executive for the Company.  The Executive agrees to disclose promptly to the Company all such Unrelated Inventions and to provide the Company or its assignee first rights of refusal to license such disclosed Unrelated Inventions within three months after his/her disclosure of such Unrelated Inventions based on commercially negotiated terms.

 

9.4                               Maintenance of Records. The Executive agrees to keep and maintain adequate and current written records of all Inventions made by the Executive (solely or jointly with others) during the term of his/her employment with the Company. The records will be in the form of notes, sketches, drawings, and any other format that may be specified by the Company. The records will be available to and remain the sole property of the Company at all times.

 

9.5                               Patent and Copyright Registrations.

 

(a)                                 The Executive agrees to assist the Company, or its designee, upon the instruction of the Company, in every proper way to secure the Company’s rights in the Inventions and any copyrights, patents or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents or other intellectual property rights relating thereto.

 

(b)                                 The Executive further agrees that his/her obligation to execute or cause to be executed any such instrument or papers shall continue after the termination of this Agreement. If the Company is unable because of the Executive’s mental or physical incapacity or for any other reason to secure his/her signature to apply for or to pursue any application for any domestic or foreign patents or copyright registrations covering Inventions assigned to the Company as above, then the Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as his/her agent and attorney in fact, to act for and in his/her behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by the Executive.

 

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10.                               INFORMATION OF PREVIOUS EMPLOYER

 

10.1                        The Executive agrees that during his/her employment with the Company he/she will not inappropriately use or disclose any proprietary information or trade secrets owned by any previous employer of the Executive or any other individual or entity obtained prior to his/her employment with the Company, nor will he/she bring to the Company any such non-public document or proprietary information.

 

11.                               INFORMATION OF THIRD PARTIES

 

11.1                        The Executive hereby acknowledges that the Company has received and may continue to receive from third parties confidential or proprietary information. The Executive agrees to keep in strict confidence all of such confidential or proprietary information in his/her possession and to refrain from using or disclosing to any individual, entity or company such confidential or proprietary information, except that such use or disclosure is in compliance with the agreement between the Company and such third party and is necessary for the performance of relevant work on behalf of the Company.

 

12.                               NO-CONFLICT

 

12.1                        The Executive represents and warrants that the execution by the Executive of this Agreement, the employment with the Company, and the performance by the Executive of his/her duties and responsibilities pursuant to this Agreement will not breach any of his/her legal or contractual obligation to any prior employer of the Executive or any other parties, including, without limitation, any obligation in respect of proprietary or confidential information or intellectual property rights of such party.

 

13.                               FOREIGN CORRUPTION ACT

 

13.1                        The Executive agrees to diligently adhere to the Foreign Corrupt Practices Act attached as Exhibit E hereof.

 

13.2                        The Executive agrees and promises not to provide or offer any remuneration, gift, service or article of value to any government officials (including working stuff or employees of any government or administrative agencies, political parties or candidates) of any country for any reason. The Executive further agrees and promises that the Executive will not accept any remuneration in the form of cash or other tangible objects from any person in performing his/her duties under this Agreement other than the compensation specified in Article 3 of this Agreement. The Executive promises that all conducts of the Executive under this Agreement shall be in compliance with all relevant laws, regulations and administrative rules of the People’s Republic of China at all times.

 

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14.                               MISCELLANEOUS

 

14.1                        Continuing Obligation. If the Executive is employed by any existing or future Affiliate of the Company at any time, or provides services to such Affiliate, or otherwise retained by such Affiliate, then the obligations under this Agreement shall continue to apply. Any reference to the Company shall include such Affiliate. In the event that this Agreement expires or terminates for any reason, the Executive shall immediately resign from any position at such Affiliate of the Company, unless otherwise required by the Company.

 

14.2                        Notice to Employer. The Executive hereby authorizes the Company to notify the relevant provisions of this Agreement and the Executive’s obligations under this Agreement to the actual or future employer of the Executive (including the Affiliate with which the Executive will work).

 

14.3                        Right to Name and Image. The Executive hereby authorizes the Company to use, or authorize any other person to use, once or from time to time during his/her employment with the Company, the names, photos, images (including cartoons), voices and resume of the Executive as well as photocopies and duplicates thereof in any media now known or developed in the future (including but not limited to movies, videos, digital or any other electronic media) for purposes as may be deemed appropriate by the Company.

 

14.4                        Legal Fees.  In any dispute arise from or in connection with this Agreement, the winning party shall be entitled to be reimbursed for reasonable legal fees.

 

14.5                        Amendments, Extension and Waiver. This Agreement may not be amended, revised, extended or terminated unless by a written instrument executed by the Executive or a duly authorized representative of the Company (excluding the Executive). Any failure or delay to assert any right, remedy or power shall not be construed as a waiver of such right, remedy or power. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

14.6                        Transfer; Successors and Assigns. The Executive agrees that he/she will not transfer, sell, assign or otherwise dispose of (whether voluntarily, involuntarily or by operation of law) any rights or interests under this Agreement, and the rights of the Executive shall not be subject to any security interest or creditors’ claims. Any such transfer, assign or other disposal shall be invalid. Nothing contained in this Agreement shall prevent the Company from merging into or with any other company or selling all or substantially all of the assets of the Company, or transfer this Agreement or any obligation under this Agreement. In the event of any change in the ownership interest or the control of the Company, the provisions of this Agreement shall continue to apply and shall be binding upon any successors. Notwithstanding and subject to the foregoing, this Agreement shall be valid and binding upon, and inure to the benefit of, the successor, representative, heirs and permitted assigns of each party, and shall not vest in any other individual or entity any interest.

 

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14.7                        Notice.  All notices or other communications under this Agreement shall be made in writing and delivered to the following addresses or any other addresses designated by each party in writing from time to time:

 

To the Company:

 

Address:                                                 10A, Building 3, Youyou Century Plaza
 428 South Yanggao Road
 Pudong New Area, Shanghai 200127

People’s Republic of China

Attention:  Mr. Yongyi Zhang

 

To the Executive:

 

Address:
 Fax:
 Attention of:

 

Any notice shall be deemed to have been delivered:

 

(a)                                 If by hand or courier, on the date of actual delivery;

 

(b)                                 If by prepaid and registered mail, on the fourth business days after the date of dispatch; or

 

(c)                                  If by fax, on the date on which the fax is transmitted (as evidenced by the confirmatory report with fax number, pages transmitted and date of transmission).

 

14.8                        Severability; Enforceability.  If all or any portion of any provision of this Agreement as applied to any person, to any place or to any circumstance shall be ruled by an arbitration commission or a court of competent jurisdiction to be invalid, illegal or incapable of being enforced, the same shall in no way affect (to the maximum extent permissible by Law) that provision or the remaining portions of that provision as applied to any parties, places or circumstances or any other provisions of this Agreement or the validity or enforceability of this Agreement as a whole.

 

14.9                        Governing Law. This Agreement shall be governed and construed in accordance with the laws of the People’s Republic of China.

 

14.10                 Language. This Agreement is written and executed in English.

 

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14.11                 Originals. This Agreement is executed by the parties in two originals. Each of the parties will hold one original, and the two originals shall be equally valid.

 

The Executive acknowledges that (a) he/she has consulted or has the opportunity to consult with independent counsel of his choice regarding this Agreement, and the Company has suggested that he/she do so and (b) he/she has read and understands this Agreement, fully understands its legal effect, and has entered into this Agreement voluntarily in his/her own judgment. The Executive hereby agrees that the obligations under Articles 7, 8 and 9 hereof and the definition of the Proprietary Information contained in those provisions shall also apply to the Proprietary Information relating to any work performed for the Company prior to the execution of this Agreement.

 

[Signatures Page to Follow]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the date first written above.

 

	
 
    	
PHOENIX   TREE HOLDINGS LIMITED
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
EXECUTIVE
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    

 

 

EXHIBIT A

 

Compensation

 

Part I.  Base Salary

 

Part II.  Bonus

 

EXHIBIT B

 

Prior InventionsExhibit 10.4

 

Equity Interest Pledge Agreement

 

This Equity Interest Pledge Agreement (this “Agreement”) has been executed by and among the following Parties on February 12, 2018:

 

Party A:                  Xiaofangjian (Shanghai) Internet Information Technology Co., Ltd.(“Pledgee”)

 

Party B:                  Jing Gao, ID number: [REDACTED];

Yan Cui, ID number: [REDACTED].

 

(“Pledgor”)

 

Party C:                  Zi Wutong (Beijing) Asset Management Co., Ltd.

 

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

 

Whereas,

 

1.              As of the date of this Agreement, Pledgor collectively holds 100 % of the equity interest in Party C. Party C is a limited liability company registered at Dongcheng Branch of Beijing Administration for Industry and Commerce. The business scope is Asset management; Housing rental management; Engaging in real estate brokerage business; Hotel management; Investment consulting; Renting office housing; Design, Production, Agent, Publishing advertisements; Organizing cultural and art exchange activities (excluding performances); Technology promotion, Technology development, Technology transfer, Technology consulting; Economic and Trade consulting; Market investigation; Conference services; Exhibition and display; Computer animation design; Sales of needles and textiles, hardware and telecommunications, clothing, shoes and hats, sports goods, stationery, household appliances, daily necessities, furniture (not engaged in physical shop operation); Professional contracting; Property management. (1) No fund shall be raised in a public way without the approval of the relevant departments; 2) No trading activities of securities products and financial derivatives shall be conducted publicly; 3) No loans shall be granted; 4) No guarantees shall be provided to enterprises other than the invested enterprises; 5) No promises shall be made to investors that the principal of the investment shall not be lost or that the minimum income shall be promised.” Enterprises independently choose and operate projects according to law; projects subject to approval according to law shall be carried out according to approved contents after approval by relevant departments; and they shall not engage in business activities of projects prohibited or restricted by the city’s industrial policy.);

 

2.              Pledgee is a wholly foreign owned enterprise registered in Shanghai, China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement on November 24, 2015 (“Exclusive Business Cooperation Agreement”); Pledgor, Pledgee and Party C have executed an Exclusive Call Option Agreement on February 12, 2018(“Exclusive Call Option Agreement”); Pledgee and Party C have executed a Power of Attorney Agreement with Jing Gao and Yan Cui respectively on February 12, 2018(“Power of Attorney Agreement”).

 

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3.              To ensure that Pledgee and Party C perform Contractual Obligations, Pledgor hereby pledges all of the equity interest he holds in Party C as security for Contractual Obligations.

 

Now therefore, the Parties have reached the following agreement:

 

1.                                      Definitions

 

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

 

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

 

1.2                               “Equity Interest” shall refer to 100% of the equity interest lawfully now held and hereafter acquired by Pledgor in Party C, namely 57% of the equity interests in Party C held by Jing Gao and 43% of the equity interest in Party C held by Yan Cui.

 

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

 

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

 

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

 

1.6                               “PRC Laws” shall refer to then effective law, administrative regulations, administrative rules, local regulations, administrative rules, judicial interpretation and other binding normative documents.

 

1.7                               “Transaction Documents” shall refer to this Agreement, Exclusive Business Cooperation Agreement, Exclusive Call Option Agreement and Power of Attorney Agreement.

 

1.8                               “Contractual Obligations” shall refer to all obligations of Pledgor and Party C under the Transaction Documents.

 

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2.                                      The Pledge

 

2.1                               As collateral security for the prompt and complete performance when due of any or all obligations under the Transaction Documents by Pledgee and Party C, including without limitation the consulting and services fees payable to the Pledgee under the Exclusive Business Cooperation Agreement, Pledgor hereby pledges to Pledgee 100% equity interest of Party C owned by the Pledgor as security for the Secured Obligations. “Secured Obligations” means all direct, indirect and derivative loss and loss of predicable interests arising from any Event of Default by Pledgor and/or Party C. The supportive materials for the amount of such loss includes but not limited to Pledgor’s reasonable business plan and profit forecast, fees payable under the Exclusive Business Cooperation Agreement and all expenses and fees caused by Pledgee for forcing Pledgor and/or Party C to perform the Contractual Obligations.

 

2.2                               Only upon the prior written consent by Pledgee, Pledgor may increase the registered capital of Party C. The increased Equity Interests of Party C held by Pledgor due to increase of registered capital shall also be subject to this Agreement. All the Parties shall use their best effort to modify and execute relevant documents and complete equity pledge registration procedure.

 

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 further agree that within thirty (30) days as of the Registration Authority officially commences the acceptance of equity pledge application, Pledgor 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 the Pledge shall end when the last obligation secured by the Pledge is paid or fully fulfilled.

 

4.                                      Custody of Records for Equity Interest

 

4.1                               During the Term of Pledge set forth in this Agreement, Pledgor shall deliver to Pledgee’s custody the capital contribution certificate for the Equity Interest and the shareholders’ register containing the Pledge within three days from the date the Pledge is registered. 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.

 

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5.                                      Representations and Warranties of Pledgor

 

5.1                               Pledgor is the sole legal and beneficial owner of the Equity Interest. There are no controversies over the ownership of the Equity Interest. Pledgor has the right to dispose all and any part of the Equity Interest.

 

5.2                               Except for the Pledge under this Agreement and the option rights under the Exclusive Call Option Agreement, Pledgor has not placed any security interest or other encumbrance on the Equity Interest.

 

5.3                               The Equity Interest is good for transfer and pledging according to applicable laws and Pledgor has full power and right to pledge the Equity Interest to Pledgee in accordance with this Agreement.

 

5.4                               Upon due execution of Pledgor, this Agreement constitute legal, effective and binding obligation on Pledgor.

 

5.5                               The Pledgor’s execution of this Agreement and exercise of its rights under this Agreement will not breach any laws, regulations, and agreements or contracts to which the Pledgor is a party, any judgment of a court, any arbitration award or any decision of an administrative authority.

 

5.6                               Pledgor hereby warrants to the Pledgee that, at any time and under any circumstances prior to complete fulfillment of the obligations under this Agreement or the Secured Obligations being fully repaid, the aforementioned representations and warranties are true and accurate and will be fully complied with.

 

6.                                      Covenants and Further Agreements of Pledgor

 

6.1                               Pledgor hereby covenants to the Pledgee, that during the term of this Agreement, Pledgor shall:

 

6.1.1                     not transfer all or any part of 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 Call Option Agreement executed by Pledgor, Pledgee and Party C on February 12, 2018;

 

6.1.2                     promptly notify Pledgee of any event or notice received by Pledgor 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                               Pledgor agrees that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed by Pledgor or any heirs or representatives of Pledgor or any other persons through any legal proceedings.

 

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6.3                               Pledgor 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, Pledgor shall indemnify Pledgee for all losses resulting therefrom.

 

7.                                      Event of Default

 

7.1                               The following circumstances shall be deemed Event of Default:

 

7.1.1                     Party C fails to pay in full any of the consulting and service fees payable under the Exclusive Business Cooperation Agreement, or fail to repay its loan 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 Pledgor violates 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 of this Agreement;

 

7.1.4                     Pledgor breach covenants and further agreement under Article 6 of this Agreement;

 

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

 

7.1.6                     Any of Pledgor’s own loans, guarantees, indemnifications, promises or other debt liabilities to any third party or parties (1) become subject to a demand of early repayment or performance due to default on the part of Pledgor; or (2) become due but are not capable of being repaid or performed in a timely manner;

 

7.1.7                     Any approval, license, permit or authorization of government agencies 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 Pledgor to continue to perform its obligations under this Agreement;

 

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

 

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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 Transaction Documents; 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, Pledgor 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 Pledgor in writing upon the occurrence of the Event of Default or at any time thereafter and demand that Pledgor immediately pays all outstanding payments due under the Exclusive Business Cooperation Agreement, and/or repays loans and all other payments due to Pledgee, and/or disposes of the Pledge in accordance with the provisions of Article 8 of this Agreement.

 

8.                                      Exercise of Pledge

 

8.1                               Without the Pledgee’s written consent, Pledgor shall not assign the Pledge or the Equity Interest in Party C.

 

8.2                               Pledgee may issue a Notice of Default to Pledgor 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 8.2 or at any time after the issuance of the Notice of Default.

 

8.4                               Pledgee is entitled to receive in priority compensation from the transfer, auction or sale of all or part of the Equity Interests pledged under this Agreement in accordance with legal procedures until all Secured Obligations is fully paid.

 

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

 

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9.                                      Assignment

 

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

 

9.2                               This Agreement shall be binding on Pledgor 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 Transaction Agreements to its designee(s) (natural/legal persons), 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 Transaction Agreements, upon Pledgee’s request, Pledgor 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, Pledgor shall, at the request of Pledgee, execute a new pledge agreement with the new pledgee on 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, 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 Pledgor except in accordance with the written instructions of Pledgee.

 

10.                               Termination

 

Upon the full performance of Contractual Obligations or the full payment of the Secured Obligations, this Agreement shall be terminated, and Pledgee shall then cancel or 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, Pledgor 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 obtaining the written consent of other Parties, it shall not disclose any relevant information to any third parties, except in 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 in this section. Disclosure of any confidential information by the staff members or agency hired by any Party shall be deemed 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.

 

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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 laws of China.

 

13.2                        In the event of any dispute with respect to the construction and performance of the provisions of this Agreement, the Parties shall 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 China International Economic and Trade Arbitration Commission (CIETAC) for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted 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 personally or sent by registered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party. 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:

 

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14.1.1              Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date of delivery or refusal at the address specified for notices.

 

14.1.2              Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by an automatically generated confirmation of transmission).

 

14.2                        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 compromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.

 

16.                               Attachments; Entire Agreement

 

The attachments set forth herein shall be an integral part of this Agreement. Except for written amendment, supplement or change after the execution of this Agreement, this Agreement shall constitute the full and entire understanding and agreement among the Parties with regard to the subjects hereof, and supersedes all other agreements between or among any of the Parties with respect to the subject matter hereof.

 

17.                               Effectiveness

 

17.1                        This Agreement shall become effective upon the executing of the Parties. Any amendments, changes and supplements to this Agreement shall be in writing and shall become effective after the affixation of the signatures or seals of the Parties.

 

17.2                        This Agreement is written in Chinese in four (4) copies. Each copy of this Agreement shall have equal validity.

 

[The space below is intentionally left blank.]

 

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[Signature Pages to Equity Interest Pledge Agreement]

 

Party A:                  Xiaofangjian (Shanghai) Internet Information Technology Co., Ltd.

 

	
By:
    	
/s/ Jing Gao
    	
 
    
	
Name:
    	
Jing Gao
    	
 
    
	
Title:
    	
Legal   Representative
    	
 
    

 

 

[Signature Pages to Equity Interest Pledge Agreement]

 

Party B:

 

Jing Gao

 

	
By:
    	
/s/ Jing Gao
    	
 
    

 

 

[Signature Pages to Equity Interest Pledge Agreement]

 

Party B:

 

Yan Cui

 

	
By:
    	
/s/ Yan Cui
    	
 
    

 

 

[Signature Pages to Equity Interest Pledge Agreement]

 

Party C:                  Zi Wutong (Beijing) Asset Management Co., Ltd.

 

	
By:
    	
/s/ Jing Gao
    	
 
    
	
Name:
    	
Jing Gao
    	
 
    
	
Title:
    	
Legal   Representative

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