Document:

Exhibit 10.6

 

Equity Pledge Agreement

 

This Equity Pledge Agreement (hereinafter referred to as “this Agreement”) was executed by and among the following parties on [Execution Date]:

 

1.                  Respective shareholders set out in Annex I (hereinafter individually and collectively referred to as the “Pledgors”)

 

2                     [Name of Pledgee] (hereinafter referred to as the “Pledgee”)

Registered address:

Legal representative:

 

3                     [Name of VIE] (hereinafter referred to as the “Company”)

Registered address:

Legal representative:

 

(In this Agreement, the aforesaid respective parties are individually referred to as a “Party” and collectively as the “Parties”.)

 

Whereas:

 

(1)             The Pledgors are registered shareholders of the Company and hold all the equity of the Company (hereinafter referred to as the “equity of the Company”) according to law. Their contributions to the Company’s registered capital and shareholding percentage as at the date of execution of this Agreement are set out in Annex I.

 

(2)             According to the Exclusive Option Agreement (hereinafter referred to as the “Option Agreement”) executed by the parties to this Agreement on [Execution Date], the Pledgors or the Company shall, where permitted by PRC Law and as required by the Pledgee, transfer all or part of its equity held in the Company or all or part of the Company’s assets to the Pledgee and/or any other entities or individuals designated by it.

 

(3)             Pursuant to the Voting Proxy Agreement (hereinafter referred to as the “Voting Proxy Agreement”) executed by the parties to this Agreement on [Execution Date], the Pledgors have irrevocably and fully authorized the person appointed by the Pledgee to exercise on their behalves all of their shareholder’s voting rights in the Company.

 

(4)             According to the Exclusive Consultation and Services Agreement (hereinafter referred to as the “Consultation and Services Agreement”) executed between the Company and the Pledgee on [Execution Date], the Company has exclusively engaged the Pledgee to provide relevant consultation services for it and agreed to pay corresponding service fees to the Pledgee for such consultation services.

 

 

(5)             As security for performance of the Contract Obligations (as defined below) and repayment of the Guaranteed Liabilities (as defined below) by the Pledgors, the Pledgors agree to pledge all of their equity of the Company to the Pledgee and grant the Pledgee the right to request for repayment on first priority and the Company agrees such equity pledge arrangement.

 

Therefore, the parties, upon negotiation, arrive at the following agreement:

 

Article 1 Definitions

 

1.1           Save as otherwise interpreted pursuant to the context, the following terms shall have the following meanings in this Agreement:

 

	
“Contract   Obligations”:
    	
 
    	
shall mean all contract obligations of the Pledgors   under the Option Agreement and Voting Proxy Agreement, all contract   obligations of the Company under the Exclusive Option Agreement, Voting Proxy   Agreement and Consultation and Services Agreement, and all contract   obligations of the Pledgors and the Company under this Agreement.
    
	
 
    	
 
    	
 
    
	
“Guaranteed Liabilities”:
    	
 
    	
shall mean all direct, indirect and consequential   losses and losses of foreseeable profits suffered by the Pledgee due to any   Breaching Event (as defined below) of the Pledgors and/or the Company; the   basis for the amount of such loss includes but is not limited to the   reasonable business plan and profit forecast of the Pledgee, and all expenses   incurred to the Pledgee for forcing the Pledgors and/or the Company to   perform their Contract Obligations.
    
	
 
    	
 
    	
 
    
	
“Transaction Agreements”:
    	
 
    	
shall mean the Option Agreement, Voting Proxy   Agreement and Consultation and Services Agreement.
    
	
 
    	
 
    	
 
    
	
“Breaching Event”:
    	
 
    	
shall mean the Pledgors’ violation of any Contract   Obligations under the Option Agreement, Voting Proxy Agreement and/or this   Agreement, and the Company’s violation of any Contract Obligations under the   Option Agreement, Voting Proxy Agreement, Consultation and Services Agreement   and/or this Agreement.
    
	
 
    	
 
    	
 
    
	
“Pledged Equity”:
    	
 
    	
shall mean all of the equity of the Company that is   legally owned by the Pledgors at the time when this Agreement takes effect   and will be pledged to the Pledgee according to the provisions of this   Agreement as security for the performance of Contract Obligations by the   Pledgors and the Company (see Annex I for the specific pledged equity of each   of the Pledgors), and the increased capital contribution and equity interest   as described in Articles 2.6 and 2.7 hereof.
    

 

 

	
“PRC Law”:
    	
 
    	
shall mean the then-effective laws, administrative   regulations, administrative rules, local regulations, judicial   interpretations and other binding regulatory documents of the People’s   Republic of China.
    

 

1.2           The references to any PRC Law herein shall be deemed (1) simultaneously to include the references to the amendments, changes, supplements and re-enactment of such PRC Law, irrespective of whether they take effect before or after the execution of this Agreement, and (2) simultaneously to include the references to other decisions, notices and regulations enacted in accordance therewith or effective as a result thereof.

 

1.3           Except as otherwise stated in the context herein, all references to an article, clause, item or paragraph herein shall refer to the corresponding part of this Agreement.

 

Article 2 Equity Pledge

 

2.1           The Pledgors agree to pledge the pledged equity legally owned by them and at their disposal to the Pledgee as security for payment of the Guaranteed liabilities according to this Agreement. The Company agrees to the Pledgors pledge of the pledged equity to the Pledgee as specified in this Agreement. Specifically, on the date of execution of this Agreement, [Name of Pledgor] pledges his equity accounting for [% of Pledgor’s Equity Interest in the VIE] % of the Company’s registered capital (equivalent to a contribution of RMB    ) to the Pledgee; and [Name of Pledgor] pledges its equity accounting for [% of Pledgor’s Equity Interest in the VIE] % of the Company’s registered capital (equivalent to a contribution of RMB    ) to the Pledgee.

 

2.2           The Pledgors hereby undertake that they will be responsible for registering the arrangement of the equity pledge hereunder (the “Equity Pledge”) with registration authorities of industry and commerce where the Company registers on the date of execution of this Agreement. The Company undertakes that it will do its best to cooperate with the Pledgors to complete the registration with authorities of industry and commerce under this Article. The equity pledge under this Agreement shall be established on the date when the pledge is registered with the registration authorities of industry and commerce where the Company registers.

 

2.3           During the valid term of this Agreement, except for the willful misconduct or gross negligence of the Pledgee which has direct cause and effect relationship with the reduction in value of the Pledged Equity, the Pledgee shall not be liable in any way, nor shall the Pledgors have any right to claim in any way or propose any demands on  the Pledgee, in respect of the said reduction in value of the Pledged Equity.

 

 

2.4           To the extent not violating provision of Article 2.3 above, in case of any possibility of obvious reduction in value of the Pledged Equity which is sufficient to jeopardize the Pledgee’s rights, the Pledgee may at any time auction or sell off the Pledged Equity on behalf of the Pledgors, and discuss with the Pledgors to use the proceeds from such auction or sale-off as pre-repayment of the Guaranteed Liabilities, or may submit such proceeds to the local notary institution where the Pledgee is domiciled for keeping (any fees incurred in relation thereto shall be borne by the Pledgee). In addition, as requested by the Pledgee, the Pledgors should provide other property as security for the Guaranteed Liabilities.

 

2.5           In case of any Breaching Event, the Pledgee shall have the right to dispose of the Pledged Equity in the way set out in Article 4 hereof.

 

2.6           With the prior consent of the Pledgee, the Pledgors may increase their capital contribution to the Company. Further contribution made by the Pledgors to the registered capital of the Company shall also be part of the Pledged Equity.

 

2.7           With the prior consent of the Pledgee, the Pledgors may be able to receive dividends or share profits from the Pledged Equity.

 

2.8           Where a Breaching Event occurs, the Pledgee has the right to dispose of any Pledged Equity of any of the Pledgors in accordance with the provisions of this Agreements.

 

Article 3 Release of Pledge

 

3.1           Upon full and complete performance of all the Contract Obligations and upon the full repayment of all the Guaranteed Liabilities by the Pledgors and the Company, the Pledgee shall, at the request of the Pledgors, release the equity pledge under this Agreement, and shall cooperate with the Pledgors to go through the formalities to cancel registration of the Equity Pledge. The reasonable fees incurred in connection with such release shall be borne by Pledgee.

 

Article 4 Disposal of the Pledged Equity

 

4.1           The Parties hereby agree that, in case of any Breaching Event, the Pledgee shall have the right to exercise, upon giving a written notice to the Pledgors, all of the remedial rights and powers enjoyable by it under PRC Law, Transaction Agreements and the terms hereof, including (but not limited to) being repaid in priority with proceeds from auctions or sale-offs of the Pledged Equity. The Pledgee shall not be liable for any loss as the result of its reasonable exercise of such rights and powers.

 

 

4.2           The Pledgee shall have the right to designate in writing its legal counsel or other  agents to exercise on its behalf any and all rights and powers set out above, and neither the Pledgors nor the Company shall raise an objection.

 

4.3           For the reasonable costs incurred to the Pledgee in connection with its exercise of any or all rights and powers set out above, the Pledgee shall have the right to deduct the costs actually incurred from the proceeds acquired from the exercise of the rights and powers.

 

4.4           The proceeds that the Pledgee acquires from the exercise of its rights and powers shall be used in the priority order as follows:

 

First, to pay any cost incurred in connection with the disposal of the Pledged Equity and the Pledgee’s exercise of its rights and powers (including remuneration paid to its legal counsels and agents);

 

Second, to pay any taxes and levies payable for the disposal of the Pledged Equity; and

 

Third, to repay the Pledgee for the Guaranteed Liabilities;

 

In case of any balance after payment of the above amounts, the Pledgee shall return it to the Pledgors or other persons entitled thereto according to the relevant laws and rules or submit it to the local notary institution where the Pledgee is domiciled for keeping (any fees incurred in relation thereto shall be borne by the Pledgee).

 

4.5           The Pledgee shall have the option to exercise, simultaneously or in certain sequence, any of the breach remedies enjoyable by it. The Pledgee shall not be obliged to exercise any other breach remedies before exercise of the right to the auctions or sale-offs of the Pledged Equity hereunder.

 

Article 5 Fees and Costs

 

5.1           All costs actually incurred in connection with the establishment of the Equity Pledge hereunder, including (but not limited to) stamp duties, any other taxes and all legal fees, shall be borne by the Parties respectively.

 

Article 6 Continuity and No Waiver

 

6.1           The Equity Pledge hereunder is a continuous guarantee, with its validity to continue until the full performance of the Contract Obligations or the full repayment of the Guaranteed Liabilities. Neither exemption or grace period granted by Pledgee to the Pledgors in respect of any breach of contract, nor delay by the Pledgee in exercising any of its rights under the Transaction Agreements and this Agreement shall affect the rights of the Pledgee under this Agreement, relevant PRC Law and the Transaction  Agreements, the rights of the Pledgee to demand at any time thereafter the strict performance of the Transaction Agreements and this Agreement by the Pledgors or the rights that the Pledgee may be entitled to due to subsequent breach of the Transaction Agreements and/or this Agreement by the Pledgors.

 

 

Article 7 Representations and Warranties of the Pledgors

 

Each of the Pledgors hereby represents and warrants to the Pledgee as follows:

 

7.1           The Pledgors have full capacity and legal rights and abilities to sign this Agreement and assume the legal obligations hereunder.

 

7.2           All reports, documents and information concerning the Pledgors and all matters as required by this Agreement which are provided by the Pledgors to the Pledgee before this Agreement comes into effect are true and correct in all material aspects at the time when this Agreement comes into effect.

 

7.3           All reports, documents and information concerning the Pledgors and all matters as required by this Agreement which are provided by the Pledgors to the Pledgee after this Agreement comes into effect are true and correct in all material aspects at the time when they are provided.

 

7.4           At the time when this Agreement comes into effect, the Pledgors are the sole legal owners of the Pledged Equity, with no existing dispute whatsoever concerning the ownership of the Pledged Equity. The Pledgors have the right to dispose of the Pledged Equity or any part thereof.

 

7.5           Except for the encumbrance set on the Pledged Equity hereunder and the rights set under the Transaction Agreements, there is no other encumbrance, third party interest or any other restrictions set on the Pledged Equity.

 

7.6           The Pledged Equity is capable of being pledged or transferred according to the laws, and the Pledgors have the full right and power to pledge the Pledged Equity to the Pledgee according to this Agreement.

 

7.7           This Agreement constitutes the legal, valid and binding obligations on the Pledgors when it is duly executed by the Pledgors.

 

7.8           Any consent, permission, waiver or authorization by any third person, or any approval, permission or exemption by any government authority, or any registration or filing formalities (if required by laws) with any government authority to be obtained in respect of the execution and performance hereof and the Equity Pledge hereunder have already been handled or obtained, and will be fully effective during the valid term of this Agreement.

 

 

7.9           The execution and performance of this Agreement by the Pledgors are not in violation of or conflict with any laws applicable to them, any agreement to which they are a party or which has binding effect on their assets, any court judgment, any arbitration award, or any administration authority’s decision.

 

7.10    The pledge hereunder constitutes the encumbrance of first order in priority on the Pledged Equity.

 

7.11    All taxes and fees payable in connection with acquisition of the Pledged Equity have already been paid in full by the Pledgors.

 

7.12    There is no pending or, to the knowledge of the Pledgors, threatened litigation, legal process or demand by any court or any arbitral tribunal against the Pledgors, or their property, or the Pledged Equity, nor is there any pending or, to the knowledge of the Pledgors, threatened litigation, legal process or demand by any government authority or any administration authority against the Pledgors, or their property, or the Pledged Equity, which is of material or detrimental effect on the economic status of the Pledgors or their capability to perform the obligations hereunder and the Guaranteed Liabilities. 7.13              The Pledgors hereby warrant to the Pledgee that the above representations and warranties will remain true and correct at any time and under any circumstance before the Contract Obligations are fully performed or the Guaranteed Liabilities are fully repaid, and will be fully complied with.

 

7.14    The Pledgors agree to immediately and unconditionally present any share profit, bonus, dividend and other incomes that they obtain from the Company during the contract period to the Pledgee or the entity/individual designated by the Pledgee.

 

7.15    If the Company is required to be dissolved or liquidated as per compulsory provisions of applicable laws, any interest distributed to the Pledgors according to law upon completion of legal dissolution or liquidation of the Company shall be presented to the Pledgee or the entity/individual designated by the Pledgee to the extent not in violation of the PRC Law.

 

Article 8 Representations and Warranties by the Company

 

The Company hereby represents and warrants to the Pledgee as follows

 

8.1           The Company is a limited liability company duly registered and legitimately existing under the PRC Law with an independent legal personality. It has the full and independent legal status and legal capacity to execute, deliver and perform this Agreement and may act independently as a party to lawsuit.

 

 

8.2           All reports, documents and information concerning the Pledged Equity and all matters as required by this Agreement which are provided by the Company to the Pledgee before this Agreement comes into effect are true and correct in all material aspects at the time when this Agreement comes into effect.

 

8.3           All reports, documents and information concerning the Pledged Equity and all matters as required by this Agreement which are provided by the Company to the Pledgee after this Agreement comes into effect are true and effective in all material aspects at the time when they are provided.

 

8.4           This Agreement constitutes the legal, valid and binding obligations on the Company when it is duly executed by the Company.

 

8.5           It has the full internal corporate power and authority to execute and deliver this Agreement and all other documents relating to the transactions specified herein and to be executed by it. It has the full power and authority to consummate the transactions specified herein.

 

8.6           There is no pending or, to the knowledge of the Company, threatened litigation, legal process or demand by any court or any arbitral tribunal against the Pledged Equity and the Company or its assets, nor is there any pending or, to the knowledge of the Company, threatened litigation, legal process or demand by any government authority or any administration authority against the Pledged Equity and the Company or its assets, which is of material or detrimental effect on the economic status of the Company or their capability to perform the obligations hereunder and the Guaranteed Liabilities.

 

8.7           The Company hereby agrees to bear joint responsibilities to the Pledgee in respect of the representations and warranties made by its relevant Pledgors to Article 7.4, Article 7.5, Article 7.6, Article 7.8 and Article 7.10 hereof.

 

8.8           The Company hereby warrants to the Pledgee that the above representations and warranties will remain true and correct at any time and under any circumstance before the Contract Obligations are fully performed or the Guaranteed Liabilities are fully repaid, and will be fully complied with.

 

8.9           If the Company is required to be dissolved or liquidated as per compulsory provisions of the PRC Law, the Company assets shall be sold to the Pledgors or qualified entities/individuals designated by the Pledgors at the lowest price permitted by the then-effective PRC Law in accordance with the PRC Law.

 

Article 9 Undertakings by the Pledgors

 

Each of the Pledgors hereby individually undertakes to the Pledgee as follows:

 

 

9.1           Without prior written consent of the Pledgee, the Pledgors shall not establish or permit to establish any new pledge or any other encumbrance on the Pledged Equity, and any pledge or any other encumbrance established on all or part of the Pledged Equity without prior written consent of the Pledgee shall be invalid.

 

9.2           Without prior written notice to the Pledgee and having the Pledgee’s prior written consent, the Pledgors shall not transfer the Pledged Equity, and any attempt by the Pledgors to transfer the Pledged Equity shall be null and void. The proceeds from transfer of the Pledged Equity by the Pledgors shall be used to repay to the Pledgee in advance the Guaranteed Liabilities or submit the same to the third party as agreed with the Pledgee.

 

9.3           In case of any litigation, arbitration or other demand which may affect detrimentally the interest of the Pledgors or the Pledgee under the Transaction Agreements and hereunder or the Pledged Equity, the Pledgors undertake to notify the Pledgee thereof in writing as soon as possible and promptly and shall take, at the reasonable request of the Pledgee, all necessary measures to ensure the pledge interest of the Pledgee in the Pledged Equity.

 

9.4           The Pledgors shall not carry on or permit any act or action which may affect detrimentally the interest of the Pledgee under the Transaction Agreements and hereunder or the Pledged Equity. The Pledgors shall waive the right of first refusal when the Pledgee realizes the pledge rights.

 

9.5           The Pledgors guarantee that they shall, at the reasonable request of the Pledgee, take all necessary measures and execute all necessary documents (including but not limited to supplementary agreement hereof) to ensure the pledge interest of the Pledgee in the Pledged Equity and the exercise and realization of the rights thereof.

 

9.6           In case of transfer of any Pledged Equity caused by the exercise of the right to the pledge hereunder, the Pledgors guarantee that they will take all necessary measures to realize such transfer.

 

9.7           The Pledgors shall ensure that the meeting convening procedures and voting methods and contents of the Company’s shareholders’ meeting or Board meeting held for the purpose of the conclusion of this Agreement and establishment and performance of the pledge rights are in compliance with laws, administrative rules or the Articles of Association.

 

9.8           Unless with the prior written consent of the Pledgee, the Pledgors shall have no right to transfer any rights and obligations thereof under this Agreement.

 

 

Article 10 Undertakings by the Company

 

10.1    Any consent, permission, waive or authorization by any third person, or any approval, permission or exemption by any government authority, or any registration or filing formalities (if required by laws) with any government authority to be handled or obtained in respect of the execution and performance hereof and the Equity Pledge hereunder will be cooperated to handle or obtain by the Company to their best and will be ensured to remain full effective during the valid term of this Agreement.

 

10.2    Without the prior written consent of the Pledgee, the Company shall not cooperate to establish or permit to establish any new pledge or any other encumbrance on the Pledged Equity.

 

10.3    Without the prior written consent of the Pledgee, the Company shall not cooperate to transfer or permit to transfer the Pledged Equity.

 

10.4    In case of any litigation, arbitration or other demand which may affect detrimentally the interest of the Company, the Pledged Equity or the Pledgee under the Transaction Agreements and hereunder, the Company undertakes to notify the Pledgee thereof in writing as soon as possible and promptly and shall take, at the reasonable request of the Pledgee, all necessary measures to ensure the pledge interest of the Pledgee in the Pledged Equity.

 

10.5    The Company shall not carry on or permit any act or action which may affect detrimentally the interest of the Pledgee under the Transaction Agreements and hereunder or the Pledged Equity.

 

10.6    The Pledgors shall provide the Pledgee with the financial statement of the last calendar season within the first month of each calendar season, including (but not limited to) the balance sheet, the income statement and the statement of cash flow.

 

10.7    The Company guarantees that they shall, at the reasonable request of the Pledgee, take all necessary measures and execute all necessary documents (including but not limited to supplementary agreement hereof) to ensure the pledge interest of the Pledgee in the Pledged Equity and the exercise and realization of the rights thereof.

 

10.8    In case of transfer of any Pledged Equity caused by the exercise of the right to the pledge hereunder, the Company guarantees that they will take all necessary measures to realize such transfer.

 

 

Article 11 Change of Circumstances 

 

11.1            As supplement and subject to compliance with other terms of the Transaction Agreements and this Agreement, in case that at any time the promulgation or change of any PRC Law, regulations or rules, or change in interpretation or application of such laws, regulations and rules, or the change of the relevant registration procedures enables the Pledgee to believe that it will be illegal or in conflict with such laws, regulations or rules to further maintain the effectiveness of this Agreement and/or dispose of the Pledged Equity in the way provided herein, the Pledgors and the Company shall, at the written direction of the Pledgee and in accordance with the reasonable request of the Pledgee, promptly take actions and/or execute any agreement or other document, in order to: 

 

(1) keep this Agreement remain in effect;

 

(2) facilitate the disposal of the Pledged Equity in the way provided herein; and/or 

 

(3) maintain or realize the intention or the guarantee established hereunder. 

 

Article 12 Effectiveness and Term of This Agreement

 

12.1            This Agreement shall become effective upon due execution by all the Parties

 

12.2            This Agreement shall have its valid term until the full performance of the Contract Obligations or the full repayment of the Guaranteed Liabilities. 

 

Article 13 Notice 

 

13.1            Any notice, request, demand and other correspondences required by this Agreement or made in accordance with this Agreement shall be delivered in writing to the relevant Party. 

 

13.2            If any of such notice or other correspondences is transmitted by facsimile or telex, it shall be deemed as served immediately upon transmission; if delivered in person, it shall be deemed as served at the time of delivery; if posted by mail, it shall be deemed as served five (5) days after posting 

 

Article 14 Miscellaneous 

 

14.1            The Pledgors and the Company agree that the Pledgee may, upon notice to the Pledgors and the Company, transfer its rights and/or obligations hereunder to any third party; and that without prior written consent of the Pledgee, neither the Pledgors nor the Company may transfer their respective rights, obligations or liabilities hereunder to any third party. Successors or permitted assignees (if any) of the Pledgors and the Company shall continue to perform the obligations of the Pledgors and the Company under this Agreement. 

 

14.2            The sum of the Guaranteed Liabilities determined by the Pledgee at its discretion in its exercise of its rights of pledge with respect to the Pledged Equity in accordance with the terms hereof shall constitute the conclusive evidence for the Guaranteed Liabilities hereunder. 

 

 

14.3            This Agreement is written in Chinese and executed in      (    ) originals, with one (1) original to be retained by each Party hereto.

 

14.4            The execution, effectiveness, performance, revision, interpretation and termination of this Agreement shall be governed by the PRC Law.

 

14.5            Any dispute arising out of and in connection with this Agreement shall be resolved through consultations among the Parties. In case the Parties fail to reach an agreement within thirty (30) days after the dispute arises, such dispute shall be submitted to China International Economic and Trade Arbitration Commission for arbitration in Beijing in accordance with such Commission’s arbitration rules in effect at the time. The language used in arbitration shall be Chinese and the arbitration award shall be final and equally binding on the Parties hereto.

 

14.6            None of the rights, powers or remedies granted to any Party by any provision herein shall preclude any other rights, powers or remedies available to such Party at law and under the other provisions of this Agreement. In addition, a Party’s exercise of any of its rights, powers and remedies shall not exclude such Party from exercising any of its other rights, powers and remedies.

 

14.7            No failure or delay by a Party in exercising any rights, powers and remedies available to it hereunder or at law (“Such Rights”) shall result in a waiver thereof, nor shall the waiver of any single or part of Such Rights shall exclude such Party from exercising Such Rights in any other way and exercising other rights of such Party.

 

 

14.8                        The headings of the provisions herein are for reference only, and in no event shall such headings be used for or affect the interpretation of the provisions hereof.

 

14.9                        Each provision contained herein shall be severable and independent from each of the other provisions. If any one or more provisions herein become(s) invalid, illegal or unenforceable at any time, the validity, legality and enforceability of the remaining provisions herein shall not be affected as a result thereof.

 

14.10                 Any amendments or supplements to this Agreement shall be made in writing. Except for assignment by the Pledgee of its rights hereunder according to Article 14.1 of this Agreement, the amendments or supplements to this Agreement shall take effect only when properly signed by the Parties to this Agreement.

 

14.11                 This Agreement shall be binding on the legal successors of the Parties.

 

[The remainder of this page is intentionally left blank]

 

 

[Signature Page of Equity Pledge Agreement]

 

In witness whereof, this Equity Pledge Agreement is signed by the Parties on the date and at the place first above written.

 

	
[Name of Pledgor]
    	
 
    
	
 
    	
 
    
	
Signature: 
    	
/s/
    	
 
    
			

 

 

[Signature Page of Equity Pledge Agreement]

 

In witness whereof, this Equity Pledge Agreement is signed by the Parties on the date and at the place first above written.

 

[Name of Pledgee] (Seal)

 

Handwritten Signature:

Name:

Position: 

 

[Name of VIE] (Seal)

 

Handwritten Signature:

Name:

Position: 

 

 

Annex I:

 

Company’s General Information

 

Company name:                   [Name of VIE]

 

Registered address:

 

Registered capital:

 

Legal representative:

 

Equity structure:

 

	
Names of
   shareholders
    	
 
    	
Contribution in
   registered capital
   (RMB)
    	
 
    	
Percentage of
   contribution
    	
 
    	
ID number/company
   registration number
    
	
[Name of Plegors]
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total
    	
 
    	
 
    	
 
    	
 
    	
 
    	
—
    

 

 

Schedule of Material Differences

 

One or more persons entered into equity pledge agreement with Lequan Technology (Beijing) Co., Ltd. using this form. Pursuant to Instruction ii to Item 601 of Regulation S-K, the Registrant may only file this form as an exhibit with a schedule setting forth the material details in which the executed agreements differ from this form:

 

	
No.
    	
 
    	
Name of
   Pledgee
    	
 
    	
Name of Pledgor
    	
 
    	
Name of Variable
   Interest Entity (the
   “VIE”)
    	
 
    	
% of
   Pledgor’s
   Equity Interest
   in the VIE
    	
 
    	
Execution Date
    
	
1
    	
 
    	
Lequan Technology   (Beijing) Co., Ltd.
    	
 
    	
Xiaoping Chen
    	
 
    	
Beijing Yunmi   Technology Co., Ltd.
    	
 
    	
60%
    	
 
    	
July 21, 2015
    
	
2
    	
 
    	
Lequan Technology   (Beijing) Co., Ltd.
    	
 
    	
De Liu
    	
 
    	
Beijing Yunmi   Technology Co., Ltd.
    	
 
    	
20%
    	
 
    	
July 21, 2015
    
	
3
    	
 
    	
Lequan Technology   (Beijing) Co., Ltd.
    	
 
    	
Liping Cao
    	
 
    	
Beijing Yunmi Technology   Co., Ltd.
    	
 
    	
20%
    	
 
    	
July 21, 2015
    
	
4
    	
 
    	
Lequan Technology   (Beijing) Co., Ltd.
    	
 
    	
Xiaoping Chen
    	
 
    	
Foshan Yunmi Electric   Appliances Technology Co., Ltd.
    	
 
    	
100%
    	
 
    	
September 5, 2018Exhibit 10.8

 

Exclusive Option Agreement

 

This Exclusive Option Agreement (hereinafter referred to as “this Agreement”) was entered into between the following parties on [Execution Date]:

 

1.                  Respective individual shareholders set out in Annex I (hereinafter individually and collectively referred to as “Existing Shareholders”)

 

2.                    [Name of WFOE] (hereinafter referred to as the “WFOE”) 
 Registered address: 
 Legal representative:

 

3.                    [Name of VIE] (hereinafter referred to as the “Company”)
 Registered address: 
 Legal representative:

 

(In this Agreement, the aforesaid respective parties are individually referred to as a “Party” and collectively as the “Parties”.)

 

Whereas:

 

(1)                     The Existing Shareholders are registered shareholders of the Company who hold all the equity of the Company according to law. Their contributions to the Company Registered Capital and shareholding percentage as at the date of execution of this Agreement are set out in Annex I.

 

(2)                     To the extent not in violation of the PRC Law, the Existing shareholders intend to transfer to the WFOE all their respective equity in the Company, and the WFOE intends to accept such transfer.

 

(3)                     To the extent not in violation of the PRC Law, the Company intends to transfer its assets to the WFOE, and the WFOE intends to accept such transfer.

 

(4)                     For the purpose of the foregoing transfer of equity or assets, the Existing Shareholders and the Company agree to grant the WFOE the exclusive and irrevocable Equity Transfer Option and Asset Purchase Option respectively. Pursuant to such Equity Transfer Option and Asset Purchase Option, at the WFOE’s request, the Existing Shareholders or the Company shall, to the extent permitted by the PRC Law, transfer the Option Equity or the Company Assets (as defined below) to the WFOE and/or any other entity or individual designated by the WFOE pursuant to the provisions of this Agreement.

 

 

(5)                     The Existing Shareholders agree that the Company grants the Asset Purchase Option to the WFOE according to this Agreement.

 

Therefore, the parties, upon negotiation, arrive at the following agreement:

 

Article 1 Definitions

 

1.1                   Save as otherwise interpreted pursuant to the context, the following terms shall have the following meanings in this Agreement:

 

	
“PRC Law”:
    	
 
    	
shall mean the then effective laws, administrative   regulations, administrative rules, local regulations, judicial   interpretations and other binding regulatory documents of the People’s   Republic of China.
    

 

 

	
“Equity Transfer Option”:
    	
 
    	
shall mean the required option to purchase the equity in the Company   as granted to the WFOE by the Existing Shareholders pursuant to the terms and   conditions of this Agreement.
    
	
 
    	
 
    	
 
    
	
“Asset Purchase Option”:
    	
 
    	
shall mean the required option to purchase any Company Assets as   granted to the WFOE by the Company pursuant to the terms and conditions of   this Agreement.
    
	
 
    	
 
    	
 
    
	
“Option Equity”:
    	
 
    	
shall mean, in respect of each of the Existing Shareholders, all the   equity held by him in the Company Registered Capital (as defined below)   respectively; in respect of all the Existing Shareholders, the equity   covering 100% of the Company Registered Capital.
    
	
 
    	
 
    	
 
    
	
“Company Registered Capital”:
    	
 
    	
shall mean the Company Registered Capital as of the date of execution   of this Agreement, i.e. RMB12.5 million, which also includes any expanded   registered capital as a result of any capital increase in any form within the   validity period of this Agreement.
    
	
 
    	
 
    	
 
    
	
“Transferred Equity”:
    	
 
    	
shall mean the equity in the Company which the WFOE has the right to   request any of the Existing Shareholders to transfer to it or its designated   entity or individual in accordance with Article 3 hereof when the WFOE   exercises its Equity Transfer Option, the quantity of which may be all or   part of the Option Equity and the specific amount of which shall be   determined by the WFOE at its sole discretion in accordance with the then   effective PRC Law and based on its commercial consideration.
    
	
 
    	
 
    	
 
    
	
“Transferred Assets”:
    	
 
    	
shall mean the Company Assets which the WFOE has the right to request   the Company to transfer to it or its designated entity or individual in   accordance with Article 3 hereof when the WFOE exercises its Asset   Purchase Option, the quantity of which may be all or part of the Company   Assets and the details of which shall be determined by the WFOE at its sole   discretion in accordance with the then effective PRC Law and based on its   commercial consideration.
    

 

 

	
“Exercise of Option”:
    	
 
    	
shall mean the exercising of the Equity Transfer   Option or the Asset Purchase Option by the WFOE.
    
	
 
    	
 
    	
 
    
	
“Transfer Price”:
    	
 
    	
shall mean all the consideration that the WFOE or   its designated entity or individual is required to pay to the Existing   Shareholders or the Company in order to obtain the Transferred Equity or the   Company Assets upon each Exercise of Option.
    
	
 
    	
 
    	
 
    
	
“Business Permits”:
    	
 
    	
shall mean any approvals, permits, filings and   registrations, etc. which the Company is required to have for legally   and validly operating all its businesses, including but not limited to Business License of Enterprise as Legal Person, Tax Registration Certificate and other relevant permits   and licenses as required by the then effective PRC Law.
    
	
 
    	
 
    	
 
    
	
“Company Assets”:
    	
 
    	
shall mean all the tangible and intangible assets   which the Company owns or has the right to dispose of during the validity   period of this Agreement, including but not limited to any immovable and   movable assets, as well as intellectual properties such as trademarks,   copyrights, patents, know-how, domain names and software use rights.
    

 

 

	
“Material Agreement”:
    	
 
    	
shall mean any agreement to which the Company is a   party and which has a material impact on the business or assets of the   Company, including but not limited to the Exclusive Consultation   and Service Agreement executed by the Company and the WFOE   together with this Agreement and other important agreements regarding the   business of the Company.
    
	
 
    	
 
    	
 
    
	
“Exercise Notice”:
    	
 
    	
shall have the meaning prescribed to such term in   Article 3.7 hereof.
    
	
 
    	
 
    	
 
    
	
“Confidential Information”:
    	
 
    	
shall have the meaning prescribed to such term in   Article 8.1 hereof.
    
	
 
    	
 
    	
 
    
	
“Defaulting Party”:
    	
 
    	
shall have the meaning prescribed to such term in   Article 11.1 hereof.
    
	
 
    	
 
    	
 
    
	
“Default”:
    	
 
    	
shall have the meaning prescribed to such term in   Article 11.1 hereof.
    
	
 
    	
 
    	
 
    
	
“Rights of such Party”:
    	
 
    	
shall have the meaning prescribed to such term in   Article 12.5 hereof.
    

 

1.2                   The references to any PRC Law herein shall be deemed:

 

(1)                                 simultaneously to include the references to the amendments, changes, supplements and re-enactment of such PRC Law, irrespective of whether they take effect before or after the execution of this Agreement; and

 

(2)                                 simultaneously to include the references to other decisions, notices and regulations enacted in accordance therewith or effective as a result thereof.

 

1.3                   Except as otherwise stated in the context herein, all references to an article, clause, item or paragraph herein shall refer to the corresponding part of this Agreement.

 

Article 2 Grant of Equity Transfer Option and Asset Purchase Option

 

2.1                   The Existing Shareholders hereby severally and jointly agree to grant the WFOE an irrevocable, unconditional and exclusive Equity Transfer Option. Pursuant to such Equity Transfer Option, the WFOE is entitled to, to the extent permitted by the PRC Law, request the Existing Shareholders to transfer the Option Equity to the WFOE or its designated entity or individual according to the terms and conditions of this Agreement. The WFOE also agrees to accept such Equity Transfer Option.

 

 

2.2                   The Company hereby agrees that the Existing Shareholders grant such Equity Transfer Option to the WFOE according to Article 2.1 above and other provisions of this Agreement.

 

2.3                   The Company hereby agrees to grant the WFOE an irrevocable, unconditional and exclusive Asset Purchase Option. Pursuant to such Asset Purchase Option, the WFOE is entitled to, to the extent permitted by the PRC Law, request the Company to transfer any or part of the Company Assets to the WFOE or its designated entity or individual according to the terms and conditions of this Agreement. The WFOE also agrees to accept such Asset Purchase Option.

 

 

2.4                   The Existing Shareholders hereby severally and jointly agree that the Company grants such Asset Purchase Option to the WFOE according to Article 2.3 above and other provisions of this Agreement.

 

Article 3 Method of Exercise of Option

 

3.1                   Subject to the terms and conditions of this Agreement, the WFOE shall have the absolute sole discretion to determine the specific time, method and times of its Exercise of Option to the extent permitted by the PRC Law.

 

3.2                   Subject to the terms and conditions of this Agreement and to the extent not in violation of the then effective PRC Law, the WFOE shall have the right to, at any time, request to acquire all or part of the Company’s equity from the Existing Shareholders by itself or through other entity or individual designated by it.

 

3.3                   Subject to the terms and conditions of this Agreement and to the extent not in violation of the then effective PRC Law, the WFOE shall have the right to, at any time, request to acquire all or part of the Company Assets from the Company by itself or through other entity or individual designated by it.

 

3.4                   With regard to the Equity Transfer Option, at each Exercise of Option, the WFOE shall have the right to arbitrarily determine the amount of the Transferred Equity which shall be transferred by the Existing Shareholders to the WFOE and/or other entity or individual designated by it. The Existing Shareholders shall respectively transfer the Transferred Equity to the WFOE and/or other entity or individual designated by it in the amount requested by the WFOE. The WFOE and/or other entity or individual designated by it shall pay the Transfer Price with respect to the Transferred Equity acquired at each Exercise of Option to the Existing Shareholders transferring such Transferred Equity.

 

3.5                   With regard to the Asset Purchase Option, at each Exercise of Option, the WFOE shall have the right to determine the specific Company Assets which shall be transferred by the Company to the WFOE and/or other entity or individual designated by it. The Company shall transfer the Transferred Assets to the WFOE and/or other entity or individual designated by it as per the requirements of the WFOE. The WFOE and/or other entity or individual designated by it shall pay the Transfer Price to the Company with respect to the Transferred Assets acquired at each Exercise of Option.

 

3.6                   At each Exercise of Option, the WFOE may acquire the Transferred Equity or Transferred Assets by itself or designate any third party to acquire all or part of the Transferred Equity or Transferred Assets.

 

 

3.7                   Having decided each Exercise of Option, the WFOE shall issue to the Existing Shareholders or the Company a notice for exercising the Equity Transfer Option or a notice for exercising the Asset Purchase Option (hereinafter referred to as “Exercise Notice”, the form of which is set out in Annex II and Annex III hereto). The Existing Shareholders or the Company shall, upon receipt of the Exercise Notice, forthwith make a one-time transfer of all the Transferred Equity in accordance with the Exercise Notice to the WFOE and/or any other entity or individual designated by the WFOE in such method as described in Article 3.4 or Article 3.5 hereof.

 

Article 4 Transfer Price

 

4.1                   With regard to the Equity Transfer Option, the total Transfer Price which shall be paid by the WFOE or any entity or individual designated by the WFOE to the respective shareholders at each Exercise of Option by the WFOE shall be the capital contribution corresponding to the corresponding Transferred Equity in the Registered Capital of the Target Company or the lowest price permitted by the then effective PRC Law, whichever is the lower. The respective shareholders, who undertake and agree that they have obtained adequate compensation from the WFOE, shall return in full the equity transfer price received by them to the WFOE or any entity or individual designated by the WFOE within ten (10) workdays after obtaining the equity transfer price.

 

 

4.2                   With regard to the Asset Purchase Option, the WFOE or any entity or individual designated by it shall pay to the Target Company the lowest price permitted by the then effective PRC Law at each Exercise of Option by the WFOE. The Target Company, who undertakes and agrees that it has obtained adequate compensation from the WFOE, shall return in full the asset transfer price received by it to the WFOE or any entity or individual designated by the WFOE within ten (10) workdays after obtaining the asset transfer price.

 

Article 5 Representations and Warranties

 

5.1                   The Existing Shareholders hereby severally and jointly represent and warrant that:

 

5.1.1                     The Existing Shareholders are Chinese citizens with full capacity. They have the complete and independent legal status and legal capacity to execute, deliver and perform this Agreement and may act as the subject of litigation independently.

 

5.1.2                     The Company is a limited liability company duly registered and legitimately existing under the PRC Law with an independent legal personality. It has the complete and independent legal status and legal capacity to execute, deliver and perform this Agreement and may act as the subject of litigation independently.

 

5.1.3                     They have the full power and authority to execute, deliver and perform this Agreement and all other documents relating to the transaction specified herein and to be executed by them. They have the full power and authority to consummate the transaction specified herein.

 

5.1.4                     This Agreement is legally and duly executed and delivered by the Existing Shareholders. This Agreement shall constitute their legal and binding obligations and may be enforceable against them in accordance with the terms of this Agreement.

 

5.1.5                     The Existing Shareholders are the registered legitimate owners of the Option Equity as of the effective date of this Agreement, and except for the pledge set under the Equity Pledge Agreement signed by and among the Company, the WFOE and the Existing Shareholders on [Execution Date] and entrusted rights set under the Voting Proxy Agreement signed on [Execution Date], the Option Equity is free from and clear of any lien, pledge, claim and other real rights for security and third party rights. Pursuant to this Agreement, the WFOE and/or other entity or individual designated by it may, after the Exercise of Option, acquire a good title to the Transferred Equity, free from and clear of any lien, pledge, claim and other real rights for security or third party rights.

 

 

5.1.6                     To the knowledge of the Existing Shareholders, the Company Assets are free from and clear of any lien, mortgage, claim and other real rights for security and third party rights. Pursuant to this Agreement, the WFOE and/or other entity or individual designated by it may, after the Exercise of Option, acquire a good title to the Company Assets, free from and clear of any lien, mortgage, claim and other real rights for security or third party rights.

 

5.1.7                     Unless as mandatorily required by the PRC Law, the Existing Shareholders shall not request the Company to declare the distribution of or in practice release any distributable profit, bonus or dividend; the Existing Shareholders shall, in compliance with the PRC Law, promptly gift any profit, bonus or dividend obtained by them from the Company to the WFOE and/or any qualified entity or individual designated by the WFOE.

 

 

5.2                   The Company hereby represents and warrants that:

 

5.2.1                     The Company is a limited liability company duly registered and legitimately existing under the PRC Law with an independent legal personality. The Company has the complete and independent legal status and legal capacity to execute, deliver and perform this Agreement and may act as the subject of litigation independently.

 

5.2.2                     The Company has the full internal corporate power and authority to execute, deliver and perform this Agreement and all other documents relating to the transaction specified herein and to be executed by it. It has the full power and authority to consummate the transaction specified herein.

 

5.2.3                     This Agreement is legally and duly executed and delivered by the Company. This Agreement shall constitute the legal and binding obligation against it.

 

5.2.4                     The Company Assets are free from and clear of any lien, mortgage, claim and other real rights for security and third party rights. Pursuant to this Agreement, the WFOE and/or other entity or individual designated by it may, after the Exercise of Option, acquire a good title to the Company Assets, free from and clear of any lien, mortgage, claim and other real rights for security or third party rights.

 

5.2.5                     Unless as mandatorily required by the PRC Law, the Company shall not declare the distribution of or in practice release any distributable profit, bonus or dividend.

 

5.3                   The WFOE hereby represents and warrants that:

 

5.3.1                     The WFOE is a wholly foreign-owned enterprise duly registered and legitimately existing under the PRC Law with an independent legal personality. The WFOE has the complete and independent legal status and legal capacity to execute, deliver and perform this Agreement and may act as the subject of litigation independently.

 

5.3.2                     The WFOE has the full internal corporate power and authority to execute, deliver and perform this Agreement and all other documents relating to the transaction specified herein and to be executed by it. It has the full power and authority to consummate the transaction specified herein.

 

5.3.3                     This Agreement is legally and duly executed and delivered by the WFOE. This Agreement shall constitute the legal and binding obligation against it.

 

 

Article 6 Undertakings by the Existing Shareholders

 

The Existing Shareholders hereby severally undertake that:

 

6.1                   Within the validity period of this Agreement, without the WFOE’s prior written consent:

 

6.1.1                     any Existing Shareholders shall not transfer or otherwise dispose of any Option Equity or create any real right for security or other third party rights on any Option Equity;

 

6.1.2                     he shall not increase or decrease the Company Registered Capital or cause the Company to be merged with any other entity;

 

6.1.3                     he shall not dispose of or cause the management of the Company to dispose of any material Company assets (excluding those incurred during normal operation);

 

 

6.1.4                     he shall not terminate or cause the management of the Company to terminate any Material Agreement entered into by the Company, or enter into any other agreement in conflict with the existing Material Agreements;

 

6.1.5                     he shall not appoint or dismiss and replace any director or supervisor of the Company or any other management personnel of the Company who shall be appointed or dismissed by the Existing Shareholders;

 

6.1.6                     he shall not cause the Company to declare the distribution of or in practice release any distributable profit, bonus or dividend;

 

6.1.7                     he shall ensure that the Company validly exists and is not terminated, liquidated or dissolved;

 

6.1.8                     he shall not amend the articles of association of the Company; and

 

6.1.9                     he shall ensure that the Company will not lend or borrow any money, or provide any guaranty or engage in security activities in any other form, or bear any substantial obligations excluding those incurred during normal operation.

 

6.2                   Within the validity period of this Agreement, he shall use his best endeavour to develop the business of the Company and ensure that the Company’s operations are legal and in compliance with the regulations, and he will not engage in any act or omission which may damage the Company Assets and goodwill or affect the validity of the Business Permits of the Company.

 

6.3                   Within the validity period of this Agreement, he shall promptly notify the WFOE of any circumstances that may have a material adverse effect on the existence, business operations, financial conditions, assets or goodwill of the Company and promptly take all the measures approved by the WFOE to remove such adverse circumstances or take effective remedial measures with respect thereto.

 

6.4                   Once the WFOE gives the Exercise Notice:

 

6.4.1                     he shall promptly convene a shareholders’ meeting, pass shareholders’ resolutions and take all other necessary actions to approve any Existing Shareholders or the Company to transfer all the Transferred Equity or the Transferred Assets at the Transfer Price to the WFOE and/or any other entity or individual designated by the WFOE, and waive any pre-emptive right to purchase enjoyed by him (if any);

 

 

6.4.2                     he shall promptly enter into an equity transfer agreement with the WFOE and/or any other equity or individual designated by the WFOE to transfer all the Transferred Equity at the Transfer Price to  the WFOE and/or any other entity or individual designated by the WFOE, and provide necessary support to the WFOE (including provision and execution of all relevant legal documents, performance of all government approval and resignation procedures and assumption of all relevant obligations) in accordance with the WFOE’s requirements and laws and regulations so that the WFOE and/or any other entity or individual designated by the WFOE may acquire all the Transferred Equity, free from and clear of any legal defect or any real right for security, third party restriction or any other restrictions on the Transferred Equity.

 

6.5                   If the total Transfer Price obtained by any Existing Shareholder with respect to the Transferred Equity held by him is higher than his capital contribution to the Company, or he receives any form of profit, dividend or bonus from the Company, then such Existing Shareholder agrees to, to the extent not in violation of the PRC Law, waive the premium earnings and any profit, dividend or bonus (after deduction of relevant taxes) and the WFOE is entitled  thereto. The Existing Shareholder shall instruct relevant assignee or company to remit the earnings to the bank account designated by the WFOE at the material time.

 

 

Article 7 Undertakings of the Company

 

7.1                   The Company hereby undertakes that:

 

7.1.1                     if any consent, permit, waiver or authorization by any third party, or any approval, permit or exemption by any government authority, or any registration or filing formalities (if required by law) with any government authority needs to be obtained or handled with respect to the execution and performance of this Agreement and the grant of the Equity Transfer Option or Asset Purchase Option hereunder, the Company shall endeavor to assist in satisfying the above conditions.

 

7.1.2                     without the WFOE’s prior written consent, the Company shall not assist or permit the Existing Shareholders to transfer or otherwise dispose of any Option Equity or create any real right for security or other third party rights on any Option Equity.

 

7.1.3                     without the WFOE’s prior written consent, the Company shall not transfer or otherwise dispose of any material Company Assets (excluding those incurred during normal operation) or create any real right for security or other third party rights on any Company Assets.

 

7.1.4                     the Company shall not do or permit any behavior or action that may adversely affect the interests of the WFOE under this Agreement, including but not limited to any behavior or action that is subject to Article 6.1.

 

7.2                   Once the WFOE gives the Exercise Notice:

 

7.2.1                     it shall promptly cause the Existing Shareholders to convene a shareholders’ meeting, pass shareholders’ resolutions and take all other necessary actions to approve the Company to transfer all the Transferred Assets at the Transfer Price to the WFOE and/or any other entity or individual designated by the WFOE;

 

7.2.2                     it shall promptly enter into an asset transfer agreement with the WFOE and/or any other equity or individual designated by the WFOE to transfer all the Transferred Assets at the Transfer Price to the WFOE and/or any other entity or individual designated by the WFOE, and cause the shareholders to provide necessary support to the WFOE (including provision and execution of all relevant legal documents, performance of all government approval and resignation procedures and assumption of all relevant obligations) in accordance with the WFOE’s requirements and laws and regulations so that the WFOE and/or any other entity or individual designated by the WFOE may acquire all the Transferred Assets, free from and clear of any legal defect, any real right for security or third party restriction on the Transferred Assets or any other restrictions on the Company Assets.

 

 

Article 8 Confidentiality Obligations

 

8.1                   Regardless of whether this Agreement is terminated or not, any of the Parties shall keep strictly confidential all the business secrets, proprietary information, customer information and all other information of a confidential nature about the other parties coming into its knowledge during execution and performance of this Agreement (hereinafter collectively referred to as the “Confidential Information”). Unless a prior written consent is obtained from the party disclosing the Confidential Information or unless it is required to be disclosed to third parties according to relevant laws and regulations or the requirement of the place where a Party’s affiliate is listed, the party receiving the Confidential Information shall not disclose to any other third party any Confidential Information. The party receiving the Confidential Information shall not use or indirectly use any Confidential Information other than for the purpose of performing this Agreement.

 

8.2                   The following information shall not be deemed part of the Confidential Information:

 

(a)     any information that has been lawfully acquired by the party receiving the information before as evidenced by written documents;

 

(b)     any information entering the public domain not attributable to the fault of the party receiving the information; or

 

(c)      any information lawfully acquired by the party receiving the information through other sources after its receipt of such information.

 

8.3                   The party receiving the information may disclose the Confidential Information to its relevant employees, agents or professionals retained by it. However, the party receiving the information shall ensure that the aforesaid persons shall comply with the relevant terms and conditions of this Agreement, and shall be responsible for any liability incurred as a result of such persons’ breach of the relevant terms and conditions of this Agreement.

 

8.4                   Notwithstanding any other provisions herein, the effect of this article shall not be affected by termination of this Agreement.

 

 

Article 9 Duration of the Agreement

 

This Agreement shall take effect after being duly executed by the Parties, and  terminate after all the Option Equity and Company Assets are lawfully transferred to the WFOE and/or any other entity or individual designated by the WFOE pursuant to the provisions of this Agreement.

 

Article 10 Notices

 

10.1            Any notice, request, demand and other correspondences required by this Agreement or made in accordance with this Agreement shall be delivered in writing to the relevant Party.

 

10.2            If any of such notices or other correspondences is transmitted by facsimile or telex, it shall be deemed as served immediately upon transmission; if delivered in person, it shall be deemed as served at the time of delivery; if posted by mail, it shall be deemed as served five (5) days after posting.

 

Article 11 Defaulting Liability

 

11.1            The Parties agree and confirm that, if any of the Parties (hereinafter referred to as the “Defaulting Party”) substantially violates any agreement herein or substantially fails to perform or delays performance of any of the obligations hereunder, such violation, failure or delay shall constitute a default under this Agreement (hereinafter referred to as “Default”). The non-defaulting Party shall have the right to request the Defaulting Party to rectify such Default or take remedial actions within a reasonable period. If the Defaulting Party fails to rectify such Default or take remedial actions within the reasonable period or within ten (10) days after the non-defaulting Party notifies the Defaulting Party in writing requesting the Default to be rectified, then the non-defaulting Party is entitled to decide at its own discretion that:

 

11.1.1              if any Existing Shareholder or the Company is the Defaulting Party, the WFOE shall be entitled to terminate this Agreement and require the Defaulting Party to compensate for the damages;

 

11.1.2              if the WFOE is the Defaulting Party, the non-defaulting Party shall be entitled to require the Defaulting Party to compensate for the damages, but unless otherwise stipulated by laws, the non-defaulting Party has no right to terminate or cancel this Agreement in any circumstances.

 

11.2            Notwithstanding any other provisions herein, the effect of this article shall not be affected by termination of this Agreement.

 

 

Article 12 Miscellaneous

 

12.1            This Agreement is written in Chinese and executed in       (      ) originals, with one (1) original to be retained by each Party hereto.

 

12.2            The execution, effectiveness, performance, revision, interpretation and termination of this Agreement shall be governed by the PRC Law.

 

12.3            Any dispute arising out of and in connection with this Agreement shall be resolved through consultations among the Parties. In case the Parties fail to reach an agreement within thirty (30) days after the dispute arises, such dispute shall be submitted to China International Economic and Trade Arbitration Commission for arbitration in Beijing in accordance with such Commission’s arbitration rules in effect at the time. The language used in arbitration shall be Chinese and the arbitration award shall be final and equally binding on the Parties hereto.

 

12.4            None of the rights, powers or remedies granted to any Party by any provision herein shall preclude any other rights, powers or remedies available to such Party at law and under the other provisions of this Agreement. In addition, a Party’s exercise of any of its rights, powers and remedies shall not exclude such Party from exercising any of its other rights, powers and remedies.

 

12.5            No failure or delay by a Party in exercising any rights, powers and remedies available to it hereunder or at law (hereinafter referred to as “Such Rights”) shall result in a waiver thereof, nor shall the waiver of any single or part of Such Rights shall exclude such Party from exercising Such Rights in any other way and exercising other rights of such Party.

 

12.6            The headings of the provisions herein are for reference only, and in no event shall such headings be used for or affect the interpretation of the provisions hereof.

 

12.7            Each provision contained herein shall be severable and independent from each of the other provisions. If any one or more provisions herein become(s) invalid, illegal or unenforceable at any time, the validity, legality and enforceability of the remaining provisions herein shall not be affected as a result thereof.

 

12.8            This Agreement, once executed, shall supersede any other legal documents previously executed by and among the Parties with respect to the subject hereof. Any amendment or supplement hereto shall be made in writing and shall become effective only upon due execution by the Parties hereto.

 

12.9            Without the prior written consent of other Parties, none of the Parties shall transfer any of its rights and/or obligations hereunder to any third party.

 

 

12.10     This Agreement shall be binding on the legal assignees or successors of the Parties.

 

[The remainder of this page is intentionally left blank]

 

 

[Signature Page of Exclusive Option Agreement]

 

In witness whereof, the following Parties have executed this Exclusive Option Agreement as of the date first above written.

 

	
[Name of Shareholder]
    	
 
    
	
 
    	
 
    
	
Signature:
    	
/s/
    	
 
    
			

 

 

[Signature Page of Exclusive Option Agreement]

 

In witness whereof, the following Parties have executed this Exclusive Option Agreement as of the date first above written.

 

	
[Name of WFOE ]
    	
 
    
	
(Seal)
    	
 
    
	
 
    	
 
    
	
Signature:
    	
/s/
    	
 
    
	
Name:
    	
 
    	
 
    
	
Position:
    	
 
    
	
 
    	
 
    
	
[Name of VIE]
    	
 
    
	
(Seal)
    	
 
    
	
 
    	
 
    
	
Signature:
    	
/s/
    	
 
    
	
Name:
    	
 
    	
 
    
	
Position:
    	
 
    
				

 

 

Annex I:

 

Company’s General Information

 

Company name:  [Name of VIE]

 

Registered address:

 

Registered capital:

 

Legal representative:

 

Ownership structure:

 

	
Names of
   shareholders
    	
 
    	
Contribution in
   registered capital
   (RMB)
    	
 
    	
Percentage of
   contribution
    	
 
    	
ID number/company
   registration number
    
	
[Name of Shareholders]
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total
    	
 
    	
 
    	
 
    	
 
    	
 
    	
—
    

 

 

Annex II:

 

Form of Exercise Notice

 

To: [Name of Shareholders]

 

Whereas, we entered into an Exclusive Option Agreement (the “Option Agreement”) with you and [Name of Variable Interest Entity] (the “Company”)  and we reached an agreement that you shall transfer the equity you hold in the Company to us or any third party designated by us at our request to the extent permitted by the PRC laws and regulations.

 

Therefore, we hereby give this notice to you as follows:

 

We hereby require to exercise the Equity Transfer Option under the Option Agreement and we/[·] [name of company/individual] designated by us will acquire the [·]% of the equity you hold in the Company (the “Proposed Acquired Equity”). Upon your receipt of this notice, you shall immediately transfer all the Proposed Acquired Equity to us/[name of designated company/individual] pursuant to the provisions of the Option Agreement.

 

Best regards

 

	
 
    	
[Name of WFOE]
    
	
 
    	
(Seal)
    
	
 
    	
 
    
	
 
    	
Signature:
    	
/s/
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    

 

 

Annex III:

 

Form of Exercise Notice

 

To: [Name of VIE]

 

Whereas, we entered into an Exclusive Option Agreement (the “Option Agreement”) with you, [Name of Shareholders] and we reached an agreement that you shall transfer your assets to us or any third party designated by us at our request to the extent permitted by the PRC laws and regulations.

 

Therefore, we hereby give this notice to you as follows:

 

We hereby require to exercise the Asset Purchase Option under the Option Agreement and we/[·] [name of company/individual] designated by us will acquire the assets owned by you as stated in a separate list (the “Proposed Acquired Assets”). Upon your receipt of this notice, you shall immediately transfer all the Proposed Acquired Assets to us/[name of designated company/individual] pursuant to the provisions of the Option Agreement.

 

Best regards

 

	
 
    	
[Name of WFOE]
    
	
 
    	
 
    
	
 
    	
Signature:
    	
/s/
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    

 

 

Schedule of Material Differences

 

One or more persons entered into exclusive option agreement with Lequan Technology (Beijing) Co., Ltd. using this form. Pursuant to Instruction ii to Item 601 of Regulation S-K, the Registrant may only file this form as an exhibit with a schedule setting forth the material details in which the executed agreements differ from this form:

 

	
No.
    	
 
    	
Name of
   WFOE
    	
 
    	
Name of
   Shareholder
    	
 
    	
Name of Variable
   Interest Entity (the
   “VIE”)
    	
 
    	
% of
   Shareholder’s
   Equity
   Interest in the
   VIE
    	
 
    	
Execution Date
    
	
1
    	
 
    	
Lequan Technology   (Beijing) Co., Ltd.
    	
 
    	
Xiaoping Chen
    	
 
    	
Beijing Yunmi   Technology Co., Ltd.
    	
 
    	
60%
    	
 
    	
July 21, 2015
    
	
2
    	
 
    	
Lequan Technology   (Beijing) Co., Ltd.
    	
 
    	
De Liu
    	
 
    	
Beijing Yunmi   Technology Co., Ltd.
    	
 
    	
20%
    	
 
    	
July 21, 2015
    
	
3
    	
 
    	
Lequan Technology   (Beijing) Co., Ltd.
    	
 
    	
Liping Cao
    	
 
    	
Beijing Yunmi   Technology Co., Ltd.
    	
 
    	
20%
    	
 
    	
July 21, 2015
    
	
4
    	
 
    	
Lequan Technology   (Beijing) Co., Ltd.
    	
 
    	
Xiaoping Chen
    	
 
    	
Foshan Yunmi Electric   Appliances Technology Co., Ltd.
    	
 
    	
100%
    	
 
    	
September 5, 2018

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00287-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00287-of-00352.parquet"}]]