EX-10.6

EX-10.6 9 d545022dex106.htm EX-10.6 EX-10.6

Exhibit 10.6

Exclusive Option Agreement

THIS Exclusive Option Agreement (this “Agreement”) is executed on October 13, 2017 by and among the following parties in Shanghai, the People’s Republic of China (“PRC”):

1.	Siliang Tan, Chinese, ID No.: [REDACTION]

2.	Lei Li, Chinese, ID No.: [REDACTION]

Tianjin Shanshi Technology L.P., a limited partnership established and validly existing under PRC law with its registered address at Room 102, Unit 2, Block 3, 600 Luoyang Dao, Haifeng Logistics Park, Tianjin Pilot Free Trade Zone (Dongjiang Bonded Port Area) (Tianjin Dongjiang Commercial Service Commercial Secretary Service Limited Company trustee No. 276)

Shanghai Xihu Cultural Transmission Co., Ltd., a limited liability company established and validly existing under PRC law with its registered address at Room J2805, Block 2, 4268 Zhennan Road, Jiading District, Shanghai. (together with Siliang Tan, Lei Li and Tianjin Shanshi L.P. are respectively or collectively referred to as the “Shareholders”)

5.	Shanghai Quyun Internet Technology Co., Ltd., a limited liability company established and validly existing under PRC law with its registered address at Room 408, Floor 4, Block 5, 1082 Huyi Road, Nanxiang Town, Jiading District, Shanghai. (the “Sole Corporation”); and

6.	Shanghai Jifen Culture Communications Co., Ltd., a limited liability company established and validly existing under PRC law with its registered address at Room 3190, Area A, Floor 3, Block 7, 88 Chenxiang Road, Jiading District, Shanghai. (the “Company”)

In this Agreement, the above parties hereinafter shall be individually referred to as a “Party” and collectively referred to as the “Parties”.

Whereas:

1.	The Shareholders collectively hold 100% equity interests of the Company. As of the date of this Agreement, the amount of contribution and proportion of shareholding in the Company are as stated in Schedule I;

2.	The Shareholders intend to grant the Sole Corporation an irrevocable and exclusive option to buy all the equity interest of the Company held by shareholders.

The Parties come to an agreement as follows by friendly negotiation:

1.	Sales and Purchase of Equity Interests

1.1

Option Granted

The Shareholders hereby irrevocably grant the Sole Corporation an irrevocable and exclusive right to purchase the equity interest without any additional condition (“Equity Interest Purchase Option”), pursuant to which the Sole Corporation is granted to require the Shareholders to perform and complete all the approval and registration procedure required by PRC law so as the Sole Corporation may, at the price stated in Article 1.3 in this Agreement and in accordance with the steps decided solely by itself to the extent permitted by PRC law, purchase, or designate a person or several persons (each, a “Designee”) to purchase, once or at multiple times at any time, all or part of the equity interest held by the Shareholders. The Sole Corporation agrees to accept such Equity Interest Purchase Option. The Equity Interest Purchase Option shall be exclusive. Except for the Sole Corporation and its Designees, no other third parties shall have the Equity Interest Purchase Option or other rights related to the Shareholders’ equity interest. The Company hereby agrees to the Shareholder’s grant of the Equity Interest Purchase Option to the Sole Corporation. The term “Person” used in this Article and this Agreement shall refer to individuals, corporations, cooperative enterprises, partnerships, enterprises, trusts or non-corporate organizations.

1.2

Steps for Exercise

Subject to the compliance with PRC laws and regulations, the Sole Corporation may exercise its Equity Interest Purchase Option by sending a written notice to the Shareholders (“Equity Interest Purchase Option Notice”), in which shall specify: (a) the decision of the Sole Corporation to exercise its Equity Interest Purchase Option; (b) the percentage of equity interest the Sole Corporation intends to purchase from the Shareholders (“Optioned Interests”); and (c) the date for purchasing/transferring the Optioned Interests (“Transferring Date”).

1.3

Equity Interest Purchase Price

When exercising its option, before the Shareholders are required to process the related Industry and Commerce Modification Registration, the Sole Corporation or its appointed entities or persons shall pay the Shareholders the corresponding transfer price. The transfer price paid shall be the lowest price permitted under the PRC law, given the percentage of the Company’s equity interest that is to be transferred. The Shareholders agree that upon receiving the transfer price, it shall, following specific instructions of the Sole Corporation, (i) use such transfer price to repay the loan under the Loan Contract (including the amendments, supplements and restatements from time to time) executed by the Shareholders and the Sole Corporation on the same date of this Agreement, and/or (ii) return to the Sole Corporation or its Designees by legal means.

1.4

Transfer of Optioned Interests

For each exercise of the Equity Interest Purchase Option by the Sole Corporation:

1.4.1

the Shareholders shall instruct the Company to convene a shareholders meeting in time, at which a resolution shall be adopted to approve the Shareholder’s transfer of the Optioned Interests to the Sole Corporation and/or the Designees.

1.4.2

the Shareholders shall obtain written statements from the other shareholders of the Company, in which such shareholders shall agree to the transfer and to waive the right of first refusal in terms of transferring the Optioned Interests to the Sole Corporation and/or the Designees from the Shareholders.

1.4.3

the Shareholders shall execute an Equity Transfer Contract for every transfer with the Sole Corporation and/or (if applicable) the Designee, according to the provisions of this Agreement and the Equity Interest Purchase Option Notice.

1.4.4

in the circumstances that there are no additional security interests, the relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government permits and approvals and take all necessary actions to transfer the valid ownership of the Optioned Interests to the Sole Corporation and/or the Designees and cause the Sole Corporation and/or the Designees to become the registered owners of the Optioned Interests. For the purpose of this Article and this Agreement, the “Security Interests” shall include securities, mortgages, third party’s rights or interests, any purchase right, acquisition right, right of first refusal, right to offset, ownership retention or other guarantee arrangement; but for sake of clarity, it does not include any security interest created by this Agreement and the Share Pledge Agreement. The “Share Pledge Agreement” specified in this Article and this Agreement refers to the Share Pledge Agreement executed by the Sole Corporation, the Shareholders and the Company on the date of this Agreement. (“Share Pledge Agreement”)

2.	Covenants

2.1

Covenants concerning the Company

The Shareholders and the Company hereby covenant as follows:

2.1.1

without prior written consent of the Sole Corporation, not to supplement, change or amend the Company’s articles of association, increase or decrease its registered capital, or change its registered capital structure in any other manner;

2.1.2

to maintain the Company’s existence, manage its business and deal with its affairs prudently and effectively in accordance with good financial and business standards and practices;

2.1.3

without prior written consent of the Sole Corporation, not to sell, transfer, mortgage, or in any other manner dispose, or to create any other security interest on any asset, business or legal right to collect interests or beneficial interest of the Company at any time after the execution of this Agreement;

2.1.4

without prior written consent of the Sole Corporation, not to create, succeed to, guarantee or permit any debt, except for (i) any debt incurred in the course of the ordinary or daily business operation other than through loans, and (ii) any debt disclosed to and agreed by the Sole Corporation in writing;

2.1.5

to manage all the business in the course of the Company’s ordinary business operation, to maintain the asset value of the Company, and not to conduct any action/omission which will affect its operating conditions and asset value;

2.1.6

without prior written consent of the Sole Corporation, not to execute any material contract, except for contracts executed in the course of the Company’s ordinary business operation (a contract will be deemed material if its total value exceeds RMB 500,000 in this Article);

2.1.7

without prior written consent of the Sole Corporation, not to provide a loan or financial credit to anyone;

2.1.8

to provide all information relating to the operation and financial condition of the Company, as required by the Sole Corporation;

2.1.9

to purchase and hold, if required by the Sole Corporation, the insurance related to its assets and business from insurance companies acceptable to the Sole Corporation, at an amount and with a type of coverage typical for companies that operate similar businesses;

2.1.10

without prior written consent of the Sole Corporation, not to merge or combine with, acquire or invest in, any person;

2.1.11

to inform the Sole Corporation immediately upon the occurrence or possible occurrence of any litigation, arbitration or administrative proceeding concerning the assets, business or income of the Company;

2.1.12

to the extent necessary to maintain the Company’s ownership of its all assets, to execute all necessary or appropriate documents, take all necessary or appropriate actions and bring all necessary or appropriate lawsuits or make all necessary and appropriate defense against all claims;

2.1.13

without prior written consent of the Sole Corporation, not to distribute dividends in any way to each shareholder, except required by the Sole Corporation, the Company shall immediately distribute all the allocable profit to each shareholder; and

2.1.14

to appoint anyone designated by the Sole Corporation to be the director of the Company as required by the Sole Corporation.

2.2

Covenants concerning the Shareholders

The Shareholders hereby covenant as follows:

2.2.1

without prior written consent of the Sole Corporation, not to sell, transfer, mortgage, or in any other manner dispose, or to create any security interest on the legal or beneficial interest of the shares of the Company held by the Shareholders, except for the pledge set according to the Shareholder’s Share Pledge Agreement;

2.2.2

to procure the Company’s Shareholders Meeting and/or Board of Directors to disapprove of any sale, transfer, mortgage, or any other manner of disposal, or creation of any security interest on the legal or beneficial interest of the equity interest of the Company held by the shareholders that has occurred without the prior written consent of the Sole Corporation, except for the pledge set according to the Shareholder’s Share Pledge Agreement;

2.2.3

without prior written consent of the Sole Corporation, to procure the Company’s Shareholders Meeting or the Board of Directors not to approve the Company to merge or combine with, acquire or invest in, any person;

2.2.4

to inform the Sole Corporation upon the occurrence or possible occurrence of any litigation, arbitration or administrative proceeding concerning the equity interest they held;

2.2.5

to procure the Company’s Shareholders Meeting or the Board of Directors to vote to approve the transferring of the Optioned Interest stated in this Agreement and take any other action as required by the Sole Corporation;

2.2.6

to the extent necessary to maintain its ownership of the equity interests, to execute all necessary or appropriate documents, take all necessary or appropriate actions and bring all necessary or appropriate lawsuits or make all necessary and appropriate defense against all claims.

2.2.7

to appoint anyone designated by the Sole Corporation to be the director and/or the executive director of the Company as required by the Sole Corporation.

2.2.8

as required by the Sole Corporation at any time, to transfer its equity interest immediately to the representative appointed by the Sole Corporation at any time without any condition according to the Equity Interest Purchase Option under this Agreement and waive its right of first refusal of transferring corresponding equity interest of any other shareholder; and

2.2.9

to strictly comply with this Agreement and any provision of other contracts executed by the Shareholders, the Company and the Sole Corporation jointly or respectively, to practically perform each of the obligations under such contracts and do not conduct any action/omission which is sufficient to affect the validity and enforceability of such contracts;

3.	Representations and Warranties

The Shareholders and the Company hereby represent and warrant to the Sole Corporation, jointly and respectively, as of the date of this Agreement and as of each Transferring Date, that:

3.1

They have the authority to execute and deliver this Agreement, any share transfer contract executed for each assignment of the Optioned Interests (each referred to as a “Transfer Contract”) to which they are parties according to this Agreement, and have the authority and ability to perform their obligations under this Agreement and any of the Transfer Contracts. Upon the Sole Corporation’s exercise of the purchase options, the Shareholders and the Company agree to enter into Transfer Contracts that are consistent with the terms of this Agreement. This Agreement and the Transfer Contracts to which they are parties constitute or shall constitute legal, valid and binding obligations and shall be enforceable against them in accordance with the provisions signed upon execution;

3.2

The execution and delivery of this Agreement or any of the Transfer Contracts and the performance of the obligations under this Agreement or any of the Transfer Contracts shall not: (i) cause the violation of any related PRC law; (ii) be inconsistent with the articles of association or other constitutional documents; (iii) cause the violation of any contract or document to which they are parties or are binding to them, or constitute breach of contract under any contract or document to which they are parties or are binding to them; (iv) cause the violation of any condition for the grant and/or continued effectiveness of any permit or approval issued to any party; or (v) cause the suspension, or revocation of, or additional conditions to any permit or approval issued to any party;

3.3

The shareholders have a good and merchantable title on the equity interest of the Company, and have not placed any security interest on such equity interests except for the pledge set pursuant to Shareholders’ Share Pledge Agreements;

3.4

The Company has a good and merchantable title to all the assets and the Company has not set any security interest on such assets.

3.5

The Company does not have any outstanding debt, except for (i) debts incurred in the ordinary course of business, and (ii) debts disclosed to and agreed by the Sole Corporation in writing;

3.6

The Company complies with all the laws and regulations applicable to the acquisition of equity interest and assets; and

3.7

There are no pending or threatening lawsuits, arbitrations or administrative proceedings related to equity interest, assets of the Company or the Company at present.

4.	Effective Date

This Agreement shall come into effect upon the execution of this Agreement of the Parties. The term of validity shall be ten (10) years, and this may be unilaterally extended by the Sole Corporation. Regardless of any provision agreed in this Agreement, without prior written consent from the Sole Corporation, the Shareholders and the Company shall not revoke the Equity Interest Purchase Option under this Agreement or terminate this Agreement. Nevertheless, the Sole Corporation may, at any time inform the Shareholders and the Company to terminate this Agreement by sending written notice thirty (30) days in advance.

5.	Applicable Law and Dispute Resolution

5.1

Applicable Law

The execution, effectiveness, interpretation, implementation, amendment and termination of this Agreement and the resolution of disputes shall be governed by officially issued PRC laws that are publically available. For the matters that are not regulated under officially issued PRC laws publically available, international laws and conventions shall apply.

5.2

Dispute Resolution

Any dispute arising from interpretation and implementation of this Agreement shall be firstly solved by the Parties through friendly negotiation. If the dispute cannot be resolved in 30 days after the written notice has been sent from one party to the other requesting negotiation and resolution, any party may submit the relevant dispute to the China International Economic and Trade Arbitration Commission for arbitration in accordance with the arbitration rules then effective. The arbitration shall be conducted in Beijing and the language used shall be Chinese. The award of the arbitral tribunal shall be final and binding on the Parties.

6.	Taxes and Expenses

Each Party shall pay any and all of the taxes, costs and expenses for transfer and registration incurred thereby or levied thereon under PRC law in connection with the preparation and execution of this Agreement and other Transfer Contracts and the consummation of the transactions contemplated under this Agreement and other Transfer Contracts.

7.	Notice

7.1

All notices and other communications required or sent under this Agreement shall be delivered personally, registered post, postage paid or business express service or fax to the Party’s following address. Each notice shall also be delivered by email. The dates on which the notices shall be deemed to have been effectively delivered shall be determined as follows:

7.1.1

For notices delivered by personal delivery, express service or registered post, postage paid, the date of delivery or refusal at the address specified for notices shall be deemed the date of effective delivery.

7.1.2

For the notices delivered by fax, the date of successful delivery (as evidenced by an automatically generated confirmation of transmission) shall be deemed the date of effective delivery.

7.2

For the purpose of notice, the addresses of the Parties are as follows:

Shareholders:

Siliang Tan