CCNC Code Chain New Continent Ltd

As disclosed on the current report on Form 8-K on September 19, 2022, on September 16, 2022, Code Chain New Continent Limited (the “Company”) entered into a Share Purchase Agreement (“SPA”) with Shanghai Highlight Media Co., Ltd., a PRC company (“Target”), and all the shareholders of Target (“Target Shareholders”). Pursuant to the SPA, the Company agreed to issue an aggregate of 9,000,000 shares of common stock of the Company (the “Shares”), valued at $1.00 per share, to the Target Shareholders, in exchange for Target Shareholders’ agreement to enter into and to cause Target to enter into certain agreements (“VIE Agreements”) with Makesi IoT Technology (Shanghai) Co., Ltd. (“WFOE”), the Company’s indirectly owned subsidiary, to establish a VIE (variable interest entity) structure (the “Acquisition”). Target and the Target Shareholders do not have other relationship with the Company, its subsidiaries, or any directors or officers or employees of the Company and its subsidiaries other than the Acquisition.

On September 16, 2022, pursuant to the SPA, WFOE entered into a series of VIE Agreements with Target and Target Shareholders.

Material terms of each of the VIE Agreements are described below:

Technical Consultation and Services Agreement.     Pursuant to the technical consultation and services agreement between WFOE and Target dated September 16, 2022, WFOE has the exclusive right to provide consultation services to Target relating to Target’s business, including but not limited to human resources, IT and intellectual properties. WFOE exclusively owns any intellectual property rights arising from the performance of this agreement. WFOE has the right to determine the service fees based on Target’s actual operation on a quarterly basis. This agreement will be effective for 20 years and can be extended by WFOE unilaterally by prior written notice to the other parties. WFOE may terminate this agreement at any time by giving a 30 days’ prior written notice to Target. If any party breaches the agreement and fails to cure within 30 days from the written notice from the non-breach party, the non-breach party may (i) terminate the agreement and request the breaching party to compensate the non-breaching party’s loss or (ii) request special performance by the breaching party and the breaching party to compensate the non-breaching party’s loss.

The foregoing description of the technical consultation and services agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the technical consultation and services agreement, which is filed as Exhibit 10.1.

Equity Pledge Agreement.    Under the equity pledge agreement among WFOE, Target and Target Shareholders dated September 16, 2022, Target Shareholders pledged all of their equity interests in Target to WFOE to guarantee Target’s performance of relevant obligations and indebtedness under the technical consultation and services agreement. In addition, Target Shareholders will complete the registration of the equity pledge under the agreement with the competent local authority. If Target breaches its obligation under the technical consultation and services agreement, WFOE, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. This pledge will remain effective until all the guaranteed obligations are performed or the Target Shareholders cease to be shareholders of Target.

The foregoing description of the equity pledge agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the equity pledge agreement, which is filed as Exhibit 10.2.

Equity Option Agreement.     Under the equity option agreement among WFOE, Target and Target Shareholders dated September 16, 2022, each of Target Shareholders irrevocably granted to WFOE or its designee an option to purchase at any time, to the extent permitted under PRC law, all or a portion of his equity interests in Target. Also, WFOE or its designee has the right to acquire any and all of its assets of Target. Without WFOE’s prior written consent, Target’s shareholders cannot transfer their equity interests in Target and Target cannot transfer its assets. The acquisition price for the shares or assets will be the minimum amount of consideration permitted under the PRC law at the time of the exercise of the option. This pledge will remain effective until all options have been exercised.

The foregoing description of the equity option agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the equity option agreement, which is filed as Exhibit 10.3.

Voting Rights Proxy and Financial Support Agreement.     Under the voting rights proxy and financial support agreement among WFOE, Target and Target Shareholders dated September 16, 2022, each Target Shareholder irrevocably appointed WFOE as its attorney-in-fact to exercise on such shareholder’s behalf any and all rights that such shareholder has in respect of his equity interests in Target, including but not limited to the power to vote on its behalf on all matters of Target requiring shareholder approval in accordance with the articles of association of Target. The proxy agreement is for a term of 20 years and can be extended by WFOE unilaterally by prior written notice to the other parties.

The foregoing description of the voting rights proxy and financial support agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the voting rights proxy and financial support agreement, which is filed as Exhibit 10.4.

On September 29, 2022. the Shares were issued to the Target Shareholders. The Acquisition was completed.