Common use of Default Event Clause in Contracts

Default Event. 7.1 Any of the following events shall be deemed a Default Event: (1) The Pledgor breaches or fails to perform any of its Contractual Obligations under the Exclusive Call Option Agreement, the Power of Attorney and/or this Agreement, and Party C breaches or fails to perform any of its Contractual Obligations under the Exclusive Call Option Agreement, the Power of Attorney, the Business Cooperation Agreement and/or this Agreement; (2) Any representation or warranty made by the Pledgor in Article 5 hereof contains serious misrepresentation or error, and/or the Pledgor breaches any warranty in Article 5 hereof and/or any undertaking in Article 6 hereof; (3) The Pledgor and Party C breach any content or provision of this Agreement; (4) Unless expressly agreed in Article 6.1(1), the Pledgor transfers or intends to transfer or abandon the pledged Equity or transfers the pledged Equity without prior written consent of the Pledgee; (5) The Pledgor’s own loan, warranty, indemnity, undertaking or other liabilities to any third party (i) are required to be repaid or fulfilled in advance due to the Pledgor’s default, or (ii) are due but cannot be repaid or fulfilled on time; (6) The Pledgor is unable to repay general debts or other debts; (7) Any approval, license, consent, permission or authorization of any government agency that makes this Agreement enforceable, legal and effective is withdrawn, suspended, invalidated or materially altered; (8) The enactment of applicable law makes this Agreement illegal or prevents the Pledgor from continuing to perform its obligations hereunder; (9) Adverse changes in the property owned by the Pledgor cause the Pledgee to believe that the ability of the Pledgor to perform its obligations hereunder has been affected; (10) Party C or its successors or custodians can only partially perform or refuse to perform the payment obligation under the Business Cooperation Agreement or the Pledgor and/or Party C can only partially settle or refuse to settle the Secured Debt; and (11) Any other circumstance in which the Pledgee is unable or may not be able to exercise its right to the Pledge. 7.2 The Pledgor and Party C shall immediately and accordingly notify the Pledgee in writing as soon as they become aware of or discover that any of the circumstances described in Article 7.1 or any of the events that may cause such circumstances has occurred. 7.3 Unless the Default Event set forth in Article 7.1 has been satisfactorily resolved by the Pledgee within thirty (30) days from the date of notice given by the Pledgee, the Pledgee may give Default Notice to the Pledgor at the time or at any time after the occurrence of the Default Event to exercise all of its rights and powers of remedy for breach of contract under the Laws of China, the Transaction Agreements and this Agreement, including but not limited to: (1) requiring the Pledgor and/or Party C to immediately make all outstanding payments due under the Business Cooperation Agreement, all arrears due under the Transaction Agreements and all other payments due to the Pledgee, and/or repay the loan; and/or (2) disposing of the Pledge and/or disposing of the pledged Equity by other means as agreed in Article 8 hereof (including but not limited to the conversion of all or part of the Equity, or the preferential payment of the proceeds from auction or sale of the Equity) to the extent permitted by law. The Pledgee shall have the right to choose to exercise any of the above rights in accordance with its independent judgment. In such case, the other parties to this Agreement shall unconditionally agree to cooperate fully. The Pledgee shall not be liable for any loss caused by its reasonable exercise of such rights and powers. 7.4 The Pledgee shall have the right to appoint its lawyer or other agents in writing to exercise any and all of the aforesaid rights and powers, and neither the Pledgor nor Party C shall raise any objection. 7.5 The Pledgee shall have the right to exercise any default remedies it enjoys at the same time or successively. The Pledgee shall not have to make other default remedies before exercising the right to auction or sell the Equity hereunder.

Default Event. 7.1 Any of the following events A Default Event shall be deemed a Default Eventto have occurred if: (1) The Pledgor breaches 7.1.1 any of Party C, the Pledgors, or their respective successor or assignee, fails to perform any of its Contractual Obligations obligations under the Exclusive Call Loan Agreement, Option Agreement, the Power of Attorney and/or this Agreement, and Party C breaches or fails to perform any of its Contractual Obligations under the Exclusive Call Option Agreement, the Power of Attorney, the Business Cooperation Operation Agreement and/or this Excusive Technology Consulting and Service Framework Agreement; (2) Any representation 7.1.2 any of the representations, warranties or warranty undertakings made by the Pledgor in Article Pledgors under Clauses 5 and 6 hereof contains serious misrepresentation is materially misleading or errorerroneous, and/or there is any other breach of the Pledgor breaches any warranty representations, warranties or undertakings made in Article Clauses 5 hereof and/or any undertaking in Article and 6 hereof; (3) The Pledgor and Party C 7.1.3 the Pledgors materially breach any content or provision term of this Agreement; (4) Unless expressly agreed 7.1.4 Other than specified in Article 6.1(1)Clause 6.1.1 of this Agreement, the Pledgor transfers or intends to Pledgors renounce, transfer or abandon the pledged Equity or transfers dispose of the pledged Equity without prior Party A’s written consent of the Pledgeeconsent; (5) The Pledgor’s own loan7.1.5 the Pledgors are required to repay or perform in advance, warrantyor unable to repay or perform on time, indemnityany of their loans, undertaking security, indemnifications, undertakings or other liabilities to any third party (i) are required to be repaid or fulfilled in advance due to the Pledgor’s a breach or default, or (ii) which gives rise to Party A’s reasonable belief that the Pledgors’ ability to perform their obligations hereunder has been affected and thus Party A’s interests are due but cannot be repaid or fulfilled on timeaffected accordingly; (6) The Pledgor is 7.1.6 the Pledgors are unable to repay general debts debt or other debtsliabilities, which in turn affects Party A’s interests; (7) Any approval, license, 7.1.7 this Agreement becomes illegal or the Pledgors are unable to continue to perform their obligations hereunder due to promulgation of any applicable law; 7.1.8 any governmental consent, permission permit, approval or authorization necessary for the enforceability, legality or validity of any government agency that makes this Agreement enforceable, legal and effective is withdrawnrevoked, suspended, invalidated expired or materially alteredchanged; (8) The enactment of applicable law makes this Agreement illegal or prevents 7.1.9 Party A believes the Pledgor from continuing Pledgors’ ability to perform its obligations hereunder; (9) Adverse changes in the property owned by the Pledgor cause the Pledgee to believe that the ability of the Pledgor to perform its their obligations hereunder has been affected;affected due to any adverse change to the properties owned by the Pledgors; or (10) 7.1.10 other circumstances where Party C or its successors or custodians can only partially perform or refuse to perform the payment obligation under the Business Cooperation Agreement or the Pledgor and/or Party C can only partially settle or refuse to settle the Secured Debt; and (11) Any other circumstance in which the Pledgee A is unable or may not be able to exercise its right or dispose of the Pledge pursuant to the Pledgeapplicable laws. 7.2 The Pledgor and Party C shall immediately and accordingly notify If the Pledgee in writing as soon as they become Pledgors is or becomes aware of or discover that the occurrence of any of the circumstances event described in Article under Clause 7.1 or any of circumstance which may give rise to an event described under Clause 7.1, the events that may cause such circumstances has occurredPledgors shall immediately notify Party A thereof in writing. 7.3 Unless the a Default Event set forth out in Article Clause 7.1 has been satisfactorily resolved by the Pledgee within thirty (30) days from the date of notice given by the Pledgeein a way satisfactory to Party A, the Pledgee Party A may give deliver a written Default Notice to the Pledgor at the time Pledgors upon or at any time after the occurrence of the Default Event Event, requesting the Pledgors to exercise all of its rights and powers of remedy for breach of contract under the Laws of China, the Transaction Agreements and this Agreement, including but not limited to: (1) requiring the Pledgor and/or Party C to immediately make all outstanding payments due under the Business Cooperation Agreement, all arrears due under the Transaction Agreements and all other payments due to the Pledgee, and/or repay the loan; and/or (2) disposing of Loan immediately, or enforce the Pledge and/or disposing of the pledged Equity by other means as agreed in Article 8 hereof (including but not limited to the conversion of all or part of the Equity, or the preferential payment of the proceeds from auction or sale of the Equity) to the extent permitted by law. The Pledgee shall have the right to choose to exercise any of the above rights in accordance with its independent judgment. In such case, the other parties to this Agreement shall unconditionally agree to cooperate fully. The Pledgee shall not be liable for any loss caused by its reasonable exercise of such rights and powersClause 8 hereof. 7.4 The Pledgee shall have the right to appoint its lawyer or other agents in writing to exercise any and all of the aforesaid rights and powers, and neither the Pledgor nor Party C shall raise any objection. 7.5 The Pledgee shall have the right to exercise any default remedies it enjoys at the same time or successively. The Pledgee shall not have to make other default remedies before exercising the right to auction or sell the Equity hereunder.

Default Event. 7.1 Any of the following events shall be deemed It is a default (‘Default Event’) under the Agreement if: (1a) the Borrower does not pay money the Borrower is required to pay the Bank under the Agreement when it is due and in the required manner (‘Monetary Default’); (b) The Pledgor breaches Borrower defaults or fails to perform any an event of its Contractual Obligations default, however described, occurs under the Exclusive Call Option Agreement or under any other contract or deed with the Bank, and, in respect of a default under any other contract or deed with the Bank that default or event of default would be a Default Event under the Agreement if references in this clause 18.1 to the Agreement were taken to be references to that contract or deed; (c) an Insolvency Event occurs in respect of the Borrower or a Guarantor (‘Insolvency Default’); (d) the Borrower or a Guarantor no longer has legal capacity; (e) another creditor commences legal proceedings against the Borrower or a Guarantor to recover an overdue payment or takes any action to enforce security over the Borrower’s or a Guarantor’s assets; (f) the Bank believes on reasonable grounds that the Borrower, the Borrower’s agent or a Guarantor has not complied with the law or any requirement of a statutory authority or it becomes unlawful for the Borrower or the Bank to continue with the Agreement (including if the Borrower is or becomes a Proscribed Person) (‘Compliance Default’); (g) the Borrower or a Guarantor gives the Bank information or makes a representation or warranty to the Bank which is materially incorrect or misleading (including by omission) in connection with the Agreement (‘Misrepresentation Default’); (h) the Borrower uses the Agreement for a loan purpose not approved by the Bank (‘Unapproved Purpose Default’); (i) property of the Borrower or a Guarantor is dealt with, or attempted to be dealt with, in breach of the Agreement or any other agreement or deed with the Bank without the Bank’s consent; (j) the Borrower or a Guarantor does not provide financial information required to be provided by the Agreement or the guarantee; (k) if the Borrower or a Guarantor carry on a business at or after the date of the Agreement, the Power of Attorney and/or this Agreement, and Party C breaches Borrower or fails a Guarantor does not maintain a licence or permit necessary to perform any of its Contractual Obligations conduct the business; (l) the Borrower or a Guarantor does not maintain insurance required to be maintained under the Exclusive Call Option Agreement, the Power of Attorney, the Business Cooperation Agreement and/or this Agreement; (2m) Any representation legal or warranty made by beneficial ownership or management control of the Pledgor in Article 5 hereof contains serious misrepresentation Borrower or error, and/or a Guarantor or a business of the Pledgor breaches any warranty in Article 5 hereof and/or any undertaking in Article 6 hereof;Borrower or a Guarantor changes without the Bank’s consent; or (3n) The Pledgor and Party C breach any content the status, capacity or provision of this Agreement; (4) Unless expressly agreed in Article 6.1(1), the Pledgor transfers or intends to transfer or abandon the pledged Equity or transfers the pledged Equity without prior written consent composition of the Pledgee; (5) The PledgorBorrower or a Guarantor changes without the Bank’s own loan, warranty, indemnity, undertaking or other liabilities to any third party (i) are required to be repaid or fulfilled in advance due to the Pledgor’s default, or (ii) are due but cannot be repaid or fulfilled on time; (6) The Pledgor is unable to repay general debts or other debts; (7) Any approval, license, consent, permission or authorization of any government agency that makes this Agreement enforceable, legal and effective is withdrawn, suspended, invalidated or materially altered; (8) The enactment of applicable law makes this Agreement illegal or prevents the Pledgor from continuing to perform its obligations hereunder; (9) Adverse changes in the property owned by the Pledgor cause the Pledgee to believe that the ability of the Pledgor to perform its obligations hereunder has been affected; (10) Party C or its successors or custodians can only partially perform or refuse to perform the payment obligation under the Business Cooperation Agreement or the Pledgor and/or Party C can only partially settle or refuse to settle the Secured Debt; and (11) Any other circumstance in which the Pledgee is unable or may not be able to exercise its right to the Pledge. 7.2 The Pledgor and Party C shall immediately and accordingly notify the Pledgee in writing as soon as they become aware of or discover that any of the circumstances described in Article 7.1 or any of the events that may cause such circumstances has occurred. 7.3 Unless the Default Event set forth in Article 7.1 has been satisfactorily resolved by the Pledgee within thirty (30) days from the date of notice given by the Pledgee, the Pledgee may give Default Notice to the Pledgor at the time or at any time after the occurrence of the Default Event to exercise all of its rights and powers of remedy for breach of contract under the Laws of China, the Transaction Agreements and this Agreement, including but not limited to: (1) requiring the Pledgor and/or Party C to immediately make all outstanding payments due under the Business Cooperation Agreement, all arrears due under the Transaction Agreements and all other payments due to the Pledgee, and/or repay the loan; and/or (2) disposing of the Pledge and/or disposing of the pledged Equity by other means as agreed in Article 8 hereof (including but not limited to the conversion of all or part of the Equity, or the preferential payment of the proceeds from auction or sale of the Equity) to the extent permitted by law. The Pledgee shall have the right to choose to exercise any of the above rights in accordance with its independent judgment. In such case, the other parties to this Agreement shall unconditionally agree to cooperate fully. The Pledgee shall not be liable for any loss caused by its reasonable exercise of such rights and powers. 7.4 The Pledgee shall have the right to appoint its lawyer or other agents in writing to exercise any and all of the aforesaid rights and powers, and neither the Pledgor nor Party C shall raise any objection. 7.5 The Pledgee shall have the right to exercise any default remedies it enjoys at the same time or successively. The Pledgee shall not have to make other default remedies before exercising the right to auction or sell the Equity hereunder.

Default Event. 7.1 Any of the following events A Default Event shall be deemed a Default Eventto occur: (1) The 7.1.1 in case of the breach or non-performance by the Pledgor breaches or fails to perform of any of its Contractual Obligations under the Exclusive Call Option Agreement, the Power of Attorney and/or this Agreement, and the breach or non-performance by Party C breaches or fails to perform of any of its Contractual Obligations under the Exclusive Call Option Agreement, the Power of Attorney, the Business Cooperation Agreement and/or this Agreement; (2) Any 7.1.2 if any representation or warranty made by the Pledgor in Article 5 hereof of this Agreement contains serious misrepresentation false statement or error, and/or the Pledgor breaches any warranty in Article 5 hereof and/or any undertaking in Article 6 hereof; (3) The 7.1.3 if the Pledgor and Party C breach fail to complete the registration/change of registration/Additional Equity pledge registration at the Registry as agreed in this Agreement; 7.1.4 if the Pledgor and Party C violate any content provisions or provision terms of this Agreement; (4) Unless expressly agreed in Article 6.1(1), 7.1.5 if the Pledgor transfers or intends to transfer or abandon the pledged Equity or transfers the pledged Equity without prior written consent of the Pledgee; (5) The Pledgor’s own loan, warrantyguarantee, indemnitycompensation, undertaking or other liabilities liability to any third party (ia) are is required to be repaid or fulfilled in advance due to the Pledgor’s default, ; or (iib) are is due but cancan not be repaid or fulfilled on timeas scheduled; (6) The Pledgor is unable to repay general debts or other debts; (7) Any 7.1.6 if any approval, license, consent, permission or authorization of any government a governmental agency that makes this Agreement enforceable, legal and effective is withdrawn, suspended, invalidated or materially substantially altered; (8) The 7.1.7 if the enactment of the applicable law makes this Agreement illegal or prevents the Pledgor from continuing to perform its obligations hereunder; (9) Adverse 7.1.8 if the adverse changes in the property owned by the Pledgor cause result in the view of the Pledgee to believe that the ability of the Pledgor to perform fulfil its obligations hereunder has been affected; (10) 7.1.9 if Party C or its successors successor or custodians can trustee may only partially perform or refuse to perform the their payment obligation obligations under the Business Cooperation Agreement or the Pledgor and/or Party C can may only partially settle or refuse to settle pay off the Secured DebtIndebtedness; and (11) Any 7.1.10 in any other circumstance in which where the Pledgee is unable not able to or may not be able to exercise its right to rights on the Pledge. 7.2 The Pledgor and Party C shall immediately and accordingly promptly notify the Pledgee in writing as soon as they become aware upon knowledge or discovery of or discover that any of the circumstances described referred to in Article 7.1 or any of the events event that may cause such circumstances has occurredlead to the above. 7.3 Unless the Default Event set forth in Article 7.1 has been satisfactorily resolved by the The Pledgee within thirty (30) days from the date of notice given by the Pledgeemay, the Pledgee may give Default Notice to the Pledgor at the time of or at any time after the occurrence of the breach, give a Default Event Notice to the Pledgor and exercise all of its remedies rights and powers of remedy for breach of contract under the Laws of ChinaPRC Laws, the Transaction Agreements and this Agreement, including but not limited to: (1a) requiring the Pledgor and/or Party C to pay immediately make all outstanding payments amounts due and payable under the Business Cooperation Agreement, all arrears due under the Transaction Agreements transaction agreement and all other payments amounts due and payable to the Pledgee, and/or to repay the loan; and/or (2b) Disposing of the Pledge as provided for in Article 8 of this Agreement and/or otherwise disposing of the Pledge and/or disposing of equity to the pledged Equity extent permitted by other means as agreed in Article 8 hereof law (including but not limited to the conversion of to, discounting all or part of the Equityequity, or giving priority to the preferential payment repayment of the proceeds debt to the Pledgee with the amount from the auction or sale of the Equity) to the extent permitted by law). The Pledgee shall have has the right to choose to exercise any of the above rights in accordance with on the basis of its independent judgment. In such this case, the other parties to this Agreement hereto shall unconditionally agree to cooperate fully. The Pledgee shall is not be liable responsible for any loss caused by its reasonable exercise of such rights and powers. 7.4 The Pledgee shall have the right to appoint its lawyer or any other agents agent in writing to exercise any and all of the aforesaid its rights and powerspowers mentioned above, and neither the Pledgor nor Party C shall raise any objectionobject to this. 7.5 The Pledgee shall have the right to choose to exercise any default remedies it enjoys at the same time or successively. The successively any remedy for breach of contract, and the Pledgee shall not have to make exercise other default remedies relief for breach of contract before exercising the right to auction or sell the Equity hereunderequity under this Agreement.

Default Event. 7.1 Any of the following events shall be deemed It is a default (‘Default Event’) under the Agreement if: (1a) the Borrower does not pay money the Borrower is required to pay the Bank under the Agreement when it is due and in the required manner (‘Monetary Default’); (b) The Pledgor breaches Borrower defaults or fails to perform any an event of its Contractual Obligations default, however described, occurs under the Exclusive Call Option Agreement or under any other contract or deed with the Bank, and, in respect of a default under any other contract or deed with the Bank that default or event of default would be a Default Event under the Agreement if references in this clause 7.1 to the Agreement were taken to be references to that contract or deed; (c) an Insolvency Event occurs in respect of the Borrower or a Guarantor (‘Insolvency Default’); (d) the Borrower or a Guarantor no longer has legal capacity; (e) another creditor commences legal proceedings against the Borrower or a Guarantor recover an overdue payment or takes any action to enforce security over the Borrower’s or a Guarantor’s assets; (f) the Bank believes on reasonable grounds that the Borrower, the Borrower’s agent or a Guarantor has not complied with the law or any requirement of a statutory authority or it becomes unlawful for the Borrower or the Bank to continue with the Agreement (including if the Borrower is or becomes a Proscribed Person) (‘Compliance Default’); (g) the Borrower or a Guarantor gives the Bank information or makes a representation or warranty to the Bank which is materially incorrect or misleading (including by omission) in connection with the Agreement (‘Misrepresentation Default’); (h) the Borrower uses the Agreement for a loan purpose not approved by the Bank (‘Unapproved Purpose Default’); (i) property of the Borrower or a Guarantor is dealt with, or attempted to be dealt with, in breach of the Agreement or any other agreement or deed with the Bank without the Bank’s consent; (j) the Borrower or a Guarantor does not provide financial information required to be provided by the Agreement or the guarantee; (k) if the Borrower or a Guarantor carry on a business at or after the date of the Agreement, the Power of Attorney and/or this Agreement, and Party C breaches Borrower or fails the Guarantor does not maintain a licence or permit necessary to perform any of its Contractual Obligations conduct the business; (l) the Borrower or a Guarantor do not maintain insurance required to be maintained under the Exclusive Call Option Agreement, the Power of Attorney, the Business Cooperation Agreement and/or this Agreement; (2m) Any representation legal or warranty made by beneficial ownership or management control of the Pledgor in Article 5 hereof contains serious misrepresentation Borrower or error, and/or a Guarantor or a business of the Pledgor breaches any warranty in Article 5 hereof and/or any undertaking in Article 6 hereof;Borrower or a Guarantor changes without the Bank’s consent; or (3n) The Pledgor and Party C breach any content the status, capacity or provision of this Agreement; (4) Unless expressly agreed in Article 6.1(1), the Pledgor transfers or intends to transfer or abandon the pledged Equity or transfers the pledged Equity without prior written consent composition of the Pledgee; (5) The PledgorBorrower or a Guarantor changes without the Bank’s own loan, warranty, indemnity, undertaking or other liabilities to any third party (i) are required to be repaid or fulfilled in advance due to the Pledgor’s default, or (ii) are due but cannot be repaid or fulfilled on time; (6) The Pledgor is unable to repay general debts or other debts; (7) Any approval, license, consent, permission or authorization of any government agency that makes this Agreement enforceable, legal and effective is withdrawn, suspended, invalidated or materially altered; (8) The enactment of applicable law makes this Agreement illegal or prevents the Pledgor from continuing to perform its obligations hereunder; (9) Adverse changes in the property owned by the Pledgor cause the Pledgee to believe that the ability of the Pledgor to perform its obligations hereunder has been affected; (10) Party C or its successors or custodians can only partially perform or refuse to perform the payment obligation under the Business Cooperation Agreement or the Pledgor and/or Party C can only partially settle or refuse to settle the Secured Debt; and (11) Any other circumstance in which the Pledgee is unable or may not be able to exercise its right to the Pledge. 7.2 The Pledgor and Party C shall immediately and accordingly notify the Pledgee in writing as soon as they become aware of or discover that any of the circumstances described in Article 7.1 or any of the events that may cause such circumstances has occurred. 7.3 Unless the Default Event set forth in Article 7.1 has been satisfactorily resolved by the Pledgee within thirty (30) days from the date of notice given by the Pledgee, the Pledgee may give Default Notice to the Pledgor at the time or at any time after the occurrence of the Default Event to exercise all of its rights and powers of remedy for breach of contract under the Laws of China, the Transaction Agreements and this Agreement, including but not limited to: (1) requiring the Pledgor and/or Party C to immediately make all outstanding payments due under the Business Cooperation Agreement, all arrears due under the Transaction Agreements and all other payments due to the Pledgee, and/or repay the loan; and/or (2) disposing of the Pledge and/or disposing of the pledged Equity by other means as agreed in Article 8 hereof (including but not limited to the conversion of all or part of the Equity, or the preferential payment of the proceeds from auction or sale of the Equity) to the extent permitted by law. The Pledgee shall have the right to choose to exercise any of the above rights in accordance with its independent judgment. In such case, the other parties to this Agreement shall unconditionally agree to cooperate fully. The Pledgee shall not be liable for any loss caused by its reasonable exercise of such rights and powers. 7.4 The Pledgee shall have the right to appoint its lawyer or other agents in writing to exercise any and all of the aforesaid rights and powers, and neither the Pledgor nor Party C shall raise any objection. 7.5 The Pledgee shall have the right to exercise any default remedies it enjoys at the same time or successively. The Pledgee shall not have to make other default remedies before exercising the right to auction or sell the Equity hereunder.

Default Event. 7.1 Any of the following events shall be deemed It is a default (‘Default Event’) under the Agreement if: (1a) The Pledgor breaches or fails the Borrower does not pay money the Borrower is required to perform any of its Contractual Obligations pay the Bank under the Exclusive Call Option Agreement when it is due and in the required manner (‘Monetary Default’); (b) the Borrower defaults or an event of default, however described, occurs under the Agreement or under any other contract or deed with the Bank, and, in respect of a default under any other contract or deed with the Bank that default or event of default would be a Default Event under the Agreement if references in this clause 7.1 to the Agreement were taken to be references to that contract or deed; (c) an Insolvency Event as defined in clause 7.2 occurs in respect of the Borrower or a Guarantor; (d) the Borrower or a Guarantor no longer has legal capacity; (e) another creditor commences legal proceedings against the Borrower or a Guarantor to recover an overdue payment or takes any action to enforce security over the Borrower’s or a Guarantor’s assets; (f) the Bank believes on reasonable grounds that the Borrower, the Borrower’s agent or a Guarantor has not complied with the law or any requirement of a statutory authority or it becomes unlawful for the Borrower or the Bank to continue with the Agreement (‘Compliance Default’); (g) the Borrower or a Guarantor gives the Bank information or makes a representation or warranty to the Bank which is materially incorrect or misleading (including by omission) in connection with the Agreement (‘Misrepresentation Default’); (h) the Borrower uses this Agreement for a loan purpose not approved by the Bank (‘Unapproved Purpose Default’); (i) property of the Borrower or a Guarantor is dealt with, or attempted to be dealt with, in breach of the Agreement or any other agreement or deed with the Bank without the Bank’s consent; (j) the Borrower or a Guarantor does not provide financial information required to be provided by the Agreement or the guarantee; (k) if the Borrower or a Guarantor carry on a business at or after the date of the Agreement, the Power of Attorney and/or this Agreement, and Party C breaches Borrower or fails the Guarantor does not maintain a licence or permit necessary to perform any of its Contractual Obligations conduct the business; (l) the Borrower or a Guarantor do not maintain insurance required to be maintained under the Exclusive Call Option Agreement, the Power of Attorney, the Business Cooperation Agreement and/or this Agreement; (2m) Any representation legal or warranty made by beneficial ownership or management control of the Pledgor in Article 5 hereof contains serious misrepresentation Borrower or error, and/or a Guarantor or a business of the Pledgor breaches any warranty in Article 5 hereof and/or any undertaking in Article 6 hereof;Borrower or a Guarantor changes without the Bank’s consent; or (3n) The Pledgor and Party C breach any content the status, capacity or provision of this Agreement; (4) Unless expressly agreed in Article 6.1(1), the Pledgor transfers or intends to transfer or abandon the pledged Equity or transfers the pledged Equity without prior written consent composition of the Pledgee; (5) The PledgorBorrower or a Guarantor changes without the Bank’s own loan, warranty, indemnity, undertaking or other liabilities to any third party (i) are required to be repaid or fulfilled in advance due to the Pledgor’s default, or (ii) are due but cannot be repaid or fulfilled on time; (6) The Pledgor is unable to repay general debts or other debts; (7) Any approval, license, consent, permission or authorization of any government agency that makes this Agreement enforceable, legal and effective is withdrawn, suspended, invalidated or materially altered; (8) The enactment of applicable law makes this Agreement illegal or prevents the Pledgor from continuing to perform its obligations hereunder; (9) Adverse changes in the property owned by the Pledgor cause the Pledgee to believe that the ability of the Pledgor to perform its obligations hereunder has been affected; (10) Party C or its successors or custodians can only partially perform or refuse to perform the payment obligation under the Business Cooperation Agreement or the Pledgor and/or Party C can only partially settle or refuse to settle the Secured Debt; and (11) Any other circumstance in which the Pledgee is unable or may not be able to exercise its right to the Pledge. 7.2 The Pledgor and Party C shall immediately and accordingly notify the Pledgee in writing as soon as they become aware of or discover that any of the circumstances described in Article 7.1 or any of the events that may cause such circumstances has occurred. 7.3 Unless the Default Event set forth in Article 7.1 has been satisfactorily resolved by the Pledgee within thirty (30) days from the date of notice given by the Pledgee, the Pledgee may give Default Notice to the Pledgor at the time or at any time after the occurrence of the Default Event to exercise all of its rights and powers of remedy for breach of contract under the Laws of China, the Transaction Agreements and this Agreement, including but not limited to: (1) requiring the Pledgor and/or Party C to immediately make all outstanding payments due under the Business Cooperation Agreement, all arrears due under the Transaction Agreements and all other payments due to the Pledgee, and/or repay the loan; and/or (2) disposing of the Pledge and/or disposing of the pledged Equity by other means as agreed in Article 8 hereof (including but not limited to the conversion of all or part of the Equity, or the preferential payment of the proceeds from auction or sale of the Equity) to the extent permitted by law. The Pledgee shall have the right to choose to exercise any of the above rights in accordance with its independent judgment. In such case, the other parties to this Agreement shall unconditionally agree to cooperate fully. The Pledgee shall not be liable for any loss caused by its reasonable exercise of such rights and powers. 7.4 The Pledgee shall have the right to appoint its lawyer or other agents in writing to exercise any and all of the aforesaid rights and powers, and neither the Pledgor nor Party C shall raise any objection. 7.5 The Pledgee shall have the right to exercise any default remedies it enjoys at the same time or successively. The Pledgee shall not have to make other default remedies before exercising the right to auction or sell the Equity hereunder.

Default Event. 7.1 Any of the The following events shall be deemed a Default Eventcircumstance is considered as default event: (1) The Pledgor breaches or fails to perform any of its Contractual Obligations under the Exclusive Call Option Agreement, the Power of Attorney and/or this Agreement, and 7.1.1 Party C breaches or fails is unable to perform any of its Contractual Obligations fully pay the consulting and servie fee payable under the Exclusive Call Option Agreement, the Power of Attorney, the Business Cooperation Agreement and/or this Agreementor makes a breach of any of its other obligations thereunder; (2) 7.1.2 Any representation or warranty made by the Pledgor in under Article 5 hereof hereunder contains serious severe misrepresentation or error, and/or the Pledgor breaches fails to honor any warranty warranties contained in Article 5 hereof and/or any undertaking in Article 6 hereof; (3) 7.1.3 The Pledgor and Party C breach any content or provision of this Agreementare unable to, in accordance with Article 3.1, complete the equity interest pledge registration with the Registration Authority; (4) Unless 7.1.4 The Pledgor and Party C make a breach of any provisions hereof; 7.1.5 Except for expressly agreed specified in Article 6.1(1)6.1.1, the Pledgor transfers or intends attempts to transfer or abandon waive the pledged Equity shares, or transfers the pledged Equity shares without prior written consent of the Pledgee; (5) 7.1.6 The Pledgor’s own liability to any third party concerning the loan, warranty, indemnitycompensation, undertaking commitment or other liabilities to any third party debts (i1) are required to should be early repaid or fulfilled in advance undertaken as required due to the breach of contract by the Pledgor’s default, ; or (ii2) are has become due but cancould not be repaid or fulfilled undertaken on timeschedule; (6) The Pledgor is unable to repay general debts or other debts; (7) 7.1.7 Any approval, license, consent, permission permit or authorization of any the government agency that makes authority as required for the enforcement, legitimacy and validity of this Agreement enforceable, legal and effective is withdrawn, suspended, invalidated or materially alteredbecomes invalid or is substantially changed; (8) The enactment 7.1.8 Release of the applicable law laws makes this Agreement illegal or prevents causes the Pledgor from continuing not to perform continue its obligations hereunder; (9) Adverse changes in the property 7.1.9 Property owned by the Pledgor cause is adversely changed, as a result, the Pledgee to believe considers that the Pledgor’s ability of the Pledgor to perform its obligations hereunder has been affected; (10) 7.1.10 Party C C’s successor or its successors or custodians trustee can only partially perform or refuse reject to perform the payment obligation responsibility under the Business Cooperation Agreement or the Pledgor and/or Party C can only partially settle or refuse to settle the Secured DebtAgreement; and (11) 7.1.11 Any other circumstance in circumstances under which the Pledgee is unable to or may not be able probably unable to exercise its right rights in and to the Pledgepledge right. 7.2 The Once the Pledgor and Party C shall immediately and accordingly notify the Pledgee in writing as soon as they become aware of has known or discover that found any of the circumstances circumstance described in Article 7.1 or any of event probably arising from the events that may cause such circumstances has occurredaforesaid circumstance, the Pledgor shall forthwith and accordingly give a written notice to the pledgee. 7.3 Unless the Default Event set forth default event described in this Article 7.1 has been satisfactorily resolved by the Pledgee within thirty (30) days from the date of notice given by successfully solved satisfactory to the Pledgee, the Pledgee may give Default Notice issue a notice of default to the Pledgor at the time occurrence of such default event or at any time after the occurrence of such default event, request the Default Event Pledgor to exercise immediately pay any and all of its rights the payment not fully repaid that has become due and powers of remedy for breach of contract under the Laws of China, the Transaction Agreements and this Agreement, including but not limited to: (1) requiring the Pledgor and/or Party C to immediately make all outstanding payments due payable under the Business Cooperation Agreement, all arrears Agreement and any other payment due under the Transaction Agreements and all other payments due payable to the Pledgee, and/or repay dispose the loan; and/or (2) disposing of the Pledge and/or disposing of the pledged Equity by other means as agreed in pledge right under Article 8 hereof (including but not limited to the conversion of all or part of the Equity, or the preferential payment of the proceeds from auction or sale of the Equity) to the extent permitted by law. The Pledgee shall have the right to choose to exercise any of the above rights in accordance with its independent judgment. In such case, the other parties to this Agreement shall unconditionally agree to cooperate fully. The Pledgee shall not be liable for any loss caused by its reasonable exercise of such rights and powershereof. 7.4 The Pledgee shall have the right to appoint its lawyer or other agents in writing to exercise any and all of the aforesaid rights and powers, and neither the Pledgor nor Party C shall raise any objection. 7.5 The Pledgee shall have the right to exercise any default remedies it enjoys at the same time or successively. The Pledgee shall not have to make other default remedies before exercising the right to auction or sell the Equity hereunder.

Default Event. 7.1 Any 7.1. Each of the following events shall be deemed regarded as a Default Event: (1) The Pledgor breaches or 7.1.1. Where Party C fails to perform any of its Contractual Obligations fully pay the consultation and service fee payable under the Exclusive Call Option Business Cooperation Agreement, or repay the Power loan, or breaches any obligation of Attorney and/or this Agreement, and Party C breaches or fails to perform any of its Contractual Obligations under the Exclusive Call Option Agreement, the Power of Attorney, the Business Cooperation Agreement and/or this AgreementControl Documents; (2) Any 7.1.2. Where any representation or warranty made by the Pledgor in Article 5 hereof contains serious misrepresentation or error, and/or the Pledgor breaches any warranty in Article 5 hereof and/or any undertaking in Article 6 hereof; (3) The 7.1.3. Where Pledgor and Party C fail to complete the Equity pledge registration with the Registration Authority pursuant to Article 3.1 hereof; 7.1.4. Where Pledgor and Party C breach any content or provision of this AgreementContract; (4) Unless expressly agreed in Article 6.1(1), the 7.1.5. Where Pledgor transfers or intends purports to transfer or abandon waive the pledged Equity Equity, or transfers the pledged Equity without prior written consent of Pledgee, assigns the Pledgeepledge, except for the express provision set forth in Article 6.1.1 hereof; (5) The 7.1.6. Where any of Pledgor’s own loanloans, warrantyguaranties, indemnitycompensations, undertaking undertakings or other debt liabilities to any third party (i1) are is required to be repaid or fulfilled in advance due performed prior to the scheduled due date because of Pledgor’s default, ; or (ii2) are is due but cannot be repaid or fulfilled on timeperformed as scheduled; (6) The Pledgor is unable to repay general debts or other debts; (7) Any 7.1.7. Where any approval, licensepermit, consent, permission license or authorization of any government agency that governmental authority which makes this Agreement Contract enforceable, legal lawful and effective is withdrawnrevoked, suspendedsuspended or substantially changed, invalidated or materially alteredbecomes invalid; (8) The enactment 7.1.8. Where this Contract becomes illegal or Pledgor cannot continue performing its obligations hereunder due to the promulgation of applicable law makes this Agreement illegal or prevents the Pledgor from continuing to perform its obligations hereunderlaw; (9) Adverse changes in 7.1.9. Where there has been adverse change to the property properties owned by the Pledgor cause the Pledgor, which causes Pledgee to believe that the ability of the Pledgor to perform its the obligations hereunder has been affected; (10) 7.1.10. Where the successor or trustee of Party C or its successors or custodians can may only partially perform or refuse refuses to perform perform, the payment obligation obligations under the Exclusive Business Cooperation Agreement or the Pledgor and/or Party C can only partially settle or refuse to settle the Secured DebtAgreement; and (11) Any other 7.1.11. Other circumstance in which the Pledgee is unable where Pledgor cannot or may not be able to exercise its right rights to and in the Pledge, including but not limited to the Pledgedeath or incapacity for civil conduct of Pledgor. 7.2 The 7.2. Pledgor and Party C shall immediately and accordingly notify the Pledgee in writing as soon as they become once it is aware of or discover that finds out any of the circumstances described in Article 7.1 or any of the events that may cause such circumstances has occurred. 7.3 Unless the Default Event circumstance set forth in Article 7.1 hereof or the occurrence of any event which may lead to the said circumstance. 7.3. Unless the Default Event listed in this Article 7.1 hereof has been satisfactorily resolved by to the satisfaction of Pledgee within thirty (30) days from as of the date notice of notice given by the Pledgee, the Pledgee may give a Default Notice to the Pledgor at the time or at any time after the occurrence of the Default Event to exercise all of its rights and powers of remedy for breach of contract under the Laws of ChinaEvent, the Transaction Agreements and this Agreement, including but not limited to: (1) requiring the Pledgor and/or Party C to immediately make pay all outstanding payments amounts due and payable under the Business Cooperation Agreement, all arrears due under the Transaction Agreements Control Documents and all other payments due and payable amounts to the Pledgee, and/or repay the loan; and/or (2) disposing of loan and/or dispose the Pledge and/or disposing of the pledged Equity by other means as agreed in Article 8 hereof (including but not limited to the conversion of all or part of the Equity, or the preferential payment of the proceeds from auction or sale of the Equity) to the extent permitted by law. The Pledgee shall have the right to choose to exercise any of the above rights in accordance with its independent judgment. In such case, the other parties to this Agreement shall unconditionally agree to cooperate fully. The Pledgee shall not be liable for any loss caused by its reasonable exercise of such rights and powersArticle 8 hereof. 7.4 The Pledgee shall have the right to appoint its lawyer or other agents in writing to exercise any and all of the aforesaid rights and powers, and neither the Pledgor nor Party C shall raise any objection. 7.5 The Pledgee shall have the right to exercise any default remedies it enjoys at the same time or successively. The Pledgee shall not have to make other default remedies before exercising the right to auction or sell the Equity hereunder.

Default Event. 7.1 Any of All the following events matters shall be deemed a Default Eventas default event: (1) The Pledgor breaches 7.1.1 Luji Technology or its successor or transferee fails to perform pay any of its Contractual Obligations due payments under the Exclusive Call Option agreements in full amount on schedule or the Pledgors or their successors or transferees fail to perform their obligations under Business Operation Agreement, the Power of Attorney and/or this Agreement, Equity Disposal Agreement and Party C breaches or fails to perform any of its Contractual Obligations under the Exclusive Call Option Agreement, the Power of Attorney, the Business Cooperation Agreement and/or this Consulting and Service Agreement; (2) 7.1.2 Any representation representations, warranties or warranty commitments made by the Pledgor Pledgors in Article Articles 5 & 6 hereof contains serious misrepresentation have the material misguidance or error, errors and/or the Pledgor breaches any warranty Pledgors violate the representations, warranties or commitments in Article Articles 5 hereof and/or any undertaking in Article & 6 hereof; (3) 7.1.3 The Pledgor and Party C breach Pledgors violate severely any content or provision of this Agreementterms hereof; (4) Unless expressly 7.1.4 Except for the matter agreed in Article 6.1(1)Article 6.1.1 hereof, the Pledgor transfers or intends to transfer or Pledgors abandon the pledged Equity equity or transfers transfer arbitrarily the pledged Equity equity without prior the written consent of the PledgeeParty A; (5) The Pledgor’s 7.1.5 Any of the Pledgors’ own loanexternal borrowings, warrantyguarantees, indemnitycompensations, undertaking commitments or other debt repayment liabilities to any third party (i) are required to be repaid or fulfilled performed in advance due to the Pledgor’s default, or (ii) are due but cancan not be repaid or fulfilled performed on timeschedule when due, which makes Party A believe reasonably that the capabilities of the Pledgors to perform the obligations hereunder have been influenced and its interests are influenced consequently; (6) 7.1.6 The Pledgor is unable to Pledgors can not repay general liabilities and other debts or other debtsand the interests of Party A are influenced thereby; (7) Any approval, license, consent, permission or authorization 7.1.7 The promulgation of any government agency that relevant laws makes this Agreement enforceable, legal and effective is withdrawn, suspended, invalidated become invalid or materially altered; (8) The enactment the Pledgors unable to continue the performance of applicable law makes this Agreement illegal or prevents the Pledgor from continuing to perform its their obligations hereunder; (9) Adverse changes in 7.1.8 Any consent, permission, approval or authorization of the property government department that enables the performance of this Agreement or makes this Agreement become valid or effective is revoked or suspended or becomes ineffective or has the material modification; 7.1.9 There is the adverse change to the properties owned by the Pledgor cause the Pledgee to Pledgors, which makes Party A believe that the ability capabilities of the Pledgor Pledgors to perform its their obligations hereunder has have been affectedinfluenced; (10) 7.1.10 Other conditions under which Party C or its successors or custodians A can only partially perform or refuse to perform not exercise the payment obligation under the Business Cooperation Agreement or the Pledgor and/or Party C can only partially settle or refuse to settle the Secured Debt; and (11) Any other circumstance in which the Pledgee is unable or may not be able to exercise its pledge right according to the Pledgeprovisions of relevant laws. 7.2 The Pledgor and Party C shall immediately and accordingly notify the Pledgee in writing as soon as they become aware of If knowing or discover discovering that any of matter stated in the circumstances described in above Article 7.1 or any of the events event that may cause such circumstances the above matters has occurred, the Pledgors shall inform Party A in writing immediately. 7.3 Unless the Default Event set forth default matters listed in Article 7.1 has have been satisfactorily resolved by the Pledgee within thirty (30) days from the date of notice given by the Pledgee, the Pledgee may give Default Notice successfully to the Pledgor at satisfaction of Party A, Party A can send the time or default notice to the Pledgors in writing at any time during or after the occurrence of the Default Event default matter conducted by the Pledgors to require the Pledgors to pay immediately the arrearages and other payable payments under the agreements or perform timely Equity Disposal Agreement and Business Operation Agreement. If the Pledgors or Luji Technology fails to timely correct its default behaviors or adopt necessary remedy behaviors, Party A shall be entitled to exercise all of its rights and powers of remedy for breach of contract under the Laws of China, the Transaction Agreements and this Agreement, including but not limited to: (1) requiring the Pledgor and/or Party C to immediately make all outstanding payments due under the Business Cooperation Agreement, all arrears due under the Transaction Agreements and all other payments due pledge right according to the Pledgee, and/or repay the loan; and/or (2) disposing provisions of the Pledge and/or disposing of the pledged Equity by other means as agreed in Article 8 hereof (including but not limited to the conversion of all or part of the Equity, or the preferential payment of the proceeds from auction or sale of the Equity) to the extent permitted by law. The Pledgee shall have the right to choose to exercise any of the above rights in accordance with its independent judgment. In such case, the other parties to this Agreement shall unconditionally agree to cooperate fully. The Pledgee shall not be liable for any loss caused by its reasonable exercise of such rights and powershereof. 7.4 The Pledgee shall have the right to appoint its lawyer or other agents in writing to exercise any and all of the aforesaid rights and powers, and neither the Pledgor nor Party C shall raise any objection. 7.5 The Pledgee shall have the right to exercise any default remedies it enjoys at the same time or successively. The Pledgee shall not have to make other default remedies before exercising the right to auction or sell the Equity hereunder.

Default Event. 7.1 Any Subject to the other provisions of the following events this ------------- Warrant, there shall be deemed have occurred a "Default Event: (1) The Pledgor breaches or fails to perform any of its Contractual Obligations " under the Exclusive Call Option Agreement, the Power of Attorney and/or this Agreement, and Party C breaches or fails to perform any of its Contractual Obligations under the Exclusive Call Option Agreement, the Power of Attorney, the Business Cooperation Agreement and/or this Agreement; (2) Any representation or warranty made by the Pledgor in Article 5 hereof contains serious misrepresentation or error, and/or the Pledgor breaches any warranty in Article 5 hereof and/or any undertaking in Article 6 hereof; (3) The Pledgor and Party C breach any content or provision of this Agreement; (4) Unless expressly agreed in Article 6.1(1), the Pledgor transfers or intends to transfer or abandon the pledged Equity or transfers the pledged Equity without prior written consent of the Pledgee; (5) The Pledgor’s own loan, warranty, indemnity, undertaking or other liabilities to any third party if: (i) are required to be repaid or fulfilled in advance due to the Pledgor’s default, or (ii) are due but cannot be repaid or fulfilled on time; (6) The Pledgor is unable to repay general debts or other debts; (7) Any approval, license, consent, permission or authorization of any government agency that makes this Agreement enforceable, legal and effective is withdrawn, suspended, invalidated or materially altered; (8) The enactment of applicable law makes this Agreement illegal or prevents the Pledgor from continuing to perform its obligations hereunder; (9) Adverse changes in the property owned by the Pledgor cause the Pledgee to believe that the ability of the Pledgor to perform its obligations hereunder has been affected; (10) Party C or its successors or custodians can only partially perform or refuse to perform the payment obligation under the Business Cooperation Agreement or the Pledgor and/or Party C can only partially settle or refuse to settle the Secured Debt; and (11) Any other circumstance in which the Pledgee is unable or may not be able to exercise its right to the Pledge. 7.2 The Pledgor and Party C shall immediately and accordingly notify the Pledgee in writing as soon as they become aware of or discover that any of the circumstances described in Article 7.1 or any of the events that may cause such circumstances has occurred. 7.3 Unless the Default Event set forth in Article 7.1 has been satisfactorily resolved by the Pledgee within thirty (30) days from the date of notice given by the Pledgee, the Pledgee may give Default Notice to the Pledgor at the time or at any time after December 31, 1999 the Company fails for any reason to honor any request for exercise of this Warrant by the holder hereof, provided -------- that such request is validly and properly made in accordance with the provisions of Section 2 hereof; (ii) at any time after December 31, 1999 the Company does --------- not have a sufficient number of authorized and unissued shares of Common Stock in order to permit the exercise in full of all of the then-outstanding Warrants; (iii) the Company has not caused a Registration Statement (as defined in the Registration Rights Agreement) to become effective by December 31, 1999 in accordance with Section 2(a) of the Registration Rights Agreement; (iv) at any ------------ time after a Registration Statement has been declared effective during the term of the Warrant, the effectiveness of such Registration Statement is suspended for any reason other than in accordance with Section 4(c) of the Registration ------------ Rights Agreement; (v) at any time after a Registration Statement has been declared effective during the term of the Warrant, the effectiveness of such Registration Statement is suspended for any period which, when added to the length of any previous such period of suspension, exceeds sixty (60) days; or (vi) at any time after December 31, 1999 the shares of Common Stock of the Company are not listed on the NASDAQ National Market System, the Nasdaq Small Cap Market, or any national securities exchange. Upon the happening of one or more Default Events, the Warrant Price shall be reduced by five percent (5%) for each continuous 30-day period (pro- rated for portions thereof) in which each such Default Event exists, but in no event shall the Warrant Price be reduced below $0.45 per share. Such reduction shall be cumulative upon the happening of multiple simultaneous Default Events. In the event that the Investors elect to undertake an underwritten offering of Warrant Shares pursuant to Section 2(d) of the Registration Rights ------------ Agreement and/or a Default Event has occurred that resulted in material part from the failure of any Investor, or any underwriter selected by the Investor, to comply in a timely manner with the reasonable requests of the Company in effecting a registration pursuant to the Registration Rights Agreement, then the occurrence of the a Default Event to exercise all of its rights and powers of remedy for breach of contract under shall be delayed during the Laws of China, the Transaction Agreements and this Agreement, including but not limited to: (1) requiring the Pledgor and/or Party C to immediately make all outstanding payments due under the Business Cooperation Agreement, all arrears due under the Transaction Agreements and all other payments due to the Pledgee, and/or repay the loan; and/or (2) disposing of the Pledge and/or disposing of the pledged Equity by other means as agreed in Article 8 hereof (including but not limited to the conversion of all or part of the Equity, or the preferential payment of the proceeds from auction or sale of the Equity) to the extent permitted by law. The Pledgee shall have the right to choose to exercise any of the above rights in accordance with its independent judgment. In such case, the other parties to this Agreement shall unconditionally agree to cooperate fully. The Pledgee shall not be liable for any loss caused by its reasonable exercise period of such rights and powersnoncompliance. 7.4 The Pledgee shall have the right to appoint its lawyer or other agents in writing to exercise any and all of the aforesaid rights and powers, and neither the Pledgor nor Party C shall raise any objection. 7.5 The Pledgee shall have the right to exercise any default remedies it enjoys at the same time or successively. The Pledgee shall not have to make other default remedies before exercising the right to auction or sell the Equity hereunder.

Default Event. 7.1 Any 14.1 If a Party fails to perform or breaches any of the following events its obligations, undertakings or representations and warranties under this Agreement (a default by either HoldCo or ASE hereunder shall be deemed to be a Default Event: (1) The Pledgor breaches joint default by HoldCo and ASE to which HoldCo and ASE shall be jointly and severally liable), if the breach is by its nature remediable , and the non-defaulting Party requests the defaulting Party in writing to remedy such failure or fails to perform any of its Contractual Obligations under the Exclusive Call Option Agreementbreach within 15 days, the Power failure to remedy in such period of Attorney and/or time after receiving such notice shall constitute an event of default under this Agreement, and Party C breaches or fails to perform any of its Contractual Obligations under the Exclusive Call Option Agreementprovided, the Power of Attorneyhowever, the Business Cooperation Agreement and/or this Agreement; (2) Any representation or warranty made by the Pledgor except as otherwise specifically provided in Article 5 hereof contains serious misrepresentation or error14.3 hereof, and/or the Pledgor breaches any warranty in Article 5 hereof and/or any undertaking in Article 6 hereof; (3) The Pledgor and Party C breach any content or provision of this Agreement; (4) Unless expressly agreed in Article 6.1(1), the Pledgor transfers or intends to transfer or abandon the pledged Equity or transfers the pledged Equity without prior written consent of the Pledgee; (5) The Pledgor’s own loan, warranty, indemnity, undertaking or other liabilities to any third party (i) are required to be repaid or fulfilled in advance due to the Pledgor’s default, or (ii) are due but cannot be repaid or fulfilled on time; (6) The Pledgor is unable to repay general debts or other debts; (7) Any approval, license, consent, permission or authorization of any government agency that makes this Agreement enforceable, legal and effective is withdrawn, suspended, invalidated or materially altered; (8) The enactment of applicable law makes this Agreement illegal or prevents the Pledgor from continuing to perform its obligations hereunder; (9) Adverse changes in the property owned by the Pledgor cause the Pledgee to believe that the ability of the Pledgor to perform its obligations hereunder has been affected; (10) Party C or its successors or custodians can only partially perform or refuse to perform the payment obligation under the Business Cooperation Agreement or the Pledgor and/or Party C can only partially settle or refuse to settle the Secured Debt; and (11) Any other circumstance in which the Pledgee is unable or may not be able to exercise its right to the Pledge. 7.2 The Pledgor and Party C shall immediately and accordingly notify the Pledgee in writing as soon as they become aware of or discover that any of the circumstances described in Article 7.1 or any representations and warranties made by either Party as of the events date of consummation of Share Exchange are regarded as invalidated from that may cause such circumstances date even if it has occurredbeen breached. 7.3 Unless 14.2 If the Default Event event of default occurs and such event of default leads to the failure to consummate this Transaction on or before the Long Stop Date, the non-defaulting Party is entitled to terminate or cancel this Agreement and claim from the defaulting Party the necessary expenses incurred in entering into this Agreement and implementing transactions agreed hereunder. The foregoing shall be in addition to, not in lieu of, the rights, remedies and damages available under law. However, if the other Party’s contributory negligence has contributed to the occurrence of such event of default, relevant costs shall be adjusted based on the proportion of contributory negligence which both Parties may choose an appointed expert appraiser to determine without arbitration; the foregoing is also applicable, mutatis mutandis, to the offset between losses and gains, if any, of non-defaulting Party from such event of default. 14.3 If a material event of default (“material event of default” refers to an event of breach of Article 8.1.1, Article 8.1.3, Article 8.1.5, Article 8.1.6, Article 8.2.2, Article 8.2.6, Article 8.3, Article 9, Article 10, Article 11 or a circumstance under Article 14.2) occurs, the non-defaulting Party shall not only be entitled to claim rights pursuant to the relevant provisions herein, but also entitled to claim liquidated damages of NT$8.5 billion from the defaulting Party. In case of a contributory negligence as set forth in the second sentence of Article 7.1 has been satisfactorily resolved by the Pledgee within thirty (30) days from the date of notice given by the Pledgee14.2, the Pledgee may give Default Notice to the Pledgor at the time or at any time after the occurrence of the Default Event to exercise all of its rights and powers of remedy for breach of contract under the Laws of China, the Transaction Agreements and this Agreement, including but not limited to: (1) requiring the Pledgor and/or Party C to immediately make all outstanding payments due under the Business Cooperation Agreement, all arrears due under the Transaction Agreements and all other payments due to the Pledgee, and/or repay the loan; and/or (2) disposing of the Pledge and/or disposing of the pledged Equity by other means as agreed in Article 8 hereof (including but not limited to the conversion of all or part of the Equity, or the preferential payment of the proceeds from auction or sale of the Equity) to the extent permitted by law. The Pledgee liquidated damages shall have the right to choose to exercise any of the above rights in accordance with its independent judgment. In such case, the other parties to this Agreement shall unconditionally agree to cooperate fully. The Pledgee shall not be liable for any loss caused by its reasonable exercise of such rights and powersadjusted accordingly. 7.4 The Pledgee shall have the right to appoint its lawyer or other agents in writing to exercise any and all of the aforesaid rights and powers, and neither the Pledgor nor Party C shall raise any objection. 7.5 The Pledgee shall have the right to exercise any default remedies it enjoys at the same time or successively. The Pledgee shall not have to make other default remedies before exercising the right to auction or sell the Equity hereunder.

Default Event. 7.1 Any Notwithstanding anything contained herein to the contrary, in the event that a Default Event occurs at any time prior to the completion of the following events shall be deemed a Default Event: (1) The Pledgor breaches Inspection Period, or fails to perform any of its Contractual Obligations under the Exclusive Call Option Agreement, the Power of Attorney and/or this Agreement, and Party C breaches or fails to perform any of its Contractual Obligations under the Exclusive Call Option Agreement, the Power of Attorney, the Business Cooperation Agreement and/or this Agreement; (2) Any representation or warranty made by the Pledgor in Article 5 hereof contains serious misrepresentation or error, and/or the Pledgor breaches any warranty in Article 5 hereof and/or any undertaking in Article 6 hereof; (3) The Pledgor and Party C breach any content or provision of this Agreement; Migration Process is not completed within four (4) Unless expressly agreed in Article 6.1(1)weeks from Closing, the Pledgor transfers or intends Buyer may, at its sole option, terminate this Agreement by providing written notice thereof to transfer or abandon the pledged Equity or transfers the pledged Equity without prior written consent of the Pledgee; (5) The Pledgor’s own loanSeller, warranty, indemnity, undertaking or other liabilities to any third party following which (i) are required all title in the Purchased Assets and Assumed Liabilities shall be returned to be repaid or fulfilled in advance due to the Pledgor’s defaultSeller, or (ii) are due but cannot be repaid Seller shall cease to have any interest in or fulfilled on time; (6) The Pledgor is unable right to repay general debts or other debts; (7) Any approval, license, consent, permission or authorization of receive any government agency that makes this Agreement enforceable, legal and effective is withdrawn, suspended, invalidated or materially altered; (8) The enactment of applicable law makes this Agreement illegal or prevents the Pledgor from continuing to perform its obligations hereunder; (9) Adverse changes in the property owned amount payable by the Pledgor cause Buyer as consideration for the Pledgee Purchased Assets; and (iii) Buyer shall deliver to believe that the ability of the Pledgor Seller any rights or benefits accrued to perform its obligations hereunder has been affected; (10) Party C or its successors or custodians can only partially perform or refuse Buyer pursuant to perform the payment obligation under the Business Cooperation Agreement or the Pledgor and/or Party C can only partially settle or refuse to settle the Secured Debt; and (11) Any other circumstance in which the Pledgee is unable or may not be able to exercise its right to the Pledge. 7.2 The Pledgor and Party C shall immediately and accordingly notify the Pledgee in writing as soon as they become aware of or discover that any of the circumstances described in Article 7.1 or any of the events that may cause such circumstances has occurred. 7.3 Unless the Default Event set forth in Article 7.1 has been satisfactorily resolved by the Pledgee within thirty (30) days from the date of notice given by the Pledgee, the Pledgee may give Default Notice to the Pledgor at the time or at any time after the occurrence of the Default Event to exercise all of its rights and powers of remedy for breach of contract under the Laws of China, the Transaction Agreements and this Agreement, including but not limited to: (1) requiring any monies received by Buyer in respect of the Pledgor and/or Party C to immediately make all outstanding payments due under operation of the Business Cooperation Agreement, all arrears due under from and after the Transaction Agreements and all other payments due to the Pledgee, and/or repay the loan; and/or Closing Date (2) disposing including from sales of the Pledge Purchased Inventory and/or disposing Seller’s Account Balance if remitted to Buyer); and (iv) the parties shall instruct the Escrow Agent to return the Closing Cash Payment to Buyer. Upon completion of the pledged Equity by other means as agreed steps referenced in Article 8 hereof items (including but not limited to the conversion of all or part of the Equityi) through (iv), or the preferential payment of the proceeds from auction or sale of the Equity) to the extent permitted by law. The Pledgee shall have the right to choose to exercise any of the above rights in accordance with its independent judgment. In such case, the other parties to this Agreement shall unconditionally agree be deemed null and void and of no further force or effect. As used herein, a “Default Event” means that: (i) there has been a material breach of any Fundamental Representation or of any of Seller’s covenants in ‎ARTICLE VIII below; (ii) an Amazon Seller Restriction has occurred and remains unresolved; or (iii) any facts, or events have occurred which, in Buyer’s reasonable opinion have had, or could reasonably be expected to cooperate fully. The Pledgee shall not be liable for have in the future, a Material Adverse Effect, including any loss caused by its reasonable exercise material litigation, Action or adverse change in the customer or supplier relations of such rights the Business, provided that prior to terminating this Agreement, Buyer and powers. 7.4 The Pledgee Seller shall have met and discussed the right matter constituting the Default Event and worked in good faith to appoint its lawyer or other agents in writing to exercise any and all resolve such Default Event over a period of the aforesaid rights and powers, and neither the Pledgor nor Party C shall raise any objectionat least five (5) Business Days (if such Default Event was of a nature that could be resolved. 7.5 The Pledgee shall have the right to exercise any default remedies it enjoys at the same time or successively. The Pledgee shall not have to make other default remedies before exercising the right to auction or sell the Equity hereunder.

Default Event. 7.1 Any Subject to the other provisions of the following events this ------------- Warrant, there shall be deemed have occurred a "Default Event: (1) The Pledgor breaches or fails to perform any of its Contractual Obligations " under the Exclusive Call Option Agreement, the Power of Attorney and/or this Agreement, and Party C breaches or fails to perform any of its Contractual Obligations under the Exclusive Call Option Agreement, the Power of Attorney, the Business Cooperation Agreement and/or this Agreement; (2) Any representation or warranty made by the Pledgor in Article 5 hereof contains serious misrepresentation or error, and/or the Pledgor breaches any warranty in Article 5 hereof and/or any undertaking in Article 6 hereof; (3) The Pledgor and Party C breach any content or provision of this Agreement; (4) Unless expressly agreed in Article 6.1(1), the Pledgor transfers or intends to transfer or abandon the pledged Equity or transfers the pledged Equity without prior written consent of the Pledgee; (5) The Pledgor’s own loan, warranty, indemnity, undertaking or other liabilities to any third party if: (i) are required to be repaid or fulfilled in advance due to the Pledgor’s default, or (ii) are due but cannot be repaid or fulfilled on time; (6) The Pledgor is unable to repay general debts or other debts; (7) Any approval, license, consent, permission or authorization of any government agency that makes this Agreement enforceable, legal and effective is withdrawn, suspended, invalidated or materially altered; (8) The enactment of applicable law makes this Agreement illegal or prevents the Pledgor from continuing to perform its obligations hereunder; (9) Adverse changes in the property owned by the Pledgor cause the Pledgee to believe that the ability of the Pledgor to perform its obligations hereunder has been affected; (10) Party C or its successors or custodians can only partially perform or refuse to perform the payment obligation under the Business Cooperation Agreement or the Pledgor and/or Party C can only partially settle or refuse to settle the Secured Debt; and (11) Any other circumstance in which the Pledgee is unable or may not be able to exercise its right to the Pledge. 7.2 The Pledgor and Party C shall immediately and accordingly notify the Pledgee in writing as soon as they become aware of or discover that any of the circumstances described in Article 7.1 or any of the events that may cause such circumstances has occurred. 7.3 Unless the Default Event set forth in Article 7.1 has been satisfactorily resolved by the Pledgee within thirty (30) days from the date of notice given by the Pledgee, the Pledgee may give Default Notice to the Pledgor at the time or at any time after December 31, 1999 the Company fails for any reason to honor any request for exercise of this Warrant by the holder hereof, provided -------- that such request is validly and properly made in accordance with the provisions of Section 2 hereof; (ii) at any time after December 31, 1999 the Company does --------- not have a sufficient number of authorized and unissued shares of Common Stock in order to permit the exercise in full of all of the then-outstanding Warrants; (iii) the Company has not caused a Registration Statement (as defined in the Registration Rights Agreement) to become effective by December 31, 1999 in accordance with Section 2(a) of the Registration Rights Agreement; (iv) at any ------------ time after a Registration Statement has been declared effective during the term of the Warrant, the effectiveness of such Registration Statement is suspended for any reason other than in accordance with Section 4(c) of the Registration ------------ Rights Agreement; (v) at any time after a Registration Statement has been declared effective during the term of the Warrant, the effectiveness of such Registration Statement is suspended for any period which, when added to the length of any previous such period of suspension, exceeds sixty (60) days; or (vi) at any time after December 31, 1999 the shares of Common Stock of the Company are not listed on the NASDAQ National Market System, the Nasdaq Small Cap Market, or any national securities exchange. Upon the happening of one or more Default Events, the Warrant Price shall be reduced by five percent (5%) for each continuous 30-day period (pro- rated for portions thereof) in which each such Default Event exists, but in no event shall the Warrant Price be reduced below $0.45 per share. Such reduction shall be cumulative upon the happening of multiple simultaneous Default Events. In the event that the Investors elect to undertake an underwritten offering of Warrant Shares pursuant to Section 2(d) of the Registration Rights ------------ Agreement and/or a Default Event has occurred that resulted in material part from the failure of any Investor, or any underwriter selected by the Investor, to comply in a timely manner with the reasonable requests E-16 of the Company in effecting a registration pursuant to the Registration Rights Agreement, then the occurrence of the a Default Event to exercise all of its rights and powers of remedy for breach of contract under shall be delayed during the Laws of China, the Transaction Agreements and this Agreement, including but not limited to: (1) requiring the Pledgor and/or Party C to immediately make all outstanding payments due under the Business Cooperation Agreement, all arrears due under the Transaction Agreements and all other payments due to the Pledgee, and/or repay the loan; and/or (2) disposing of the Pledge and/or disposing of the pledged Equity by other means as agreed in Article 8 hereof (including but not limited to the conversion of all or part of the Equity, or the preferential payment of the proceeds from auction or sale of the Equity) to the extent permitted by law. The Pledgee shall have the right to choose to exercise any of the above rights in accordance with its independent judgment. In such case, the other parties to this Agreement shall unconditionally agree to cooperate fully. The Pledgee shall not be liable for any loss caused by its reasonable exercise period of such rights and powersnoncompliance. 7.4 The Pledgee shall have the right to appoint its lawyer or other agents in writing to exercise any and all of the aforesaid rights and powers, and neither the Pledgor nor Party C shall raise any objection. 7.5 The Pledgee shall have the right to exercise any default remedies it enjoys at the same time or successively. The Pledgee shall not have to make other default remedies before exercising the right to auction or sell the Equity hereunder.