Common use of Realization of Pledge Clause in Contracts

Realization of Pledge. 1.3.1 If (i) the Company fails to perform the Guaranteed Debts in accordance with the provisions of the Master Agreements or (ii) the Pledgors fail to or the Company fails to perform the Contractual Obligations in accordance with the provisions of the Master Agreements, the Pledgee shall be entitled to dispose of the Pledged Equity in accordance with the provisions of the Guarantee Law of the People’s Republic of China and the Property Law, and to use the proceeds from the disposal of the Pledged Equity first to satisfy the Guaranteed Debts and any other related expenses in accordance with the applicable laws. The Parties agree that the proceeds obtained in accordance with this article shall be paid for in the following order of priority: (1) all taxes and fees incurred in disposing of the Pledged Equity; (2) repayment of the Pledgors’ outstanding Guaranteed Debts; (3) if the agreed amounts under the foregoing two items have been paid, and there is no amount that the Pledgors or the Company should pay to the Pledgee, and the payments obtained by the Pledgee in accordance with this article still have a balance, the Pledgee shall return the balance to the Pledgors. At this time, the Pledgors, as the shareholders of the Company, agree to give up their preemptive right and agree that the Pledgee has the right to purchase the Pledged Equity.