EQUITY INTEREST PLEDGE AGREEMENT
THIS
EQUITY INTEREST PLEDGE AGREEMENT
(“Agreement”) is entered into by and
between the following parties on September 28, 2007.
Pledgee:
Zhi Xxx Xx Xxxx (Beijing) Technology Co., Ltd. (“Party
A” or “ZBDT”)
Registered
address: Xxxx 000, #00 xxxxxxxx, #00 An Ning Zhuang East Road, Haidian District,
Beijing.
Pledgor:
Xu Junjun (“Party B”)
ID
No.: 422422197012200040
Address:
Xxxx 000, Xxxxxxxx X, Xxxxxxx Xxxxxx, #0 Xxx Xxx Yuan Xxx Xx, Fengtai
District.
(each
a
“Party”
and
collectively the “Parties”)
WHEREAS:
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1.
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The
Pledgee is a wholly
foreign-owned enterprise duly established and valid existing under
the
People’s
Republic of China (the “PRC”)
laws. The Pledgee and Beijing Zhi Xxxx Xxxx Xia Technology Co.,
Ltd.
(“ZYTX”)
owned by the Pledgor entered into Exclusive Technical Consulting
and
Service Agreement on September 28, 2007(the “Service
Agreement”).
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|
2.
|
The
Pledgor, a local citizen of the
PRC,
who holds 40% equity interest of ZYTX, which is a
limited liability company duly established and valid existing
in
Beijing under the laws of PRC.
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|
3.
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Pursuant
to the Service Agreement, ZYTX shall make certain payments to the
Pledgee
in consideration of the services and consultant provided by the
Pledgee
thereunder. In order to ensure that the Pledgee collects technical
fee
from ZYTX, the Pledgor is willing to pledge all its equity interest
in
ZYTX to the Pledgee as a security for the Pledgee to collect the
technical
consulting and service fees under the Service
Agreement.
|
NOW
THEREFORE, through
mutual negotiations, the Parties hereto agree as follows:
| Article 1 |
Definitions
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Unless
it
is otherwise stipulated, for the purpose of this Agreement, the following
terms
shall have the following meanings:
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1.1
|
Pledge
means the full meaning assigned to that term in Article 2 of this
Agreement.
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1.2
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Equity
Interest means the 40% equity interest (the “Equity
Interest”)
in ZYTX legally held by the Pledgor and all the other equity interest
which might be further held by the
Pledgor;
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1.3
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Rate
of Pledge means the ratio between the value of the pledge under
this
Agreement and the technical consulting fees under the Service Agreement.
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1
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1.4
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Term
of Pledge means the period provided for under Article 3.2
hereunder.
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1.5
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Service
Agreement means the Exclusive Technical Consulting and Service
Agreement
entered into by and between ZYTX and the Pledgee.
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1.6
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Event
of Default means any event in accordance with Article 7
hereunder.
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1.7
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Notice
of Default means the notice of default issued by the Pledgee in
accordance
with this Agreement.
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Article
2
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Pledge
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2.1
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Party
B agrees to pledge all its Equity Interest in ZYTX to the Pledgee
as a
guarantee for the technical consulting service fee payable to the
Pledgee
under the Service Agreement.
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2.2
|
Pledge
under this Agreement refers to the rights owned by the Pledgee
who shall
be entitled to have priority in receiving payment or proceeds from
the
auction or sale of the equity interest pledged by the Pledgor to
the
Pledgee.
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Article
3
|
Rate
of Pledge and Term of
Pledge
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| 3.1 |
The
Rate of Pledge:
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The
Rate
of Pledge shall be 100% under this Agreement.
| 3.2 |
The
Term of Pledge
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| 3.1.1 |
The
Pledge of the Equity Interest under this Agreement shall take effect
as of
the date that the Pledge of the Equity Interest is recorded in
the
register of shareholders of ZYTX.
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| 3.1.2 |
During
the Term of Pledge, the Pledgee shall be entitled to foreclose
on the
Pledge in accordance with this Agreement in the event that ZYTX
fails to
pay exclusive technical consulting and service fees in accordance
with
Service Agreement.
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Article
4
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Physical
Possession of Documents
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| 4.1 |
During
the Term of Pledge, the Pledgee shall be entitled to possess
the
contribution certificate of the Equity Interest (the “Contribution
Certificate”)
and the register of shareholders of ZYTX. The Pledgor shall
delivery the
Contribution Certificate and the register of shareholders hereunder
to the
Pledgee within one week after the signature date of this
Agreement.
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| 4.2 |
The
Pledgee shall be entitled to collect the dividends from the
Equity
Interest.
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2
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Article
5
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Representations
and Warranties of Party B
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| 5.1 |
Party
B is the legal owner of the Equity
Interest.
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| 5.2 |
Except
as otherwise provided hereunder, the Pledgee shall not be interfered
with
by any parties at any time when the Pledgee exercising its
rights in
accordance with this Agreement.
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| 5.3 |
Except
as otherwise provided hereunder, the Pledgee shall be entitled
to
exercise, dispose of or assign the Pledge in accordance with
this
Agreement.
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| 5.4 |
The
Pledgor shall not pledge or encumber the Equity Interest to
any other
person except for the
Pledgee.
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Article
6
|
Covenant
of the Pledgor
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| 6.1 |
During
the effective term of this Agreement, the Pledgor covenants
to the Pledgee
that the Pledgor shall:
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6.1.1
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Except
for the transfer of the Equity Interest by the Pledgor, as subject
to the
Exclusive Equity Interest Purchase Agreement entered into by and
among the
Pledgor and ZBDT to transfer the Equity Interest to the Pledgee
or the
specified person consigned by the Pledgee (“Specified
Person”),
not transfer or assign the Equity Interest, create or permit to
be created
any pledges which may have an adverse affect on the rights or benefits
of
the Pledgee without prior written consent from the Pledgee.
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6.1.2
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Comply
with and implement laws and regulation with respect to the right
of
pledge, present to the Pledgee the notices, orders or suggestions
with
respect to the Pledge issued or made by the competent authority
after
receiving such notices, orders or suggestions and comply with such
notices, orders or suggestions, or object to the foregoing matters
at the
reasonable request of the Pledgee or with the written consent from
the
Pledgee.
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6.1.3
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Timely
notify the Pledgee of any events or any received notices which
may affect
the Pledgor’s Equity Interest or any part of its right, and any events or
any received notices which may change any of the Pledgor’s convenants and
obligations under this Agreement or which may affect the Pledgor’s
performance of its obligation under this
Agreement.
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| 6.2 |
The
Pledgor agrees that the Pledgee’s right to exercise the Pledge obtained
from this Agreement shall not be suspended or hampered through
legal
procedure by the Pledgor or any successors of the Pledgor or
any person
authorized by the Pledgor or any person authorized by the
Pledgor..
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3
| 6.3 |
The
Pledgor warrants to the Pledgee that in order to protect or
perfect the
security over the payment of the technical consulting and service
fees
under the Service Agreement, the Pledgor shall execute in good
faith and
cause other parties who have interest in the Pledge to execute
all the
title certificates, contracts, and/or perform and cause other
parties who
have interests to take action as required by the Pledgee and
provide
access to exercise the rights and authorization vested in the
Pledgee
under this Agreement, and execute all the documents with respect
to the
changes or certificate of the Equity Interest with the Pledgee
or the
person (natural person or legal entity) designated by the Pledgee,
and
provide all the notices, orders and decisions regarded as necessary
by the
Pledgee to the Pledgee within the reasonable time.
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| 6.4 |
The
Pledgor warrants to the Pledgee that the Pledgor will comply
with and
perform all the guarantees, covenants, agreements, representations
and
conditions for the benefits of the Pledgee. The Pledgor shall
compensate
all the losses suffered by the Pledgee in the event that the
Pledgor does
not perform or fully perform his guarantees, covenants, agreements,
representations and
conditions.
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Article
7
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Events
of Default
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| 7.1 |
The
events listed below shall be deemed as an event of
default:
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| 7.1.1 |
ZYTX
fails to make full payments of the exclusive technical consulting
and
service fees as scheduled under the Service Agreement.
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| 7.1.2 |
The
Pledgor makes any material misleading or fraudulent representations
or
warranties under Article 5 herein, and/or the Pledgor is in
violation of
any warranties under Article 5
herein.
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| 7.1.3 |
The
Pledgor violates the covenants under Article 6
herein.
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| 7.1.4 |
The
Pledgor violates any terms or conditions herein.
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| 7.1.5 |
The
Pledgor waives the pledged Equity Interest or transfers or
assigns the
pledged Equity Interest without prior written consent of the
Pledgee,
except as provided in Article 6.1.1 in this Agreement.
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| 7.1.6 |
Any
external loan, security, compensation, covenants or other compensation
liabilities of the Pledgor’s (1) are required to be repaid or performed
prior to the scheduled date; or (2) are due but cannot be repaid
or
performed as scheduled and thereby cause the Pledgee to deem
that the
Pledgor’s capacity to perform the obligations herein is
effected.
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| 7.1.7 |
The
Pledgor is incapable of repaying its general debt or other
debt.
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| 7.1.8 |
This
Agreement becomes illegal for the reason of the promulgation
of the
related laws or the Pledgor’s incapability of continuing to perform the
obligations herein.
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| 7.1.9 |
Any
approval, permits or authorization from the competent authority
of the
government needed to perform this Agreement or validate this
Agreement are
withdrawn, suspended, invalidated or materially revised.
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| 7.1.10 |
The
property of the Pledgor adversely changed and causes the Pledgee
to deem
that the capability of the Pledgor to perform the obligations
herein under
this Agreement is
effected.
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4
| 7.1.11 |
The
successors or assignees of ZYTX are only entitled to perform
a portion of
or refuse to perform the payment liability under Service
Agreement.
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| 7.1.12 |
Other
circumstances whereby the Pledgee is incapable of exercising
the right to
foreclose on the Pledge in accordance with the related
laws.
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| 7.2 |
Party
B should immediately notice Party A in writing if the Pledgor
is aware of
or finds that any event under Article 7.1 herein or any events
that may
result in the foregoing events have occurred or are occurring.
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| 7.3 |
Unless
the Event of Default under Article 7.1 herein has been remedied
to the
Pledgee’s satisfaction, the Pledgee, at any time when the Event of
Default
occurs or thereafter, may give a written notice of default
to the Pledgor
and require the Pledgor to immediately make full payments of
the
outstanding service fees under the Service Agreement and other
payables or
foreclose on the Pledge in accordance with Article 8 herein.
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Article
8
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Exercise
of the Right of the Pledge
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8.1
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The
Pledgor shall not transfer or assign the Equity Interest without
prior
written approval from the Pledgee prior to the full repayment of
the
consulting and service fees under the Service
Agreement.
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8.2
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The
Pledgee shall give the Notice of Default to the Pledgor when the
Pledgee
exercises the right of pledge.
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8.3
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Subject
to Article 7.3, the Pledgee may exercise the right to foreclose
on the
Pledge at any time when the Pledgee gives the Notice of Default
pursuant
to Article 7.3
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8.4
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The
Pledgee is entitled to have priority in receiving payment or proceeds
from
the auction or sale of whole or part of the Equity Interest pledged
herein
in accordance with applicable law until the outstanding technical
consulting and service fees and all other payables under the Service
Agreement are repaid.
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8.5
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The
Pledgor shall not hinder the Pledgee from foreclosing on the Pledge
in
accordance with this Agreement and shall give necessary assistance
so that
the Pledgee may effectively realize the value of the Pledge.
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Article
9
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Transfer
or Assignment
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9.1
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The
Pledgor shall not donate or transfer his rights or obligations
herein
without the prior written consent from the Pledgee.
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9.2
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This
Agreement shall be binding upon and inure to the benefit of the
successors
of the Pledgor and be effective to the Pledgee and his each successor
and
assignee.
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5
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9.3
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The
Pledgee may transfer or assign his all or any rights and obligations
under
the Service Agreement to any person (natural person or legal entity)
at
any time. In this case, the assignee shall enjoy and undertake
the same
rights and obligations herein of the Pledgee as if the assignee
is a party
hereto. When the Pledgee transfers or assigns the rights and obligations
under the Service Agreement, at the request of the Pledgee, the
Pledgor
shall execute the relevant agreements and/or documents with respect
to
such transfer or assignment.
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9.4
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Due
to the Pledgee’s change resulting from the transfer or assignment, the new
parties to the pledge shall re-execute a pledge
contract.
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Article
10
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Termination
|
| 10.1 |
This
Agreement shall not be terminated until the consulting and
service fees
under the Service Agreement are paid in full and ZYTX shall
no longer
undertake any obligations under the Service Agreement.
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Article
11
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Formalities
Fees and Other Expenses
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| 11.1 |
The
Pledgor shall be responsible for all the fees and actual expenditures
in
relation to this Agreement, including but not limited to legal
fees, cost
of production, stamp tax and any other taxes and charges. If
the Pledgee
pays the relevant taxes in accordance with the laws, the Pledgor
shall
fully indemnity such taxes paid by the
Pledge.
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| 11.2 |
The
Pledgor shall be responsible for all the fees (including but
not limited
to any taxes, formalities fees, management fees, litigation
fees,
attorney’s fees, and various insurance premiums in connection with
disposition of the Pledge) incurred by the Pledgor for the
reason that the
Pledgor fails to pay any payable taxes, fees or charges in
accordance with
this Agreement, or the Pledgee has recourse to any forgoing
taxes, charges
or fees by any means for other reasons.
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Article
12
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Force
Majeure
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| 12.1 |
If
the fulfillment of this Agreement is delayed or blocked due to
the Force
Majeure Event, the party affected by such a Force Majeure Event
shall free
from any obligation to the extent of delay or holdback. Force Majeure
Event (“Event”) means any event which is out of control of each party, and
which is unavoidable or insurmountable even the party affected
by such
event has paid reasonable attention to it. The Event shall include,
but
not limited to, government actions, nature disaster, fire, explosion,
typhoons, floods, earthquakes, tide, lightning or war. However,
any lack
of credit, assets or financing shall not be deemed as Event. The
party
claiming the occurrence of Event shall provide the other party
with the
steps of fulfilling the obligations of this Agreement.
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| 12.2 |
The
Party affected by such an Event shall free from any obligation
under this
Agreement based on the conditions that the Party affected by such
an Event
have made reasonable endeavors to perform the Agreement and request
the
exemption from the other party. The both Parties agree to do their
best to
recover performance of this Agreement if the reason for exemption
has been
corrected or remedied.
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6
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Article
13
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Dispute
Settlement
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| 13.1 |
This
Agreement shall be governed by and construed in all respects
in accordance
with the PRC laws.
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| 13.2 |
The
Parties shall strive to settle any dispute arising from the
interpretation
or performance, or in connection with this Agreement through
friendly
consultation. In case no settlement can be reached through
consultation,
each Party can submit such matter to China International Economic
and
Trade Arbitration Committee for arbitration according to the
current
effective arbitration rules of its. The arbitration shall be
held in
Beijing. The arbitration proceedings shall be conducted in
Chinese. The
arbitration award shall be final and binding upon the Parties.
The
arbitration award may be submitted to the applicable People’s Court for
enforcement.
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Article
14
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Notices
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| 14.1 |
Any
notice to which is given by the both Parties hereto for the
purpose of
performing the rights and obligations hereunder shall be in
writing. Where
such notice is delivered personally, the time of notice is
the time when
such notice actually reaches the addressee; where such notice
is
transmitted by telex or facsimile, the notice time is the time
when such
notice is transmitted. If such notice does not reach the addressee
on
business date or reaches the addressee after the business time,
the next
business day following such day is the date of notice. The
delivery place
is the address first written above of the Parties hereto or
the address
advised in writing including facsimile and telex from time
to time.
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Article
15
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Appendix
|
| 15.1 |
The
Appendix of this Agreement as attached hereto is the part of
this
Agreement.
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Article
16
|
Effectiveness
|
| 16.1 |
This
Agreement and any amendments, supplements and modifications
of this
Agreement shall be in writing, and come into effect upon being
executed by
the Parties thereto.
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| 16.2 |
This
Agreement is executed both in Chinese and English with two
copies for each
language. The Chinese version will prevail in the event of
any
inconsistency between the English and any Chinese translations
thereof.
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[THIS
SPACE IS INTENTIONALLY LEFT BLANK]
7
This
page
is the signing page of this Equity Interest Pledge Agreement.
IN
WITNESS WHEREOF,
the
undersigned have executed this Agreement as of the date first set forth above
written.
Party
A: Zhi Xxx Xx Xxxx (Beijing) Technology Co., Ltd.
Legal
Representative: /s/ DeLu Gao
Party
B: Xu Junjun
Signature:
/s/ Xu Junjun
8
APPENDIX
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1.
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The
register of the shareholders of ZYTX
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2.
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The
Contribution Certificate of ZYTX
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| 3. |
The
Exclusive Technical Consulting and Service
Agreement.
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9
