EQUITY INTEREST PLEDGE AGREEMENT
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:
Xxxx Xxxxxx (“Party B”)
ID
No.: 222323197004100013
Address:
Xxxx 000, Xxxx 0, Xxxxxxxx 00, Xxxxxxx Xxxx, Xxxxxxxx Zhen, Daxing District,
Beijing
(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.
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The
Pledgor, a local citizen of the PRC, who holds 60% 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.
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NOW
THEREFORE, through
mutual negotiations, the Parties hereto agree as follows:
Article
1 Definitions
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
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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 60% 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 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
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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
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The
Rate of Pledge:
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The
Rate of Pledge shall be 100% under this Agreement.
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3.2
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The
Term of Pledge
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3.1.1
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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
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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 Physical
Possession of Documents
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4.1
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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
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The
Pledgee shall be entitled to collect the dividends from the Equity
Interest.
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2
Article
5 Representations
and Warranties of Party B
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5.1
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Party
B is the legal owner of the Equity Interest.
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5.2
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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
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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
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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
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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
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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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6.3
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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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3
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6.4
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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 Events
of Default
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7.1
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The
events listed below shall be deemed as an event of
default:
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7.1.1
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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
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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
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The
Pledgor violates the covenants under Article 6 herein.
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7.1.4
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The
Pledgor violates any terms or conditions herein.
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7.1.5
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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
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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
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The
Pledgor is incapable of repaying its general debt or other
debt.
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7.1.8
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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
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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
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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
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7.1.11
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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
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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
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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
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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 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 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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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 Termination
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10.1
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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 Formalities
Fees and Other Expenses
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11.1
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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
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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 Force
Majeure
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12.1
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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
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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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Article
13 Dispute
Settlement
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13.1
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This
Agreement shall be governed by and construed in all respects in accordance
with the PRC laws.
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13.2
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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 Notices
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14.1
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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 Appendix
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15.1
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The
Appendix of this Agreement as attached hereto is the part of this
Agreement.
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Article
16 Effectiveness
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16.1
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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
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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: Xxxx Xxxxxx
Signature:
/s/ Xxxx Xxxxxx
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APPENDIX
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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.
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The
Exclusive Technical Consulting and Service
Agreement.
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