Equity Pledge Agreement among
among
Beijing
Xin Fu Industry Consulting Co., Ltd.
(北京信赋兴业咨询有限公司)
Li
Anning, Liu Liguo, Liu Yabin, Liu Yasheng, Wang Pingyi, Zhang Fude, Beijing Wan
Qiao Mechanical and Electrical Equipment Co., (北京市万桥机电设备公司) and
Ding Ting
This Equity Pledge
Agreement (the “Agreement”) is
entered into on the day of August 25, 2009 by and among the following
parties:
Pledgee:
Beijing
Xin Fu Industry Consulting Co., Ltd. (北京信赋兴业咨询有限公司)
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Legal
Address:
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B2-D2-301
A Block TIANCHENG MANSION, #2 XINFENG Road DESHENGMENWAI Street, XICHENG
Dist. Beijing P.R.China, 100088
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Pledgor:
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(1)
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Li
Anning whose China's ID number is 110102580802234, with her principal
domicile at 15 The 8TH
Floor of #1 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇.
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(2)
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Liu
Liguo, whose China's ID number is ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, with his principal
domicile at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇.
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(3)
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Liu
Yabin, whose China's ID number is ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, with his principal
domicile at ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇.
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(4)
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Liu
Yasheng, whose China's ID number is ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, with his principal
domicile at 7 the 15th
Floor West Gate of the No. 2 Building, the East of Jimenli Haidian
District, Beijing, China.
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(5)
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Wang
Pingyi, whose China's ID number is 110101540701404, with his principal
domicile at 46 West Street of East 4, Dongcheng District,
Beijing.
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(6)
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Zhang
Fude, whose China's ID number is 110108560127601, with his principal
domicile at 131 1 of the West Building, Beijing Jiaotong University,
Shangyuan Village, Haidian District,
Beijing.
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(7)
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Ding
Ting, whose China's ID number is ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, with his principal
domicile at 301 The First Gate in the 76th
of Dengshikou Street, Dongcheng District,
Beijing.
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(8)
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Beijing
Wan Qiao Mechanical and Electrical Equipment Co., (北京市万桥机电设备公司,
herein referred to as “Wan Qiao”) a
limited liability company incorporated and established in Beijing, China
with its registered address at 2102 The Third Building of Lihengmingyuan,
the No. 23 of Nanbinminghe Road, Xuan Wu District,
Beijing.
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Li
Anning, Liu Liguo, Liu Yabin, Liu Yasheng, Wang Pingyi, Zhang Fude, Beijing Wan
Qiao Mechanical and Electrical Equipment Co., and Ding Ting are collectively
referred to as the “Pledgors”.
WHEREAS,
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1.
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Li
Anning, Liu Liguo, Liu Yabin, Liu Yasheng, Wang Pingyi, Zhang Fude and
Ding Ting, the citizens of the People's Republic of China ("PRC”) and
Beijing Wan Qiao Mechanical and Electrical Equipment Co., a limited
liability company in China, are the shareholders of Beijing
Wowjoint Machinery Co., Ltd (“Beijing
Wowjoint”), holding 0.7% (representing RMB199,500 in the registered
capital), 4.09% (representing 1,165,650 in the registered capital), 37.78%
(representing RMB 10,767,300 in the registered capital), 8.18%
(representing RMB 2,331,300 in the registered capital), 0.7% (representing
RMB199,500in the registered capital), 33.55% (representing RMB9,561,750 in
the registered capital), 9% (representing RMB2,565,000 in the registered
capital) and 6% (representing RMB1,710,000 in the registered capital) of
the equity interests of Beijing Wowjoint respectively. Beijing
Wowjoint is a company registered in Beijing carrying on the business of
manufacturing and installation of specialist construction equipment and
machinery, whose registered capital is RMB
28,500,000.
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2.
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The Pledgee, a
wholly foreign-owned company registered in Beijing,
PRC, and Beijing Wowjoint enter into Exclusive Technical Consulting
and Service Agreement (the “Service
Agreement”) on August 25,
2009.
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3.
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In
order to ensure that the Pledgee collects consulting and service fees from Beijing
Wowjoint, each of the Pledgors is willing to pledge all its Equity
Interest in
Beijing Wowjoint to the Pledgee as a security for the Pledgee to
collect technical consulting and service fees under the Service
Agreement.
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In order
to define each Party’s rights and obligations, the Pledgee and the Pledgors
through mutual negotiations hereby enter into this Agreement based upon the
following terms:
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1.
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DEFINITIONS AND
INTERPRETATIONS
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Unless
otherwise provided in this Agreement, the following terms shall have the
following meanings:
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1.1
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Pledge
has the meaning assigned to it in Article
2.2.
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1.2
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Equity
Interest means all its 100% equity interests in Beijing Wowjoint legally
held by the Pledgors.
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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 and service fees under the Service
Agreement.
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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 Beijing Wowjoint and the Pledgee on August 25,
2009.
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2
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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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1.8
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The
definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined.
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2.
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PLEDGE
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2.1
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Each
of the Pledgors agrees to pledge all his/her/its Equity Interest in Beijing Wowjoint
to the Pledgee as a guarantee for the technical consulting and
service fees payable to the Pledgee under the Service
Agreement. Specifically, Li Anning agrees to pledge 0.70% of
the Equity Interest, representing RMB199,500 of the registered capital of
Beijing Wowjoint, to the Pledgee; Liu Liguo agrees to pledge
4.09% of the Equity Interest, representing RMB1,165,650 of the registered
capital of Beijing Wowjoint, to the Pledgee; Liu Yabin agrees
to pledge 37.78% of the Equity Interest,
representing RMB10,767,300 of the registered capital of Beijing
Wowjoint, to the Pledgee; Liu Yasheng agrees to pledge 8.18% of the Equity
Interest, representing RMB 2,331,300 of the registered capital of Beijing
Wowjoint; Wang Pingyi agrees to pledge 0.70% of the Equity Interest,
representing RMB 199,500 of the registered capital of Beijing Wowjoint;
Zhang Fude agrees to pledge 33.55% of the Equity Interest, representing
RMB 9,561,750 of the registered capital of Beijing Wowjoint; Wang Qiao
agrees to pledge 6% of the Equity Interest, representing RMB1,710,000 of
the registered capital of Beijing Wowjoint; Ding Ting agrees to pledge 9%
of the Equity Interest, representing RMB2,565,000 of the registered
capital of Beijing Wowjoint to the
Pledgee.
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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 interests pledged by the Pledgors to the
Pledgee.
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3.
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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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3.1.1
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The
Rate of Pledge shall be 100%.
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3.2
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The
Term of Pledge
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3.2.1
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The
Pledge of the Equity Interest under this Agreement shall take effect as of
the date when the Equity Interest under this Agreement are recorded in the
Register of Shareholder of Beijing
Wowjoint and registered with the competent Administration for
Industry and Commerce. The Term of the Pledge is the same as
the term of Service Agreement.
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3
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3.2.2
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During
the Term of Pledge, the Pledgee shall be entitled to dispose of the Pledge
in accordance with this Agreement in the event that Beijing
Wowjoint fails to pay exclusive technical consulting and service
fees in accordance with the Service
Agreement.
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3.3
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Value
of Guaranteed Debt
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The
parties agree that the estimated value of the debt guaranteed by this Pledge is
about RMB 300,000,000.
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4.
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PHYSICAL POSSESSION OF
DOCUMENTS
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4.1
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The
Pledgee shall be entitled to collect the dividends accrued on the Equity
Interest.
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5.
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WARRANTIES AND REPRESENTATIONS
OF THE PLEDGORS
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5.1
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Each
of the Pledgors is the legal owner of their respective 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 exercises 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 dispose
of or assign the Pledge in accordance with this
Agreement.
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5.4
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The
Pledgors will not pledge or encumber the Equity Interest to any other
person except for the Pledgee.
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6.
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COVENANT OF THE
PLEDGORS
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6.1
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During
the term of this Agreement, each of the Pledgors covenants to the Pledgee
that each of the Pledgors shall:
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6.1.1
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Except
for the transfer of the Equity Interest by the Pledgors, as subject to the
Exclusive Call
Options Agreement entered into among the Pledgors, Beijing Wowjoint
and the
Pledgee, to the Pledgee or the person designated by the Pledgee,
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 regulations with respect to the pledge of
rights, present to the Pledgee the notices, orders or suggestions with
respect to the Pledge issued or made by the competent authority within
five (5) days upon 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 consent
from the Pledgee.
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4
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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 Equity Interest or any part of the right of the Pledgors as
shareholders of Beijing Wowjoint, and any events or any received notices
which may change any of the Pledgors’ covenant and obligation under this
Agreement or which may affect the Pledgors’ performance of their
obligations under this Agreement.
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6.2
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Each
of the Pledgors agrees that the Pledgee’s right to exercise the Pledge
obtained from this Agreement shall not be suspended or hampered through
legal procedure by any of the Pledgors or any successors of the Pledgors
or any person authorized by the
Pledgors.
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6.3
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Each
of the Pledgors 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, each of the Pledgors shall
execute in good faith and cause other parties who have interests in the
Pledge to execute all the title certificates, contracts including but not
limited to all documents required to register the Pledge with the
competent Administration of Industry and Commerce, and perform and cause
other parties who have interests to take action as required by the Pledgee
and make access to exercise the rights and authorization vested in the
Pledgee under this Agreement, and execute all the documents with respect
to the changes of certificate of the Equity Interest with the Pledgee or
the person (natural person or legal entity) designed by the Pledgee, and
provides all the notices, orders and decisions regarded as necessary by
the Pledgee with the Pledgee within the reasonable
time.
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6.4
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Each
of the Pledgors warrants to the Pledgee that each of the Pledgors will
comply with and perform all the guarantees, covenants, agreements,
representations and conditions for the benefits of the
Pledgee. The Pledgors shall compensate all the losses suffered
by the Pledgee for the reasons that any of the Pledgors does not perform
or fully perform its/his/her guarantees, covenants, agreements,
representations and conditions.
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7.
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EVENTS OF
DEFAULT
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7.1
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The
following events shall be regarded as the event of
default:
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7.1.1
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Beijing Wowjoint
fails to make full payments of the exclusive technical consulting
and service fees as scheduled under the Service
Agreement;
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5
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7.1.2
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Any of the Pledgors
makes any material misleading or fraudulent representations or
warranties under Article 5 herein, and/or any of the Pledgors is in
violation of any warranties under Article 5
herein;
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7.1.3
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Any
of the Pledgors violates the covenants under Article 6
herein;
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7.1.4
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Any
of the Pledgors violates any terms and conditions
herein;
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7.1.5
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Any
of the Pledgors 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 of this
Agreement;
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7.1.6
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Any
of the Pledgors’ external loan, security, compensation, covenants or any
other compensation liabilities (1) are required to be repaid or performed
prior to the scheduled date; or (2) are due but can not be repaid or
performed as scheduled and thereby cause the Pledgee to deem that the
Pledgors’ capacity to perform the obligations herein is
affected;
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7.1.7
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Any
of the Pledgors is incapable of repaying the general debt or other
debt;
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7.1.8
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This
Agreement is illegal for the reason of the promulgation of the related
laws or any of the Pledgors' incapability of continuing to perform the
obligations herein;
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7.1.9
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Any
approval, permits, licenses or authorization from the competent authority
of the government needed to perform this Agreement or validate this
Agreement are withdrawn, suspended, invalidated or materially
amended;
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7.1.10
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The
property of any of the Pledgors is adversely changed and causes the
Pledgee to deem that the capability of the Pledgors to perform the
obligations herein is affected;
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7.1.11
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The
successors or assignees of Beijing Wowjoint are only entitled to perform a
portion of or refuse to perform the payment liability under the 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
dispose the Pledge in accordance with the related
laws.
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7.2
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The
Pledgors shall immediately give a written notice to the Pledgee if the
Pledgors become aware of or find that any event under Article 7.1 herein
or any events that may result in the foregoing events have happened or is
going on.
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6
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7.3
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Unless
the event of default under Article 7.1 herein has been solved to the
Pledgee's satisfaction, the Pledgee, at any time when the event of default
happens or thereafter, may give a written notice of default to the
Pledgors and require Beijing Wowjoint to immediately make full payments of
the outstanding service fees under the Service Agreement and other
payables or dispose the Pledge in accordance with Article 8
herein.
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8.
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EXERCISE OF THE RIGHT OF THE
PLEDGE
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8.1
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None
of the Pledgors shall 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 Pledgors 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 dispose the Pledge
at any time when the Pledgee gives the Notice of Default in accordance
with Article 7.3 or thereafter.
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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 legal procedure 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
Pledgors shall not hinder the Pledgee from disposing the Pledge in
accordance with this Agreement and shall give necessary assistance so that
the Pledgee could realize his
Pledge.
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9.
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TRANSFER OR
ASSIGNMENT
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9.1
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None
of the Pledgors may donate or transfer his/her/its rights and obligations
herein without prior 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 Pledgors 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 all or any of its rights and obligations
under the Service Agreement to any individual (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 Pledgors shall execute the relevant agreements
and/or documents with respect to such transfer or
assignment.
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7
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9.4
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After
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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10.
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TERMINATION
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This
Agreement shall not be terminated until the consulting and service fees under
the Service Agreement are paid off and Beijing Wowjoint no
longer needs to undertake any obligations under the Service
Agreement. The Pledgee shall then cancel or terminate this Agreement
within reasonable time as soon as practicable.
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11.
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FORMALITIES FEES AND OTHER
EXPENSES
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11.1
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The
Pledgors 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
Pledgors shall fully indemnify such taxes paid by the
Pledgee.
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11.2
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The
Pledgors 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 Pledge) incurred by the Pledgee for the reason that (1) the
Pledgors fail to pay any payable taxes, fees or charges in accordance with
this Agreement; or (2) the Pledgee has recourse to any foregoing taxes,
charges or fees by any means for other
reasons.
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12.
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FORCE
MAJEURE
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12.1
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If
any party to this Agreement is delayed in or prevented from performing
his/her/its obligations hereunder in the event of Force Majeure (“Event of Force
Majeure”), only within the limitation of such delay or prevention,
the affected party is absolved from any liability under this
Agreement. Events of Force Majeure, which includes acts of
governments, acts of nature, fire, explosion, typhoon, flood, earthquake,
tide, lightning, war, means any unforeseen events beyond the prevented
party’s reasonable control and cannot be prevented with reasonable
care. However, any shortage of credit, capital or finance shall
not be regarded as an event beyond a party’s
reasonable control. The Pledge affected by Event of Force
Majeure who claims for exemption from performing any obligations under
this Agreement or under any Article herein shall notify the other party of
such exemption promptly and advice him of the steps to be taken for
completion of the performance.
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12.2
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The
party affected by Event of Force Majeure shall not assume any liability
under this Agreement. However, subject to the party affected by
Event of Force Majeure having taken its reasonable and practicable efforts
to perform this Agreement, the party claiming for exemption of the
liabilities may only be exempted from performing such liability as within
limitation of the part performance delayed or prevented by Event of Force
Majeure. Once causes for such exemption of liabilities are
rectified and remedied, both parties agree to resume performance of this
Agreement with their best efforts.
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8
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13.
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DISPUTE
RESOLUTION
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13.1
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This
Agreement shall be governed by and construed in accordance with the laws
of the PRC.
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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 Hong Kong International Arbitration
Centre (the “HKIAC”) for
arbitration in Hong Kong under the current effective rules of HKIAC. The
arbitration tribunal shall comprise of three (3)
arbitrators. The Pledgors collectively and the Pledgee shall
each be entitled to appoint one (1) arbitrator and the arbitrators so
appointed shall appoint a third (3rd)
arbitrator who shall preside as Chairman. The arbitration proceedings
shall be conducted in Chinese. The arbitration award shall be
final and binding upon the parties.
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14.
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NOTICE
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14.1
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Any
notice which is given by the parties hereto for the purpose of performing
the rights, duties 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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15.
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EFFECTIVENESS
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15.1
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This
Agreement and any amendments, modification, supplements, additions or
changes hereto shall be in writing and come into effect upon being
executed and sealed by the parties
hereto.
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15.2
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This
Agreement is executed in English and Chinese with the same legal
effect.
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9
Equity
Pledge Agreement Signature Page
(No text
on this page)
The
Pledgee:
Beijing
Xin Fu Industry Consulting Co., Ltd.
(北京信赋兴业咨询有限公司)
(Affix
Seal)
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By:
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/s/ Liu
Yabin
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| Name: Liu Yabin | |
| Title: Legal Representative | |
The
Pledgor:
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By:
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/s/ Li
Anning
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By:
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/s/ Liu
Liguo
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Li
Anning
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Liu Liguo | |||
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By:
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/s/ Liu
Yabin
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By:
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/s/ Liu
Yasheng
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Liu
Yabin
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Liu
Yasheng
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By:
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/s/ Wang
Pingyi
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By:
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/s/ Zhang
Fude
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Wang
Pingyi
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Zhang
Fude
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|||
| Beijing Wan Qiao Mechanical and Electrical Equipment Co., (北京市万桥机电设备公司) (Affix Seal) | ||||
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By:
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/s/ Ding
Ting
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By:
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/s/ Liu
Yabin
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Ding
Ting
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Name:
Liu Yabin
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Title:
Legal
Representative
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