Equity Pledge Agreement between Beijing Ao Hang Construction Material Technology Co., Ltd. and Weili He
between
Beijing
Ao Hang Construction Material Technology Co., Ltd.
and
Weili
He
This
Equity Pledge Agreement (the “Agreement”) is entered into on the day of November
_28_,
2007
by and between the following parties:
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Pledgee:
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Beijing
Ao Hang Construction Material Technology Co., Ltd.
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Address:
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1701
Yingu Mansion, ▇▇. ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇.
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Pledgor:
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Weili
He
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| Identification Card No: ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ | |
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Address:
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▇▇.▇
▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇.
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WHEREAS,
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1.
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Weili
He, the Pledgor, is the citizen of the People's Republic of China
("PRC”).
The Pledgor owns 40% of the Equity Interest in Beijing Xin Ao Concrete
Co., Ltd. (“XinAo”).
XinAo is a company registered in Beijing carrying on concrete
manufacturing business.
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2.
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The
Pledgee, a wholly foreign-owned company registered in Beijing, PRC,
has
been licensed by the PRC relevant government authority to carry on
the
business of construction material technology. The Pledgee and the
Pledgor’s subsidiary, XinAo enter into Exclusive
Technical Consulting and Service Agreement
(the “Service Agreement”) on November_28_,
2007.
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3.
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In
order to ensure that the Pledgee collects consulting and service
fees from
XinAo, the Pledgor is willing to pledge all its Equity Interest in
XinAo
to the Pledgee as a security for the Pledgee to collect technical
consulting and service fees under the Service
Agreement.
|
In
order
to define each Party’s rights and obligations, the Pledgee and the Pledgor
through mutual negotiations hereby enter into this Agreement based upon the
following terms:
| 1. |
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
means the full meaning assigned to that term in Article
2.
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1.2
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Equity
Interest means all its 40% equity interests in XinAo legally 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 and service fees under the
Service
Agreement.
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2
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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 XinAo 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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| 2. |
PLEDGE
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2.1
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The
Pledgor agrees to pledge all its Equity Interest in XinAo to the
Pledgee
as a guarantee for the technical consulting and service fees 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 interests pledged by the Pledgor to
the
Pledgee.
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| 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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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 XinAo 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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3.2.2
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During
the Term of Pledge, the Pledgor shall be entitled to dispose of the
Pledge
in accordance with this Agreement in the event that XinAo fails to
pay
exclusive technical consulting and service fees in accordance with
the
Service Agreement.
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| 4. |
PHYSICAL
POSSESSION OF
DOCUMENTS
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4.1
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The
Pledgee shall be entitled to collect the dividends from the Equity
Interest.
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| 5. |
WARRANTIES
AND REPRESENTATIONS OF THE
PLEDGOR
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5.1
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The
Pledgor is the legal owner of the Equity
Interest.
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3
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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
Pledgor will not pledge or encumber the Equity Interest to any other
person except for the Pledgee.
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| 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 Purchase Contract entered into among the Pledgor, Xin Ao
Construction Materials, Inc. and XinAo, to Xin Ao Construction Materials,
Inc. or the person designated by XinAo Construction Materials, Inc.,
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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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 the Pledgor’s any covenant and
obligation under this Agreement or which may affect the Pledgor’s
performance of its obligations 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.
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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 interests 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 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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4
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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 for the reasons that the Pledgor
does not perform or fully perform their guarantees, covenants, agreements,
representations and conditions.
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| 7. |
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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XinAo
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 and 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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The
Pledgor’s 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 Pledgor’s
capacity to perform the obligations herein is
affected;
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7.1.7
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The
Pledgor 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 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, 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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5
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7.1.10
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The
property of the Pledgor is adversely changed and causes the Pledgee
to
deem that the capability of the Pledgor to perform the obligations
herein
is affected;
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7.1.11
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The
successors or assignees of the Pledgor 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
Pledgor shall immediately give a written notice to the Pledgee if
the
Pledgor is 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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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
Pledgor
and require the Pledgor 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. |
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 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
Pledgor 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. |
TRANSFER
OR ASSIGNMENT
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9.1
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The
Pledgor shall not donate or transfer his 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 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 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 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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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. |
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 XinAo shall no longer undertake any
obligations under the Service Agreement. The Pledgee shall then cancel or
terminate this Agreement within reasonable time as soon as
practicable.
| 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 indemnify such taxes paid by the
Pledgee.
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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 Pledge) incurred by the Pledgor for the reason that
(1) the
Pledgor fails 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. |
FORCE
MAJEURE
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12.1
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If
this Agreement is delayed in or prevented from performing 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. 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 effected by 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 Force Majeure shall not assume any liability under
this
Agreement. However, subject to the party affected by 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 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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| 13. |
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 China International Economic
and
Trade Arbitration Commission (“CIETAC”) for arbitration in Beijing under
the current effective rules of CIETAC. The arbitration proceedings
shall
be conducted in Chinese. The arbitration award shall be final and
binding
upon the parties.
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| 14. |
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. |
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.
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(No
text
on this page)
The
Pledgee: Beijing Ao Hang Construction Material Technology Co., Ltd.
Authorized
Representative: Weili He
The
Pledgor: Weili He
Signature:
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