EX-10.4
7
ex10-4.htm
Equity
Pledge Agreement
This
Equity Pledge Agreement (this “Agreement”) is entered into by and between the following two parties below on
December 10, 2018 in the People’s Republic of China (“PRC”):
Party
A: Xxxx Xxx, a citizen of the PRC with Chinese identification No.: 000000000000000000 and PRC passport No.: X00000000
with an address at 00X-0 Xxxxx Xxxxxx Xxxxxx Xxxxxxxx, Xxxxxxxxx of Nanshan Street, Nanshan District, Shenzhen; and
Party
B: Adamant DRI Processing and Minerals Group, a corporation organized under the laws of the State of Nevada (“Adamant”),
with its address at Chunshugou Luanzhuang Village, Zhuolu County, Zhangjiakou City, Hebei Province, which owns all of the equity
of China Real Fortune Mining Limited, a BVI corporation, which owns all of the equity of Real Fortune Holdings Limited, a Hong
Kong limited company, which in turn owns all of the issued and outstanding capital stock of Zhangjiakou Tongda Mining Technologies
Service Co., Ltd., a Chinese limited company (“China Tongda”).
In
this Agreement, each of Party A and Party B shall be referred to as a “Party” respectively, and they shall be collectively
referred to as the “Parties”.
Whereas:
| | 1.
| On
the date of execution of this Agreement, Party A is the only shareholder of Shenzhen Dingshang Technology Co., Ltd., (“Shenzhen
Company”) and duly holds 100% of the shares of Shenzhen Company; |
| | 2.
| Shenzhen
Company is a corporation incorporated and validly existing in the territory of the PRC pursuant to the law of the PRC with
business license registration number: XX 91440300699088287 and its address at 00X-0 Xxxxx Xxxxxx Xxxxxx Xxxxxxxx, Xxxxxxxxx
of Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxxx. |
| | 0.
| In
order to ensure that Party A and Shenzhen Company perform all their obligations under the Management Entrustment Agreement,
Power of Attorney and Exclusive Purchase Option Agreement (collectively referred to as “Onshore Agreements”) entered
into on the same day as this Agreement, Party A agrees to pledge all the shares held by Party A in Shenzhen Company to Party
B as the guarantee for the performance of the Onshore Agreements by the related responsible parties pursuant to the terms
and conditions of this Agreement, and Party B agrees to accept such pledge provided by Party A. |
NOW,
THEREFORE, under the principle of equality and mutual benefit and with the consensus reached through negotiation, both parties
have entered into this Agreement and agreed to abide by it pursuant to the applicable laws, regulations and rules of the PRC(“laws
of the PRC”).
| | 1.1 | In
order to guarantee that Shenzhen Company and Party A and other related responsible parties perform all obligations and liabilities
under the Onshore Agreements, Party A pledges the Pledged Equities (as defined in Section 4 herein) under this Agreement to
Party B, including Adamant and China Tongda, pursuant to the terms and conditions of this Agreement, and Party B agrees to
accept the above equity pledge, and have priority right to the proceeds from the conversion, auction, or sale of the Pledged
Equities. |
| | 1.2 | The
pledge under this Agreement includes the rights owned by Party B, including Adamant and China Tongda, to collect the fees
(including legal fees), expenses, interests, losses, liquidated damages and compensations that Shenzhen Company and/or Party
A shall pay under the Onshore Agreements, and civil liabilities that Shenzhen Company and/or Party A shall bear in case the
Onshore Agreements wholly or partially become null and void due to any reason. |
| | 1.3 | Unless
consented to in writing by Party B, after the execution of this Agreement, the pledge under this Agreement will be terminated
only when Shenzhen Company and Party A have performed all the obligations and liabilities under the Onshore Agreements and
Party B confirms such fulfillment in writing. If Shenzhen Company or Party A have not fully performed all or part of its or
their obligations or liabilities under the Onshore Agreements at the expiration of such agreements, Party B will maintain
the pledge hereunder up to the date when all such obligations and liabilities are fully performed. |
| 2. | Representations
and Warranties |
| | 2.1 | Party
A represents and warrants to Party B, on the day of execution of this Agreement: |
| | 2.1.1. | Party
A has the right to execute this Agreement and the capability to perform the same; |
| | 2.1.2. | Party
A has gone through necessary internal decision-making procedures, obtained proper authority, acquire all the necessary consents
and approvals of any requisite third party and government authority to enter into and perform this Agreement and this Agreement
does not violate the laws of the PRC and contracts binding or affecting it; |
| | 2.1.3. | upon
the execution, this Agreement will constitute the legal, valid, binding obligation of both parties and both parties will be
subject to compulsory enforcement pursuant to the terms and conditions of this Agreement; |
| | 2.1.4. | Party
A is the exclusive and duly owner of the Pledged Equities, has paid up all capitals subscribed, has obtained the capital verification
report issued by the duly qualified Certified Public Accounting firm and has the right to set the pledge of the first priority
on such Pledged Equities for Party B; |
| | 2.1.5. | except
for the pledge under this Agreement, there is not: (i) any other encumbrance or any security interests for the benefit of
any third party on the equity interests pledged by Party A (including but not limited to pledge); (ii) any mortgages or other
guarantee rights set for any third party; (iii) any pending or possible civil, administrative or criminal litigation or administrative
punishment or arbitration relating to the equity interests hereunder on the date of execution of this Agreement; (iv) any
trusts or conditions of limited use; (v) any exemptions from lawsuit, execution, enforcement or other legal proceedings; or
(vi) any outstanding taxes, fees or undecided legal procedures related with the equity interests hereunder on the date of
execution of this Agreement; |
| | 2.1.6. | Party
A has not effected and will not effect an Event of Default (as defined in Section 8) and has no knowledge of any risk of an
Event of Default under this Agreement or any other agreement to which Party A are a party; |
| | 2.1.7. | Party
A has abided by and performed all obligations stipulated by the applicable laws, regulations and rules and all applicable
authorizations and permissions; Party A does not have any circumstances that go against any laws, regulations or rules and
may have material and adverse effect on the validity, effect, performance and enforceability of this Agreement; and |
| | 2.1.8. | to
the best knowledge of Party A, no court, arbitral tribunal or government authority starts to take any legal proceedings or
administrative proceedings against Party A or the Pledged Equities, neither does any courts, arbitral tribunals or government
authority start to file any legal proceedings or administrative proceedings against Party A or the Pledged Equities, and Party
A has no knowledge of any such risks. |
| | 2.2 | Party
B presents and warranties to Party A on the day of execution of this Agreement: |
| | 2.2.1. | it
has the right, to execute this Agreement and the capability to perform the same; |
| | 2.2.2. | it
has carried out necessary internal decision-making procedures, obtained proper authority, acquire the necessary consents and
approvals of any third party and government authority to enter into and perform this Agreement and it does not go against
the laws and contracts binding or affecting it; and |
| | 2.2.3. | upon
the execution, this Agreement will constitute the legal, valid, binding obligation of both parties and both parties shall
be subject to compulsory enforcement pursuant to the terms and conditions of this Agreement. |
| 3. | Guaranteed
Liabilities |
The
liabilities guaranteed under this Agreement are the obligations and liabilities of Shenzhen Company, Party A, and all related
responsible parties incurred under the Onshore Agreements (including the extended agreements to these agreements and the revised
and supplementary agreements to such agreements), including but not limited to the Entrustment fees, interest, liquidated damages,
indemnities, fees for realization of the creditor’s right arising out of and in relation to the Onshore Agreements and payable
by the Shenzhen Company and/or Party A to Party B, and the damages and other fees that are payable by Shenzhen Company and/or
Party A to Party B due to the default.
The
Pledged Equities are 100% of the shares of Shenzhen Company which Party A duly and legally holds and all rights and proceeds of
or in relation to such equities. Party A holds 100% of the shares of Shenzhen Company.
| 5. | Pledge
Procedures and Transaction |
Within
thirty (30) days of the execution of this Agreement, Party A shall transact the registration procedures in relation to this pledge
of equity in favor of such of Adamant and China Tongda as Adamant shall direct, at Zhuolu Administration of Industry and Commerce.
If the registration for such pledge of equity fails due to the reason of Zhuolu Administration of Industry and Commerce, Party
A shall demand Shenzhen Company to write down the matter about such pledge of equity into the stock ledger of Shenzhen Company
and apply to Zhuolu Administration of Industry and Commerce for the transaction of the registration of the pledge of equity within
thirty (30) days as of the day when Zhuolu Administration of Industry and Commerce approves such registration or the information
about the approval for such registration is obtained.
Within
the term of this Agreement, Party A undertakes to Party B that:
| | 6.1 | without
the prior written consent of Party B, Party A shall not impose any other encumbrance (whether prevailing over the pledge under
this Agreement or not) or other restrictive conditions on all or part of the Pledged Equities; |
| | 6.2 | without
the prior written consent of Party B, Party A shall not sell, lease, lend, transfer, assign, grant, remortgage, trust, or
participate in equity investment by, the Pledged Equities or dispose by any other means all or part of the Pledged Equities; |
| | 6.3 | Party
A shall not use or allow others to use the Pledged Equities for any actions or events against any laws or this Agreement; |
| | 6.4 | after
receiving any notice, order, ruling, verdict or other instruments in relation to the Pledged Equities from the government,
judicial authority or arbitral organization, Party A shall immediately notify Party B and within the period provided by the
applicable laws take all necessary steps to reduce the risks that such notice, order or other instruments may bring to the
Pledged Equities. Where Party B deems necessary, Party A shall file a lawsuit, arbitration or administrative lawsuit against
the above notice, order or other instruments and bear all fees that arising therefrom and in relation thereto; |
| | 6.5 | Party
A shall immediately notify Party B of any events or any received notices which may affect the equity interest of Party A or
any part of its right, and any events or any received notices which may change the covenants and obligations of Party A under
this Agreement or which may affect the performance of its obligations under this Agreement, and take actions in accordance
with the instructions of Party B; |
| | 6.6 | Party
A agrees that the right of Party B to exercise the pledge pursuant to this Agreement shall not be suspended or hampered by
Party A or any successors or transferees of Party A or any other persons; |
| | 6.7 | Party
A warrants to Party B that in order to protect and perfect the security over the obligations of Party A and/or Shenzhen Company
under the Onshore Agreements, Party A shall make any necessary amendment (if applicable), execute in good faith and cause
any third party who has interests in the pledge to execute all the title certificates, contracts, and /or perform and cause
any third party who has interests to take action as required by Party B and make access to exercise the rights and authorization
vested in Party B under this Agreement, and execute all the documents with respect to the changes of equity interests owned
by Party B or another party designated by Party B, and provides Party B with all the necessary documents within the reasonable
time; and |
| | 6.8
| Party
A warrants to Party B that Party A will comply with and perform all the guarantees, covenants,
agreements, representations and conditions for the benefits of Party B. Party A shall
indemnity Party B for all the damages suffered by Party B for the reasons that Party
A does not perform or fully perform such guarantees, covenants, agreements, representations
and conditions.
|
| | | |
| | 6.9 | Party
A will not cause or permit Shenzhen Company to issue shares of its equity to another party without the prior written consent
of Party B. |
| | 7.1 | Subject
to Clause 8.3, Party B may dispose of the Pledged Equities at any time upon or after sending the notice for the exercise of
the pledge. |
| | 7.2 | Party
B shall have the priority right to dispose all or part of Pledged Equities under this Agreement (including but not limited
to purchase of shares at discounted price by agreement, sell at auction by the laws of the PRC, sell-off Pledged Equities)
as per legal procedures and to be paid with the sum gained from the disposal until all guaranteed liabilities of Shenzhen
Company and the Shareholders under the Onshore Agreements are fulfilled completely. |
| | 7.3 | Where
Party B disposes the Pledged Equities pursuant to this Agreement, Party A shall provide and cause Shenzhen Company to provide
necessary assistance so that Party B can realize its pledge. |
| | 8.1 | The
following events shall be regarded as an Event of Default: |
| | 8.1.1. | where
Party A and/or Shenzhen Company and related responsible parties fail to perform any obligations under the Onshore Agreements
in time or fails to discharge any guaranteed liability as scheduled in full sum; |
| | 8.1.2. | where
there are any falsity, fraud, misleading statements or errors relating to any representation and undertaking Party A makes
in Section 2 herein; |
| | 8.1.3. | where
Party A violates any undertaking in Section 6 of this Agreement; |
| | 8.1.4. | where
Party A violates any other terms and conditions of this Agreement; |
| | 8.1.5. | where
Party A refuses or intentionally delays the registration procedures for the pledge under this Agreement and fails to correct
such action within ten (10) days as of the day when Party B requires in writing to do so; |
| | 8.1.6. | where
any loan, guarantee, indemnity, undertaking or other compensation liability of Party A: (i) is required to be repaid or performed
in advance due to an event of default; or (ii) is due but unable to be repaid or performed as scheduled, which makes Party
B reasonably believe that the ability of Party A to perform its obligations under this Agreement has been materially and adversely
affected; |
| | 8.1.7. | where
this Agreement becomes ineffective, revocable, unenforceable or Party A cannot continue performing its obligations under this
Agreement in time and fully due to the fault (including omission) of Party A after the issuance of new laws of the PRC; |
| | 8.1.8. | Party
A waives the pledged equity interests or transfers the pledged equity interests without prior written consent from the Party
B; |
| | 8.1.9. | any
approval, permits, licenses or authorization from the competent authority of the government needed to perform under this Agreement
or validate this Agreement are withdrawn, suspended, invalidated or materially amended; |
| | 8.1.10. | the
property of Party A is adversely changed and causes Party B to deem that the capability of Party A to perform the obligations
herein is affected; and |
| | 8.1.11. | other
circumstances in which Party B cannot exercise and dispose the pledge due to the fault (including omission) of Party A. |
| | 8.2 | If
Party A knows or should have known the occurrence of any event stated above in Subsection 8.1 or any matter that may incur
the above events, Party A shall immediately notify Party B in writing. |
| | 8.3 | Unless
Party A immediately takes the measures satisfactory to Party B to correct the Event of Default listed in Subsection 8.1 above,
Party B may send written notice of exercising the pledge to Party A at any time upon or after the occurrence of Event of Default,
demand Party A and/or Shenzhen Company to: (i) make full payment of the outstanding fees pursuant to the Onshore Agreement,
and (ii) immediate perform their obligations under the Onshore Agreements, and require disposal of the Pledged Equities pursuant
to this Agreement. |
| | 8.4 | The
Event of Default provided in this Section 8 will not affect the exercise of other remedies by the parties pursuant to the
laws of the PRC. |
| 9. | Liability
in the Event of Default |
Both
parties shall sufficiently perform their obligations under this Agreement. Either party breaching this Agreement shall bear the
liability as arising therefrom and in relation thereto. If such breach causes damages to the other party, the breaching party
shall indemnify the other party for all such damages.
| | 10.1 | Without
the prior written consent of Party B, Party A shall not have the right to assign or delegate its rights and obligations under
this Agreement. |
| | 10.2 | This
Agreement shall be binding on Party A and its successors and permitted assigns, and shall be valid with respect to Party B
and each of its successors and assigns. |
| | 10.3 | At
any time, Party B may assign any and all of its rights and obligations under the Onshore Agreements to its designee(s) (natural
or legal persons), in which case the assigns shall have the rights and obligations of Party B under this Agreement, as if
it were the original party to this Agreement. When Party B assigns the rights and obligations under the Onshore Agreements,
at the request of Party B, Party A shall execute relevant agreements or other documents relating to such assignment. |
| | 10.4 | In
the event of a change in the pledgee due to an assignment, Party A shall, at the request of Party B, execute a new pledge
agreement with the new pledgee on the same terms and conditions as this Agreement, and register for change of the pledgee
with the competent Administration of Industry and Commerce. |
Upon
the date that all guaranteed liabilities of Shenzhen Company and Party A under the Onshore Agreements are fulfilled completely,
this Agreement shall be terminated. In such case, Party B shall cancel the pledge registration under this Agreement as soon as
possible within the reasonable and feasible period.
| 12. | Taxes,
Fees and Other Expenses |
All
taxes, fees and other expenses arising from the execution and performance of this Agreement, including but not limited to legal
costs, costs of production, stamp tax and any other taxes and fees shall be borne by Party B.
| | 13.1 | Both
parties agree that, all materials, documents, communications and other information obtained in the negotiation, execution
or performance of this Agreement, whether commercial, technical or in any other form (“Confidential information”),
shall be strictly kept confidential and used only for the performance of the obligations under this Agreement. Unless the
other parties consent in writing, neither of the parties shall release, leak or disclose any Confidential Information to any
third party. |
| | 13.2 | Either
party may disclose the Confidential Information in the following circumstances: (i) where the laws, court orders or the competent
courts with jurisdiction require, and such disclosure may be conducted only within such requirement; (ii) where the competent
authority or government department requires; (iii) where such Confidential Information has been known to the general public;
(iv) where such Confidential Information was owned duly and legally by the disclosing party rather obtained from the other
party before the disclosing party obtains it; (v) the information is required to be disclosed subject to the applicable laws
or the rules or provisions of a stock exchange or securities governing authority; and (vi) the information is disclosed by
each party to its legal or financial consultant relating the transaction of this Agreement, and this legal or financial consultant
shall comply with the confidentiality set forth in this Section 13. However, for the circumstances aforesaid, where either
party discloses the Confidential Information, it shall inform the other party of the Confidential Information to be disclosed. |
| | 13.3 | Nonetheless
other provisions of this Section 13, either party shall have the right to disclose the Confidential Information to its lawyer,
accountant, other professional consultants, directors or senior officers; such personnel shall undertake in writing to treat
such information as Confidential Information by taking the measures similar to those provided in 13.1 of this Section. |
| | 13.4 | The
disclosure of the Confidential Information by staff or employed institution of any party shall be deemed as the disclosure
of such Confidential Information by such party, and such party shall bear the liabilities for breaching the agreement. |
| | 13.5 | This
Section 13 shall survive whatever this Agreement is invalid, amended, revoked, terminated or unable to implement by any reason. |
| 14. | Governing
Law and Dispute Resolution |
| | 14.1 | The
execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes
hereunder shall be governed by the formally published and publicly available laws of the PRC. Matters not covered by formally
published and publicly available laws of the PRC shall be governed by international legal principles and practices. |
| | 14.2 | Both
parties agree that any dispute arising from or in relation to this Agreement shall first be settled by the friendly negotiation
of both parties. If the negotiation fails within 45 days, either party shall have the right to file the dispute with China
International Economic and Trade Arbitration Commission (“CIETAC”) in Beijing for arbitration pursuant
to the currently effective arbitration rules of CIETAC at the time of application. This arbitration shall be final and bind
both parties and shall be enforceable in any court of competent jurisdiction. The arbitration fees shall be borne by the losing
party. |
| | 14.3 | Upon
the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration
of any dispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective
rights under this Agreement and perform their respective obligations under this Agreement. |
| 15. | Effect,
Change and Recession of this Agreement |
| | 15.1 | This
Agreement shall come into effect on and after the date that it is signed and/or stamped by both parties. |
| | 15.2 | After
this Agreement comes into effect, except otherwise provided by this Agreement, neither party shall amend or terminate this
Agreement in advance. If it is necessary to amend or terminate this Agreement, both parties shall negotiate to reach a written
agreement. Before such written agreement is reached, this Agreement shall remain in effect. |
| 16. | Physical
Possession Of Documents |
| | 16.1 | Party
A shall deliver the physical possession of the certificates of registration (original) of the pledge equities to Party B,
provide the proper record relating to the registration of such pledge to Party B, and transact various approval and examination,
registration and filling procedures required by the laws of the PRC within thirty (30) business days as of the date of execution
of this Agreement or an earlier time agreed upon by the parties. |
| | 16.2 | If
the subjects of the pledge change and such changes need to be registered or filed, Party A shall register or file or cause
Shenzhen Company to register or file such changes within five (5) business days as of the day of change, and shall deliver
relevant registration of change or filling documents to Party B. |
| | 16.3 | During
the term of the equity pledge, Party A shall instruct Shenzhen Company not to distribute any dividends, or adopt any profits
distribution plans other than distributions made to Party B; if Party A shall be entitled to collect any interests other than
distribution plans of dividends and profits, Party A shall instruct Shenzhen Company to transform such interests into cash
and pay such interests into the bank account designated by Party B in accordance with Party B’s requirements, and Party
A shall not use any money deposited into the bank account without the prior written consent of Party B. |
| | 16.4 | During
the term of equity pledge, if Party A subscribes new capital contributions to Shenzhen Company or accepts an equity transfer
of Shenzhen Company (“Newly-added Equities”), the Newly-added Equities shall be automatically become Pledged Equities
under this Agreement, and Party A shall accomplish all the procedures with respect to the pledge of the Newly-added Equities
within ten (10) business days after acquiring the Newly-added Equities. If Party A fails to accomplish the relevant procedures
as specified in this Section 16, Party B shall have the right to exercise the pledge right under this Agreement. |
| | 17.1 | Entire
Agreement. This Agreement and the Exhibits and Schedules hereto contain the entire understanding between the parties, no other
representations, warranties or covenants having induced any party to execute this Agreement, and supersede all prior or contemporaneous
agreements with respect to the subject matter hereof. All references to schedules and exhibits are to exhibits and schedules
attached to and to become a part of this Agreement unless otherwise indicated. |
| | 17.2 | Amendment.
Any amendment and/or rescission shall be in writing and signed by the authorized representatives of both parties. Such revision
shall be a valid integral part of this Agreement. |
| | 17.3 | Headings.
The headings of any Sections or other portion of this Agreement are for convenience only and are not to be considered in construing
this Agreement. |
| | 17.4 | Construction.
References in this Agreement to “Sections,” “Schedules” and “Exhibits” shall be to the
Sections, Schedules and Exhibits of this Agreement, unless otherwise specifically provided; any use in this Agreement of the
singular or plural, or the masculine, feminine or neuter gender, shall be deemed to include the others, unless the context
otherwise requires; the words “herein”, “hereof” and “hereunder” and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this
Agreement; the word “including” when used in this Agreement shall mean “including without limitation”;
and except as otherwise specified in this Agreement, all references in this Agreement (i) to any agreement, document, certificate
or other written instrument shall be a reference to such agreement, document, certificate or instrument, in each case together
with all exhibits, schedules, attachments and appendices thereto, and as amended, restated, supplemented or otherwise modified
from time to time in accordance with the terms thereof; and (ii) to any law, statute or regulation shall be deemed references
to such law, statute or regulation as the same may be supplemented, amended, consolidated, superseded or modified from time
to time. |
| | 17.5 | Severability.
Any provision hereof that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability, without invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction. |
| | 17.6 | Waiver.
No failure or delay of either party to enforce any right hereunder shall constitute a waiver of any such right hereunder.
No waiver shall be effective hereunder unless in writing and a waiver shall only be effective for the specific act or circumstance
for which it is given and not for any future act or circumstance. |
| | 17.7 | Language.
This Agreement is in both Chinese and English and signed by both parties, and the two versions have the same effect. Should
there be any discrepancy between the two language versions, the Chinese version shall prevail. |
| | 17.8 | Copies
of this Agreement. This Agreement shall be executed in four counterparts; each party holds one and the rest are used for the
transaction of related formalities. Each of the copies shall be deemed as the original one and has the same effect. |
In
witness hereof, both parties have signed this Agreement on the date specified on the first page of this Agreement by their
respective authorized representatives.
| Party
A: Xxxx Xxx: | /s/
Xxxx Xxx | |
| | Xxxx
Xxx | |
Party
B: Adamant DRI Processing and Minerals Group
| Legal
Representative or Authorized Representative: | /s/
Xxxxx Xxxxxx | |
| | Xxxxx
Xxxxxx | |
