Exhibit 10.5

 

 

 

 

SHARES PLEDGE AGREEMENT

 

BY AND AMONG

 

CHUANGXIANG NETWORK TECHNOLOGY (SHENZHEN) LIMITED

 

 

AND

 

 

JIYING LI

 

HUIBIN SU

 

CHAORAN ZHANG

 

 

 

 

April 20, 2017

 

 

 

 

 

 

 

SHARES PLEDGE AGREEMENT

(Translation Copy)

 

THIS SHARES PLEDGE AGREEMENT (this “Agreement”), is entered into as of the 20th
day of April, 2017 in Shenzhen, the Peoples Republic of China (the PRC)

 

By and among

 

Party A: Chuangxiang Network Technology (Shenzhen) Limited

Entity Registration Number: 440300MA5DAEP93

Registered Address: Room 201, Building A, 1 Qianwan Road 1, Qianhai Deep Harbor
Cooperation Zone (sharing offices with Shenzhen Qianhai Commerce Secretary
Limited)

Legal Representative: Jiyin Li

 

Party B: Jiyin Li

(China) Citizen ID Number: 410203198712131555

Address: No. 12 Building 5, Dirun Road 2, Jinshui District, Zhenzhou City, China

 

Party C: Huibin Su

(China) Citizen ID Number: 440781198001200210

Address: Room 503, Huanyuan Street 5, Haizhu District, Guangzhou City, China

 

Party D: Chaoran Zhang

(China) Citizen ID Number: 440112197809270019

Address: Room 503, Huajin Road 72, Tianhe District, Guangzhou City, China

 

(Party A, Party B, Party C and Party D individually being referred to as a Party
and collectively the Parties).

 

WHEREAS

 

1.Party A is a validly registered wholly foreign owned entity in the People’s
Republic of China (“P.R. China” or “China”) , duly incorporated and in a good
standing;

 

 1 

 

 

2.Shenzhen Chuangxiang Network Technology Limited (the “Company”) is a validly
registered limited liability company under PRC law, duly incorporated and in
good standing;

 

3.Party B, Party C and Party D are the total shareholders (collectively, the
“Shareholders”) of the Company, holding 60%, 20% and 20% of issued and
outstanding shares of Company, respectively, representing 100% equity interest
of the Company in aggregate;

 

4.Party A and the Company entered into an Exclusive Technology Consulting
Service Agreement on April 20, 2017;

 

5.Party A, the Shareholders and the Company entered into a Business Operation
Management Agreement on April 20, 2017;

 

6.Party A, the Shareholders and the Company entered into an Exclusive Purchase
Option Agreement on April 20, 2017;

 

7.To ensure the performance of the Exclusive Technology Consulting Service
Agreement, the Business Operation Management Agreement and the Exclusive
Purchase Option Agreement and Party A’s legal rights and interests thereunder,
the Shareholders (hereinafter, the “Pledgors”) agree to pledge all their shares
of the Company to Party A (hereinafter, the “Pledgee”) as a security interest of
the agreements set forth herein above.

 

NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements herein contained, and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be bound, do hereby agree as follows:

 

 

ARTICLE 1: DEFINITIONS

 

Unless otherwise provided in this Agreement, the following terms shall have the
following meanings:

 

1.1Pledge means the full content of Article 2 hereunder.

 

1.2Shares means the shares in the Company respectively held by the Pledgors
including the rights and benefits underlying to be realized at any time.

 

1.3The Agreements mean the Exclusive Technology Consulting Service Agreement,
the Business Operation Management Agreement and the Exclusive Purchase Option
Agreement.

 

 2 

 

 

1.4Event of Default means any event in accordance with Article 7 hereunder.

 

1.5Notice of Default means the notice of default issued by the Pledgee in
accordance with this Agreement.

 

ARTICLE 2: PLEDGE

 

2.1The Pledgors assign, convey to the Pledgee, for its benefit, a pledge over
and security interest in all of their respective shares in the Company to secure
all and any rights and privileges that the Pledgee is entitled to under each of
the Agreements.

 

2.2In order to avoid any indoubtness, despite of the disappearance of party of
the Secured Indebtedness, the Pledgors assign, convey to the Pledgee, for its
benefit, a pledge over and security interest in all of their respective Shares
in Kewen Dangdang as a security of the remaining part of the Secured
Indebtedness in accordance with the provisions of this Agreement.

 

2.3The scope of the security interest under this Agreement including all
payables of any fees (including legal fee), expenses, losses, interests,
indemnification, liquidated damages, compensation incurred by the Pledgors
and/or the Company to the Pledgee in connection with each of the Agreement of
the Pledgors and the obligations of the Company and the Pledgors in default of
each of the Agreement in full or in part by any cause.

 

2.4Except prior written consent of the Pledgee, the Pledge and the Pledgors
shall not be released until the Company and the Pledgors have completed
fulfilled their obligations under each of the Agreements and such fulfilled has
been confirmed by the Pledgee in written. Within the effective period of this
Agreement, in case that the Pledgee exercise the Option and therefore obtains
all or part of the shares, the relative Pledge over that part of Share disappear
in proportion as of the execution date of the Shares transfer and the shares
pledged by the Pledgors reduce in the same proportion.

 

 3 

 

 

ARTICLE 3: THE EFFECTIVENESS AND TERM OF PLEDGE

 

3.1The effectiveness of this Agreement

 

This Agreement shall become valid upon the execution by the respective duly
authorized representatives of the Parties and take effect upon the registration
of the Pledge on the shareholder book of the Company. The Pledge set forth in
this Agreement shall take effect upon the registration with the relevant
Industry and Commerce Bureau of PRC or other applicable regulatory authority.

 

3.2During the term of the Pledge, the Pledgee is entitled to exercise the rights
under the Pledge if the Pledgors and/or the Company fails to perform or fulfill
their obligations under the Business Operation Management Agreement and the
Exclusive Purchase Option Agreement.

 

3.3The Pledgee can terminate this Agreement by a written notice at least 30 days
in advance of the termination.

 

ARTICLE 4: POSSESSION AND PERFECTION OF PLEDGE DOCUMENTS

 

4.1Each Pledgor shall deliver as security to the Pledgees within 15 business
days of the execution of this Agreement or on an earlier date agreed by all
parties, the original copy of all certificates representing the pledged shares
owned by such Pledgor and proof of registration of the Pledge on the shareholder
book of the Company. Each Pledgor shall promptly register the Pledge with
relevant regulatory authority as required by the applicable China laws and
regulations.

 

4.2In the event that there is a change in the Pledge or to the security interest
created hereunder requiring a change of the registration of the Pledge, the
Pledgors and the Company shall complete such registration within 5 business days
of the occurrence of such event and delivery the documents evidencing such
registration to the Pledgee.

 

4.3During the term of the Agreement, the Pledgors shall instruction the Company
not to pay any dividends, distribution bonuses, or any other payments which they
would otherwise be authorized to receive and retain as shareholders; if the
Pledgors have received any dividends, distribution bonuses, or any other
payments which they would otherwise be authorized to receive and retain as
shareholders; they shall instruction the Company to transfer the proceeds (in
cash value of any distribution) to the bank account designated by the Pledgee
and the Pledgors are not allowed to accept any such distribution without the
written consent of Party A.

 

4.4During the term of this Agreement, any increased equity interest due to the
subscription of increased registered capital of the Company (the “New Shares”)
by each Pledgor shall be automatically be added into the Pledge and such Pledgor
shall complete the relevant registration of the Pledge in the New Shares with
the regulatory authority. If such Pledgor cannot complete the registration
promptly as set forth in this paragraph, the Pledgee shall be entitled to
exercise or cause to be exercised the same, the Pledge immediately in accordance
with Section 8 of this Agreement.

 

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ARTICLE 5: REPRESENTATIONS AND WARRANTIES OF THE PLEDGORS

 

Each Pledgor hereby represents and warrants to the Pledgee, for the benefit of
the Pledgee, and to confirm that the Pledgor’s reliance on such representations
and warranties to enter into and perform its obligations under this Agreement,
as follows:

 

5.1Each Pledgor has legal title to the Pledged Collateral of such Pledgor. Each
Pledgor has all power, statutory and otherwise, to execute and deliver this
Agreement, to perform their obligations hereunder and to subject the Collateral
Shares to the security interest created hereby.

 

5.2At any time during the period from the execution of this Agreement to the
Pledgee exercises the rights hereunder pursuant to Article 2.4 of this
Agreement, there will be no legal and valid intervene or other third party’s
claim when the Pledges exercises or causes it exercised the same, Pledge granted
by this Agreement.

 

5.3The Pledgee has the right to exercise the Pledge in compliance with the
relevant China law and regulation and as set forth in this Agreement.

 

5.4The Pledgor has all appropriate civil rights, powers and capabilities, to
execute and deliver this Agreement, to perform their obligations hereunder.

 

5.5The pledged shares are not subject to any right entitlement, obligations,
securities interest, or otherwise granted to any third party (including but not
limited to pledge).

 

5.6No Pledge pledged by each Pledgor is subject to any pending civil, regulatory
or criminal litigation or regulatory proceedings or arbitration, and will not be
subject to any foregoing civil, regulatory or criminal litigation or regulatory
proceedings or arbitration.

 

5.7No Pledge pledged by each Pledgor is subject to any unpaid tax payable,
expense payable or any pending legal proceedings.

 

5.8Each Pledgor confirms the terms of this Agreement accurately reflects its
true intention and agrees to the legal binding effect of this Agreement.

 

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ARTICLE 6: COVENANTS AND UNDERTAKINGS OF THE PLEDGORS

 

6.1Each Pledgor hereby covenants, that during the term of this Agreement, such
Pledgors shall:

 

6.1.1not transfer the pledged shares, or grant or allow to grant any third party
any lien, securities interests or other rights on the pledged shares unless
consented by the Pledgee in writing except for the transfer of the pledged
shares to a designed party by the Pledgee.

 

6.1.2comply with the relevant law and regulation of PRC and notify the Pledgee
within 5 business days of the receipt of any notice, order or guidance from the
relevant regulatory authority and respond in accordance with the reasonable
instructions given by Party A.

 

6.1.3promptly notify the Pledgee of occurrence of any event or receipt of any
notice that may substantially change the obligations of such Pledgor under this
Agreement or materially adversely affect the performance of such Pledgor under
this Agreement and act in accordance with the reasonable instructions given by
the Pledgee.

 

6.2Each Pledgor agrees and warrants that there will be no restrictions,
intervene or interruption in any form by such Pledgor, or the estate of such
Pledgor, or the assignee of such Pledgor when the Pledgee exercises or claims
Pledge hereunder.

 

6.3Each Pledgor consents to the Pledgee that, to the extent necessary to ensure
the perfections of the Pledge and the performance of the obligations of such
Pledgor and/or the Company under this Agreement, it will amend the articles of
incorporation and/or bylaws of the Company; execute or cause to execute any
certificate, agreement and/or instrument with any party to act under the
Pledgee’s instructions to provide convenience for the Pledgee to exercise its
rights; execute documents with the Pledgee or its designed party to transfer the
pledged shares; and deliver the appropriate document evidencing the Pledgee’s
security interest in the Pledge within a reasonable period.

 

6.4Each Pledgor confirms to the Pledgee that such Pledgor shall comply with and
execute all the representations, warranties, agreements and covenants contained
herein for the interest of the Pledgee. Such Pledgor agrees to indemnify any
damage, loss caused by its default of its representations, warranties,
agreements and covenants herein.

 

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ARTICLE 7: EVENT OF DEFAULT

 

7.1The occurrence of any one or more of the following events shall constitute an
event of default (an “Event of Default”) under this Agreement:

 

7.1.1Failure to perform its obligation under any Agreement by the Company, the
Pledgors or their successors or assignees.

 

7.1.2The Pledgors make any material misleading or fraudulent representations and
warranties in Article 5 of this Agreement, or covenants in Articles 6 of this
Agreement being or becoming materially inaccurate, and/or the Pledgors are in
violation of any warranties or covenants under Article 5 or Article 6 herein, as
the case may be.

 

7.1.3The Pledgors violate any terms and conditions herein;

 

7.1.4The Pledgors abandon or transfer its pledged shares without the prior
written consent of the Pledgee except in accordance with the terms set forth in
Article 6.1.1;

 

7.1.5The Pledgors’ any external loan, security, compensation, covenants or any
other compensation liabilities (1) are required to be repaid or performed prior
to the scheduled due 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 has been impacted;

 

7.1.6The Pledgors are incapable of repaying general debts or other debts which
impacts the rights and interests of the Pledgee;

 

7.1.7This Agreement is illegal for the reason of the promulgation of the related
laws or the Pledgors' incapability of continuing to perform the obligations
herein;

 

7.1.8Any 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;

 

7.1.9The properties of the Pledgors are adversely changed and cause the Pledgee
to deem that the capability of the Pledgors of performing the obligations herein
has been impacted;

 

7.1.10Other circumstances whereby the Pledgors are incapable of exercising the
right to dispose of the Pledge in accordance with the related laws.

 

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7.2The Pledgors shall give written notice to the Pledgee if the Pledgors are
aware of or find that any event under Article 7.1 herein or any events that may
result in the foregoing events have happened.

 

7.3Unless 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 written notice of default to the Pledgors and
require the Pledgors to immediately dispose of the Pledge in accordance with the
applicable laws of PRC. If the Pledgors or the Company have not corrected the
default or make necessary remedy, the Pledgee can exercise the right of the
Pledge in accordance with Article 8 of this Agreement.

 

ARTICLE 8: EXERCISE OF THE RIGHT OF THE PLEDGE

 

8.1Except for the written consent of the Pledgee, the Pledgors shall not
transfer the pledged shares before the complete fulfillment of their respective
obligations under this Agreement;

 

8.2The Pledgee shall give notice of default to the Pledgors when the Pledgee
exercises the right of Pledge in accordance with Article 7.3 of this Agreement.

 

8.3Subject to Article 7.3, the Pledgee may exercise the right to dispose of the
right of Pledge at any time when the Pledgee give notice of default in
accordance with Article 7.3 or thereafter.

 

8.4The Pledgee is entitled to transfer or assign full or a portion of the
pledged shares herein in accordance with legal procedure or compensated with a
priority during the auction or sale of the pledged shares.

 

8.5The Pledgors shall not hinder the Pledgee from disposing of the Pledge in
accordance with this Agreement and shall give necessary assistance so that the
Pledgee can realize the Pledge.

 

ARTICLE 9: TRANSFER OR ASSIGNMENT

 

9.1The Pledgors shall not transfer their rights and obligations herein to a
third party without prior written consent from the Pledgee.

 

9.2This Agreement shall be effective and binding upon the successors of each of
the Pledgors and the Pledgee and the assignees as designated by the Pledgee.

 

 8 

 

 

9.3The Pledgee can transfer any or assign all or part of its rights and
interests under the Agreements to any designated third party. The Transferee is
entitled to the equal rights and interests as the Pledgee on the pledged shares
transferred. The Pledgors shall execute the transfer agreement and/or other
document at the request of the Pledgee.

 

9.4After the Pledgee is changed for the reason of the transfer or assignment,
the parties to the changed Pledge shall execute the pledge agreement and the
Pledgors shall be responsible for related registration (with applicable
regulatory authority).

 

ARTICLE 10: FEES AND OTHER EXPENDITURE

 

10.1Each Party will bear its own fees and other expenditure in relation to this
Agreement including but not limited to legal fees, costs, stamp tax and any
other taxes and charges.

 

 

ARTICLE 11. FORCE MAJEURE

 

11.1Force Majeure means any of the events beyond the reasonable control of one
party, and even under the attention of the affected party, any of the events is
still unavoidable, including but not limited to, acts of government, the forces
of nature, fire, explosion, geographic variation, storms, floods, earthquakes,
tidal, lightning or war. However, the insufficient credit, fund or financing
shall not be considered as events beyond the reasonable control of one party.
The affected party shall promptly notify the other party the occurrence of the
force majeure.

 

11.2If the performance of either Party’s obligation under this Agreement is
delayed, prevented, restricted, or interfered with by reason of force majeure as
set forth in Article 11.1 herein, the Party so affected shall be excused from
such performance to the extent of such delay, prevention, restriction or
interference. The Party so affected shall use reasonable efforts to reduce or
eliminate the impact of force majeure and perform the delayed or interfered
obligations. Once force majeure is eliminated, the Parties agree to use
respective best efforts to per this Agreement.

 

11.3The Parties shall bear the respective loss and damages caused by force
majeure.

 

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ARTICLE 12: GOVERNING LAW AND DISPUTE SETTLEMENT

 

12.1The execution, validity, interpretation, performance and the dispute
resolution of this Agreement shall be governed by the laws of PRC (for the
purpose of this Agreement, the laws of PRC limits to the laws of the main land
China and excludes the laws of Hong Kong, Macau or Taiwan).

 

12.2Any disputes arising from or relating to this Agreement shall be resolved
through consultation by the Parties. In case of a failure to reach an agreement
through consultations within thirty (30) days, each Party can submit the
disputes to the China International Economics & Trade Arbitration Commission
Huanan Branch for arbitration in accordance with its Arbitration Rules in effect
at the time of the arbitration. The arbitration shall be held in Shenzhen. The
arbitral award shall be final and binding upon the Parties.

 

ARTICLE 13: NOTICE

 

Unless otherwise designated by the other Party, any notices of other
correspondences among the Parties in connection with the performance of this
Agreement shall be delivered in person, by personal delivery, certified mail,
pre-stamped mail, express mall or facsimile to the following correspondence
addresses:

 

 

Party A Chuangxiang Network Technology (Shenzhen) Limited Address Room 201,
Building A, 1 Qianwan Road 1, Qianhai Deep Harbor Cooperation Zone
(sharing offices with Shenzhen Qianhai Commerce Secretary Limited) Facsimile:  
Telephone   Attention           Party B Jiyin Li Address   Facsimile:  
Telephone   Attention  

 

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Party C Huibin Su Address   Facsimile   Telephone   Attention           Party D
Chaoran Zhang Address   Facsimile   Telephone   Attention  

 

ARTICLE 14: CONFIDENTIALITY

 

No party to this Agreement shall publicize, divulge or disclose any information
regarding this Agreement, the transaction under this Agreement, unless that (1)
disclosure is required by applicable laws or rules of any stock exchange; (2)
information has been made publicly known without the default of any party; (3)
disclosure is made to its shareholder, legal counsel, accountant financial
advisor or other professional; or (4) the other party gives a written consent in
advance.

 

ARTICLE 15: EXHIBITS

 

Exhibits to this Agreement constitute a valid part of this Agreement and shall
be included for its integrity.

 

ARTICLE 16: WAIVER

 

The failure or delay of a Party to exercise any rights, power or privilege under
this Agreement shall not be treated as a waiver of its rights. Any exercise of
any right, power or privilege in part or in full as set forth in this Agreement
shall not be traded as the exclusion to other right, power or privilege. The
rights and remedies in the event of the default set forth in this Agreement do
not exclude any rights, remedies or power granted by as applicable laws of PRC.

 

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ARTICLE 17: MISCELLENOUS

 

17.1This 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 Pledgors and the Pledgee hereto.

 

17.2This Agreement sets forth the fair and reasonable agreements among the
Parties based on equal and value consideration. If any article of this Agreement
is not valid or cannot be fulfilled due to conflict with any law of PRC, it does
not impact the effectiveness and the force of other articles of this Agreement.

 

17.3The Shareholders represent that in the event there is a change of the
Shareholder or its ownership in share of the Company due to any reason
(including but not limited to bankruptcy, divorce, death, etc.), this Agreement
is legally binding to the Shareholder’s inherits or transferees and subject any
shares held by the inherits or the transferees which shall be treated as the
successor party to this Agreement.

 

17.4This Agreement shall be executed in five (5) copies. Each has the same legal
effect with one (1) copy for the registration with the applicable regulatory
authority.

 

[THE REMAINDER OF THIS PAGE IS ITENTIONALLY LEFT BLANK]

 

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[EXECUTION PAGE]

 

SIGNED and SEALED by

For and on behalf of

Party A: Chuangxiang Network Technology (Shenzhen) Limited

Legal Representative: Jiyin Li

 

SIGNED by

Party B: Jiyin Li

 

SIGNED by

Party C: Huibin Su

 

SIGNED by

Party D: Chaoran Zhang

 

 13 

 

 

Exhibits:

 

1.Shareholder List of the Company;

2.Proof of Capital Contribution of Shareholders

 

 14 

 

 

Shenzhen Chuangxiang Network Technology Limited

Shareholder List

As the date of _____, 2017

 

Name of Shareholder  ID Number  Capital Contribution  Amount of registered
capital (RMB)  Amount of capital contribution (RMB)  % of capital contribution 
Certificate number of the capital contribution  Note Jiyin Li 
410203198712131555  cash  3 Million  3 Million  60%  001  Pledged to Chuangxiang
Network Technology (Shenzhen) Limited on __, 2017 Huibin Su  440781198001200210 
cash  3 Million  3 Million  20%  002  Pledged to Chuangxiang Network Technology
(Shenzhen) Limited on __, 2017 Chaoran Zhang  440112197809270019  cash  3
Million  3 Million  20%  003  Pledged to Chuangxiang Network Technology
(Shenzhen) Limited on __, 2017

 

Sealed by the company: Shenzhen Chuangxiang Network Technology Limited

Legal Representation: /s/ Jiyin Li

Date: April 20, 2017

 

SL-1

 

 

Shenzhen Chuangxiang Network Technology Limited

Certificate of Capital Contribution

 

(Number: 0001)

 

Shenzhen Chuangxiang Network Technology Limited (the “Company”) was incorporated
on August 14, 2015 and was validly registered with Shenzhen Market Supervision
Bureau (registration number 44030034988710X5). It is current registered capital
is RMB 5 million.

 

Jiyin Li, a shareholder of the Company (PRC ID number: 410203198712131555) has
agreed to contribute the capital of RMB 3 million representing 60% of the
Company’s registered capital and injected the fund in accordance with the
articles of incorporation of the Company. The Company hereby issues this
certificate certifying his capital contribution.

 

 

Sealed by

 

Shenzhen Chuangxiang Network Technology Limited

April 20, 2017

 

SL-2

 

 

Shenzhen Chuangxiang Network Technology Limited

Certificate of Capital Contribution

 

(Number: 0002)

 

Shenzhen Chuangxiang Network Technology Limited (the “Company”) was incorporated
on August 14, 2015 and was validly registered with Shenzhen Market Supervision
Bureau (registration number 44030034988710X5). It is current registered capital
is RMB 5 million.

 

Huibin Su, a shareholder of the Company (PRC ID number: 440781198001200210) has
agreed to contribute the capital of RMB 1 million representing 20% of the
Company’s registered capital and injected the fund in accordance with the
articles of incorporation of the Company. The Company hereby issues this
certificate certifying his capital contribution.

 

 

Sealed by

 

Shenzhen Chuangxiang Network Technology Limited

April 20, 2017

 

SL-3

 

 

Shenzhen Chuangxiang Network Technology Limited

Certificate of Capital Contribution

 

(Number: 0003)

 

Shenzhen Chuangxiang Network Technology Limited (the “Company”) was incorporated
on August 14, 2015 and was validly registered with Shenzhen Market Supervision
Bureau (registration number 44030034988710X5). It is current registered capital
is RMB 5 million.

 

Chaoran Zhang, a shareholder of the Company (PRC ID number: 440112197809270019)
has agreed to contribute the capital of RMB 1 million representing 20% of the
Company’s registered capital and injected the fund in accordance with the
articles of incorporation of the Company. The Company hereby issues this
certificate certifying his capital contribution.

 

 

Sealed by

 

Shenzhen Chuangxiang Network Technology Limited

April 20, 2017

 

 

SL-4