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: Jing Xie, a citizen of the PRC with Chinese identification No.:
612324199007184046 and PRC passport No.: E91973264 with an address at 13B-1
South Garden Fengye Building, Southeast 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 13B-1 South Garden
Fengye Building, Southeast of Nanshan Street, Nanshan District, Shenzhen.

 

  3. 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. Pledge of Equity

 

  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.

 

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  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.

 

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  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.

 

4. Pledged Equities

 

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.

 

6. Party A’s Undertaking

 

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;

 

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  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. Exercise of Pledge

 

  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. Event of Default

 

  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;

 

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  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.

 

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10. Assignment

 

  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.

 

11. Termination

 

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. Confidentiality

 

  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.

 

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  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.

 

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  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. General Terms

 

  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.

 

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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: Jing Xie: /s/ Jing Xie     Jing Xie  

 

Party B: Adamant DRI Processing and Minerals Group

 

Legal Representative or Authorized Representative: /s/ Ethan Chuang     Ethan
Chuang  

 

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