tod_ex10x6.htm


    Exhibit 10.6

    
 

    EQUITY
PLEDGE AGREEMENT

     

    This
Equity Pledge Agreement (hereinafter this “Agreement”) is dated
January 27, 2010, and is entered into in Yixing City, Jiangsu Province, People’s
Republic of China (“PRC” or “China”) by and among Yixing Dragon Path Environment
Technology Limited (“Pledgee”), Jiangsu
Zhenyu Environmental Protection Technology Co. Ltd. (“Party B” or the
“Company”), and each of the shareholders of Party B  listed on the
signature pages hereto (each a “Pledgor” and collectively, the “Pledgors”).

    


     

    RECITALS

     

    1.           The
Pledgee is a company incorporated in the PRC as a foreign invested enterprise
and has the expertise in the business of consulting.

    


    2.           The
Company is a company incorporated in the People’s Republic of China (“PRC” or
“China”) and is in the business of the technical research, development and
design of the equipments for environmental pollution prevention and control;
manufacturing and sales of the equipments for water-pollution prevention and
control, building-use heat insulating materials and glass fiber reinforced
plastic products; contractor of the environmental engineering; import or export
of various products and technology on behalf of this company itself or as the
agent of others (except those products or technology limited or prohibited by
the state) (the “Business”).

    


    3.           The
Pledgors are shareholders of the Company and collectively own 100% of the
outstanding equity interests of the Company.

    


    4.           The
Pledgee and the Company have executed a Consulting Services Agreement (the
“Consulting Services
Agreement”) concurrently herewith, pursuant to which the Company shall
pay consulting and service fees (the “Consulting Services
Fee”) to the Pledgee for consulting and related services in connection
with the Business.

    


    5.           In
order to ensure that the Company will perform its obligations under the
Consulting Services Agreement, and in order to provide an additional mechanism
for the Pledgee to enforce its rights to collect the Consulting Services Fee
from the Company, the Pledgors agree to pledge all their equity interests in the
Company as security for the performance of the obligations of the Company under
the Consulting Services Agreement, including payment of the Consulting Services
Fee.

    


    NOW THEREFORE, the Pledgee,
the Company and the Pledgors through mutual negotiations hereby enter into this
Agreement based upon the following terms:

    


    1.           Definitions and
Interpretation.  Unless otherwise provided in this Agreement,
the following terms shall have the following meanings:

    


    1.1           “Pledge” refers to the
full content of Section 2 hereunder.

     
 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.2           “Equity Interest”
refers to all the equity interests in the Company legally held by the
Pledgors.

    


    1.3           “Term of Pledge”
refers to the period provided for under Section 3.2 hereunder.

    


    1.4           “Event of Default”
refers to any event in accordance with Section 7.1 hereunder.

    


    1.5           “Notice of Default”
refers to the notice of default issued by the Pledgee in accordance with this
Agreement.

    


    2.          
 The
Pledge.  The Pledgors hereby pledge the Equity Interest to the
Pledgee as a security for the obligations of the Company under the Consulting
Services Agreement (the “Pledge”).  Pursuant thereto, the Pledgee
shall have priority in receiving payments from the evaluation or the proceeds
from the auction or sale of the Equity Interest. The Equity Interest shall
hereinafter be referred to as the “Pledged Collateral”.

    


    3.        
   Term
of Pledge.

    


    3.1           The
Pledge shall take effect as of the date when the Pledge is recorded in the
Company’s Register of Shareholders, and shall expire two (2) years from the
Company’s satisfaction of all its obligations under the Consulting Services
Agreement (the “Term”).

    


    3.2           During
the Term, the Pledgee shall be entitled to vote, control, sell, or dispose of
the Pledged Collateral in accordance with this Agreement in the event that the
Company does not perform its obligations under the Consulting Services
Agreement, including without limitations thee failure to pay the Consulting
Service Fee.

    


    3.3           During
the Term, the Pledgee shall be entitled to collect any and all dividends
declared or paid in connection with the Pledged Collateral.

    


    4.           
Pledge Procedure and
Registration.

    


    4.1           The
Pledge shall be recorded in the Company’s Register of
Shareholders.  The Pledgors shall, within ten (10) days after the date
of this Agreement, process the registration procedures with the Administration
for Industry and Commerce concerning the Pledge.

    


    5.         
  Representation and
Warranties of Pledgors.

    


    5.1           The
Pledgors are the legal owners of the Pledged Collateral.

    


    5.2           Other
than to the Pledgee, the Pledgors have not pledged the Pledged Collateral to any
other party, and the Pledged Collateral is not encumbered to any other
party.

    


    6.          
 Covenants of
Pledgors.

     

     

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    6.1           During
the Term, the Pledgors represent and warrant to the Pledgee for the Pledgee’s
benefit that the Pledgors shall:

    


    6.1.1  Not
transfer or assign the Pledged Collateral, nor create or permit to create any
pledge or encumbrance to the Pledged Collateral which may adversely affect the
rights and/or benefits of the Pledgee without the Pledgee’s prior written
consent.

    


    6.1.2  Comply
with the laws and regulations with respect to the Pledge; present to Pledgee any
notices, orders or advisements with respect to the Pledge that may be issued or
made by a competent PRC authority within five (5) days upon receiving such
notices, orders or advisements; comply with such notices, orders or advisements;
or object to the foregoing matters upon the reasonable request of the Pledgee or
with consent from the Pledgee.

    


    6.1.3  Timely
notify the Pledgee of any events which may affect the Pledged Collateral or the
Pledgors’ rights thereto, or which may change any of the Pledgors’ warranties or
affect the Pledgor’s performance of their obligations under this
Agreement.

    


    6.2  The
Pledgors agree that the Pledgee’s right to the Pledge pursuant to this Agreement
shall not be suspended or inhibited by any legal proceedings initiated by the
Pledgors, jointly or separately, or by any successor of or any person authorized
by the Pledgors.

    


    6.3  The
Pledgors represent and warrant to the Pledgee that in order to protect and
perfect the security for the payment of the Consulting Services Fee, the
Pledgors shall execute in good faith and cause other parties who have interests
in the Pledged Collateral to execute all the title certificates, contracts, and
perform actions and cause other parties who have interests to take action, as
required by the Pledgee.

    


    6.4  The
Pledgors represent and warrant to the Pledgee or its appointed representative
(whether a natural person or a legal entity) that they will execute all
applicable and required amendments in connection with the registration of the
Pledge, and within a reasonable amount of time upon request, provide the
relevant notice, order and decision regarding such registration to the
Pledgee.

    


    6.5  The
Pledgors represent and warrant to the Pledgee that they will abide by and
perform all relevant guarantees, covenants, warranties, representations and
conditions necessary to insure the rights of the Pledgee under this
Agreement.  The Pledgors shall compensate all the losses suffered by
the Pledgee as a result of the Pledgors’ failure to perform any such guarantees,
covenants, warranties, representations or conditions.

    


    7.           Events of
Default.

    


    
      	
                
      7.1         

            	
              The
      occurrence of any one of the following events shall be regarded as an
      “Event of Default”:

            


    

     

     

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    7.1.1 This
Agreement is deemed illegal by a governing authority of the PRC, or the Pledgor
is incapable of continuing to perform the obligations herein due to any reason
except force
majeure;

     

    7.1.2 The
Company fails to timely pay the Consulting Services Fee in full as required
under the Consulting Service Agreement;

     

    7.1.3 A Pledgor
makes any materially false or misleading representations or warranties under
Section 5 herein, or breaches any warranties under Section 5
herein;

     

    7.1.4 A Pledgor
breaches the covenants under Section 6 herein;

     

    7.1.5 A Pledgor
breaches any terms and conditions of this Agreement;

     

    7.1.6 A Pledgor
transfers or assigns, cause to be transferred or assigned, or otherwise abandons
the Pledged Collateral without the prior written consent of the
Pledgee;

     

    7.1.7 The
Company is incapable of repaying debt;

     

    7.1.8 The
assets of a Pledgor are adversely affected so as to cause the Pledgee to believe
that such Pledgor’s ability to perform the obligations herein is adversely
affected;

     

    7.1.9 The
successors or agents of the Company refuse, or are only partly able, to perform
the payment obligations under the Consulting Services Agreement;

    


    7.2       A
Pledgor shall immediately give a written notice to the Pledgee if such Pledgor
is aware of or discovers that any event under Section 7.1 herein, or any event
that may result in any one of the foregoing events, has occurred or is likely to
occur.

    


    7.3       Unless
an Event of Default has been resolved to the Pledgee’s satisfaction within 15
days of its occurrence (the “Cure Period”), the Pledgee may, at any time
thereafter, give a written default notice (the “Default Notice”) to the Pledgor
and require the Pledgors to immediately make full payment of the then
outstanding Consulting Service Fee and any other outstanding payables in
accordance with Section 8 herein.

    


    8.           Exercise of
Remedies.

    


    8.1           Authorized Action by Secured
Party. The
Pledgors hereby irrevocably appoint Pledgee as the attorney-in-fact of the
Pledgors for the purpose of carrying out the security provisions of this
Agreement and to take any action and execute any instrument that the Pledgee may
deem necessary or advisable to accomplish the purpose of this
Agreement.  Such power of attorney shall be effective, automatically
and without the necessity of any action (including any transfer of any Pledged
Collateral) by any person, upon the occurrence an Event of
Default.  Pledgee shall not have any duty to exercise any such right
or to preserve the same and shall not be liable for any failure to do so or for
any delay in doing so.

     

     

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    If an Event of Default occurs, or is
already proceeding, Pledgee shall have the right to exercise the following
rights:

    


    (a)           Collect
by legal proceedings or otherwise, and endorse and/or receive all payments,
proceeds and other sums and property now or hereafter payable on or on account
of the Pledged Collateral;

    


    (b)           Enter
into any extension, reorganization, deposit, merger, consolidation or other
agreement pertaining to, or deposit, surrender, accept, hold or apply other
property in exchange for the Pledged Collateral;

    


    (c)           Transfer
the Pledged Collateral under the Pledgee’s name or under an appointed
nominee;

    


    (d)           Make
any compromise or settlement, and take any action the Pledgee deems advisable,
with respect to the Pledged Collateral;

    


    (e)           Notify
any obligor with respect to the Pledged Collateral to make payment directly to
the Pledgee;

    


    (f)           All
rights of the Pledgors that they would otherwise be entitled to enjoy or
exercise with respect to the Pledged Collateral, including without limitations
the rights to vote and to receive distributions, shall cease without any further
action by or notice, and all such rights shall thereupon become vested in the
Pledgee; and

    


    (g)           The
Pledgors shall execute and deliver to the Pledgee such other instruments as the
Pledgee may request in order to permit the Pledgee to exercise the rights set
forth herein.

     
 

    8.2           Other
Remedies.  Upon the expiration of the Cure Period, the Pledgee,
in addition to the remedies set forth in Section 8.1 or such other rights in
law, equity or otherwise, may, without notice or demand on the Pledgors, elect
any of the following:

    


    (a)           Require
the Pledgors to immediately pay all outstanding unpaid amounts due under the
Consulting Services Agreement;

    


    (b)           Foreclose
or otherwise enforce the Pledgee’s security interest to the Pledged Collateral
in any manner permitted by law or provided under this Agreement;

     

    
      (c)           Terminate
this Agreement pursuant to Section 11;

       

    

    (d)           Exercise
any and all rights as the beneficial and legal owner of the Pledged Collateral,
including, without limitation, the transfer and exercise of voting and any other
rights to the Pledged Collateral; and

     

     

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    (e)           Exercise
any and all rights and remedies of a secured party under applicable
laws.

    


    8.3           The
Pledgee has priority in the receipt of payments from the proceeds of auction or
sale of the Pledged Collateral, in part or in whole, in accordance with legal
procedures, until all payment obligations under the Consulting Services
Agreement are satisfied.

    


    8.4           The
Pledgors shall not hinder the Pledgee from exercising its rights in accordance
with this Agreement and shall give necessary assistance so that the Pledgee may
exercise its rights in full.


    


    9.         
  Assignment.

    


    9.1            The
Pledgors shall not assign or otherwise transfer the rights and obligations
herein without the Pledgee’s prior written consent.

    


    9.2           This
Agreement shall be binding upon each of the Pledgors and their respective
successors, and shall be binding on the Pledgee and each of its successor and
assignee.

    


    9.3           Upon
the transfer or assignment by the Pledgee of any or all of its rights and
obligations under the Consulting Service Agreement, the Pledgee’s transferee or
assignee shall enjoy and undertake the same rights and obligations as the
Pledgee under this Agreement.  The Pledgors shall be notified of any
such transfer or assignment by written notice and at the request of the Pledgee,
the Pledgors shall execute such relevant agreements and/or documents with
respect to such transfer or assignment.

    


    9.4           In
the event of the Pledgee’s change in control resulting in the transfer or
assignment of this Agreement, the successor to the Pledgee and the Pledgors
shall execute a new equity pledge agreement.

    


    
      	
              10.  

            	
              Formalities, Fees and
      Other Charges.

            


    

    


    10.1           The
Pledgors shall be responsible for all the fees and expenses 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 applicable law, the Pledgors shall fully reimburse the
Pledgee of such taxes.

    


    10.2           The
Pledgors shall be responsible for all expenses (including, but not limited to,
any taxes, application fees, management fees, litigation costs, attorney’s fees,
and various insurance premiums in connection with the disposition of the Pledge)
incurred by the Pledgee in its recourse to collect from the Pledgors arising
from the Pledgors’ failure to pay any relevant taxes and fees.

     

     

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              11.  

            	
              Confidentiality.
      The Parties hereby acknowledge and agree to ensure the confidentiality of
      all oral and written materials exchanged relating to this
      Agreement.  No Party shall disclose any confidential information
      to any other third party without the other Parties’ prior written
      approval, unless: (a) such information was in the public domain at the
      time it was communicated (unless it entered the public domain without the
      authorization of the disclosing Party); (b) the disclosure was in response
      to the relevant laws, regulations, or stock exchange rules; or (c) the
      disclosure was required by any of the Party’s legal counsel or financial
      consultant for the purpose of the transaction underlying this
      Agreement.  However, such legal counsel and/or financial
      consultant shall also comply with the confidentiality as stated
      hereof.  The disclosure of confidential information by employees
      or agents of the disclosing Party is deemed to be an act of the disclosing
      Party, and such disclosing Party shall bear all liabilities for any breach
      of confidentiality.

            


    

    


    
      	
              12.  

            	
              Dispute
      Resolution.

            


    

    


    12.1     This
Agreement shall be governed by and construed in accordance with the laws of the
PRC.

    


    12.2     The
Parties shall strive to resolve any disputes arising from the interpretation or
performance of this Agreement through amicable negotiations.  If a
dispute cannot be settled, any Party may submit such dispute to China
International Economic and Trade Arbitration Commission (“CIETAC”) for
arbitration. There shall be three (3) arbitrators.  Party B shall
select one (1) arbitrator and Party A shall select one (1) arbitrator, and both
arbitrators shall be selected within thirty (30) days after giving or receiving
the demand for arbitration.  Such arbitrators shall be freely
selected, and the Parties shall not be limited in their selection to any
prescribed list.  The chairman of the CIETAC shall select the third
arbitrator.  If a Party does not appoint an arbitrator who consents to
participate within thirty (30) days after giving or receiving the demand for
arbitration, the relevant appointment shall be made by the chairman of the
CIETAC. The arbitration shall abide by the rules of CIETAC, and the arbitration
proceedings shall be conducted in Beijing, China in English.  The
decision of CIETA shall be final and binding upon the parties.

    


    13.  Notices.  Any
notice given by the parties hereto for the purpose of performing the rights and
obligations hereunder shall be in writing.  If such notice is
delivered by messenger, the time of receipt is the time when such notice is
received by the addressee; if such notice is transmitted by facsimile, the time
of receipt is the time when such notice is transmitted.  If the notice
does not reach the addressee by the end of the business day, the following
business day shall be the date of receipt.  The place of delivery is
the Party’s address as set forth in the signature pages hereto or the address
advised in writing including via facsimile.

    


    14.  Entire
Contract.  The Parties agree that this Agreement constitutes
the entire agreement of the Parties upon its effectiveness and supersedes all
prior oral and/or written agreements and understandings relating to this
Agreement.

    


    15.  Severability.  If
any provision or provisions of this Agreement shall be held by a proper
authority to be invalid, illegal, unenforceable or in conflict with the laws and
regulations of the PRC, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired
thereby.

     

    
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    16.  Appendices.  The
appendices to this Agreement are incorporated into and are a part of this
Agreement.

    


    17.  Amendment or
Supplement.

    


    17.1    The
Parties may amend this Agreement in writing, provided that such amendment shall
be duly executed and signed by the Pledgee, the Company, and such Pledgors
collectively holding a majority of the Equity Interests, and such amendment
shall thereupon become a part of this Agreement and shall have the same legal
effect as this Agreement.

    


    17.2    This
Agreement and any amendments, modification, supplements, additions or changes
hereto shall be in writing and come into effect upon being executed and stamped
by the parties hereto.

    


    18.  Language and Copies of the
Agreement.  This Agreement shall be executed in English in
seven (7) original copies.  Each Party shall receive one (1) original
copy, all of which shall be equally valid and enforceable.

    


    [SIGNATURE
PAGE FOLLOWS]

    


    


    


    


    


     

     

     

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    IN WITNESS WHEREOF this
Agreement is duly executed by each Party or its legal representatives as of the
date first set forth above.

    


    
      	
              PLEDGEE:

            	
              Yixing
      Dragon Path Environment Technology
Limited

            


    

    


    Legal/Authorized Representative: 
/s/ LI
Boping

    Name: LI Boping

    Title: Executive Director

    


    
      	
              PARTY B:

            	
              Jiangsu
      Zhenyu Environmental Protection Technology Co.
  Ltd.

            


    

    


    Legal/Authorized
Representative:  /s/ LI
Boping

                                   
Name: LI
Boping

    Title: Executive Director

    


    


     

     

     

     

     

     

     

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    PLEDGOR SIGNATURE
PAGE

    


    PLEDGORS:

    


    
      


      
         

        
          	LI Boping	 


        

        LI
Boping

      

      ID Card
No.:320223196212216178

      Owns
71.15% of Jiangsu Zhenyu Environmental Protection Technology Co.
Ltd.

      


      


      


      
         

        
          	DING
Qinfen	 


        
DING
Qinfen

      ID Card No. :
320223196301176163

      Owns
22.63% of Jiangsu Zhenyu Environmental Protection Technology Co.
Ltd.

      


      


      


      
         

        
          	LI Panhong	 


        
LI
Panhong

      ID Card No.:
320223193712276173

      Owns
6.22% of Jiangsu Zhenyu Environmental Protection Technology Co.
Ltd.

      


      


       

       

    

     

     

     

     

     

     

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    Appendix
1

    


    RESOLUTIONS
OF THE SHAREHOLDERS

    OF JIANGSU ZHENYU ENVIRONMENTAL
PROTECTION TECHNOLOGY CO. LTD.

    


     

    


    WHEREAS,
Jiangsu Zhenyu Environmental Protection Technology Co. Ltd. (the “Company”) has
entered into a Consulting Services Agreement with Yixing Dragon Path Environment
Technology Limited  (the “Yixing Dragon Path”), pursuant to which the
Company is obligated to pay certain fees in exchange for  Yixing
Dragon Path ’s consultation and related services;

    


    WHEREAS,
the undersigned shareholders of the Company (the “Shareholders”) collectively
hold 100% of the issued and outstanding equity interests of the Company (the
“Equity Interest”), and have been requested by the Company to pledge the Equity
Interest toYixing Dragon Path  pursuant to an Equity Pledge Agreement
in order to secure the Company’s payment obligations under the Consulting
Services Agreement; and

    


    WHEREAS,
it is in the best interest of the Company and the Shareholders to enter into the
Pledge Agreement;

    


    RESOLVED,
that the Shareholders shall pledge the Equity Interest to Yixing Dragon Path
pursuant to the Equity Pledge Agreement, the terms and conditions of which are
hereby approved.

    


    These
resolutions were executed and submitted on January 27, 2010 by the undersigned
shareholders:

    


     

     

     

     

     

     

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    SHAREHOLDERS:

    


    
      


      
         

        
          	LI Boping	 


        

        LI
Boping

      

      ID Card
No.:320223196212216178

      Owns
71.15% of Jiangsu Zhenyu Environmental Protection Technology Co.
Ltd.

      


      


      


      
         

        
          	DING
Qinfen	 


        
DING
Qinfen

      ID Card No. :
320223196301176163

      Owns
22.63% of Jiangsu Zhenyu Environmental Protection Technology Co.
Ltd.

      


      


      


      
         

        
          	LI Panhong	 


        
LI
Panhong

      ID Card No.:
320223193712276173

      Owns
6.22% of Jiangsu Zhenyu Environmental Protection Technology Co.
Ltd.

      


      


       

       

       

    

     

    


    


     

     

     

     

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