Unassociated Document


    Exhibit 10.5

     

    PLEDGE
OF EQUITY AGREEMENT


     

    BETWEEN

    


    LI
TAO AND OTHER INDIVIDUALS

    


    XI’AN
TECHTEAM INVESTMENT HOLDING GROUP

     COMPANY

    


    SHENZHEN
CAPITAL GROUP CO., LTD

    


    XI’AN
HONGTU CAPITAL CO., LTD

    


    SHAANXI
YUANXING SECIENCE AND TECHNOLOGY CO., 

    LTD

     

    AND


     

    XI’AN
SOFTECH CO., LTD


     

    December
15, 2009


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    PLEDGE
OF EQUITY AGREEMENT

    


    This
Pledge of Equity Agreement (“the Agreement”) is executed
on December 15, 2009 in Xi’an by:

    


    Pledgeors
(hereinafter collectively referred to as “Party A”):

    


    1.           Li
Tao and other seventeen individuals (collectively, the “Individual Shareholders”), the
specific list of the Individual Shareholders is referred herero as Exhibit
A;

    


    2.           Xi’an
TechTeam Investment Holding Group Company, a limited liability company
registered in Xi’an, and the registration number of its legal and valid Business
License is 610131100003173;

    


    3.           Shenzhen
Capital Group Co., Ltd,a limited
liability company registered in Shenzhen, and the registration number of its
legal and valid Business License is 440301103269709;

    


    4.           Xi’an
Hongtu Capital Co., Ltd, a limited liability company registered in Xi’an, and
the registration number of its legal and valid Business License is
610100100085399;

    


    5.           Shaanxi
Yuanxing Science and Technology Co., Ltd, a limited liability company registered
in 610000100089857,;

    


    and

    


    Pledgee
(hereinafter referred to as “Party B”):

    


    6.           Xi’an
Softech Co., Ltd, a wholly foreign-owned enterprise registered in Xi’an; and the
registration number of its legal and valid Business License is
610100400006807;

    


    Whereas,

    


    1.            Party A consists of all of the
shareholders of Xi’an Kingtone Information Technology Co., Ltd (hereinafter
referred to as “Kingtone
Information”), who legally
hold all of the equity interest of Kingtone Information, of which the Individual
Shareholders hold 61.6%, Xi’an TechTeam Investment Holding Group Company holds
25% Shenzhen Capital Group Co., Ltd holds 7.42%, Xi’an Hongtu Capital Co., Ltd
holds 3.30%, Shaanxi Yuanxing Science and Technology Co., Ltd holds 2.68%,
representing 100% of the capital stock of Kingtone Information.


    
      
         


      

      
        2

        
          

        

      

      
         


      

    

    


    2.            Party
B is a wholly-foreign owned enterprise incorporated and existing within the
territory of China in accordance with the law of the People’s Republic of China,
the registration number of its legal and valid Business License is
610100400006807, and the legal registered address is 3/F of District A, the
Industry Office Building, No.181 of Tai Bai Southern Road, Xi’an City,
China.

    


    3.            Xi’an
Kingtone Information Technology Co., Ltd is an enterprise limited by shares
which is incorporated and existing within the territory of China in accordance
with the law of the People’s Republic of China, the registration number of its
legal and valid Business License is 610131100001233 and the legal registered
address is the third floor of District A, the Industry Office Building, No.181
of Tai Bai Southern Road, Xi’an City, China.

    


    4.            Party
B intends to acquire all of the equity interests or assets of Kingtone
Information. Prior to the completion of such acquisition, Party B agrees to
provide exclusive technology service to Kingtone Information. In order to
protect the interests of Party B, Party A agrees to pledge the 100% of equity
interest of Kingtone Information they own to Party B.

    


    5.            Party
B accepts the pledge of the equity interest by Party A.

    


    Therefore,
in accordance with applicable laws and regulations of the People’s Republic of
China, the Parties hereto reach the Agreement through friendly negotiation on
the principle of equality and mutual benefit and abide by.

    


    
      Article
1    Guaranteed
Obligations

    

    


    The
equity interest is being pledged to guarantee all of the rights and interests
Party B is entitled to under all of the following listed agreements by and
between Party A and Party B:

    


    (a)       Entrusted
Management Agreement, by and among Party A, Kingtone Information and Party B on
December 15, 2009 in Xi’an;

     

    (b)       Exclusive
Technology Service Agreement, by and between Kingtone Information and Party B on
December 15,
2009 in Xi’an;

     

    (c)       Exclusive
Option Agreement by and among Party A, Kingtone Information and Party B on December 15, 2009
in Xi’an; and

     

    (d)       Shareholders’
Voting Proxy Agreement, by and between Party A and Party B on December 15, 2009
in Xi’an.

    


    
      Article
2    Pledged
Properties

    

    


    Party A
pledges, by way of first priority pledge, all of its rights, title and interest,
in, to and under all or any part of:


    
      
         


      

      
        3

        
          

        

      

      
         


      

    

     

    (a)      100%
of the equity interest in Kingtone Information;

    (b)      100%
of the registered capital (“Registered Capital”) of
Kingtone Information;

    (c)      all
investment certificates and other documents in respect of the Registered Capital
of Kingtone Information;

    (d)      all
money, dividends, interest and benefits at any time arising in respect of all
the equity interest and Registered Capital of Kingtone Information;
and

    (e)      all
voting rights and all other rights and benefits attaching to or accruing to the
equity interest or the Registered Capital of Kingtone Information to Party
B.

    


    
      Article
3    Scope
of Guaranteed Obligations

    

    


    The scope
of the guaranteed obligations is all rights and interests Party B is entitled to
in accordance with all the agreements signed by and between Party A and Party
B.

    


    
      Article
4    Pledge
Procedure and Registration

    

    


    Party A
shall process the registration procedures with Xi’an Administration for Industry
and Commerce concerning the pledged equity interest and ensure that all other
approval(s) from or registration with relevant PRC authorities is granted or
duly secured.

    


    
      Article
5    Transfer
of Pledged Equity Interest

    

    


    Party A
shall not transfer any of the pledged equity interest without the prior written
consent of Party B during the term of this agreement.

    


    
      Article
6    Effectiveness,
Modification and Termination

    

    


    6.1            This
Agreement shall go into effect when it is signed by the authorized
representatives of the Parties with seals affixed;

    


    6.2            Upon
the effectiveness of this Agreement and unless otherwise agreed upon by the
parties hereto, neither party may modify or terminate this Agreement. Any
modification or termination shall be in writing after both parties’
consultations. The provisions of this Agreement remain binding on both parties
prior to any written agreement on modification or termination.

    


    
      Article
7    Governing
Law

    

    


    The
execution, validity, interpretation and performance of this Agreement and the
disputes resolution under this Agreement shall be governed by the laws of
PRC.


    
      
         


      

      
        4

        
          

        

      

      
         


      

    

    


    
      Article
8    Liability
for Breach of Agreement

    

    


    Upon the
effectiveness of this Agreement, the Parties hereto shall perform their
respective obligations under the Agreement. Any failure to perform the
obligations stipulated in the Agreement, in part or in whole, shall be deemed as
breach of contract and the breaching party shall compensate the non-breaching
party for the loss incurred as a result of the breach.

    


    
      Article
9    Settlement
of Dispute

    

    


    The
parties shall strive to settle any dispute arising from the interpretation or
performance of this Agreement through friendly consultation. In case no
settlement can be reached through consultation within thirty (30) days after
such dispute is raised, each party can submit such matter to China International
Economic and Trade Arbitration Commission in accordance with its rules then in
effect. The arbitration award shall be final, conclusive and binding upon both
parties.

    


    
      Article
10    Severability

    

    


    10.1            Any
provision of this Agreement that is invalid or unenforceable due to the laws and
regulations shall be ineffective without affecting in any way the remaining
provisions hereof.

    


    10.2            In
the event of the foregoing paragraph, the parties hereto shall prepare
supplemental agreement as soon as possible to replace the invalid provision
through friendly consultation.

    


    
      Article
11    Miscellaneous

    

    


    11.1            The
headings contained in this Agreement are for the convenience of reference only
and shall not in any other way affect the interpretation of the provisions of
this Agreement.

    


    11.2            The
Agreement shall be executed in twenty-five copies, both in Chinese and English.
Each party holds one Chinese and one English original, and the remaining shall
be kept for completing relevant procedures. Each copy shall have equal legal
force, and both the English version and Chinese version shall have the same
effect.

    


    (This
space intentionally left blank)


    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    IN
WITNESS HEREOF, the Parties hereof have caused this Agreement to be executed by
their duly authorized representatives as of the date first written
above.

     

    
      
        
          
            	
                    PARTY
      A:

                  	 
      
	 	 
	
                    Li
      Tao

                  	 
      
	 	 
	
                    (Signature):

                  	
                    /s/ Li Tao

                  	 
      
	 
      	 
      
	
                    Chen
      Xue Tao

                  	 
      
	 
      	 
      
	
                    (Signature):

                  	
                    /s/ Chen Xue Tao

                  	 
      
	 
      	 
      
	
                    Wang
      Wan Jiao

                  	 
      
	 
      	 
      
	
                    (Signature):

                  	
                    /s/ Wang Wan
      Jiao    

                  	 
      
	 
      	 
      
	
                    Wu
      Li

                  	 
      
	 
      	 
      
	
                    (Signature):

                  	
                    /s/ Wu Li

                  	 
      
	 
      	 
      
	
                    Pu
      Wei

                  	 
      
	 
      	 
      
	
                    (Signature):

                  	
                    /s/ Pu Wei

                  	 
      


          

        

      

    


    
      
         


      

      
        6

        
          

        

      

      
         


      

    

     

    
      
        	
                Zhang
      Yu Fan

              	 
      
	 
      	 
      
	
                (Signature):

              	
                /s/ Zhang Yu Fan

              	 
      
	 
      	 
      
	
                Guo
      Ming

              	 
      
	 
      	 
      
	
                (Signature):

              	
                /s/ Guo Ming

              	 
      
	 
      	 
      
	
                Zhang
      Wei

              	 
      
	 
      	 
      
	
                (Signature):

              	
                /s/ Zhang Wei

              	 
      
	 
      	 
      
	
                Li
      Jian Ping

              	 
      
	 
      	 
      
	
                (Signature):

              	
                /s/ Li Jian Ping

              	 
      
	 
      	 
      
	
                Qin
      Shu Ling

              	 
      
	 
      	 
      
	
                (Signature):

              	
                /s/ Qin Shu Ling

              	 
      
	 
      	 
      
	
                Li
      Jing

              	 
      
	 
      	 
      
	
                (Signature):

              	
                /s/ Li Jing

              	 
      
	 
      	 
      
	
                Zhang
      Xiao Ming

              	 
      
	 
      	 
      
	
                (Signature):

              	
                /s/ Zhang Xiao Ming

              	 
      


      

    

     

    
      
         


      

      
        7

        
          

        

      

      
         


      

    

     

    
      
        	
                Zhang
      Xiao Bin

              	 
      
	 
      	 
      
	
                (Signature):

              	
                /s/ Zhang Xiao Bin

              	 
      
	 
      	 
      
	
                Wang
      Wei

              	 
      
	 
      	 
      
	
                (Signature):

              	
                /s/ Wang Wei

              	 
      
	 
      	 
      
	
                Zhang
      Peng

              	 
      
	 
      	 
      
	
                (Signature):

              	
                
                  
                    /s/ Zhang Peng

                  

                

              	 
      
	 
      	 
      
	
                Xi
      Peng Guo

              	 
      
	 
      	 
      
	
                (Signature):

              	
                /s/ Xi Peng
      Guo    

              	 
      
	 
      	 
      
	
                Chen
      Xian Ying

              	 
      
	 
      	 
      
	
                (Signature):

              	
                /s/ Chen Xian Ying

              	 
      
	 
      	 
      
	
                Ma
      Jun

              	 
      
	 
      	 
      
	
                (Signature):

              	
                /s/ Ma Jun

              	 
      


      

    

     

    
      
         


      

      
        8

        
          

        

      

      
         


      

    

     

    
      
        	
                Xi’an
      TechTeam Investment Holding Group Company

              	 
      
	 
      	 
      
	
                (Seal)

              	 
      
	 
      	 
      
	
                Legal
      Representative/Authorized Representative

              	 
      
	 
      	 
      
	
                (Signature):

              	
                /s/ Li Tao

              	 
      
	 
      	 
      
	
                Shenzhen
      Capital Group Co., Ltd

              	 
      
	 
      	 
      
	
                (Seal)

              	 
      
	 
      	 
      
	
                Legal
      Representative/Authorized Representative

              	 
      
	 
      	 
      
	
                (Signature):

              	
                      
                  /s/ Jin Hai
      Tao

                

              	 
      
	 
      	 
      
	
                Xi’an
      Hongtu Capital Co., Ltd

              	 
      
	 
      	 
      
	
                (Seal)

              	 
      
	 
      	 
      
	
                Legal
      Representative/Authorized Representative

              	 
      
	 
      	 
      
	
                (Signature):

              	
                      
                  /s/ Xia Fu
      Xi

                

              	 
      
	 
      	 
      
	
                Shaanxi
      Yuanxing Science and Technology Co., Ltd

              	 
      
	 
      	 
      
	
                (Seal)

              	 
      
	 
      	 
      
	
                Legal
      Representative/Authorized Representative

              	 
      
	 
      	 
      
	
                (Signature):

              	
                /s/ Li Ke Chen

              	 
      


      

    


    
      
         


      

      
        9

        
          

        

      

      
         


      

    

     

    
      
        	
                PARTY
      B: Xi’an Softech Co., Ltd

              	 
      
	 
      	 
      
	
                (Seal)

              	 
      
	 
      	 
      
	
                Legal
      Representative/Authorized Representative

              	 
      
	 
      	 
      
	
                (Signature):

              	
                /s/ Wang Wan Jiao

              	 
      


      

    


    
      
         


      

      
        10

        
          

        

      

      
         


      

    


    Exhibit
A

     

    List
of Individual Shareholders

     

    
      
        
          
            
              
                
                  	
                          Name

                        	 	
                          ID
      Card Number

                        	 	 	
                          Share
      Percentage

                        	 
	 
      	 	 	 	 	 	 
	
                          Li
      Tao

                        	 	 	610103196511281613	 	 	 	36.61	%
	 
      	 	 	 	 	 	 	 	 
	
                          Chen
      Xue Tao

                        	 	 	61010319710930165X  
      	 	 	 	8.93	%
	 
      	 	 	 	 	 	 	 	 
	
                          Wang
      Wan Jiao

                        	 	 	610104198109266162	 	 	 	5.35	%
	 
      	 	 	 	 	 	 	 	 
	
                          Wu
      Li

                        	 	 	610111620918202	 	 	 	1.09	%
	 
      	 	 	 	 	 	 	 	 
	
                          Pu
      Wei

                        	 	 	610104196910302123	 	 	 	1.04	%
	 
      	 	 	 	 	 	 	 	 
	
                          Zhang
      Yu Fan

                        	 	 	610103196508063244	 	 	 	0.89	%
	 
      	 	 	 	 	 	 	 	 
	
                          Guo
      Ming

                        	 	 	610113195801080017	 	 	 	0.89	%
	 
      	 	 	 	 	 	 	 	 
	
                          Zhang
      Wei

                        	 	 	610103197802122043	 	 	 	0.89	%
	 
      	 	 	 	 	 	 	 	 
	
                          Li
      Jian Pin

                        	 	 	
                          610103681102368

                        	 	 	 	0.89	%
	 
      	 	 	 	 	 	 	 	 
	
                          Qin
      Shu Ling

                        	 	 	
                          610113195503020446

                        	 	 	 	0.89	%
	 
      	 	 	 	 	 	 	 	 
	
                          Li
      Jing

                        	 	 	
                          420500197212035246

                        	 	 	 	0.89	%
	 
      	 	 	 	 	 	 	 	 
	
                          Zhang
      Xiao Ming

                        	 	 	
                          610113195303102930

                        	 	 	 	0.89	%
	 
      	 	 	 	 	 	 	 	 
	
                          Zhang
      Xiao Bin

                        	 	 	
                          612325197911180016

                        	 	 	 	0.53	%
	 
      	 	 	 	 	 	 	 	 
	
                          Wang
      Wei

                        	 	 	610627198201080055	 	 	 	0.38	%
	 
      	 	 	 	 	 	 	 	 
	
                          Zhang
      Peng

                        	 	 	
                          622101196712220017

                        	 	 	 	0.36	%
	 	 	 	 	 	 	 	 	 


                

              

            

          

        

      

    

    
      
        
          
            	
                    Xi
      Peng Guo

                  	 	
                    ID
      Card Number

                  	 	 	 	0.36	%
	 
      	 	 	 	 	 	 	 
	
                    Chen
      Xian Ying

                  	 	 	
                    610103196511281613

                  	 	 	 	0.36	%
	 
      	 	 	 	 	 	 	 	 
	
                    Ma
      Jun

                  	 	 	61010319710930165X   
      	 	 	 	0.36	%


          

        

      

    

     

    
      
         


      

      
        11