Document:

ex103.htm

Exhibit 10.3

 

EXCLUSIVE TECHNOLOGY CONSULTING AGREEMENT

 

This EXCLUSIVE TECHNOLOGY CONSULTING AGREEMENT (“Agreement”) is entered into as of September 30, 2010 (the “Effective Date”), by and between the following (each a “Party” and together the “Parties”):

 

	
  

	
(i)

	
Zi Bo Costar Information Consulting Co., Ltd., a wholly foreign-owned enterprise existing under the laws of the People’s Republic of China (“WFOE”), with its registered office at [ ], People’s Republic of China; and

 

	
  

	
(ii)

	
Zi Bo Jia Zhou Chemicals Co., Ltd. (淄博嘉周化工有限公司), a limited liability company existing under the laws of the Peoples’ Republic of China (“Jia Zhou”) , with its registered office at 1, Electric Power Road, Zhou Cun District, Zi Bo, People’s Republic of China.

 

Capitalized terms not otherwise defined have the meanings assigned to them in Appendix A to this Agreement, which is incorporated and made a part hereof by reference.

 

RECITALS

 

This Agreement is entered into with reference to the following facts:

 

A.           WFOE is a wholly-foreign owned enterprise duly incorporated and existing under the laws of the Peoples’ Republic of China (“PRC” or “China”), owned 100% by Gold Champ Consultants Limited, a company existing under the laws of Hong Kong SPA. WFOE has technology, experience and capability relevant to the production of chemical products and related activities, and technical staff experienced in operation of chemical factories and related services.

 

B.           Jia Zhou is a PRC limited liability company owned by Lu Feng (卢锋), Lu Ling Liang(卢令良), Zhang Meng(张盟), and [HKCo] (each a “Shareholder” and together, the “Shareholders”). Jia Zhou holds licenses necessary for the production of phthalic anhydride and maleic anhydride. The business in which Jia Zhou is now and may in the future become involved is referred to as the “Business.”

 

NOW, THEREFORE, in consideration for the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged by the Parties, and through friendly consultation, under the principle of equality and mutual benefits, in accordance with the relevant laws and regulations of the People's Republic of China, the Parties agree as follows:

 

  

1

  

 

AGREEMENT

 

	
1.  

	
Exclusive Technology Consulting and Other Services.

 

(a) During the Term of this Agreement, WFOE agrees to act as the exclusive technology consulting and related services provider to Jia Zhou, and Jia Zhou engages WFOE for that purpose. The scope of the services to be provided by WFOE to Jia Zhou under this Agreement (the “Services”) is set out in Appendix B.

 

(b) Jia Zhou agrees to accept the Services provided by WFOE in exchange for the payment of the Fee in accordance with Section 2, and agrees it will not accept the same or similar services from any other Person, during the Term of this Agreement.

 

	
2.  

	
Fee for Services.

 

(a) In consideration for the Services to be provided to Jia Zhou by WFOE, Jia Zhou agrees to pay to WFOE a fee (the “Fee”) calculated at the amount equivalent to fifty percent (50%) of the Net Profit of Jia Zhou during the Term of this Agreement without giving effect to the payment under the other Business Cooperation Agreement.

 

(b) By that certain Equity Pledge Agreement between and among WFOE, the Shareholders and the Jia Zhou dated as of September 30, 2010, the equity holders of Jia Zhou have pledged the equity interests held by them in Jia Zhou to secure Jia Zhou’s payment of the Fee in accordance with this Agreement.

 

	
3.  

	
Ownership of Intellectual Property.   All Intellectual Property created by WFOE in the course of providing the Services, will be the sole property of WFOE and Jia Zhou will have no right to any ownership or use of such Intellectual Property except under separate written agreement with WFOE.

 

	
4.  

	
Representations and Warranties of Jia Zhou.  Jia Zhou hereby makes the following representations and warranties for the benefit of WFOE:

 

(a) Corporate Existence and Power.  Jia Zhou is a limited liability company duly organized and validly existing under the laws of the PRC, and has all corporate powers and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted and as currently contemplated to be conducted and as currently contemplated to be conducted.  Jia Zhou has never approved, or commenced any proceeding or made any election contemplating, the dissolution or liquidation of Jia Zhou or the winding up or cessation of the business or affairs of Jia Zhou.

 

(b) Authorization; No Consent.   Jia Zhou  has taken all necessary corporate actions to authorize its execution, delivery and performance of this Agreement and all related documents and has the corporate power and authorization to execute, deliver and perform this Agreement and the other related documents;  has the absolute and unrestricted right, power, authority, and capacity to execute and deliver this Agreement and the other related documents and to perform their obligations under this Agreement and the other related documents;  is not required to give any notice to or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the exclusive cooperation arrangement contemplated under this Agreement except for any notices that have been duly given or consents that have been duly obtained; and  holds all the governmental authorizations necessary to permit Jia Zhou to lawfully conduct and operate its business in the manner it currently conducts and operates such business and to permit Jia Zhou to own and use its assets in the manner in which it currently owns and uses such assets. To the best knowledge of Jia Zhou, there is no basis for any governmental authority to withdraw, cancel or cease in any manner any of such governmental authorizations.

 

  

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(c) No Conflicts. The execution and perform of this Agreement by Jia Zhou will not contravene, conflict with, or result in violation of  any provision of the organizational documents of Jia Zhou;  resolution adopted by the board of directors or the shareholders of Jia Zhou; and  any laws and regulations to which Jia Zhou or the exclusive cooperation arrangement contemplated in this Agreement is subject.

 

	
5.  

	
Representations and Warranties of WFOE.  WFOE hereby makes the following representations and warranties for the benefit of Jia Zhou and the Shareholders:

 

(a) Corporate Existence and Power.  WFOE  is a foreign invested company duly organized and validly existing under the laws of the PRC, and has all corporate powers and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted and as currently contemplated to be conducted and as currently contemplated to be conducted; and  has not ever approved, or commenced any proceeding or made any election contemplating, the dissolution or liquidation of WFOE or the winding up or cessation of the business or affairs of WFOE.

 

(b) Authorization; No Consent.   WFOE  has taken all necessary corporate actions to authorize its execution, delivery and performance of this Agreement and all related documents and has the corporate power and authorization to execute, deliver and perform this Agreement and the other related documents;  has the absolute and unrestricted right, power, authority, and capacity to execute and deliver this Agreement and the other related documents and to perform its obligations under this Agreement and the other related documents;  is not required to give any notice to or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the exclusive cooperation arrangement contemplated under this Agreement except for any notices that have been duly given or consents that have been duly obtained; and   has all the governmental authorizations necessary to permit WFOE to lawfully conduct and operate its business in the manner it currently conducts and operates such business and to permit WFOE to own and use its assets in the manner in which it currently owns and uses such assets. To the best knowledge of WFOE, there is no basis for any governmental authority to withdraw, cancel or cease in any manner any of such governmental authorizations.

 

(c) No Conflicts.   The execution and perform of this Agreement by WFOE will not contravene, conflict with, or result in violation of  any provision of the organizational documents of WFOE;  any resolution adopted by the board of directors or the shareholders of WFOE; and  any laws and regulations to which WFOE or the exclusive cooperation arrangement contemplated in this Agreement is subject to.

 

	
6.  

	
Liability for Breach; Indemnification and Hold Harmless.  Each of the Parties will be liable to each of the other Parties for any damage or loss caused by such Party’s breach of this Agreement. Jia Zhou will indemnify and hold harmless WFOE from and against any claims, losses or damages unless caused by a breach by WFOE of its obligations under this Agreement or by the willful, reckless or illegal conduct of WFOE. WFOE will indemnify and hold harmless Jia Zhou and the Shareholders from and against any claims, losses or damages caused by any breach by WFOE of its obligations under this Agreement or by the willful, reckless or illegal conduct of WFOE.

 

 

  

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7.  

	
Dispute Resolution.

 

(a) Friendly Consultations.   Any and all disputes, controversies or claims arising out of or relating to the interpretation or implementation of this Agreement, or the breach hereof or relationships created hereby, will be settled through friendly consultations.

 

(b) Arbitration.   If any such dispute is not resolved through friendly consultations within sixty (60) days from the date a Party gives the other Parties written notice of a dispute, then it will be resolved exclusively by arbitration under the auspices of and in accordance with the Arbitration Rules of China International Economic and Trade Arbitration Commission (“CIETAC”) and will be submitted to CIETAC Shanghai Branch. Any arbitration will be heard before three (3) arbitrators, one (1) of whom will be appointed by WFOE, one (1) of whom will be appointed by TPS Jia Zhou and the Shareholders acting together, and the remaining one (1) arbitrator (chairman of the arbitration tribunal) will be appointed by the Director of CIETAC.  Any arbitration will be conducted in both the English and Chinese languages.  The arbitration award will be final and binding on both Parties and will not be subject to any appeal, and the Parties agree to be bound thereby and to act accordingly.

 

(c) Continuation of Agreement.   It is not necessary for any Party to declare a breach of this Agreement in order to proceed with the dispute resolution process set out in this Section 7. Unless and until this Agreement is terminated pursuant to Section 8, this Agreement will continue in effect during the pendency of any discussions or arbitration under this Section 7.

 

	
8.  

	
Term. This Agreement is effective as of the date first set forth above, and will continue in effect until terminated by one of the following means. The period during which this Agreement is effective is referred to as the “Term.”

 

(a) Mutual Consent.   This Agreement may be terminated at any time by the mutual consent of the Parties, evidenced by an agreement in writing signed by all Parties.

 

(b) Breach or Insolvency.   Either of Jia Zhou or WFOE may terminate this Agreement immediately (a) upon the material breach by the other of its obligations hereunder and the failure of such Party to cure such breach within thirty (30) working days after written notice from the non-breaching Party; or (b) upon the filing of a voluntary or involuntary petition in bankruptcy by the other or of which the other is the subject, or the insolvency of the other, or the commencement of any proceedings placing the other in receivership, or of any assignment by the other for the benefit of creditors.

 

(c)  Termination by WFOE.   This Agreement may be terminated at any time by WFOE upon ninety (90) calendar days’ written notice delivered to all other Parties.

 

(d) Survival.   The provisions of Section 6 (Indemnification; Hold Harmless); Section 7 (Dispute Resolution),  and Section 9 (Miscellaneous) will survive any termination of this Agreement. Any amounts owing from any Party to any other Party on the effective date of any termination under the terms of this Agreement will continue to be due and owing despite such termination.

 

  

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9.  

	
Miscellaneous.

 

(a) Headings and Gender.   The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the word “including” does not limit the preceding words or terms.

 

(b) Usage.  The words “include” and “including” will be read to include “without limitation.”

 

(c) Severability.   Whenever possible each provision and term of this Agreement will be interpreted in a manner to be effective and valid but if any provision or term of this Agreement is held to be prohibited by or invalid, then such provision or term will be ineffective only to the extent of such prohibition or invalidity, without invalidating or affecting in any manner whatsoever the remainder of such provision or term or the remaining provisions or terms of this Agreement. If any of the covenants set forth in this Agreement are held to be unreasonable, arbitrary, or against public policy, such covenants will be considered divisible with respect to scope, time and geographic area, and in such lesser scope, time and geographic area, will be effective, binding and enforceable against the Shareholders.

 

(d) Waiver.   No failure or delay by any Party to exercise any right, power or remedy under this Agreement will operate as a waiver of any such right, power or remedy.

 

(e) Integration. This Agreement and the other Business Cooperation Agreements supersede any and all prior discussions and agreements (written or oral) between the Parties with respect to the exclusive cooperation arrangement and other matters contained herein.

 

(f) Assignments, Successors, and No Third-Party Rights.   No Party may assign any of its rights under this Agreement without the prior consent of the other Parties, which will not be unreasonably withheld. Subject to the preceding sentence. This Agreement will apply to, be binding in all respects upon, and inure to the benefit of the successors and permitted assigns of the Parties. Nothing expressed or referred to in this Agreement will be construed to give any Person other than the Parties to this Agreement any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement. This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the Parties to this Agreement and their successors and assigns.

 

(g) Notices.   All notices, requests, demands, claims, and other communications under this Agreement will be in writing. Any Party may send any notice, request, demand, claim, or other communication under this Agreement to the intended recipient at the address set forth on the signature page of this Agreement by any means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication will be deemed to have been duly given unless and until it actually is received by the intended recipient. Refusal by a Party to accept notice that is validly given under this Agreement will be deemed to have been received by such Party upon receipt. Any Party may change the address to which notices, requests, demands, claims, and other communications under this Agreement are to be delivered by giving the other Parties notice in the manner herein set forth. Any notice, request, demand, claim, or other communication under this Agreement will be addressed to the intended recipient as set forth on the signature page hereto.

 

  

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(h) Further Assurances. Each of the Parties will use its best efforts to take all action and to do all things necessary, proper, or advisable in order to consummate and make effective the transactions contemplated by this Agreement.

 

(i) Governing Law. This Agreement will be construed, and the rights and obligations under this Agreement determined, in accordance with the laws of the PRC, without regard to the principles of conflict of laws thereunder.

 

(j) Amendment. This Agreement may not be amended, altered or modified except by a subsequent written document signed by all Parties.

 

(k) Counterparts. This Agreement may be executed in any number of counterparts. When each Party has signed and delivered to all other Parties at least one such counterpart, each of the counterparts will constitute one and the same instrument.  This Agreement is made in both Chinese and English and in case of any conflicts between these two versions, the English version shall prevail.

 

 

[Signature Page Follows]

 

  

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IN WITNESS WHEREOF, the Parties have execute this Exclusive Technology Consulting Agreement as of the date first above written.

 

	
Jia Zhou:

 

Zi Bo Jia Chemicals Co. Ltd.

	 	 	
WFOE:

 

Zi Bo Costar Information Consulting Co.,

	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	By: 	
/s/ Lu Feng

	 	 	By: 	
/s/ Ma Danni

	 
	 	
Lu Feng

	 	 	 	
Ma Danni

	 
	 	
Legal Representative

	 	 	 	
Legal Representative

	 
	 	 	 	 	 	 	 
	
Address:

 

1, Electric Power Road, Zhou Cun District, Zi Bo, People's Republic of China

	 	 	

Address:

 

1, Electric Power Road, Zhou Cun District, Zi Bo, People's Republic of China

	 

 

  

7

  

 

 

APPENDIX A

 

Definitions

 

For purposes of this Exclusive Technology Consulting Agreement between Zi Bo Costar Information Consulting Co., Ltd. and Zi Bo Chemicals Co., Ltd. (淄博嘉周化工有限公司) dated as of September 30, 2010, to which this is Appendix A, the following terms have the meanings set forth below:

 

“Business” is defined in the Recitals.

 

“Business Cooperation Agreements” means the following agreements between the Parties and/or their affiliates:  the Exclusive Management Consulting Services Agreement between and among Zi Bo Costar Information Consulting Co., Ltd., Zi Bo Jia Zhou Chemicals Co., Ltd. (淄博嘉周化工有限公司), Lu Feng(卢锋), Lu Ling Liang(卢令良), Zhang Meng(张盟) and YLL Investment Group Limited dated as of September 30, 2010  Exclusive Technology Consulting Agreement between and among Zi Bo Costar Information Consulting Co., Ltd. and Zi Bo Jia Zhou Chemicals Co., Ltd. (淄博嘉周化工有限公司), dated as of September 30, 2010  the Purchase Option Agreement between and among Zi Bo Costar Information Consulting Co., Ltd., Zi Bo Jia Zhou Chemicals Co., Ltd. (淄博嘉周化工有限公司), Lu Feng(卢锋), Lu Ling Liang(卢令良), Zhang Meng(张盟) and YLL Investment Group Limited dated as of September 30, 2010; and  the Equity Pledge Agreement between and among Zi Bo Costar Information Consulting Co., Ltd., Zi Bo Jia Zhou Chemicals Co., Ltd. (淄博嘉周化工有限公司), Lu Feng(卢锋), Lu Ling Liang(卢令良), Zhang Meng(张盟) and YLL Investment Group Limited  dated as of September 30, 2010.

 

 “Consent” means any approval, consent, ratification, permission, waiver or authorization, including any of the foregoing issued or granted by any Governmental Authority.

 

“Intellectual Property” means any patent, patent application, trademark (whether registered or unregistered and whether or not relating to a published work), trademark application, trade name, fictitious business name, service mark (whether registered or unregistered), service mark application, copyright (whether registered or unregistered), copyright application, maskwork, maskwork application, trade secret, know-how, franchise, system, computer software, invention, design, blueprint, proprietary product, technology, proprietary right, and improvement on or to any of the foregoing, or any other intellectual property right or intangible asset.

 

“Net Profit” means the net profit of Jia Zhou under generally accepted accounting principles in the United States.

 

“Person” means an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

“Term” is defined in Section 8.

 

  

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APPENDIX B

 

Technology Consulting Services

 

For purposes of this Exclusive Technology Consulting Agreement between Zi Bo Costar Information Consulting Co., Ltd.(淄博科先达信息咨询有限公司) and Zi Bo Chemicals Co., Ltd. (淄博嘉周化工有限公司) dated as of [  ], 2010, to which this is Appendix B, “Services” means services necessary or appropriate to accomplish the following:

 

(a) Maintain the facilities and equipments used in connection with the Business;

 

(b)  Develop and update application software required in the Business for the Company;

 

(c) Technical support for operation of the Business;

 

(d) Training of technical and other personnel of Jia Zhou;

 

(e) Other personnel support requirements; and

 

(f)  The development, support, maintenance and execution of any other tasks agreed by the Parties.

 

 

9ex104.htm

Exhibit 10.4

Jia Zhou Chemical

Equity Pledge Agreement

Equity Pledge Agreement

This Equity Pledge Agreement (“Agreement”) is entered into as of September 30, 2010 by and among:

“Pledgor A”

	
Lu Feng (卢锋)

	
ID Card Number:

	  
	
Address:

	  
	
Telephone:

	  

“Pledgor B”

	
Lu Ling Liang(卢令良)

	
ID Card Number:

	  
	
Address:

	  
	
Telephone:

	  

“Pledgor C”

	
Zhang Meng(张盟)

	
ID Card Number:

	  
	
Address:

	  
	
Telephone:

	  

“Pledgor D”

	
YLL Investment Group Limited

	
Represented By:

	  
	
Address:

	  
	
Telephone:

	  

“Company”

	
Zi Bo Jia Zhou Chemical Co., Ltd.

	
Address:

	  
	
Represented By:

	  
	
Telephone:

	  

“Pledgee”

	
Zi Bo Costar Information Consulting Co., Ltd.

	
Address:

	  
	
Represented By:

	  
	
Telephone:

	  

 

  

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Jia Zhou Chemical

Equity Pledge Agreement

Pledgor A, Pledgor B, Pledgor C and Pledgor D are collectively referred to as “Pledgors”.

WHEREAS,

	
(1)

	
Pledgors are the registered shareholders of the Company.  Pledgors legally hold all shares of the Company (“Company Shares”) and will hold all company shares on the date the parties execute this Agreement.  Each Pledgor’s contribution of the Company’s Registered Capital and the Share Holding Proportion are identified in Exhibit I.

	
(2)

	
Pursuant to that certain Exclusive Management Consulting Services Agreement between Pledgee, the Company and the Pledgors dated as of September 30, 2010, the Pledgors have guaranteed the performance by the Company of its obligations under the Business Cooperation Agreements, as that term is defined therein, and have agreed to pledge all of the Company shares they own (the “Pledged Equity”) to secure that guarantee. This is the Equity Pledge Agreement referred to in Section 14 of the Management Services Agreement.

Through the friendly negotiation, the parties hereby agree:

ARTICLE 1

EQUITY PLEDGE

	
1.1  

	
Pledgee will own priority of payment of the interest from the Pledged Equity converted into money, or the money from Pledged Equity’s auction or sale (“Pledge Right”).  The effectiveness of the Pledge Right will extend to any bonus arising from the Pledged Equity.

	
1.2  

	
The Pledgors shall cooperate with the Pledgee to register the Pledged Equity with competent equity-pledge registration authority within thirty (30) days following the execute date hereof, and shall provide the relevant registration certificate of the Pledged Equity to the Pledgee in the way satisfactory to the Pledgee. The bonus of Pledged Equity will be deposited into a bank account appointed and supervised by Pledgee.

	
1.3  

	
The scope of the pledge guarantee hereby includes payment obligations of the Company under the Business Cooperation Agreements, any and all associated penal sum(s) and other expenses incurred in connection with the pledge guarantee as well as the expense of realizing the Pledgee's rights.

	
1.4  

	
Pledgors will not hold Pledgee responsible for any decrease in value of the Pledged Equity during the period this Agreement is in effect.

	
1.5  

	
If the Pledgors engage in activity to intentionally reduce the value of the Pledged Equity, Pledgee may auction or sell off the Pledged Equity, and Pledgors agree to use the money from the auction or sale of the Pledged Equity to pay off the debts guaranteed by the Pledged Equity in advance.

	
1.6  

	
Pledgors may contribute additional capital into Company only with the prior written consent of Pledgee.  This increased capital contribution regarded as additional Pledged Equity.

 

 

  

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Jia Zhou Chemical

Equity Pledge Agreement

 

	
1.7  

	
The period of Pledged Equity under this Agreement will commence on the date the Pledged Equity is registered with the local Administration of Industry and Commerce where the Company located, and ends on the date when the Pledgors pay off all the debt assumed under the Loan Agreement.

	
  

	
ARTICLE 2

	
  

	
WARRANTY AND COMMITMENT OF PLEDGOR

Pledgors hereby warrant and represent respectively and collectively to Pledgee as follows:

	
2.1

	
Pledgors have read this entire Agreement and understands the content contained herein.

	
2.2

	
All expressions of Pledgors’ intent contained in this Agreement are true.

	
2.3

	
Pledgors’ execution and fulfillment of this Agreement is voluntary.

	
2.4

	
Pledgors are the legal owner of the Pledged Equity and warrants that there is no current ownership dispute of Pledged Equity.  Pledgors will be entitled to dispose of the Pledged Equity and any part of such equity.

	
2.5

	
With the exception of the pledge rights identified in this Agreement, there are no other outstanding pledge rights and benefits or third party’s pledge rights and benefits on the Pledged Equity identified in this Agreement.

	
2.6

	
All documents, information and reports provided by Pledgors to Pledgee were true, complete and effective at the time of their production and are true, complete and effective as of the date of execution of this Agreement.

	
2.7

	
Without the prior written agreement of Pledgee, Pledgors will not transfer the Pledged Equity, make any other agreement or pledge concerning the Pledged Equity or take any action that will dispose or negatively influence the Pledged Equity or Right.

	
2.8

	
Pledgors will immediately inform Pledgee in writing of any possible event or act which may affect the Pledge Right.

	
2.9

	
Pledgors will take every necessary measure and sign every necessary document to ensure the Pledge Right can be exercised and realized.

	
  

	
ARTICLE 3

	
  

	
WARRANTY AND COMMITMENT OF COMPANY

	
3.1

	
Company hereby agrees that it will take joint responsibility with Pledgors’ for the warranties and representations made by Pledgors to Pledgee in Article 2.

	
3.2

	
Company promises that it will not pass any resolutions concerning the Pledge Right which may have an affect on the exertion and realization of the Pledge Rights under this Agreement.

 

 

  

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Jia Zhou Chemical

Equity Pledge Agreement

	
  

	
ARTICLE 4

	
  

	
LIFE AND TRANSFER OF AGREEMENT

	
  

	
4.1

	
This Agreement will be effective on the execution date of this Agreement, and will end on the date Pledgors fulfill the obligations under the Business Cooperation Agreements.

	
4.2

	
This Agreement is binding on all legal heirs and/or successors of the parties hereby.

	
4.3

	
This Agreement, nor any of the duties and obligations identified herein, can be transferred to a third party, except by Pledgee’s prior written consent.

	
  

	
ARTICLE 5

	
  

	
FORCE MAJEURE

	
5.1

	
“Force Majeure” under this Agreement is identified as war, fire acts of god, such as an earthquake or flood, as well as government order, government action, or related laws and regulations that are unforeseeable, irresistible and/or unavoidable events (“Force Majeure event”).

	
5.2

	
Any Party who fails to perform or fails all or any partial obligations under this Agreement (“Breaching Party”) due to a Force Majeure will not be held responsible for the breach if the Breaching Party has taken every effort to fulfill its other obligations under this Agreement.  Once the Force Majeure event no longer prevents the Breaching Party from fulfilling its obligations under this Agreement, the Breaching Party agrees to recommence performance of its obligations. If the Force Majeure event has made fulfillment of this Agreement impossible, the Parties will make best efforts to fulfill the purpose of this Agreement in accordance with the requirement of the Pledgee.

	
  

	
ARTICLE 6

	
  

	
NOTICES

	
6.1

	
Any notice, request, demand or other communication required by this Agreement or made according to this Agreement will be delivered to the relevant Party in writing.

	
6.2

	
Notices given by personal delivery or mail will be deemed effective on the date of receipt.  Notices given by facsimile transmission or email will be deemed effective on the date of transmission or, if the transmission date is not a working day or the transmission time is after regular business hours (defined as 9:00-18:00), then the effective date will be the first (1st) business day following the date of transmission.

	
  

	
ARTICLE 7

	
  

	
LIABILITIES FOR BREACH OF CONTRACT

	
7.1

	
If any Party to this Agreement fails in any of its representations, warranties or covenants under this Agreement, or if fails to perform any of its obligations under this Agreement, such failure will constitute a breach under this Agreement (“Breach”).

	
7.2

	
The Party that does not breach this Agreement (“Non-breaching Party”) will have the right to require the Breaching Party to rectify or take remedial actions within an agreed period.  If the Breaching Party fails to rectify its breaching activities within the agreed period, the Non-Breaching Party has the right, at its own discretion, to choose one of the following remedies: (1) terminate this Agreement and require the Breaching party to compensate all the losses incurred to the other Party due to its Breach; or (2) require enforcement of the obligations of the Breaching Party under this Agreement and require compensation for all losses incurred to the other party due to the Breach.

 

 

  

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Jia Zhou Chemical

Equity Pledge Agreement

	
  

	
ARTICLE 8

	
  

	
APPLICABLE LAWS AND SETTLEMENT OF DISPUTES

	
8.1

	
This Agreement will be governed by and construed in accordance with the laws of the People’s Republic of China.

	
8.2

	
In the event of a dispute arising from, or in connection with, this Agreement, the Parties will first attempt to resolve the dispute through friendly consultations.  In the event that satisfactory resolution is not reached within thirty (30) days after the occurrence of such dispute, the parties will submit the dispute for resolution by arbitration to the China International Economic and Trade Arbitration Commission (“Commission”) in Shanghai, in accordance with the then-effective procedural rules of the Commission.  The arbitration will be conducted in Chinese.  The arbitral award will be final and binding upon all Parties.  The arbitration fee will be borne by the losing Party.  All other terms in this Agreement, other than the disputed portion of this Agreement, will remain effective.

	
  

	
ARTICLE 9

	
  

	
MISCELLANEOUS

	
9.1

	
This Agreement is written in Chinese and has four (4) counterparts, with each Party holding one (1) counterpart and the remaining one (1) counterpart used for the registration of the Pledged Equity.

	
9.2

	
The headings contained in this Agreement are inserted for convenience only and should not be interpreted as having any affect on the meaning or interpretation of this Agreement or any provision hereof.

	
9.3

	
This Agreement will take effect upon execution and will be binding on the Parties.

	
9.4

	
Each part of this Agreement is intended to be severable.  If any term, covenant, condition or provision hereof is unlawful, invalid or unenforceable for any reason whatsoever, then all such remaining parts hereof will be valid and enforceable and have full force and effect as if the invalid or unenforceable part had not been included in the Agreement.

	
  

	
.

	
9.5

	
This Agreement may not be amended, altered or modified except by a subsequent written document signed by all Parties.

	
  

	
[The remainder of this page is intentionally left blank.]

 

 

  

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Jia Zhou Chemical

Equity Pledge Agreement

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