Document:

OPTION
AGREEMENT

    

    This
Option Agreement (this “Agreement”) is dated April 2, 2010, and is entered into
in Dachang
Hui Autonomous County, Hebei Province, People’s Republic of China (“PRC” or
“China”) by and among Hebei Anbang Investment Consultation Co., Ltd. (“Party A”)
and Dachang Hui Autonomous County Baosheng Steel Products Co., Ltd. (“Baosheng
Company” or “Party B”), and the shareholders holding 100% of the issued and
outstanding equity interests of Party B (the “Shareholders of Party B” or “Party
C”). Party A, Party B, and Party C are each referred to in this Agreement
as a “Party” and collectively as the “Parties.”

    

    RECITALS

    

    1. Party
A, a company incorporated in the PRC as a foreign investment
enterprise, specializes in the research and development of ferrous metal
products and consulting of enterprise management and investment, and the
Baosheng Company is engaged in a variety of ferrous products (collectively the
“Business”), including the process and sale of the cold rolled steel strip, cold
rolled steel coil, high frequency welded pipe and tin plates; import and export
of steel materials. Party A and the Baosheng Company have entered into a certain
Consulting Services Agreement dated April 2, 2010 (the “Consulting Services
Agreement”) in connection with the Business.

    

    2. The
Shareholders are shareholders of Party B, each legally holding such amount
of equity interest of the Party B as set forth on the signature page of
this Agreement and collectively holding 100% of the issued and outstanding
equity interests of Party B (collectively the “Equity
Interest”).

    

    3. The
Parties are entering into this Agreement in connection with the
Consulting Services Agreement.

    

    NOW, THEREFORE, the Parties to
this Agreement hereby agree as follows:

    

    1.
PURCHASE AND SALE OF EQUITY INTEREST

    

    1.1 Grant
of Rights. The Shareholders (hereinafter the “Transferors”)
hereby collectively and irrevocably grant to Party A or a designee of Party
A (the “Designee”) an option to purchase at any time, to the extent
permitted under PRC Law, all or a portion of the Equity Interest in accordance
with such procedures as determined by Party A, at the price specified in Section
1.3 of this Agreement (the “Option”). No Option shall be granted to any party
other than to Party A and/or a Designee. Party B hereby agrees to Party C’s
grant of the Option to Party A and/or the Designee. As used herein, Designee may
be an individual person, a corporation, a joint venture, a partnership, an
enterprise, a trust or an unincorporated organization.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    1.2
Exercise of Rights. According with the requirements of applicable PRC
laws and regulations, Party A and/or the Designee may exercise the Option
at any time by issuing a written notice (the “Notice”) to one or more of the
Transferors and specifying the amount of the Equity Interest to be purchased
from such Transferor(s) and the manner of purchase.

    

    1.3
Purchase Price.

    

    1.3.1 The
purchase price of the Equity Interest pursuant to an exercise of the Option
shall be equal to the original paid-in price of the Transferors, adjusted pro
rata for purchase of less than all of the Equity Interest, unless
applicable PRC laws and regulations require an appraisal of the Equity Interest
or stipulate other restrictions regarding the purchase price of the Equity
Interest.

    

    1.3.2 If
the applicable PRC laws and regulations require an appraisal of the Equity
Interest or stipulate other restrictions regarding the purchase price of the
Equity Interest at the time Party A exercises the Option, the Parties agree
that the purchase price shall be set at the lowest price permissible under
the applicable laws and regulations.

    

    1.4
Transfer of Equity Interest. Upon each exercise of the Option under
this Agreement:

    

    1.4.1 The
Transferors shall hold or cause to be held a meeting of shareholders of
Party B in order to adopt such resolutions as necessary in order to approve the
transfer of the relevant Equity Interest (such Equity Interest hereinafter the
“Purchased Equity Interest”) to Party A and/or the Designee;

    

    1.4.2 The
relevant Parties shall enter into an Equity Interest Purchase Agreement in
a form reasonably acceptable to Party A, setting forth the terms and conditions
for the sale and transfer of the Purchased Equity Interest;

    

    1.4.3 The
relevant Parties shall execute, without any security interest, all other
requisite contracts, agreements or documents, obtain all requisite approval and
consent of the government, conduct all necessary actions, transfer the valid
ownership of the Purchased Equity Interest to Party A and/or the Designee, and
cause Party A and/or the Designee to be the registered owner of the Purchased
Equity Interest. As used herein, “security interest” means any mortgage,
pledge, the right or interest of the third party, any purchase right of equity
interest, right of acquisition, right of first refusal, right of set-off,
ownership detainment or other security arrangements; however, such term shall
not include any security interest created under that certain Equity Pledge
Agreement dated as of April 2, 2010 by and among the Parties (the “Pledge
Agreement”).

    

    1.5
Payment. Payment of the purchase price shall be determined through negotiation
between the Transferors and Party A in accordance with the applicable laws at
the time of the exercise of the Option.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2.
REPRESENTATIONS RELATING TO EQUITY INTEREST

    

    2.1 Party
B’s Representations. Party B hereby represents and warrants:

    

    2.1.1
Without Party A’s prior written consent, Party B’s Articles of Association
shall not be supplemented, changed or renewed in any way, Party B’s registered
capital of shall not be increased or decreased, and the structure of Party B’s
registered capital shall not be changed in any form;

    

    2.1.2 To
maintain the corporate existence of Party B and to prudently
and effectively operate the Business according with customary fiduciary
standards applicable to managers with respect to corporations and their
shareholders;

    

    2.1.3
Upon the execution of this Agreement, to not sell, transfer, mortgage
or dispose, in any other form, any asset, legitimate or beneficial interest
of business or income, or encumber or approve any encumbrance or imposition of
any security interest on Party B’s assets without Party A’s prior written
consent;

    

    2.1.4 To
not issue or provide any guarantee or permit the existence of any debt
without Party A’s prior written consent, other than (i) such debt that may arise
from Party B’s ordinary course of business (excepting a loan); and (ii)
such debt which has been disclosed to Party A;

    

    2.1.5 To
operate and conduct all business operations in the ordinary course of
business, without damaging the Business or the value of Party B’s
assets;

    

    2.1.6 To
not enter into any material agreements without Party A’s prior written consent,
other than agreements entered into in the ordinary course of business (for
purpose of this paragraph, if any agreement for an amount in excess of One
Hundred Thousand Renminbi (RMB 100,000) shall be deemed a material
agreement);

    

    2.1.7 To
not provide loan or credit to any other party or organization without Party
A’s prior written consent;

    

    2.1.8 To
provide to Party A all relevant documents relating to the Business and its
operations and finance at the request of Party A;

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.1.9 To
purchase and maintain general business insurance of the type and amount
comparable to those held by companies in the same industry, with similar
business operations and assets as Party B, from an insurance company approved by
Party A;

    

    2.1.10 To
not enter into any merger, cooperation, acquisition or investment without
Party A’s prior written consent;

    

    2.1.11 To
notify Party A of the occurrence or the potential occurrence of litigation,
arbitration or administrative procedure relating to Party B’s assets,
business operations and/or income;

    

    2.1.12 In
order to guarantee the ownership of Party B’s assets, to execute
all requisite or relevant documents, take all requisite or relevant
actions, and make and pursue all relevant claims;

    

    2.1.13 To
not assign the Equity Interest in any form without Party A’s prior written
notice; however, Party B shall distribute dividends to the Shareholders upon
the request of Party A; and

    

    2.1.14 In
accordance with Party A’s request, to appoint any person designated by
Party A to a management position for Party B.

    

    2.2
Transferors’ Representations. The Transferors hereby represent and
warrant:

    

    2.2.1
Without Party A’s prior written consent, upon the execution of
this Agreement, to not sell, transfer, mortgage or dispose in any other
form any legitimate or beneficial interest of the Equity Interest, or to
approve any security interest, except as created pursuant to the Pledge
Agreement;

    

    2.2.2
Without Party A’s prior written notice, to not adopt or support or execute
any shareholders resolution at any meeting of the shareholders of Party B that
seeks to approve any sale, transfer, mortgage or disposal of any legitimate or
beneficial interest of the Equity Interest, or to allow any attachment of
security interests, except as created pursuant to the Pledge
Agreement;

    

    2.2.3
Without Party A’s prior written notice, to not agree or support or execute
any shareholders resolution at any meeting of the shareholders of Party B that
seeks to approve Party B’s merger, cooperation, acquisition or
investment;

    

    2.2.4 To
notify Party A the occurrence or the potential occurrence of
any litigation, arbitration or administrative procedure relevant to the
Equity Interest;

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.2.5 To
cause Party B’s Board of Directors to approve the transfer of the Purchased
Equity Interest pursuant to this Agreement;

    

    2.2.6 In
order to maintain the ownership of Equity Interest, to execute
all requisite or relevant documents, conduct all requisite or relevant
actions, and make all requisite or relevant claims, or make requisite or
relevant defense against all claims of compensation;

    

    2.2.7
Upon the request of Party A, to appoint any person designated by Party A to
be a director of Party B; and

    

    2.2.8 To
prudently comply with the provisions of this Agreement and any other
agreements entered into with Party A and Party B in connection therewith, and
to perform all obligations under all such agreements, without taking any
action or nonfeasance that may affect the validity and enforceability of such
agreements.

    

    3.
Representations and Warranties. As of the execution date of this Agreement and
on each transfer of Purchased Equity Interest pursuant to an exercise of
the Option, Party B and the Transferors hereby represent and warrant as
follows:

    

    3.1 Such
Parties shall have the power and ability to enter into and deliver
this Agreement and to perform their respective obligations thereunder, and
at each transfer of Purchased Equity Interest, the relevant Equity Interest
Purchase Agreement and to perform their obligations thereunder. Upon execution,
this Agreement and each Equity Interest Purchase Agreement will constitute
legal, valid and binding obligations and be fully enforceable in accordance with
their terms;

    

    3.2 The
execution and performance of this Agreement and any Equity
Interest Purchase Agreement shall not: (i) violate any relevant laws and
regulations of the PRC; (ii) conflict with the Articles of Association or other
organizational documents of Party B; (iii) cause to breach any agreements or
instruments or having binding obligation on it, or constitute a breach under any
agreements or instruments or having binding obligation on it; (iv) breach
relevant authorization of any consent or approval and/or any effective
conditions; or (v) cause any authorized consent or approval to be suspended,
removed, or cause other added conditions;

    

    3.3 The
Equity Interest is transferable in whole and in part, and neither Party
B nor the Transferors has permitted or caused any security interest to be
imposed upon the Equity Interest other than pursuant to the Pledge
Agreement;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.4 Party
B does not have any unpaid debt, other than (i) such debt that may
arise during the ordinary course of business; and (ii) debt either
disclosed to Party A or incurred pursuant to Party A’s written
consent;

    

    3.5 Party
B has complied with all applicable PRC laws and regulations in connection
with this Agreement;

    

    3.6 There
are no pending or ongoing litigation, arbitration or
administrative procedures with respect Party B, its assets or the Equity
Interests, and Party B and the Transferors have no knowledge of any pending
or threatened claims to the best of their knowledge; and

    

    3.7 The
Transferors own the Equity Interest free and clear of encumbrances of
any kind, other than the security interest pursuant to the Pledge
Agreement.

    

    4.
ASSIGNMENT OF AGREEMENT

    

    4.1 Party
B and the Transferors shall not transfer their rights and obligations
under this Agreement to any third party without Party A’s prior written
consent.

    

    4.2 Party
B and the Transferors hereby agrees that Party A shall be able to
transfer all of its rights and obligations under this Agreement to any
third party, and such transfer shall only be subject to a written notice of
Party A to Party B and the Transferors without any further consent from Party B
or the Transferors.

    

    5.
EFFECTIVE DATE AND TERM

    

    5.1 This
Agreement shall be effective as of the date first set forth above.

    

    5.2 The
term of this Agreement is ten (10) years unless it is early terminated
in accordance with this Agreement. This Agreement may be extended by Party
A’s written consent prior to the expiration of this Agreement. The terms of
any such extension shall be determined through mutual agreement of the
Parties.

    

    5.3 At
the end of the term of this Agreement (including any extension thereto),
or if earlier terminated pursuant to Section 5.2, the Parties agree that
any transfer of rights and obligations pursuant to Section 4.2 shall continue to
be in effect.

    

    6.
APPLICABLE LAWS AND DISPUTE RESOLUTION

    

    6.1
Applicable Laws. The execution, validity, interpretation and performance
of this Agreement and the dispute resolution under this Agreement shall be
governed by the laws of PRC.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    6.2
Dispute Resolution. The Parties shall strive to resolve any disputes
arising from the interpretation or performance of this Agreement through
amicable negotiations. If such dispute cannot be settled within thirty (30)
days, any Party may submit such dispute to China International Economic and
Trade Arbitration Commission (“CIETAC”) for arbitration. The arbitration shall
abide by the current rules of CIETAC, and the arbitration proceedings shall be
conducted in Shanghai, China in Chinese. The determination of CIETAC shall be
final and binding upon the Parties.

    

    7. Taxes
and Expenses. Each Party shall, according with PRC laws, bear any and
all registration taxes, costs and expenses for the transfer of equity
arising from the preparation, execution and completion of this Agreement and all
Equity Interest Purchase Agreements.

    

    8.
Notices. Notices or other communications required to be given by any
Party pursuant to this Agreement shall be written in English and Chinese
and delivered personally or sent by registered mail or prepaid mail or by a
recognized courier service or by facsimile transmission to the relevant address
of each Party as set forth below or other addresses of the Party as specified by
such Party from time to time. The date when the notice is deemed to be duly
served shall be determined as follows: (a) a notice delivered personally is
deemed duly served upon the delivery; (b) a notice sent by mail is deemed duly
served the tenth (10th) day after the date of the air registered mail with the
postage prepaid has been sent out (as is shown on the postmark), or the fourth
(4th) day after the delivery by an internationally recognized courier service;
and (c) a notice sent by facsimile transmission is deemed duly served upon
the receipt time as shown on the transmission confirmation.

    

    Party
A

    Hebei
Anbang Investment Consultation Co., Ltd.

    Address:
Inside of Baosheng Steel Product Company, No. 3

    Muslim
Shangmao Street (Xiaodingfu Part in the south of

    Jingha
Road), Xiadian Town, Hui Autonomous County,

    China

    Attn: LI,
Hongzhou

    Fax:

    Tel:

    

    Party
B:

    Dachang
Hui Autonomous County Baosheng Steel Products Co.,

    Ltd.

    Address:
Xiadian Town Industrial Zone, Dachang County, China.

    Attn: LI,
Hongzhong

    Fax:

    Tel:

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Party
C :

    LI,
Hongzhong

    Address:

    Tel:

    Fax:

    

    MENG,
Xianmin

    Address:

    Tel:

    Fax

    

    CHEN,
Wenyi

    Address:

    Tel:

    Fax:

    Fax:

    

    9.
Confidentiality. The Parties acknowledge and confirm that any oral or
written information exchanged by the Parties in connection with this
Agreement is confidential. The Parties shall maintain the confidentiality
of all such information. Without the written approval by the other Parties,
any Party shall not disclose to any third party any confidential information
except as follows:

    

    (a) Such
information was in the public domain at the time it was
communicated;

    

    (b) Such
information is required to be disclosed pursuant to the applicable
laws, regulations, policies relating to the stock exchange; or

    

    (c) Such
information is required to be disclosed to a Party’s legal counsel
or financial consultant, provided 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 Party shall be responsible for all breach of confidentiality arising from
such disclosure. This provision shall survive even if certain clauses of this
Agreement are subsequently amended, revoked, terminated or determined to be
invalid or unable to implement for any reason.

    

    10.
Further Warranties. The Parties agree to promptly execute such documents
as required to perform the provisions of this Agreement, and to take such
actions as may be reasonably required to perform the provisions of this
Agreement.

    

    11.
MISCELLANEOUS

    

    11.1
Amendment, Modification and Supplement. Any amendments and supplements to
this Agreement shall only take effect if executed by both Parties in
writing.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    11.2
Entire Agreement. Notwithstanding Article 5 of this Agreement, the
Parties acknowledge that this Agreement constitutes the entire agreement of
the Parties with respect to the subject matters therein and supercede and
replace all prior or contemporaneous agreements and understandings, whether oral
or in writing.

    

    11.3
Severability. If any provision of this Agreement is deemed invalid
or non-enforceable according with relevant laws, such provision shall be
deemed invalid only within the applicable laws and regulations of the PRC, and
the validity, legality and enforceability of the other provisions hereof
shall not be affected or impaired in any way. The Parties shall, through
reasonable negotiation, replace such invalid, illegal or non-enforceable
provisions with valid provisions in order to bring similar economic effects of
those invalid, illegal or non-enforceable provisions.

    

    11.4
Headings. The headings contained in this Agreement are for reference
only and shall not affect the interpretation and explanation of the
provisions in this Agreement.

    

    11.5
Language and Copies. This Agreement shall be executed in English in
four (8) duplicate originals. Each Party shall hold one (1) original, each
of which shall have the same legal effect.

    

    11.6
Successor. This Agreement shall be binding on the successors of each
Party and the transferee allowed by each Party.

    

    11.7
Survival. Each Party shall continue to perform its
obligations notwithstanding the expiration or termination of this
Agreement. Article 6, Article 8, Article 9 and Section 11.7 hereof shall
continue to be in full force and effect after the termination of this
Agreement.

    

    11.8
Waiver. Any Party may waive the terms and conditions of this Agreement
in writing with the written approval of all the Parties. Under certain
circumstances, any waiver by a Party to the breach of other Parties shall not be
construed as a waiver of any other breach by any other Parties under similar
circumstances.

    

    [SIGNATURE
PAGE FOLLOWS]EQUITY
PLEDGE AGREEMENT

    

    This
Equity Pledge Agreement (hereinafter this “Agreement”) is dated April 2, 2010,
and is entered into in Dachang Hui Autonomous County, Hebei Province,
People’s Republic of China (“PRC” or “China”) by and among Hebei Anbang
Investment Consultation Co., Ltd (“Pledgee”), and each of the shareholders
listed on the signature pages hereto (each a “Pledgor” and collectively, the
“Pledgors”) of Dachang Hui Autonomous County Baosheng Steel Products Co., Ltd.
(“Baosheng Company”). The Baosheng Company is made a party to this Agreement for
the purpose of acknowledging the Agreement.

    

    RECITALS

    

    1. The
Pledgee incorporated in the PRC as a foreign investment enterprise and
specializes in research and development of ferrous metal products and
consulting of enterprise management and investment.

    

    2.
Baosheng Company is engaged in a variety of production of ferrous
products (collectively the “Business”), including the process and sale of
the cold rolled steel strip, cold rolled steel coil, high frequency welded
pipe and tin plates; import and export of steel materials.

    

    3. The
Pledgors are shareholders of the Baosheng Company, each legally holding
such amount of equity interest of the Baosheng Company as set forth on the
signature page of this Agreement and collectively holding 100% of the
issued and outstanding equity interests of the Baosheng Company (collectively
the “Equity Interest”).

    

    4. The
Pledgee and the Baosheng Company have executed a Consulting
Services Agreement dated April 2, 2010 (the “Consulting Services
Agreement”) concurrently herewith, pursuant to which the Baosheng 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 Baosheng 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 Baosheng Company, the Pledgors agree to pledge all their
equity interests in the Baosheng Company as security for the performance of the
obligations of the Baosheng Company under the Consulting Services Agreement,
including payment of the Consulting Services Fee.

    

    NOW THEREFORE, the Pledgee 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 Baosheng
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 Baosheng 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 Baosheng Company’s Register of Shareholders, and shall expire two (2)
years from the Baosheng 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 Baosheng Company does not perform its obligations under the
Consulting Services Agreement, including without limitations thee failures 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 Baosheng Company’s Register
of Shareholders. The Pledgors shall, 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.

    

    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”:

    

    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
Baosheng 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
Baosheng 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 Baosheng 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. 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

    

    (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.

    

    11. Force
Majeure.

    

    11.1
“Force Majeure” shall
include, but not be limited, to acts of governments, acts of nature, fire,
explosion, typhoon, flood, earthquake, tide, lightning, war, and any
unforeseen events beyond a Party’s reasonable control or which cannot be
prevented with reasonable care. However, any shortage of credit, capital or
finance shall not be regarded as an event beyond a Party’s reasonable control. A
Party affected by Force
Majeure shall promptly notify the other Parties of such event in order to
be exempted from such Party’s obligations under this Agreement.

    

    11.2 In
the event that the affected Party is delayed or prevented from performing
its obligations under this Agreement due to Force Majeure, the affected
Party shall not be responsible for any damage caused by the delay or
prevention of such performance, as long as such damage is within the scope of
such delay or prevention. The affected Party shall take appropriate means
to minimize or remove the effects of Force Majeure and attempt to
resume performance of the obligations delayed or prevented by Force Majeure. When such
Force Majeure ceases to exist, both
Parties covenant and agree to resume the performance of this Agreement with
their best efforts.

    

    12.
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.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    13.
Dispute Resolution.

    

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

    

    13.2 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. The arbitration shall abide by the then current rules of CIETAC,
and the arbitration proceedings shall be conducted in Beijing, China in Chinese.
The decision of CIETA shall be final and binding upon the parties.

    

    14.
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.

    

    15.
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.

    

    16.
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.

    

    17.
Appendices. The appendices to this Agreement are incorporated into and are a
part of this Agreement.

    

    18.
Amendment or Supplement.

    

    18.1 The
Parties may amend this Agreement in writing, provided that such
amendment shall be duly executed and signed by the Pledgee, the Baosheng
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.

    

    18.2 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.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    19.
Language and Copies of the Agreement. This Agreement shall be executed in
English in four (4) original copies. Each Party shall receive one (1)
original copy, all of which shall be equally valid and
enforceable.

    

    [SIGNATURE
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