EQUITYINTEREST PLEDGE AGREEMENT

EX-10.3 24 v209562_ex10-3.htm
  
EQUITY INTEREST PLEDGE AGREEMENT

This Equity Interest Pledge Agreement (hereinafter referred to as “Agreement”) is entered into by and between the following Parties effective in Weifang, Shandong Province, People’s Republic of China (hereinafter referred to as the “PRC”) as of February 1, 2011.

Pledgee:
Beijing Binhai Yintai Technology Co., Ltd., a wholly foreign-owned enterprise duly established and validly existing under the laws of the PRC.
Registered Address: Room 2006, Floor 20, Qingyun Dangdai Plaza, Building 9 of Mantingfangyuan Community, Qingyunli, Haidian District, Beijing, PRC.

Pledgor:
(1) YANG Chunbin, a citizen of the PRC.
ID No. 370703196303303016
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC
 
 (2) SUN Tongjiang, a citizen of the PRC.
PRC Passport No. 370206196901121652
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(3) LIU Shangxue, a citizen of the PRC.
ID No. 370703195303183056
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC
 
(4) CUI Xiusheng, a citizen of the PRC.
ID No. 370703196209223036
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC
 
(5) LU Junyou, a citizen of the PRC.
ID No. 370703195507083030
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(6) WANG Yunyu, a citizen of the PRC.
ID No. 370703195208153019
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(7) MU Zuolei, a citizen of the PRC.
ID No. 370703197410270058
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC
 

 
(8) MU Sisheng, a citizen of the PRC.
ID No. 370703195606183053
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(9) HOU Junhua, a citizen of the PRC.
ID No. 370703196712244133
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(10) CUI Huabei, a citizen of the PRC.
ID No. 370703196206143014
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(11) XU Xiuzhi, a citizen of the PRC.
ID No. 370703196104020881
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(12) XU Dayong, a citizen of the PRC.
ID No. 37070319630813301X
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(13) WANG Bintang, a citizen of the PRC.
ID No. 370703195708043019
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(14) LIU Zhixia, a citizen of the PRC.
ID No. 370703196411143048
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(15) CUI Tongjing, a citizen of the PRC.
ID No. 370703196201203030
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC
 
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(16) XU Shigang, a citizen of the PRC.
ID No. 370703197212180051
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(17) CUI Tonglin, a citizen of the PRC.
ID No. 370703195508253011
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(18) XU Jieguo, a citizen of the PRC.
ID No. 370703195503163519
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(19) WANG Chuanqiang, a citizen of the PRC.
ID No. 370703197009282280
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(20) SUN Zhipeng, a citizen of the PRC.
ID No. 37070319630207301X
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(21) SHEN Zhaofa, a citizen of the PRC.
ID No. 37070319710211351X
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(22) LU Junping, a citizen of the PRC.
ID No. 370703196406193139
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(23) XU Jiechang, a citizen of the PRC.
ID No. 370703196304253575
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(24) ZHU Yuanhong, a citizen of the PRC.
ID No. 370728196808232871
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC
 
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(25) ZHU Jiuquan, a citizen of the PRC.
ID No. 370703197208020012
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(26) LIN Chunhui, a citizen of the PRC.
ID No. 37070319730618001X
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(27) CUI Zhuande, a citizen of the PRC.
ID No. 37070319650312301X
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(28) WANG Xinhua, a citizen of the PRC.
ID No. 370703196903083010
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(29) ZHU Linsheng, a citizen of the PRC.
ID No. 32052119661129701X
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(30) WU Jincai, a citizen of the PRC.
ID No. 37070319640820302X
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(31) YANG Xiaoyang, a citizen of the PRC.
ID No. 370703199001070329
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(32) YANG Chunxiang, a citizen of the PRC.
ID No. 370703197303280015
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC

(33) ZHU Xiaolei, a citizen of the PRC.
ID No. 110105198404023639
Address: Haiwang Street, Yangzi Community, Coastal Economic Zone, Weifang, Shandong Province, PRC
 
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(the thirty-three persons aforementioned are collectively referred to as Pledgor)

WHEREAS, Plegdee is a wholly foreign-owned enterprise duly established and validly existing in Beijing under the laws of the PRC. With the approval of relevant PRC authorities, it is permitted to engage in research and development of application software, computer system integration, technical consulting and service, training, technology transfer, sale of products developed by the company itself. Pledgee and Shandong Haiwang Chemical Stock Co., Ltd., entered into an Exclusive Technical and Consulting Service Agreement effective as of February 1, 2011 (hereinafter referred to as “Service Agreement”).

WHEREAS, Pledgor is citizen of the PRC and collectively holds a 100% equity interest in Shandong Haiwang Chemical Stock Co., Ltd., which is a joint stock company duly established and validly existing under the laws of the PRC.

WHEREAS, in order to ensure that Pledgee collects the Consulting Service Fee (as such term is defined in the Service Agreement) from Shandong Haiwang Chemical Stock Co., Ltd., Pledgor is willing to pledge all of its equity interest in Shandong Haiwang Chemical Stock Co., Ltd. as security.

NOW THEREFORE, intending to be bound hereby and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Unless it is otherwise stipulated, for the purpose of this Agreement, the following terms shall have the following meanings:

1.1
Pledge shall have the meaning assigned to it in Article II of this Agreement.

1.2
Equity Interest shall mean the 100% equity interest in Shandong Haiwang Chemical Stock Co., Ltd., collectively held by Pledgee.

1.3
Rate of Pledge shall mean the ratio between the value of the Pledge under this Agreement and the Consulting Service Fee under the Service Agreement.

1.4
Term of Pledge shall mean the period provided for in Article 3.2.

1.5
Service Agreement shall mean the Exclusive Technical and Consulting Service Agreement entered into by and between Shandong Haiwang Chemical Stock Co., Ltd. and Pledgee effective as of February 1, 2011.

1.6
Event of Default shall have the meaning assigned to it in Article VII.
 
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1.7
Notice of Default shall mean the notice of default issued by Pledgee in accordance with this Agreement.

ARTICLE II

PLEDGE

2.1
Pledgor pledges the Equity Interest in Shandong Haiwang Chemical Stock Co., Ltd. as security for the payment of the Consulting Service Fee payable to Pledgee under the Service Agreement.

2.2
Pledgee, by virtue of the Pledge, shall be entitled to have priority in receiving any payment or proceeds from the auction or sale of the Equity Interest pledged by Pledgor to Pledgee.
 
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ARTICLE III

RATE OF PLEDGE AND TERM OF PLEDGE

3.1
The Rate of Pledge:

The Rate of Pledge shall be 100% under this Agreement.

3.2
The Term of Pledge:

 
3.2.1
The Pledge shall take effect as of the date that the Pledge is recorded in the register of shareholders of Shandong Haiwang Chemical Stock Co., Ltd. and shall remain effective so long as this Agreement remains in effect.

 
3.2.2
During the term of Pledge, Pledgee shall be entitled to foreclose on the Pledge in accordance with this Agreement in the event Shandong Haiwang Chemical Stock Co., Ltd. fails to pay the Consulting Service Fee in accordance with the Service Agreement.

ARTICLE IV

PHYSICAL POSSESSION OF PLEDGE DOCUMENTS

4.1
During the term of the Pledge, Pledgee shall be entitled to possess the contribution certificate of the Equity Interest (the “Contribution Certificate”) and the register of shareholders of Shandong Haiwang Chemical Stock Co., Ltd. Pledgor shall deliver the Contribution Certificate and the register of shareholders hereunder to Pledgee within one week after the date of this Agreement.

4.2
Pledgee shall be entitled to collect any dividends from the Equity Interest during the term of the Pledge.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF PLEDGOR

5.1
Pledgor is the legal owner of the Equity Interest.

5.2
At any time Pledgee exercises its right under this Agreement, it shall be free from any interference.

5.3
Pledgee has the right to exercise or transfer the Pledge in accordance with this Agreement.

5.4
Pledgor shall not pledge or encumber the Equity Interest to any other person except for Pledgee.
 
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ARTICLE VI

COVENANTS OF PLEDGOR

6.1
During the term of this Agreement, Pledgor covenants to Pledgee as follows:

 
6.1.1
Except for the transfer of the Equity Interest in accordance with the Exclusive Equity Interest Purchase Agreement entered into by and among Pledgor, Pledgee and Shandong Haiwang Chemical Stock Co., Ltd., the Pledgor shall not transfer or assign the Equity Interest or create or permit to be created any pledge which may have an adverse affect on the rights or benefits of Pledgee without prior written consent from Pledgee.

 
6.1.2
Pledgor shall comply with all laws and regulations with respect to the right of Pledge, present Pledgee any notices, orders or suggestions relating to the Pledge issued or made by a relevant authority after receiving such notices, orders or suggestions and comply with such notices, orders or suggestions or object to the foregoing matters at the reasonable request of Pledgee or with the written consent of Pledgee.

 
6.1.3
Pledgor shall timely notify Pledgee of any events or the receipt of any notice which may affect the Equity Interest or any part of its right, which may change any of Pledgor’s covenants and obligations under this Agreement or which may affect Pledgor’s performance of its obligations under this Agreement.

6.2
Pledgor agrees that Pledgee’s right to exercise the Pledge shall not be suspended or hampered through any legal procedure instituted by Pledgor, any successors of Pledgor or any person authorized by Pledgor.

6.3
Pledgor warrants to execute in good faith and cause other parties who may have any interest in the Pledge to execute all title certificates, contracts or other documents, and/or perform and cause other parties who have interests to take action as required by Pledgee and provide access to exercise the rights and authorization vested in Pledgee under this Agreement, and execute all the documents with respect to the Equity Interest and promptly provide all the notices, orders and decisions related to the Equity Interest and deemed necessary by Pledgee to Pledgee within a reasonable time.

6.4
Pledgor warrants that it will comply with and perform all the guarantees, covenants, agreements, representations and conditions hereunder for the benefit of Pledgee. Pledgor shall compensate Pledgee for all losses suffered in the event that Pledgor does not fully perform its guarantees, covenants, agreements, representations or conditions hereunder and causes any damage to Pledgee.

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ARTICLE VII

EVENTS OF DEFAULT

7.1
The occurrence of any of the events listed below shall be deemed as an Event of Default:

 
7.1.1
Failure by Shandong Haiwang Chemical Stock Co., Ltd. to make full payment of the Consulting Service Fee, as provided under the Service Agreement.

 
7.1.2
Pledgor makes any material misleading or fraudulent representations or warranties under Article 5 herein.

 
7.1.3
Pledgor violates any of the covenants under Article 6 herein.

 
7.1.4
Pledgor violates any of the terms or conditions hereof.

 
7.1.5
Pledgor waives the pledged Equity Interest or transfers or assigns the pledged Equity Interest without the prior written consent of Pledgee, except as provided in Article 6.1.1 in this Agreement.

 
7.1.6
Any loan, security, compensation, covenant or other compensation liability of Pledgor (i) is required to be paid or performed in advance because of an event of default; or (ii) is due but cannot be paid or performed, which makes Pledgee reasonably believe Pledgor’s capability of performing under this Agreement has been affected.

 
7.1.7
Pledgor is incapable of paying its general debt or other debt.

 
7.1.8
The promulgation of relevant laws makes the performance of this Agreement illegal or makes Pledgor unable to perform its obligations under this Agreement.

 
7.1.9
The withdrawal, suspension, invalidation or material revision of any approval, permit or authorization from the relevant authorities needed to perform or validate this Agreement.

7.1.10
Any adverse change in the property of Pledgor that causes Pledgee to reasonably believe that Pledgor may be unable to perform its obligations hereunder.

7.1.11
The inability or refusal by any successor or assignee of Shandong Haiwang Chemical Stock Co., Ltd. to pay the amounts due under the Service Agreement.

7.1.12
The occurrence of any other circumstances whereby Pledgee becomes incapable of exercising its right to foreclose on the Pledge.

7.2
Pledgor must immediately notify Pledgee in writing if Pledgor knows or is aware of any event stipulated in Article 7.1 or events that may reasonably lead to any event stipulated in Article 7.1.
 
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7.3
Unless the event of default stipulated in Article 7.1 has been remedied to Pledgee’s sole and absolute satisfaction, Pledgee may (i) give a written notice of default to Pledgor and require Pledgor to immediately make full payment of the outstanding Consulting Service Fee under the Service Agreement and other payables or (ii) foreclose on the Pledge in accordance with Article 8 herein.

ARTICLE VIII

EXERCISE OF THE RIGHT OF THE PLEDGE

8.1
Prior to full payment of the Consulting Service Fee under the Service Agreement, Pledgor shall not transfer or assign the Equity Interest without prior written approval from Pledgee.

8.2
Pledgee shall give Notice of Default to Pledgor when Pledgee exercises its right to foreclose on the Pledge.

8.3
Subject to Article 7.3 herein, Pledgee may exercise the right to foreclose on the Pledge at any time following written Notice of Default.

8.4
Pledgee is entitled to priority receipt of any payment or proceeds from the auction or sale of all or part of the Equity Interest pledged herein in accordance with applicable law until the outstanding Consulting Service Fee and all other payables under the Service Agreement are fully repaid.

8.5
Pledgor shall not hinder Pledgee from foreclosing on the Pledge in accordance with this Agreement and shall give necessary assistance so that Pledgee may effectively realize the value of the Pledge.

ARTICLE IX

TRANSFER OR ASSIGNMENT

9.1
Pledgor shall not grant or transfer its rights or obligations hereunder without prior written consent from Pledgee.

9.2
This Agreement shall be binding upon and inure to the benefit of Pledgor and the successors of Pledgor.

9.3
Pledgee may transfer or assign all or any rights and obligations under the Service Agreement to any person (natural person or legal entity) at any time.  Any assignee shall enjoy and undertake the same rights and obligations herein of Pledgee as if the assignee is a party hereto.  To the extent Pledgee transfers or assigns its rights and obligations under the Service Agreement, at the request of Pledgee, Pledgor shall execute the relevant agreements and/or documents with respect to such transfer or assignment.
 
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9.4
Upon Pledgee’s transfer or assignment, the new parties to the Pledge shall re-execute a Pledge contract.

ARTICLE X

TERMINATION

10.1
This Agreement shall expire on the date that is twenty years following the date hereof, and this Agreement may be extended prior to termination upon written agreement executed by each Party.
 
ARTICLE XI

FORMALITIES FEES AND OTHER EXPENSES

11.1
Pledgor shall be responsible for all fees and actual expenditures in relation to this Agreement, including, but not limited to, legal fees, costs of production, stamp tax and any other taxes and charges.  If Pledgee pays the relevant taxes in accordance with the laws, Pledgor shall fully reimburse Pledgee for any such taxes it pays.

11.2
Pledgor shall be responsible for all fees, including, but not limited to, any taxes, formalities fees, management fees, litigation fees, attorney’s fees, and various insurance premiums in connection with disposition of the Pledge, incurred by Pledgor as a result of the failure of Pledgor to pay any payable taxes, fees or charges in accordance with this Agreement, or as a result of the fact that Pledgee has recourse to any foregoing taxes, charges or fees by any means or for any other reasons.

ARTICLE XII

FORCE MAJEURE

12.1
If the fulfillment of this Agreement is delayed or blocked due to a Force Majeure Event (as defined below), the Party affected by such a Force Majeure Event shall be free from any obligation to the extent of such delay or holdback. As used herein, the term “Force Majeure Event” shall mean any event which is out of the control of either Party, and which is unavoidable or insurmountable even if the Party affected by such event paid reasonable attention to it. A Force Majeure Event shall include, but not be limited to, government actions, natural disaster, fire, explosion, typhoons, floods, earthquakes, tide, lightning or war. However, any lack of credit, assets or financing shall not be deemed as a Force Majeure Event. The Party claiming the occurrence of a Force Majeure Event shall inform the other Party and provide the other Party with the steps of fulfilling the obligations of this Agreement.
 
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12.2
The Party affected by such a Force Majeure Event shall be free from any obligation under this Agreement to the extent it is delayed or impeded provided that the Party affected by such a Force Majeure Event has made reasonable endeavors to perform the Agreement. Upon termination of the Force Majeure Event, the Parties agree to use reasonable best efforts to complete the transactions contemplated by this Agreement.

ARTICLE XIII

DISPUTE SETTLEMENT

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

13.2
The Parties shall strive to settle any dispute arising from the interpretation or performance, or in connection with this Agreement through mutual agreement and negotiation.  In case no settlement can be reached through consultation, each Party may submit such matter to the China International Economic and Trade Arbitration Committee for arbitration. The arbitration shall be held in Beijing. The arbitration proceedings shall be conducted in Chinese. The arbitration award shall be final and binding upon the Parties.  The arbitration award may be submitted to any court with jurisdiction for enforcement.

ARTICLE XIV

NOTICES

14.1
Any notice which is given by the Parties for the purpose of performing the rights and obligations hereunder shall be in writing. Where such notice is delivered personally, the time of notice shall be the time when such notice actually reaches the addressee. Where such notice is transmitted by telex or facsimile, the notice time shall be the time when such notice is transmitted. If such notice does not reach the addressee on a business date or reaches the addressee after the business time, the date of notice shall be the next business day. The delivery place shall be the address first written above for each Party hereto or any other address provided to the other Parties in writing from time to time. Written method includes fax and telefax.
 
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ARTICLE XV

APPENDIX

15.1
The Appendix of this Agreement as attached hereto is part of this Agreement.

ARTICLE XVI

EFFECTIVENESS

16.1
This Agreement and any amendments, supplements and modifications shall be in writing and come into effect upon execution by the Parties hereto.

16.2
This Agreement is executed both in Chinese and English in one or more original or facsimile counterparts. The Chinese version will prevail in the event of any inconsistency between the English and any Chinese translations thereof.
 
[Remainder of Page Left Intentionally Blank – Signature Page Follows]
 
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[Equity Interest Pledge Agreement – Signature Page]
 
IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first above written.
   
Pledgee:
Beijing Binhai Yintai Technology Co., Ltd.
By:
/s/ Yang Chunbin
Name:
Yang Chunbin
Its:
Legal Representative

Pledgor:

1YANG Chunbin
/s/ Yang Chunbin
   
2SUN Tongjiang
/s/ Sun Tongjiang
   
3LIU Shangxue
/s/ Liu Shangxue
   
4CUI Xiusheng
/s/ Cui Xiusheng 
   
5LU Junyou
/s/ Lu Junyou 
   
6WANG Yunyu
/s/ Wang Yunyu 
   
7MU Zuolei
/s/ Mu Zuolei
   
8MU Sisheng
/s/ Mu Sisheng 
   
9HOU Junhua
/s/ Hou Junhua  
   
10CUI Huabei
/s/ Cui Huabei 
   
11XU Xiuzhi
/s/ Xu Xiuzhi 
   
12XU Dayong
/s/ Xu Dayong 
   
13WANG Bintang    
/s/ Wang Bintang 
   
14LIU Zhixia
/s/ Liu Zhixia 
 
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15CUI Tongjing
/s/ Cui Tongjing
   
16XU Shigang
/s/ Xu Shigang 
   
17CUI Tonglin
/s/ Cui Tonglin 
   
18XU Jieguo
/s/ Xu Jieguo 
   
19WANG Chuanqiang    
/s/ Wang Chuanqiang 
   
20SUN Zhipeng
/s/ Sun Zhipeng 
   
21SHEN Zhaofa
/s/ Shen Zhaofa 
   
22LU Junping
/s/ Lu Junping 
   
23XU Jiechang
/s/ Xu Jiechang 
   
24Zhu Yuanhong
/s/ Zhu Yuanhong 
   
25ZHU Jiuquan
/s/ Zhu Jiuquan 
   
26LIN Chunhui
/s/ Lin Chunhui 
   
27CUI Zhuande
/s/ Cui Zhuande 
   
28WANG Xinhua
/s/ Wang Xinhua 
   
29ZHU Linsheng
/s/ Zhu Linsheng 
   
30  WU Jincai
/s/ Wu Jincai 
   
31YANG Xiaoyang
/s/ Yang Xiaoyang
   
32YANG Chunxiang
/s/ Yang Chunxiang 
   
33ZHU Xiaolei
/s/ Zhu Xiaolei 
 
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APPENDIX

1.
The register of the shareholders of Shandong Haiwang Chemical Stock Co., Ltd.

2.
The Contribution Certificate of Shandong Haiwang Chemical Stock Co., Ltd.

3.
The Exclusive Technical and Consulting Service Agreement by and between Beijing Binhai Yintai Technology Co., Ltd. and Shandong Haiwang Chemical Stock Co., Ltd.