Share Pledge Agreement
This
Share Pledge Agreement (this “Agreement”) was entered into
and between the following parties in Jinjiang, Fujian Province, the People’s
Republic of China (the “PRC”) on 18 November,
2010.:
Party A (the “Pledgee”):
AILIBAO
(FUJIAN) MARKETING MANAGEMENT CO.,LTD
|
Address:
|
Xxxxx
0, Xxxxxxxx 0, Xxxxxxx Xxxxxxxxxx Xxxx
Xx.000,
|
Xxxxxxxx
Xxxxxxx, Xxxxxxx Xxxx, Xxxxxxxx Xxxx
Xxxxx
Representative: Xxx
Xxxxxxx
Party B (the “Pledgors”):
Ding
Baojian
ID
Number: 35058219650824574
|
Address:
|
East
Xxxxxx Xxxx Xx.0, Xxxxxxxx village, Chendai Town, Jinjiang City, Fujian
Province
|
Ding
Baofu
ID
Number: 350582721015053
|
Address:
|
Dongmei
Xx.00, Xxxxxxxx xxxxxxx, Xxxxxxx Xxxx, Xxxxxxxx Xxxx, Xxxxxx
Xxxxxxxx
|
Ding
Changming
ID
Number: 000000000000000000
|
Address:
|
East
Xxxxxx Xxxx Xx.0, Xxxxxxxx village, Chendai Town, Jinjiang City, Fujian
Province
|
Party
C:
Fujian
Jinjiang Chendai Ailibao Shoes & Clothes Co., Ltd
|
Address:
|
Jiangtou
village, Chendai town, Jinjiang, Fujian
province
|
Legal
Representative: Ding Baojian
WHEREAS:
|
1.
|
The
Pledgee is a wholly foreign-owned enterprise duly registered and validly
existing in the PRC.
|
1
|
2.
|
Party
C. is a limited liability company duly registered and validly existing in
the PRC.
|
|
3.
|
The
Pledgors are interested in Party C: Ding Baojian owns 33.34% equity
interest in Party C, Ding Baofu owns 33.33%, Ding Changming owns
33.33%.
|
|
4.
|
The
Pledgee, the Pledgors and Party C have entered into certain Exclusive
Business Consultation and Services Agreement, Business Operation
Agreement, Option Agreement and Intellectual Property License Agreement
dated as of 18 November, 2010.
|
|
5.
|
In
order to guarantee that the Pledgee normally collects the fees for
business consulting and service under Exclusive Business Consulting and
Services Agreement from Party C owned by the Pledgor, and to ensure the
performance of Exclusive Business Consulting and Services Agreement,
Business Operation Agreement, Option Agreement and Intellectual Property
License Agreement, the Pledgors are willing to severally and jointly
pledge all their Equity Interests in Party C to the Pledgee as a security
for the performance of the obligations under the aforesaid agreements. The
Pledgee shall be Party A.
|
THEREFORE,
The Parties, through friendly negotiation in the principles of equality and
mutual benefits, hereby agree the following:
|
1.
|
Definitions
|
Unless
otherwise provided in this Agreement, the following terms shall have the
meanings ascribed to it as follows:
|
1.1
|
“Pledge”
has the meaning set out in Section 2
hereunder.
|
|
1.2
|
“Equity
Interests” means 100% Equity Interests in Party C legally and jointly held
by the Pledgors and all of the rights in and interests at present and in
future based on such Equity
Interests.
|
|
1.3
|
“Controlling
Agreements” means Exclusive Business Consultation and Service Agreement,
Option Agreement, Business Operation Agreement and Intellectual Property
License Agreement executed by the Pledgee, Party C and other relevant
parties dated as of 18 November,
2010.
|
|
1.4
|
“Event
of Breach” means any event defined in Section 7
hereunder.
|
2
|
1.5
|
“Notice
of Default” means the notice of default issued by the Pledgee in
accordance with this Agreement.
|
|
2.
|
Pledge
|
|
2.1
|
The
Pledgors agree to pledge all the Equity Interests in Party C to the
Pledgee as the security for the Pledgee’s rights and interests under the
Controlling Agreements.
|
|
2.2
|
The
Pledge under this Agreement covers all fees (including legal fees), costs
and losses, interests, liquidated damages, compensations and expenses for
enforcement of the Pledge to be paid by Party C and/or Pledgors to Pledgee
under the Controlling Agreements, and the liabilities to be borne by Party
C and/or Pledgors in case the Contolling
Agreements become void as a whole or in part due to any
reason.
|
|
2.3
|
The
Pledge of equity under this Agreement refers to the priority of the
Pledgee to be compensated from the proceeds of the conversion, auction, or
sale of the Equity Interests pledged by the Pledgors to the
Pledgee.
|
|
2.4
|
Unless
otherwise agreed by Pledgee in writing after the effective date of this
Agreement, the Pledge under this Agreement may be discharged only when
Party C and Pledgors have performed all of the obligations under the
Controlling Agreements subject to the Pledgee’s written consent. If Party
C or Pledgors have not fully performed all or any part of its obligations
under the Controlling Agreements upon the expiry of the term stipulated in
such Controlling Agreements, the Pledgee hereunder will still enjoy the
rights of pledge until all of such obligations under such agreements are
fully performed in the forms reasonable and satisfactory to
Pledgee.
|
|
3.
|
Effectiveness
|
|
3.1
|
This
Agreement shall come into existence as of the date executed or sealed by
all Parties and come into effect as of the date when the Pledge is
recorded in the Register of Shareholders of Party
C.
|
|
3.2
|
The
Pledgee is entitled to enforce the Pledge hereunder with reasonable notice
if Party C fails to pay the consulting and service fees under and in
accordance with the Business Consulting and Service Agreement and the
Intellectual Property License Agreement or otherwise fails to fully
perform the Business Operation Agreement, the Assets Transfer Agreement or
the Option Agreement.
|
3
|
4.
|
Physical
Possession Of Documents
|
|
4.1
|
Pledgors
and Party C shall (1) register the Pledge in the shareholders' register of
Party C within 10 business days following the execution of this Agreement,
and (2) submit an application to the relevant Administration for Industry
and Commerce (“AIC”) for the registration of the Pledge of the Equity
Interest contemplated herein within 5 business days following the
execution of this Agreement. The parties covenant that for the purpose of
registration of the Pledge, the parties hereto and all other shareholders
of Party C shall submit to the AIC this Agreement or an equity interest
pledge contract in the form required by the AIC at the location of Party C
which shall truly reflect the information of the Pledge hereunder (the
“AIC Pledge Contract”). For matters not specified in the AIC Pledge
Contract, the parties shall be bound by the provisions of this Agreement.
Pledgors and Party C shall submit all necessary documents and complete all
necessary procedures, as required by the PRC laws and regulations and the
relevant AIC, to ensure that the Pledge of the Equity Interest shall be
registered with the AIC as soon as possible after
filing.
|
|
4.2
|
If
any change occurs to any item of the Pledge and such change needs to be
registered or filed, the Pledgee and the Pledgors shall register or file
such changes within five (5) working days as of the day of change, and
shall submit relevant documents for the registration
change.
|
|
4.3
|
During
the term of the Pledge of the equity, the Pledgors shall instruct Party C
not to distribute any dividend, bonus, or adopt any profits distribution
plan. If the Pledgors shall be entitled to any benefit other than dividend
and profits distribution plan, the Pledgors shall instruct Party C to
liquidate such payments (after cashing) and directly pay the same into the
bank account designated by the Pledgee as per the Pledgee’s request.
Pledgors shall not use money deposited into the bank account without the
prior written consent of the
Pledgee.
|
|
4.4
|
During
the term of the Pledge of the Equity, if any Pledgor subscribes new
capital contribution or purchases any of the Equity Interests in Party C
owned by another Pledgor (“Additional Equity”), the
Additional Equity shall automatically become the Equity Interests pledged
under this Agreement, and the Pledgor shall complete all the statutory
procedures necessary for the Pledge of the Additional Equity within ten
(10) working days after acquiring the Additional Equity. If the Pledgor
fails to complete the relevant procedures pursuant to this Section 4, the
Pledgee shall have the right to forthwith enforce the Pledge pursuant to
Section 8 of this Agreement.
|
|
5.
|
Representations
and Warranties of the Pledgors
|
The
Pledgors hereby represent and warrant to the Pledgee as follows upon the
execution of this Agreement, and acknowledge that the Pledgee enters into this
Agreement in reliance of such representations and warranties to execute and
perform this Agreement:
4
|
5.1
|
Each
Pledgor is the legal owner of its Equity Interests hereunder and is
entitled to create Pledge on such the Equity
Interests.
|
|
5.2
|
During
the term of equity Pledge under Section 2.4 hereof, the Pledgee shall not
be legally claimed by or duly interfered with any other party when the
Pledgee enforces or exercise the Pledge at any time in accordance with
this Agreement.
|
|
5.3
|
The
Pledgee is entitled to enforce the Pledge in accordance with relevant
laws, regulations and this
Agreement.
|
|
5.4
|
Each
Pledgor has all requisite corporate powers and authorities to execute and
perform this Agreement, the execution and performance of which will not
constitute breach of any applicable laws and regulations. The authorized
signatory hereunder has full lawful and valid
authorization.
|
|
5.5
|
Except
for the Pledge under this Agreement, there is no other encumbrance or any
security interests (including but not limited to pledge) in favor of any
third party on the Equity Interests under the
Pledge.
|
|
5.6
|
There
is no pending or possible civil, administrative or criminal litigation or
administrative penalty or arbitration in respect of the Pledge of the
Equity Interests hereunder at the date of this
Agreement.
|
|
5.7
|
There
are no outstanding taxes, fees or legal proceedings or formalities due and
unaccomplished with respect to the Equity Interests
hereunder.
|
|
5.8
|
Each
term of this Agreement reflects the true intent of each Pledgor and has
binding force on it.
|
|
6.
|
Covenant
of the Pledgor
|
|
6.1
|
During
the term of this Agreement, each Pledgor covenants to the Pledgee that it
shall:
|
|
6.1.1
|
without
prior written consent of the Pledgee, not transfer or assign the Equity
Interests to, create or permit to create any pledge or security interest,
which may have an adverse effect on the rights or benefits of the Pledgee,
in favor of any third party, except for the transfer of the Equity
Interests to the Pledgee or the person designated by the Pledgee as
required by the Pledgee;
|
5
|
|
6.1.2
|
comply
with and implement all applicable laws and regulations with respect to the
Pledge, present to the Pledgee the notices, orders or suggestions with
respect to the Pledge issued or made by the competent authority within
five (5) working days upon receiving such notices, orders or suggestions
and take actions in accordance with the reasonable instruction of the
Pledgee;
|
|
|
6.1.3
|
timely
notify the Pledgee of any event or any received notice which may affect
the Pledgor’s Equity Interests or any part of its right therein, and any
event or any received notice which may change the Pledgor’s any obligation
under this Agreement or affect the Pledgor’s performance of its
obligations under this Agreement, and take actions in accordance with the
reasonable instructions of the
Pledgee.
|
|
6.2
|
The
Pledgors agree that the Pledgee’s rights to enforce the Pledge pursuant to
this Agreement shall not be suspended or hampered by the Pledgors or any
of its successors or assigns or any other
person.
|
|
6.3
|
The
Pledgors warrant to the Pledgee that in order to protect or perfect the
security over the obligations of the Pledgor and/or Party C under the
Controlling Agreements, the Pledgors shall make all necessary amendments
to Party C’s articles of association (if applicable), and procure the
other parties interested in the Pledge to execute all the title
certificates, contracts, and/or perform and cause other interested Parties
to take actions as required by the Pledgee and assist in the enforcement
of the Pledge under this Agreement, enter into all the documents with
respect to the changes of share certificate with the Pledgee or any third
party designated by the Pledgee, and provides the Pledgee with all the
documents it deems necessary for the Pledge within the reasonable
period.
|
|
6.4
|
The
Pledgors covenants to the Pledgee that, in the interest of the Pledgee,
the Pledgors shall comply with and perform all the warranties, covenants,
agreements and representations.
|
|
7.
|
Events
of Breach
|
|
7.1
|
Any
of the following events shall be deemed as an Event of
Breach:
|
|
|
7.1.1
|
Party
C or its successors or assigns fails to make full payment of service fees
under the Service Agreement on schedule, or the Pledgors or its successors
or assigns fails to perform the Business Operation Agreement, Option
Agreement, Exclusive Business Consulting and Service Agreement and
Intellectual Property License
Agreement;
|
|
|
7.1.2
|
Any
of representations, warranties or covenants under Sections 5 and 6 of any
Pledgor is misleading or incorrect in material aspect, and/or the Pledgor
is in violation of any representations or warranties under Sections 5 and
6;
|
6
|
|
7.1.3
|
The
Pledgors materially breach any term of this
Agreement;
|
|
|
7.1.4
|
The
Pledgors waive the Equity Interests pledged or transfer the Equity
Interests pledged without prior written consent of the Pledgee except
otherwise provided under Section 6.1.1
herein;
|
|
7.2
|
Any
Pledgor shall immediately give a written notice to Pledgee if it has the
knowledge or is aware of any event under Section 7.1 or any event that may
result in any of the foregoing event has
occurred.
|
|
7.3
|
Unless
the Event of Breach under Section 7.1 has been settled to the Pledgee's
satisfaction, the Pledgee, on the date when the Event of Breach occurs or
any time thereafter, may give a written Notice of Breach to the Pledgor
and require the Pledgors and/or Party C to forthwith pay all fees and
other payables due and outstanding under the Controlling Agreements or
timely perform the Business Operation Agreement, the Option Agreement, the
Intellectual Property License Agreement. If the Pledgor fails to timely
redress or cure its breach or make necessary remedies within ten (10) days
upon such written notice, the Pledgee shall be entitled to enforce the
Pledge in accordance with Section 8
herein.
|
|
8.
|
Enforcement
of the Pledge
|
|
8.1
|
The
Pledgor shall not transfer the Equity Interests pledged without prior
written approval by the Pledgee prior to the full payment of the fees and
the full performance of the obligations under Controlling
Agreements.
|
|
8.2
|
The
Pledgee shall give the Notice of Breach to the Pledgors when it exercises
the right of pledge.
|
|
8.3
|
Subject
to Section 7.3, the Pledgee may enforce the Pledge at any time after it
gives the Notice of Breach in accordance with Section 7.3 of this
Agreement.
|
|
8.4
|
The
Pledgee shall have the priority in receiving compensation out of the
proceeds from the disposition by agreement, auction or sale of whole or
part of the Equity Interests pledged hereunder in accordance with legal
procedures until the all outstanding fees and other payables under the
Controlling Agreements are paid off, and the full performance of the
Business Operation Agreement, the Option Agreement and the Intellectual
Property License Agreement.
|
|
8.5
|
The
Pledgors shall not hinder the Pledgee from disposing the Pledge when the
Pledgee exercises the Pledge in accordance with this Agreement. The
Pledgors shall give necessary assistance in the enforcement of the
Pledge.
|
7
|
9.
|
Transfer
|
|
9.1
|
The
Pledgors shall not transfer any of its rights and/or obligations hereunder
to any third party without prior written consent of the
Pledgee.
|
|
9.2
|
Pledgee
is entitled to transfer or assign all or part of its rights and
obligations under the Controlling Agreements at any time. Under such
situation, the transferee shall have and bear the rights and obligations
borne by the Pledgee under this Agreement. When the Pledgee transfers the
rights and obligations under the Controlling Agreements, the Pledgor shall
execute relevant agreements and/or documents for such purpose as per the
request of the Pledgee.
|
|
9.3
|
After
the Pledgee is changed resulting from the transfer, the new Parties to the
Pledge shall execute a new pledge agreement and the new Parties of the
Pledge shall handle all the relevant registration
procedures.
|
|
10.
|
Fees
and other Expenses
|
All
expense and actual costs in connection with this Agreement, including but not
limited to legal fees, paper cost, stamp duty and any other taxes and charges,
shall be borne half by Party A and Party B respectively.
|
11.
|
Force
Majeure
|
|
11.1
|
“Event
of Force Majeure” means any event that is unforeseeable or beyond the
reasonable control of the Party affected and cannot be prevented with
reasonable care, which includes but is not limited to the acts of
governments, acts of nature, fire, explosion, geographic change, flood,
earthquake, tide, lightning, war. However, any shortage of credit, capital
or finance shall not be regarded as an event beyond a Party’s reasonable
control. However, deficiency of credit, fund or financing shall not be
deemed as the item out of reasonable control of the Party. The Party
affected by an Event of Force Majeure who claims to be exempted from
performing any obligations under this Agreement or under any section
herein shall notify each other Party promptly of such
exemption.
|
|
11.2
|
When performance of this
Agreement is suspended or prevented due to an Event of Force
Majeure defined as the
above, the Party affected by such Event of Force Majeure shall be exempted
from any liability under this Agreement to the extent of such suspend or
prevention. The Party affected shall take proper measures to decrease or
diminish the impacts from such Event of Force Majeure and make reasonable
and practicable efforts to resume the performance suspended or prevented
by the Event of Force Majeure, so that it may be exempted from performing
such obligations to the extent of the part of the obligations suspended or
prevented. Once the Event of Force Majeure ceased, the affected Party
shall make its best endeavors to resume the performance of this
Agreement.
|
8
|
12.
|
Governing
Law and Dispute Resolution
|
|
12.1
|
The
execution, validity, performance and interpretation of this Agreement
shall be governed by and construed in accordance with the laws of the
PRC.
|
|
12.2
|
The
Parties shall strive to settle any dispute arising from the interpretation
or execution of this Agreement through negotiation in good faith. In case
no settlement can be reached through consultation, each Party may submit
such dispute to Xiamen Arbitration Commission for arbitration in
accordance with its then-current and effective arbitration rules. The
arbitration shall be conducted in Chinese. The arbitration award shall be
final and binding upon the Parties.
|
|
12.3
|
Each
Party shall continue to perform its obligations in good faith in
accordance with this Agreement except for the matters in
dispute.
|
|
13.
|
Notice
|
Any
notice or correspondence given by the Parties hereunder, shall be in writing and
shall be delivered in person registered mail, postage prepaid mail, recognized
courier service or by facsimile transmission to the address of the relevant
Party or Parties set forth below:
Party
A:
AILIBAO
(FUJIAN) MARKETING MANAGEMENT CO.,LTD
|
|
Address:
|
Xxxxx
0, Xxxxxxxx 0, Xxxxxxx Xxxxxxxxxx Xxxx
Xx.000,
|
Xxxxxxxx
Xxxxxxx, Xxxxxxx Xxxx, Xxxxxxxx Xxxx
|
Fax:
|
0000-00000000
|
|
Telephone:
|
0000-00000000
|
|
Addressee:
|
Xxx
Xxx Xxxx
|
Party
B:
Ding
Baojian
|
|
Address:
|
East
Kaituo Road Xx.0, Xxxxxxxx xxxxxxx, Xxxxxxx Xxxx, Xxxxxxxx
Xxxx,
Xxxxxx Xxxxxxxx
|
|
Fax:
|
0000-00000000
|
|
Telephone:
|
0000-00000000
|
Ding
Baofu
|
|
Address:
|
Dongmei
Xx.00, Xxxxxxxx xxxxxxx, Xxxxxxx Xxxx, Xxxxxxxx Xxxx,
Xxxxxx
Xxxxxxxx
|
|
|
Fax:
|
0000-00000000
|
|
Telephone:
|
0000-00000000
|
9
Ding
Changming
|
|
Address:
|
East
Kaituo Road Xx.0, Xxxxxxxx xxxxxxx, Xxxxxxx Xxxx, Xxxxxxxx
Xxxx,
Xxxxxx Xxxxxxxx
|
|
|
Fax:
|
0000-00000000
|
|
Telephone:
|
0000-00000000
|
Party
C:
Fujian
Jinjiang Chendai Ailibao Shoes & Clothes Co., Ltd
|
Address:
|
Jiangtou
village, Chendai town, Jinjiang, Fujian
province
|
|
|
Fax:
|
0000-00000000
|
|
Telephone:
|
0000-00000000
|
|
Addressee:
|
Ding
Baofu
|
|
14.
|
Waiver
|
The
Pledgee’s non-exercise or suspend in exercise of any right, remedie, power or
privilege hereunder shall not be deemed as a waiver thereof. Any single or
partial exercise of the rights, remedies, power and privileges shall not exclude
the Pledgee from exercising any other rights, remedies, power and privileges.
The rights, remedies, power and privileges hereunder are accumulative and shall
not exclude the application of any other rights, remedies, power and privileges
under any applicable laws.
|
15.
|
Miscellaneous
|
|
16.1
|
Any
amendment, supplement or modification to this Agreement shall be in
writing and come into effect upon being executed or sealed by the Parties
hereto.
|
|
16.2
|
The
Parties hereby acknowledge that they enter into this Agreement in good
faith on the basis of equality and mutual benefit. In case any provision
in this Agreement is void or unenforceable due to incompliance with
relevant laws, such provisions shall be deemed to become null and void and
unenforceable to the extent provided by the applicable laws, and the
balance of this Agreement will remain
enforce.
|
|
16.3
|
This
Agreement is made in English, with five [5]
originals.
|
10
(Signature
Page to the Share Pledge Agreement)
Party
A:
AILIBAO
(FUJIAN) MARKETING MANAGEMENT CO.,LTD
|
Authorized
Representative:
|
/s/ XXX Xxx Ying
|
Party
B:
|
Ding
Baojian
|
||
|
Signature:
|
/s/ DING Baojian
|
|
|
Ding
Baofu
|
||
|
Signature:
|
/s/
DING Baofu
|
|
|
Ding
Changming
|
||
|
Signature:
|
/s/ DING Changming
|
|
Party
C:
Fujian
Jinjiang Chendai Ailibao Shoes & Clothes Co., Ltd
|
Authorized
Representative:
|
/s/ DING Baojian
|
11
