SHARE PLEDGE AGREEMENT
EXECUTION
COPY
This
SHARE PLEDGE
AGREEMENT,
dated
as of June 1, 2007 (this “Agreement”),
is
executed between (i) Xx. Xxxx You-Bin, being an individual resident in the
People’s Republic of China (“Xx.
Xxxx”),
and
American Dairy, Inc.,
a Utah
corporation (the “Company”,
and
together with Xx. Xxxx, the “Pledgors”)
and The
Bank
of New York, in its capacity as collateral agent (with its successors in such
capacity, the “Collateral
Agent”)
for
the benefit of the Secured Parties (as defined below).
WITNESSETH:
(1) The
Company issued certain 1.0% Guaranteed Senior Secured Convertible Notes due
2012
(the “Notes”)
pursuant to an indenture dated the date hereof (as amended, restated,
supplemented or otherwise modified and in effect from time to time, the
“Indenture”),
among
the Company, American Flying Crane Corporation, a Delaware Corporation (the
“Guarantor”),
the
other Subsidiaries (as defined in the Notes Purchase Agreement) of the Company
and The Bank of New York, a New York banking corporation, as trustee (in such
capacity, the “Trustee”);
(2) The
Company, its Subsidiaries, Xx. Xxxx, Mr. Xxx Xxx and Citadel Equity Fund Ltd.
have entered into an amended and restated notes purchase agreement dated as
of
June 1, 2007 (the “Notes
Purchase Agreement”)
for
the sale and purchase of the Notes;
(2) The
Pledgors own the issued and outstanding equity interests in the Company and
the
Guarantor, as applicable, set forth on Exhibit
A
attached
hereto and made a part hereof (the “Equity
Interests”);
and
(3) The
Pledgors are required to execute and deliver this Agreement pursuant to the
Notes Purchase Agreement and the Indenture.
NOW,
THEREFORE,
for and
in consideration of the foregoing and of any financial accommodations or
extensions of credit heretofore, now or hereafter made to or for the benefit
of
the Secured Parties pursuant to the Indenture or any other agreement, instrument
or document executed pursuant to or in connection therewith, and for other
good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Pledgors and the Collateral Agent hereby agree as
follows:
1.
Defined
Terms.
Unless
otherwise defined herein, each capitalized term used herein that is defined
in
the Indenture shall have the meaning specified for such term in the Indenture.
Unless otherwise defined herein or in the Indenture, terms used in Article
8 or
Article 9 of the Uniform Commercial Code as in effect from time to time in
the
State of New York are used herein as therein defined. In addition, the following
terms used in this Agreement shall have the meanings set forth
below:
1.
“Qualified
Event of Default”
shall
mean an Event of Default as defined in Section 6.01 of the Indenture, provided
that an Event of Default described under Section 6.01(e) of the Indenture shall
not be a Qualified Event of Default for purposes of this Agreement unless and
until the following conditions have been satisfied:
(i) if
the
Collateral Agent receives written notice from the Company within the 30-day
period prescribed in Section 6.01(e) of the Indenture stating either that (A)
the Company objects to the notice of failure given pursuant to Section 6.01(e)
of the Indenture or (B) the Company believes that it has cured the failure
so
notified within such 30-day period, then the Collateral Agent shall allow 14
days after the occurrence of such Event of Default for the Company and the
Trustee or the holders of 25% in aggregate principal amount of the Notes then
outstanding (the “Initiating
Noteholders”),
whoever gave such notice of failure, to attempt to resolve such dispute,
following which, in the absence of its receipt of joint instructions signed
by
both the Company and the Trustee (acting at the written direction of the
Initiating Noteholders) or the Initiating Noteholders, whoever gave such notice
of failure, the Collateral Agent shall submit the dispute to an arbitrator
to be
mutually agreed by the Company on the one hand and the Trustee or the Initiating
Noteholders, whoever gave such notice of failure, for resolution, on the other
hand;
(ii) in
case the Company gives notice to the Collateral Agent as described in the
preceding clause (i), the Collateral Agent shall not transfer, register or
otherwise exercise any remedies with respect to the Pledged Collateral pursuant
to the Event of Default described in the preceding clause (i) until it receives
(A)
a binding arbitration award rendered or given by the arbitrator described in
the
preceding clause (i) stating that an Event of Default under Section 6.01(e)
of
the Indenture has in fact occurred and that the Collateral Agent has the right
to exercise its remedies under this Section 4, or (B)
joint
written instructions of the Company and the Trustee (acting at the written
direction of the Initiating Noteholders) or the Initiating Noteholders, whoever
gave the notice of failure under Section 6.01(e) of the Indenture;
provided,
that nothing herein shall prevent the Collateral Agent from pursuing remedies
with respect to the Pledged Collateral pursuant to any other Qualified Event
of
Default which has occurred and is continuing.
“Secured
Obligations”
shall
mean all obligations owing by the Company, its Subsidiaries, Xx. Xxxx and Mr.
Xxx Xxx from time to time under the Indenture, the Notes, the Guarantees, the
Notes Purchase Agreement and in respect of all other Note Obligations,
including, without limitation, interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless
of
whether allowed or allowable in such proceeding.
“Secured
Parties”
shall
mean each of the Collateral Agent, the Trustee, the holders of any Note
(“Holders”)
and
each other party to whom any Secured Obligation is owed.
2.
Pledge.
Each
Pledgor hereby pledges to the Collateral Agent, for the benefit of the Secured
Parties, and grants to the Collateral Agent for the benefit of the Secured
Parties, a security interest in, the following (collectively, the “Pledged
Collateral”):
(a)
All
of
the right, title and interest of such Pledgor in the Equity Interests, whether
now existing or hereafter arising, and the certificates representing the shares
of such capital stock (such now-existing shares being identified on Exhibit
A
attached
hereto and made a part hereof), and (in the case of the Company as the Pledgor)
all options and warrants for the purchase of additional equity interests in
the
Guarantor now or hereafter held in the name of the Company (all of said Equity
Interests and (in the case of the Company as the Pledgor) options and warrants
and all capital stock held in the name of the Company as a result of the
exercise of such options or warrants being hereinafter collectively referred
to
as the “Pledged
Stock”),
herewith delivered to the Collateral Agent,
accompanied by undated Powers (as defined below) executed in blank by such
Pledgor, and, subject to Section
9
hereof,
all dividends, distributions, cash, instruments and other property from time
to
time received, receivable or otherwise distributed in respect of, or in exchange
for, any or all of the Pledged Stock;
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(b)
All
Additional Equity Interests (as defined below) from time to time acquired by
the
Company from the date hereof in any manner, and the certificates representing
such Additional Equity Interests (any such additional equity interests shall
constitute part of the Pledged Stock and the Collateral Agent is irrevocably
authorized to amend Exhibit
A
from
time to time to reflect such additional equity interests), and subject to
Section
9
hereof,
all options, warrants, dividends, distributions, cash, instruments and other
rights and options from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Equity Interests
or Additional Equity Interests; and
(c)
All
proceeds of the foregoing.
3.
Security
for Liabilities.
The
Pledged Collateral secures the full and prompt payment, performance and
observance when due (whether at stated maturity, by acceleration or otherwise)
of the Secured Obligations.
4.
Delivery
of Pledged Collateral; Registration and Acknowledgments.
All
certificates representing or evidencing the Pledged Collateral, if any, and
a
copy of the UCC financing statements filed with the State of Utah or the
District of Columbia, as applicable, pursuant to Section 26 below, shall be
physically delivered to and held by or on behalf of the Collateral Agent,
pursuant hereto and shall be in suitable form for transfer by delivery and
shall
be accompanied by duly executed instruments of transfer, powers, or assignments
in blank as appropriate (such instruments of transfer, powers, or assignments
in
blank, in the form of Exhibit
B
attached
hereto and made a part hereof, being the “Powers”),
all
in form and substance satisfactory to the Collateral Agent. After the occurrence
and during the continuance of a Qualified Event of Default under the Indenture,
the Collateral Agent shall have the right, at any time in its discretion and
without notice to any Pledgor, to transfer to or to register in the name of
the
Collateral Agent or any of its nominees any or all of the Pledged Collateral,
subject only to the revocable rights specified in Sections
8
and
9.
In
addition, the Collateral Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged Collateral for
certificates or instruments of smaller or larger denominations.
5.
Pledged
Collateral Adjustments.
If,
during the term of this Agreement:
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(a)
Any
stock
dividend, reclassification, readjustment or other change is declared or made
in
the capital structure of either Pledged Entity (as defined below), or any option
included within the Pledged Collateral is exercised, or both, or
(b)
Any
subscription warrants, shares, or any other rights or options or other
securities shall be issued in connection with the Pledged Collateral,
then
all
new, substituted and additional shares, warrants, rights, options or other
securities, issued by reason of any of the foregoing, shall be immediately
delivered to and held by the Collateral Agent, under the terms of this Agreement
and shall constitute Pledged Collateral hereunder; provided,
however,
that
nothing contained in this Section
5
shall be
deemed to permit any distribution, issuance of additional shares, warrants,
rights, options or other securities, reclassification, readjustment or other
change in the capital structure which is expressly prohibited in the Indenture
nor to permit any such distribution, issuance of additional equity interests,
warrants, shares, rights, options or other securities, reclassification,
readjustment or other change in the capital structure of such issuer which
is
expressly prohibited in the Indenture.
6.
Subsequent
Changes Affecting Pledged Collateral.
Each
Pledgor represents and warrants that it has made its own arrangements for
keeping itself informed of changes or potential changes affecting the Pledged
Collateral (including, but not limited to, rights to convert, rights to
subscribe, payment of distributions, reorganization or other exchanges, offers
to purchase and voting rights), and each Pledgor agrees that none of the
Collateral Agent or any of the Secured Parties shall have any obligation to
inform such Pledgor of any such changes or potential changes or to take any
action or omit to take any action with respect thereto. The Collateral Agent
may, after the occurrence and during the continuance of a Qualified Event of
Default, without notice and at its option, transfer or register the Pledged
Collateral or any part thereof into its or its nominee’s name with or without
any indication that such Pledged Collateral is subject to the security interest
hereunder.
7.
Representations
and Warranties.
Each
Pledgor represents and warrants, severally and not jointly, as follows:
(a)
Such
Pledgor is the sole legal and beneficial owner of the Equity Interests set
forth
opposite its name on Exhibit
A
attached
hereto and made a part hereof, free and clear of any Lien except for the Lien
created by this Agreement;
(b)
All
of
the Pledged Stock pledged by such Pledgor has been duly authorized and validly
issued, is fully paid and non-assessable; such Pledgor has acquired its
ownership in such Pledged Collateral in good faith without notice of any adverse
claims;
(c)
All
of
the Pledged Stock pledged by such Pledgor is presently represented by the
certificates listed on Exhibit
A
hereto
and are a “Certificated Security” within the meaning given to such term in
Section 8-102(a)(4) of the UCC (as defined below). As of the date hereof, there
are no existing options, warrants, calls or commitments of any character
whatsoever relating to such Pledged Stock;
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(d)
Such
Pledgor has full power and authority to enter into this Agreement and perform
the obligations hereunder;
(e)
There
are
no restrictions upon the voting rights associated with, or upon the transfer
of,
any of the Pledged Collateral pledged by such Pledgor;
(f)
Such
Pledgor has the right to vote, pledge, assign and grant a security interest
in
or otherwise transfer the Pledged Collateral pledged by such Pledgor free of
any
Liens;
(g)
No
authorization, approval, or other action by, and no notice to or filing with,
any Governmental Authority and no consent from any other party (including,
without limitation, any stockholder, partner, member or creditor of such Pledgor
or any of its Affiliates) is required either (i) for the pledge of the Pledged
Collateral pledged by such Pledgor pursuant to this Agreement or for the
execution, delivery or performance of this Agreement by such Pledgor or (ii)
for
the exercise by the Collateral Agent of the voting or other rights provided
for
in this Agreement or the remedies in respect of such Pledged Collateral pursuant
to this Agreement (except as may be required in connection with such disposition
by laws affecting the offering and sale of securities generally);
(h)
The
pledge of the Pledged Collateral pursuant to this Agreement, together with
the
delivery of the stock certificates in accordance with Section
4
hereof
to the Collateral Agent, creates a valid and perfected first priority security
interest in the Pledged Collateral, in favor of the Collateral Agent for the
benefit of the Secured Parties, securing the payment and performance of the
Secured Obligations; the Collateral Agent shall have “control” (within the
meaning given to such term in Section 8-106 of the UCC) of the Pledged
Collateral and the Collateral Agent will be a “protected purchaser” (within the
meaning given to such term in Section 8-303 of the UCC);
(i)
This
Agreement has been duly executed and delivered by and on behalf of such Pledgor
and constitutes the legal, valid and binding obligation of such Pledgor,
enforceable against such Pledgor in accordance with its terms;
(j)
There
is
no action, suit, proceeding, governmental investigation or arbitration, at
law
or in equity, or before or by any Governmental Authority, pending, or to the
knowledge of such Pledgor, threatened against such Pledgor, the respective
Pledged Entity (as defined below) or any of its property which will materially
and adversely affect the value of the Pledged Collateral pledged by such Pledgor
or the ability of such Pledgor to perform its obligations under this Agreement;
(k)
The
execution, delivery and performance of this Agreement by such Pledgor (i) does
not violate, constitute a breach of or a default (with the passage of time
or
otherwise) under, require the consent of any person or a Governmental Authority
or result in the imposition of a Lien (other than the Lien created by this
Agreement) on any assets of such Pledgor under or pursuant to (x) any indenture,
mortgage, or any other agreement to which such Pledgor is a party or by which
any of its properties or assets may be bound or (y) any statute, rule,
regulation, law or ordinance, or any judgment, decree or order applicable to
such Pledgor; (ii) complies with all corporate organization documents of such
Pledgor; and (iii) does not violate any restriction on such transfer or
encumbrance of the Pledged Collateral pledged by such Pledgor;
5
(l)
The
Powers delivered by such Pledgor are effective endorsements duly executed by
an
appropriate person and give the Collateral Agent the authority they purport
to
confer;
(m)
The
Pledged Stock pledged by such Pledgor constitutes (i) in the case of the Company
as the Pledgor, constitutes all of the equity interests in the Guarantor held
by
the Company as of the date hereof and (ii) in the case of Xx. Xxxx as the
Pledgor, constitutes 30% of all the equity interests in the Company held by
Xx.
Xxxx on a fully-diluted basis as of the date hereof; and
(n)
The
respective Pledged Entity has been duly incorporated and is validly existing
as
a corporation in good standing under the laws of its jurisdiction of
incorporation (i.e.,
Utah in
the case of the Company as the Pledged Entity, and Delaware in the case of
the
Guarantor as the Pledged Entity).
8.
Voting
Rights.
During
the term of this Agreement, and except as provided in this Section
8
below,
each Pledgor shall have the right to vote the Pledged Stock pledged by such
Pledgor on all corporate questions in a manner not inconsistent with the terms
of this Agreement and the other Transaction Documents to which it is a party;
provided,
however,
that no
vote shall be cast, and no consent shall be given or action taken, which would
have the effect of impairing the position or interest of any Secured Party
in
respect of the Pledged Collateral or which would authorize, effect or consent
to
(unless and to the extent expressly permitted by the Transaction Documents
to
which it is a party) (i) the dissolution or liquidation, in whole or in part,
of
the issuer of Pledged Stock (a “Pledged
Entity”,
i.e.,
the
Company in the context of the pledge of its shares by Xx. Xxxx, and the
Guarantor in the context of the pledge of its shares by the Company); (ii)
the
consolidation or merger of a Pledged Entity with any other Person; (iii) the
sale, disposition or encumbrance of all or substantially all of the assets
of a
Pledged Entity, except for Liens in favor of the Collateral Agent for the
benefit of the Secured Parties; (iv) any change in the authorized number of
shares, the stated capital or the authorized share capital of a Pledged Entity
or the issuance of any additional shares of its Equity Interests; or (v) the
alteration of the voting rights with respect to the Equity Interests of a
Pledged Entity. After the occurrence and during the continuation of a Qualified
Event of Default, the Collateral Agent shall have the right to, following
written notice from the Collateral Agent to the Pledgor, exercise all voting
rights pertaining to the Pledged Collateral, including the right to take action
by shareholder consent.
9.
Dividends
and Other Distributions.
(a) So
long as no Qualified Event of Default shall have occurred and be continuing:
(i)
Each
Pledgor shall be entitled to receive and retain any and all dividends and
distributions paid in respect of the Pledged Collateral, notwithstanding such
dividends and distributions being subject to the pledge and assignment thereof
pursuant to Section
2,
provided,
however,
that
any and all
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(A)
dividends
and distributions paid or payable other than in cash with respect to, and
instruments and other property received, receivable or otherwise distributed
with respect to, or in exchange for, any of the Pledged Collateral;
(B)
dividends
and other distributions paid or payable in cash with respect to any of the
Pledged Collateral on account of a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus or paid-in
surplus; and
(C)
cash
paid, payable or otherwise distributed with respect to principal of, or in
redemption of, or in exchange for, any of the Pledged Collateral;
shall
be
Pledged Collateral, and shall be forthwith delivered to the Collateral Agent
to
hold, for the benefit of the Secured Parties, as Pledged Collateral and shall,
if received by such Pledgor, be received in trust for the Collateral Agent,
for
the benefit of the Secured Parties; and
(ii)
The
Collateral Agent shall execute and deliver (or cause to be executed and
delivered) to the relevant Pledgor all such proxies and other instruments as
such Pledgor may reasonably request for the purpose of enabling such Pledgor
to
receive the dividends which it is authorized to receive and retain pursuant
to
clause (i) above.
(b)
After
the
occurrence and during the continuation of a Qualified Event of Default:
(i)
All
rights of each Pledgor to receive the dividends and other distributions which
it
would otherwise be authorized to receive and retain pursuant to Section
9(a)(i)
hereof
shall cease, and all such rights shall thereupon become vested in the Collateral
Agent, for the benefit of the Secured Parties, which shall thereupon have the
sole right to receive and hold as Pledged Collateral such dividends and other
distributions;
(ii)
All
dividends and other distributions which are received by each Pledgor contrary
to
the provisions of clause (i) of this Section
9(b)
shall be
received in trust for the Collateral Agent, for the benefit of the Secured
Parties;
(iii)
Each
Pledgor shall, upon the reasonable request of the Collateral Agent, at such
Pledgor’s expense, execute and deliver, and cause the respective Pledged Entity
and its officers and directors to execute and deliver, all such instruments
and
documents, and do or cause to be done all such other acts and things, as may
be
required by applicable law or may be necessary or, in the opinion of the holders
of at least a majority in aggregate principal amount of the Notes then
outstanding or their counsel, advisable to register the applicable Pledged
Collateral under the provisions of the Securities Act, and to exercise its
best
efforts to cause the registration statement relating thereto to become effective
and to remain effective for such period as prospectuses are required by law
to
be furnished, and to make all amendments and supplements thereto and to the
related prospectus which, in the opinion of the Holders of at least a majority
in aggregate principal amount of the Notes then outstanding or their counsel,
are necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Commission applicable
thereto;
7
(iv)
Each
Pledgor shall, at such Pledgor’s expense, use its best efforts to qualify the
Pledged Collateral pledged by such Pledgor under U.S. state securities or “Blue
Sky” laws and to obtain all necessary governmental approvals for the sale of
such Pledged Collateral;
(v)
Each
Pledgor, if applicable, shall, at such Pledgor’s expense, cause the respective
Pledged Entity to make available to the holders of its securities, as soon
as
practicable, earning statements which will satisfy the provisions of Section
11(a) of the Securities Act; and
(vi)
Each
Pledgor shall, at such Pledgor’s expense, do or cause to be done all such other
acts and things as may be necessary to make such sale of the Pledged Collateral
pledged by such Pledgor or any part thereof valid and binding and in compliance
with applicable law.
Each
Pledgor will reimburse the Collateral Agent for all expenses incurred by the
Collateral Agent, including, without limitation, reasonable attorneys’ and
accountants’ fees and expenses in connection with the foregoing. Upon or at any
time after the occurrence and during the continuation of a Qualified Event
of
Default, if the Secured Parties (pursuant to the terms of the
Indenture) determines
that, prior to any public offering of any securities constituting part of the
Pledged Collateral, such securities should be registered under the Securities
Act and/or registered or qualified under any other federal or state law and
such
registration and/or qualification is not practicable, then each Pledgor agrees
that it will be commercially reasonable if a private sale, upon at least ten
(10) Business Days’ notice to such Pledgor, is arranged so as to avoid a public
offering, even though the sales price established and/or obtained at such
private sale may be substantially less than prices which could have been
obtained for such security on any market or exchange or in any other public
sale.
10.
Transfers
and other Liens.
Other
than as permitted under the Indenture, each Pledgor agrees that it will not,
without the prior written consent of the Collateral Agent: (i) sell, transfer
or
otherwise dispose of or grant any option with respect to, or create or permit
to
exist any Lien upon or with respect to, any of the Pledged Collateral, except
as
expressly permitted by this Agreement; or (ii) take any action in connection
with any of the Pledged Collateral which would materially impair the value
of
the Pledged Collateral or otherwise materially and adversely affect the interest
or rights of the Collateral Agent or the Secured Parties hereunder.
Each
Pledgor further agrees that it will procure, or take reasonable efforts to
procure, that the respective Pledged Entity and any other direct or indirect
subsidiary thereof shall carry on business only in the ordinary course and
will
not dispose of or agree to dispose of a substantial part of its assets or
undertaking or take any action in connection with any of the Pledged Collateral
pledged by such Pledgor which would materially impair the value of such Pledged
Collateral or otherwise materially and adversely affect the interest or rights
of the Collateral Agent or the Secured Parties hereunder.
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11.
Defense
of Title.
Each
Pledgor will defend the title to the Pledged Collateral pledged by such Pledgor
and the Liens of the Collateral Agent in such Pledged Collateral against the
claim of any Person and will maintain and preserve such Liens.
12.
Additional
Equity Interests.
The
Pledgors will, upon the Company obtaining ownership of any additional equity
interests in the Guarantor, which equity interests are not already Pledged
Collateral (the “Additional
Equity Interests”),
promptly (and in any event within three (3) Business Days) deliver to the
Collateral Agent an amendment to this Agreement, duly executed by the Pledgors
and in form and substance satisfactory to the Secured Parties, in respect of
any
such Additional Equity Interests, pursuant to which the Company shall pledge
to
the Collateral Agent all of such Additional Equity Interests. The Pledgors
hereby authorizes the Collateral Agent to attach such amendment to this
Agreement and agrees that all Pledged Stock listed on any such amendment
delivered to the Collateral Agent shall for all purposes hereunder be considered
Pledged Collateral.
13.
Remedies.
(a)
(a) The
Collateral Agent shall have, in addition to any other rights given under this
Agreement or by law, all of the rights and remedies with respect to the Pledged
Collateral of a secured party under the Uniform Commercial Code as in effect
in
the State of New York (the “UCC”)
(whether or not the UCC applies to the affected Pledged Collateral). In
addition, after the occurrence and during the continuation of a Qualified Event
of Default, the Collateral Agent shall have such powers of sale and other powers
as may be conferred by applicable law. With respect to the Pledged Collateral
or
any part thereof which shall then be in or shall thereafter come into the
possession or custody of the Collateral Agent or which the Collateral Agent
shall otherwise have the ability to transfer under applicable law, the
Collateral Agent may, in its sole discretion, without notice except as specified
below, after the occurrence and during the continuation of a Qualified Event
of
Default, sell or cause the same to be sold at any exchange, broker’s board or at
public or private sale, in one or more sales or lots, at such price as the
Collateral Agent or the Secured Parties (pursuant to the terms of the Indenture)
may deem best, for cash or on credit or for future delivery, without assumption
of any credit risk, and the purchaser of any or all of the Pledged Collateral
so
sold shall thereafter own the same, absolutely free from any claim, encumbrance
or right of any kind whatsoever. The Collateral Agent or any Secured Party
may,
in its own name, or in the name of a designee or nominee, buy the Pledged
Collateral at any public sale and, if permitted by applicable law, buy the
Pledged Collateral at any private sale. Each Pledgor agrees to pay to the
Collateral Agent all reasonable expenses (including, without limitation, court
costs and reasonable attorneys’ and paralegals’ fees and expenses) of, or
incident to, the enforcement of any of the provisions hereof. The Collateral
Agent agrees to distribute any proceeds of the sale of the Pledged Collateral
in
accordance with the Indenture and the Pledgors shall remain liable for any
deficiency following the sale of the Pledged Collateral.
9
(b)
Unless
any of the Pledged Collateral threatens to decline speedily in value or is
or
becomes of a type sold on a recognized market, the Collateral Agent will give
the Pledgors reasonable notice of the time and place of any public sale thereof,
or of the time after which any private sale or other intended disposition is
to
be made. Any sale of the Pledged Collateral conducted in conformity with
reasonable commercial practices of banks, commercial finance companies,
insurance companies or other financial institutions disposing of property
similar to the Pledged Collateral shall be deemed to be commercially reasonable.
Notwithstanding any provision to the contrary contained herein, each Pledgor
agrees that any requirements of reasonable notice shall be met if such notice
is
received by such Pledgor as provided in Section
29
below at
least ten (10) Business Days before the time of the sale or disposition. Any
other requirement of notice, demand or advertisement for sale is waived, to
the
extent permitted by law. The Collateral Agent shall not be obligated to make
any
sale of the Pledged Collateral regardless of notice of sale having been given.
The Collateral Agent may adjourn any public or private sale from time to time
by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so
adjourned.
(c)
In
view
of the fact that U.S. federal and state securities laws may impose certain
restrictions on the method by which a sale of the Pledged Collateral may be
effected after a Qualified Event of Default, each Pledgor agrees that after
the
occurrence and during the continuation of a Qualified Event of Default, the
Collateral Agent may, from time to time, attempt to sell all or any part of
the
Pledged Collateral by means of a private placement restricting the bidders
and
prospective purchasers to those who are qualified and will represent and agree
that they are purchasing for investment only and not for distribution. In so
doing, the Collateral Agent may solicit offers to buy the Pledged Collateral,
or
any part of it, from a limited number of investors deemed by the Collateral
Agent, in its reasonable judgment, to be financially responsible parties who
might be interested in purchasing the Pledged Collateral. If the Collateral
Agent solicits such offers from not less than four (4) such investors, then
the
acceptance by the Collateral Agent of the highest offer obtained therefrom
shall
be deemed to be a commercially reasonable method of disposing of such Pledged
Collateral; provided,
however,
that
this Section
13
does not
impose a requirement that the Collateral Agent solicit offers from four (4)
or
more investors in order for the sale to be commercially reasonable.
(d)
Each
Pledgor agrees to the maximum extent permitted by applicable law that, following
the occurrence and during the continuance of a Qualified Event of Default,
it
will not at any time plead, claim or take the benefit of any appraisal,
valuation, stay, extension, moratorium or redemption law now or hereafter in
force in order to prevent or delay the enforcement of this Agreement, or the
absolute sale of the whole or any part of the Pledged Collateral or the
possession thereof by any purchaser at any sale hereunder, and each Pledgor
waives the benefit of all such laws to the extent it lawfully may do so. Each
Pledgor agrees that it will not interfere with any right, power and remedy
of
the Collateral Agent provided for in this Agreement or now or hereafter existing
at law or in equity or by statute or otherwise, or the exercise or beginning
of
the exercise by the Collateral Agent of any one or more of such rights, powers
or remedies. No failure or delay on the part of the Collateral Agent to exercise
any such right, power or remedy and no notice or demand which may be given
to or
made upon any Pledgor by the Collateral Agent with respect to any such remedies
shall operate as a waiver thereof, or limit or impair the Collateral Agent’s
right to take any action or to exercise any power or remedy hereunder, without
notice or demand, or prejudice its rights as against any Pledgor in any respect.
10
(e)
Each
Pledgor further agrees that a breach of any of the covenants by the Pledgor
contained in this Section
13
will
cause irreparable injury to the Collateral Agent, that the Collateral Agent
shall have no adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every covenant contained in this Section
13
shall be
specifically enforceable against such Pledgor, and each Pledgor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants.
14.
Security
Interest Absolute.
All
rights of the Collateral Agent and security interests hereunder, and all
obligations of each Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(i)
any
lack
of validity or enforceability of the Indenture or any other agreement or
instrument relating thereto;
(ii)
any
change in the time, manner or place of payment of, or in any other term of,
all
or any part of the Secured Obligations, or any other amendment or waiver of
or
any consent to any departure from the Indenture or this Agreement;
(iii)
any
exchange, release or non-perfection of any other collateral, or any release
or
amendment or waiver of or consent to departure from any guaranty, for all or
any
part of the Secured Obligations;
(iv)
the
insolvency of any of the Pledgors or the Pledged Entities; or
(v)
any
other
circumstance which might otherwise constitute a defense available to, or a
discharge of, such Pledgor in respect of the Secured Obligations or of this
Agreement.
15.
Collateral
Agent Appointed Attorney-in-Fact.
Each
Pledgor hereby appoints the Collateral Agent its attorney-in-fact, with full
authority, in the name of such Pledgor or otherwise, after the occurrence and
during the continuation of a Qualified Event of Default, from time to time
in
the Collateral Agent’s sole discretion, to take any action and to execute any
instrument which the Collateral Agent or any Secured Party may deem necessary
or
advisable to accomplish the purposes of this Agreement, including, without
limitation, to receive, endorse and collect all instruments made payable to
such
Pledgor representing any dividend or other distribution in respect of the
Pledged Collateral or any part thereof and to give full discharge for the same
and to arrange for the transfer of all or any part of the Pledged Collateral
on
the books of the respective Pledged Entity to the name of the Collateral Agent
or the Collateral Agent’s nominee.
16.
Waivers.
Each
Pledgor waives to the fullest extent permitted by applicable laws presentment
and demand for payment of any of the Liabilities, protest and notice of dishonor
or a Qualified Event of Default with respect to any of the Liabilities and
all
other notices to which the Pledgor might otherwise be entitled except as
otherwise expressly provided herein or in the Indentures.
11
17.
Term.
This
Agreement shall remain in full force and effect until the final payment in
full,
in cash, of the Secured Obligations. Upon the termination of this Agreement
as
provided above (other than as a result of the sale of the Pledged Collateral),
the Collateral Agent will release the security interest created hereunder and,
if it then has possession of any Pledged Stock pledged hereunder, will deliver
such Pledged Stock previously delivered to it and the Powers to the relevant
Pledgor.
18.
Reinstatement.
This
Agreement shall remain in full force and effect and continue to be effective
should any petition be filed by or against any Pledgor or the Pledged Entity
for
liquidation or reorganization, should any Pledgor or any Pledged Entity become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of any
Pledgor’s or any Pledged Entity’s assets, and shall continue to be effective or
be reinstated, as the case may be.
19.
Definitions.
The
singular shall include the plural and vice versa and any gender shall include
any other gender as the context may require.
20.
Binding
Effect; Successors and Assigns.
This
Agreement shall be binding upon each Pledgor and its successors and assigns,
and
shall inure to the benefit of the Collateral Agent and the Secured Parties,
and
their respective successors and assigns. Nothing set forth herein or in any
other Security Document is intended or shall be construed to give any other
Person any right, remedy or claim under, to or in respect of this Agreement,
the
Indenture or any Collateral. Each Pledgor’s successors shall include, without
limitation, a receiver, trustee or debtor-in-possession of or for such Pledgor.
21.
Governing
Law.
This
Agreement has been executed and delivered by the parties hereto in New York,
New
York. Any dispute between the Collateral Agent and the Pledgor arising out
of or
related to the relationship established between them in connection with this
Agreement, and whether arising in contract, tort, equity, or otherwise, shall
be
resolved in accordance with the laws of the State of New York.
22.
Consent
to Jurisdiction; and Service of Process.
THE
COLLATERAL AGENT HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE
OR FEDERAL COURTS LOCATED IN XXX XXXX XXXXXX, XXXX XX XXX XXXX, XXX XXXX. EACH
PLEDGOR HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED
IN
XXX XXXX XXXXXX, XXXX XX XXX XXXX, XXX XXXX SHALL HAVE EXCLUSIVE JURISDICTION
TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY PLEDGOR AND THE COLLATERAL
AGENT PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING
TO THIS AGREEMENT; PROVIDED
THAT THE
COLLATERAL AGENT AND EACH PLEDGOR ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY X XXXXX XXXXXXX XXXXXXX XX XXX XXXX XXXXXX; AND,
PROVIDED,
FURTHER,
NOTHING
IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE COLLATERAL AGENT
FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE SECURED OBLIGATIONS,
OR
TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE COLLATERAL AGENT.
EACH PLEDGOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
IN
ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH PLEDGOR HEREBY WAIVES
ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS
AND
HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. EACH PLEDGOR HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE
BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PLEDGOR AT THE ADDRESS SET FORTH
IN THIS AGREEMENT FOR SUCH PLEDGOR AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR FIVE (5) DAYS AFTER
DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID. The Collateral Agent shall
have the right to proceed against each Pledgor or its personal property in
a
court in any location to enable the Collateral Agent to obtain personal
jurisdiction over such Pledgor, to realize on the Pledged Collateral or any
other security for the Secured Obligations or to enforce a judgment or other
court order entered in favor of the Collateral Agent.
12
23.
Waiver
of Jury Trial.
Each
Pledgor and the Collateral Agent waives, to the extent permitted by applicable
law, any right to trial by jury in any dispute, whether sounding in contract,
tort, or otherwise, between the Collateral Agent and any Pledgor arising out
of
or related to the transactions contemplated by this Agreement or any other
instrument, document or agreement executed or delivered in connection herewith.
Either of the Pledgors or the Collateral Agent may file an original counterpart
or a copy of this Agreement with any court as written evidence of the consent
of
the parties hereto to the waiver of their right to trial by jury.
24.
Advice
of Counsel.
Each
Pledgor represents and warrants to the Collateral Agent that it has discussed
this Agreement and, specifically, the provisions of Sections 21 through 23
hereof, with its counsel.
25.
Severability.
If any
provision of this Agreement is held to be prohibited or unenforceable in any
jurisdiction the substantive laws of which are held to be applicable hereto,
such prohibition or unenforceability shall not affect the validity or
enforceability of the remaining provisions hereof, to the extent permitted
by
applicable law, and shall not invalidate or render unenforceable such provision
in any other jurisdiction, to the extent permitted by applicable law.
26.
Further
Assurances.
Each
Pledgor agrees that at any time and from time to time, at the expense of such
Pledgor, such Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be required by applicable
law or may be necessary or desirable, or that the Collateral Agent or any
Secured Party may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable the
Collateral Agent to exercise and enforce its rights and remedies hereunder
with
respect to any of the Pledged Collateral, including, without limitation, the
filing of financing statements under Article 9 of the Uniform Commercial Code
of
(i) the State of Utah, in the case of the Company as the Pledgor, and (ii)
the
District of Columbia, in the case of Xx. Xxxx as the Pledgor, which initial
filing shall be completed or caused to be completed by such Pledgor within
ten
(10) days from the date hereof. Each Pledgor hereby further agrees that it
shall
not make any change to its name, jurisdiction, the form of its organization
or
principal residence without prior written notice or otherwise permitted under
the Indenture. Each Pledgor authorizes the Collateral Agent to file any
financing statements and amendments thereto relating to the Pledged Collateral,
in form and substance required by the Collateral Agent (acting at the direction
of the holders of the Notes pursuant to the Indenture), which describe the
Pledged Collateral and include therein all other information which is required
by Article 9 of the UCC or other applicable law with respect to the preparation
or filing of a financing statement or amendment.
13
27.
The
Collateral Agent’s Duty of Care.
(a)
The
Collateral Agent shall not be liable for any acts, omissions, errors of judgment
or mistakes of fact or law including, without limitation, acts, omissions,
errors or mistakes with respect to the Pledged Collateral, except for those
arising out of or in connection with the Collateral Agent’s (i) gross negligence
or willful misconduct, or (ii) failure to use reasonable care with respect
to
the safe custody of the Pledged Collateral in the Collateral Agent’s possession.
Without limiting the generality of the foregoing, the Collateral Agent shall
be
under no obligation to take any steps necessary to preserve rights in the
Pledged Collateral against any other parties but may do so at its option. All
expenses incurred in connection therewith shall be for the sole account of
the
Pledgors, and shall constitute part of the Secured Obligations secured hereby.
(b)
Without
limiting the generality of the foregoing, (i) the Collateral Agent shall not
be
subject to any fiduciary or other implied duties, regardless of whether a
Qualified Event of Default has occurred and is continuing and (ii) the
Collateral Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby, provided that it shall not amount to gross
negligence or willful misconduct or a failure to use reasonable
care.
(c)
No
provision of this Agreement shall require the Collateral Agent to expend or
risk
its own funds or otherwise incur any financial liability in the performance
of
any of its duties hereunder, or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it. The Collateral Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement or the Indenture. The Collateral
Agent shall not be liable for any delay or failure to act as may be required
hereunder when such delay or failure is due to any act of God, interruption
or
other circumstances beyond its control provided
it
exercises such diligence as the circumstances may reasonably require. The
Collateral Agent shall be entitled to rely on any communication, instrument,
paper or other document reasonably believed by it to be genuine and correct
and
to have been signed or sent by the proper person. After receiving any direction
from the Pledgors or the Secured Parties, the Collateral Agent may (at the
expense of the Pledgors) consult with legal counsel of its selection (provided
that such counsel shall be a firm of nationally recognized reputation), and
the
written advice of such counsel (or any Opinion of Counsel caused by the Pledgors
to be furnished by the Company to the Collateral Agent) shall be full and
complete protection in respect of any action taken, suffered or omitted by
it
hereunder in good faith and in reliance thereon.
14
(d)
The
Collateral Agent shall not be deemed to have notice of any Qualified Event
of
Default unless an officer of the Collateral Agent has actual knowledge thereof
or unless written notice of any such Qualified Event of Default is received
by
the Collateral Agent at the office of the Collateral Agent specified in or
pursuant to Section 29 hereof.
(e)
The
Collateral Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Pledged Collateral shall be to deal with it in
the
same manner as the Collateral Agent deals with similar property for its own
account.
(f)
In
no
event shall the Collateral Agent be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Collateral Agent has been advised of the
likelihood of such loss or damage and regardless of the form of
action.
(g)
The
Collateral Agent shall not be responsible for or have any duty to ascertain
or
inquire into (i) any statement, warranty or representation made herein or in
connection herewith, (ii) the contents of any certificate, report or other
document delivered thereunder or in connection therewith, (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth herein, or (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement or any other agreement, instrument or
document.
(h)
The
Collateral Agent is authorized to take such actions and to exercise such powers
as are delegated to the Collateral Agent by the terms hereof, together with
such
actions and powers as are reasonably incidental thereto.
(i)
The
bank
serving as the Collateral Agent shall, in its capacity as a Secured Party,
have
the same rights and powers as any other Secured Party and may exercise the
same
as though it were not the Collateral Agent. Such bank and its Affiliates may
accept deposits from, lend money to and generally engage in any kind of business
with the Pledgor or any of its Affiliates as if it were not the Collateral
Agent
hereunder.
28.
Additional
Provisions Relating to the Collateral Agent.
(a)
Any
corporation, bank, trust company or association into which the Collateral Agent
may be merged or converted or with which it may be consolidated, or any
corporation, bank, trust company or association resulting from any merger,
conversion or consolidation to which the Collateral Agent shall be a party,
or
any corporation, bank, trust company or association succeeding to all or
substantially all the corporate trust business of the Collateral Agent, shall
be
the successor of the Collateral Agent hereunder, without the execution or filing
of any paper or any further act on the part of any of the parties
hereto.
Any
resignation or removal of the Trustee under the Indenture in accordance with
the
provisions thereof shall result in a resignation or removal of the Collateral
Agent hereunder. The provisions of Sections 7.08 and 7.09 in the Indenture
with
respect to replacement of the Trustee shall be applicable to the replacement
of
the Collateral Agent.
15
(b)
At
any
time or times, for the purpose of meeting any legal requirements of any
jurisdiction in which any of the Pledged Collateral may at the time be located,
the Collateral Agent shall have the power to appoint any Person or Persons
either to act as co-collateral agent, or co-collateral agents, jointly with
the
Collateral Agent of all or any part of the Pledged Collateral or to act as
separate collateral agent or separate collateral agents of all or any part
of
the Pledged Collateral and to vest in such Person or Persons, in such capacity,
such title to the Pledged Collateral or any part thereof, and such rights,
powers, duties or obligations as the Collateral Agent may consider necessary
or
desirable, subject to the other provisions of this Section
28.
(c)
Unless
otherwise provided in the instrument appointing such co-collateral agent or
separate collateral agent, every co-collateral agent or separate collateral
agent in respect of the custody, control or management of the Pledged Collateral
shall, to the extent permitted by law, be appointed subject to the following
terms:
(i)
All
rights, power, duties and obligations under this Agreement conferred upon the
Collateral Agent shall be exercised solely by the Collateral Agent;
(ii)
All
rights, powers, duties and obligations conferred or imposed upon the collateral
agents shall be conferred or imposed upon and exercised or performed by the
Collateral Agent, or by the Collateral Agent and such co-collateral agent or
co-collateral agents, or separate collateral agent or separate collateral agents
jointly, except to the extent that, under the law of any jurisdiction in which
any particular act or acts are to be performed, the Collateral Agent shall
be
incompetent or unqualified to perform such act or acts, in which event such
act
or acts shall be performed by such co-collateral agent or co-collateral agents
or separate collateral agent or separate collateral agents;
(iii)
Any
request in writing by the Collateral Agent to any co-collateral agent or
separate collateral agent to take or to refrain from taking any action hereunder
shall be sufficient warrant for the taking, or the refraining from taking,
of
such action by such co-collateral agent or separate collateral
agent;
(iv)
Any
co-collateral agent or separate collateral agent to the extent permitted by
law
may delegate to the Collateral Agent the exercise of any right, power, duty
or
obligation, discretionary or otherwise;
(v)
The
Collateral Agent at any time, by an instrument in writing, may accept the
resignation of, or remove, any co-collateral agent or separate collateral agent
appointed under this Section
28.
As
successor to any co-collateral agent or separate collateral agent so resigned
or
removed may be appointed in the manner provided in this Section
28;
(vi)
No
collateral agent hereunder shall be personally liable by reason of any act
or
omission of any other collateral agent hereunder;
16
(vii)
Any
demand, request, direction, appointment, removal, notice, consent, waiver or
other action in writing delivered to the Collateral Agent shall be deemed to
have been delivered to each such co-collateral agent or separate collateral
agent; and
(viii)
Any
Collateral received by any such co-collateral agent or separate collateral
agent
hereunder shall forthwith, so far as may be permitted by law, be turned over
to
the Collateral Agent to be held pursuant to the terms hereof.
(d)
Upon
the
acceptance in writing of such appointment by any such co-collateral agent or
separate collateral agent, it or he shall be vested with the estate, right,
title and interest in the Pledged Collateral, or any portion thereof, and with
such rights, powers, duties, trusts or obligations, jointly or separately with
the Collateral Agent, all as shall be specified in the instrument of
appointment, subject to all the terms hereof.
(e)
In
case
any co-collateral agent or separate collateral agent shall become incapable
of
acting, resign or be removed, the right, title and interest in the Pledged
Collateral and all rights, powers, duties and obligations of said co-collateral
agent or separate collateral agent shall, so far as permitted by law, vest
in
and be exercised by the Collateral Agent unless and until a successor
co-collateral agent or separate collateral agent shall be appointed pursuant
to
this Section 28.
29.
Notices.
Notices
given pursuant to any provision of this Agreement may
be
sent by facsimile and shall be addressed as
follows:
(i) if to Xx. Xxxx or the Company, Star
City
International Building, Xx. 00 Xxxxxxxxxxx Xxxx, X-00xx
Xxxxx,
Xxxxxxxx Xxxxxxxx, Xxxxxxx, People’x Xxxxxxxx xx Xxxxx 000000,
Fax:
(00)
00
0000 0000,
Attention:
Xx. Xxxx You-Bin,
with a
copy to Xxxxxxx Xxxx LLP, 0000 Xxxxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Fax: 000-000-0000, Attention: Xxxxxxx X. Xxxxx, Esq.
and (ii) if to the Collateral Agent, to: The Bank of New York, 000 Xxxxxxx
Xxxxxx, 0X, Xxx Xxxx, Xxx Xxxx 00000 , Fax: (000) 000-0000/5803, Attention:
Global Finance Americas.
30.
Indemnity
and Expenses.
Each
Pledgor agrees, upon demand, to indemnify the Collateral Agent against any
and
all losses, claims, damages, penalties, fines, liabilities or expenses,
including incidental and out-of-pocket expenses and reasonable attorneys fees
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Agreement and to pay to the Collateral
Agent the amount of any and all expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which the Collateral
Agent may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Pledged Collateral, (iii) the
exercise or enforcement of any of the rights of the Collateral Agent hereunder
or (iv) the failure by such Pledgor to perform or observe any of the provisions
hereof.
31.
Amendments,
Waivers and Consents.
None of
the terms or provisions of this Agreement may be waived, altered, modified
or
amended, and no consent to any departure by any Pledgor herefrom shall be
effective, except by or pursuant to an instrument in writing which (i) is duly
executed by each Pledgor and the Collateral Agent and (ii) complies with the
requirements of the Indenture. Any such waiver shall be valid only to the extent
set forth therein. A waiver by the Collateral Agent of any right or remedy
under
this Agreement on any one occasion shall not be construed as a waiver of any
right or remedy which the Collateral Agent would otherwise have on any future
occasion. No failure to exercise or delay in exercising any right, power or
privilege under this Agreement on the part of the Collateral Agent shall operate
as a waiver thereof; and no single or partial exercise of any right, power
or
privilege under this Agreement shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
17
32.
Section
Headings.
The
section headings herein are for convenience of reference only, and shall not
affect in any way the interpretation of any of the provisions hereof.
33.
Execution
in Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
an original, but all of which shall together constitute one and the same
agreement.
34.
Merger.
This
Agreement and the other Transaction Documents embody the entire agreement and
understanding, between the Pledgors and the Collateral Agent or any holder
of
the Notes and supersedes all prior agreements and understandings, written and
oral, relating to the subject matter hereof.
35.
Termination;
Release of Collateral.
Notwithstanding anything in this Agreement to the contrary, the Company may,
to
the extent permitted by Section 4.12 in the Indenture, sell, assign, transfer
or
otherwise dispose of any Pledged Collateral pledged by the Company. In addition,
the Pledged Collateral pledged by the Company shall be subject to release in
accordance with Section 10.04 in the Indenture (such Pledged Collateral and
the
Pledged Collateral referred to in the immediately preceding sentence being
the
“Released
Collateral”).
The
Liens under this Agreement shall terminate with respect to the Released
Collateral upon such sale, transfer, assignment, disposition or release and
upon
the written request of the Company, the Collateral Agent shall execute and
deliver, at the cost of the Company, such instrument or document as may be
necessary to release the Liens granted hereunder; provided,
however,
that
(i) the Collateral Agent shall not be required to execute any such documents
on
terms which would expose the Collateral Agent or any holder of the Notes to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Secured Obligations or any
Liens on (or obligations of the Company in respect of) all interests retained
by
the Company, including without limitation, the proceeds of any sale, all of
which shall continue to constitute part of the Pledged Collateral pledged by
the
Company.
[remainder
of page intentionally left blank]
18
IN
WITNESS WHEREOF,
each
Pledgor and the Collateral Agent have executed this Agreement as of the date
set
forth above.
|
XX.
XXXX YOU-BIN
By:
/s/
Leng You-Bin
Name:
Leng
You-Bin
AMERICAN
DAIRY, INC.
By:
/s/
Leng You-Bin
Name:
Leng
You-Bin
Title:
CEO
|
Acknowledged
and agreed to
as
of the
date first written above.
The
Bank
of New York,
as
Collateral Agent
By:
________________________________
Name:
Title:
EXHIBIT
A
PLEDGED
STOCK
|
Name
of Pledgor
|
Name
of Issuer
|
Percentage
of Equity Interest on a Fully-Diluted Basis
|
Number
of Shares
|
|
Xx.
Xxxx You-Bin
|
American
Dairy, Inc.
|
~
13.89%1
|
2,664,340
shares of Common Stock, par value $0.001 per share
|
|
American
Dairy, Inc.
|
American
Flying Crane Corporation
|
100%
|
10,000
shares of common stock, par value $0.0001 per
share
|
1
as of
May 21, 2007
EXHIBIT
B
[Form
of Stock Power for Xx. Xxxx as the Pledgor]
STOCK
POWER
(EXECUTED
IN BLANK)
FOR
VALUE RECEIVED,
the
undersigned hereby sells, assigns and transfers unto _______ shares of the
Common Stock of American Dairy, Inc, a Utah corporation (the “Corporation”),
standing in the name of the undersigned on the books of the Corporation
represented by Certificate No. ________, and does hereby irrevocably constitute
and appoint ________________ as attorney-in-fact to transfer the shares on
the
books of the Corporation with full power of substitution in the
premises.
Dated:
________
|
XX.
XXXX YOU-BIN
By:
________________________________
Name: Leng
You-Bin
|
[Form
of Stock Power for the Company as the Pledgor]
STOCK
POWER
(EXECUTED
IN BLANK)
FOR
VALUE RECEIVED,
the
undersigned hereby sells, assigns and transfers unto _______ shares of the
Common Stock of American Flying Crane Corporation, a Delaware corporation (the
“Corporation”),
standing in the name of the undersigned on the books of the Corporation
represented by Certificate No. ________, and does hereby irrevocably constitute
and appoint ________________ as attorney-in-fact to transfer the shares on
the
books of the Corporation with full power of substitution in the
premises.
Dated:
________
|
AMERICAN
DAIRY, INC. By:
________________________________
Name:
Title:
|
[Form
of Acknowledgement for pledge by Xx. Xxxx]
ACKNOWLEDGMENT
The
undersigned hereby acknowledges receipt of a copy of the foregoing Share Pledge
Agreement, agrees promptly to note on its books the security interests granted
under such Share Pledge Agreement, and waives any rights or requirement at
any
time hereafter to receive a copy of such Share Pledge Agreement in connection
with the registration of any Pledged Collateral in the name of the Collateral
Agent or its nominee or the exercise of voting rights by the Collateral
Agent.
|
American
Dairy, Inc.
By:
________________________________
Name:
Title:
|
[Form
of Acknowledgement for pledge by the Company]
ACKNOWLEDGMENT
The
undersigned hereby acknowledges receipt of a copy of the foregoing Share Pledge
Agreement, agrees promptly to note on its books the security interests granted
under such Share Pledge Agreement, and waives any rights or requirement at
any
time hereafter to receive a copy of such Share Pledge Agreement in connection
with the registration of any Pledged Collateral in the name of the Collateral
Agent or its nominee or the exercise of voting rights by the Collateral
Agent.
|
American
Flying Crane
Corporation By:
________________________________
Name:
Title:
|
