This Earn-in Agreement (this “Agreement”) is made and entered into as of February 10, 2010 (the “Effective Day”), between _______ (the “Purchaser”) and Song Liqiang, a resident of the United States (the “Seller”). Purchaser and Seller are also...
EXHIBIT
10.4
This Earn-in Agreement (this “Agreement”) is made and
entered into as of February 10, 2010 (the “Effective Day”), between
_______ (the “Purchaser”) and Song Liqiang,
a resident of the United States (the “Seller”). Purchaser
and Seller are also referred to herein together as the “Parties” and individually as a
“Party”.
RECITALS
WHEREAS, pursuant to a Share
Exchange Agreement by and among Expedite 4, Inc., a Delaware company (the “Shell Company”), Southern
China Livestock International, Inc (“Southern China Livestock”), a
Nevada company (the “Company”) and the Seller as
the majority shareholder of the Company, the Shell Company is expected to
acquire 100%
of the issued and outstanding capital stock of Company (the “Exchange
Agreement”);
WHEREAS, Purchaser has agreed
with Seller, as an inducement to the Purchaser in continuing to provide services
to Beijing Huaxin Tianying Livestock Technology Co., Ltd (“Beijing Huaxin”), a PRC
company that is a wholly owned subsidiary of the Company, to enter into this
Agreement;
WHEREAS, Seller is the holder
of 9,000,000 shares of the Company’s common stock;
WHEREAS, upon the consummation
of the Exchange Agreement, Seller will be issued and hold shares of common stock
of the Shell Company (the “Common Stock”), $0.001 par
value per share;
WHEREAS, Seller desires to grant
to Purchaser an option to acquire ____% of the shares of Common Stock to be
issued to him pursuant to the Exchange Agreement (for purposes of this
Agreement, including the Call Right described herein, the “Seller’s Shares”) pursuant to
the terms and conditions set forth herein;
NOW, THEREFORE, the Parties, in
consideration of the foregoing premises and the terms, covenants and conditions
set forth below, and other good and valuable consideration, receipt of which is
acknowledged, hereby agree as follows:
AGREEMENT
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1.
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DEFINITIONS;
INTERPRETATION
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1.1.
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Terms
Defined in this agreement. The following terms when used in
this agreement shall have the following
definitions:
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1
“Bankruptcy Law” means any Law
of any jurisdiction relating to bankruptcy, insolvency, corporate
reorganization, company arrangement, civil rehabilitation, special liquidation,
moratorium, readjustment of debt, appointment of a conservator, trustee or
receiver, or similar debtor relief.
“Business Day” means any day on
which commercial banks are required to be open in the United
States.
“Call Price” means, with
respect to any exercise of the Call Right, par value or $[●] per share of
the Seller’s Shares subject to any Call Exercise Notice.
“Conditions” means Conditions 1
through 3, as defined below, in the aggregate.
“Condition 1” means: the entry
by Xu Dengfu and Beijing Huaxin or the Shell Company into a binding employment
agreement for a term of not less than 3 years.
“Condition 2” means: the registration statement for the
financing being declared effective by the SEC
“Condition 3” means: the Company's US GAAP audited net
income reaching $6 million for the fiscal year 2010.
“Government Authority” means
any: (a) nation, principality, state, commonwealth, province, territory,
country, municipality, district or other jurisdiction of any nature; (b)
federal, state, local, municipal, foreign or other government; (c) governmental
or quasi government authority of any nature (including any governmental
division, subdivision, department, agency, bureau, branch, office, commission,
council, board, instrumentality, officer, official, representative,
organization, unit, body or Person and any court or other tribunal); or (d)
individual, Person or body exercising, or entitled to exercise, any executive,
legislative, judicial, administrative, regulatory, police, military or taxing
authority or power of any nature.
“Law” means any federal, state,
local, municipal, foreign or other law, statute, legislation, constitution,
principle of common law, resolution, ordinance, code, order, edict, decree,
proclamation, treaty, convention, rule, regulation, permit, ruling, directive,
pronouncement, requirement (licensing or otherwise), specification,
determination, decision, opinion or interpretation that is, has been or may in
the future be issued, enacted, adopted, passed, approved, promulgated, made,
implemented or otherwise put into effect by or under the authority of any
Government Authority.
“Person” means any individual ,
firm, company, corporation, limited liability company, unincorporated
association, partnership, trust, joint venture, governmental authority or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
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1.2.
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Interpretation.
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(a)
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Certain
Terms. The words “hereof”, “herein”, “hereunder” and
similar words refer to this Agreement as a whole and not to any particular
provision of this Agreement. The term “including” is not
limited and means “including without
limitation.”
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(b)
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Section References:
Titles and Subtitles. Unless otherwise noted, all
references to Sections herein are to Sections of this
Agreement. The titles, captions and headings of this Agreement
are inserted for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this
Agreement.
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(c)
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Reference to Entities,
Agreements, Statutes. Unless otherwise expressly
provided herein, (i) references to a Person include its successors and
permitted assigns, (ii) reference to agreements (including this Agreement)
and other contractual instruments shall be deemed to include all
subsequent amendments, restatements and other modifications thereto or
supplement thereof and (iii) references to any statute or regulation are
to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such
statute or regulation.
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2.
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CALL
RIGHT
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2.1
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Call Right.
Purchaser shall have, during the Exercise Period (as defined below), and
when a Condition is met, the right and option to purchase from the Seller,
and upon the exercise of such right and option the Seller shall have the
obligation to sell to Purchaser, a portion of the Seller’s Shares
identified in the Call Exercise Notice (the “Call
Right”). Purchaser shall be permitted to purchase, and
Seller shall be obligated to sell, the following number of Seller’s Shares
upon the attainment of the following
Conditions:
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Condition
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Percentage
of Seller’s Shares as to which there is a Call Right
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Condition
1
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20%
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Condition
2
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30%
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Condition
3
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50%
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3
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2.2
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Call Period.
The Call Right shall be exercisable by Purchaser, by delivering a Call
Exercise Notice at any time during the period (the “Exercise Period”)
commencing on the day that shall be 180 days (the “Initial Exercise Date”)
subsequent to the date that the Exchange Agreement is consummated
continuing until the fifth anniversary date from the Initial Exercise Date
(such date or the earlier expiration of the Call Right is referred to
herein as the “Expiration
Date”).
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2.3
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Exercise
Process. In order to exercise the Call Right during the Exercise
Period, the Purchaser shall deliver to the Seller, a written notice of
such exercise substantially in the form attached hereto as Appendix
A (a “Call
Exercise Notice”) to such address or facsimile number set forth
therein. The Call Exercise Notice shall indicate the number of Seller’s
Shares as to with Purchaser in then exercising its Call Right and the
aggregate Call Price. Provided the Call Exercise Notice is delivered in
accordance with Section 6.4 to such Seller on or prior to 6:30 p.m. (New
York time) on any day or on a date which is not a Business Day, the
Exercise Date shall be deemed to be the first Business Day after the date
of such delivery of such Call Exercise Notice. The delivery of a Call
Exercise Notice in accordance herewith shall constitute a binding
obligation (a) on the part of such Purchaser to purchase, and (b) on the
part of the Seller to sell, the Seller’s Shares subject to such Call
Exercise Notice in accordance with the terms of this
Agreement.
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2.4
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Call Price. If
the Call Right is exercised pursuant to this Section 2, as payment for the
Seller’s Shares being purchased by the Purchaser pursuant to the Call
Right, such Purchaser shall pay the aggregate Call Price to the Seller
(but no later than fifteen (15) Business Days of the Exercise
Date).
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2.5
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Delivery of the
Shares. Upon the receipt of a Call Exercise Notice, the Seller
shall deliver, or take all steps necessary to cause to be delivered, the
Seller’s Shares being purchased pursuant to such Call Exercise
Notice.
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3.
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ENCUMBRANCES;
TANSFERS, SET-OFF AND WITHHOLDINGS
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3.1
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Encumbrances.
Upon exercise of the Call Right, the Seller’s Shares being purchased shall
be sold, transferred and delivered to the Purchaser free and clear of any
claim, pledge, charge, lien, preemptive rights, restrictions on transfers
(except as required by securities laws of the United States), proxies,
voting agreements and any other encumbrance
whatsoever.
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4
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3.2
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Transfers.
Prior to the Expiration Date, Seller shall continue to own, free and clear
of any hypothecation, pledge, mortgage or other encumbrance, except
pursuant to this Agreement and except in favor of the Collateral Agent (as
defined below) for the benefit of the Purchaser, such amount of the
Seller’s Shares as may be required from time to time to in order for the
Purchaser to exercise its Call Right in
full.
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3.3
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Set-off. The
Purchaser shall be absolutely entitled to receive all Seller’s Shares
subject to the exercise of a Call Right, and for the purposes of this
Agreement, Seller hereby waives, as against the Purchaser, all rights of
set-off or counterclaim that would or might otherwise be available to the
Seller.
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3.4
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Escrow of Seller’s
Shares.
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(a)
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Upon
execution of this Agreement, Seller shall deliver to Jingtian &
Gongcheng Attorneys at Law, as Collateral Agent (the “Collateral Agent”),
certificates representing Seller’s Shares. The certificates representing
the Seller’s Shares (together with duly executed stock powers in blank)
shall be held by the Collateral
Agent.
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(b)
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Upon
receipt of a Call Exercise Notice, the Collateral Agent shall promptly
deliver the Seller’s Shares being purchased pursuant to such Call Exercise
Notice in accordance with the instructions set forth therein and in
accordance with any other Lock-up or Make Good Agreement in place between
the Purchaser or Seller and other third party. In the event that the
Collateral Agent shall receive notice from the Parties that the Conditions
have not been met, the Seller’s Shares shall be distributed in accordance
with their instructions.
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4.
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REPRESENTATIONS
AND WARRANTIES
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4.1
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Representations and
Warranties by Seller. Seller represents and warrants to Purchaser
that:
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(a)
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Due
Authorization. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereunder to be carried out
by it have been duly authorized by all necessary action on the part of
Seller. This Agreement, and all agreements and documents executed and
delivered pursuant to this Agreement, constitute valid and binding
obligations of such Seller, enforceable against such Seller in accordance
with its terms, subject to applicable Bankruptcy Laws and other laws or
equitable principles of general application affecting the rights of
creditors generally.
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5
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(b)
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No Conflicts.
Neither the execution or delivery of this Agreement by the Seller nor the
fulfillment or compliance by the Seller with any of the terms hereof
shall, with or without the giving of notice and/or the passage of time,
(i) conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, (A) the organizational or
charter documents of the Seller is bound, or (ii) require any consent,
license, permit, authorization, approval or other action by any Person or
Government Authority which has not yet been obtained or received. The
execution, delivery and performance of this Agreement by the Seller or
compliance with the provisions hereof by the Seller does not, and shall
not, violate any provision of any Law to which the Seller is subject or by
which it is bound.
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(c)
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No
Actions. There are no lawsuits, actions (or to the best
knowledge of the Seller, investigations), claims or demands or other
proceedings pending or, to the best of the knowledge of the Seller,
threatened against the Seller which, if resolved in a manner adverse to
the Seller, would adversely affect the right or ability of the Seller to
carry out its obligations set forth in this
Agreement.
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(d)
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Title. Seller
owns the Seller’s Shares free and cleat of any claim, pledge, charge,
lien, preemptive rights, restrictions on transfers, proxies, voting
agreements and any other encumbrance whatsoever, except as contemplated by
this Agreement. The Seller has not entered into or is a party to any
agreement that would cause the Seller to not own such Seller’s Shares free
and clear of any encumbrance, except as contemplated by this
Agreement.
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4.2
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Representations and
Warranties by Purchaser. The Purchaser represents and warrants to the
Seller that:
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(a)
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Due
Authorizations. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereunder to be carried
out by it have been duly authorized by all necessary action on the part of
the Purchaser. This Agreement, and all agreements and documents executed
and delivered pursuant to this Agreement, constitute valid and binding
obligations of Purchaser, enforceable against Purchaser in accordance with
its terms, subject to applicable Bankruptcy Laws and other laws or
equitable principles of general application affecting the rights of
creditors generally.
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(b)
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No conflicts.
Neither the execution or delivery of this Agreement by Purchaser nor the
fulfillment or compliance by Purchaser with any of the terms hereof shall,
with or without the giving of notice and/or the passage of time, (i)
conflict with ,or result in a breach of the terms, conditions or
provisions of or constitute a default under, (A) the organizational or
charter documents of Purchaser or (B) any contract or any judgment, decree
or order to which Purchaser is subject or by which Purchaser is bound, or
(ii) requite any consent, license, emit, authorization, approval or other
action by any Person or Government Authority which has not yet been
obtained or received. The execution, delivery and performance of this
Agreement by Purchaser or compliance with the provisions hereof by
Purchaser does not, and shall not, violate any provision of any Law to
which Purchaser is subject or by which it is
bound.
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6
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(c)
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No Actions.
There are no lawsuits, actions (or to the best knowledge of Purchase,
investigations), claims or demands or other proceedings pending or, to the
best of the knowledge of Purchaser, threatened against Purchaser which, if
resolved in a manner adverse to Purchaser, would adversely affect the
right or ability of Purchaser to carry out its obligations set forth in
this Agreement.
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5.
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ENENTS
OF DEFAULT AND TERMINATION
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5.1
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Events of
Default. The occurrence at any time with respect to a Party
(the “Defaulting
Party”) of any of the following events shall constitute an event of
default (an “Event of
Default”) with respect tot such
party:
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(a)
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Failure to Pay or
Deliver. The failure by a Party to make, when due, any payment
under this Agreement or deliver the Seller’s Shares in accordance with
this Agreement, if such failure is not remedied on or before the third
Business Day after notice of such failure is given to the Defaulting
Party;
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(b)
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Breach of
Agreement. The failure by a party to comply with or perform any
agreement, covenant or obligation (other than a failure described in
Section 5.1(a)) to be complied with or performed by such Party in
accordance with this Agreement if such failure is not remedied on or
before the tenth Business Day after notice of such failure is given to the
Defaulting Party; or
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(c)
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Bankruptcy. A
Party (1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay its
debts or fails or admits in writing its inability generally to pay its
debts as they become due; (3) makes a general assignment, arrangement or
composition with or for the benefit of its creditors; (4) institutes or
has instituted against it a proceeding seeking a judgment of insolvency or
bankruptcy or any relief under any Bankruptcy Law, or a petition is
presented for its winding-up or liquidation, and in the case of any such
proceeding or petition instituted or presented against it, such proceeding
or petition (A) results in a judgment of insolvency or bankruptcy or the
entry of an order for relief or the making of an order for its winding-up
or liquidation (B) is not dismissed, discharged, stayed or restrained in
each case within 30 days of the institution or presentation thereof; (5)
has a resolution passed for its winding-up, official management or
liquidation (other than pursuant to a consolidation, amalgamation or
merger); (6) seeks or becomes subject to the appointment of an
administrator, provisional liquidator, conservator, receiver, trustee,
custodian or other similar official for it or for all or substantially all
it assets; (7) has a secured party take possession of all or substantially
all its assets or has a distress, execution, attachment, sequestration or
other legal process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains possession,
or any such process I not dismissed, discharged, stayed or rescinded, in
each case within 30 days thereafter; (8) causes or is subject to any event
with respect to it which, under the applicable Law, has an analogous
effect to any of the events described in clauses (1) through (7); or (9)
takes any actions in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing
acts.
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7
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5.2
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Termination. If
at any time an Event of Default with respect to a Party has occurred and
is continuing, the other party may terminate this Agreement and deem the
Expiration Date to have occurred by giving written notice to the
Defaulting Party specifying the relevant Event of
Default.
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6.
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MISCELLANEOUS.
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6.1
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Governing Law;
Jurisdiction. This Agreement shall be construed according to, and
the rights of the Parties shall be governed by, the laws of the State of
New York, without reference to any conflict of laws principle that would
cause the application of the laws of any jurisdiction other than New York,
Each Party hereby irrevocably submits to the exclusive jurisdiction of the
federal and state courts sitting in the City of New York, for the
adjudication of any dispute hereunder or in connection herewith, and
agrees not to assert in any suit, action or proceeding, any claim that it
is personally subject to the jurisdiction of such court, that such, suit,
action or proceeding is brought in an inconvenient forum, or that the
venue of such suit, action or proceeding is
improper.
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6.2
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Successors and
Assigns. No Party may assign this Agreement or any tights or
obligations hereunder without the prior written consent of the other
Party. The provisions hereof shall inure to the benefit of, and be binding
upon, the successors and permitted assigns of the
Parties.
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6.3
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Entire Agreement;
Amendment. This Agreement constitutes the full and entire
understanding and agreement between and among the Parties with regard to
the subject matter hereof. Any term of this Agreement may be amended only
with the written consent of each
Party.
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6.4
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Notices and Other
Communications. Any and all notices, requests, demands and other
communications required or otherwise contemplated to be made under this
Agreement shall be in writing and shall be provided by one or more of the
following means and shall be deemed to have been duly given (a) if
delivered personally, when received, (b) if transmitted by facsimile, on
the date of transmission with receipt of a transmittal confirmation, or
(c) if by an internationally recognized overnight courier service, one
Business Day after deposit with such courier service. All such notices,
requests, demands and other communications shall be addressed to such
address or facsimile number as a party may have specified to the other
parties in writing delivered in accordance with this Section
6.4.
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8
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6.5
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Delays or
omissions. No delay or omission to exercise any right, power or
remedy accruing to any Person hereunder, upon any breach or default under
this Agreement, shall impair any such right, power or remedy nor shall it
be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed
a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any Person hereunder of any breach or default
under this Agreement, or any waiver on the part of any Person of any
provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing and
sighed by the waiving or consenting
Person.
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6.6
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Severability.
If any provision of this Agreement is found to be invalid or
unenforceable, then such provision shall be construed, to the extent
feasible, so as to render the provision enforceable and to provide for the
consummation of the transactions contemplated hereby on substantially the
same terms as originally set forth herein, an if no feasible
interpretation would save such provision, it shall be severed from the
remainder of this Agreement, which shall remain in full force and effect
unless the severed provision is essential to the rights or benefits
intended by the Parties. In such event, the parties shall use best efforts
to negotiate, in good faith, a substitute, valid and enforceable provision
or agreement which most nearly affects the Parties’ intent in entering
into this Agreement.
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6.7
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Construction.
The language used in this Agreement will be deemed to be the language
chosen by the Parties to express their mutual intent, and no rules of
strict construction will be applied against any
Party.
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6.8
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Further
assurances. The parties shall perform such acts, execute and
deliver such instruments and documents and do all other such things as may
be reasonably necessary to effect the transactions contemplated
hereby.
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6.9
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Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument. Execution and delivery of this Agreement by exchange of
facsimile copies bearing the facsimile signature of a Party shall
constitute a valid and binding execution and delivery of this Agreement by
such Party.
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9
Signature
Page of Earn-in Agreement
IN WITNESS WHEREOF, the
Parties have executed this Agreement as of the date first written
above.
| Purchaser | ||
| /s/ XU Dengfu | ||
| XU Dengfu | ||
| Seller | ||
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||
| /s/ Song Liqiang | ||
| Song Liqiang |
Acknowledged
and agreed to:
Collateral
Agent:
Jingtian
& Gongcheng Attorneys at Law
By:
Jingtian & Gongcheng Attorneys at Law
10
Signature
Page of Earn-in Agreement
IN WITNESS WHEREOF, the
Parties have executed this Agreement as of the date first written
above.
| Purchaser | ||
| /s/ Luping Pan | ||
| Luping Pan | ||
| Seller | ||
| /s/ Song Liqiang | ||
| Song Liqiang |
Acknowledged
and agreed to:
Collateral
Agent:
Jingtian
& Gongcheng Attorneys at Law
By:
Jingtian & Gongcheng Attorneys at Law
11
APPENDIX
A
Form of
Exercise Notice
[Date]
[______________](the
“Seller”)
[______________]
[______________]
Attention:[______]
Re:
Earn-in Agreement dated _____________ (the “Earn-in Agreement”) between
___________ (“Purchaser”) and Song Liqiang.
Dear
Sir:
In
accordance with Section 2.3 of the Earn-in Agreement, Purchaser hereby provides
this notice of exercise of the Call Right in the manner specified
below:
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(a)
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The
Purchaser hereby exercises its Call Right with respect to Seller’s Shares
pursuant to the Earn-in Agreement.
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(b)
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The
Purchaser shall pay the sum of $________ to the
Seller.
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Date:
____________,______
