EQUITY INTEREST PLEDGE AGREEMENT
EQUITY
INTEREST PLEDGE AGREEMENT
This
Equity Interest Pledge Agreement (the “Agreement”)
is
entered into by and between the following Parties effective as of November
14,
2007.
| Pledgee: |
Trans
Pacific Shipping Ltd. (“Party
A”)
|
Registered
address: Rm. 1208b Tower D Qingye Building, Xx.0
Xxxxxxxxxxxxx,
Xxxxxxxx Xxxxxxxx, Xxxxxxx
| Pledgor: |
CAO
Lei (“Party
B-1”)
|
ID
No. 110101196402032035
Address:
Xxxx 0-X-000, Xxxxxxxxxxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx
XXXXX
Xxxxxxx
(“Party
B-2”)
ID
No. 120106195311010016
Address:
Room
21-304,707 Suo, the Third Avenue, Dingzigu, Hongqiao
District,
Tianjin
WHEREAS,
Party
A is a wholly
foreign-owned enterprise duly established and valid existing in Beijing under
the laws of the People’s Republic of China (the “PRC”).
Party
A and Sino-Global
Shipping Agency Ltd. (“Sino-Global”),
owned by Parties B and C, entered into an Exclusive Technical Consulting and
Service Agreement effective as of November 14, 2007 (the “Service
Agreement”).
WHEREAS,
Party
B-1
and Party B-2, citizens of the PRC, collectively hold 100% equity interest
of
Sino-Global,
a
limited liability company duly established and valid existing
in Beijing under the laws of the PRC.
WHEREAS,
in
order to ensure that Party A collects technical consulting and service fees
from
Sino-Global, each of Party
B-1
and Party B-2 are willing to pledge all of their equity interests in Sino-Global
to Party A as security.
NOW
THEREFORE, through
mutual negotiations, the Parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
Unless
it is otherwise stipulated, for the purpose of this Agreement, the following
terms shall have the following meanings:
“Pledge”
means the full meaning assigned to that term in Article II of this
Agreement.
“Equity
Interest”
means the 100% equity interest in Sino-Global collectively held by Party
B-1
and Party B-2.
“Rate
of Pledge”
means the ratio between the value of the Pledge under this Agreement to the
technical consulting and service fees under the Service Agreement.
“Term
of Pledge”
means the period provided for under Article III(b) hereunder.
“Service
Agreement”
has the meaning ascribed to it in Recital 1 above.
“Event
of Default”
means any event in accordance with Article VII hereunder.
“Notice
of Default”
means the notice of default issued by Party A in accordance with this
Agreement.
ARTICLE
II
PLEDGE
(a)
Each
of Party
B-1
and Party B-2 agrees to pledge all of its portion of the Equity Interest as
security for the payment of technical consulting and service fees payable to
Party A under the Service Agreement (the “Pledge”).
(b)
Party
A shall be entitled to have priority in receiving payment or proceeds from
the
auction or sale of the Equity Interest pledged by Party
B-1
and Party B-2 to Party A.
ARTICLE
III
RATE
OF PLEDGE AND TERM OF PLEDGE
(a) The
Rate of Pledge:
The
Rate of Pledge shall be 100% under this Agreement.
(b) The
Term of Pledge:
(i) The
Pledge shall take effect as of the date that the Pledge is recorded in the
register of shareholders of Sino-Global. This
Agreement shall expire on the date that is twenty-five (25) years following
the
date hereof unless earlier terminated as set forth in this Agreement or upon
mutual agreement of the Parties hereto.
(ii) This
Agreement may be extended prior to termination for one or more twenty-five
(25)
year terms upon written notice by Party A, provided such extension is permitted
by law. The parties will cooperate to renew this Agreement if such renewal
is
legally permitted at the time.
(iii) During
the term of Pledge, Party A shall be entitled to foreclose on the Pledge in
accordance with this Agreement in the event that Sino-Global fails to pay
exclusive technical consulting and service fees in accordance with the Service
Agreement.
(c) Except
as otherwise provided hereunder, Party A shall be entitled to exercise, dispose
of or assign the Pledge in accordance with this Agreement.
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ARTICLE
IV
PHYSICAL
POSSESSION OF DOCUMENTS
(a) During
the term of Pledge, Party A shall be entitled to possess the contribution
certificate of the Equity Interest (the “Contribution
Certificate”)
and the register of shareholders of Sino-Global. Party
B-1
and Party B-2 shall deliver the Contribution Certificate and the register of
shareholders hereunder to Party A within one week after the date of this
Agreement.
(b) Party
A shall be entitled to collect any dividends from the Equity Interest during
the
term of the Pledge.
ARTICLE
V
REPRESENTATION
AND WARRANTIES OF PARTY B-1 AND PARTY B-2
(a) Party
B-1
and Party B-2 collectively own 100% of the Equity Interest.
(b)
Except
as otherwise provided hereunder, Party
B-1
and Party B-2 shall not interfere with exercise of Party A’s rights in
accordance with this Agreement.
ARTICLE
VI
COVENANTS
OF PARTY B-1 AND PARTY B-2
(a) During
the term of this Agreement, each of Party
B-1
and Party B-2 covenants to Party A as follows:
(i) Except
for the transfer of the Equity Interest by Party
B-1
and
Party
B-2,
as
contemplated by the Exclusive Equity Interest Purchase Agreement entered into
by
and among Party
B-1,
Party
B-2
and
Sino-Global,
Party
B-1
and
Party
B-2
shall
not transfer or assign the Equity Interest or create or permit to be created
any
pledge which may have an adverse affect on the rights or benefits of Party
A
without prior written consent from Party A.
(ii) Party
B-1
and Party B-2 shall: comply with all laws and regulations with respect to the
right of pledge; present Party A any notices, orders or suggestions relating
to
the Pledge issued or made by the competent authority; and comply with such
notices, orders or suggestions or object to the foregoing matters at the
reasonable request of Party A or with the written consent of Party A.
(iii) Party
B-1
and Party B-2 shall timely notify Party A of any events or the receipt of any
notice which may affect the Equity Interest, which may change any of
Party
B-1’s
or Party B-2’s covenants and obligations under this Agreement or which may
affect the performance of Party
B-1
or Party B-2 under this Agreement.
(iv) Other
than as noted in this Agreement, neither Party
B-1
nor Party B-2 shall pledge or otherwise encumber the Equity Interest to any
other person except for Party A.
3
(b) Party
B-1
and Party B-2 agree that Party A’s right to exercise the Pledge shall not be
suspended or hampered through legal procedure instituted by Party
B-1,
Party B-2, any successors of Party
B-1
or Party B-2 or any person authorized by Party
B-1
or Party B-2.
(c)
Each
of Party
B-1
and Party B-2 warrants to execute in good faith and cause other parties who
may
have interest in the Pledge to: execute title certificates, contracts, and/or
perform and cause other parties who have interests to take action as required
by
Party A and provide access to exercise the rights and authorization vested
in
Party A under this Agreement; execute all the documents with respect to the
Equity Interest; and promptly provide all the notices, orders and decisions
(as
referenced above) related to the Equity Interest to Party A.
(d) Each
of Party
B-1
and Party B-2 warrants that each will comply with and perform all the
guarantees, covenants, agreements, representations and conditions hereunder
for
the benefits of Party A. Each of Party
B-1
and Party B-2 shall compensate Party A losses suffered in the event that
Party
B-1
or Party B-2 does not perform or fully perform its guarantees, covenants,
agreements, representations and conditions hereunder.
ARTICLE
VII
EVENTS
OF DEFAULT
(a) The
events listed below shall be deemed as an event of default:
(i) Failure
by Sino-Global to make full payment of the exclusive technical consulting and
service fees as provided under the Service Agreement.
(ii) The
making of any material misleading or fraudulent representations or warranties
under Article V herein by Party
B-1
or Party B-2.
(iii) The
violation by Party
B-1
or Party B-2 of the covenants under Article VI herein.
(iv) The
violation by Party
B-1
or Party B-2 of any terms or conditions hereof.
(v) The
waiver by Party
B-1
or Party B-2 of the pledged Equity Interest or the transfer or assignment by
Party A or Party
B-1
of the pledged Equity Interest without prior written consent of Party A, except
as provided in Article VI(a)(i) in this Agreement.
(vi) The
acceleration of any loan, security, compensation, covenants or other
compensation liabilities of Party
B-1
or Party B-2.
(vii) Party
A’s reasonable belief that Party
B-1
or Party B-2 is incapable of performing under this Agreement.
(viii) The
insolvency of Party
B-1
or Party B-2.
(ix) The
determination by relevant legal authorities that the performance of this
Agreement is illegal.
4
(x) The
withdrawal, suspension, invalidation or material revision of any approval,
permits or authorization from the competent authority of the Chinese government
needed to perform or validate this Agreement.
(xi) Any
adverse change in the property of Party
B-1
or Party B-2 that causes Party A to reasonably deem that Party
B-1
or Party B-2 may be unable to perform the obligations hereunder.
(xii) The
inability or refusal by any successor or assignee of Sino-Global to pay the
amounts due under Service Agreement.
(xiii) The
occurrence of any other circumstances whereby Party A is incapable of exercising
the right to foreclose on the Pledge.
(b) Each
of Party
B-1
and Party B-2 must immediately notify Party A in writing if either Party
B-1
or Party B-2 is aware of any event of default or events that may reasonably
lead
to an event of default hereunder.
(c) Unless
the event of default has been remedied to Party A’s sole and absolute
satisfaction, Party A may (i) give a written notice of default to Party
B-1
and Party B-2 and require Party
B-1
and Party B-2 to immediately make full payments of the outstanding technical
consulting and service fees under the Service Agreement and other payables
or
(ii) foreclose on the Pledge in accordance with Article VIII herein.
ARTICLE
VIII
EXERCISE
OF THE RIGHT OF THE PLEDGE
(a) Prior
to the full payment of the consulting and service fees under the Service
Agreement, neither Party
B-1
nor Party B-2 shall transfer or assign the Equity Interest without prior written
approval from Party A.
(b) Party
A shall give notice of default to Party
B-1
and Party B-2 when Party A exercises the right of pledge.
(c) Subject
to terms hereof, Party A may exercise the right to foreclose on the Pledge
at
any time following written notice of default.
(d) Party
A is entitled to priority receipt in payment or proceeds from the auction or
sale of whole or part of the Equity Interest pledged herein in accordance with
applicable law until the outstanding technical consulting and service fees
and
all other payables under the Service Agreement are fully repaid.
(e) Neither
Party
B-1
nor Party B-2 shall hinder Party A from foreclosing on the Pledge in accordance
with this Agreement, each shall give necessary assistance so that Party A may
effectively realize the value of the Pledge.
5
ARTICLE
IX
TRANSFER
OR ASSIGNMENT
(a)
Neither
Party
B-1
nor Party B-2 shall transfer his rights or obligations hereunder without the
prior written consent from Party A.
(b)
This
Agreement shall be binding upon and inure to the benefit of the successors
of
Party A, Party
B-1
and Party B-2.
(c)
Party
A may transfer or assign his all or any rights and obligations under the Service
Agreement to any person (natural person or legal entity) at any time. In this
case, the assignee shall enjoy and undertake the same rights and obligations
herein of Party A as if the assignee is a party hereto. To the extent Party
A
transfers or assigns the rights and obligations under the Service Agreement,
at
the request of Party A, each of Party
B-1
and Party B-2 shall execute the relevant agreements and/or documents with
respect to such transfer or assignment.
(d)
Upon
Party A’s transfer or assignment, the new parties to the Pledge shall re-execute
a Pledge contract.
ARTICLE
X
TERMINATION
This
Agreement shall not be terminated until the consulting and service fees under
the Service Agreement are paid in full and Sino-Global shall no longer undertake
any obligations under the Service Agreement.
ARTICLE
XI
FORMALITIES
FEES AND OTHER EXPENSES
(a)
Party
B-1
and Party B-2, jointly and severally, shall be responsible for all fees and
actual expenditures in relation to this Agreement, including, but not limited
to, legal fees, cost of production, stamp tax and any other taxes and charges.
If Party A pays the relevant taxes in accordance with the laws, Party
B-1
and Party B-2, jointly and severally, shall fully indemnity such taxes paid
by
the Pledge.
(b)
Party
B-1
and Party B-2 shall be responsible for all fees (including, but not limited
to,
any taxes, formalities fees, management fees, litigation fees, attorney’s fees,
and various insurance premiums in connection with disposition of the Pledge)
incurred by Party
B-1
and Party B-2 as a result of the failure of Party
B-1
or Party B-2 to pay any payable taxes, fees or charges in accordance with this
Agreement, or as a result of the fact that Party A has recourse to any foregoing
taxes, charges or fees by any means for other reasons.
6
ARTICLE
XII
FORCE
MAJEURE
(a) If
the fulfillment of this Agreement is delayed or blocked due to a Force Majeure
Event (as defined below), the Party affected by such a Force Majeure Event
shall
be free from any obligation to the extent of such delay or holdback. As used
herein, the term “Force
Majeure Event”
shall mean any event which is out of control of each Party, and which is
unavoidable or insurmountable even if the Party affected by such event has
paid
reasonable attention to it. A Force Majeure Event shall include, but not be
limited to, government actions, nature disaster, fire, explosion, typhoons,
floods, earthquakes, tide, lightning or war. However, any lack of credit, assets
or financing shall not be deemed as a Force Majeure Event. The Party B-2laiming
the occurrence of a Force Majeure Event shall provide the other Party with
the
steps of fulfilling the obligations of this Agreement.
(b) The
Party
affected by such a
Force Majeure Event shall
be
free from any obligation under this Agreement so long as the Party affected
by
such a
Force Majeure Event has
made
reasonable endeavors to perform the Agreement and request the exemption from
the
other Party. Upon termination of the Force Majeure Event, the Parties agree
to
use reasonable best efforts to complete the transactions contemplated by this
Agreement.
ARTICLE
XIII
DISPUTE
SETTLEMENT
(a)
This
Agreement shall be governed by and construed in all respects in accordance
with
the PRC laws.
(b)
The
Parties shall strive to settle any dispute arising from the interpretation
or
performance, or in connection with this Agreement through friendly consultation.
In case no settlement can be reached through consultation within sixty (60)
days
of notice thereof, each Party may submit such matter to the China International
Economic and Trade Arbitration Committee for arbitration. The arbitration shall
be held in Beijing. The arbitration proceedings shall be conducted in Chinese.
The arbitration award shall be final and binding upon the Parties. The
arbitration award may be submitted to the applicable People’s Court for
enforcement.
ARTICLE
XIV
NOTICES
Any
notice to which is given by the both Parties hereto for the purpose of
performing the rights and obligations hereunder shall be in writing. Where
such
notice is delivered personally, the time of notice shall be the time when such
notice actually reaches the addressee. Where such notice is transmitted by
telex
or facsimile, the notice time shall be the time when such notice is transmitted.
If such notice does not reach the addressee on business date or reaches the
addressee after the business time, the date of notice shall be the next business
day. The delivery place shall be the address first written above of each Party
hereto or any other address provided to the other Parties in writing from time
to time.
7
ARTICLE
XV
APPENDIX
The
Appendix of this Agreement as attached hereto is part of this
Agreement.
ARTICLE
XVI
EFFECTIVENESS
(a) This
Agreement and any amendments, supplements and modifications shall be in writing
and come into effect upon execution by the Parties hereto.
(b) This
Agreement is executed both in Chinese and English with two copies for each
language. The Chinese version will prevail in the event of any inconsistency
between the English and any Chinese translations thereof.
IN
WITNESS WHEREOF,
the undersigned have executed this Agreement effective as of the date first
set
forth above written.
|
Party
A: Trans
Pacific Shipping Ltd..
|
||
|
(seal)
|
/s/ Cao Lei | |
| Legal Representative | ||
|
Date:
|
November 14, 2007 | |
|
Party
B-1: CAO Lei
|
||
| /s/ Cao Xxx | ||
|
XXX
Lei
|
||
|
Date:
|
November 14, 2007 | |
|
Party
B-2: XXXXX Xxxxxxx
|
||
| /s/ Xxxxx Xxxxxxx | ||
|
XXXXX
Xxxxxxx
|
||
|
Date:
|
November 14, 2007 | |
8
APPENDIX
|
1.
|
The
register of the shareholders of Sino-Global
|
|
2.
|
The
Contribution Certificate of
Sino-Global
|
| 3. |
The
Exclusive Technical Consulting and Service
Agreement.
|
9
