EQUITY INTEREST PLEDGE AGREEMENT
Exhibit
10.3
THIS EQUITY INTEREST PLEDGE AGREEMENT
(this “Agreement”) is entered into by
and between the following parties effective as of March 25, 2010.
Pledgee:
Beijing CHENGMUJINMING Technology Service Co., Ltd (“Party A”)
Registered
address: 1704F1 17th floor
Tsing Wun Contemporary Building, Mantingfangyuan housing estate, Qingyunli,
Haidian District, Beijing, China.
Pledgor:
Shan Junfeng (“Party B”)
ID No.:
000000000000000000
Address:
Apartment 0-0-000, Xx. 0 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx xxxxxxxx,
Xxxxx
Each of
Party A and Party B is referred to as a “Party”, and Party A and Party
B are referred to collectively as the “Parties”.
WHEREAS:
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1.
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Party A is a wholly foreign-owned
enterprise duly established and validly existing under the laws of the
PRC. Party A and Weifang Jinzheng Poultry Co., Ltd. (the “Company”) entered into an Exclusive
Technical Consulting Service Agreement effective as of March 25, 2010 (the
“Service
Agreement”).
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2.
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Party B, a citizen of the PRC
holds a 89.85% equity interest in the Company, which is a limited
liability company duly established and validly existing in Shandong
province under the laws of the
PRC.
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3.
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Pursuant
to the Service Agreement, the Company shall make certain payments to Party
A in consideration of the consulting services provided by Party A
thereunder. In order to ensure that Party A collects the Consulting Fee
from the Company as provided in the Service Agreement, Party B is willing
to pledge all of its equity interest in the Company to Party A as security
to ensure that Party A collects the Consulting Fee under the Service
Agreement.
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NOW THEREFORE, intending to be
bound hereby, the Parties hereto agree as follows:
Article
1 Definitions
Unless it
is otherwise stipulated, for the purpose of this Agreement, the following terms
shall have the following meanings:
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1.1
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“Event
of Default” means any event in accordance with Article 7
hereunder.
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1.2
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“Equity
Interest” means the 89.85% equity interest in the Company legally held by
Party B and any other equity interest in the Company which may be held by
Party B in the future;
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1.3
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“Force
Majeure Event” means any event that is out of the control of each party
and that would be unavoidable or insurmountable even if the party affected
by such event paid reasonable attention to it. Force Majeure Event shall
include, but not be limited to government actions, natural disasters,
fire, explosion, typhoons, floods, earthquakes, tide, lightning and war.
However, any lack of credit, assets or financing shall not be deemed to be
a Force Majeure Event.
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1.4
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“Notice
of Default” means the notice of default issued by Party A in accordance
with this Agreement.
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1.5
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“Pledge”
has the full meaning assigned to that term in Article 2 of this
Agreement.
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1.6
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“Rate
of Pledge” means the ratio between the value of the Pledge under this
Agreement and the Consulting Fees under the Service
Agreement.
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1.7
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“Service
Agreement” means the Exclusive Technical Consulting and Service Agreement
entered into by and between the Company and Party
A.
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1.8
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“Term
of Pledge” means any event in accordance with Article 7
hereunder.
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Article
2 Pledge
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2.1
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Party
B agrees to pledge all of its Equity Interest in the Company to Party A as
a guarantee for the Consulting Fees payable to Party A under the Service
Agreement.
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2.2
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Party
A, by virtue of the Pledge, shall be entitled to have priority in
receiving payment or proceeds from the auction or sale of the Equity
Interest pledged by Party B to Party
A.
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Article
3 Rate of Pledge and Term of Pledge
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3.1
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The Rate of Pledge shall be 100%
under this Agreement.
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3.2
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The Term of
Pledge
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3.2.1
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The Pledge shall be effective as
of the date that the Pledge is recorded in the register of shareholders of
the Company and shall remain effective so long as this Agreement remains
in effect.
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3.2.2
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During the Term of the Pledge,
Party A shall be entitled to foreclose on the Pledge in accordance with
this Agreement in the event that the Company fails to pay the Consulting
Fees in accordance with the Service
Agreement.
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3.2.3
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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
4 Physical Possession of Documents
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4.1
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During
the Term of the Pledge, Party A shall be entitled to possess the
contribution certificate of the Equity Interest (the “Contribution Certificate”) and the
register of shareholders of the Company. Party B shall deliver the
Contribution Certificate and the register of shareholders hereunder to
Party A within one week after the execution date of this
Agreement.
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4.2
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Party
A shall be entitled to collect the dividends from the Equity Interest
during the term of the Pledge.
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Article
5 Representations and Warranties of Party B
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5.1
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Party
B is the legal owner of the Equity
Interest.
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5.2
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Except
as otherwise provided hereunder, Party A shall not be interfered with by
any parties at any time when Party A is exercising its rights in
accordance with this Agreement.
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5.3
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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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5.4
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Party
B shall not pledge or encumber the Equity Interest to any other person
except for Party A.
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Article
6 Covenant of Party B
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6.1
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During the effective term of this
Agreement, Party B covenants to Party A as
follows:
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6.1.1
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Except
for the transfer of the Equity Interest by Party B, Party A and the
Company, as contemplated by the Exclusive Equity Interest Purchase
Agreement entered into by and between Party B and Party A, Party B shall
not transfer or assign the Equity Interest, or create or permit to be
created any pledges which may have an adverse effect on the rights or
benefits of Party A without prior written consent from Party
A.
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6.1.2
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Party
B shall comply with and implement all laws and regulations with respect to
the right of pledge, shall present to Party A any notices, orders or
suggestions with respect to the Pledge issued or made by the competent
authority after receiving such notices, orders or suggestions and shall
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.
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6.1.3
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Party B shall timely notify Party
A of any events or the receipt of any notices which may affect the Equity
Interest or any part of its right, which may change any of Party B’s
covenants and obligations under this Agreement or which may affect Party
B’s performance of its obligations under this
Agreement.
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6.2
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Party
B agrees that Party A’s right to exercise the Pledge shall not be
suspended or hampered through legal procedure by Party B, any successors
of Party B or any person authorized by Party
B.
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6.3
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Party
B warrants to Party A that in order to protect or perfect the security
over the payment of the Consulting Fees under the Service Agreement, Party
B shall execute in good faith and cause other parties who may have any
interest in the Pledge to execute all title certificates, contracts or
other documents, and/or perform and cause other parties who have any
interest to take action as required by Party A and provide access to
exercise the rights and authorization vested in Party A under this
Agreement, and execute all the documents with respect to the Equity
Interest and promptly provide all the notices, orders and decisions
regarded as necessary by Party A to Party A within a reasonable
time.
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6.4
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Party
B warrants to Party A that Party B will comply with and perform all the
guarantees, covenants, agreements, representations and conditions for the
benefit of Party A. Party B shall indemnify Party A for all the losses
suffered by Party A in the event that Party B does not perform or fully
perform its guarantees, covenants, agreements, representations or
conditions hereunder.
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Article
7 Events of Default
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7.1
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The occurrence of any of the
events listed below shall be deemed an Event of
Default:
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7.1.1
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The
Company fails to make full payment of the Consulting Fees as scheduled
under the Service Agreement.
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7.1.2
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Party
B makes any misleading or fraudulent representations or warranties under
Article 5 herein, and/or Party B violates any warranties under Article 5
herein.
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7.1.3
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Party
B violates any of the covenants under Article 6
herein.
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7.1.4
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Party
B violates any terms or conditions
herein.
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7.1.5
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Party
B waives, transfers or assigns the pledged Equity Interest without the
prior written consent of Party A, except as provided by Article 6.1.1
herein.
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7.1.6
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Any
external loan, security, compensation, covenant or other compensation
liability of Party B (1) is required to be repaid or performed prior
to its scheduled date; or (2) is due but is not repaid or performed
as scheduled.
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7.1.7
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Party
B is incapable of repaying its general debt or other
debt.
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7.1.8
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Party
A determines that the performance of this Agreement is illegal for any
reason.
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7.1.9
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Any
approval, permit or authorization needed to perform this Agreement or to
validate this Agreement is withdrawn, suspended, invalidated or materially
revised.
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7.1.10
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The
property of Party B adversely changes and causes Party A to conclude that
the capability of Party B to perform the obligations herein under this
Agreement is impaired.
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7.1.11
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The successors or assigns of the
Company are only entitled to perform a portion of or refuse to perform the
payment liability under the Service
Agreement.
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7.1.12
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Other circumstances whereby Party
A determines that its rights hereunder have been
impaired.
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7.2
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Party
B shall immediately notify Party A in writing if Party B becomes aware of
or finds that any event under Article 7.1 herein or any event that may
result in an Event of Default has occurred or is
occurring.
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7.3
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Unless
the Event of Default under Article 7.1 herein has been remedied to Party
A’s sole and absolute satisfaction, Party A, at any time during the Event
of Default or thereafter, may give a written Notice of Default to Party B
and require Party B to make immediate full payment of the outstanding
technical consulting and service fees under the Service Agreement and
other payables or foreclose on the Pledge in accordance with Article 8
herein.
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Article
8 Exercise of the Right of Pledge
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8.1
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Party
B shall not transfer or assign the Equity Interest without prior written
approval from Party A prior to the full repayment of the Consulting Fees
under the Service Agreement.
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8.2
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Party
A shall give Notice of Default to Party B when Party A exercises its right
to foreclose on the Pledge.
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8.3
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Subject
to Article 7.3, Party A may exercise the right to foreclose on the Pledge
at any time provided Party A gives the Notice of Default pursuant to
Article 7.3.
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8.4
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Party
A is entitled to have priority in receiving payment or proceeds from the
auction or sale of all or part of the Equity Interest pledged herein in
accordance with applicable law until the Consulting Fees and all other
payables under the Service Agreement are
repaid.
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8.5
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Party
B shall not hinder Party A from foreclosing on the Pledge in accordance
with this Agreement and shall give necessary assistance so that Party A
may effectively realize the value of the
Pledge.
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Article
9 Transfer or Assignment
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9.1
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Party
B shall not transfer or assign any rights or obligations herein without
the prior written consent of Party A, which shall be in Party A’s sole and
absolute discretion. Party B understands that any transferee or assignee
shall be required to be bound
hereby.
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9.2
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Party
A may transfer or assign all or any rights and obligations under the
Service Agreement to any person (natural person or legal entity) at any
time without the consent of Party B. Any transferee or assignee shall
enjoy and undertake the same rights and obligations herein of Party A as
if the assignee were a party hereto. If Party A transfers or assigns the
rights and obligations under the Service Agreement, the Service Agreement
will continue in full force and effect without need for execution of
further documents.
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9.3
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This
Agreement shall be binding upon and inure to the benefit of Party A and
its successors and assigns and shall be effective as to Party B and any of
its permitted successors and
assigns.
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Article
10 Termination
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10.1
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This
Agreement shall remain in full force and effect so long as the Service
Agreement remains in effect.
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Article
11 Formalities Fees and Other Expenses
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11.1
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Party
B shall be responsible for all the fees and actual expenditures in
relation to this Agreement, including but not limited to, legal fees,
costs of production, stamp tax and any other taxes and charges. If Party A
pays any such fees on behalf of Party B, Party B shall promptly reimburse
Party A in full. Nothing in the foregoing sentence shall be construed to
require Party A to pay any such
fees.
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11.2
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Party
B shall be responsible for all the fees, including but not limited to, any
taxes, formalities fees, management fees, litigation fees, attorneys’
fees, and various insurance premiums in connection with disposition of the
Pledge incurred by Party B by virtue of Party B’s failure to pay any
taxes, fees or charges in accordance with this
Agreement.
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Article
12 Force Majeure
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12.1
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If
the fulfillment of this Agreement is delayed or blocked due to a Force
Majeure Event, the party affected by such a Force Majeure Event shall be
free from any obligation to the extent of the delay or holdback. The party
claiming the occurrence of a Force Majeure Event shall provide the other
party with the steps of fulfilling the obligations of this
Agreement.
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12.2
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Performance
under this Agreement shall be suspended during the existence of such Force
Majeure Event, provided the Party claiming the existence of the Force
Majeure Event has notified the other Party of the existence of such Force
Majeure Event and has used reasonable best efforts to perform under the
Agreement. Both Parties agree to use reasonable best efforts to resume
performance of this Agreement if the reason for exemption has been
corrected or remedied.
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Article
13 Dispute Settlement
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13.1
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This Agreement shall be governed
by and construed in all respects in accordance with the laws of the
PRC.
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13.2
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The
Parties shall strive to settle any dispute arising from the interpretation
or performance of this Agreement through mutual agreement and negotiation.
In case no settlement can be reached through consultation, each Party can
submit such matter to the China International Economic and Trade
Arbitration Committee for arbitration according its current effective
arbitration rules. 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 PRC court for
enforcement.
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Article
14 Notices
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14.1
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Any
notice or other communication under this Agreement shall be in Chinese and
be sent to the address first written above or other address as may be
designated from time to time by hand delivery or mail or facsimile. Any
notice required or given hereunder shall be deemed to have been served:
(a) on the same date if sent by hand delivery; (b) on the tenth
date after posting if sent by air-mail, (c) on the fourth date if
sent by the professional hand delivery which is acknowledged worldwide;
and (d) the receipt date displayed on the transmission confirmation
notice if sent by facsimile.
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Article
15 Appendix
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15.1
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The
Appendix of this Agreement as attached hereto is the part of this
Agreement.
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Page 7 of
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Article
16 Effectiveness
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16.1
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This Agreement is effective as of
the date above first written. Any amendments, supplements and
modifications shall be in writing and shall be effective upon execution by
the Parties thereto.
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[THIS
SPACE IS INTENTIONALLY LEFT BLANK]
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EQUITY INTEREST PLEDGE
AGREEMENT
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This page
is the signing page of this Equity Interest Pledge Agreement.
IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the date first set forth above
written.
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Party
A: Beijing CHENGMUJINMING
Technology
Service Co., Ltd
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By:
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/s/
Shan Junfeng
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Name:
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Shan
Junfeng
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Its:
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Chief
Executive Officer
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Party
B: Shan Junfeng
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/s/
Shan Junfeng
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Shan
Junfeng
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Page 9 of
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EQUITY INTEREST PLEDGE
AGREEMENT
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APPENDIX
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1.
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The
register of the shareholders of the
Company
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2.
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The
Contribution Certificate of the
Company
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3.
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The Exclusive Technical
Consulting Service
Agreement.
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Page 10
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