This Stock Pledge Agreement involves
Title: Share Pledge Agreement
Industry: Food Processing Sector: Consumer/Non-Cyclical
Share Pledge Agreement
This Share Pledge Agreement (hereinafter referred to as “This Agreement”) was entered into in Qingdao, China, on July 20, 2008 by the following parties (hereinafter referred to as “Parties to the Agreement”):
Party A: Shengyuan Nutritional Foods Co., Ltd.
Shareholder A: Zhang Jibin, ID No.: 370223196408110032
Shareholder B: Jiang Yunpeng, ID No.: 231026196305045811
1. Party A is a validly existing exclusively foreign-owned enterprise registered and legally established in the PRC and its legal effective registration No. is: ;
2. Beijing Shengyuan Huimin Technical Service Co., Ltd. (hereinafter referred to as “Shengyuan Huimin”) is a limited liability company registered and established in the PRC and its legal effective registration No. is: ;
3. Parties of Party B are the shareholders of Shengyuan Huimin (hereinafter referred to as “Pledgor”), among whom, Zhang Jibin holds 50 ％ of the equity and Jiang Yunpeng holds 50 ％ of the equity;
4. Party A, Parties of Party B and Shengyuan Huimin included the Exclusive Consultation and Service Agreement, the Equity Disposal Agreement and the Business Management Agreement;
5. In order to ensure that Party A from Shengyuan Huimin owned by Party B normally receive the services fees under the Exclusive Consultation and Service Agreement, and to ensure the performance of the Equity Disposal Agreement and the Business Management Agreement, the Pledgors shall separately and with joint efforts take all their the shares owned in Shengyuan Huimin as the pledge guarantee of the aforementioned agreements, and the Pledgee is the Party A.
Parties to this Agreement hereby have reached the following agreement upon friendly consultations based on the principle of equality and mutual benefit and comply with it:
Unless otherwise construed in this agreement, the following terms shall be interpreted as the following meanings:
Pledge: refers to all the content set out in Article 2 of this Agreement;
Equity: refers to 100% of the equity of Shengyuan Huimin jointly and legally held by the Pledgor and all the current and future rights and benefits that the Pledgor enjoys based on the equity;
Agreements: refers to the Exclusive Consultation and Service Agreement, the Equity Disposal Agreement and the Business Management Agreement, which were entered to by Party A, Shengyuan Huimin and other parties concerned on July 20,2008;
Event of Default: refers to any situation set out in Article 7 of this Agreement;
Notice of Default: refers to the notice of default events declared upon this Agreement.
The Pledgor pledges to Party A the all his/her equity owned in Shengyuan Huimin as the security for Party A’s rights and interests under the agreements.
The security of Share Pledge under this Agreement covers all the fees (including legal costs) payable to Party A by Shengyuan Huimin and (or) the Pledgor under the Agreements, expenses, and fees borne for the losses, interest , liquidated damages, compensation claims and costs to achieve the obligatory right, as well as the liabilities undertaken by Shengyuan Huimin and the Pledgor for Party A in case the Agreements become invalid in whole or in part for any reason.
The right of pledge under this Agreements means the right of preferential compensation of payments obtained, which Party A enjoys, through discount, auction and disposal of the equity that the Pledgor pledges to Party A.
Unless otherwise Party A expresses the written consent after this Agreement becomes effective, the pledge under this Agreement can not be removed except when Shengyuan Huimin and the Pledgor have properly completed the performance of all their obligations and responsibilities under the Agreements and with a written approval of Party A. In case Shengyuan Huimin or the Pledgor fails to complete the performance of all or any part of their obligations and responsibilities under the Agreements at the expiration of the Agreements, Party A will still enjoy such right of pledge under this Agreement until the above-mentioned obligations and responsibilities are completely fulfilled to the reasonable satisfaction of Party A.
3.1 This Pledge Agreement is included and effective upon signing and seals of the parties concerned. The right of pledge is set since the Administrative Department of Industry and Commerce handles the Registration of Share Pledge.
3.2 In the pledge process, in case Shengyuan Huimin fails to pay the service fees according to the Exclusive Consultation and Service Agreement, or fails to perform other provisions under such agreement or any provisions under the Business Management Agreement or Equity Disposal Agreement with the reasonable notice, Party A shall be entitled to exercise the right of pledge under the provisions of this Agreement.
4. Possession and Maintaining of the Certificate of Pledge Right
4.1 The Pledgor shall submit the investment certificate (original) of equity in Shengyuan Huimin to Party A for maintaining within ten workdays after the signing of this Agreement or at a earlier time all parties agree, and shall submit to Party A the certificate showing that the pledge under this Agreement has been properly registered in the register of shareholders, handle all the approval, registration and filing procedures required by the laws and regulations of the PRC, and submit the documents of Share Pledge Registration handled completely in the Registration Department of Industry and Commerce.
4.2 In case any change of registration items of pledge occurs and the alternation registration need be made by law, Party A and Party B shall make the alternation registration within five working days from the date of change of the corresponding registration items, and submit the related alternation registration documents.
4.3 During the Share Pledge, the Pledgor shall instruct Shengyuan Huimin not to distribute any dividends, bonuses, or take any profit distribution plan; in case the Pledgor should obtain the economic interest of any nature except that set out in the dividends, bonuses, or other profit distribution plan in terms of the pledge right, the Pledgor shall directly remit the relevant payments (after cashed) to the bank account appointed by Party A according to Party A’s requirements and instructions. The Pledgor shall not draw on the payments without the prior written consent of Party A.
4.4 During the Share Pledge period, in case the Pledgor subscribes the new registered capital of Shengyuan Huimin or acquises the equity (“new equity”) held by other Pledgor of Shengyuan Huimin, then the new equity will automatically become part of pledged equity under this Agreement, and the Pledgor shall complete all the procedures required for the desired pledge of the new equity within 10 working days after obtaining the new equity. If the Pledgor fails to complete the relevant procedures formalities in accordance with the foregoing provisions, Party A may immediately achieve the right of pledge in accordance with the provisions of Article VIII of this Agreement.
5. Declaration and Warranty of the Pledgor
The Pledgor shall make following presentations and warranties to Party A upon signing this Agreement, and ensure that Party A sign and implement this agreement by relying on such presentations and warranties:
5.1 The Pledgor shall legally hold the equity under this agreement and have the right to provide pledge guarantee for Party A with such equity.
5.2 At any time during the period from the date of signing this agreement till when Party A enjoys the right of pledge based on the provisions of Item 2.4 of this agreement, once Party A performs its rights or realizes the right of pledge in accordance with this Pledge Agreement, no legal right requirement or proper interventions from any other parties shall be allowed.
5.3 Party A shall be entitled to exercise the right of pledge in accordance with laws and regulations and provisions under this Agreement.
5.4 This Agreement was signed and obligations under this Agreement were implemented with all the necessary authorization of company and without violation of the provisions under any applicable laws and regulations. The signatory was authorized legally and effectively to sign this Agreement.
5.5 The equity the Pledgor holds does not bear any other rights or a third party’s security interest of any form (including but not limited to the pledge).
5.6 There are no ongoing equity-linked civil, administrative or criminal proceedings, administrative penal