Equity Pledge Agreement (English Version) This Equity Pledge Agreement (the "Agreement") is entered into as of December 20, 2006, among the following three parties: PARTY A: Longdan International Inc. Legal Address: Renaissance Trust Ltd, Solomon...
(English Version)
This Equity Pledge Agreement (the "Agreement") is entered into as of
December 20, 2006, among the following three parties:
PARTY A: Longdan International Inc.
Legal Address: Renaissance Trust Ltd, Solomon Building, P. O. Xxx 000,
Xxxx Xxxxxx, Xxxxxxxxxxx, Xxxxx.
PARTY B: Hubei Longdan Biological Medicine Technology Co. Ltd.
Legal Address: Floor 21, Jiangtian Building, No. 586 Wuluo Road,
Wuchang District, Wuhan, Hubei, China, 430070
PARTY C: Xxxxxx Xxxxx, Chairman and an authorized person to represent
shareholders of Party B, who collectively own more than 50% of the
outstanding equity interests in Party B.
Legal Address: Xx.0, 0xx Xxxxx, 000 Xxxx Xxx Xxxx, Xxxxxxx, Xxxxx,
Xxxxx Xxxxx
WHEREAS, Party A, ( the Pledgee ) is a business company incorporated
under the laws of Nevis, and has entered a series of agreement,
collectively the "Main Agreements" , which include "Exclusive Consult
and Services Agreement", "Operating Agreement" and "Exclusive Option
Agreement", and "Proxy Agreement", with Part B, or Part B and Part B's
shareholders together, concurrently with this Agreement.
WHEREAS, Party B is a company with exclusively domestic capital
registered in the People's Republic of China, and is engaged in the
business of Chinese medicine development, manufacturing, sale, and
pharmacy management distribution network;
WHEREAS, Party C ( the Pledgor ) represents more than 50% equity
interest of Party B, and agrees to provide security of pledge over the
equity interests for the performance of payment obligations of Party B
under the "Exclusive Consult and Services Agreement", and Party A
agrees to accept such security of pledge.
WHEREAS, "Agreement Letter for Equity Pledge Agreement" as showed in
the appendix is an integral part of this Agreement and has the same
legal effects as the other parts of the Agreement. Part C will legally
represent any shareholder of Part B, who signs the "Agreement Letter
for Equity Pledge Agreement", in this Agreement.
NOW THEREFORE, Party A, Part B and Part C through negotiations hereby
agree as follows through mutual negotiations:
1. Pledge
1.1 In order to ensure that Part B will perform its payment to
Part A under Exclusive Consult and Services Agreement and other
obligation under the Main Agreements, Party C (the Pledgors) agrees to
provide security of pledge over 100% of the equity interests it holds
in Party B ("Pledged Equity Interests") to Party A (the Pledgee).
Pledge under this Agreement refers to the rights owned by the Pledgee,
who shall be entitled to a priority in receiving payment by the
evaluation or proceeds from the auction or sale of the equity interests
pledged by the Pledgors to the Pledgee.
1.2 The Parties confirm that all members in Party C undertake the
obligations under the security pledge independently. Such members shall
not be jointly and severally liable for such obligations.
2. Term of Pledge
2.1 This Agreement shall be effective from the date when all
parties sign the Agreement and the said equity interests pledges are
recorded in the register of shareholders of Party B and the term is two
(2) years until all the obligations of Party B under Main Agreements
(including all amendments and supplementary contracts to Main
Agreements) are fulfilled.
2.2 During the term of pledge, in the event that Party B fails to
perform any obligations under Main Agreements, Party A shall have the
right to sell or dispose of the pledged assets in accordance with
relevant laws.
3. Registration
3.1 Party C guarantees to Party A that its implementation of its
obligations under this Agreement have been formally approved and/or
will be formally approved by the shareholders meeting of Party B.
3.2 After this Agreement effective, Party C will register equity
interests pledge hereof with the shareholder register of Party B.
3.3 Party C shall deliver to Party A Party C's physical possession
of their investment certificates in Party B and shareholders register
of Party B.
3.4 The Party A shall be entitled to collect any and all dividends
for declared or paid in connection with the equity interests.
4. Party C's Representation
4.1 Party C is the legal owner of the equity interests pledged.
4.2 Party C has not placed any other pledge on the pledged equity
interests, except for the pledge provided hereunder.
5. Party C's Warrants and Undertakings
In the term of this Agreement, Party C guarantees to Party A that
the Pledgors will:
5.1 Not transfer the pledged equity interests, or establish or
permit the creation of any guaranty on the pledged equity interests,
unless otherwise agreed by both Parties, or with Party A's prior
written consent;
5.2 Comply with and implement all the People's Republic of China's
Laws and regulations concerning the pledge of rights, and in the case
of receiving any notice, order or suggestion made by the governmental
authority, provide to Party A within 5 calendar days upon receiving
them, and pursuant to Party A's reasonable requests or with Party A's
consent comply with, or suggest arguments and representations against
such notice, order or suggestion.
5.3 Upon Party A's request, honestly sign, and urge other persons
with interests to the pledge to sign, all certificates of rights,
agreements and covenants in connection with the performance of this
Agreement, and encourage other persons with interests to the pledge to
take any action in relation to the enforcement of this Agreement and
facilitate Party A's exercising of its rights under this Agreement.
5.4 Perform all the guarantees, covenants, and warranties as
specified in Main Agreements, for the benefits of the Part A. The Part
C shall compensate all the losses suffered by the Part A for the
reasons that the Part C does not fully perform the guarantees,
covenants, and warranties as specified in Main Agreements.
6. Transfer
6.1 Party B shall not have the right to donate or transfer any
rights and obligations under this Agreement unless with Party A's prior
written consent.
6.2 This Agreement shall be binding upon Party C and its
successors, and also binding upon Party A and its successors.
6.3 Party A, at any time, may assign all or any of its rights and
obligations under this Agreement, to a designated person, or persons.
Where Party A transfers its rights and obligations under this Agreement,
Party B and Part C shall, upon Party A's request, execute agreements
concerning said transfer.
7. Confidentiality
The Agreement itself and relevant materials of this Agreement
shall be held confidential by all the Parties and shall not be
disclosed to any third party excluding senior officers, directors,
shareholders, agents and professional consultants. If any Party is
required by People's Republic of China Laws or other jurisdictional
laws to disclose any information in connection with this Agreement to
the public, or to file this Agreement with the regulatory authorities
involved, that Party shall not be subject to this Article.
This Article shall survive any amendment, supplementary or
termination of this Agreement
8. Language
This Agreement is written in both Chinese and English, and
executed in Chinese only, and the executed Chinese language Agreement
shall prevail in all cases. This Agreement is executed in three
originals and each Party holds one original. Each original has the same
legal effect.
9. Amendments and Supplementary Agreements
Parties may negotiate and enter any amendments of this Agreement,
or supplementary agreements on matters not agreed upon herein. Any
amendments of this Agreement, or supplementary agreements shall be
valid only when made in writing and signed by all parties. Any
amendments of this Agreement, or supplementary contracts have equal
effect as this Agreement.
10. This Agreement shall be governed by, and construed in
accordance with the laws of the People's Republic of China.
11. Settlement of Dispute
The parties shall strive to settle any dispute arising from, out
of or in connection with the interpretation or performance of this
Agreement through friendly negotiation. In case no settlement can be
reached through negotiation within six months, each party can submit
such matter to China International Economic and Trade Arbitration
Commission (the "CIETAC"). The arbitration shall follow the current
rules of CIETAC. The arbitration award shall be final and binding upon
the parties and shall be enforceable in accordance with its terms.
12. Force Majeure
Force Majeure means any event that is beyond the party's
reasonable control and cannot be prevented with reasonable care, such
as the acts of nature: earthquake, flood, typhoon, fire, explosion, and
acts of governments, war, and acts of terrorism or other civil unrest
means. If a Force Majeure event exists and affects the performance of
this Agreement, the affected party shall immediately notify the other
parties by means of telegraph, e-mail or other electronic forms, and
shall furnish sufficient evidence in writing of the occurrence of the
Force Majeure event within twenty (20) calendar days thereafter.
According to the impact of the Force Majeure on the performance of this
Agreement, the Parties determine whether to release this Agreement.
After the event of Force Majeure is removed, all parties agree to
resume performance of this Agreement with their best efforts.
13. Capable of Severing
Any of the provisions of this Agreement will be deemed as capable
of severing in the jurisdiction where it conflicts with the laws in
such jurisdiction. The invalid or unenforceable effect of such
provision in one jurisdiction should not be affected that in other
jurisdictions.
(A Signature Page Follows)
Signature Page
IN WITNESS WHEREOF the Part A, Part B and Part C hereto have caused
this Agreement to be duly executed on their behalf by a duly authorized
representative as of the date first written above.
Party A (Pledgee): Longdan International Inc.
By: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
Chairman
Party B: Hubei Longdan Biological Medicine Technology Co. Ltd.
By: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
Chairman
Party C (Pledgors): Shareholders of Part B
By: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
An authorized representative of the majority shareholders
(An Appendix Page Follows)
Appendix: Form of Agreement Letter for Equity Pledge Agreement
Agreement Letter for Equity Pledge Agreement
( English Version, for Reference only )
To:
Hubei Longdan Biological Medicine Technology Co. Ltd. and Longdan
International Inc.
I, as the shareholder of Hubei Longdan Biological Medicine
Technology Co. Ltd., hereby agree and confirm as follows:
I have read the full text of Equity Pledge Agreement, and I fully
agree to all contents of this agreement.
I assign Xxxxxx Xxxxx, Chairman of Hubei Longdan Biological
Medicine Technology Co. Ltd. to represent me with the Common stock
shares specified at the bottom of this agreement, together with Hubei
Longdan Biological Medicine Technology Co. Ltd. to sign the Equity
Pledge Agreement with Longdan International Inc.
I agree to sign or provide necessary documents to perform the
Signature:
Print Name:
Identity Card Number:
Information of Possession of Common Stocks of Hubei Longdan Biological
Medicine Technology Co. Ltd. :
Class of Common Stocks: Number of Shares:
Percentage of Voting Power:
Date: December 20, 2006
