Document:

EXCLUSIVE EQUITY INTEREST PURCHASE AGREEMENT

 

EXCLUSIVE EQUITY INTEREST PURCHASE AGREEMENT

 

THIS EXCLUSIVE EQUITY INTEREST PURCHASE AGREEMENT (the “Agreement”) is entered into by and among the following parties effective as of September 25, 2010.

Party A: Putian Asia Success Cereals & Oils Technical Service Co., Ltd, a wholly foreign-owned enterprise incorporated under the PRC laws with its registered address at No. 999, Houguo Street, Sanjiangkou Town, Hanjiang District, Putian City.

  

Party B: Yao Jianxin, a PRC citizen, with ID No. 350303197201280334

Address: Linbing Village, Guohuan Town, Hanjiang District, Putian City

 

Party C: Fujian Grand Farm Foods Development Co., Ltd. a limited liability company duly established and validly existing under the laws of the PRC, with its registered address at No. 2089, Hanhua East Road, Guohuan Town, Hanjiang District, Putian City.

WHEREAS,

	
1.

	
Party B holds a 0.25% equity interest in Party C; and

	
2.

	
Party A and Party C have entered into an Exclusive Technical Consulting Service Agreement and an Operating Agreement, both dated as of September 25, 2010.

NOW THEREFORE, intending to be bound hereby, the Parties hereto agree as follows:

 

	
1.

	
Transfer of Equity Interest

	 	
1.1

	
Grant of Purchase Right

Party B hereby irrevocably grants Party A the exclusive right to purchase or designate one or more persons (each a “Specified Person”) to purchase all or any portion of the 0.25% equity interest in Party C held by Party B (the “Equity Interest”), subject to compliance with legal restrictions under applicable PRC laws (the “Purchase Right”). Party B shall not sell or transfer all or any portion of the Equity Interest to any party other than Party A and/or the Specified Person(s). Party C hereby agrees that Party B may grant the Purchase Right to Party A, and the other shareholders of Party C hereby waive any and all preemptive rights relating to the Equity Interest evidenced by the Announcement document attached hereto as the Appendix. The term “person” as used herein means an individual, corporation, joint enterprise, partnership, enterprise, trust or non-corporation organization.

	
  

	
1.2

	
Exercise of the Purchase Right

	 	
1.2.1

	
To the extent permitted under PRC laws, Party A, at its sole discretion, may decide the specific time, method and number of its exercise.

 

  

Page 1 of 10

 

 

	
EXCLUSIVE EQUITY INTEREST PURCHASE AGREEMENT

 

	 	
1.2.2

	
When Party A intends to exercise the Purchase Right, it shall issue a written notice (the “Purchase Notice”) to Party B, and the Purchase Notice shall state the following: (a) Party A intends to exercise the Purchase Right; (b) the percentage of the Equity Interest to be purchased therewith; and (c) the effective date or transfer date. Party A may exercise the Purchase Right one or more times, in whole or in part.

	
  

	
1.3

	
Consideration of the Equity Interest

The Transfer Fee (“Transfer Fee”) payable by Party A shall be confirmed by both Party A and Party B through negotiation according to the evaluation of the Equity Interest by the relevant qualified institute, and it shall be the lowest price allowable by the PRC laws and regulations.

	
  

	
1.4

	
Transfer of the Equity Interest

 

Each time Party A exercises the Purchase Right in whole or in part:

	 	
1.4.1

	
Party B shall ensure that Party C timely convenes a shareholders’ meeting, at which the shareholders of Party C shall pass shareholders’ resolutions providing that Party B can transfer to Party A or the Specified Person(s) the Equity Interest as specified in the Purchase Notice.

	
  

	
1.4.2

	
Party B shall enter into a transfer agreement with Party A or the Specified Person(s) in relation to the Equity Interest to be transferred pursuant to the Purchase Notice.

	
  

	
1.4.3

	
The Parties shall execute all other agreements or documents, obtain all government approvals and consents, and take all actions necessary to legally transfer the ownership of the Equity Interest as specified in the Purchase Notice to Party A or the Specified Person(s) and ensure that Party A or the Specified Person will be registered as the owner of such Equity Interest. Such Equity Interest shall be free from any Security Interest or other encumbrance. For the purposes of this Agreement, “Security Interest” shall include any guarantee, mortgage, third party rights or interest, purchase rights, preemption rights, offset rights and any other security arrangements, but shall exclude any security interest granted in accordance with this Agreement and the Equity Interest Pledge Agreement entered into by and between Party B and Party A effective as of September 25, 2010 (the “Pledge Agreement”).

	
  

	
1.4.4

	
Party B and Party C shall unconditionally assist Party A in obtaining the governmental approvals, permits, registrations, filings and completing all the necessary formalities for obtaining the Equity Interest to be transferred pursuant to the Purchase Notice.

 

	 	
1.5

	
Payment for the Equity Interest

	
  

	
1.5.1

	
Party A shall pay the Transfer Fee to Party B in accordance with the provision of Article 1.3.

   

	
2.

	
Covenants Relating to the Equity Interest

	
  

	
2.1

	
Covenants of Party C

	
  

	
2.1.1

	
Without the prior written consent of Party A, Party C will not supplement, amend, or modify any provisions of the charter and organizational documents of Party C and will not increase or reduce its registered capital or change the equity holding structures in any other way.

 

  

Page 2 of 10

  

 

	
EXCLUSIVE EQUITY INTEREST PURCHASE AGREEMENT

 

	
  

	
2.1.2

	
Party C shall remain legally existing, in good standing, will prudently and efficiently operate its business and deal with corporate affairs in accordance with commercial standards and practice.

	
  

	
2.1.3

	
Without the prior written consent of Party A, Party C shall not sell, transfer, mortgage or dispose of any assets, business or beneficial rights of Party C, or allow any creation of another security interest or other encumbrance upon its assets.

	
  

	
2.1.4

	
Without the prior written consent of Party A, Party C shall not incur, inherit, or guarantee any debts except for (i) debt incurred during the course of normal business operations (excluding business loans); and (ii) the debt that has been previously disclosed to Party A and to which Party A has provided prior written consent.

	
  

	
2.1.5

	
Party C shall operate its business normally to maintain the value of its assets, and shall not take any action which shall bring any materially adverse influence upon the business operation or the value of the assets.

	
  

	
2.1.6

	
Without the prior written consent of Party A, Party C shall not enter into any material agreement except in the normal course of business. (For the purpose of this paragraph, an agreement covering an amount in excess of RMB 100,000 will be considered a material agreement).

	
  

	
2.1.7

	
Without the prior written consent of Party A, Party C shall not provide any loans or credit to any third party.

	
  

	
2.1.8

	
At Party A’s request, Party C shall provide Party A with any materials relating to the business operation and financial status of Party C.

	
  

	
2.1.9

	
Party C shall purchase insurance from an insurance company acceptable to Party A and shall maintain such insurance. The amount and kinds of such insurance shall be similar to insurance carried by other companies which operate similar businesses and possess similar assets.

	
  

	
2.1.10

	
Without the prior written consent of Party A, Party C shall not merge with, combine with, make investment in, purchase the equity or substantially all the assets of any other entity.

	
  

	
2.1.11

	
Within 24 hours after receiving notice or becoming aware thereof, Party C shall inform Party A of any actual or potential litigation, arbitration, or administrative procedure in relation to the Equity Interest.

	
  

	
2.1.12

	
In order to keep the ownership of all assets, Party C shall execute all necessary or proper documents, take all necessary or proper actions, substitute all necessary or proper claims, and make all necessary or proper answers to all compensation claims.

	
  

	
2.1.13

	
Without the prior written consent of Party A, Party C shall not allot any dividend to any shareholder. However, Party C shall immediately allot all dividends to the shareholders upon the request of Party A.

	
  

	
2.2

	
Covenants of Party B

 

	
  

	
2.2.1

	
Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of any rights or interest relating to the Equity Interest, or allow any creation of other security interests or encumbrances on the Equity Interest (excluding the Security Interest under this Agreement and the Pledge Agreement).

 

  

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EXCLUSIVE EQUITY INTEREST PURCHASE AGREEMENT

 

	
  

	
2.2.2

	
Party B shall use its best efforts to prevent the other shareholders of Party C from approving resolutions relating to the sale, transfer, mortgage, or disposal of any rights or interests relating to the Equity Interest, or allowing any creation of any security interest or other encumbrance on the Equity Interest (excluding the Security Interest created pursuant to this Agreement and the Equity Interest Pledge Agreement).

	
  

	
2.2.3

	
Party B shall use its best efforts to prevent the other shareholders of Party C from approving resolutions relating to Party C’s merger with, combination with, purchase of, or investment in any other entity.

	
  

	
2.2.4

	
Party B shall inform Party A of any actual or potential litigation, arbitration, or administrative procedure in relation to the Equity Interest.

	
  

	
2.2.5

	
Party B shall ensure that the other shareholders of Party C approve the transfer of the Equity Interest as set out in this Agreement.

	
  

	
2.2.6

	
In order to keep ownership of the Equity Interest, Party B shall cause Party C to execute all necessary or proper documents, take all necessary or proper actions, substitute all necessary or proper claims, and make all necessary or proper answer to all compensation claims.

	
  

	
2.2.7

	
At the request of Party A from time to time, Party B shall immediately transfer to Party A or the Specified Person(s) the Equity Interest pursuant to this Agreement.

	
  

	
2.2.8

	
Party B shall strictly comply with this Agreement and any other agreements which may be entered into by and among Party B, Party C and Party A collectively or separately, and shall perform its obligations under such agreements, and shall not take or fail to take any actions which actions or inactions will affect the validity and enforceability of such agreements.

 

	
3.

	
Representations and Warranties

	
  

	
3.1

	
Party B and Party C jointly and severally represent and undertake as follows:

	
  

	
3.1.1

	
Each such party has the power to enter into and deliver this Agreement and such other agreements for the transfer of the Equity Interest to Party A or the Designated Person(s), and has the power and capacity to perform its obligations under this Agreement.

	
  

	
3.1.2

	
Neither the execution and delivery of this Agreement, nor the performance of the obligations under this Agreement will: (i) violate any PRC laws; (ii) conflict with the Articles of Association or other organizational documents of any party; (iii) breach any contract or document which such Party is a party to or which binds such Party; (iv) violate any required permit, approval or any valid qualification; or (v) result in the cessation, revocation or imposition of additional conditions on the required permit, approval or qualification.

	
  

	
3.1.3

	
Party C has full and transferable ownership of its assets and facilities. Other than the pledge and/or mortgage incurred by this Agreement and the pledge of the Equity Interest pursuant to the Pledge Agreement, there is no other pledge and/or mortgage on such assets and facilities.

	
  

	
3.1.4

	
Party C has no outstanding debt except for (i) the legal debt, incurred during the normal course of business; and (ii) the debt that has been previously disclosed to Party A.

 

  

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EXCLUSIVE EQUITY INTEREST PURCHASE AGREEMENT

 

	
  

	
3.1.5

	
Party C complies with all applicable laws and regulations.

	
  

	
3.1.6

	
There is no actual, pending or potential litigation, arbitration, or administrative procedure in relation to the Equity Interest, assets of Party C or other matters relating to Party C.

 

	
4.

	
Effectiveness and Term of this Agreement

	
  

	
4.1

	
This Agreement shall be executed and come into effect as of the date first set forth above. This Agreement shall expire on the date that is 50 years following the date hereof unless earlier terminated as set forth in this Agreement or upon mutual agreement of the Parties hereto.

	
  

	
4.2

	
This Agreement may be unilaterally extended prior to termination for a successive 50 year term upon written notice by Party A, provided such extension is permitted by law and subject to the approval of the registration administration for the extension of Party C’s business duration. The parties will cooperate to renew this Agreement upon such notice by Party A if such renewal is legally permitted at the time.

 

	
5.

	
Breach of Contract

	 	
5.1

	
If any party (the “Defaulting Party”) breaches any provision of this Agreement, which may cause damages to other parties (each a “Non-defaulting Party”), the Non-defaulting Party can notify the Defaulting Party in writing to rectify and correct such breach; if the Defaulting Party does not take actions which rectify and correct such breach to the satisfaction of the Non-defaulting Party within fifteen (15) days upon the issuance of the written notice, the Non-defaulting Party can take actions pursuant to this Agreement or other measures in accordance with applicable laws.

	 	
5.2

	
The occurrence of the following events constitutes a breach by Party B:

	
  

	
5.2.1

	
Any violation by Party B of the provisions of this Agreement, or the representation and warranties herein contain material mistakes, inaccuracies or are otherwise incorrect;

	
  

	
5.2.2

	
Transference in any manner, or the pledging of any rights pursuant to this Agreement without the prior written consent of Party A;

	
  

	
5.2.3

	
This Agreement and/or the Pledge Agreement becomes invalid or unenforceable.

	 	
5.3

	
Should a breach or violation of provisions under the Pledge Agreement and the Operating Agreement occur, Party A can request that Party B transfers all or part of Equity Interests to Party A or the Specified Person(s) pursuant to Article 1 hereof.

6. Assignment

	 	
6.1

	
Without the prior written consent of Party A, Party B shall not transfer its rights and obligations under this Agreement to any third party; if Party B dies, Party B agrees to transfer the rights and obligations under this Agreement to a person approved by Party A.

	 	
6.2

	
This Agreement shall be binding on the successor to Party B and is effective on any successor or transferee that is allowed by Party A.

 

  

Page 5 of 10

  

 

	
EXCLUSIVE EQUITY INTEREST PURCHASE AGREEMENT

 

	 	
6.3

	
Party B hereby agrees that Party A may transfer all of its rights and obligation under this Agreement to any third party subject to a written notice to Party B, and no further consent from Party B will be required.

	
7.

	
Governing Law and Dispute Settlement

	
  

	
7.1

	
Governing Law

This Agreement shall be governed by and interpreted according to the laws of the PRC.

	
  

	
7.2

	
Dispute Settlement

With regard to any dispute in relation to the interpretation or implementation of this Agreement, the Parties shall negotiate in good faith to settle the dispute. If the dispute cannot be settled within thirty (30) days from the date any party issues written notice requesting settlement of a dispute through negotiation, each party has the right to submit the dispute to the China International Economic and Trade Arbitration Committee for arbitration according to its then effective arbitration rules. The arbitration shall be held in Beijing. The arbitration proceedings shall be conducted in Chinese. The arbitration award is final and binding on each party.

 

8.    Tax and Expenses

Each party shall bear its own tax, costs and expenses in connection with this Agreement and the transactions contemplated herein.

 

9.    Notice

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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EXCLUSIVE EQUITY INTEREST PURCHASE AGREEMENT

 

	
10.

	
Confidentiality

	 	
10.1

	
The parties acknowledge and confirm that any oral or written information relating to this Agreement that is communicated among the parties shall be deemed as confidential information (“Confidential Information”). The parties shall keep confidential such Confidential Information and shall not disclose such Confidential Information to any third party without the prior written consent of the other parties. The following information shall be excluded from the definition of Confidential Information: (a) information that is or becomes publicly available, so long as it is not disclosed by the party receiving such Confidential Information; or (b) information that is disclosed as required by applicable laws or regulations. In addition, without ceasing to be Confidential Information, a Party may disclose Confidential Information to its attorney or financial advisor so long as such attorney or financial advisor needs access to such information in order to ensure compliance with this Article and agrees to keep such information confidential. The disclosure by the employee or agent of each party shall be deemed disclosure by such party itself, and such party shall be liable therefor. The parties agree that the provisions of this Article shall survive notwithstanding the termination of this Agreement.

 

	
11.

	
Further Assurance

	 	
11.1

	
The parties agree that each will, without any hesitation, execute any necessary documents and take any necessary actions for the purpose of performing the objectives of this Agreement and will execute any documents and take any actions which are beneficial for the purposes of this Agreement.

 

	
12.

	
Miscellaneous

12.1  Amendment and Supplementation

Any revision, amendment or supplementation of this Agreement shall be in writing and be executed by each party.

12.2  Compliance with laws and regulations

The parties shall comply with all applicable laws and regulations which have been formally issued and may be publicly acquired.

12.3  Entire Agreement

Unless it is otherwise revised, amended or supplemented after execution, this Agreement constitutes the entire agreement among the parties as to the subject matter of this Agreement, and supersedes any prior oral or written negotiations, statements or agreements among the parties relating thereto.

12.4  Headings

Headings in this Agreement are only set out for reading convenience, and shall not be used to interpret, explain or otherwise influence the meaning of the provisions of this Agreement.

12.5  Severability

If any of the terms of this Agreement is declared invalid, illegal or unenforceable in accordance with any applicable laws or regulations, the validity and enforceability of the other terms hereof shall nevertheless remain unaffected, and the parties hereto agree to, through good faith negotiation, make valid terms to replace such invalid, illegal or unenforceable terms, and the economic results from such valid terms shall be close to, as much as may be possible, the superseded invalid, illegal or unenforceable terms.

 

  

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EXCLUSIVE EQUITY INTEREST PURCHASE AGREEMENT

 

12.6  Successor

This Agreement shall be binding on the successor of each party or the transferee permitted by the other parties and shall be interpreted for its benefit.

12.7  Survival

 

	
  

	
12.7.1

	
Any obligations incurred in relation to this Agreement before its expiration or early termination shall continue to be effective after expiration or early termination of the Agreement.

	
  

	
12.7.2

	
The provisions of Articles 7, 10 and 12.7 shall survive notwithstanding the termination of this Agreement.

12.8Waiver

 

Each party may waive the terms and conditions under this Agreement in writing. Such waiver document shall be effective only if it is duly signed by the party granting such waiver. Any waiver relating to the breach of the other party in certain circumstances shall not be deemed as a waiver for a similar breach in other circumstances.

[The remainder of this page is intentionally left blank]

IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first written above.

 

	
Party A: Putian Asia Success Cereals & Oils Technical Service Co., Ltd. [seal]

	  
	
By:

	
/s/ Yao Jianshan

	  
	
Name:

	
Yao Jianshan

	
Its:

	
Chief Executive Officer

 

	
Party B: Yao Jianxin

	  
	
/s/ Yao Jianxin

	  	  
	
Yao Jianxin

 

  

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EXCLUSIVE EQUITY INTEREST PURCHASE AGREEMENT

 

	
Party C: Fujian Grand Farm Foods Development Co., Ltd. [seal]

	  	  
	
By:

	
/s/ Yao Jianshan

	  
	
Name:

	
Yao Jianshan

	
Its:

	
Chief Executive Officer

   

Appendix A

Announcement Letter

Fujian Grand Farm Foods Development Co., Ltd. is a limited liability company duly established and valid existing under the PRC laws, of which (i) I hold a 99.75% equity interest and (ii) the other shareholder, Yao Jianxin, holds the remaining 0.25% equity interest. I hereby irrevocably waive any pre-emptive right I may have upon the other 0.25% equity interest held by the other shareholder and will not encumber the transfer of the equity interest you proposed.

This Announcement Letter is effective as of September 25, 2010.

 

  

Page 9 of 10

  

 

	
EXCLUSIVE EQUITY INTEREST PURCHASE AGREEMENT

  

	
/s/ Yao Jianshan

	  
	
Yao Jianshan

 

  

Page 10 of 10EQUITY INTEREST PLEDGE AGREEMENT 

EQUITY INTEREST PLEDGE AGREEMENT

THIS EQUITY INTEREST PLEDGE AGREEMENT (this “Agreement”) is made and entered into by and among the following parties on September 25, 2010 in Fujian, the People’s Republic of China (“China” or the “PRC”):

Party A: Putian Asia Success Cereals & Oils Technical Service Co., Ltd

Registered address: No. 999, Houguo Street, Sanjiangkou Town, Hanjiang District, Putian City

Party B:   Yao Jianshan  

ID No.: 350303690720035

Address: Linbing Village, Guohuan Town, Hanjiang District, Putian City

Party C: Fujian Grand Farm Foods Development Co., Ltd.

Registered Address: No. 2089, Hanhua East Road, Guohuan Town, Hanjiang District, Putian City

In this Agreement, each of Party A, Party B and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the "Parties".

WHEREAS:

 

	
1.

	
Party A is a wholly foreign-owned enterprise duly established and validly existing under the laws of the PRC. Party A and Party C entered into an Exclusive Technical Consulting Service Agreement effective as of September 25, 2010 (the “Service Agreement”).

	
  

	
 

	
2.

	
Party B, a citizen of the PRC, holds a 99.75 % equity interest in Party C (the “Equity Interest”), which is a limited liability company duly established and validly existing in Fujian under the laws of the PRC. Party C acknowledges the respective rights and obligations of Party A and Party B under this Agreement;

	
  

	
 

	
3.

	
Pursuant to the Service Agreement, Party C shall pay a certain fee to Party A in consideration of the consulting services provided by Party A thereunder (the “Consulting Fee”). In order to ensure Party C’s performance of its obligations under the Service Agreement, including payment of the Consulting Fee, Party B is willing to pledge all of the Equity Interest to Party A as security.

  

Page 1 of 11

  

 

EQUITY INTEREST PLEDGE AGREEMENT 

 

NOW THEREFORE, through mutual discussion, the Parties have agreed as follows:

 

Article 1 Definitions

 

Unless it is otherwise stipulated, for the purpose of this Agreement, the following terms shall have the following meanings:

 

	
1.1

	
“Event of Default” means any event in accordance with Article 7 hereunder.

 

	
1.2

	
“Equity Interest” means the 99.75 % equity interest in Party C legally held by Party B and any other equity interest in Party C which may be held by Party B in the future.

 

	
1.3

	
“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.

 

	
1.4

	
“Notice of Default” means the notice of default issued by Party A in accordance with this Agreement declaring an Event of Default.

 

	
1.5

	
“Pledge” means the security interest granted by Party A to Party B pursuant to Article 2 of this Agreement, i.e., the right of Party A to be compensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.

  

	
1.6

	
“Service Agreement” means the Exclusive Technical Consulting and Service Agreement entered into by and between Party A and Party C on September 25, 2010.

	
1.7

	
“Consulting Fee” means the fee that Party C is obligated to pay Party A in consideration of the consulting services provided by Party A pursuant to the Service Agreement.

	
1.8

	
“Term of the Pledge” means the term in accordance with Article 3 hereunder.

 

Article 2 Pledge

 

	
2.1

	
As collateral security for Party C’s prompt and complete performance when due (whether at stated maturity, by acceleration or otherwise) of its obligations under the Service Agreement, including without limitation the Consulting Fee, Party B hereby pledges to Party A a first security interest in all of Party B's right, title and interest in the Equity Interest, whether now owned or hereafter acquired by Party B.

 

  

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EQUITY INTEREST PLEDGE AGREEMENT 

  

Article 3 Term of Pledge

 

	
3.1

	
The Pledge shall be effective as of the date that the Pledge is recorded in the register of shareholders of Party C and shall remain effective so long as this Agreement remains in effect.

 

	
3.2

	
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 Party C fails to perform any of its obligations under the Service Agreement, including without limitation the payment of the Consulting Fee.

	
3.3

	
Except as otherwise provided hereunder, Party A shall be entitled to exercise, dispose of or assign the Pledge in accordance with this Agreement.

 

Article 4 Physical Possession of Documents

 

	
4.1

	
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 Party C. 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.

 

Party A shall be entitled to collect 15% of Party C’s annual net profit from the Equity Interest during the term of the Pledge.

 

4.2

 

Article 5 Representations and Warranties of Party B

 

	
5.1

	
Party B is the legal owner of the Equity Interest.

 

	
5.2

	
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.

 

	
5.3

	
Except as otherwise provided hereunder, Party A shall be entitled to exercise, dispose of or assign the Pledge in accordance with this Agreement.

 

	
5.4

	
Party B has not pledged to any other person or otherwise encumbered the Equity Interest except to Party A.

 

Article 6 Covenant of Party B

 

	
6.1

	
During the effective term of this Agreement, Party B covenants to Party A as follows:

 

  

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EQUITY INTEREST PLEDGE AGREEMENT 

 

	 	
6.1.1

	
Except for the transfer of the Equity Interest pursuant to that certain 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 create any pledges which may have an adverse effect on the rights or benefits of Party A without prior written consent from Party A.

 

	 	
6.1.2

	
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.

 

	 	
6.1.3

	
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 rights thereto, 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.

 

	
6.2

	
Party B shall complete the pledge registration at the competent administration for industry and commerce where Party C is located pursuant to this Agreement once such registration procedure is available.

	
6.3

	
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.

 

	
6.4

	
Party B warrants to Party A that in order to protect or perfect the security over the payment of the Consulting Fee under the Service Agreement, Party B shall execute in good faith 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 deemed necessary by Party A to Party A within a reasonable time.

 

	
6.5

	
Party B warrants to Party A that Party B will comply with and perform all the guarantees, covenants, agreements, representations and conditions herein 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 such guarantees, covenants, agreements, representations or conditions.

Article 7 Events of Default

 

	
7.1

	
The occurrence of any of the events listed below shall be deemed an Event of Default:

 

  

Page 4 of 11

  

 

EQUITY INTEREST PLEDGE AGREEMENT 

 

	 	
7.1.1

	
Party C fails to make full payment of the Consulting Fee as required under the Service Agreement.

 

	 	
7.1.2

	
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.

 

	 	
7.1.3

	
Party B violates any of the covenants under Article 6 herein.

 

	 	
7.1.4

	
Party B violates any terms or conditions herein.

 

	 	
7.1.5

	
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.

 

	 	
7.1.6

	
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.

 

	 	
7.1.7

	
Party B is incapable of repaying its general debt or other debt.

 

	 	
7.1.8

	
Party A determines that the performance of this Agreement is illegal for any reason.

 

	 	
7.1.9

	
Any approval, permit or authorization needed to perform this Agreement or to validate this Agreement is withdrawn, suspended, invalidated or materially revised.

 

	 	
7.1.10

	
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.

 

	 	
7.1.11

	
The successors or assigns of Party C are only entitled to perform a portion of or refuse to perform the payment obligations under the Service Agreement.

 

	 	
7.1.12

	
Other circumstances whereby Party A determines that its rights hereunder have been impaired.

 

	
7.2

	
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.

 

	
7.3

	
Unless the Event of Default under Article 7.1 herein has been remedied to Party A’s sole and absolute satisfaction, Party A may, at any time during the Event of Default, immediately give a written Notice of Default to Party B requiring Party B to make immediate full payment of the then outstanding Consulting Fee under the Service Agreement and other payables or foreclose on the Pledge in accordance with Article 8 herein.

 

  

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EQUITY INTEREST PLEDGE AGREEMENT 

 

Article 8 Exercise of the Right of Pledge

 

	
8.1

	
Prior to the full satisfaction by Party C of its obligations under the Service Agreement, including without limitations the full payment of the Consulting Fee, Party B shall not transfer or assign the Equity Interest without prior written approval from Party A.

 

	
8.2

	
Party A shall give Notice of Default to Party B when Party A exercises its right to foreclose on the Pledge.

 

	
8.3

	
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.

 

	
8.4

	
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 Fee and all other payables under the Service Agreement are fully paid.

 

	
8.5

	
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 Equity Interest.

 

Article 9 Transfer or Assignment

 

	
9.1

	
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.

 

	
9.2

	
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.

 

	
9.3

	
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.

 

Article 10 Termination

 

	
10.1

	
This Agreement shall remain in full force and effect so long as the Service Agreement remains in effect.

 

  

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EQUITY INTEREST PLEDGE AGREEMENT 

  

Article 11 Formalities Fees and Other Expenses

 

	
11.1

	
Party B shall be responsible for all the fees and actual expenditures in relation to this Agreement, including but not limited to, legal fees, 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.

 

	
11.2

	
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 pledged Equity Interest incurred by Party B by virtue of Party B’s failure to pay any taxes, fees or charges in accordance with this Agreement.

 

Article 12 Force Majeure

 

	
12.1

	
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.

 

	
12.2

	
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.

 

Article 13 Governing Law and Dispute Settlement

 

	
13.1

	
The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shall be governed by the laws of China.

	
13.2

	
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 then 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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EQUITY INTEREST PLEDGE AGREEMENT 

 

Article 14 Notices

 

	
14.1

	
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 professional hand delivery which is acknowledged worldwide; and (d) the receipt date displayed on the transmission confirmation notice if sent by facsimile.

 

Article 15 Appendix

 

	
15.1

	
The Appendix of this Agreement as attached hereto is the part of this Agreement.

 

Article 16 Effectiveness

 

	
16.1

	
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.

[THIS SPACE IS INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Agreement as of the date first written above.

 

  

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EQUITY INTEREST PLEDGE AGREEMENT 

 

Party A: Putian Asia Success Cereals & Oils Technical Service Co., Ltd [seal]

	
By:

	
/s/ Yao Jianshan

	
Name: Yao Jianshan

	
Its:       Chief Executive Officer

 

  

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EQUITY INTEREST PLEDGE AGREEMENT 

	
Party B: Yao Jianshan

	  
	
/s/ Yao Jianshan

	
Yao Jianshan

 

  

Page 10 of 11

  

 

EQUITY INTEREST PLEDGE AGREEMENT 

	
Party C: Fujian Grand Farm Foods Development Co., Ltd. [seal]

	  
	
By:

	
/s/ Yao Jianshan

	
Name:

	
Yao Jianshan

	
Its:

	
Chief Executive Officer

 

  

Page 11 of 11

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