OPTION AGREEMENT
Exhibit
10.2 Option
Agreement, Dated as of December 23, 2007
This
Option Agreement (this “Agreement”) is dated
December 23, 2007, and is entered into in Beijing, China between Orient Come
Holdings Limited, a company incorporated under the laws of the British Virgin
Islands, located at Xxxx 000, Xxxxx X0, Xxxxxxxx Xxxxx, Xx. 0 Xxxxx Xx Xxxxxx,
Xxxxxxx, Xxxxx 000000 (“Party A”), and
Beijing K's Media Advertising Ltd. Co., a limited liability company organized
under the laws of the PRC (“Party B”), with a
registered address at Xxxx 000, Xx. 00, Xxx Xx Xxxxxx, Xxx Xi Economic Xxxx,
Xxxx Xxx Xxxxxxxx, Xxxxxxx, Xxxxx, and shareholders holding 100% outstanding
shares of Party B (the “Shareholders” or
"Party C").
Party A and Party B, and Shareholders are referred to collectively in this
Agreement as the “Parties.”
RECITALS
1.
Party A is a company incorporated under the laws of the British Virgin Islands,
which has the expertise in the business of media and media
placements;
2.
Party B is a company incorporated in Beijing, China, and is an emerging outdoor
media company, which will place advertisements that contain premium bands in
KTV
nightclubs (the ?癇usiness”);
3.
Party C are the Shareholders
of
Party B. Party C has the ownership of 100% equity interests
in Party B
(each, an “Equity
Interest”and
collectively the “Equity
Interests”);
4.
A series of agreements such
as the
Business Cooperation Agreement (the “Service
Agreement”)
have been entered into by Parties A
and B as of December 23,
2007;
5.
An Equity Pledge Agreement (the
“Pledge
Agreement”) has been
entered into by the Parties as of December 23, 2007;
6.
The Parties are entering into
this
Option Agreement in conjunction with the Pledge Agreement, Consulting Services
Agreement and
related agreements.
NOW,
THEREFORE, the Parties to
this Agreement hereby agree as follows:
1. Purchase
and Sale of Equity
Interest.
1.1 Grant
of Rights.
Party C (hereafter collectively the “Transferor”) hereby
irrevocably grants to Party A an option to purchase or cause any person
designated by Party A(“Designated Persons”) to purchase, to the extent permitted
under PRC Law, according to the steps determined by Party A, at the price
specified in Section 1.3 of this Agreement, at any time from the Transferor
a
portion or all of the equity interests held by Transferor in Party B (the “Option”). No Option
shall be granted by Transferor to any third party other than Party A and/or
the
Designated Persons. Party B hereby agrees to the granting of the Option by
Party
C to Party A and/or the Designated Persons. The "person” set forth in this
clause and this Agreement means an individual, corporation, joint venture,
partnership, enterprise, trust or a non-corporation organization.
1.2 Exercise
of Rights.
According to the stipulations of PRC laws and regulation, Party A and/or the
Designated Persons may exercise Option by issuing a written notice (the “Notice”)to the
Transferor and specifying the equity interest purchased from Transferor (the
"Purchased Equity
Interest”) and the manner of purchase.
1.3 Purchase
Price. For Party A to
exercise the Option, the purchase price of the Purchased Equity Interest (“Purchase Price”)
shall be One Hundred Dollars ($100.00), unless the applicable PRC laws and
regulations require appraisal of the equity interests or stipulate other
restrictions on the purchase price of equity interests.
1.4 Transfer
of
the Purchased Equity Interest. Upon
each
exercise of the Option rights under this Agreement:
1.4.1 Party
B shall convene a shareholders'
meeting upon request by the Transferor, and Transferor agrees to call such
meeting. During the meeting, the resolutions shall be proposed, approving
the transfer of the
appropriate Equity Interest to Party A and/or the Designated
Persons;
1.4.2 The
Transferor shall, upon the terms and
conditions of this Agreement and the Notice related to the Purchased Equity
Interest, enter into Equity Interest purchase agreement
in a form
reasonably acceptable to Party A, with Party A and/or the Designated Persons
(as
applicable);
1.4.3 The
related parties shall execute all
other requisite contracts, agreements or documents, obtain all requisite
approval and consent of the
government, conduct all necessary actions, without any security interest,
transfer the valid ownership of the Purchased Equity Interest to Party A and/or
the Designated Persons, and cause Party A and/or the Designated Persons to
be
the
registered owner of the Purchased
Equity Interest. In this clause and this Agreement, “Security Interest”means
any mortgage, pledge, the right or
interest of the third party, any purchase right of equity interest, right of
acquisition, right of first refusal,
right of set-off, ownership
detainment or other security arrangements, however, it does not include any
security interest created under the Equity Pledge Agreement.
1.5 Payment.
The payment of the
Purchase Price shall be determined
by the consultation of
Party A and/or the Designated Persons with the Transferor according to the
applicable laws at the time of exercise of the Option.
2. Promises
Relating to Equity Interest.
2.1 Promises
Related to Party B. Party B
and Party C hereby promise:
2.1.1 Without
prior written consent by Party
A, not, in any form, to supplement, change or renew the Articles of Association
of Party B, to increase or decrease registered capital of the corporation,
or to
change the structure of the registered capital in anyother forms;
2.1.2 According
to customary fiduciary
standards applicable to managers with respect to corporations and their
shareholders, to maintain the existence of the corporation, prudently and
effectively operate the business;
2.1.3 Without
priorwritten consentby Party
A, not, upon the
execution of this Agreement, to sell, transfer, mortgage or dispose, in any
other form, any asset, legitimate or beneficial interest of business or income
of Party B, or encumber or approve any encumbrance or imposition
of any security interest on Party
A's assets;
2.1.4 Without
prior written notice by Party A,
not issue or provide any guarantee or permit the existence of any debt, other
than (i) the debt arising from normal or daily business but not from
borrowing; and (ii) the
debt disclosed to Party A and obtained the written consent from Party
A;
2.1.5 To
normally operate all business to
maintain the asset value of Party B, without taking any action or failing to
take any action that would result in a material adverse effect on the
business or
asset value of Party B;
2.1.6 Without
prior written consent by Party
A, not to enter into any material agreement, other than agreements in the
ordinary course of business (for purposes of this paragraph, if the amount
of the Agreement involves
an amount that exceeds a hundred thousand Yuan (RMB 100,000) the agreement
shall
be deemed material);
2.1.7 Without
prior written consent by Party
A, not to provide loan or credit loan to any others;
2.1.8 Upon
the
request of Party A, to provide all
materials of operation and finance relevant to Party B;
2.1.9 To
Purchase and hold the insurance from
an insurance company accepted by Party A, the insurance amount and category
shall be the same with those held by the companies in the
same industry or
field, operating the similar business and owning the similar properties and
assets as Party B;
2.1.10 Without
prior written consent by Party
A, not to cause Party B to merge or associate with any person, or acquire
or invest in any
person;
2.1.11 To
notify Party A of the occurrence or
the potential occurrenceof the litigation, arbitration or administrative
procedure related to the assets, business and income of Party
B;
2.1.12 To
cause Party B to maintain and
preserve all its assets,
and to execute all requisite or appropriate documents, take all requisite or
appropriate actions, and pursue all appropriate claims, or make requisite or
appropriate pleas for all claims;
2.1.13 Without
prior written notice by Party
A, not to assign equity
interests to shareholders in any form;
2.1.14 According
to the request of Party A, to
appoint any person designated by Party A to be the directors of Party
B.
2.2 Promises
Related to Transferor.
Party C hereby promises:
2.2.1 Without
prior written consent by Party
A, not, upon the execution of this Agreement, to sell, transfer, mortgage or
dispose in any otherform any legitimate or beneficial interest of equity
interest, or to approve any other security interest set on it, withthe
exception of the pledge set on the
equity interest of the Transferor subject to Equity Pledge
Agreement;
2.2.2 Without
the prior writtennotice by Party
A, not to decide or support or execute any shareholder resolution at any
shareholder meeting of Party B that approves
any sale,
transfer, mortgage or dispose of any legitimate or beneficial interest of equity
interest, or allows any other security interest set on it, other than the
pledge on the equity interests of Transferor pursuant to Equity Pledge
Agreement;
2.2.3 Without
prior written notice by Party A,
the Parties shall not agree or support or execute any shareholders resolution
at
any shareholder meeting of Party B that approves Party B's merger or association
with any person, acquisition of any person or investment
in any
person;
2.2.4 To
notify Party A the occurrence or the
potential occurrence of the litigation, arbitration or administrative procedure
related to the equity interest owned by them;
2.2.5 To
cause the Board of Directors
ofParty B to approve the
transfer of the Purchased Equity Interest subject to this
Agreement;
2.2.6 In
order to keep its ownership of the
equity interest, to execute all requisite or appropriate documents, conduct
all requisite or
appropriate actions, and make all requisite or appropriate claims, or make
requisite or appropriate defend against fall claims of
compensation;
2.2.7 Upon
the request of Party A, to appoint
any person designated by Party A to be the directors of Party B;
2.2.8 Upon
the request of Party A at any time,
to transfer its Equity Interest immediately to the representative designated
by
Party A unconditionally at any time and abandon its prior right of first refusal
of such equity interest transferring to another available
shareholder;
2.2.9 To
prudently comply with the provisions
of this Agreement and other Agreements entered into collectively or respectively
by the Transferor, Party B and Party A and perform all obligations under these
Agreements, without taking
any action or any nonfeasance that sufficiently affects the validity and
enforceability of these Agreements;
3. Representations
and Warranties. As of the
execution date of this Agreement and every transferring date, PartyB and
PartyC hereby represent and
warrant collectively and respectively to Party A as follows:
3.1 It
has the power and ability to enter
into and deliver this Agreement, and any equity interest transferring agreement
(“Transferring
Agreement,”respectively)
having it as a party, for every
single transfer
of the Purchased Equity Interest according to this Agreement, and to perform
its
obligations under this Agreement and any Transferring Agreement. Upon execution,
this Agreement and the Transferring Agreementshaving it
as a party will constitute a legal,
valid and binding obligation of it enforceable against it in accordance with
its
terms;
3.2 The
execution, delivery of this
Agreement and any Transferring Agreement and performance of the obligations
under this Agreement and
any Transferring Agreement will not: (i) cause a violation of any relevant
laws
and regulations of PRC; (ii) conflict with its Articles of Association or other
organizational documents (if an entity); (iii) cause to breach any agreement
or
instruments
to which it is a party or having
binding obligation on it, or constitute the breach under any agreement or
instruments to which it is a party or having binding obligation on it; (iv)cause
to violate relevant authorization of any consent or approvaltoit
and/or any continuing valid
condition; or (v) cause any consent or approval authorized to it to be
suspended, removed, or into which other requests be added;
3.3 The
shares of Party B are transferable,
and Party B has not permitted or caused any security interest to be imposed
upon the
shares of Party B.
3.4 Party
B does not have any unpaid debt,
other than (i) debt arising from its normal business; and (ii) debt disclosed
to
Party A and obtained by written consent of Party A;
3.5 Party
B has complied with all PRC laws
and regulations
applicable to the acquisition of assets and securities in connection with this
Agreement;
3.6 No
litigation, arbitration or
administrative procedure relevant to the Equity Interests and assets of Party
B
or Party B itself is in
process or to be settled and the Parties have no knowledge of any pending or
threatened claim;
3.7 The
Transferor bears the fair and
salable ownership of its Equity Interest free of encumbrances of any kind,
other
than the security interest pursuant to the Equity
Pledge
Agreement.
4. Assignment
of Agreement
4.1 Party
B and Party C shall not transfer
their rights and obligations under this Agreement to any third party without
the
prior written consent of the Party A.
4.2 Party
B
and Party C hereby agree that Party A
shall be ableto transfer all of its rights and obligation under this Agreement
to any third party with its needs, and such transfer shall only be subject
to a
written notice sent to Party B and Party C by Party A, and
no any further consent from Party B or
Party C will be required.
5. Effective
Date and Term
5.1 This
Agreement shall be effective as of
the date first set forth above.
5.2 The
term of this Agreement is twenty
(20) years unless the
early
termination in accordance with this Agreement or other terms of the relevant
agreements stipulated by the Parties. This Agreement may be extended according
to the written consent of Party A before the expiration of this
Agreement.
The term of extension will be decided
unanimously through mutual agreement of the Parties.
5.3 If
Party A orParty B terminates by the
expiration of its operating period (including any extended period) or other
causes in the term set forth in Section 5.2, this Agreement shall
be terminated
simultaneously, except Party A has transferred its rights and obligationsin
accordance with Section 4.2 of this Agreement.
6. Applicable
Law and Dispute Resolution
6.1 Applicable
Law. The execution,
validity, construing and
performance of this Agreement and the resolution of disputes under this
Agreement shall be governed by the lawsof PRC.
6.2 Dispute
Resolution. The parties
shall strive to settle any dispute arising from the interpretation or
performance in connection
with this Agreement through friendly consultation. In case no settlement can
be
reached through consultation within thirty (30) days after such dispute is
raised, each party can submit such matter to China International Economic and
Trade Arbitration
Commission (the “CIETAC”)
in accordance with its rules.
Arbitration shall take place in Beijing and the proceedings shall beconducted
in
Chinese. Any resulting arbitration award shall be final conclusive and binding
upon both parties.
7. Taxes
and
Expenses.
Each Party shall, according to the PRC
laws, bear any and all registering taxes, costs and expenses for equity transfer
arising from the preparation and execution of this Agreement and all
Transferring Agreements, and the completion of the transactions under this Agreement
and all
Transferring Agreements.
8. Notices.
Notices or other communications
required to be given by any party pursuant to this Agreement shall be written
in
English and Chinese and delivered personally or sent by registered
mailor postage prepaid mail
or by a recognized courier service or by facsimile transmission to the address
of relevant each party or both parties set forth below or other address of
the
party or of the other addressees specified by such party from time to
time.
The date when the notice is deemed to
be duly served shall be determined as the follows: (a) a notice delivered
personally is deemed duly served upon the delivery; (b) a notice sent by
mail is deemed duly served the tenth (10th)
day after the date when the air registered mail
with postage
prepaid has been sent out (as is shown on the postmark), or the fourth
(4th)
day after the deliverydate to the
internationally recognized courier service agency; and (c) a notice sent by
facsimile transmission is deemedduly served upon the
receipt time as is
shown on the transmission confirmation of relevant
documents.
Party
A:
Orient Come Holdings Limited
Address:
|
Room
810, Xxxxx X0
|
Xxxxxxxx
Xxxxx, Xx. 0 XxxxxXx Xxxxxx
|
Xxxxxxx,
Xxxxx 1007388
|
Party
B:
Beijing K's Media Advertising Ltd. Co.
Address:
|
211
Xx. 00 XxxXx Xxxxxx
|
YanXi
Economic Xxxx, Xxxx Xxx Xxxxxxxx
|
Xxxxxxx,
Xxxxx
|
Party
C:
Shareholders
Kun
(Xxxxx) Wei
Address:
Same as Party A
Xxxx
Xx
Address:
Same as Party B
9. Confidentiality.
The Parties acknowledge and confirm
any oral or written materials exchanged by the Parties in connection with this Agreement
are
confidential. The Parties shall maintain the secrecy and confidentiality of
all
such materials. Without the written approval by the other Parties, any Party
shall not disclose to any third party any relevant materials, but thefollowing
circumstances shall be
excluded:
(a) The
materials that is known
or may be known by the general public (but not include the materials disclosed
by each party receiving the materials);
(b) The
materials are required
to be disclosed subject to the applicable laws or the rules or provisions of
stock exchange; or
(c) The
materials are disclosed
by each Party to its legal or financial consultant relating the transaction
of
this Agreement, and this legal or financial consultant shall comply with the
confidentiality set forth in this Section. The disclosure of the confidential
materials by staff or employed institution of any Party shall be deemed as
the
disclosure of such materials by such Party, and such Party shall bear the
liabilities for breaching the contract. This clause shall survive whatever
this
Agreement is invalid, amended, revoked, terminated or unable to implement by
any
reason.
10. Further
Warranties. The Parties
agree to promptly execute documents reasonably required to perform
theprovisions and the aim
of this Agreement or documents beneficial to it, and to take actions reasonably
required to perform the provisions and the aim of this Agreement or actions
beneficial to it.
11. Miscellaneous.
11.1 Amendment,
Modification
and Supplement. Any
amendment and supplement to this Agreement shall only be effective is made
by
the Parties in writing.
11.2 Entire
Agreement. Notwithstanding
the Article 5 of this Agreement, the Parties acknowledge that this Agreement
constitutes the entire
agreement of the Parties with respect to the subject matters therein and
supersede and replace all prior or contemporaneous agreements and understandings
in verb or/and in writing.
11.3 Severability.
If any provision of this
Agreementis judged as
invalid or non-enforceable according to relevant Laws, the provision shall
be
deemed invalid only within the applicable laws and regulations of the PRC,
and
the validity, legality and enforceability of the other provisions hereof shall
not beaffected
or impaired in any way. The
Parties shall, through fairly consultation, replace those invalid, illegal
or
non-enforceable provisions with valid provisions that may bring the similar
economic effects with the effects caused by those invalid, illegal
or non-enforceable
provisions.
11.4 Headings.
The headings contained in this
Agreement are for the convenience of reference only and shall not affect the
interpretation, explanation or in any other way the meaning of the provisions
of
this Agreement.
11.5 Language
and
Copies. This Agreement has
been executed in Chinese in four (4) duplicate originals; each Party holds
one
(1) original and each duplicate original shall have the same legal
effect.
11.6 Successor.
This Agreement shall bind and
benefitthe successor of
each Party and the transferee allowed by each Party.
11.7 Survival.
Any obligation taking place or at term
hereof prior to the end or termination ahead of the end of this Agreement shall
continue in force and effect notwithstanding the occurrence of the end
or termination
ahead of the end of the Agreement. Article 6, Article 8, Article 9 and Section
11.7 hereof shall continue in forceand effect after the termination of this
Agreement.
11.8 Waiver.
Any Party may waive the terms
and conditions of this
Agreement in writing with the signature of the Parties. Any waiver by a Party
to
the breach by other Parties within certain situation shall not be construed
as a
waiver to any similar breach by other Parties within other
situations.
IN
WITNESS WHEREOF, the
parties hereof have caused this Option Agreement to be executed by their duly
authorized representatives as of the date first written above.
PARTY A: | Orient Come Holdings, Inc. | ||
|
By:
|
/s/ Xx Xxxx | |
Name Xx Xxxx | |||
Title President | |||
PARTY B: | Beijing K's Media Advertising Ltd. Co. | ||
|
By:
|
/s/ Kun (Xxxxx) Wei | |
Name Kun (Xxxxx) Wei | |||
Title President | |||
[OPTION
AGREEMENT SIGNATURE PAGE CONTINUED]
PARTY
C:
SHAREHOLDERS
OF PARTY
B:
/s/
Kun (Xxxxx)
Wei
Name:
Kun
Wei__
(PRC
ID
Card
No.:
06825970
)
Shares
of Beijing K's Media Advertising Ltd. Co. owned by Kun (Xxxxx)
Wei): 50%
|
/s/
Xxxx
Xx
Name:
Xxxx
Xx
(PRC
ID
Card
No.:
11010219670607195)
Shares
of Beijing K's Media Advertising Ltd. Co. owned by Xxxx
Xx: 50%
|