PLEDGE AGREEMENT
Exhibit O
TABLE OF CONTENTS
Section 1. Definitions
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Section 2. The Security Interests
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Section 3. Representations and Warranties of Pledgor
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Section 4. Certain Covenants of Pledgor
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Section 5. Administration of the Collateral and Valuation of the Securities
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Section 6. Income and Voting Rights in Collateral
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Section 7. Remedies upon Default Events
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Section 8. Netting and Set-off
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Section 9. Miscellaneous
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Section 10. Termination of Pledge Agreement
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THIS AGREEMENT is made as of the date stated on the last page hereof between the counterparty
named on the last page hereof (“Pledgor”) and Xxxxxxx Xxxxx Financial Markets, L.P. (“Secured
Party”).
WHEREAS, pursuant to the Transaction Confirmation, dated as of the date hereof between Pledgor
and Secured Party (as amended, modified, supplemented, replaced or amended and restated from time
to time, the “Confirmation”, and together with the Agreement (as defined therein ), the
“Transaction Agreement”), Pledgor has agreed to enter into a transaction for the Sale of certain
Shares of the Issuer, both as defined therein, or cash in lieu thereof to Secured Party, subject
to the terms and conditions of the Transaction Agreement;
WHEREAS, the parties have entered into a Collateral Account Control Agreement, by and among
Bank of New York Mellon (“Custodian”), Pledgor and Secured Party
WHEREAS, it is a condition to the effectiveness of the Confirmation that Pledgor and Secured
Party enter into this Agreement and that Pledgor grant the pledge provided for herein;
NOW, THEREFORE, in consideration of their mutual covenants contained herein and to secure the
performance by Pledgor of its obligations under the Transaction Agreement and the observance and
performance of the covenants and agreements contained herein and in the Transaction Agreement, the
parties hereto, intending to be legally bound, hereby mutually covenant and agree as follows:
Section 1. Definitions. Capitalized terms used and not otherwise defined herein
shall have the meanings ascribed to them in the Confirmation. As used herein, the following words
and phrases shall have the following meanings:
“Additions and Substitutions” has the meaning provided in Section 2(a).
“Authorized Officer” of Pledgor means, if Pledgor is not a natural person, any officer,
trustee, general partner, manager or similar Person (or any officer thereof) as to whom Pledgor
shall have delivered notice to Secured Party that such officer, trustee, general partner, manager
or similar Person (or officer thereof) is authorized to act hereunder on behalf of Pledgor.
“Collateral” has the meaning provided in Section 2(a).
“Collateral Account” means Account No. 878555 maintained by the Secured Party with the
Custodian in the name of “Xxxxxxx Xxxxx Financial Markets, L.P., as secured party of New-Wave
Investment Holding Company Limited”, including any substitute, replacement, successor, or
renumbered accounts.
“Collateral Event of Default” means, at any time, the occurrence of either of the following:
(i) failure of the Collateral to include, as Eligible Collateral, at least the Maximum Deliverable
Number of Shares, (ii) failure at any time of the Security Interests to constitute valid and
perfected security interests in all of the Collateral, subject to no prior or equal Lien, (iii)
failure at any time of Secured Party to have Control with respect to any Collateral consisting of
securities or security entitlements (each as defined in Section 8-102 of the UCC), other than
Control by the Custodian with respect to the Collateral, or (iv) in each case, assertion of such by
Pledgor in writing.
“Control” means “control” as defined in Section 8-106 and Section 9-106 of the UCC.
“Default Event” means (i) any Event of Default with respect to Pledgor, (ii) any Termination
Event with respect to which Pledgor is the Affected Party or an Affected Party or (iii) an
Extraordinary Event that results in an obligation of Pledgor to pay an amount pursuant to Section
12.7 of the Equity Definitions.
“Dividend Proceeds” has the meaning provided in Section 6(a).
“Eligible Collateral” means Shares or other Collateral acceptable to Secured Party in its
reasonable discretion, provided that Pledgor has good and marketable title thereto, free of all
Liens (other than the Security Interests) and Transfer Restrictions (other than any Existing
Transfer Restrictions) and that Secured Party has a valid, first priority perfected security
interest therein, a first lien thereon and Control with respect thereto, and provided further that
to the extent the number of Shares pledged hereunder exceeds at any time the Maximum Deliverable
Number thereof, such excess shares shall not be Eligible Collateral.
“Existing Transfer Restrictions” means, with respect to any Shares pledged as Collateral
hereunder, any legal restrictions under the federal securities laws of the United States arising
solely as a result of the Pledgor’s affiliation with the Issuer.
“Lien” means any lien, mortgage, security interest, pledge, charge or encumbrance of any kind.
“Location” means, with respect to any party, the place such party is located within the
meaning of Section 9-307 of the UCC.
“Maximum Deliverable Number” means, on any date, a number of Shares or security entitlements
in respect thereof equal to the Number of Shares, or the sum of the Number of Shares for each
Component (as set forth in the Confirmation), if applicable, with respect to which settlement under
the Confirmation has not been fully made.
“Ordinary Dividend” means any portion of any cash dividend on the Shares that does not
constitute an Extraordinary Dividend.
“Person” means an individual, a corporation, a partnership, an association, a trust or any
other entity or organization, including a government or political subdivision or an agency or
instrumentality thereof.
“Pledged Items” means, as of any date, any and all securities (or security entitlements in
respect thereof) and instruments, cash or other assets delivered by Pledgor to be held by or on
behalf of Secured Party under this Agreement as Collateral.
“Security Interests” means the security interests in the Collateral created hereby.
“Transfer Restrictions” means, with respect to any property (including, in the case of
securities, security entitlements in respect thereof), any condition to or restriction on the
ability of the holder thereof to sell, assign or otherwise transfer such property or item of
collateral or to enforce the provisions thereof or of any document related thereto whether set
forth in such item of collateral itself or in any document related thereto, including, without
limitation, (i) any requirement that any sale, assignment or transfer or enforcement of such
property or item of collateral be consented to or approved by any person, including, without
limitation, the issuer thereof or any other obligor thereon, (ii) any limitations on the type or
status, financial or otherwise, of any purchaser, pledgee, assignee or transferee of such property
or item of collateral, (iii) any requirement of the delivery of any certificate, consent,
agreement, opinion of counsel, notice or any other document of any person to the issuer of, any
other obligor on or any registrar or transfer agent for, such property or item of collateral, prior
to the sale, pledge, assignment or other transfer or enforcement of such property or item of
collateral, (iv) any registration or qualification requirement or prospectus delivery requirement
for such property or item of collateral pursuant to any federal, state or foreign securities law
(including, without limitation, any such requirement arising under the Securities Act) and (v) any
legend or other notification appearing on any certificate representing such property to the effect
that any such condition or restriction exists; except that the required delivery of any assignment,
instruction or entitlement order from Pledgor or any pledgor, assignor or transferor of such
property or item of collateral, together with any evidence of the corporate or other authority of
such Person, shall not constitute such a condition or restriction.
“UCC” means the Uniform Commercial Code as in effect in the State of New York; provided that,
if perfection or the effect of perfection or non-perfection or the priority of any security
interest in Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction
other than New York, “UCC” means the Uniform Commercial Code
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as in effect from time to time in such other jurisdiction for purposes of the provisions
hereof relating to such perfection, effect of perfection or non-perfection or priority.
Section 2. The Security Interests. In order to secure the full and punctual
observance and performance of the covenants and agreements contained herein and in the Transaction
Agreement:
(a) Pledgor hereby assigns and pledges to Secured Party, and grants to Secured Party, security
interests in and to, and a lien upon and right of set-off against, and transfers to Secured Party,
as and by way of a security interest having priority over all other security interests, with power
of sale, all of its right, title and interest in and to (i) the Pledged Items described in
paragraph (b); (ii) all additions to and substitutions for such Pledged Items (including, without
limitation, any securities, instruments or other property delivered or pledged pursuant to Section
4(a) or 5(b)) (such additions and substitutions, the “Additions and Substitutions”); (iii) subject
to Section 6 hereof, all income, proceeds and collections received or to be received, or derived or
to be derived, now or any time hereafter (whether before or after the commencement of any
proceeding under applicable bankruptcy, insolvency or similar law, by or against Pledgor, with
respect to Pledgor) from or in connection with the Pledged Items or the Additions and Substitutions
(including, without limitation, any shares of capital stock issued by the Issuer in respect of any
Shares constituting Collateral or any cash, securities or other property distributed in respect of
or exchanged for any Shares constituting Collateral, or into which any such Shares are converted,
in connection with any Merger Event or otherwise); (iv) the Collateral Account and all securities
and other financial assets (each as defined in Section 8-102 of the UCC), including the Pledged
Items and the Additions and Substitutions, and other funds, property or assets from time to time
held therein or credited thereto; and (v) all powers and rights now owned or hereafter acquired
under or with respect to the Pledged Items or the Additions and Substitutions, and any security
entitlements in respect of any of the foregoing (such Pledged Items, Additions and Substitutions,
proceeds, collections, powers, rights, Collateral Account, assets held therein or credited thereto
and security entitlements being herein collectively called the “Collateral”). Secured Party shall
have all of the rights, remedies and recourses with respect to the Collateral afforded a secured
party by the UCC, in addition to, and not in limitation of, the other rights, remedies and
recourses afforded to Secured Party by this Agreement.
(b) On or prior to the Trade Date, Pledgor shall deliver to Secured Party in the manner
described in Section 5(c) hereunder Eligible Collateral consisting of 1,250,000 Shares. To the
extent that on the Prepayment Date, the number of Shares pledged hereunder exceeds the Maximum
Deliverable Number, Secured Party shall instruct the Custodian to return such excess Shares to
Pledgor.
(c) In the event that the Issuer at any time issues to Pledgor in respect of any Shares
constituting Collateral hereunder any additional or substitute shares of capital stock of any class
(or any security entitlements in respect thereof), Pledgor shall immediately pledge and deliver to
Secured Party in accordance with Section 5(c) all such shares and security entitlements as
additional Collateral hereunder.
(d) The Security Interests are granted as security only and shall not subject Secured Party
to, or transfer or in any way affect or modify, any obligation or liability of Pledgor or the
Issuer with respect to any of the Collateral or any transaction in connection with the Transaction
Agreement.
(e) The parties hereto expressly agree that all rights, assets and property at any time held
in or credited to the Collateral Account or otherwise held as or constituting Collateral hereunder
shall be treated as financial assets (as defined in Section 8-102 of the UCC).
Section 3. Representations and Warranties of Pledgor. Pledgor hereby represents and
warrants to Secured Party that:
(a) Pledgor (i) acquired and made full payment for all Pledged Items on November 25, 2009 and
owns and, at all times prior to the release of the Collateral pursuant to the terms of this
Agreement, will own such Collateral free and clear of any Liens (other than the Security Interests)
or Transfer Restrictions (other than any Existing Transfer Restrictions) and (ii) is not and will
not become a party to or otherwise bound by any agreement, other than this Agreement, that (x)
restricts in any manner the rights of any present or future owner of Collateral with respect
thereto or (y) provides any person other than Pledgor, Secured Party, the Custodian or any other
securities
intermediary through whom any Collateral is held (but, in the case of the Custodian or any
such other
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securities intermediary, only in respect of Collateral held through it) with Control
with respect to any such Collateral. The Shares have been validly issued and are non-assessable.
(b) Other than financing statements or other similar or equivalent documents or instruments
with respect to the Security Interests, no financing statement, security agreement or similar or
equivalent document or instrument covering all or any part of the Collateral is on file or of
record in any jurisdiction in which such filing or recording would be effective to perfect a lien,
security interest or other encumbrance of any kind on such Collateral.
(c) All Shares at any time pledged hereunder (or in respect of which security entitlements are
pledged hereunder) are and will be issued by an issuer organized under the laws of the Cayman
Islands, and delivered as set forth in Section 5(c); and the parties hereto agree to procedures or
amendments hereto necessary to enable Secured Party to maintain a valid and continuously perfected
security interest in such Collateral, in respect of which Secured Party will have Control, subject
to no prior Lien. The parties hereto agree to negotiate in good faith any such procedures or
amendments.
(d) Upon (i) in the case of Collateral consisting of investment property (as defined in
Section 9-102(a)(49) of the UCC), (A) the registration of uncertificated Shares in the name of the
Custodian or its nominee in accordance with Section 5(c)(B), or (B) the crediting of any securities
or other financial assets underlying any such investment property consisting of security
entitlements to the Collateral Account or (ii) in the case of Collateral not consisting of
investment property, the filing of UCC-1 financing statements in the Office of the Recorder of
Deeds of the District of Columbia, in each case Secured Party will have a valid and perfected
security interest in such Collateral or a security entitlement in respect thereof, in respect of
which Secured Party will have (in the case of Collateral consisting of investment property)
Control, subject to no prior Lien.
(e) Other than the filing of a UCC-1 financing statement as contemplated by this Agreement, no
registration, recordation or filing with any governmental body, agency or official is required in
connection with the execution and delivery of this Agreement or the Transaction Agreement or
necessary for the validity or enforceability hereof or thereof or for the perfection or enforcement
of the Security Interests.
(f) Pledgor has not performed and will not perform any acts that might prevent Secured Party
from enforcing any of the terms of this Agreement or that might limit Secured Party in any such
enforcement.
(g) The chief executive office of Pledgor is the address set forth in Section 9(d).
Section 4. Certain Covenants of Pledgor. Pledgor agrees that, so long as any of its
obligations under the Transaction Agreement remain outstanding:
(a) Pledgor shall ensure at all times that a Collateral Event of Default shall not occur, and
shall pledge additional Collateral in the manner described in Sections 5(b) and 5(c) as necessary
to cause such requirement to be met.
(b) Pledgor shall, at the expense of Pledgor and in such manner and form as Secured Party may
require, give, execute, deliver, file and record any financing statement, notice, instrument,
document, agreement or other papers that may be necessary or desirable in order (i) to create,
preserve, perfect, substantiate or validate any security interest granted pursuant hereto, (ii) to
create or maintain Control with respect to any such security interests in any investment property
(as defined in Section 9-102(a)(49) of the UCC) or (iii) to enable Secured Party to exercise and
enforce its rights hereunder with respect to such security interest. To the extent permitted by
applicable law, Pledgor hereby authorizes Secured Party to execute and file, in the name of Pledgor
or otherwise, UCC financing or continuation statements (which may be carbon, photographic,
photostatic or other reproductions of this Agreement or of a financing statement relating to this
Agreement) that Secured Party in its sole discretion may deem necessary or appropriate to further
perfect, or maintain the perfection of, the Security Interests, including, without limitation,
registering the security interests created by this Agreement with the Registrar of Corporate
Affairs in the British Virgin Islands pursuant to section 163 of the BVI Business Companies Act,
2004 (the “BVI Act”). Pledgor authorizes Secured Party to originate any instructions to the
Custodian with respect to the Collateral Account or any Collateral credited thereof without further
consent of Pledgor. Without limitation to the foregoing, the Pledgor shall on the
date of this Agreement (i) record the security interests created by this Agreement on its
register of charges in accordance with section 162 of the BVI Act; and (ii) duly register such
security interests with
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the Registrar of Corporate Affairs in the British Virgin Islands pursuant
to section 163 of the BVI Act.
(c) Pledgor shall warrant and defend its title to the Collateral, subject to the rights of
Secured Party, against the claims and demands of all persons. Secured Party may elect, but without
an obligation to do so, to discharge any Lien of any third party on any of the Collateral.
(d) Pledgor agrees that it shall not change (1) its name or identity, and if Pledgor is not a
natural person, its corporate or partnership structure in any manner or (2) its Location, unless in
either case (A) it shall have given Secured Party not less than 30 days’ prior notice thereof and
(B) such change shall not cause any of the Security Interests to become unperfected, cause Secured
Party to cease to have Control in respect of any of the Security Interests in any Collateral
consisting of investment property (as defined in Section 9-102(a)(49) of the UCC) or subject any
Collateral to any other Lien.
(e) Pledgor agrees that it shall not (1) create or permit to exist any Lien (other than the
Security Interests) or any Transfer Restriction (other than any Existing Transfer Restrictions)
upon or with respect to the Collateral, (2) sell or otherwise dispose of, or grant any option with
respect to, any of the Collateral or (3) enter into or consent to any agreement pursuant to which
any person other than the Pledgor, Secured Party, the Custodian and any other securities
intermediary through whom any of the Collateral is held (but in the case of any such securities
intermediary only in respect of Collateral held through it) has or will have Control in respect of
any Collateral.
Section 5. Administration of the Collateral and Valuation of the Securities.
(a) The Calculation Agent shall determine on each Business Day whether a Collateral Event of
Default shall have occurred.
(b) Pledgor may pledge additional Collateral that is, upon delivery to Secured Party, Eligible
Collateral hereunder at any time. Concurrently with the delivery of any such additional Eligible
Collateral, Pledgor shall deliver to Secured Party a certificate of an Authorized Officer of
Pledgor substantially in form and substance satisfactory to Secured Party and dated the date of
such delivery, (A) identifying the additional items of Eligible Collateral being pledged, (B)
identifying the Confirmation, and (C) certifying that with respect to such items of additional
Eligible Collateral the representations and warranties contained in paragraphs (a), (b), (c), (d)
and (e) of Section 3 are true and correct with respect to such Eligible Collateral on and as of the
date thereof. Pledgor hereby covenants and agrees to take all actions required under Section 5(c)
and any other actions necessary to create for the benefit of Secured Party a valid, first priority,
perfected security interest in, and a first lien upon, such additional Eligible Collateral, as to
which Secured Party will have (in the case of Collateral consisting of investment property)
Control.
(c) Any delivery of Shares as Collateral to Secured Party by Pledgor shall be effected (A) in
the case of Collateral consisting of certificated Shares registered in the name of Pledgor, by
delivery of certificates representing such Shares to Custodian, accompanied by any required
transfer tax stamps, and in suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank, with signatures appropriately guaranteed, all in
form and substance satisfactory to the Custodian, and the crediting by the Custodian of such
securities to the Collateral Account, (B) in the case of Collateral consisting of uncertificated
Shares registered in the name of Pledgor, by transmission by Pledgor of an instruction to the
issuer of such Shares instructing such issuer to register such Shares in the name of the Custodian
or its nominee, accompanied by any required transfer tax stamps, the issuer’s compliance with such
instructions and the crediting by the Custodian of such securities to the Collateral Account, (C)
in the case of Shares in respect of which security entitlements are held by Pledgor through the
Custodian, by the crediting of such Shares, accompanied by any required transfer tax stamps, to the
Collateral Account or (D) in any case, by complying with such alternative delivery instructions as
Secured Party shall provide to Pledgor in writing. Upon delivery of any such Pledged Item under
clause 5(c)(A) of this Agreement, Secured Party shall examine such Pledged Item and any
certificates delivered pursuant to Section 5(b) or otherwise pursuant to the terms hereof in
connection therewith to determine that they comply as to form with the requirements for Eligible
Collateral.
(d) If on any Business Day Secured Party determines that a Collateral Event of Default shall
have occurred, Secured Party shall promptly notify Pledgor of such determination by telephone
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call
to an Authorized Officer of Pledgor followed by a written confirmation of such call.
(e) If on any Business Day Secured Party determines that no Default Event or failure by
Pledgor to meet any of its obligations under Sections 4 or 5 hereof has occurred and is continuing,
Pledgor may obtain the release from the Security Interests of any Collateral upon delivery to
Secured Party of a written notice from an Authorized Officer of Pledgor indicating the items of
Collateral to be released so long as, after such release, no Collateral Event of Default shall have
occurred. Secured Party shall instruct Custodian to transfer to Pledgor any Collateral so
released.
(f) On each Settlement Date or Cash Settlement Payment Date, as the case may be, unless (i) by
10:00 A.M., New York City time on the Settlement Date, Pledgor shall have otherwise effected the
delivery of the Number of Shares to be Delivered for such Settlement Date or delivered the
Preliminary Forward Cash Settlement Amount in lieu thereof by 5:00 P.M., New York City time, on
the Preliminary Cash Settlement Payment Date or (ii) the Collateral then held by or on behalf of
Secured Party hereunder does not include a number of Shares with respect to which the
Representation and Agreement set forth in Section 9.11 of the Equity Definitions (as modified in
the Transaction Agreement) are true and satisfied (or, at the absolute discretion of Secured Party,
Shares with respect to which such Representation and Agreement are not true or satisfied) at least
equal to the Number of Shares to be Delivered for such Settlement Date, Secured Party shall deliver
or cause to be delivered to itself, or to an affiliate of Secured Party designated by Secured
Party, from the Collateral Account, in whole or partial, as the case may be, satisfaction of
Pledgor’s obligations to deliver the Number of Shares to be Delivered for such Settlement Date
under the Transaction Agreement, a number of Shares then held by or on behalf of Secured Party
hereunder equal to the Number of Shares to be Delivered for such Settlement Date. Upon any such
delivery, Secured Party or such affiliate of Secured Party shall hold such Shares absolutely and
free from any claim or right whatsoever (including, without limitation, any claim or right of
Pledgor).
(g) Secured Party may at any time or from time to time, in its sole discretion, cause any or
all of the Shares pledged hereunder registered in the name of Pledgor or its nominee to be
transferred of record into the name of Secured Party or its nominee. Pledgor shall promptly give
to Secured Party copies of any notices or other communications received by Pledgor with respect to
Shares pledged hereunder registered, or held through a securities intermediary, in the name of
Pledgor or Pledgor’s nominee and Secured Party shall promptly give to Pledgor copies of any notices
and communications received by Secured Party with respect to Shares pledged hereunder registered,
or held through a securities intermediary, in the name of Secured Party or its nominee.
(h) Pledgor agrees that Pledgor shall forthwith upon demand pay to Secured Party:
(i) the amount of any taxes that Secured Party may have been required to pay by reason
of the Security Interests or to free any of the Collateral from any Lien thereon, and
(ii) the amount of any and all out-of-pocket expenses, including the reasonable fees
and disbursements of counsel and of any other experts, that Secured Party may incur in
connection with (A) the enforcement of this Agreement, including such expenses as are
incurred to preserve the value of the Collateral and the validity, perfection, rank and
value of the Security Interests, (B) the collection, sale or other disposition of any of the
Collateral, (C) the exercise by Secured Party of any of the rights conferred upon it
hereunder or (D) any Default Event.
Any such amount not paid on demand shall bear interest (computed on the basis of a year of 360 days
and payable for the actual number of days elapsed) at a rate per annum equal to 5% plus the prime
rate as published in The Wall Street Journal, Eastern Edition in effect from time to time during
the period from the date hereof to the date of the termination of this Agreement.
(i) As between Pledgor and Secured Party, Secured Party agrees that it will not deliver any
instructions (including entitlement orders) to the Custodian with respect to the Collateral Account
or the Collateral credited thereto under the Collateral Account Control Agreement unless it is
permitted to
do so under this Agreement or the Transaction Agreement. Secured Party shall reimburse Pledgor, in
a manner and at times agreed between Pledgor and Secured Party, for any fees and expenses of the
Custodian paid by Pledgor.
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Section 6. Income and Voting Rights in Collateral.
(a) Secured Party shall have the right to receive and retain as Collateral hereunder (i) all
proceeds (other than Ordinary Dividends or interest) of the Collateral and (ii) upon the occurrence
and during the continuance of a Default Event, all proceeds of the Collateral, including without
limitation all proceeds consisting of Ordinary Dividends or interest (“Dividend Proceeds”), and
Pledgor shall take all such action as Secured Party shall deem necessary or appropriate to give
effect to such right. All such proceeds including, without limitation, all dividends and other
payments and distributions that are received by Pledgor shall be received in trust for the benefit
of Secured Party and, if Secured Party so directs (but only, in the case of Dividend Proceeds, upon
the occurrence and during the continuance of a Default Event), shall be segregated from other funds
of Pledgor and shall, forthwith upon demand by Secured Party (but only, in the case of Dividend
Proceeds, during the continuance of a Default Event), be delivered over to Secured Party as
Collateral in the same form as received (with any necessary endorsement). After all Events of
Default have been cured, Secured Party’s right to retain Dividend Proceeds in the Collateral
Account under this Section 6(a) shall cease and Secured Party shall pay over to Pledgor out of the
Collateral Account any such Collateral consisting of Dividend Proceeds retained in the Collateral
Account during the continuance of a Default Event.
(b) Unless a Default Event shall have occurred and be continuing, Pledgor shall have the
right, from time to time, to vote and to give consents, ratifications and waivers with respect to
the Collateral, and Secured Party shall, upon receiving a written request from Pledgor accompanied
by a certificate of an Authorized Officer of Pledgor stating that no Default Event has occurred and
is continuing, deliver to Pledgor or as specified in such request such proxies, powers of attorney,
consents, ratifications and waivers in respect of any of the Collateral that is registered, or held
through a securities intermediary, in the name of Secured Party or its nominee as shall be
specified in such request and shall be in form and substance satisfactory to Secured Party.
(c) If a Default Event shall have occurred and be continuing, Secured Party shall have the
right, to the extent permitted by law, and Pledgor shall take all such action as may be necessary
or appropriate to give effect to such right, to vote and to give consents, ratifications and
waivers, and to take any other action with respect to any or all of the Collateral with the same
force and effect as if Secured Party were the absolute and sole owner thereof.
Section 7. Remedies upon Default Events.
(a) If any Default Event shall have occurred and be continuing, Secured Party may exercise all
the rights of a secured party under the UCC (whether or not in effect in the jurisdiction where
such rights are exercised) and, in addition, without being required to give any notice, except as
herein provided or as may be required by mandatory provisions of law, shall: (i) deliver or cause
to be delivered to itself or to an affiliate of Secured Party designated by Secured Party from the
Collateral Account all Collateral consisting of Shares with respect to which the Representation and
Agreement set forth in Section 9.11 of the Equity Definitions (as modified in the Transaction
Agreement) are true and satisfied (or, at the absolute discretion of Secured Party, Shares with
respect to which such Representation and Agreement are not true or satisfied) (but not in excess of
the number thereof that Pledgor is obligated to deliver pursuant to paragraph 3(k) of the
Confirmation) on the related Early Termination Date or the date on which the Cancellation Amount is
due, as the case may be, in whole or partial, as the case may be, satisfaction of Pledgor’s
obligations to deliver Shares under the Transaction Agreement, whereupon Secured Party shall hold
such Shares absolutely free from any claim or right of whatsoever kind, including any equity or
right of redemption of Pledgor that may be waived or any other right or claim of Pledgor, and
Pledgor, to the extent permitted by law, hereby specifically waives all rights of redemption, stay
or appraisal that Pledgor has or may have under any law now existing or hereafter adopted; and (ii)
if such delivery shall be insufficient to satisfy in full all of the obligations of Pledgor under
the Transaction Agreement or hereunder, sell all of the remaining Collateral, or such lesser
portion thereof as may be necessary to generate proceeds sufficient to satisfy in
full all of the obligations of Pledgor under the Transaction Agreement or hereunder, at public
or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or
for future delivery, and at such price or prices as Secured Party may deem satisfactory. Pledgor
covenants and agrees that it will execute and deliver such documents and take such other action as
Secured Party deems necessary or advisable in order
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that any such sale may be made in compliance
with law. Upon any such sale Secured Party shall have the right to deliver, assign and transfer to
the buyer thereof the Collateral so sold. Each buyer at any such sale shall hold the Collateral so
sold absolutely and free from any claim or right of whatsoever kind, including any equity or right
of redemption of Pledgor that may be waived or any other right or claim of Pledgor, and Pledgor, to
the extent permitted by law, hereby specifically waives all rights of redemption, stay or appraisal
that Pledgor has or may have under any law now existing or hereafter adopted. The notice (if any)
of such sale required by Section 9-611 of the UCC shall (1) in case of a public sale, state the
time and place fixed for such sale, (2) in case of sale at a broker’s board or on a securities
exchange, state the board or exchange at which such sale is to be made and the day on which the
Collateral, or the portion thereof so being sold, will first be offered for sale at such board or
exchange, and (3) in the case of a private sale, state the day after which such sale may be
consummated. Any such public sale shall be held at such time or times within ordinary business
hours and at such place or places as Secured Party may fix in the notice of such sale. At any such
sale the Collateral may be sold in one lot as an entirety or in separate parcels, as Secured Party
may determine. Secured Party shall not be obligated to make any such sale pursuant to any such
notice. Secured Party may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and place fixed for
the sale, and such sale may be made at any time or place to which the same may be so adjourned. In
case of any sale of all or any part of the Collateral on credit or for future delivery, the
Collateral so sold may be retained by Secured Party until the selling price is paid by the buyer
thereof, but Secured Party shall not incur any liability in case of the failure of such buyer to
take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may
again be sold upon like notice. Secured Party, instead of exercising the power of sale herein
conferred upon it, may proceed by a suit or suits at law or in equity to foreclose the Security
Interests and sell the Collateral, or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction. The Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act, and applicable state securities laws, the Secured Party may be
compelled, with respect to any sale of all or any part of the Collateral, to limit purchasers to
those who will agree, among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. The Pledgor acknowledges
that any such private sales may be at prices and on terms less favorable to the Secured Party than
those obtainable through a public sale without such restrictions, and, notwithstanding such
circumstances, agrees that any such private sale, if so required, shall be deemed to have been made
in a commercially reasonable manner and that the Secured Party shall have no obligation to engage
in public sales and no obligation to delay the sale of any Collateral for the period of time
necessary to permit registration of such Collateral for public sale.
(b) Pledgor hereby irrevocably appoints Secured Party Pledgor’s true and lawful attorney, with
full power of substitution, in the name of Pledgor, Secured Party or otherwise, for the sole use
and benefit of Secured Party, but at the expense of Pledgor, to the extent permitted by law, to
exercise, at any time and from time to time while a Default Event has occurred and is continuing,
all or any of the following powers with respect to all or any of the Collateral:
(i) to demand, xxx for, collect, receive and give acquittance for any and all monies
due or to become due upon or by virtue thereof,
(ii) to settle, compromise, compound, prosecute or defend any action or proceeding with
respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or with the same or the proceeds
or avails thereof, as fully and effectually as if Secured Party were the absolute owner
thereof (including, without limitation, the giving of instructions and entitlement orders in
respect thereof), and
(iv) to extend the time of payment of any or all thereof and to make any allowance and
other adjustments with reference thereto;
provided that Secured Party shall give Pledgor not less than one day’s prior written notice of the
time and place of any sale or other intended disposition of any of the Collateral, except any
Collateral that threatens to decline speedily in value, including, without limitation, equity
securities, or is of a type customarily sold on a recognized market. Secured Party and Pledgor
agree that such notice constitutes reasonable authenticated notification within the meaning of
Section 9-611 of the UCC.
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(c) Upon any delivery or sale of all or any part of any Collateral made either under the power
of delivery or sale given hereunder or under judgment or decree in any judicial proceedings for
foreclosure or otherwise for the enforcement of this Agreement, Secured Party is hereby irrevocably
appointed the true and lawful attorney of Pledgor, in the name and stead of Pledgor, to make all
necessary deeds, bills of sale, instruments of assignment, transfer or conveyance of the property,
and all instructions and entitlement orders in respect of the property, thus delivered or sold.
For that purpose Secured Party may execute all such documents, instruments, instructions and
entitlement orders. This power of attorney shall be deemed coupled with an interest, and Pledgor
hereby ratifies and confirms that which Pledgor’s attorney acting under such power, or such
attorney’s successors or agents, shall lawfully do by virtue of this Agreement. If so requested by
Secured Party or by any buyer of the Collateral or a portion thereof, Pledgor shall further ratify
and confirm any such delivery or sale by executing and delivering to Secured Party or to such buyer
or buyers at the expense of Pledgor all proper deeds, bills of sale, instruments of assignment,
conveyance or transfer, releases, instructions and entitlement orders as may be designated in any
such request.
(d) In the case of a Default Event, Secured Party may proceed to realize upon the security
interest in the Collateral against any one or more of the types of Collateral, at any time, as
Secured Party shall determine in its sole discretion subject to the foregoing provisions of this
Section 7. The proceeds of any sale of, or other realization upon, or other receipt from, any of
the Collateral shall be applied by Secured Party in the following order of priorities:
first, to the payment to Secured Party of the expenses of such sale or other
realization, including reasonable compensation to the agents and counsel of Secured Party,
and all expenses, liabilities and advances incurred or made by Secured Party in connection
therewith, including brokerage fees in connection with the sale by Secured Party of any
Collateral;
second, to the payment to Secured Party of an amount equal to the Close-out Amount of
Secured Party or the Cancellation Amount, as the case may be, under the Transaction
Agreement as a result of such Default Event;
finally, if all of the obligations of Pledgor hereunder and under the Transaction
Agreement have been fully discharged or sufficient funds have been set aside by Secured
Party, any remaining proceeds shall be released to Pledgor.
(e) The rights and powers of the Secured Party under or arising out of or in connection with
this Agreement are separate, independent, additional and supplemental to any rights and powers that
may arise pursuant to the Conveyancing and Law of Property Ordinance 1961(Cap. 220) of the British
Virgin Islands (the “CLP”). If any powers arise pursuant to the CLP and there is ambiguity or
conflict between the powers contained in the CLP and those contained in, or arising out of or in
connection with, this Agreement, those contained in this Agreement shall prevail.
Section 8. Netting and Set-off. (a) If on any date, cash would otherwise be
payable or Shares or other property would otherwise be deliverable pursuant to the Transaction
Agreement, this Agreement or any other Credit Support Document by Secured Party to Pledgor and by
Pledgor to Secured Party and the type of property required to be paid or delivered by each such
party on such date is the same, then, on such date, each such party’s obligation to make such
payment or delivery will be automatically satisfied and discharged and, if the aggregate amount
that would otherwise have been payable or deliverable by one such party exceeds the aggregate
amount that would otherwise have been payable or deliverable by the other such party, replaced by
an obligation upon the party by whom the larger aggregate amount would have been payable or
deliverable to pay or deliver to the other party the excess of the larger aggregate amount over the
smaller aggregate amount.
(b) In addition to and without limiting any rights of set-off that Secured Party may have as
a matter of law, pursuant to contract or otherwise, upon the occurrence of a Default Event,
Secured Party shall have the right to terminate, liquidate and otherwise close out the transactions
contemplated by the Transaction Agreement, any Credit Support Document or this Agreement pursuant
to the terms thereof and hereof, and to set off any obligation it may have to (i) release from the
Security Interests or return to Pledgor any Collateral pursuant to Section
9
5(e) or Section 10 or
(ii) make any other payment or delivery pursuant to this agreement or pursuant to any other
agreement, against any right Secured Party or any of its affiliates may have against Pledgor,
including without limitation any right to receive a payment or delivery pursuant to any provision
of the Transaction Agreement. In the case of a set-off of any obligation to return or replace
assets against any right to receive assets of the same type, such obligation and right shall be set
off in kind. In the case of a set-off of any obligation to return or replace assets against any
right to receive assets of any other type, the value of each of such obligation and such right
shall be determined by the Calculation Agent and the result of such set-off shall be that the net
obligor shall pay or deliver to the other party an amount of cash or assets, at the net obligor’s
option, with a value (determined, in the case of a delivery of assets, by the Calculation Agent)
equal to that of the net obligation. In determining the value of any obligation to release or
deliver Shares or right to receive Shares, the value at any time of such obligation or right shall
be determined by reference to the market value of such Shares at such time. If an obligation or
right is unascertained at the time of any such set-off, the Calculation Agent may in good faith
estimate the amount or value of such obligation or right, in which case set-off will be effected in
respect of that estimate, and the relevant party shall account to the other party at the time such
obligation or right is ascertained.
Section 9. Miscellaneous.
(a) Whenever any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party. All the covenants and agreements herein
contained by or on behalf of Pledgor shall bind, and inure to the benefit of, Pledgor’s respective
successors and assigns whether so expressed or not, and shall be enforceable by and inure to the
benefit of Secured Party and its successors and assigns.
(b) To the extent permitted by law, the unenforceability or invalidity of any provision or
provisions of this Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.
(c) Any provision of this Agreement may be amended or waived if, and only if, such amendment
or waiver is in writing and signed, in the case of an amendment, by Pledgor and Secured Party or,
in the case of a waiver, by the party against whom the waiver is to be effective. No failure or
delay by either party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
(d) All notices and other communications hereunder shall be in writing and shall be deemed to
have been duly given if mailed or transmitted by any standard forms of telecommunication. Notices
to Pledgor shall be directed to it at the address specified on the last page hereof; notices to
Secured Party shall be directed to it care of Xxxxxxx, Xxxxx & Co., 000 Xxxx Xxxxxx, Xxx Xxxx, XX
00000-0000, attn: Xxxxx Xxxxxxx, Equity Capital Markets.
(e) This Agreement shall in all respects be construed in accordance with and governed by the
laws of the State of New York (without reference to choice of law rules thereof except for Section
5-1401 of the New York General Obligations Law); provided that as to Pledged Items located in any
jurisdiction other than the State of New York, Secured Party shall have, in addition to any rights
under the laws of the State of New York, all of the rights to which a secured party is entitled
under the laws of such other jurisdiction.
(f) Each party hereby irrevocably and unconditionally submits to the exclusive jurisdiction of
the Federal and state courts located in the Borough of Manhattan, in the City of New York in any
suit or proceeding arising out of or relating to the Transaction Agreement, any Credit Support
Document or this Agreement, or the transactions contemplated thereby or hereby.
(g) Each party hereby irrevocably and unconditionally waives any and all right to trial by
jury in any legal proceeding arising out of or related to the Transaction Agreement, any
Credit Support Document or this Agreement or the transactions contemplated thereby or hereby.
(h) This Agreement may be executed, acknowledged and delivered in any number of counterparts
and all such counterparts taken together shall be deemed to constitute one and the same agreement.
Section 10. Termination of Pledge Agreement. This Agreement and the rights hereby
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granted by Pledgor in the Collateral shall cease, terminate and be void upon fulfillment of all of
the obligations of Pledgor under the Transaction Agreement, under each Credit Support Document and
hereunder. Any Collateral remaining at the time of such termination shall be fully released and
discharged from the Security Interests and delivered to Pledgor by Secured Party. At any time
Secured Party shall be obligated to deliver or return Collateral or proceeds thereof to Pledgor
hereunder, Secured Party shall instruct Custodian to make such transfer.
*************
Date of Agreement:
Pledgor: New-Wave Investment Holding Company Limited
Pledgor’s Address for Notices:
20/F Beijing Ideal International Plaza
No. 58 Northwest 4th Ring Road
Haidian District, Beijing, 100080
People’s Republic of China
No. 58 Northwest 4th Ring Road
Haidian District, Beijing, 100080
People’s Republic of China
Fax No. (0000)-00000000
Attention: Chief Executive Officer
Attention: Chief Executive Officer
*************
[Signature Pages Follow]
[Signature Pages Follow]
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*************
IN WITNESS WHEREOF, the parties have signed this Agreement as of the date and year first above
written.
| PLEDGOR: NEW-WAVE INVESTMENT HOLDING COMPANY LIMITED |
||||
| By: | /s/ Xxxxxxx Xxxxxx Xxxx | |||
| Name: | ||||
| SECURED PARTY: XXXXXXX SACHS FINANCIAL MARKETS, L.P. |
||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Name: | ||||
| Title: | ||||
Pledge Agreement — June 2011
