PLEDGE AGREEMENT
This
PLEDGE
AGREEMENT,
dated
as of August 31, 2007 (this “Agreement”),
is
executed between GAH-CDC Holdings LLC, a Delaware limited liability company
(the
“Pledgor”)
and Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP, in its capacity as collateral agent (with its
successors in such capacity, the “Collateral
Agent”)
for
the benefit of the Secured Parties (as defined below).
WITNESSETH:
(1) The
Pledgor has simultaneously with the execution of this Agreement entered into
a
Non-Recourse Continuing Guaranty in favor of the Secured Parties (the
“Guaranty”);
(2) The
Pledgor owns the issued and outstanding shares of Common Stock, par value
$.001
per share, of Golden Autumn Holdings Inc. (the “Company”)
set
forth on Exhibit
A
attached
hereto and made a part hereof (the “Shares”);
and
(3) The
Pledgor is required to execute and deliver this Agreement as a condition
of the
Secured Parties to the closing of a Securities Purchase Agreement, dated
as of
the date hereof, between the Company and the Secured Parties (the “SPA”).
NOW,
THEREFORE,
for and
in consideration of the foregoing and of any financial accommodations or
extensions of credit heretofore, now or hereafter made to or for the benefit
of
the Secured Parties pursuant to the SPA or any other agreement, instrument
or
document executed pursuant to or in connection therewith, and for other good
and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Pledgor and the Collateral Agent hereby agree as
follows:
1. Defined
Terms.
Unless
otherwise defined herein, each capitalized term used herein that is defined
in
the SPA shall have the meaning specified for such term in the SPA. Terms
used in
Article 8 or Article 9 of the Uniform Commercial Code as in effect from time
to
time in the State of New York are used herein as therein defined. In addition
as
used herein, “Secured
Parties”
means
each of the Collateral Agent and the holders of any Note (the “Holders”).
2. Pledge.
The
Pledgor hereby pledges to the Collateral Agent, for the benefit of the Secured
Parties, and grants to the Collateral Agent for the benefit of the Secured
Parties, a security interest in, the following (collectively, the “Pledged
Collateral”):
(a) All
of
the right, title and interest of the Pledgor in the Shares, whether now existing
or hereafter arising, and the certificates representing the shares of such
capital stock (such now-existing shares being identified on Exhibit
A
attached
hereto and made a part hereof), all of said Shares being hereinafter
collectively referred to as the “Pledged
Stock”
herewith delivered to the Collateral Agent,
accompanied by an undated stock power in the form of Exhibit
B
attached
hereto and made a part hereof duly executed in blank by the Pledgor, and,
subject to Section
9
hereof,
all dividends, distributions, cash, instruments and other property from time
to
time received, receivable or otherwise distributed in respect of, or in exchange
for, any or all of the Pledged Stock;
(b) All
Additional Shares (as defined below) from time to time acquired by the Pledgor
from the date hereof in any manner, and the certificates representing such
Additional Shares (any such additional Shares shall constitute part of the
Pledged Stock and the Collateral Agent is irrevocably authorized to amend
Exhibit
A
from
time to time to reflect such additional Shares), and subject to Section
9
hereof,
all options, warrants, dividends, distributions, cash, instruments and other
rights and options from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Shares or
Additional Shares; and
(c) All
proceeds of the foregoing.
3. Security
for Liabilities.
The
Pledged Collateral secures the full and prompt payment, performance and
observance when due (whether at stated maturity, by acceleration or otherwise)
of (i) the payment of all of the principal of and interest and premium, if
any,
on the Notes, (ii) all other Obligations under the Guaranty, and (iii) all
obligations of the Pledgor under this Agreement (all such obligations referred
to in Clauses (i), (ii) and (iii) now or hereafter existing being hereinafter
collectively referred to as the “Liabilities”).
4. Delivery
of Pledged Collateral; Registration and Acknowledgments.
All
certificates representing or evidencing the Pledged Collateral, if any, and
a
copy of the UCC financing statements filed with the State of Nevada pursuant
to
Section 26 below, shall be physically delivered to and held by or on behalf
of
the Collateral Agent, pursuant hereto and shall be in suitable form for transfer
by delivery and shall be accompanied by duly executed instruments of transfer,
powers, or assignments in blank as appropriate (such instruments of transfer,
powers, or assignments in blank, being the “Powers”),
all
in form and substance satisfactory to the Collateral Agent. After the occurrence
and during the continuance of an Event of Default under any Note, the Collateral
Agent shall have the right, at any time in its discretion and without notice
to
the Pledgor, to transfer to or to register in the name of the Collateral
Agent
or any of its nominees any or all of the Pledged Collateral, subject only
to the
revocable rights specified in Sections
8
and
9.
In
addition, the Collateral Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged Collateral
for
certificates or instruments of smaller or larger denominations.
5. Pledged
Collateral Adjustments.
If,
during the term of this Agreement:
(a) Any
stock
dividend, reclassification, readjustment or other change is declared or made
in
the capital structure of the Pledged Entity (as defined below), or any option
included within the Pledged Collateral is exercised, or both, or
(b) Any
subscription warrants, shares, or any other rights or options or other
securities shall be issued in connection with the Pledged Collateral,
then
all
new, substituted and additional shares, warrants, rights, options or other
securities, issued by reason of any of the foregoing, shall be immediately
delivered to and held by the Collateral Agent, under the terms of this Agreement
and shall constitute Pledged Collateral hereunder.
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6. Subsequent
Changes Affecting Pledged Collateral.
The
Pledgor represents and warrants that it has made its own arrangements for
keeping itself informed of changes or potential changes affecting the Pledged
Collateral (including, but not limited to, rights to convert, rights to
subscribe, payment of distributions, reorganization or other exchanges, offers
to purchase and voting rights), and the Pledgor agrees that none of the
Collateral Agent or any of the Secured Parties shall have any obligation
to
inform the Pledgor of any such changes or potential changes or to take any
action or omit to take any action with respect thereto. The Collateral Agent
may, after the occurrence and during the continuance of an Event of Default,
without notice and at its option, transfer or register the Pledged Collateral
or
any part thereof into its or its nominee’s name with or without any indication
that such Pledged Collateral is subject to the security interest hereunder.
7. Representations
and Warranties.
The
Pledgor represents and warrants as follows:
(a) The
Pledgor is the sole legal and beneficial owner of the Shares set forth opposite
its name on Exhibit
A
attached
hereto and made a part hereof, free and clear of any Lien, except for the
Lien
created by this Agreement and Permitted Liens;
(b) All
of
the Pledged Stock has been duly authorized and validly issued, is fully paid
and
non-assessable; the Pledgor has acquired its ownership in the Pledged Collateral
in good faith without notice of any adverse claims;
(c) All
of
the Pledged Stock is presently represented by the certificates listed on
Exhibit
A
hereto
and are a “Certificated Security” within the meaning given to such term in
Section 8-102(a)(4) of the UCC (as defined below). As of the date hereof,
there
are no existing options, warrants, calls or commitments of any character
whatsoever relating to the Pledged Stock;
(d) The
Pledgor has full power and authority to enter into this Agreement and perform
the obligations hereunder;
(e) There
are
no restrictions upon the voting rights associated with, or upon the transfer
of,
any of the Pledged Collateral;
(f) The
Pledgor has the right to vote, pledge, assign and grant a security interest
in
or otherwise transfer such Pledged Collateral free of any Liens, except as
set
forth in paragraph (e) above;
(g) No
authorization, approval, or other action by, and no notice to or filing with,
any governmental authority and no consent from any other party (including,
without limitation, any stockholder, partner, member or creditor of the Pledgor
or any of its Affiliates) is required either (i) for the pledge of the Pledged
Collateral pursuant to this Agreement or for the execution, delivery or
performance of this Agreement by the Pledgor or (ii) for the exercise by
the
Collateral Agent of the voting or other rights provided for in this Agreement
or
the remedies in respect of the Pledged Collateral pursuant to this Agreement
(except for the filing of UCC financing statement with the appropriate office
in
the State of Nevada pursuant to Section 26 below, and except for those that
may
be required in connection with such disposition by laws affecting the offering
and sale of securities generally);
3
(h) The
pledge of the Pledged Collateral pursuant to this Agreement, together with
the
delivery of the stock certificates in accordance with Section
4
hereof
to the Collateral Agent, creates a valid and perfected first priority security
interest in the Pledged Collateral, in favor of the Collateral Agent for
the
benefit of the Secured Parties, securing the payment and performance of the
Liabilities; the Collateral Agent shall have “control” (within the meaning given
to such term in Section 8-106 of the UCC) of the Pledged Collateral and the
Collateral Agent will be a “protected purchaser” (within the meaning given to
such term in Section 8-303 of the UCC);
(i) This
Agreement has been duly executed and delivered by and on behalf of the Pledgor
and constitutes the legal, valid and binding obligation of the Pledgor,
enforceable against the Pledgor in accordance with its terms;
(j) There
is
no action, suit, proceeding, governmental investigation or arbitration, at
law
or in equity, or before or by any Governmental Authority, pending, or to
the
knowledge of the Pledgor, threatened against the Pledgor, the Pledged Entity
(as
defined below) or any of its property which will materially and adversely
affect
the value of the Pledged Collateral or the ability of the Pledgor to perform
its
obligations under this Agreement;
(k) The
execution, delivery and performance of this Agreement by the Pledgor (i)
does
not violate any indenture, mortgage, or any other agreement to which the
Pledgor
is a party or by which any of its properties or assets may be bound; (ii)
complies with all corporate organization documents of the Pledgor; and (iii)
does not violate any restriction on such transfer or encumbrance of the Pledged
Collateral;
(l) The
Powers are effective endorsements duly executed by an appropriate person
and
give the Collateral Agent the authority they purport to confer;
(m) The
Pledged Stock constitutes such percent of the issued and outstanding shares
of
Shares of the issuer thereof as set forth in Exhibit
A
hereto;
and
(n) The
Pledged Entity has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Nevada.
8. Voting
Rights.
During
the term of this Agreement, and except as provided in this Section
8
below,
the Pledgor shall have the right to vote the Pledged Stock on all corporate
questions in a manner not inconsistent with the terms of this Agreement After
the occurrence and during the continuation of an Event of Default under either
Indenture, the Collateral Agent shall have the right to, following written
notice from the Collateral Agent to the Pledgor, exercise all voting rights
pertaining to the Pledged Collateral, including the right to take action
by
shareholder consent.
9. Dividends
and Other Distributions.
(a) So
long as no Event of Default under the Notes or Guaranty shall have occurred
and
be continuing:
4
(i) The
Pledgor shall be entitled to receive and retain any and all dividends and
distributions paid in respect of the Pledged Collateral, notwithstanding
such
dividends and distributions being subject to the pledge and assignment thereof
pursuant to Section
2,
provided,
however,
that
any and all
(A) dividends
and distributions paid or payable other than in cash with respect to, and
instruments and other property received, receivable or otherwise distributed
with respect to, or in exchange for, any of the Pledged Collateral;
(B) dividends
and other distributions paid or payable in cash with respect to any of the
Pledged Collateral on account of a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus or paid-in
surplus; and
(C) cash
paid, payable or otherwise distributed with respect to principal of, or in
redemption of, or in exchange for, any of the Pledged Collateral;
shall
be
Pledged Collateral, and shall be forthwith delivered to the Collateral Agent
to
hold, for the benefit of the Secured Parties, as Pledged Collateral and shall,
if received by the Pledgor, be received in trust for the Collateral Agent,
for
the benefit of the Secured Parties; and
(ii) The
Collateral Agent shall execute and deliver (or cause to be executed and
delivered) to the Pledgor all such proxies and other instruments as the Pledgor
may reasonably request for the purpose of enabling the Pledgor to receive
the
dividends which it is authorized to receive and retain pursuant to clause
(i)
above.
(b) After
the
occurrence and during the continuation of an Event of Default under the Notes
or
Guaranty:
(i) All
rights of the Pledgor to receive the dividends and other distributions which
it
would otherwise be authorized to receive and retain pursuant to Section
9(a)(i)
hereof
shall cease, and all such rights shall thereupon become vested in the Collateral
Agent, for the benefit of the Secured Parties, which shall thereupon have
the
sole right to receive and hold as Pledged Collateral such dividends and other
distributions;
(ii) All
dividends and other distributions which are received by the Pledgor contrary
to
the provisions of clause (i) of this Section
9(b)
shall be
received in trust for the Collateral Agent, for the benefit of the Secured
Parties;
(iii) The
Pledgor shall, upon the reasonable request of the Collateral Agent, at the
Pledgor’s expense, execute and deliver, and cause the Pledged Entity and its
officers and directors to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as
may be
required by applicable law or may be necessary or, in the opinion of the
Pledgor
or its counsel, advisable to register the applicable Pledged Collateral under
the provisions of the Securities Act, and to exercise its best efforts to
cause
the registration statement relating thereto to become effective and to remain
effective for such period as prospectuses are required by law to be furnished,
and to make all amendments and supplements thereto and to the related prospectus
which, in the opinion of the Collateral Agent, the Pledgor or its counsel,
are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Commission applicable
thereto;
5
(iv) The
Pledgor shall, at the Pledgor’s expense, use its best efforts to qualify the
Pledged Collateral under U.S. state securities or “Blue Sky” laws and to obtain
all necessary governmental approvals for the sale of the Pledged
Collateral;
(v) The
Pledgor, if applicable, shall, at the Pledgor’s expense, cause the Pledged
Entity to make available to the holders of its securities, as soon as
practicable, earning statements which will satisfy the provisions of Section
11(a) of the Securities Act; and
(vi) The
Pledgor shall, at the Pledgor’s expense, do or cause to be done all such other
acts and things as may be necessary to make such sale of the Pledged Collateral
or any part thereof valid and binding and in compliance with applicable
law.
The
Pledgor will reimburse the Collateral Agent for all expenses incurred by
the
Collateral Agent, including, without limitation, attorneys’ and accountants’
fees and expenses in connection with the foregoing. Upon or at any time after
the occurrence and during the continuation of an Event of Default, if any
Secured Party determines that, prior to any public offering of any securities
constituting part of the Pledged Collateral, such securities should be
registered under the Securities Act and/or registered or qualified under
any
other federal or state law and such registration and/or qualification is
not
practicable, then the Pledgor agrees that it will be commercially reasonable
if
a private sale, upon at least ten (10) Business Days’ notice to the Pledgor, is
arranged so as to avoid a public offering. The Collateral Agent shall incur
no
liability as a result of a sale of the Pledged Collateral, or any part thereof,
at any private sale conducted in a commercially reasonable manner. The Pledgor
hereby waives any claims against the Collateral Agent arising by reason of
the
fact that the sales price established and/or obtained at such private sale
was
less than prices which could have been obtained for such security on any
market
or exchange or in any other public sale.
10. Transfers
and other Liens.
Other
than as permitted under each Indenture, the Pledgor agrees that it will not,
without the prior written consent of the Collateral Agent: (i) sell, transfer
or
otherwise dispose of, or create or permit to exist any Lien upon or with
respect
to, any of the Pledged Collateral, except as expressly permitted by this
Agreement or the Indentures; or (ii) take any action in connection with any
of
the Pledged Collateral which would materially impair the value of the Pledged
Collateral or otherwise materially and adversely affect the interest or rights
of the Collateral Agent or the Secured Parties hereunder.
The
Pledgor further agrees that it will procure, or take reasonable efforts to
procure, that the Pledged Entity and any other direct or indirect subsidiary
thereof shall carry on business only in the ordinary course and will not
dispose
of or agree to dispose of a substantial part of its assets or undertaking
or
take any action in connection with any of the Pledged Collateral which would
materially impair the value of the Pledged Collateral or otherwise materially
and adversely affect the interest or rights of the Collateral Agent or the
Secured Parties hereunder.
6
11. Defense
of Title.
The
Pledgor will defend the title to the Pledged Collateral and the Liens of
the
Collateral Agent in the Pledged Collateral against the claim of any Person
(other than Permitted Liens) and will maintain and preserve such Liens, except
with respect to Permitted Liens.
12. Additional
Shares.
The
Pledgor will, upon obtaining ownership of any additional Shares otherwise
required to be pledged to the Collateral Agent pursuant to this Agreement,
which
Shares are not already Pledged Collateral (the “Additional
Shares”),
promptly (and in any event within three (3) Business Days) deliver to the
Collateral Agent an amendment to this Agreement, duly executed by the Pledgor
and in form and substance satisfactory to the Secured Parties, in respect
of any
such Additional Shares, pursuant to which the Pledgor shall pledge to the
Collateral Agent all of such Additional Shares. The Pledgor hereby authorizes
the Collateral Agent to attach such amendment to this Agreement and agrees
that
all Pledged Stock listed on any such amendment delivered to the Collateral
Agent
shall for all purposes hereunder be considered Pledged Collateral.
13. Remedies.(a) (a)
The
Collateral Agent shall have, in addition to any other rights given under
this
Agreement or by law, all of the rights and remedies with respect to the Pledged
Collateral of a secured party under the Uniform Commercial Code as in effect
in
the State of New York (the “UCC”)
(whether or not the UCC applies to the affected Pledged Collateral). In
addition, after the occurrence and during the continuation of an Event of
Default under the Notes or Guaranty, the Collateral Agent shall have such
powers
of sale and other powers as may be conferred by applicable law. With respect
to
the Pledged Collateral or any part thereof which shall then be in or shall
thereafter come into the possession or custody of the Collateral Agent or
which
the Collateral Agent shall otherwise have the ability to transfer under
applicable law, the Collateral Agent may, in its sole discretion, without
notice, except as specified below, after the occurrence and during the
continuation of an Event of Default, sell or cause the same to be sold at
any
exchange, broker’s board or at public or private sale, in one or more sales or
lots, at such price as the Collateral Agent or any Secured Party may deem
best,
for cash or on credit or for future delivery, without assumption of any credit
risk, and the purchaser of any or all of the Pledged Collateral so sold shall
thereafter own the same, absolutely free from any claim, encumbrance or right
of
any kind whatsoever. The Collateral Agent or any Secured Party may, in its
own
name, or in the name of a designee or nominee, buy the Pledged Collateral
at any
public sale and, if permitted by applicable law, buy the Pledged Collateral
at
any private sale. The Pledgor agrees to pay to the Collateral Agent all expenses
(including, without limitation, court costs and attorneys’ and paralegals’ fees
and expenses) of, or incident to, the enforcement of any of the provisions
hereof. The Collateral Agent agrees to distribute any proceeds of the sale
of
the Pledged Collateral in accordance with the Indentures and the Pledgor
shall
remain liable for any deficiency following the sale of the Pledged Collateral.
7
(b) Unless
any of the Pledged Collateral threatens to decline speedily in value or is
or
becomes of a type sold on a recognized market, the Collateral Agent will
give
the Pledgor reasonable notice of the time and place of any public sale thereof,
or of the time after which any private sale or other intended disposition
is to
be made. Any sale of the Pledged Collateral conducted in conformity with
reasonable commercial practices of banks, commercial finance companies,
insurance companies or other financial institutions disposing of property
similar to the Pledged Collateral shall be deemed to be commercially reasonable.
Notwithstanding any provision to the contrary contained herein, the Pledgor
agrees that any requirements of reasonable notice shall be met if such notice
is
received by the Pledgor as provided in Section
29
below at
least ten (10) Business Days before the time of the sale or disposition.
Any
other requirement of notice, demand or advertisement for sale is waived,
to the
extent permitted by law. The Collateral Agent shall not be obligated to make
any
sale of the Pledged Collateral regardless of notice of sale having been given.
The Collateral Agent may adjourn any public or private sale from time to
time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so
adjourned.
(c) In
view
of the fact that U.S. federal and state securities laws may impose certain
restrictions on the method by which a sale of the Pledged Collateral may
be
effected after an Event of Default, the Pledgor agrees that after the occurrence
and during the continuation of an Event of Default, the Collateral Agent
may,
from time to time, attempt to sell all or any part of the Pledged Collateral
by
means of a private placement restricting the bidders and prospective purchasers
to those who are qualified and will represent and agree that they are purchasing
for investment only and not for distribution. In so doing, the Collateral
Agent
may solicit offers to buy the Pledged Collateral, or any part of it, from
a
limited number of investors deemed by the Collateral Agent, in its reasonable
judgment, to be financially responsible parties who might be interested in
purchasing the Pledged Collateral. If the Collateral Agent solicits such
offers
from not less than four (4) such investors, then the acceptance by the
Collateral Agent of the highest offer obtained therefrom shall be deemed
to be a
commercially reasonable method of disposing of such Pledged Collateral;
provided,
however,
that
this Section does not impose a requirement that the Collateral Agent solicit
offers from four (4) or more investors in order for the sale to be commercially
reasonable.
(d) The
Pledgor agrees to the maximum extent permitted by applicable law that, following
the occurrence and during the continuance of an Event of Default, it will
not at
any time plead, claim or take the benefit of any appraisal, valuation, stay,
extension, moratorium or redemption law now or hereafter in force in order
to
prevent or delay the enforcement of this Agreement, or the absolute sale
of the
whole or any part of the Pledged Collateral or the possession thereof by
any
purchaser at any sale hereunder, and the Pledgor waives the benefit of all
such
laws to the extent it lawfully may do so. The Pledgor agrees that it will
not
interfere with any right, power and remedy of Collateral Agent provided for
in
this Agreement or now or hereafter existing at law or in equity or by statute
or
otherwise, or the exercise or beginning of the exercise by Collateral Agent
of
any one or more of such rights, powers or remedies. No failure or delay on
the
part of Collateral Agent to exercise any such right, power or remedy and
no
notice or demand which may be given to or made upon the Pledgor by the
Collateral Agent with respect to any such remedies shall operate as a waiver
thereof, or limit or impair the Collateral Agent’s right to take any action or
to exercise any power or remedy hereunder, without notice or demand, or
prejudice its rights as against the Pledgor in any respect.
8
(e) The
Pledgor further agrees that a breach of any of the covenants by the Pledgor
contained in this Section
13
will
cause irreparable injury to the Collateral Agent, that the Collateral Agent
shall have no adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every covenant contained in this Section
13
shall be
specifically enforceable against the Pledgor, and the Pledgor hereby waives
and
agrees not to assert any defenses against an action for specific performance
of
such covenants.
14. Security
Interest Absolute.
All
rights of the Collateral Agent and security interests hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(i) Any
lack
of validity or enforceability of the Indentures or any other agreement or
instrument relating thereto;
(ii) Any
change in the time, manner or place of payment of, or in any other term of,
all
or any part of the Liabilities, or any other amendment or waiver of or any
consent to any departure from the Indentures or this Agreement;
(iii) Any
exchange, release or non-perfection of any other collateral, or any release
or
amendment or waiver of or consent to departure from any guaranty, for all
or any
part of the Liabilities;
(iv) the
insolvency of the Pledgor or the Pledged Entity; or
(v) any
other
circumstance which might otherwise constitute a defense available to, or
a
discharge of, the Pledgor in respect of the Liabilities or of this
Agreement.
15. Collateral
Agent Appointed Attorney-in-Fact.
The
Pledgor hereby appoints the Collateral Agent its attorney-in-fact, with full
authority, in the name of the Pledgor or otherwise, after the occurrence
and
during the continuation of an Event of Default, from time to time in the
Collateral Agent’s sole discretion, to take any action and to execute any
instrument which the Collateral Agent or any Secured Party may deem necessary
or
advisable to accomplish the purposes of this Agreement, including, without
limitation, to receive, endorse and collect all instruments made payable
to the
Pledgor representing any dividend or other distribution in respect of the
Pledged Collateral or any part thereof and to give full discharge for the
same
and to arrange for the transfer of all or any part of the Pledged Collateral
on
the books of the Pledged Entity to the name of the Collateral Agent or the
Collateral Agent’s nominee.
16. Waivers.
The
Pledgor waives to the fullest extent permitted by applicable laws presentment
and demand for payment of any of the Liabilities, protest and notice of dishonor
or Event of Default with respect to any of the Liabilities and all other
notices
to which the Pledgor might otherwise be entitled except as otherwise expressly
provided herein or in the Indentures.
9
17. Term.
This
Agreement shall remain in full force and effect until the final satisfaction
in
full of the Note either by way of payment in full of the principal, interest
and
premium, if any, due on the Note or by way of conversion of the Note into
the
shares of the common stock of the Company. Upon the termination of this
Agreement as provided above (other than as a result of the sale of the Pledged
Collateral), the Collateral Agent will release the security interest created
hereunder and, if it then has possession of any Pledged Stock pledged hereunder,
will deliver such Pledged Stock previously delivered to it and the Powers
to the
Pledgor.
18. Reinstatement.
This
Agreement shall remain in full force and effect and continue to be effective
should any petition be filed by or against the Pledgor or the Pledged Entity
for
liquidation or reorganization, should the Pledgor or the Pledged Entity become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of the
Pledgor’s or the Pledged Entity’s assets, and shall continue to be effective or
be reinstated, as the case may be.
19. Definitions.
The
singular shall include the plural and vice versa and any gender shall include
any other gender as the context may require.
20. Binding
Effect; Successors and Assigns.
This
Agreement shall be binding upon the Pledgor and its successors and assigns,
and
shall inure to the benefit of the Collateral Agent and the Secured Parties,
and
their respective successors and assigns. Nothing set forth herein or in any
other Security Document is intended or shall be construed to give any other
Person any right, remedy or claim under, to or in respect of this Agreement,
the
Indentures or any Collateral. The Pledgor’s successors shall include, without
limitation, a receiver, trustee or debtor-in-possession of or for the Pledgor.
21. Governing
Law.
This
Agreement has been executed and delivered by the parties hereto in New York,
New
York. Any dispute between the Collateral Agent and the Pledgor arising out
of or
related to the relationship established between them in connection with this
Agreement, and whether arising in contract, tort, equity, or otherwise, shall
be
resolved in accordance with the laws of the State of New York.
22. Consent
to Jurisdiction; and Service of Process.
THE
COLLATERAL AGENT HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF THE
STATE
OR FEDERAL COURTS LOCATED IN XXX XXXX XXXXXX, XXXX XX XXX XXXX, XXX XXXX.
THE
PLEDGOR HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED
IN
XXX XXXX XXXXXX, XXXX XX XXX XXXX, XXX XXXX SHALL HAVE EXCLUSIVE JURISDICTION
TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE PLEDGOR AND THE COLLATERAL
AGENT PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING
TO THIS AGREEMENT; PROVIDED
THAT THE
COLLATERAL AGENT AND THE PLEDGOR ACKNOWLEDGE THAT ANY APPEALS FROM THOSE
COURTS
MAY HAVE TO BE HEARD BY X XXXXX XXXXXXX XXXXXXX XX XXX XXXX XXXXXX; AND,
PROVIDED,
FURTHER,
NOTHING
IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE COLLATERAL AGENT
FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION
TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE GUARANTEED OBLIGATIONS,
OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF COLLATERAL AGENT.
THE
PLEDGOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND THE PLEDGOR HEREBY WAIVES
ANY
OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON CONVENIENS
AND
HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. THE PLEDGOR HEREBY WAIVES PERSONAL SERVICE OF
THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE
MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE PLEDGOR AT THE ADDRESS SET
FORTH
IN THE INDENTURES AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON
THE
EARLIER OF ACTUAL RECEIPT THEREOF OR FIVE (5) DAYS AFTER DEPOSIT IN THE U.S.
MAILS, PROPER POSTAGE PREPAID. The Collateral Agent shall have the right
to
proceed against the Pledgor or its personal property in a court in any location
to enable the Collateral Agent to obtain personal jurisdiction over the Pledgor,
to realize on the Pledged Collateral or any other security for the Liabilities
or to enforce a judgment or other court order entered in favor of the Collateral
Agent.
10
23. Waiver
of Jury Trial.
The
Pledgor and the Collateral Agent waives any right to trial by jury in any
dispute, whether sounding in contract, tort, or otherwise, between the
Collateral Agent and the Pledgor arising out of or related to the transactions
contemplated by this Agreement or any other instrument, document or agreement
executed or delivered in connection herewith. Either the Pledgor or the
Collateral Agent may file an original counterpart or a copy of this Agreement
with any court as written evidence of the consent of the parties hereto to
the
waiver of their right to trial by jury.
24. Advice
of Counsel.
The
Pledgor represents and warrants to the Collateral Agent that it has discussed
this Agreement and, specifically, the provisions of Sections 21 through 23
hereof, with the Pledgor’s lawyers.
25. Severability.
If any
provision of this Agreement is held to be prohibited or unenforceable in
any
jurisdiction the substantive laws of which are held to be applicable hereto,
such prohibition or unenforceability shall not affect the validity or
enforceability of the remaining provisions hereof and shall not invalidate
or
render unenforceable such provision in any other jurisdiction.
26. Further
Assurances.
The
Pledgor agrees that at any time and from time to time, at the expense of
the
Pledgor, the Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be required by applicable
law or may be necessary or desirable, or that the Collateral Agent or any
Secured Party may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable
the
Collateral Agent to exercise and enforce its rights and remedies hereunder
with
respect to any of the Pledged Collateral, including, without limitation,
the
filing of financing statements under Article 9 of the Uniform Commercial
Code of
Nevada, which initial filing shall be completed or caused to be completed
by the
Pledgor no later than one month from the date hereof. The Pledgor hereby
further
agrees that it shall not make any change to its name or jurisdiction or the
form
of its organization without prior written notice or otherwise permitted under
the Indenture.
11
27. The
Collateral Agent’s Duty of Care.
(a) The
Collateral Agent shall not be liable for any acts, omissions, errors of judgment
or mistakes of fact or law including, without limitation, acts, omissions,
errors or mistakes with respect to the Pledged Collateral, except for those
arising out of or in connection with the Collateral Agent’s (i) gross negligence
or willful misconduct, or (ii) failure to use reasonable care with respect
to
the safe custody of the Pledged Collateral in the Collateral Agent’s possession.
Without limiting the generality of the foregoing, the Collateral Agent shall
be
under no obligation to take any steps necessary to preserve rights in the
Pledged Collateral against any other parties but may do so at its option.
All
expenses incurred in connection therewith shall be for the sole account of
the
Pledgor, and shall constitute part of the Liabilities secured hereby.
(b) Without
limiting the generality of the foregoing, (i) the Collateral Agent shall
not be
subject to any fiduciary or other implied duties, regardless of whether an
Event
of Default has occurred and is continuing and (ii) the Collateral Agent shall
not have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby,
provided that it shall not amount to gross negligence or willful misconduct
or a
failure to use reasonable care.
(c) No
provision of this Agreement shall require the Collateral Agent to expend
or risk
its own funds or otherwise incur any financial liability in the performance
of
any of its duties hereunder, or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that repayment of such
funds
or adequate indemnity against such risk or liability is not reasonably assured
to it. The Collateral Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement, the SPA or the Notes. The
Collateral Agent shall not be liable for any delay or failure to act as may
be
required hereunder when such delay or failure is due to any act of God,
interruption or other circumstances beyond its control provided
it
exercises such diligence as the circumstances may reasonably require. The
Collateral Agent shall be entitled to rely on any communication, instrument,
paper or other document reasonably believed by it to be genuine and correct
and
to have been signed or sent by the proper person. The Collateral Agent may
consult with, and obtain advice from, legal counsel as to the construction
of
any of the provisions of this Agreement, and shall incur no liability in
acting
in good faith in accordance with the reasonable advice of such
counsel.
(d) The
Collateral Agent shall not be deemed to have notice of any Event of Default
unless an officer of the Collateral Agent has actual knowledge thereof or
unless
written notice of any such Event of Default is received by the Collateral
Agent
at the office of the Collateral Agent specified in or pursuant to Section
29
hereof.
(e) The
Collateral Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Pledged Collateral shall be to deal with it
in the
same manner as the Collateral Agent deals with similar property for its own
account.
12
(f) In
no
event shall the Collateral Agent be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Collateral Agent has been advised of the
likelihood of such loss or damage and regardless of the form of
action.
(g) The
Collateral Agent shall not be responsible for or have any duty to ascertain
or
inquire into (i) any statement, warranty or representation made herein or
in
connection herewith, (ii) the contents of any certificate, report or other
document delivered thereunder or in connection therewith, (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth herein, or (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement or any other agreement, instrument or
document.
(h) The
Collateral Agent may refuse to act on any notice, consent, direction or
instruction from any Secured Parties or any agent, trustee or similar
representative thereof that, in the Collateral Agent’s opinion, (i) is contrary
to law or the provisions of this Agreement or the Indentures, (ii) may expose
the Collateral Agent to liability (unless the Collateral Agent shall have
been
indemnified, to its satisfaction, for such liability by the Secured Parties
that
gave such notice, consent, direction or instruction) or (iii) is unduly
prejudicial to Secured Parties not joining in such notice, consent, direction
or
instruction.
(i) The
Collateral Agent is authorized to take such actions and to exercise such
powers
as are delegated to the Collateral Agent by the terms hereof, together with
such
actions and powers as are reasonably incidental thereto.
(j) The
Collateral Agent shall, in its capacity as a Secured Party, have the same
rights
and powers as any other Secured Party and may exercise the same as though
it
were not the Collateral Agent.
28. Additional
Provisions Relating to the Collateral Agent.
(a) Any
corporation, bank, trust company or association into which the Collateral
Agent
may be merged or converted or with which it may be consolidated, or any
corporation, bank, trust company or association resulting from any merger,
conversion or consolidation to which the Collateral Agent shall be a party,
or
any corporation, bank, trust company or association succeeding to all or
substantially all the corporate trust business of the Collateral Agent, shall
be
the successor of the Collateral Agent hereunder, without the execution or
filing
of any paper or any further act on the part of any of the parties
hereto.
(b) At
any
time or times, for the purpose of meeting any legal requirements of any
jurisdiction in which any of the Collateral may at the time be located, the
Collateral Agent shall have the power to appoint any Person or Persons either
to
act as co-collateral agent, or co-collateral agents, jointly with the Collateral
Agent of all or any part of the Pledged Collateral or to act as separate
collateral agent or separate collateral agents of all or any part of the
Pledged
Collateral and to vest in such Person or Persons, in such capacity, such
title
to the Pledged Collateral or any part thereof, and such rights, powers, duties
or obligations as the Collateral Agent may consider necessary or desirable,
subject to the other provisions of this Section 28.
13
(c) Unless
otherwise provided in the instrument appointing such co-collateral agent
or
separate collateral agent, every co-collateral agent or separate collateral
agent in respect of the custody, control or management of the Pledged Collateral
shall, to the extent permitted by law, be appointed subject to the following
terms namely:
(i) All
rights, power, duties and obligations under this Agreement conferred upon
the
Collateral Agent shall be exercised solely by the Collateral Agent;
(ii) All
rights, powers, duties and obligations conferred or imposed upon the collateral
agents shall be conferred or imposed upon and exercised or performed by the
Collateral Agent, or by the Collateral Agent and such co-collateral agent
or
co-collateral agents, or separate collateral agent or separate collateral
agents
jointly, except to the extent that, under the law of any jurisdiction in
which
any particular act or acts are to be performed, the Collateral Agent shall
be
incompetent or unqualified to perform such act or acts, in which event such
act
or acts shall be performed by such co-collateral agent or co-collateral agents
or separate collateral agent or separate collateral agents;
(iii) Any
request in writing by the Collateral Agent to any co-collateral agent or
separate collateral agent to take or to refrain from taking any action hereunder
shall be sufficient warrant for the taking, or the refraining from taking,
of
such action by such co-collateral agent or separate collateral
agent;
(iv) Any
co-collateral agent or separate collateral agent to the extent permitted
by law
may delegate to the Collateral Agent the exercise of any right, power, duty
or
obligation, discretionary or otherwise;
(v) The
Collateral Agent at any time, by an instrument in writing, may accept the
resignation of, or remove, any co-collateral agent or separate collateral
agent
appointed under this Section
28.
As
successor to any co-collateral agent or separate collateral agent so resigned
or
removed may be appointed in the manner provided in this Section
28;
(vi) No
collateral agent hereunder shall be personally liable by reason of any act
or
omission of any other collateral agent hereunder; the Collateral Agent shall
not
be responsible for any misconduct or negligence on the part of any agent
appointed with due care by it hereunder;
(vii) Any
demand, request, direction, appointment, removal, notice, consent, waiver
or
other action in writing delivered to the Collateral Agent shall be deemed
to
have been delivered to each such co-collateral agent or separate collateral
agent; and
(viii) Any
Collateral received by any such co-collateral agent or separate collateral
agent
hereunder shall forthwith, so far as may be permitted by law, be turned over
to
the Collateral Agent to be held pursuant to the terms hereof.
(d) Upon
the
acceptance in writing of such appointment by any such co-collateral agent
or
separate collateral agent, it or he shall be vested with the estate, right,
title and interest in the Pledged Collateral, or any portion thereof, and
with
such rights, powers, duties, trusts or obligations, jointly or separately
with
the Collateral Agent, all as shall be specified in the instrument of
appointment, subject to all the terms hereof.
14
(e) In
case
any co-collateral agent or separate collateral agent shall become incapable
of
acting, resign or be removed, the right, title and interest in the Pledged
Collateral and all rights, powers, duties and obligations of said co-collateral
agent or separate collateral agent shall, so far as permitted by law, vest
in
and be exercised by the Collateral Agent unless and until a successor
co-collateral agent or separate collateral agent shall be appointed pursuant
to
this Section 28.
29. Notices.
Any
notice, demand, request or any other communication required or desired to
be
served, given or delivered hereunder shall be in writing and shall be served,
given or delivered (a) with respect to the Pledgor, to the Pledgor at at
Xx.
Xxxxxxx Xx, President, Golden Autumn Holdings Inc., 00000 Xxxxxx Xxxx,
0xx
Xxxxx,
Xxxxxx, Xxxxx 00000 and (b) with respect to the Collateral Agent, to Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention
Xxxxxxx Xxxxxxxxx, Esq.
30. Indemnity
and Expenses.
The
Pledgor agrees, upon demand, to indemnify the Collateral Agent against any
and
all losses, claims, damages, penalties, fines, liabilities or expenses,
including incidental and out-of-pocket expenses and attorneys fees incurred
by
it arising out of or in connection with the acceptance or administration
of its
duties under this Agreement and to pay to the Collateral Agent the amount
of any
and all expenses, including the fees and expenses of its counsel and of any
experts and agents, which the Collateral Agent may incur in connection with
(i)
the administration of this Agreement, (ii) the custody, preservation, use
or
operation of, or the sale of, collection from, or other realization upon,
any of
the Pledged Collateral, (iii) the exercise or enforcement of any of the rights
of the Collateral Agent hereunder or (iv) the failure by the Pledgor to perform
or observe any of the provisions hereof.
31. Amendments,
Waivers and Consents.
None of
the terms or provisions of this Agreement may be waived, altered, modified
or
amended, and no consent to any departure by the Pledgor herefrom shall be
effective, except by or pursuant to an instrument in writing which (i) is
duly
executed by the Pledgor and the Collateral Agent. Any such waiver shall be
valid
only to the extent set forth therein. A waiver by the Collateral Agent of
any
right or remedy under this Agreement on any one occasion shall not be construed
as a waiver of any right or remedy which the Collateral Agent would otherwise
have on any future occasion. No failure to exercise or delay in exercising
any
right, power or privilege under this Agreement on the part of the Collateral
Agent shall operate as a waiver thereof; and no single or partial exercise
of
any right, power or privilege under this Agreement shall preclude any other
or
further exercise thereof or the exercise of any other right, power or privilege.
32. Section
Headings.
The
section headings herein are for convenience of reference only, and shall
not
affect in any way the interpretation of any of the provisions hereof.
33. Execution
in Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
an original, but all of which shall together constitute one and the same
agreement.
15
34. Merger.
This
Agreement and the Guaranty embody the entire agreement and understanding,
between the Pledgor and the Collateral Agent and supersedes all prior agreements
and understandings, written and oral, relating to the subject matter hereof.
35.
Disputes.
The
Collateral Agent shall be permitted to act as counsel for the Company in
any
transaction and/or dispute including any dispute between the Company and
the
Pledgor, whether or not the Collateral Agent is then holding the Collateral
held
by the Collateral Agent hereunder.
36.
Collateral It is acknowledged that as of the day hereof the Collateral Agent
has
received a certificate for 5,366,613
shares of the Company’s common stock owned by GAH-CDC Holdings, LLC
(“Certificate No. 1”) and that upon the receipt of a stock certificate for
3,000,000 of the Company’s common stock owned by either BJP-GAH Holdings LLC or
Li Guanglong or a combination of the two (“Certificate No. 2”), the Collateral
Agent may release and deliver Certificate No. 1 to the Pledgor and shall
hold
Certificate No. 2 pursuant to this Agreement.
[remainder
of page intentionally left blank]
16
IN
WITNESS WHEREOF,
the
Pledgor and the Collateral Agent have executed this Agreement as of the date
set
forth above.
|
GAH-CDC
HOLDINGS, LLC
|
||
|
By:
|
/s/Xxxxxxx
Xx
|
|
|
Name:
Xxxxxxx Xx
|
||
|
Title:
President & Manager
|
||
Acknowledged
and agreed to
as
of the
date first written above.
SICHENZIA
XXXX XXXXXXXX XXXXXXX LLP,
as
Collateral Agent
|
By:
|
/s/Xxxxxx
X. Xxxx
|
|
|
Name:
Xxxxxx X. Xxxx
|
||
|
Title:
Partner
|
||
Golden
Autumn Holdings, Inc,.
|
By:
|
/s/
Xxxxxxx Xx
|
|
|
Name:
Xxxxxxx Xx
|
||
|
Title:
President
|
||
BUYER:
Agreed and acknowledged Only as to Section 36
|
/s/
Xxxxxx Xxxxxxx
Name:
Xxxxxx Xxxxxxx
|
|
|
Title
Parner
|
|
EXHIBIT
A
PLEDGED
STOCK
|
Name
of
Pledgor
|
Name
of Issuer
|
Number
of Shares
|
||
|
GAH-CDC
Holdings, LLC
|
5,366,613
shares of Common Stock, par value $0.001 per share represented
by
Certificate No. 164 dated February 15,
2007
|
EXHIBIT
B
STOCK
POWER
(EXECUTED
IN BLANK)
FOR
VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto ___________ shares of
the
Common Stock of Golden
Autumn Holdings Inc.,
a
Nevadacorporation (the “Corporation”),
standing in the name of the undersigned on the books of the Corporation
represented by Certificate No. ______, and does hereby irrevocably constitute
and appoint ______________ as attorney-in-fact to transfer the shares on
the
books of the Corporation with full power of substitution in the
premises.
Dated:
______
|
By:
|
|
|
|
Name:
|
||
|
Title:
|
||
ACKNOWLEDGMENT
The
undersigned hereby acknowledges receipt of a copy of the foregoing Pledge
Agreement, agrees promptly to note on its books the security interests granted
under such Pledge Agreement, and waives any rights or requirement at any
time
hereafter to receive a copy of such Pledge Agreement in connection with the
registration of any Pledged Collateral in the name of the Collateral Agent
or
its nominee or the exercise of voting rights by the Collateral
Agent.
|
By
|
/s/
Xxxxxxx Xx
|
|
|
Name:
Xxxxxxx Xx
|
||
|
Title:
President
|
||
