Share Pledge Agreement
Exhibit 4.12
This Share Pledge Agreement (this “Agreement”) has been executed by and among the following
parties on July 8, 2009 in Beijing, the People’s Republic of China (“China” or the “PRC”):
Party A:
|
Ku6 (Beijing) Technology Co., Ltd. (hereinafter “Pledgee”) | |
Address:
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Room A402, Great Wall Computer Tower, No. Jia 38, Xueyuan Road, Haidian District, Beijing | |
Party B:
|
Shanyou Li (hereinafter “Pledgor”) |
|
ID Card:
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12010419720322681X | |
Party C:
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Ku6 (Beijing) Information Technology Co., Ltd. | |
Address:
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Room A401, Great Wall Computer Tower, No. Jia 38, Xueyuan Road, Haidian District, Beijing |
In this Agreement, each of Pledgee, Pledgor and Party C shall be referred to as a “Party”
respectively, and they shall be collectively referred to as the “Parties”.
Whereas:
| 1. | Beijing Tuohua Management Consulting Co., Ltd. (the “Tuo Hua”) and Pledgor entered into
Equity Interest Transfer Agreement on June 23, 2008, in which Tuo Hua transfers 90% of equity
interests of Party C to Pledgor. The 90% of equity interests of Party C has been completed as
of the date of this Agreement. |
| 2. | Pledgee, Pledgor and Party C entered into a Share Pledge Agreement dated April 11, 2007 and a
Supplementary Agreement to the Share Pledge Agreement dated June 23, 2008 (collectively, the
“Original Share Pledge Agreements”), and the Parties now wish to amend certain provisions of
the Original Share Pledge Agreements by executing this Agreement, which shall supersede and
replace the Original Share Pledge Agreements upon execution; |
| 3. | Pledgor is a citizen of China, who contributes RMB 9,800,000 to the registered capital of
Party C and holds 98% of the equity interest in Party C. Party C is a limited liability
company registered in Beijing, China engaging in value-added telecommunication services and/or
other business approved by Pledgee. Party C intends to acknowledge the respective rights and
obligations of Pledgor and Pledgee under this Agreement, and to provide any necessary
assistance in registering the Pledge; |
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| 4. | Pledgee is a wholly foreign-owned enterprise registered in China. Pledgee and Party C
partially owned by Pledgor executed an Exclusive Business Cooperation Agreement on April 11,
2007 (the “Original Business Cooperation Agreement”) and a new Exclusive Business Cooperation
on June 23, 2008 (the “New Business Cooperation Agreement”), which has superseded and replaced
the Original Business Cooperation Agreement; |
| 5. | To ensure that Party C fully performs its obligations under the New Business Cooperation
Agreement and pay the consulting and service fees thereunder to the Pledgee when the same
becomes due, Pledgor hereby pledges to the Pledgee all of the equity interest he holds in
Party C as security for payment of the consulting and service fees by Party C under the New
Business Cooperation Agreement. |
|
To perform the provisions of the New Business Cooperation Agreement, the Parties have mutually
agreed to execute this Agreement upon the following terms. |
| 1. | Definitions |
Unless otherwise provided herein, the terms below shall have the following meanings:
| 1.1 | Pledge: shall refer to the security interest granted by Pledgor to Pledgee pursuant
to Article 2 of this Agreement, i.e., the right of Pledgee to be compensated on a
preferential basis with the conversion, auction or sales price of the Equity Interest. |
| 1.2 | Equity Interest: shall refer to all of the equity interest lawfully now held and
hereafter acquired by Pledgor in Party C. |
1.3 Term of Pledge: shall refer to the term set forth in Section 3.2 of this Agreement.
| 1.4 | New Business Cooperation Agreement: shall refer to the Exclusive Business
Cooperation Agreement executed by and between Party C and Pledgee on June 23, 2008. |
| 1.5 | Event of Default: shall refer to any of the circumstances set forth in Article 7 of
this Agreement. |
| 1.6 | Notice of Default: shall refer to the notice issued by Pledgee in accordance
with this Agreement declaring an Event of Default.
|
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| 2. | The Pledge |
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As collateral security for the timely and complete payment and performance when due (whether
at stated maturity, by acceleration or otherwise) of any or all of the payments due by Party
C, including without limitation the consulting and services fees payable to the Pledgee under
the New Business Cooperation Agreement, Pledgor hereby pledges to Pledgee a first security
interest in all of Pledgor’s right, title and interest, whether now owned or hereafter
acquired by Pledgor, in the Equity Interest of Party C. |
| 3. | Term of Pledge |
| 3.1 | The Pledge shall become effective on such date when the pledge of the Equity
Interest contemplated herein has been registered with relevant administration for
industry and commerce (the “AIC”). The Parties hereby acknowledge and agree that, in the
event that the Pledge cannot be registered due to the AIC’s suspension of pledge
registration formalities, Party C shall, and Pledgor shall cause Party C to, go through
the registration formalities within such a period as reasonably requested by Pledgee upon
resuming of the pledge registration formalities. |
| 3.2 | The Pledge shall be continuously valid until all payments due under the New
Business Cooperation Agreement have been fulfilled by Party C. The parties agree that
within 3 business days following the execution of this Agreement, Pledgor and Party C
shall register the Pledge in the shareholders’ register of Party C, and within 10
business days after the competent AIC has formally begun accepting applications for the
registration of equity interest pledge, Pledgor and Party C shall file the pledge of the
Equity Interest contemplated herein with such AIC for registration. |
| 3.3 | During the Term of Pledge, in the event Party C fails to pay the exclusive
consulting or service fees in accordance with the New Business Cooperation Agreement,
Pledgee shall have the right, but not the obligation, to dispose of the Pledge in
accordance with the provisions of this Agreement. |
| 4. | Custody of Records for Equity Interest subject to Pledge |
| 4.1 | During the Term of Pledge set forth in this Agreement, Pledgor shall deliver to
Pledgee’s custody the capital contribution certificate for the Equity
Interest and the shareholders’ register containing the Pledge within one week from the
execution of this Agreement. Pledgee shall have custody
of such items during the entire
Term of Pledge set forth in this Agreement. |
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| 4.2 | Pledgee shall have the right to collect dividends generated by the Equity Interest
during the Term of Pledge. |
| 5. | Representations and Warranties of Pledgor |
5.1 Pledgor is the sole legal and beneficial owner of the Equity Interest.
| 5.2 | Pledgee shall have the right to dispose of and transfer the Equity Interest in
accordance with the provisions set forth in this Agreement. |
| 5.3 | Except for the Pledge, Pledgor has not placed any security interest or other
encumbrance on the Equity Interest. |
| 6. | Covenants and Further Agreements of Pledgor |
| 6.1 | Pledgor hereby covenants to the Pledgee, that during the term of this Agreement,
Pledgor shall: |
| 6.1.1 | not transfer the Equity Interest, place or permit the existence of any
security interest or other encumbrance on the Equity Interest, without the prior
written consent of Pledgee, except for the performance of the Exclusive Option
Agreement executed by Pledgor, Pledgee and Party C on July 8 2009; |
| 6.1.2 | comply with the provisions of all laws and regulations applicable to
the pledge of rights, and within 5 days of receipt of any notice, order or
recommendation issued or prepared by relevant competent authorities regarding the
Pledge, shall present the aforementioned notice, order or recommendation to
Pledgee, and shall comply with the aforementioned notice, order or recommendation
or submit objections and representations with respect to the aforementioned matters
upon Pledgee’s reasonable request or upon consent of Pledgee; |
| 6.1.3 | promptly notify Pledgee of any event or notice received by Pledgor
that may have an impact on Pledgee’s rights to the Equity Interest or
any portion thereof, as well as any event or notice received by Pledgor that
may have an impact on any guarantees and other obligations of Pledgor arising
out of this Agreement.
|
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| 6.2 | Pledgor agrees that the rights acquired by Pledgee in accordance with this
Agreement with respect to the Pledge shall not be interrupted or harmed by Pledgor or any
heirs or representatives of Pledgor or any other persons through any legal proceedings. |
| 6.3 | To protect or perfect the security interest granted by this Agreement for payment
of the consulting and service fees under the New Business Cooperation Agreement, Pledgor
hereby undertakes to execute in good faith and to cause other parties who have an
interest in the Pledge to execute all certificates, agreements, deeds and/or covenants
required by Pledgee. Pledgor also undertakes to perform and to cause other parties who
have an interest in the Pledge to perform actions required by Pledgee, to facilitate the
exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to
enter into all relevant documents regarding ownership of Equity Interest with Pledgee or
designee(s) of Pledgee (natural persons/legal persons). Pledgor undertakes to provide
Pledgee within a reasonable time with all notices, orders and decisions regarding the
Pledge that are required by Pledgee. |
| 6.4 | Pledgor hereby undertakes to comply with and perform all guarantees, promises,
agreements, representations and conditions under this Agreement. In the event of failure
or partial performance of its guarantees, promises, agreements, representations and
conditions, Pledgor shall indemnify Pledgee for all losses resulting therefrom. |
| 7. | Event of Breach |
| 7.1 | The following circumstances shall be deemed Event of Default: |
| 7.1.1 | Party C fails to pay in full any of the consulting and service fees
payable under the New Business Cooperation Agreement or breaches any other
obligations of Party C thereunder; |
| 7.1.2 | Any representation or warranty by Pledgor in Article 5 of this
Agreement contains material misrepresentations or errors, and/or Pledgor violates
any of the warranties in Article 5 of this Agreement; |
| 7.1.3 | Pledgor and Party C fail to register the Pledge in the shareholders’
register of Party C stipulated in Section 3.1; |
| 7.1.4 | Pledgor or Party C breach any provisions of this Agreement; |
| 7.1.5 | Except as expressly stipulated in Section 6.1.1, Pledgor transfers or
purports to transfer or abandons the Equity Interest pledged or assigns the Equity
Interest pledged without the written consent of Pledgee; |
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| 7.1.6 | Any of Pledgor’s own loans, guarantees, indemnifications, promises or
other debt liabilities to any third party or parties (1) become subject to a demand
of early repayment or performance due to default on the part of Pledgor; or (2)
become due but are not capable of being repaid or performed in a timely manner; |
| 7.1.7 | Any approval, license, permit or authorization of government agencies
that makes this Agreement enforceable, legal and effective is withdrawn,
terminated, invalidated or substantively changed; |
| 7.1.8 | The promulgation of applicable laws renders this Agreement illegal or
renders it impossible for Pledgor to continue to perform its obligations under this
Agreement; |
| 7.1.9 | Adverse changes in properties owned by Pledgor, which lead Pledgee to
believe that that Pledgor’s ability to perform its obligations under this Agreement
has been affected; |
| 7.1.10 | The successor or custodian of Party C is capable of only partially perform or
refuses to perform the payment obligations under the New Business Cooperation
Agreement; and |
| 7.1.11 | Any other circumstances occur where Pledgee is or may become unable to exercise
its right with respect to the Pledge. |
| 7.2 | Upon notice or discovery of the occurrence of any circumstances or event that may
lead to the aforementioned circumstances described in Section 7.1, Pledgor shall
immediately notify Pledgee in writing accordingly. |
| 7.3 | Unless an Event of Default set forth in this Section 7.1 has been successfully
resolved to Pledgee’s satisfaction, Pledgee may issue a Notice of Default to Pledgor in
writing upon the occurrence of the Event of Default or at any time thereafter and demand
that Pledgor immediately pay all outstanding payments due under the New Business
Cooperation Agreement and all other payments due to Pledgee, and/or dispose of the Pledge
in accordance with the provisions of Article 8 of this Agreement. |
| 8. | Exercise of Pledge |
| 8.1 | Prior to the full payment of the consulting and service fees described in the
New Business Cooperation Agreement, without the Pledgee’s written consent, Pledgor shall
not assign the Pledge or the Equity Interest in Party C. |
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| 8.2 | Pledgee may issue a Notice of Default to Pledgor when exercising the Pledge. |
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| 8.3 | Subject to the provisions of Section 7.3, Pledgee may exercise the right to enforce
the Pledge concurrently with the issuance of the Notice of Default in accordance with
Section 7.2 or at any time after the issuance of the Notice of Default. Once Pledgee
elects to enforce the Pledge, Pledgor shall cease to be entitled to any rights or
interests associated with the Equity Interest. |
| 8.4 | In the event of default, Pledgee is entitled to dispose of the Equity Interest
pledged, to the extent permitted and in accordance with applicable laws, without
obligation to account to Pledgor for proceeds of disposition and Pledgor hereby waives
any rights it may have to demand any such accounting from Pledgee. Likewise, in such
circumstance Pledgor shall have no obligation to Pledgee for any deficiency remaining
after such disposition of the Equity Interest pledged. |
| 8.5 | When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgor and
Party C shall provide necessary assistance to enable Pledgee to enforce the Pledge in
accordance with this Agreement. |
| 9. | Assignment |
| 9.1 | Without Pledgee’s prior written consent, Pledgor shall not have the right to assign
or delegate its rights and obligations under this Agreement. |
| 9.2 | This Agreement shall be binding on Pledgor and its successors and permitted
assigns, and shall be valid with respect to Pledgee and each of its successors and
assigns. |
| 9.3 | At any time, Pledgee may assign any and all of its rights and obligations under the
New Business Cooperation Agreement to its designee(s) (natural/legal persons), in which
case the assigns shall have the rights and obligations of Pledgee under this Agreement,
as if it were the original party to this Agreement. When the Pledgee assigns the rights
and obligations under the New Business Cooperation Agreement, upon Pledgee’s request,
Pledgor shall execute relevant agreements or other documents relating to such assignment. |
| 9.4 | In the event of a change in Pledgee due to an assignment, Pledgor shall, at the
request of Pledgee, execute a new pledge agreement with the new pledgee on the same terms
and conditions as this Agreement. |
| 9.5 | Pledgor shall strictly abide by the provisions of this Agreement and other
contracts jointly or separately executed by the Parties hereto or any of them, including
the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the
obligations hereunder and thereunder, and refrain from any action/omission that may
affect the effectiveness and enforceability thereof. Any remaining rights of Pledgor
with respect to the Equity Interest pledged hereunder shall not be exercised by Pledgor
except in accordance with the written instructions of Pledgee. |
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| 10. | Termination |
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Upon the full payment of the consulting and service fees under the New Business Cooperation
Agreement and upon termination of Party C’s obligations under the New Business Cooperation
Agreement, this Agreement shall be terminated, and Pledgee shall then cancel or terminate this
Agreement as soon as reasonably practicable. |
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| 11. | Handling Fees and Other Expenses |
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All fees and out of pocket expenses relating to this Agreement, including but not limited to
legal costs, costs of production, stamp tax and any other taxes and fees, shall be borne by
Party C. |
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| 12. | Confidentiality |
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The Parties acknowledge that the existence and the terms of this Agreement and any oral or
written information exchanged between the Parties in connection with the preparation and
performance this Agreement are regarded as confidential information. Each Party shall maintain
confidentiality of all such confidential information, and without obtaining the written
consent of the other Party, it shall not disclose any relevant confidential information to any
third parties, except for the information that: (a) is or will be in the public domain (other
than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be
disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or
orders of the court or other government authorities; or (c) is required to be disclosed by any
Party to its shareholders, investors, legal counsels or financial advisors regarding the
transaction contemplated hereunder, provided that such shareholders, investors, legal counsels
or financial advisors shall be bound by the confidentiality obligations similar to those set
forth in this Section. Disclosure of any confidential information by the staff members or
agencies hired by any Party shall be deemed disclosure of such confidential information by
such Party, which Party shall be held liable for breach of this Agreement. This Section shall
survive the termination of this Agreement for any reason. |
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| 13. | Governing Law and Resolution of Disputes |
The execution, effectiveness, construction, performance, amendment and termination of
this Agreement and the resolution of disputes hereunder shall be governed by the laws of
China. |
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In the event of any dispute with respect to the construction and performance of this
Agreement, the Parties shall first resolve the dispute through friendly negotiations. In
the event the Parties fail to reach an agreement on the dispute within 30 days after
either Party’s request to the other Parties for resolution of the dispute through
negotiations, either Party may submit the relevant dispute to the China International
Economic and Trade Arbitration Commission for arbitration, in accordance with its
Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used
in arbitration shall be Chinese. The arbitration award shall be final and binding on all
Parties. |
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Upon the occurrence of any disputes arising from the construction and performance of
this Agreement or during the pending arbitration of any dispute, except for the matters
under dispute, the Parties to this Agreement shall continue to exercise their respective
rights under this Agreement and perform their respective obligations under this
Agreement. |
| 14. | Notices |
All notices and other communications required or permitted to be given pursuant to this
Agreement shall be delivered personally or sent by registered mail, postage prepaid, by
a commercial courier service or by facsimile transmission to the address of such party
set forth below. A confirmation copy of each notice shall also be sent by E-mail. The
dates on which notices shall be deemed to have been effectively given shall be
determined as follows: |
Notices given by personal delivery, by courier service or by registered mail,
postage prepaid, shall be deemed effectively given on the date of delivery or
refusal at the address specified for notices. |
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Notices given by facsimile transmission shall be deemed effectively given on the
date of successful transmission (as evidenced by an automatically generated
confirmation of transmission). |
For the purpose of notices, the addresses of the Parties are as follows: |
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Party A:
|
Ku6 (Beijing) Technology Co., Ltd. | |
Address:
|
Room A402, Great Wall Computer Tower, No. Jia 38, Xueyuan Road, Haidian District, Beijing | |
Attn:
|
Shanyou Li | |
Phone:
|
000-00000000 | |
Facsimile:
|
010- 62368882 | |
Party B:
|
Shanyou Li | |
Phone:
|
000-00000000 | |
Party C:
|
Ku6 (Beijing) Information Technology Co., Ltd. | |
Address:
|
Room A401, Great Wall Computer Tower, No. Jia 38, Xueyuan Road, Haidian District, Beijing | |
Attn.:
|
Shanyou Li | |
Phone:
|
000-00000000 | |
Facsimile:
|
010- 62368882 |
Any Party may at any time change its address for notices by a notice delivered to the
other Parties in accordance with the terms hereof. |
| 15. | Severability |
|
In the event that one or several of the provisions of this Contract are found to be invalid,
illegal or unenforceable in any aspect in accordance with any laws or regulations, the
validity, legality or enforceability of the remaining provisions of this Contract shall not be
affected or compromised in any respect. The Parties shall strive in good faith to replace such
invalid, illegal or unenforceable provisions with effective provisions that accomplish to the
greatest extent permitted by law and the intentions of the Parties, and the economic effect of
such effective provisions shall be as close as possible to the economic effect of those
invalid, illegal or unenforceable provisions. |
| 16. | Attachments |
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The attachments set forth herein shall be an integral part of this Agreement. |
| 17. | Entire Agreement |
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Except for the amendments, supplements or changes in writing executed after the execution of
this Agreement, this Agreement, together with all the exhibits hereto and thereto, shall
constitute and contain the entire agreement and understanding
of the parties with respect to the subject matter hereof and supersedes any and all prior
negotiations, correspondence, agreements, understandings, duties or obligations between the
parties respecting the subject matter hereof. Without limiting the generality of the
foregoing, this Agreement supersedes, in its entirety, the Original Share Pledge Agreements
relating to the matters set forth herein, which shall be null and void and have no force or
effect whatsoever as of the date of this Agreement.
|
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| 18. | Effectiveness |
Any amendments, changes and supplements to this Agreement shall be in writing and shall
become effective upon completion of the governmental filing procedures (if applicable)
after the affixation of the signatures or seals of the Parties. |
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This Agreement is written in Chinese and English in three copies. Pledgor, Pledgee and
Party C shall hold one copy respectively. Each copy of this Agreement shall have equal
validity. In case there is any conflict between the Chinese version and the English
version, the Chinese version shall prevail. |
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IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this
Share Pledge Agreement as of the date first above written.
| Party A: Ku6 (Beijing) Technology Co., Ltd. | ||||
By: |
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| Title: Legal Representative | ||||
| Party B: Shanyou Li | ||||
By:
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|
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| Party C: Ku6 (Beijing) Information Technology Co., Ltd. | ||||
By: |
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| Title: Legal Representative | ||||
Signature Page to Share Pledge Agreement- Li Shanyou
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Attachments:
| 1. | Shareholders’ register of Ku6 (Beijing) Information Technology Co., Ltd. dated as of July 8,
2009; |
|
| 2. | The Capital Contribution Certificate of Ku6 (Beijing) Information Technology Co., Ltd. dated
as of July 8, 2009; |
|
| 3. | Exclusive Business Cooperation Agreement dated as of June 23, 2008. |
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