EQUITY PLEDGE AGREEMENT
Exhibit
10.4 Equity
Pledge Agreement, Dated as of December 23, 2007.
This
Equity Pledge Agreement (hereinafter this “Agreement”) is dated
December 23, 2007, and is entered into in Beijing, China between Orient Come
Holdings Limited, a company incorporated under the laws of the British Virgin
Islands, located at Xxxx 000, Xxxxx X0, Xxxxxxxx Xxxxx, Xx. 0 XxxxxXx Xxxxxx,
Xxxxxxx, Xxxxx 100738 (“Pledgee”), and each
of the shareholders of Party B listed on the signature pages hereto (each "Pledgor" and
collectively, the “Pledgors”), and
Beijing K's Media Advertising Ltd. Co., a limited liability company organized
under the laws of the PRC (“Party B” or “Media”),
with a
registered address at 211 Xx. 00 XxxXx Xxxxxx, XxxXx Economic Xxxx, Xxxx Xxx
Xxxxxxxx, Xxxxxxx, Xxxxx.
RECITALS
1.
The Pledgee is a corporation incorporated under the laws of the British Virgin
Islands that has expertise in the outdoor media business.
2.
The Pledgors are each shareholders of Media. The Pledgors collectively own
100%
of the outstanding equity interests of Media.
3.
Pledgee and Media have executed a Consulting Services Agreement (hereinafter
“Business Cooperation
Agreement” or “Services
Agreement”)
concurrently herewith. Based on this Agreement, Media shall pay technical
consulting and service fees (hereinafter the “Consulting Services
Fees” or “Services
Fees”) to
Pledgee for offering consulting and related services.
4.
In order to ensure that Media will perform its obligations under the Consulting
Services Agreement, and in order to provide an additional mechanism for the
Pledgee to enforce its rights to collect the Consulting Services Fees from
Media, the Pledgors agree to pledge all their equity interest in Media as
security for the performance of the obligations of Media under the Consulting
Services Agreement and the payment of Consulting Services Fees under such
agreement.
NOW
THEREFORE, the Pledgee,
Media and the Pledgors through mutual negotiations hereby enter into this
Agreement based upon the following terms:
1. Definitions
and
Interpretation. Unless otherwise provided in this Agreement, the
following terms shall have the following meanings:
1.1 "Pledge”
refers
to the
full content of Section 2 hereunder.
1.2 “Equity
Interest”
refers to all the equity interest in Media legally held by the Pledgors.
1.3 “Term
of Pledge”
refers to the period provided for under Section 3.2 hereunder.
1.4 “Event
of Default”
refers to any event in accordance with Section 7.1 hereunder.
1.5 “Notice
of Default”
refers to the notice of default issued by the Pledgee in accordance
with this
Agreement.
2. Pledge.
The Pledgors
agree to pledge their equity interest in Media to the Pledgee (“Pledged Collateral”)
as a security for the obligations of Media under the Consulting Services
Agreement. Pledge under this Agreement refers to the rights owned by the
Pledgee, who shall be entitled to a priority in receiving payment by the
evaluation or proceeds from the auction or sale of the equity interest pledged
by the Pledgors to the Pledgee.
3. Term
of
Pledge.
3.1 The
Pledge shall take
effect as of the date when the Pledge of the equity interest under this
Agreement is recorded in the Register of Shareholders of Media. The term of
the
Pledge shall last until all the obligations under the Business Cooperation
Agreement have been satisfied by Media in full to the sole satisfaction of
Pledgee.
3.2 During
the term of the
Pledge, the Pledgee shall be entitled in accordance with PRC laws to vote,
control, sell, or dispose of the pledged assets in accordance with this
Agreement in the event that Pledgors do not perform their obligation under
the
Consulting Services Agreement and Media fails to pay the Consulting Services
Fees in accordance with the Consulting Services Agreement.
4. Physical
Possession of
Documents.
4.1 During
the term of Pledge
under this Agreement, the Pledgors shall deliver the physical possession of
their certificates representing shares of capital stock of Media (“Share Certificates”)
to the Pledgee.
4.2 The
Pledgee shall be
entitled to collect any and all dividends for declared or paid in connection
with the equity interest.
4.3 The
Pledge under this
Agreement shall be recorded in the Register of Shareholders of Media. The
Pledgors shall, within ten (10) days after the date of this Agreement, process
the registration procedures with Beijing Administration for Industry and
Commerce concerning the Pledge.
5. Representation
and
Warranties of Pledgors.
5.1 The
Pledgors are the legal
owners of the equity interest pledged.
5.2 The
Pledgors have not
pledged the equity interest to any other party, and or the equity interest
is
not encumbered to any other person except for the Pledgee.
6. Covenants
of
Pledgors.
6.1 During
the effective term
of this Agreement, the Pledgors promise to the Pledgee for its benefit that
the
Pledgors shall:
6.1.1 Not
transfer or assign the
equity interest, create or permit to create any pledges which may have an
adverse effect on the rights or benefits of the Pledgee without prior written
consent from the Pledgee.
6.1.2 Comply
with and implement
laws and regulations with respect to the pledge of rights; present to the
Pledgee the notices, orders or suggestions with respect to the Pledge issued
or
made by the competent authority within five (5) days upon receiving such
notices, orders or suggestions; and comply with such notices, orders or
suggestions; or object to the foregoing matters at the reasonable request of
the
Pledgee or with consent from the Pledgee.
6.1.3 Timely
notify the Pledgee
of any events or any received notices, which may affect the Pledgor's equity
interest or any part of its right, and any events or any received notices,
which
may change the Pledgor's any warranty and obligation under this Agreement or
affect the Pledgor's performance of its obligations under this Agreement.
6.2 The
Pledgors agree that the
Pledgee's right to the Pledge obtained from this Agreement shall not be
suspended or inhibited by any legal procedure launched by the Pledgor or any
successors of the Pledgor or any person authorized by the Pledgor or any such
other person.
6.3 The
Pledgors promise to the
Pledgee that in order to protect or perfect the security for the payment of
the
Services Fees, the Pledgors shall execute in good faith and cause other parties
who have interests in the Pledge to execute all the title certificates,
contracts, and perform actions and cause other parties who have interests to
take action, as required by the Pledgee; and make access to exercise the rights
and authorization vested in the Pledgee under this Agreement.
6.4 The
Pledgors promise to the
Pledgee that they will execute all amendment documents (if applicable and
necessary) in connection with any registration of the Pledge or any transfer
of
the Share Certificates with the Pledgee or its designated person (natural person
or a legal entity), and provide the notice, order and decision to the Pledgee
as
necessary, within a reasonable amount of time upon request.
6.5 The
Pledgors promise to the
Pledgee that they will comply with and perform all the guarantees, covenants,
warranties, representations and conditions for the benefits of the Pledgee.
The
Pledgors shall compensate all the losses suffered by the Pledgee as a result
of
the Pledgors failing perform or fully perform their guarantees, covenants,
warranties, representations and conditions.
7. Events
Of
Default.
7.1 The
following events shall
be regarded as the events of default:
7.1.1 This
Agreement is deemed
illegal by a governing authority in the PRC, or the Pledgor is not capable
of
continuing to perform the obligations herein due to any reason except force
majeure;
7.1.2 Media
fails to make full
payment of the Services Fees as scheduled under the Service Agreement;
7.1.3 A
Pledgor makes any
materially false, inaccurate, incomplete or misleading representations or
warranties under Section 5 herein, and/or any Pledgor breaches any warranties
under Section 5 herein;
7.1.4 A
Pledgor breaches the
covenants under Section 6 herein;
7.1.5 A
Pledgor breaches the term
or condition herein;
7.1.6 A
Pledgor waives the
pledged equity interest or transfers or assigns the pledged equity interest
without prior written consent of the Pledgee;
7.1.7 Media
is incapable of
repaying in general debt or other debt;
7.1.8 The
property of a Pledgor
is adversely affected causing the Pledgee to believe that the capability of
any
Pledgors to perform its obligations herein is adversely affected;
7.1.9 The
successors or agents of
Media are only able to perform a portion of or refuse to perform the payment
obligations under the Services Agreement;
7.1.10 The
breach of the other
terms by action or inaction under this Agreement by a Pledgor.
7.2 The
Pledgors shall
immediately give a written notice to the Pledgee if a Pledgor is aware of or
discovers that any event under Section 7.1 herein or any event that may result
in the foregoing events has occurred or is likely to occur.
7.3 Unless
the event of default
under Section 7.1 herein has been resolved to the Pledgee's sole satisfaction,
the Pledgee, at any time when the event of default occurs or thereafter, may
give a written notice of default to the Pledgors and require the Pledgors to
immediately make full payment of the outstanding Service Fees under the Service
Agreement and other payables or exercise other rights in accordance with Section
8 herein.
8. Exercise
of
Remedies.
8.1 Authorized
Action by Secured
Party. The
Pledgors hereby irrevocably appoint Pledgee the attorney-in-fact of the Pledgors
for the purpose of carrying out the security provisions of this Agreement and
taking any action and executing any instrument that the Pledgee may deem
necessary or advisable to accomplish the purposes of this Agreement in
accordance with applicable law. If an event of default occurs, or is continuing,
Pledgee shall have the right to exercise the following rights and powers:
(a) Collect
by legal
proceedings or otherwise and endorse and/or receive all payments, proceeds
and
other sums and property now or hereafter payable on or on account of the Pledged
Collateral;
(b) Enter
into any extension,
reorganization, deposit, merger, consolidation or other agreement pertaining
to,
or deposit, surrender, accept, hold or apply other property in exchange for
the
Pledged Collateral;
(c) Transfer
the Pledged
Collateral to its own or its nominee's name;
(d) Make
any compromise or
settlement, and take any action it deems advisable, with respect to the Pledged
Collateral;
(e) Notify
any obligor with
respect to any Pledged Collateral to make payment directly to the
Pledgee;
(f) All
rights of the Pledgors
to exercise the voting and other consensual rights it would otherwise be
entitled to exercise without any action or the giving of any notice shall cease,
and all such rights shall thereupon become vested in the Pledgee;
(g) All
rights of the Pledgors
to receive distributions with respect to the Pledged Collateral which it would
otherwise be authorized to receive and retain shall cease and all such rights
shall thereupon become vested in the Pledgee; and
(h) The
Pledgors shall execute
and deliver to the Pledgee appropriate instruments as the Pledgee may request
in
order to permit the Pledgee to exercise the voting and other rights, which
it
may be entitled to exercise and to receive all distributions which it may be
entitled to receive.
The
Pledgors hereby grant to Pledgee an exclusive, irrevocable power of attorney,
with full power and authority in the place and stead of the Pledgors to take
all
such action permitted under this Section 8.1. Such
power of attorney shall be effective, automatically and without the necessity
of
any action (including any transfer of any Pledged Collateral) by any person,
upon the occurrence and continuance of an event of default. Pledgee shall not
have any duty to exercise any such right or to preserve the same and shall
not
be liable for any failure to do so or for any delay in doing so.
8.2 Events
of default;
Remedies. Upon the occurrence of an event of default, Pledgee may,
without notice to or demand on the Pledgors and in addition to all rights and
remedies available to Pledgee, at law, in equity or otherwise, do any of the
following:
(a) Require
the Pledgors to
immediately pay all outstanding unpaid amounts due under the Services
Agreement;
(b) Foreclose
or otherwise
enforce Pledgee's security interest in any manner permitted by law or provided
for in this Agreement;
(c) Sell
or transfer the rights
or otherwise dispose of any Pledged Collateral at one or more public or private
sales at Pledgee's place of business or any other place or places, whether
or
not such Pledged Collateral is present at the place of sale, for cash or credit
or future delivery, on such terms and in such manner as Pledgee may
determine;
(d) Terminate
this Agreement
pursuant to Section 11.
(e) Personally,
or by agents or
attorneys, immediately take possession of the Pledged Collateral or any part
thereof, from the Pledgors or any other person who then has possession of any
part thereof with or without notice or process of law;
(f) Demand,
xxx for, collect or
receive any money or property at any time payable or receivable in respect
of
the Pledged Collateral;
(g) Sell
or otherwise
liquidate, or direct the Pledgors to sell, assign, transfer or otherwise
liquidate the Pledged Collateral or any part thereof, and take possession of
the
proceeds of any such sale or liquidation;
(h) Exercise
any and all rights
as beneficial and legal owner of the Pledged Collateral, including, without
limitation, perfecting assignment of and exercising any and all voting,
consensual and other rights and powers with respect to any Pledged
Collateral;
(i) Exercise
any and all rights
as beneficial and legal owner of the Pledged Collateral, including, without
limitation, perfecting assignment of and exercising any and all voting,
consensual and other rights and powers with respect to any Pledged Collateral;
and
(j) All
the rights and remedies
of a secured party upon default under applicable law.
8.3 The
Pledgee shall give a
notice of default to the Pledgors when the Pledgee exercises its remedies under
this Agreement.
8.4 Subject
to Section 7.3, the
Pledgee may exercise its remedies under this Agreement at any time after the
Pledgee gives a notice of default in accordance with Section 7.3 or
thereafter.
8.5 The
Pledgee is entitled to
priority in receiving payment by the evaluation or proceeds from the auction
or
sale of whole or part of the equity interest pledged herein in accordance with
legal procedure until the unpaid Services Fees under the Services Agreement
are
repaid.
8.6 The
Pledgor shall not
hinder the Pledgee from exercising its rights in accordance with this Agreement
and shall give necessary assistance so that the Pledgee may exercise its rights
in full.
9. Assignment.
9.1 The
Pledgors shall not
donate or transfer rights and obligations herein without prior written consent
from the Pledgee.
9.2 This
Agreement shall be
binding upon each of the Pledgors and his, her or its successors and be binding
on the Pledgee and its successor and assignee.
9.3 The
Pledgee may transfer or
assign any of all of its rights and obligations under the Service Agreement
to
any individual specified by it (natural person or legal entity) at any time.
In
this case, the assignee shall enjoy and undertake the same rights and
obligations herein of the Pledgee as if the assignee is a party hereto. When
the
Pledgee transfers or assigns the rights and obligations under the Service
Agreement, and such transfer shall only be subject to a written notice serviced
to Pledgors, and at the request of the Pledgee, the Pledgors shall execute
the
relevant agreements and/or documents with respect to such transfer or
assignment.
9.4 In
the event of a change in
control of the Pledgee resulting in the transfer or assignment of this
Agreement, the successor parties to the pledge shall execute a new pledge
agreement.
10. Formalities,
Fees and Other
Charges.
10.1 The
Pledgors shall be
responsible for all the fees and actual expenses in relation to this Agreement
including but not limited to legal fees, cost of production, stamp tax and
any
other taxes and charges. If the Pledgee pays the relevant taxes in accordance
with applicable law, the Pledgors shall fully indemnify the Pledgee such taxes
paid by the Pledgee.
10.2 The
Pledgors shall be
responsible for all the fees (including but not limited to any taxes,
formalities fees, management fees, litigation fees, attorney's fees, and various
insurance premiums in connection with disposition of Pledge) incurred by the
Pledgors for the reason that the Pledgors fail to pay any payable taxes, fees
or
charges for other reasons which cause the Pledgee to recourse by any means
or
ways.
11. Force
Majeure.
11.1 “Force
Majeure,” shall
include but not be limited to acts of governments, acts of nature, fire,
explosion, typhoon, flood, earthquake, tide, lightning, war, refers to any
unforeseen events beyond the party's reasonable control and cannot be prevented
with reasonable care. However, any shortage of credit, capital or finance shall
not be regarded as an event beyond a Party's reasonable control. The affected
party by Force Majeure shall notify the other party of such event resulting
in
exemption promptly.
11.2 In
the event that the
affected party is delayed in or prevented from performing its obligations under
this Agreement by Force Majeure, only within the scope of such delay or
prevention, the affected party will not be responsible for any damage by reason
of such a failure or delay of performance. The affected party shall take
appropriate means to minimize or remove the effects of Force Majeure and attempt
to resume performance of the obligations delayed or prevented by the event
of
Force Majeure. After occurrence of an event of Force Majeure, when such event
or
condition ceases to exist, both parties agree to resume the performance of
this
Agreement with their best efforts.
12. Confidentiality.
The
parties of this Agreement acknowledge and make sure that all the oral and
written materials exchanged relating to this contract are confidential. All
the
parties have to keep them confidential and can not disclose them to any other
third party without other parties' prior written approval, unless: (a) the
public know and will know the materials (not because of the disclosure by any
contractual party); (b) the disclosed materials are required by laws or stock
exchange rules; or(c) materials relating to this transaction are disclosed
to
parties' legal consultants or financial advisors, however, who have to keep
them
confidential as well. Disclosure of confidential information by Employees or
hired institutions of the parties is deemed as the act by the parties,
therefore, subjecting them to liability.
13. Dispute
Resolution.
13.1 This
Agreement shall be
governed by and construed in accordance with the PRC law.
13.2 The
parties shall strive to
settle any dispute arising from the interpretation or performance, or in
connection with this Agreement through friendly consultation. In case no
settlement can be reached through consultation, each party can submit such
matter to China International Economic and Trade Arbitration Commission
(“CIETAC”) for arbitration. The arbitration shall follow the current rules of
CIETAC, and the arbitration proceedings shall be conducted in Chinese and shall
take place in Beijing. Any resulting arbitration award shall be final and
binding upon the parties.
14. Notices.
Any notice
which is given by the parties hereto for the purpose of performing the rights
and obligations hereunder shall be in writing. Where such notice is delivered
personally, the time of notice is the time when such notice actually reaches
the
addressee; where such notice is transmitted by facsimile, the notice time is
the
time when such notice is transmitted. If such notice does not reach the
addressee on business date or reaches the addressee after the business time,
the
next business day following such day is the date of notice. The delivery place
is the address first written above of the parties hereto or the address advised
in writing including via facsimile from time to time.
15. Entire
Contract. All
Parties agree that this Agreement constitute the entire agreement of the Parties
with respect to the subject matter therein upon its effectiveness and supersedes
and replaces all prior oral and/or written agreements and understandings
relating to this Agreement.
16. Severability.
Any
provision of this Agreement which is invalid or unenforceable because of
inconsistent with the relevant laws shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability, without
affecting in any way the remaining provisions hereof.
17. Appendices.
The
appendices to this Agreement are entire and integral part of this
Agreement.
18. Amendment
or
Supplement.
18.1 Parties
may amend and
supply this Agreement with a written agreement, provided that such amendment
shall be duly executed and signed by the Pledgee, Media, and holders of a
majority of the shares of Media held by the Pledgors, and such amendment shall
thereupon become a part of this Agreement and shall have the same legal effect
as this Agreement.
18.2 This
Agreement and any
amendments, modification, supplements, additions or changes hereto shall be
in
writing and come into effect upon being executed and sealed by the parties
hereto.
19. Counterparts.
This
Agreement may be executed by the Parties in counterparts, each Party holds
one
counterpart, and each original has the same legal effect.
20. Effectiveness
and
Term. The Agreement is effective as of the date first set forth above and
from the date when the Pledge is recorded on the Register of Shareholders of
Media.
SIGNATURE
PAGE
IN
WITNESS WHEREOF, each party
hereto has caused this Agreement duly executed by itself or a duly authorized
representative on its behalf as of the date first written above.
| PLEDGEE: | Orient Come Holdings Limited | ||
|
|
By:
|
/s/ Xx Xxxx | |
| Name Xx Xxxx | |||
| Title President | |||
| PARTY B: | Beijing K's Media Advertising Ltd. Co. | ||
|
|
By:
|
/s/ Kun (Xxxxx) Wei | |
| Name Kun (Xxxxx) Wei | |||
| Title President | |||
PLEDGORS:
SHAREHOLDERS
OF PARTY B:
/s/
Kun (Xxxxx)
Wei
Name:
Kun (Xxxxx)
Wei
(PRC
ID
Card
No.:
06825970
)
|
Shares
of Beijing K's Media Advertising Ltd. Co. owned by Kun (Xxxxx) Wei:
50%
|
/s/Xxxx
Xx
Name:
Xxxx
Xx
(PRC
ID
Card No.:11010219670607195)
|
Shares
of Beijing K's Media Advertising Ltd. Co. owned by Xxxx Xx:
50%
|
Appendix
I
RESOLUTIONS
OF THE GENERAL SHAREHOLDERS’
MEETING
OF BEIJING K'S MEDIA ADVERTISING LTD. CO.
WHEREAS,
that certain significant shareholders of Beijing K's Media Advertising Ltd.
Co.
have agreed to pledge their shares of the company under an Equity Pledge
Agreement dated December 23, 2007; and
WHEREAS,
it is in the best interest of the Company for the shareholders to enter into
such Equity Pledge Agreement.
RESOLVED,
that the pledge of shares held by the shareholders of the company under the
Equity Pledge Agreement is hereby approved.
This
resolution was executed and submitted on December 23, 2007 by the undersigned
shareholders:
SHAREHOLDERS:
Signature:
Name:
Address:
ID
Card
No.:
Telephone:
Facsimile:
