EXHIBIT 10.10
EQUITY PLEDGE AGREEMENT
between
XXXX XXXXX WU YOU NETWORK INFORMATION TECHNOLOGY (BEIJING) COMPANY LIMITED
and
BEIJING RUN AN INFORMATION CONSULTANCY COMPANY LIMITED
and
XXXX XXX
May 3, 2004
ARTICLE 1 CREATION OF PLEDGE ON THE PLEDGED EQUITIES...................................... 3
ARTICLE 2 COVERAGE OF THE SECURITY........................................................ 4
ARTICLE 3 PLEDGED EQUITIES................................................................ 4
ARTICLE 4 REPRESENTATIONS AND WARRANTIES BY PARTY B....................................... 4
ARTICLE 5 SPECIAL AGREEMENTS.............................................................. 6
ARTICLE 6 DISPOSAL OF THE PLEDGED EQUITIES................................................ 8
ARTICLE 8 TERM AND TERMINATION OF PLEDGE.................................................. 9
ARTICLE 9 TAXES AND FEES.................................................................. 9
ARTICLE 10 LIABILITIES FOR BREACH OF CONTRACT.............................................. 9
ARTICLE 11 FORCE MAJEURE................................................................... 10
ARTICLE 12 NOTICE.......................................................................... 10
ARTICLE 13 DISPUTES RESOLUTIONS............................................................ 11
ARTICLE 14 MODIFICATIONS AND AMENDMENTS.................................................... 11
ARTICLE 15 SEVERABILITY.................................................................... 11
ARTICLE 16 JOINT AND SEVERABLE LIABILITY................................................... 11
ARTICLE 17 APPENDIX........................................................................ 11
ARTICLE 18 MISCELLANEOUS................................................................... 12
APPENDIX I PARTICULARS..................................................................... 14
APPENDIX II SHAREHOLDERS MEETING RESOLUTION................................................. 15
APPENDIX III SHAREHOLDERS LIST FOR XXXX XXXXX SI JIN ADVERTISING (BEIJING) COMPANY LIMITED... 16
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EQUITY PLEDGE AGREEMENT
This EQUITY PLEDGE AGREEMENT (hereinafter referred to as "AGREEMENT") is made
and entered into on the 3rd day of May, 2004 by and between the following
parties:
PLEDGEE: Xxxx Xxxxx Wu You Network Information Technology (Beijing) Company
Limited ("PARTY A"); and
PLEDGOR: Beijing Run An Information Consultancy Company Limited ("RUN AN") and
XXXX Xxx ("XXXXXXX XXXX") (Run An and XXXX Xxx hereinafter referred to as "PARTY
B" collectively.)
WHEREAS:
1. Run An and XXXX Xxx have established Beijing Xxxx Xxxxx Si Jin Advertising
Company Limited ("QIANCHENG ADVERTISING") in Beijing under the laws of the
People's Republic of China on February 12, 1999, in which Run An holds 20%
equity interest and XXXX Xxx holds 80% equity interest;
2. Party A and Qiancheng Advertising entered into a Technical and Consulting
Service Agreement on May 3, 2004 (the "MASTER AGREEMENT"), according to
which, Qiancheng Advertising shall engage Party A as its exclusive
technology provider, and shall pay the relevant service fee to Party A.
The term for the Master Agreement is ten (10) years;
3. In order to secure the performance of the obligations of Qiancheng
Advertising under the Master Agreement, Run An and Xx. XXXX Xxx agree to
pledge to Party A all the equity interest they held in Qiancheng
Advertising, and Party A agrees to accept such pledge.
NOW THEREFORE, with respect to the aforesaid pledge of equity, the Parties to
this Agreement hereby mutually agree through consultations, as follows:
ARTICLE 1 CREATION OF PLEDGE ON THE PLEDGED EQUITIES
As a security for Qiancheng Advertising to perform all of its obligations under
the Master Agreement, Party B agrees to pledge to Party A 100% of the equity of
Qiancheng Advertising held by Party B ("PLEDGED EQUITIES"), and Party A agrees
to accept from Party B such pledge.
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ARTICLE 2 COVERAGE OF THE SECURITY
The pledge provided by Party B as a security shall cover the obligations under
the Master Agreement, penalties, compensations, the expenses for exercise of the
right of pledge, and all other payments payable.
ARTICLE 3 PLEDGED EQUITIES
3.1 Particulars for Party B, Qiancheng Advertising and the Pledged Equities
are set out in Appendix I hereto.
ARTICLE 4 REPRESENTATIONS AND WARRANTIES
4.1 Party A represents and warrants that:
4.1.1 Party A is a company incorporated and registered and duly
existing under the PRC laws;
4.1.2 Party A has the power and authorization to execute and perform
this Agreement. The execution and performance by Party A of this
Agreement are in compliance with the business scope, and the
articles of association or other incorporation documents of Party
A. Party A has obtained all necessary and appropriate approvals
and authorizations to execute and perform this Agreement;
4.1.3 The execution and performance by Party A of this Agreement are
not against any law or regulation, or any government approval,
authorization, notice or other government document, which is
binding upon or affects Party A, nor are such execution and
performance against any agreement concluded by Party A and any
third party, or any covenant made by Party A to any third party;
and
4.1.4 Upon the execution of this Agreement, this Agreement shall
constitute valid obligations of Party A which are enforceable
against Party A.
4.2 Party B represents and warrants that:
4.2.1 Qiancheng Advertising is a limited liability company organized
and registered and duly existing under the PRC laws, and has the
authorization to design and produce advertisement and act as an
agency to represent companies for advertising within China;
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4.2.2 Party B has the power and authorization to execute and perform
this Agreement, and Party B has obtained all necessary and
appropriate approvals and authorizations with respect to the
execution and performance of this Agreement;
4.2.3 Party B has obtained a resolution required for the execution of
this Agreement from the shareholders meeting of Qiancheng
Advertising, which resolution is attached hereto as Appendix II;
4.2.4 The execution and performance by Party B of this Agreement are
not against any law or regulation, government approval,
authorization notice or other government document, which is
binding upon or affects Party B, nor are such execution and
performance against any agreement concluded by Party B and any
third party, or any covenant made by Party B to any third party;
4.2.5 Upon the execution of this Agreement, this Agreement shall
constitute valid obligations of Party B, which are enforceable
against Party B;
4.2.6 Party B has fully paid up all required capital contributions
according to the law in connection with the Pledged Equities and
has obtained the capital verification report issued by a
qualified accounting firm regarding the capital contributions;
4.2.7 As of the execution date of this Agreement, there is no currently
valid mortgage, pledge or any other security arrangements has
been created on the Pledged Equities.
4.2.8 As of the execution date of this Agreement, there is no offer
made by Party B to any third party to transfer the Pledged
Equities hereunder, nor is there any covenant made by Party B
with respect to any offer made by any third party to purchase the
Pledged Equities hereunder;
4.2.9 As of the execution date of this Agreement, there is no agreement
entered into by and between Party B and any third party to
transfer the Pledged Equities hereunder.
4.2.10 As of the execution date of this Agreement, there is no dispute,
litigation, arbitration, administrative procedures or any other
legal procedures in connection with Party B, Qiancheng
Advertising and/or the Pledged Equities, nor is there any
potential dispute, litigation, arbitration, administrative
procedures or any other legal procedures in connection with Party
B, Qiancheng Advertising and/or the Pledged Equities.
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ARTICLE 5 SPECIAL AGREEMENTS
5.1 From the date of this Agreement to the date when Qiancheng Advertising
fully performs its obligations under the Master Agreement (hereinafter
referred to as "PLEDGE TERMINATING DATE"), Party B shall not conduct any
of the following without the prior written consent of Party A:
5.1.1 create any mortgage, pledge or other security arrangements on the
Pledged Equities;
5.1.2 take any actions which may hamper Party A's rights against the
Pledged Equities or any of Party A's rights under this Agreement;
5.1.3 Party B shall not transfer the Pledged Equities or otherwise
dispose of any rights in the Pledged Equities without the written
consent of Party A;
5.1.4 Party B undertakes that, without the prior written consent of
Party A, Party B shall not take any actions or omissions that may
materially affect the assets, business or liabilities of
Qiancheng Advertising.
5.2 To avoid any depreciation of the Pledged Equities due to the operation of
Qiancheng Advertising, before Party B decides on any of the following
matters, the prior written consent shall be obtained from Party A:
5.2.1 profit distributions;
5.2.2 increase or decrease of the registered capital;
5.2.3 issuance of bonds;
5.2.4 merger, split up or any change in the form of the entity;
5.2.5 dissolution and liquidation
5.2.6 any change of the business scope;
5.2.7 amendment of the articles of association;
5.2.8 borrowing from any third party or assumption of any indebtedness
to any third party in the name of Qiancheng Advertising; and
5.2.9 appointment of the member of the board of Qiancheng Advertising..
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Party B further agrees that Party A shall recommend the candidates of the
general manager and other senior executives of Qiancheng Advertising and
Party B shall cause the board of directors to appoint the general manager
and other senior executives only from those candidates recommended by
Party A.
5.3 Party B hereby irrevocably grants Party A and/or the company or individual
designated by Party A the option to purchase Party B's equity in Qiancheng
Advertising ("OPTION") as follows:
5.3.1 To the extend permitted under PRC laws, Party A and/or the
company or individual designated by Party A shall exercise the
Option, in whole or in part, at any time during the term of this
Agreement to acquire from Party B and hold the equity of
Qiancheng Advertising. Upon the full exercise of the Option,
Party A and/or the company or individual designated by Party A
will acquire from Party B and hold 100% of the equity. In the
event that the then applicable PRC laws prohibit Party A and/or
the company or individual designated by Party A from fully
exercising the Option, Party A and/or the company or individual
designated by Party A shall exercise the Option to the fullest
extent permitted by applicable law. The Option price shall be the
lowest price permitted under the applicable laws.
5.3.2 Upon the exercise of the Option by Party A and/or the company or
individual designated by Party A, Party B is obligated to
transfer the relevant equity to Party A and/or the company or
individual designated by Party A.
5.3.3 Party B hereof agrees that, without the written consent of Party
A, it will not grant a third party the same or similar option.
5.3.4 Party A and/or the company or individual designated by Party A
shall exercise the Option in a manner permitted by law at any
time after the date of this Agreement. To the extent permitted
under PRC laws, Party A and/or the company or individual
designated by Party A may exercise the Option, in whole or in
part, and at one time or otherwise purchase the equity that it
has the right to purchase under this Agreement.
5.3.5 When Party A and/or the company or individual designated by Party
A decides to exercise the Option, it shall issue Party B an
Option Notice with respect to the exercise of such Option. Once
the Option Notice is issued, Party B shall promptly perform its
obligation to transfer such equity to Party A and/or the company
or individual designated by Party A.
5.3.6 Party B shall, within 60 days following the issuance of the
Option Notice
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by Party A and/or the company or individual designated by Party A
to Party B, complete all procedures and formalities necessary for
Party A and/or the company or individual designated by Party A to
acquire the relevant equity and become the legal holder of such
equity .
ARTICLE 6 DISPOSAL OF THE PLEDGED EQUITIES
6.1 In case of occurrence of any one or several of the following events during
the term of the pledge hereunder, Party A shall have the right to dispose
of the Pledged Equities under this Agreement in accordance with the law
and this Agreement:
6.1.1 Qiancheng Advertising is in default under the Master Agreement;
6.1.2 Qiancheng Advertising breaches any provisions contained herein
6.1.3 Pledgor breaches any representation, warranty or covenant it made
under Article 4 and Article 5 hereof;
6.1.4 Qiancheng Advertising suspends its operations or is dissolved, or
is ordered to suspend its operations or to dissolve, or is
declared insolvent;
6.1.5 Qiancheng Advertising is involved in any dispute, litigation,
arbitration, administrative procedures or any other legal
procedures which, in the opinion of Party A, are capable of
effecting the performance of the Master Agreement and/or this
Agreement; or
6.1.6 other occurrences stipulated by relevant laws and regulations.
6.2 Upon the occurrence of any one or several of the above events, and subject
to the relevant laws and regulations, Party A shall have the right to
dispose of the Pledged Equities in any one or several of the following
manners:
6.2.1 convert the Pledged Equities into value;
6.2.2 auction or sale of the Pledged Equities;
6.2.3 in other manners permitted by the relevant laws and regulations.
6.3 The proceeds received by Party A by disposing of the Pledged Equities
hereunder according to the foregoing provisions shall be used in the
following priority:
6.3.1 to pay for all necessary taxes and fees incurred due to the
disposal of the Pledged Equities;
6.3.2 to pay for amounts payable by Qiancheng Advertising to Party A
under
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the Master Agreement within the coverage set forth in Article 2
hereof, and amounts payable to Party A due to breach of this
Agreement by Party B; and
6.3.3 the remaining proceeds after all the above payments have been
made shall be refunded to Party B.
6.4 At the time of the disposal of the Pledged Equities by Party A and upon
request of Party A, Party B shall provide all relevant documents requested
by Party A and Party A's agents, complete and assist Party A in completing
the procedures for all approvals of and registration with the government
authority in connection with the disposal of the Pledged Equities.
ARTICLE 7 REGISTRATIONS
At the same time of the execution of this Agreement, the Pledged Equities under
this Agreement shall be recorded on the shareholders list of the Qiancheng
Advertising as set out in Appendix III hereto.
ARTICLE 8 TERM AND TERMINATION OF PLEDGE
8.1 The Pledge Term shall commence on the effective date of this Agreement,
ending on the day when Qiancheng Advertising completes the performance of
all of its obligations under the Master Agreement.
8.2 The pledge of the Pledged Equities shall be automatically terminated upon
the expiration of the aforesaid Pledge Term. The termination of the pledge
shall be recorded on the shareholders list of Qiancheng Advertising.
ARTICLE 9 TAXES AND FEES
All taxes and fees incurred by the Parties hereto due to the execution and
performance of this Agreement shall be borne by the Parties in accordance with
the relevant provisions of PRC laws.
ARTICLE 10 LIABILITIES FOR BREACH OF CONTRACT
10.1 In the event of any loss suffered by one Party hereto due to any breach of
this Agreement by the other Party, such defaulting Party shall be liable
pursuant to
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the law for all losses thus caused to the non-defaulting party.
10.2 Any allowance, grace period and deferred exercise of the rights entitled
under this Agreement granted by one Party in connection with the other
Party's default or delay shall not be deemed as a waiver by such Party of
any of its rights.
ARTICLE 11 FORCE MAJEURE
11.1 For the purpose of this Agreement, a force majeure event shall refer to
government act, fire, explosion, typhoon, flood, earthquake, tide,
lightning or war, or any event which is unforeseeable by and beyond the
control of any Party (hereinafter referred to as a "FORCE MAJEURE EVENT").
If any Force Majeure Event occurs to any Party hereto, such Party shall
notify the other Party in a timely manner.
11.2 In the event of any Force Majeure Event, no Party shall be held liable for
any damage, loss or increased cost caused by its failure of or delay in
the performance this Agreement due to such Force Majeure Event, and such
failure of or delay in the performance of this Agreement due to any Force
Majeure Event shall not be deemed as a breach of this Agreement. The Party
affected by a Force Majeure Event shall take appropriate measures to off
set or minimize the effects of such Force Majeure Event, and shall exert
its best efforts to perform any of its obligation the performance of which
has been prevented or delayed due to such Force Majeure Event. The Parties
hereto agree that, upon termination of such Force Majeure Event, they
shall exert their best efforts to perform this Agreement.
ARTICLE 12 NOTICE
All notices hereunder shall be either delivered by personal delivery or via
facsimile or by registered mail. A notice, if sent by registered mail, shall be
deemed to have been served on the date of the receipt as specified on the return
receipt of the registered mail, or if sent by personal delivery or via
facsimile, shall be deemed to have been served on the date immediately following
the date on which such notice is sent. If a notice is sent via facsimile, the
original of such notice shall be sent by registered mail or by personal delivery
immediately after the transmission.
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ARTICLE 13 DISPUTES RESOLUTIONS
13.1 If any dispute arises from the interpretation and performance of this
Agreement, the Parties hereto shall first settle such dispute through
friendly consultations. Should such dispute fail to be settled through the
consultations, either Party may submit such dispute to China International
Economic and Trade Arbitration Commission ("CIETAC") for arbitration. The
arbitration shall be conducted in Beijing according to the then applicable
arbitration rules of CIETAC. The arbitration award shall be final and
binding upon both Parties.
13.2 In the event of any dispute arising out of the interpretation and
performance hereof or if any such dispute is under arbitration, each Party
hereto shall continue to exercise its other rights and perform its other
obligations under this Agreement not subject to the disputes.
ARTICLE 14 MODIFICATIONS AND AMENDMENTS
This Agreement may be modified or supplemented by written agreement between the
Parties hereof. Any amendment agreement and/or supplementary agreement concluded
between the Parties hereto regarding this Agreement shall be an integral part of
this Agreement and shall have the same force.
ARTICLE 15 SEVERABILITY
The invalidity of any provisions under this Agreement shall not affect the
validity of other provisions hereunder.
ARTICLE 16 JOINT AND SEVERABLE LIABILITY
Run An and XXXX Xxx shall be liable, jointly and severally, for the obligations
under this Agreement.
ARTICLE 17 APPENDIX
Appendixes attached to this Agreement shall constitute an integral part of this
Agreement and shall have the same force.
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ARTICLE 18 MISCELLANEOUS
The Parties have caused their respective duly authorized representatives to
execute this Agreement and affixed their respective company seals hereto on the
day and year as first written above. This Agreement shall become effective on
the date when the pledge has been recorded on the shareholders list of Qiancheng
Advertising. This Agreement shall be written in three (3) counterparts, each of
Party A and Party B shall hold one counterpart. All counterparts shall have the
same force.
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PARTY A (PLEDGEE): XXXX XXXXX WU YOU NETWORK INFORMATION TECHNOLOGY (BEIJING)
COMPANY LIMITED
Authorized representative: ________
PLEDGOR: BEIJING RUN AN INFORMATION CONSULTANCY COMPANY LIMITED
Authorized representative: ________
PLEDGOR: XXXX XXX
_______________________________
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APPENDIX I PARTICULARS
Party B:
Beijing Run An Information Consultancy Company Limited
Establishment Date: January 29, 1997
Registered address: Xxxx X, 00/X, Xxxxx Merchant Tower, 118 Xxxx Xxx Road, Xxxx
Xxxx District, Beijing
Business Scope: strategic design of corporate identity, market investigation and
analysis and economic information consulting services
Registered capital: RMB1,000,000.00
XXXX Xxx:
Nationality: China
Address: Apt.#2003, Xxxxxxxx 00 Xxxxxxxxxxxxx X Xxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx
Telephone: 0000-00000000000
Qiancheng Advertising:
Enterprise Name: Beijing Xxxx Xxxxx Si Jin Advertising Company Limited
Establishment Date: February 12, 1999
Registered Address: Premises of the Government of Yujiawu Hui Nationality
Township, Tongzhou District, Beijing
Registered Capital: RMB100,000.00
Shareholders: Run An and XXXX Xxx, where Run An holds 20% equity of Qiancheng
Advertising, and XXXX Xxx holds the other 80% equity of Qiancheng Advertising.
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APPENDIX II RESOLUTION OF SHAREHOLDERS MEETING OF BEIJING XXXX XXXXX SI JIN
ADVERTISING COMPANY LIMITED
The shareholders meeting of Beijing Xxxx Xxxxx Si Jin Advertising Company
Limited (the "Company") made this resolution with unanimous vote with respect to
the Equity Pledge Agreement entered into by and between the shareholders of the
Company and Xxxx Xxxxx Wu You Network Information Technology (Beijing) Company
Limited on May 3, 2004. The shareholders meeting adopts and agrees the
following:
Resolved and approved that the shareholders of the Company pledge 100% equity of
the Company to Xxxx Xxxxx Wu You Network Information Technology (Beijing)
Company Limited.
This Shareholders Meeting Resolution is executed by and submitted to the
following shareholders on May 3, 2004:
SHAREHOLDER: BEIJING RUN AN INFORMATION CONSULTANCY COMPANY LIMITED
Authorized Representative
_______________________________
SHAREHOLDER: XXXX XXX
_______________________________
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APPENDIX III SHAREHOLDERS LIST FOR XXXX XXXXX SI JIN ADVERTISING (BEIJING)
COMPANY LIMITED
PROPORTIONATE
SHAREHOLDER CONTRIBUTION PARTICULARS OF SHAREHOLDER SHAREHOLDER PLEDGE REGISTRATION
----------- ------------- ------------------------------------------------- -------------------------------------------------
XXXX Xxx 80% Nationality: China In accordance with the Equity Pledge Agreement
entered into by and between Beijing Run An
Address: Apt.#2003, Building 10 Information Consultancy Company Limited. and
Fangchengyuan I Area, Fengtai District, Beijing XXXX Xxx and Xxxx Xxxxx Wu You Network
Information Technology (Beijing) Company
Telephone: 0000-00000000000 Limited. dated May 3, 2004, XXXX Xxx has pledged
all of his equity in Qiancheng Advertising to
Xxxx Xxxxx Wu You Network Information Technology
(Beijing) Company Limited. The registration date
for the equity pledge shall be the execution date
of such Equity Pledge Agreement.
Beijing Run 20% Establishment Date: January 29, 1997 In accordance with the Equity Pledge Agreement
An entered into by and between Beijing Run An
Information Registered address: Xxxx X, 00/X, Xxxxx Merchant Information Consultancy Company Limited and FENG
Consulting Tower, 118 Xxxx Xxx Road, Xxxx Xxxx District, Lei and Xxxx Xxxxx Wu You Network Information
Company Beijing Technology (Beijing) Company Limited. dated May
Limited 3, 2004, Beijing Run An Information Consultancy
Business Scope: provide consulting services to Company Limited has pledged all of its equity in
entities, provide marketing analysis services Qiancheng Advertising to Xxxx Xxxxx Wu You
and information consulting services Network Information Technology (Beijing) Company
Limited The registration date for the equity
pledge shall be the execution date of such
Equity Pledge Agreement.
BEIJING XXXX XXXXX SI JIN ADVERTISING COMPANY LIMITED (SEAL)
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LEGAL REPRESENTATIVE: ___________________________
SHAREHOLDER: BEIJING RUN AN INFORMATION CONSULTANCY COMPANY LIMITED
________________________________
SHAREHOLDER: XXXX XXX
________________________________
DATE: MAY 3, 2004
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