Document:

exhibit_10-1.htm

    
Exhibit
      10.1    Escrow
      Agreement, dated as of December 23, 2007. 

    

       

      ESCROW
        AGREEMENT

      THIS
        ESCROW AGREEMENT (the “Escrow Agreement”) is made as of December 23, 2007, by
        and between Kinglake Resources, Inc. (the "KGLK" or "Party A"), a Nevada
        corporation; Orient Come Holdings Limited, a British Virgin Islands company
        ("Party A Subsidiary" or "Orient"); and the Beijing K's Media Advertising
        Ltd.
        Co., a limited liability company organized under the laws of the PRC ("Chinese
        Advertisement Company" or "Party B"); the persons listed on Schedule A hereto
        ("Party B Shareholders"); and Arnstein & Lehr LLP, a law firm ("Escrow
        Agent) (each of the parties hereto is a "Party" and, collectively, they are
        the
        "Parties").

      WITNESSETH

      WHEREAS,
        on or about December 23, 2007, Party A Subsidiary and KGLK entered into an
        Acquisition Agreement (the "Acquisition Agreement");

      WHEREAS,
        on or about December 23, 2007, Party A Subsidiary, KGLK and Party B and the
        Party B Shareholders entered into a Share Exchange Agreement (the "Share
        Exchange Agreement);

      WHEREAS,
        on or about December 23, 2007, Party A Subsidiary and Party B entered into
        a
        Business Cooperation Agreement (the "Business Cooperation"); and

      WHEREAS,
        as contemplated in the Share Exchange Agreement and Business Cooperation
        Agreement, Party A Subsidiary, KGLK, Party B and the Party B Shareholders
        intend
        that this Escrow Agreement shall delineate the escrow arrangements between
        Party
        A and the Party B Shareholders.

      NOW,
        THEREFORE, in consideration of the mutual covenants contained herein and
        other
        good and valuable consideration, the receipt and sufficiency of which is
        hereby
        acknowledged, Party A and Party B hereby agree as follows:

      1. Pursuant
        to the provisions
        of the Share Exchange Agreement, the 10,500,000 new issued, but not outstanding
        restricted common shares of KGLK (the "Escrowed Shares") will be deposited
        or
        held in an escrow account with the Escrow Agent.

      2. The
        10,500,000 new
        restricted common shares of KGLK will be distributed to Party B Shareholders
        according to the following terms and conditions:

      (a) Not
        later than 90 days
        after the end of the first anniversary of this Agreement, Party A will prepare
        and deliver to Party B and Escrow Agent with calculations setting forth in
        sufficient detail Party B's "RMB Before Tax Profit" for such one year period
        (the "One Year Tax Profit Report").  Such Report shall be prepared in
        accordance with generally accepted accounting principles applied on a consistent
        basis.  Party B shall have 15 days after receipt of such Report (the
        "Pretax Profit Objection Statement"), to provide Party A and Escrow Agent,
        in
        writing, with any objections Party A shall have to the calculations set forth
        in
        the One Year Tax Profit Report (the "Objections").  In the event that
        Party A and Escrow Agent have not received any such Objections within the
        objection period, the One Year Tax Profit Report shall be considered final
        and
        conclusive.  The number of shares to be released shall be determined
        in accordance with Appendix I.

       

      In
        the
        event the Escrow Agent and Party A receive one or more Objections within
        the
        applicable time period and are unable to resolve such Objections within twenty
        (20) days from the receipt of such notice, Party A and Party B hereto shall
        collectively agree upon an outside independent accounting firm which shall
        then
        be engaged to compile the information required to be included in the One
        Year
        Tax Profit Report.  Once complied, such Report shall be conclusive,
        and any Escrowed Shares due thereunder shall be paid by Escrow Agent to Party
        B
        on account of the Party B Shareholders with 15 days of the day
        hereof.  Any costs associated with the engagement of an outside
        accounting firm shall be shared equally by Party A and Party B
        Shareholders.

      (b) Not
        later than 90 days
        after the end of the second anniversary of this Agreement, Party A will prepare
        and deliver to Party B and Escrow Agent with calculations setting forth in
        sufficient detail Party B's "RMB Before Tax Profit" for such two year period
        (the "Two Year Tax Profit Report").  Such Report shall be prepared in
        accordance with generally accepted accounting principles applied on a consistent
        basis.  Party B shall have 15 days after receipt of such Report (the
        "Pretax Profit Objection Statement"), to provide Party A and Escrow Agent,
        in
        writing, with any objections Party A shall have to the calculations set forth
        in
        the Two Year Tax Profit Report (the "Objections").  In the event that
        Party A and Escrow Agent have not received any such Objections within the
        objection period, the Two Year Tax Profit Report shall be considered final
        and
        conclusive.  The number of shares to be released shall be determined
        in accordance with Appendix I.

       

      In
        the
        event the Escrow Agent and Party A receive one or more Objections within
        the
        applicable time period and are unable to resolve such Objections within twenty
        (20) days from the receipt of such notice, Party A and Party B hereto shall
        collectively agree upon an outside independent accounting firm which shall
        then
        be engaged to compile the information required to be included in the Two
        Year
        Tax Profit Report.  Once complied, such Report shall be conclusive,
        and any Escrowed Shares due thereunder shall be paid by Escrow Agent to Party
        B
        on account of the Party B Shareholders with 15 days of the day
        hereof.  Any costs associated with the engagement of an outside
        accounting firm shall be shared equally by Party A and Party B
        Shareholders.

      (c) Not
        later than 90 days
        after the end of the third anniversary of this Agreement, Party A will prepare
        and deliver to Party B and Escrow Agent with calculations setting forth in
        sufficient detail Party B's "RMB Before Tax Profit" for such three year period
        (the "Three Year Tax Profit Report").  Such Report shall be prepared
        in accordance with generally accepted accounting principles applied on a
        consistent basis.  Party B shall have 15 days after receipt of such
        Report (the "Pretax Profit Objection Statement"), to provide Party A and
        Escrow
        Agent, in writing, with any objections Party A shall have to the calculations
        set forth in the Three Year Tax Profit Report (the "Objections").  In
        the event that Party A and Escrow Agent have not received any such Objections
        within the objection period, the Three Year Tax Profit Report shall be
        considered final and conclusive.  The number of shares to be released
        shall be determined in accordance with Appendix I.

       

      In
        the
        event the Escrow Agent and Party A receive one or more Objections within
        the
        applicable time period and are unable to resolve such Objections within twenty
        (20) days from the receipt of such notice, Party A and Party B hereto shall
        collectively agree upon an outside independent accounting firm which shall
        then
        be engaged to compile the information required to be included in the Three
        Year
        Tax Profit Report.  Once complied, such Report shall be conclusive,
        and any Escrowed Shares due thereunder shall be paid by Escrow Agent to Party
        B
        on account of the Party B Shareholders with 15 days of the day
        hereof.  Any costs associated with the engagement of an outside
        accounting firm shall be shared equally by Party A and Party B
        Shareholders.

      3. Each
        Party shall use their
        best efforts to make available to the other Party all work papers, and other
        financial materials used in preparing the appropriate reports, and make such
        information available to such Parties' accountants or representatives at
        such
        reasonable times and upon reasonable notice at any time during the preparation
        (a) by Party A of the applicable report, (b) the review by Party B of the
        applicable report, and (c) the resolution by the Parties of any objections
        thereto.

      4. Appointment
        of Escrow
        Agent.  Parties hereby appoint the Escrow Agent as escrow agent
        upon the terms and conditions set forth herein, and the Escrow Agent hereby
        accepts such appointment.  This Escrow Agreement and the Escrow
        Agent’s obligations hereunder shall commence on the date first written
        above.

      5. Disbursement
        Into
        Court.  At any time, the Escrow Agent, in its sole discretion,
        may commence an action in the nature of interpleader in any court it deems
        appropriate, to determine ownership or disposition of the Escrowed Shares
        or it
        may deposit the Escrowed Shares with the clerk of any appropriate court or
        it
        may retain the Escrowed Shares pending receipt of a final, non-appealable
        order
        of a court having jurisdiction over all of the parties hereto directing to
        whom
        and under what circumstances the Escrowed Shares are to be disbursed and
        delivered.  During the pendency of any such action, the Escrow Agent
        may suspend the performance of any of its obligations under this Escrow
        Agreement until such dispute or uncertainty shall be resolved to the sole
        satisfaction of Escrow Agent or until a successor Escrow Agent shall have
        been
        appointed (as the case may be).  The Escrow Agent shall have no
        liability to all Parties or any other person with respect to any such suspension
        of performance or disbursement into court, specifically including any liability
        or claimed liability that may arise, or be alleged to have arisen, out of
        or as
        a result of any delay in the disbursement of the Escrowed Shares or any delay
        in
        or with respect to any other action required or requested of Escrow
        Agent.

      6. Limitation
        of Responsibility
        and Liability and Duties of the Escrow Agent.  The acceptance
        by the Escrow Agent of its duties as such under this Escrow Agreement is
        subject
        to the following terms and conditions, which all parties to this Escrow
        Agreement hereby agree shall govern and control with respect to the rights,
        duties, and liabilities of the Escrow Agent:

      (a) The
        Escrow Agent shall not
        be liable for any error in judgment or mistake of law or fact, or for any
        action
        taken or omitted to be taken by it, or any action suffered by it to be taken
        or
        omitted by it, in good faith and in the exercise of its own best
        judgment.  The Escrow Agent shall not be liable for any delay in
        delivering the Escrowed Shares to any party to this Escrow Agreement, absent
        its
        own gross negligence or willful misconduct.

      (b) The
        Escrow Agent shall not
        be bound by any notice or demand, or any waiver, modification, termination
        or
        rescission of this Escrow Agreement unless evidenced by a writing delivered
        to
        the Escrow Agent signed by all Parties and, if the duties or rights of the
        Escrow Agent are affected by any such modification of or waiver under this
        Escrow Agreement unless the Escrow Agent shall have given its prior written
        consent thereto.

      (c) The
        Escrow Agent shall be
        indemnified and held harmless by all Parties, upon demand by the Escrow Agent,
        from and against any claims, demands, losses, damages, liabilities, costs
        and
        expenses, including counsel fees and disbursements, (collectively, “Damages”)
        suffered by the Escrow Agent in connection with any action, suit or other
        proceeding involving any claim, or in connection with any claim or demand,
        which
        in any way directly or indirectly arises out of or relates to this Escrow
        Agreement, the services of the Escrow Agent hereunder, the monies or other
        property held by it hereunder or any such Damages.  Promptly after the
        receipt by the Escrow Agent of notice of any demand or claim or the commencement
        of any action, suit or proceeding, the Escrow Agent shall, if a claim in
        respect
        thereof shall be made against the other parties hereto, notify such parties
        thereof in writing; but the failure by the Escrow Agent to give such notice
        shall not relieve any party from any liability which such party may have
        to the
        Escrow Agent hereunder, except to the extent of actual prejudice demonstrated
        by
        such party.  The obligations of all Parties under this subsection
        shall survive any termination of this Escrow Agreement and the resignation
        or
        removal of the Escrow Agent.

      (d) The
        Escrow Agent may resign
        at any time and be discharged from its duties as Escrow Agent hereunder by
        its
        giving the other parties hereto prior written notice of at least seven (7)
        business days.  As soon as practicable after its resignation, the
        Escrow Agent shall turn over to a successor escrow agent appointed by the
        other
        parties hereto, jointly, all of the Escrowed Shares held hereunder upon
        presentation of the document appointing the new escrow agent and its acceptance
        thereof.  If no new escrow agent is so appointed within the twenty
        (20) day period following the giving of such notice of resignation, the Escrow
        Agent may deposit the Escrowed Shares with any court it deems
        appropriate.

      (e) The
        Escrow Agent is
        authorized, in its sole discretion, to comply with orders issued or process
        entered by any court with respect to the Escrowed Shares, without determination
        by the Escrow Agent of such court’s jurisdiction in the matter.  If
        any portion of the Escrowed Shares is at any time attached, garnished or
        levied
        upon under any court order, or in case the payment, assignment, transfer,
        conveyance or delivery of any such property shall be stayed or enjoined by
        any
        court affecting such property or any part thereof, then and in any such event,
        the Escrow Agent is authorized, in its sole discretion, to rely upon and
        comply
        with any such order, writ, judgment or decree which it is advised by legal
        counsel selected by it is binding upon it without the need for appeal or
        other
        action; and if the Escrow Agent complies with any such order, writ, judgment
        or
        decree, it shall not be liable to any of the parties hereto or to any other
        person or entity by reason of such compliance even though such order, writ,
        judgment or decree may be subsequently reversed, modified, annulled, set
        aside
        or vacated.

      7. Governing
        Law; Jurisdiction,
        Venue.  This Escrow Agreement, and all proceedings hereunder,
        shall be governed by and construed in accordance with the domestic laws of
        the
        State of Florida without giving effect to any choice or conflict of law
        provision or rule (either of the State of Florida or any other jurisdiction)
        that would cause the application of the laws of any jurisdiction other than
        the
        State of Florida.  Each party to this Escrow Agreement hereby submits
        to exclusive jurisdiction of any state or federal court within Broward County,
        Florida for purposes of all legal proceedings arising out of or relating
        to this
        Escrow Agreement or the transactions contemplated hereby.  Each party
        to this Escrow Agreement hereby irrevocably waives, to the fullest extent
        permitted by law, any objections which it may now or hereafter have to the
        laying of the venue of any such proceeding brought in such a court and any
        claim
        that any such proceeding brought in such a court has been brought in an
        inconvenient forum.

      8. Notices.  All
        notices and communications shall be deemed to have been duly given: at the
        time
        (a) when received, if deposited in the mail, postage prepaid, addressed as
        provided below; (b) when transmission is verified, if telecopied; and (c)
        on the
        next business day, if timely delivered to a courier service guaranteeing
        overnight delivery; provided that the Escrow Agent shall have no obligation
        hereunder unless notice is actually received by it;

      
        
          	 If
                  to Party A: 	 
                  Kinglake Resources, Inc.
	 	 Suite
                  500-666 
	 	 Burrard
                  Street, Vancouver, BC 
	 	 V6C
                  3P6, Canada 
	 	 Attention:  Jake
                  Wei

        

      

      
         

          

        
          	 With
                  a copy to:	 Arnstein
&
Lehr
                  LLP 
	 	 200
                  East Las Olas Boulevard 
	 	 Suite
                  1700 
	 	 Fort
                  Lauderdale, FL 33301 
	 	 Attention:  Joel
                  D. Mayersohn, Esq.
                  

        

         

         

        
        

        
          	 If
                  to Party A
                  Subsidiary:         	 Orient
                  Come Holdings Limited 
	 	 Room
                  810, Block C2
	 	 Oriental
                  Plaza, No. 1 Chang An Street 
	 	 Beijing,
                  China 100738 
	 	 Attention:  Ke
                  Wang

        

                           

         

           

        
          	 If
                  to Party B:  	 Beijing
                  K's Media Advertising Ltd. Co. 
	 	 Room
                  211, No. 31
	 	Yan
                  Xi
                  Street, Yan Xi Economic Zone 
	 	Huai
                  Rou District, Beijing, China 
	 	Attention:  Kun
                  Wei

        

                         

         

           
          
            	 If
                    to the Escrow Agent:	Arnstein
&
Lehr
                    LLP 
	 	200
                    East Las Olas Boulevard
	 	Suite
                    1700
	 	Fort
                    Lauderdale, Florida 33301
	 	Attention:  Joel
                    D. Mayersohn, Esq.
	 	Facsimile
                    No.: (954) 713-7700

          
                  

      

      

      
        	 If
                to Party B Shareholders:	Beijing
                K's Media Advertising Ltd. Co. 
	 	Room
                211, No. 31
	 	Yan
                Xi
                Street, Yan Xi Economic Zone 
	 	Huai
                Rou District, Beijing, China 
	 	Attention:  Yan
                Zhuang

      

                                                                      
        

      Any
        party
        may change its address by providing written notice of such change to the
        other
        parties hereto.  All notices and communications provided by Buyer
        and/or Seller to the Escrow Agent shall be signed by duly authorized persons
        of
        each.

      9. Termination
        of Escrow
        Agreement.  The Escrow Agent’s responsibilities hereunder shall
        terminate upon the earliest to occur of the termination of this Escrow Agreement
        by mutual consent of Parties, the disbursement of the Escrowed Shares pursuant
        to this Agreement hereof, the disbursement of the Escrowed Shares into court
        pursuant to this Agreement hereof, and the resignation of the Escrow Agent
        pursuant to this Agreement hereof.

      10. Entire
        Escrow
        Agreement.  This Escrow Agreement contains the entire
        understanding by and among the parties hereto with respect to the subject
        matter
        hereof; there are no promises, agreements, understandings, representations
        or
        warranties, other than as herein set forth.  No change or modification
        of this Escrow Agreement shall be valid or effective unless the same is in
        writing and is signed by all of the parties hereto.

      11. Counterparts.  This
        Escrow Agreement may be executed in two or more counterparts, each of which
        shall be deemed an original, but all of which shall constitute one and the
        same
        agreement.

      12. Waive
        of
        Conflicts.  Parties hereby acknowledge that Escrow Agent has
        represented Party A in connection with certain acquisitions, securities matters,
        general corporate counseling, and various other matters, and hereby waive
        any
        and all conflicts of interest arising as a result of said
        representation.  Parties further acknowledge that Escrow Agent may
        represent Party A in the future, and hereby consent to any such
        representation.

      13. Party
        B Shareholders
        appoint Yan Zhuang (the “Designee”) to serve as their authorized representative
        and give Designee the authority to act on their behalf under the terms of
        this
        Agreement.

      

       

      IN
        WITNESS WHEREOF, the parties hereto have caused their respective hands to
        be set
        hereto with the intention of being bound effective in all respects as of
        the
        date first written above.

       

      
        
          	 	
                  Kinglake
                    Resources, Inc.

                	 
	 	 	 	 
	
                   

                	
                  By:
                    

                	/s/ Jake
                  Wei                                                                           
                  	 
	 	 	Name Jake
                  Wei	 
	 	 	Its
                  President	 
	 	 	 	 

        

      

       

       

      
        
          	 	Orient Come Holdings Limited
	 
	 	 	 	 
	
                   

                	
                  By:
                    

                	/s/ Ke
                  Wang                                                                
                  	 
	 	 	Name Ke
                  Wang                                                                           
                  	 
	 	 	Its
                  President                                                                
                  	 
	 	 	 	 

        
                                                                          

       

      
        
          	 	Beijing
                  K's Media Advertising Ltd. Co. 	 
	 	 	 	 
	
                   

                	
                  By:
                    

                	/s/ Kun
                  (James)
                  Wei                                                                
                  	 
	 	 	Name  Kun
                  (James) Wei	 
	 	 	Its
                  President	 
	 	 	 	 

        

       

      

      Party
        B's
        Shareholders

      

       /s/
        Yan
        Zhuang                                                                         

      Yan
        Zhuang

      /s/
        Yong
        Lu                                                             

      Yong
        Lu

      /s/
        Lin
        Chang                                                                   

      Lin
        Chang

      /s/
        LiHong
        Wu                                                             

      LiHong
        Wu

      /s/
        Qing Ya
        Wang                                                                   

      QingYa
        Wang

      

      Arnstein
        & Lehr LLP

      

      By:
        /s/ Joel D.
        Maysohn

            Joel
        D. Mayersohn

      

       

      SCHEDULE
        A

      List
        of Shareholders

      

      Yan
        Zhuang

      Yong
        Lu

      Lin
        Chang

      LiHong
        Wu

      QingYa
        Wang

      

       

      APPENDIX
        I

      Release
        Formula

      
        	
                KTV
                  Financial Projection

              	 	 	 
	
                In
                  US Dollar

              	
                Year
                  1

              	
                Year
                  2

              	
                Year
                  3

              
	
                Cash
                  Inflow

              	

              	

              	 
	
                Signed
                  Sales

              	
                2,118,789

              	
                15,980,447

              	
                36,929,605

              
	
                90%
                  of Signed Sales

              	
                1,906,911

              	
                14,382,403

              	
                33,236,645

              
	
                50%
                  of Signed Sales

              	
                       1,059,395

              	
                      7,990,224

              	
                      18,464,803

              
	

              	

              	

              	

              
	
                Release
                  Formula:

              	

              	

              	

              
	
                Notes:

              	

              	

              	

              
	
                1.
                  KTV Management Team refers to: Zhuang, Yan; Lu, Yong; Chang, Lin;
                  Wu,
                  LiHong (4 persons). Each of them will receive 25% of total released
                  shares.

              
	

              	

              	

              	

              
	
                2.
                  KTV Management Team are entitled to have 75% of the Escrow Share,
                  that is
                  10,500,000 X 75% = 7,875,000. Each year, they can have up to 2,625,000
                  shares. Release Formula (1) apply to KTV Management Team Release
                  Formula
                  (1) applies to KTV Management Team

              
	

              	

              	

              	

              
	
                3.
                  Wang, QingYa (1 person) is entitled to have 25% of the Escrow Share,
                  that
                  is 10,500,000 X 25% = 2,625,000. Each year, he can have up to
                  875,000.

                Release
                  Formula (2) applies to him.

              
	

              	

              	

              	

              
	
                Release
                  Formula (1):

              	

              	

              	

              
	
                Year
                  1:

              	

              	

              	

              
	
                If
                  K's Media achieved >=90% of Year 1 Signed Sales, that is
                  >=US$1,900,000,  release 2,625,000 to KTV Management
                  Team

              
	

              	

              	

              	

              
	
                If
                  K's Media achieved <50% of Year 1 Signed Sales, that is <
                  $1,059,000, none of the escrowed shares will be released. Rather
                  these
                  shares will be escrowed by the Escrow Agent instead of
                  cancellation.

              
	

              	

              	

              	

              
	
                If
                  K's Media achieved in between, a proportionate number of shares
                  will be
                  released using the following equation:  Actual Signed Sales /
                  $1,900,000 X 2,625,000

              
	

              	

              	

              	

              
	
                Year
                  2:

              	

              	

              	

              
	
                If
                  K's Media achieved >=90% of Year 2 Signed Sales, that is
                  >=US$14,380,000,  release 2,625,000 to KTV Management
                  Team

              
	

              	

              	

              	

              
	
                If
                  K's Media didn't achieve > 50% in Year 1, but achieved >=90% in Year
                  2, we will release Year 1's escrowed shares using the following
                  equation:

              
	
                Actual
                  Signed Sales in Year 1 / $1,900,000 X 2,625,000

              
	

              	

              	

              	

              
	
                If
                  K's Media achieved <50% of Year 2 Signed Sales, that is <
                  $7,990,000, none of the escrowed shares will be released.

              
	

              	

              	

              	

              
	
                If
                  K's Media achieved in between, a proportionate number of shares
                  will be
                  released using the following equation:

              
	
                Actual
                  Signed Sales/ $14,380,000 X 2,625,000

              
	

              	

              	

              	

              
	
                Year
                  3:

              	

              	

              	

              
	
                If
                  K's Media achieved >=90% of Year 3 Signed Sales, that is
                  >=US$33,230,000,  release 2,625,000 to KTV Management
                  Team

              
	

              	

              	

              	

              
	
                If
                  K's Media achieved <50% of Year 3 Signed Sales, that is <
                  $18,460,000, none of the escrowed shares will be released.

              
	

              	

              	

              	

              
	
                If
                  K's Media achieved in between, a proportionate number of shares
                  will be
                  released using the following equation:

              
	
                Actual
                  Signed Sales / $33,230,000 X 2,625,000

              
	

              	

              	

              	

              
	
                All
                  un-released shares will be cancelled then.

              
	

              	

              	

              	

              
	
                Release
                  Formula (2):

              	

              	

              	

              
	

              	

              	

              	

              
	
                Release
                  date will be same as Release Formula (1)

              
	

              	

              	

              	

              
	
                Release
                  standard as follows:

              	

              	

              	

              
	

              	

              	

              	

              
	
                eg:
                  Year 1, if Wang, QingYa signed up less than 300 KTV club for the
                  "KTV
                  Advertisement Placing Agreement" with K's Media ("AD Agreement"),
                  we will
                  cancel 60% of his entitled shares, which is 10,500,000 X 25%=2,625,000
                  X
                  60% = 1,575,000 shares.

              
	

              	

              	

              	

              
	
                DATE

              	
                Condition

              	
                Total
                  # of Shares=2,625,000

              	

              
	
                Year
                  1

              	
                >600

              	
                release
                  60%

              	

              
	 	
                300-600

              	
                Pro
                  Rata

              	

              
	 	
                <300

              	
                Cancel
                  60%

              	

              
	 	 	 	

              
	
                Year
                  2

              	
                >600

              	
                Release
                  20%

              	

              
	 	
                300-600

              	
                Pro
                  Rata

              	

              
	

              	
                <300

              	
                Cancel
                  20%

              	

              
	 	 	 	

              
	
                Year
                  3

              	
                >600

              	
                Release
                  20%

              	

              
	 	
                300-600

              	
                Pro
                  Rata

              	

              
	 	
                <300

              	
                Cancel
                  20%exhibit_10-2.htm

     

    Exhibit
      10.2    Option
      Agreement, Dated as of December 23, 2007

     

     

     

    OPTION
      AGREEMENT

     

    This
      Option Agreement (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 Room 810, Block C2, Oriental Plaza, No. 1 Chang An Street,
      Beijing, China 100738 (“Party A”), and
      Beijing K's Media Advertising Ltd. Co., a limited liability company organized
      under the laws of the PRC (“Party B”), with a
      registered address at Room 211, No. 31, Yan Xi Street, Yan Xi Economic Zone,
      Huai Rou District, Beijing, China, and shareholders holding 100% outstanding
      shares of Party B (the “Shareholders” or
      "Party C").
      Party A and Party B, and Shareholders are referred to collectively in this
      Agreement as the “Parties.”

     

     

    RECITALS

    1.         
      Party A is a company incorporated under the laws of the British Virgin Islands,
      which has the expertise in the business of media and media
      placements;

    2.         
      Party B is a company incorporated in Beijing, China, and is an emerging outdoor
      media company, which will place advertisements that contain premium bands in
      KTV
      nightclubs (the ?癇usiness”);

    3.         
      Party C are the Shareholders
      of
      Party B. Party C has the ownership of 100% equity interests
      in Party B
      (each, an “Equity
      Interest”and
      collectively the “Equity
      Interests”);

    4.         
      A series of agreements such
      as the
      Business Cooperation Agreement (the “Service
      Agreement”)
      have been entered into by Parties A
      and B as of December 23,
      2007;

    5.         
      An Equity Pledge Agreement (the
      “Pledge
      Agreement”) has been
      entered into by the Parties as of December 23, 2007;

    6.         
      The Parties are entering into
      this
      Option Agreement in conjunction with the Pledge Agreement, Consulting Services
      Agreement and
      related agreements.

    NOW,
      THEREFORE, the Parties to
      this Agreement hereby agree as follows:

    1. Purchase
      and Sale of Equity
      Interest.

    1.1 Grant
      of Rights.
      Party C (hereafter collectively the “Transferor”) hereby
      irrevocably grants to Party A an option to purchase or cause any person
      designated by Party A(“Designated Persons”) to purchase, to the extent permitted
      under PRC Law, according to the steps determined by Party A, at the price
      specified in Section 1.3 of this Agreement, at any time from the Transferor
      a
      portion or all of the equity interests held by Transferor in Party B (the “Option”). No Option
      shall be granted by Transferor to any third party other than Party A and/or
      the
      Designated Persons. Party B hereby agrees to the granting of the Option by
      Party
      C to Party A and/or the Designated Persons. The "person” set forth in this
      clause and this Agreement means an individual, corporation, joint venture,
      partnership, enterprise, trust or a non-corporation organization.

    1.2 Exercise
      of Rights.
      According to the stipulations of PRC laws and regulation, Party A and/or the
      Designated Persons may exercise Option by issuing a written notice (the “Notice”)to the
      Transferor and specifying the equity interest purchased from Transferor (the
      "Purchased Equity
      Interest”) and the manner of purchase.

    1.3 Purchase
      Price.  For Party A to
      exercise the Option, the purchase price of the Purchased Equity Interest (“Purchase Price”)
      shall be One Hundred Dollars ($100.00), unless the applicable PRC laws and
      regulations require appraisal of the equity interests or stipulate other
      restrictions on the purchase price of equity interests.

    1.4 Transfer
      of
      the Purchased Equity Interest. Upon
      each
      exercise of the Option rights under this Agreement:

    1.4.1 Party
      B shall convene a shareholders'
      meeting upon request by the Transferor, and Transferor agrees to call such
      meeting. During the meeting, the resolutions shall be proposed, approving
      the transfer of the
      appropriate Equity Interest to Party A and/or the Designated
      Persons;

    1.4.2 The
      Transferor shall, upon the terms and
      conditions of this Agreement and the Notice related to the Purchased Equity
      Interest, enter into Equity Interest purchase agreement
      in a form
      reasonably acceptable to Party A, with Party A and/or the Designated Persons
      (as
      applicable);

    1.4.3 The
      related parties shall execute all
      other requisite contracts, agreements or documents, obtain all requisite
      approval and consent of the
      government, conduct all necessary actions, without any security interest,
      transfer the valid ownership of the Purchased Equity Interest to Party A and/or
      the Designated Persons, and cause Party A and/or the Designated Persons to
      be
the
      registered owner of the Purchased
      Equity Interest. In this clause and this Agreement, “Security Interest”means
      any mortgage, pledge, the right or
      interest of the third party, any purchase right of equity interest, right of
      acquisition, right of first refusal,
      right of set-off, ownership
      detainment or other security arrangements, however, it does not include any
      security interest created under the Equity Pledge Agreement.

    1.5 Payment.
      The payment of the
      Purchase Price shall be determined
      by the consultation of
      Party A and/or the Designated Persons with the Transferor according to the
      applicable laws at the time of exercise of the Option.

    2. Promises
      Relating to Equity Interest.

    2.1 Promises
      Related to Party B. Party B
      and Party C hereby promise:

    2.1.1 Without
      prior written consent by Party
      A, not, in any form, to supplement, change or renew the Articles of Association
      of Party B, to increase or decrease registered capital of the corporation,
      or to
      change the structure of the registered capital in anyother forms;

    2.1.2 According
      to customary fiduciary
      standards applicable to managers with respect to corporations and their
      shareholders, to maintain the existence of the corporation, prudently and
      effectively operate the business;

    2.1.3 Without
      priorwritten consentby Party
      A, not, upon the
      execution of this Agreement, to sell, transfer, mortgage or dispose, in any
      other form, any asset, legitimate or beneficial interest of business or income
      of Party B, or encumber or approve any encumbrance or imposition
      of any security interest on Party
      A's assets;

    2.1.4 Without
      prior written notice by Party A,
      not issue or provide any guarantee or permit the existence of any debt, other
      than (i) the debt arising from normal or daily business but not from
      borrowing; and (ii) the
      debt disclosed to Party A and obtained the written consent from Party
      A;

    2.1.5 To
      normally operate all business to
      maintain the asset value of Party B, without taking any action or failing to
      take any action that would result in a material adverse effect on the
      business or
      asset value of Party B;

    2.1.6 Without
      prior written consent by Party
      A, not to enter into any material agreement, other than agreements in the
      ordinary course of business (for purposes of this paragraph, if the amount
      of the Agreement involves
      an amount that exceeds a hundred thousand Yuan (RMB 100,000) the agreement
      shall
      be deemed material);

    2.1.7 Without
      prior written consent by Party
      A, not to provide loan or credit loan to any others;

    2.1.8 Upon
the
      request of Party A, to provide all
      materials of operation and finance relevant to Party B;

    2.1.9 To
      Purchase and hold the insurance from
      an insurance company accepted by Party A, the insurance amount and category
      shall be the same with those held by the companies in the
      same industry or
      field, operating the similar business and owning the similar properties and
      assets as Party B;

    2.1.10 Without
      prior written consent by Party
      A, not to cause Party B to merge or associate with any person, or acquire
      or invest in any
      person;

    2.1.11 To
      notify Party A of the occurrence or
      the potential occurrenceof the litigation, arbitration or administrative
      procedure related to the assets, business and income of Party
      B;

    2.1.12 To
      cause Party B to maintain and
      preserve all its assets,
      and to execute all requisite or appropriate documents, take all requisite or
      appropriate actions, and pursue all appropriate claims, or make requisite or
      appropriate pleas for all claims;

    2.1.13 Without
      prior written notice by Party
A, not to assign equity
      interests to shareholders in any form;

    2.1.14 According
      to the request of Party A, to
      appoint any person designated by Party A to be the directors of Party
      B.

    2.2 Promises
      Related to Transferor.
      Party C hereby promises:

    2.2.1 Without
      prior written consent by Party
      A, not, upon the execution of this Agreement, to sell, transfer, mortgage or
      dispose in any otherform any legitimate or beneficial interest of equity
      interest, or to approve any other security interest set on it, withthe
      exception of the pledge set on the
      equity interest of the Transferor subject to Equity Pledge
      Agreement;

    2.2.2 Without
      the prior writtennotice by Party
      A, not to decide or support or execute any shareholder resolution at any
      shareholder meeting of Party B that approves
      any sale,
      transfer, mortgage or dispose of any legitimate or beneficial interest of equity
      interest, or allows any other security interest set on it, other than the
      pledge on the equity interests of Transferor pursuant to Equity Pledge
      Agreement;

    2.2.3 Without
      prior written notice by Party A,
      the Parties shall not agree or support or execute any shareholders resolution
      at
      any shareholder meeting of Party B that approves Party B's merger or association
      with any person, acquisition of any person or investment
      in any
      person;

    2.2.4 To
      notify Party A the occurrence or the
      potential occurrence of the litigation, arbitration or administrative procedure
      related to the equity interest owned by them;

    2.2.5 To
      cause the Board of Directors
      ofParty B to approve the
      transfer of the Purchased Equity Interest subject to this
      Agreement;

    2.2.6 In
      order to keep its ownership of the
      equity interest, to execute all requisite or appropriate documents, conduct
      all requisite or
      appropriate actions, and make all requisite or appropriate claims, or make
      requisite or appropriate defend against fall claims of
      compensation;

    2.2.7 Upon
      the request of Party A, to appoint
      any person designated by Party A to be the directors of Party B;

    2.2.8 Upon
      the request of Party A at any time,
      to transfer its Equity Interest immediately to the representative designated
      by
      Party A unconditionally at any time and abandon its prior right of first refusal
      of such equity interest transferring to another available
      shareholder;

    2.2.9 To
      prudently comply with the provisions
      of this Agreement and other Agreements entered into collectively or respectively
      by the Transferor, Party B and Party A and perform all obligations under these
      Agreements, without taking
      any action or any nonfeasance that sufficiently affects the validity and
      enforceability of these Agreements;

    3. Representations
      and Warranties. As of the
      execution date of this Agreement and every transferring date, PartyB and
      PartyC hereby represent and
      warrant collectively and respectively to Party A as follows:

    3.1 It
      has the power and ability to enter
      into and deliver this Agreement, and any equity interest transferring agreement
      (“Transferring
      Agreement,”respectively)
      having it as a party, for every
      single transfer
      of the Purchased Equity Interest according to this Agreement, and to perform
      its
      obligations under this Agreement and any Transferring Agreement. Upon execution,
      this Agreement and the Transferring Agreementshaving it
      as a party will constitute a legal,
      valid and binding obligation of it enforceable against it in accordance with
      its
      terms;

    3.2 The
      execution, delivery of this
      Agreement and any Transferring Agreement and performance of the obligations
      under this Agreement and
      any Transferring Agreement will not: (i) cause a violation of any relevant
      laws
      and regulations of PRC; (ii) conflict with its Articles of Association or other
      organizational documents (if an entity); (iii) cause to breach any agreement
      or
      instruments
      to which it is a party or having
      binding obligation on it, or constitute the breach under any agreement or
      instruments to which it is a party or having binding obligation on it; (iv)cause
      to violate relevant authorization of any consent or approvaltoit
      and/or any continuing valid
      condition; or (v) cause any consent or approval authorized to it to be
      suspended, removed, or into which other requests be added;

    3.3 The
      shares of Party B are transferable,
      and Party B has not permitted or caused any security interest to be imposed
      upon the
      shares of Party B.

    3.4 Party
      B does not have any unpaid debt,
      other than (i) debt arising from its normal business; and (ii) debt disclosed
      to
      Party A and obtained by written consent of Party A;

    3.5 Party
      B has complied with all PRC laws
      and regulations
      applicable to the acquisition of assets and securities in connection with this
      Agreement;

    3.6 No
      litigation, arbitration or
      administrative procedure relevant to the Equity Interests and assets of Party
      B
      or Party B itself is in
      process or to be settled and the Parties have no knowledge of any pending or
      threatened claim;

    3.7 The
      Transferor bears the fair and
      salable ownership of its Equity Interest free of encumbrances of any kind,
      other
      than the security interest pursuant to the Equity
      Pledge
      Agreement.

    4. Assignment
      of Agreement 

    4.1 Party
      B and Party C shall not transfer
      their rights and obligations under this Agreement to any third party without
      the
      prior written consent of the Party A.

    4.2 Party
B
      and Party C hereby agree that Party A
      shall be ableto transfer all of its rights and obligation under this Agreement
      to any third party with its needs, and such transfer shall only be subject
      to a
      written notice sent to Party B and Party C by Party A, and
      no any further consent from Party B or
      Party C will be required.

    5. Effective
      Date and Term 

    5.1 This
      Agreement shall be effective as of
      the date first set forth above.

    5.2 The
      term of this Agreement is twenty
(20) years unless the
      early
      termination in accordance with this Agreement or other terms of the relevant
      agreements stipulated by the Parties. This Agreement may be extended according
      to the written consent of Party A before the expiration of this
      Agreement.
      The term of extension will be decided
      unanimously through mutual agreement of the Parties.

    5.3 If
      Party A orParty B terminates by the
      expiration of its operating period (including any extended period) or other
      causes in the term set forth in Section 5.2, this Agreement shall
      be terminated
      simultaneously, except Party A has transferred its rights and obligationsin
      accordance with Section 4.2 of this Agreement.

    6. Applicable
      Law and Dispute Resolution

    6.1 Applicable
      Law. The execution,
      validity, construing and
      performance of this Agreement and the resolution of disputes under this
      Agreement shall be governed by the lawsof PRC.

    6.2 Dispute
      Resolution. The parties
      shall strive to settle any dispute arising from the interpretation or
      performance in connection
      with this Agreement through friendly consultation. In case no settlement can
      be
      reached through consultation within thirty (30) days after such dispute is
      raised, each party can submit such matter to China International Economic and
      Trade Arbitration
      Commission (the “CIETAC”)
      in accordance with its rules.
      Arbitration shall take place in Beijing and the proceedings shall beconducted
      in
      Chinese. Any resulting arbitration award shall be final conclusive and binding
      upon both parties.

    7. Taxes
      and
      Expenses.
      Each Party shall, according to the PRC
      laws, bear any and all registering taxes, costs and expenses for equity transfer
      arising from the preparation and execution of this Agreement and all
      Transferring Agreements, and the completion of the transactions under this Agreement
      and all
      Transferring Agreements.

    8. Notices.
      Notices or other communications
      required to be given by any party pursuant to this Agreement shall be written
      in
      English and Chinese and delivered personally or sent by registered
      mailor postage prepaid mail
      or by a recognized courier service or by facsimile transmission to the address
      of relevant each party or both parties set forth below or other address of
      the
      party or of the other addressees specified by such party from time to
      time.
      The date when the notice is deemed to
      be duly served shall be determined as the follows: (a) a notice delivered
      personally is deemed duly served upon the delivery; (b) a notice sent by
      mail is deemed duly served the tenth (10th)
      day after the date when the air registered mail
      with postage
      prepaid has been sent out (as is shown on the postmark), or the fourth
      (4th)
      day after the deliverydate to the
      internationally recognized courier service agency; and (c) a notice sent by
      facsimile transmission is deemedduly served upon the
      receipt time as is
      shown on the transmission confirmation of relevant
      documents.

    Party
      A:                         
Orient Come Holdings Limited

    
      	
              Address:

            	
              Room
                810, Block C2

            
	
            	
              Oriental
                Plaza, No. 1 ChangAn Street

            

    

     

    
      	
            	
              Beijing,
                China 1007388

            

    

    

    

    Party
      B:                      
Beijing K's Media Advertising Ltd. Co.

    
      	
              Address:

            	
              211
                No. 31 YanXi Street

            
	
            	
              YanXi
                Economic Zone, Huai Rou District

            

    

    

    
      	
            	
              Beijing,
                China

            

    

    

    

    Party
      C:                         
Shareholders

    

    Kun
      (James) Wei

    Address:                      
      Same as Party A

    

    Yong
      Lu

    Address:                      
      Same as Party B

    

    9. Confidentiality.
      The Parties acknowledge and confirm
      any oral or written materials exchanged by the Parties in connection with this Agreement
      are
      confidential. The Parties shall maintain the secrecy and confidentiality of
      all
      such materials. Without the written approval by the other Parties, any Party
      shall not disclose to any third party any relevant materials, but thefollowing
      circumstances shall be
      excluded:

    (a) The
      materials that is known
      or may be known by the general public (but not include the materials disclosed
      by each party receiving the materials);

    (b) The
      materials are required
      to be disclosed subject to the applicable laws or the rules or provisions of
      stock exchange; or

    (c) The
      materials are disclosed
      by each Party to its legal or financial consultant relating the transaction
      of
      this Agreement, and this legal or financial consultant shall comply with the
      confidentiality set forth in this Section. The disclosure of the confidential
      materials by staff or employed institution of any Party shall be deemed as
      the
      disclosure of such materials by such Party, and such Party shall bear the
      liabilities for breaching the contract. This clause shall survive whatever
      this
      Agreement is invalid, amended, revoked, terminated or unable to implement by
      any
      reason.

    10. Further
      Warranties. The Parties
      agree to promptly execute documents reasonably required to perform
      theprovisions and the aim
      of this Agreement or documents beneficial to it, and to take actions reasonably
      required to perform the provisions and the aim of this Agreement or actions
      beneficial to it.

    11. Miscellaneous.

    11.1 Amendment,
      Modification
      and Supplement. Any
      amendment and supplement to this Agreement shall only be effective is made
      by
      the Parties in writing.

    11.2 Entire
      Agreement. Notwithstanding
      the Article 5 of this Agreement, the Parties acknowledge that this Agreement
      constitutes the entire
      agreement of the Parties with respect to the subject matters therein and
      supersede and replace all prior or contemporaneous agreements and understandings
      in verb or/and in writing.

    11.3 Severability.
      If any provision of this
      Agreementis judged as
      invalid or non-enforceable according to relevant Laws, the provision shall
      be
      deemed invalid only within the applicable laws and regulations of the PRC,
      and
      the validity, legality and enforceability of the other provisions hereof shall
      not beaffected
      or impaired in any way. The
      Parties shall, through fairly consultation, replace those invalid, illegal
      or
      non-enforceable provisions with valid provisions that may bring the similar
      economic effects with the effects caused by those invalid, illegal
      or non-enforceable
      provisions.

    11.4 Headings.
      The headings contained in this
      Agreement are for the convenience of reference only and shall not affect the
      interpretation, explanation or in any other way the meaning of the provisions
      of
      this Agreement.

    11.5 Language
      and
      Copies. This Agreement has
      been executed in Chinese in four (4) duplicate originals; each Party holds
      one
      (1) original and each duplicate original shall have the same legal
      effect.

    11.6 Successor.
      This Agreement shall bind and
      benefitthe successor of
      each Party and the transferee allowed by each Party.

    11.7 Survival.
      Any obligation taking place or at term
      hereof prior to the end or termination ahead of the end of this Agreement shall
      continue in force and effect notwithstanding the occurrence of the end
      or termination
      ahead of the end of the Agreement. Article 6, Article 8, Article 9 and Section
      11.7 hereof shall continue in forceand effect after the termination of this
      Agreement.

    11.8 Waiver.
      Any Party may waive the terms
and conditions of this
      Agreement in writing with the signature of the Parties. Any waiver by a Party
      to
      the breach by other Parties within certain situation shall not be construed
      as a
      waiver to any similar breach by other Parties within other
      situations.

    

     

    IN
      WITNESS WHEREOF, the
      parties hereof have caused this Option Agreement to be executed by their duly
      authorized representatives as of the date first written above.

    
      
        	 PARTY
                A:      	 Orient Come
                Holdings, Inc. 	 
	 	 	 	 
	
                 

              	
                By:
                  

              	/s/ Ke
                Wang                                                        
                	 
	 	 	Name Ke
                Wang                                                  
                	 
	 	 	Title President                                                  
                	 
	 	 	 	 

      

    

                                                              

    

    
      
        	 PARTY
                B: 	Beijing
                K's Media
                Advertising Ltd. Co. 	 
	 	 	 	 
	
                 

              	
                By:
                  

              	/s/ Kun
                (James)
                Wei                                                                         
                	 
	 	 	Name Kun
                (James) Wei	 
	 	 	Title President                                            
                	 
	 	 	 	 

      

    

                                                                   
      

     

    

     

    [OPTION
      AGREEMENT SIGNATURE PAGE CONTINUED]

    

    PARTY
      C:

    SHAREHOLDERS
      OF PARTY
      B:

    

    

    /s/
      Kun (James)
      Wei                                                             

    Name:                 
      Kun
      Wei__                                                  

    (PRC
      ID
      Card
      No.:                                                
06825970
      )

    
      	
            	
              Shares
                of Beijing K's Media Advertising Ltd. Co. owned by Kun (James)
                Wei):  50%

            

    

    

    

    

    /s/
      Yong
      Lu                                          

    Name:                 
      Yong
      Lu                                            

    (PRC
      ID
      Card
      No.:                                                
11010219670607195)

    
      	
            	
              Shares
                of Beijing K's Media Advertising Ltd. Co. owned by Yong
                Lu:  50%

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}]]