Exhibit 4.65
XINHUA FINANCE MEDIA LIMITED HE ZHIHAO
and and
SINGSHINE (HOLDINGS) HONGKONG LIMITED LU QIBO
and and
XXXXX XXXXXX XXXX XXX
and and
HU SHENGZHONG LU HANG
and
YIN ZIJIAN
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PURCHASE AGREEMENT
IN RESPECT OF
SHARES IN THE CAPITAL OF
SINGSHINE (HOLDINGS) HONGKONG LIMITED
AND
OTHER ASSETS SET OUT HEREIN
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11 JUNE, 2007
Xxxxxxxxxxx & Xxxxxxxx Xxxxxxx Xxxxx Xxxxx
xxx.xxxxxxx.xxx
Our ref.: 55762-00005/CSMN/EWCM/FTYL
THIS PURCHASE AGREEMENT (this "AGREEMENT") is made on the 11th day of June 2007
BETWEEN
1. XINHUA FINANCE MEDIA LIMITED, a company incorporated under the laws of the
Cayman Islands with registration number 157511 and its registered address
located at Century Yard, Cricket Square, Xxxxxxxx Drive, P.O. Box 2681GT,
Xxxxxx Town, Grand Cayman, Cayman Islands, British West Indies, as
purchaser ("XFM");
2. SINGSHINE (HOLDINGS) HONGKONG LIMITED, a company incorporated under the
laws of Hong Kong with incorporation number 861173 and business
registration number 33905071 and its registered address located at Xxxx
0000, 00xx Xxxxx, Xxxx Xxxx Commercial Building, 00 Xxxxx'x Xxxx Xxxx,
Xxxxxxx, Xxxx Xxxx (the "COMPANY");
3. HE ZHIHAO, holder of People's Republic of China identity card number
000000000000000000, as vendor and covenantor ("HE");
4. LU QIBO, holder of People's Republic of China identity card number
000000000000000000, as vendor and covenantor ("LU", collectively with He,
the "VENDORS");
5. XXXXX XXXXXX, holder of People's Republic of China identity card number
000000000000000000, as covenantor ("ZHANG");
6. HU SHENGZHONG, holder of People's Republic of China identity card number
000000000000000000, as covenantor ("HU");
7. LU HANG, holder of People's Republic of China identity card number
000000000000000000, as covenantor ("LU HANG");
8. YIN ZIJIAN, holder of People's Republic of China identity card number
000000000000000000, as covenantor ("YIN ZIJIAN"); and
9. XXXX XXX, holder of Australia Passport number X0000000, as covenantor
("XXXX XXX").
WHEREAS
A. The Vendors hold all of the legal and beneficial interest in the Company
whereby He holds 550 Company Shares (representing 55% of the total issued
share capital for the Company) and Lu holds 450 Company Shares
(representing 45% of the total issued share capital for the Company).
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B. XFM desires to purchase and the Vendors wish to sell to XFM all of the
Company Shares they own and sell and procure the sale of certain other
assets of the Vendors subject to the terms and conditions set out in this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants set
forth herein the sufficiency, adequacy and receipt of which are hereby
acknowledged, XFM, the Company and the Vendors do hereby agree as follows:
1. DEFINITIONS
1.1 Definitions. The following terms, as used herein, have the following
meanings:
"ACCOUNTS RECEIVABLES" means (a) any right to payment for goods sold,
leased or licensed or for services rendered, whether or not it has been
earned by performance, whether billed or unbilled, and whether or not it is
evidenced by any contract or agreement or otherwise; (b) any note
receivable; or (c) any other receivable or right to payment of any nature;
"ADR" means American Depositary Receipts;
"AFFILIATES" of a specified Person means any other Person that, directly or
indirectly, through one or more intermediaries, Controls, is Controlled by,
or is under common Control with, such specified Person or, in the case of a
natural Person, such Person's spouse, parents and descendants (whether by
blood or adoption and including stepchildren);
"ANCILLARY AGREEMENTS" means collectively, the PRC Equity Transfer
Documents, the Employment Agreements, the Escrow Agreement and any other
agreements contemplated in this Agreement;
"APRIL 30 STATEMENTS" means the Financial Statements of SSMS as of April
30, 2007 provided by the Vendors to XFM;
"ASSETS" means any real, personal, mixed, tangible, intangible or other
property of any nature, including, but not limited to, cash or cash
equivalents, inventory, prepayments, deposits, escrows, Accounts
Receivables, Tangible Property, Intellectual Property, Real Property,
software and goodwill, and claims, causes of action and other legal rights
and remedies of any nature whatsoever.
"BUSINESS DAY" means any Monday, Tuesday, Wednesday, Thursday and Friday on
which banks in Hong Kong or the PRC are required or permitted by laws to be
open;
"CLIENT" means any individual or entity to whom the Group has provided any
services or products in respect of the businesses of the Group as at the
Group Closing Date within two years prior to the commencement of or at any
time during the Non-Compete Period;
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"CLOSING DELIVERABLE AGREEMENTS" means all the agreements or documents
required to be delivered by the Vendors or the Covenantors under this
Agreement as condition to Company Closing, Group Closing or Procurement
Payment;
"COMPANY CHARTER DOCUMENTS" has the meaning ascribed to it in Clause
7.1(a);
"COMPANY CLOSING" has the meaning ascribed to it in Clause 2.3;
"COMPANY CLOSING DATE" has the meaning ascribed to it in Clause 2.3;
"COMPANY SHARES" means all of the share capital of the Company being
ordinary shares each with a par value of HK$10.00 in the capital of the
Company comprising of the He Shares and Lu Shares;
"COMPETING COMPANIES" has the meaning ascribed to it in Clause 10.7;
"CONDITIONS" means the conditions to the completion of the transactions
described herein as set out in Clause 9;
"CONSENT" means any consent, approval, permit, licence, order, or
authorization of or registration, declaration, or filing with or exemption
by Governmental Entity;
"CONTROL", "CONTROLS", "CONTROLLED" (or any correlative term) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management of a Person, whether through the ownership of
voting securities, by contract, credit arrangement or proxy, as trustee,
executor, agent or otherwise. For the purpose of this definition, a Person
shall be deemed to Control another Person if such first Person, directly or
indirectly, owns or holds more than 50% of the voting equity interests in
such other Person;
"COOPERATION AGREEMENTS" means the various agreements entered into between
SSC and Guangdong Station, particulars of which are set out under Schedule
L;
"COVENANTORS" means, collectively, Zhang, Hu, Lu Hang, Yin Zijian, and Xxxx
Xxx;
"DISCLOSING PARTY" has the meaning ascribed to it in Clause 13.4;
"DISCLOSURE SCHEDULE" means the disclosure schedule attached hereto as
Schedule K;
"EARNOUTS" means the amount payable by XFM in accordance with Clause 5;
"EMPLOYMENT AGREEMENTS" means the employment agreements duly signed by the
persons set out in Schedule I and the form of which is set out under
Schedule H;
"ENCUMBRANCE" means and includes any interest or equity of any person
(including, without prejudice to the generality of the foregoing, any right
to acquire, option or right of pre-emption) or any mortgage, charge,
pledge, lien or assignment or any other
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encumbrance, priority or security interest or arrangement of whatsoever
nature over or in the relevant property;
"ESCROW AGREEMENT" has the meaning ascribed to it in Clause 3.11;
"FINANCIAL STATEMENTS" means the result of the financial due diligence
conducted by XFM in respect of the financial condition of SSC and SSMS;
"FORCE MAJEURE" means events that are reasonably uncontrollable and
unforeseeable by the parties or, although foreseeable, unavoidable due to
reasons beyond their control and have totally and partially prevented any
party from performing this Agreement. Such events shall include
earthquakes, collapses, flood, typhoons and other natural disasters and
fire, bombing, accidents, war, civil riots, social disturbances and other
similar or different occasions;
"FOREIGN EXCHANGE RATE" means the average of the closing middle exchange
rates posted on the website of the State Administration of Foreign Exchange
at xxx.xxxx.xxx.xx for the conversion of RMB to USD on the close of the
fifteen trading days prior to any date of payment under this Agreement;
"GOVERNMENTAL ENTITY" means any court, regulatory body, administrative
agency or commission or other governmental authority or instrumentality,
whether domestic or foreign;
"GROUP" means, collectively, the Company and the PRC Group;
"GROUP CLOSING" has the meaning ascribed to it in Clause 3.8;
"GROUP CLOSING DATE" means the time and date when Group Closing takes
place;
"GROUP CLOSING INSTRUCTION" has the meaning ascribed to it in Clause 3.11;
"GUANGDONG STATION" means Guangdong People's Broadcast Radio Station, an
entity established under the laws of the People's Republic of China and an
address at Guangdong Guangbo Zhongxin, Xx. 000 Xxxxxx Xxx Xx, Xxxxxxxxx;
"HE" means He Zhihao, holder of People's Republic of China identity card
number 000000000000000000;
"HE SHARES" means 550 Company Shares held by He representing 55% of the
total issued share capital of the Company to be sold by He to XFM,
particulars of which are set out under Schedule A;
"HE SHARES CONSIDERATION" has the meaning ascribed to it in Clause 2.1(a);
"HK$" means the lawful currency of Hong Kong;
"HONG KONG" means the Hong Kong Special Administrative Region of the PRC;
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"HU" means Hu Shengzhong, a PRC national and holder of PRC identity card
number 440102196902174016;
"IFRS" means the International Financial Reporting Standards issued by the
International Accounting Standards Board from time to time;
"INDEMNIFIED PARTY" has the meaning ascribed to it in Clause 11.4;
"INDEMNIFYING PARTY" has the meaning ascribed to it in Clause 11.4;
"INTELLECTUAL PROPERTY" means, collectively, the Owned Intellectual
Property and the Licensed Intellectual Property;
"K&L GATES" means Xxxxxxxxxxx & Xxxxxxxx Xxxxxxx Xxxxx Xxxxx, a solicitors
firm governed under the laws of Hong Kong;
"LEASE" has the meaning ascribed to it in Clause 7.2(l) and the particulars
of which are set out in Schedule E;
"LICENSED INTELLECTUAL PROPERTY" means any and all licence rights granted
to the PRC Companies in any third party intellectual property or other
proprietary or personal rights, including any and all of the following that
are licensed to the PRC Companies anywhere in the world: (1) trademarks,
trade names, service marks and trade dress, and all goodwill associated
with trademarks, trade names, service marks and trade dress; (2) patents;
(3) mask works; (4) utility models; (5) domain names; (6) copyrights and
copyrightable works; (7) databases; (8) graphics; (9) schematics; (10)
marketing, sales and user data; (11) technology; (12) trade secrets,
including confidential know-how, inventions, specifications and processes;
(13) computer software programs of any kind (in both source and object code
form); (14) application programming interfaces; (15) protocols; and (16)
any renewal, extension, reissue, continuation or division rights,
applications and/or registrations for any of the foregoing;
"LOSSES" has the meaning ascribed to it in Clause 11.1;
"LU" means Lu Qibo, holder of People's Republic of China identity card
number 000000000000000000;
"LU HANG" means Lu Hang, a PRC national and holder of PRC identity card
number 440102197405153614;
"LU SHARES" means 450 Company Shares held by Lu representing 45% of the
total issued share capital of the Company to be sold by Lu to XFM,
particulars of which are set out under Schedule A;
"LU SHARES CONSIDERATION" has the meaning ascribed to it in Clause 2.1(b);
"MARKET VALUE" shall mean, with respect to XFM Shares, the average of the
closing price of XFM Common Shares or their equivalent in ADRs on NASDAQ
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for the fifteen (15) trading days up to and including the third trading day
prior to the applicable date (adjusted to give effect to any splits,
consolidations, dividends or other recapitalizations occurring during such
fifteen-day period);
"MATERIAL ADVERSE CHANGE" means any event or circumstance that occurs which
might reasonably be expected to have a material adverse effect on the
prospects, business, operations or financial condition of the Group or the
PRC Companies taken as a whole or that would materially affect the ability
of any of the companies in the Group or any Person who is a party to any of
the Ancillary Agreements to perform its material obligations under any of
the Ancillary Agreements;
"MATERIAL CONTRACTS" means the material contracts the particulars of which
are set out in Schedule F;
"NASDAQ" means the National Association of Securities Dealers Automated
Quotations;
"NOMINEE 1" means He Jiayue, a PRC national and holder of PRC identity card
number 310108198305192089;
"NOMINEE 2" means Xxxxx Xxxxxx, a PRC national and holder of PRC identity
card number 310110197903044227;
"NOMINEES" means, collectively, the SSMS Nominees and SSC Nominee;
"NON-COMPETE PERIOD" shall have the meaning ascribed to it in Clause 10;
"NON-DISCLOSING PARTIES" has the meaning ascribed to it in Clause 13.4;
"OWNED INTELLECTUAL PROPERTY" means any and all of the following that are
owned (including joint ownership) or held by the PRC Companies anywhere in
the world: (1) trademarks, trade names, service marks and trade dress, and
all goodwill associated with trademarks, trade names, service marks and
trade dress; (2) patents; (3) mask works; (4) utility models; (5) domain
names; (6) copyrights and copyrightable works; (7) databases; (8) graphics;
(9) schematics; (10) marketing, sales and user data; (11) technology; (12)
trade secrets, including confidential know-how, inventions, specifications
and processes; (13) computer software programs of any kind (in both source
and object code form); (14) application programming interfaces; (15)
protocols; and (16) any renewal, extension, reissue, continuation or
division rights, applications and/or registrations for any of the
foregoing;
"PERSON" or "PERSONS" means any natural person, corporation, company,
association, partnership, organization, business, firm, joint venture,
trust, unincorporated organization or any other entity or organization, and
shall include any governmental authority;
"PPO LICENCE" means the Program Production and Operation Licence as
described in Clause 6.7;
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"PRC" means the People's Republic of China;
"PRC CHARTER DOCUMENTS" has the meaning ascribed to it in Clause 7.2(a);
"PRC COMPANIES" means, collectively, SSC and SSMS and their branches and
subsidiaries, if any;
"PRC EQUITY INTERESTS" means, collectively, the SSC Equity Interests and
SSMS Equity Interests;
"PRC EQUITY TRANSFERS" means, collectively, the SSC Equity Transfer and
SSMS Equity Transfer;
"PRC EQUITY TRANSFER DOCUMENTS" means, collectively, the SSC Equity
Transfer Documents and SSMS Equity Transfer Documents;
"PRC GROUP" means, collectively, the PRC Companies and the WFOE;
"PROCUREMENT PAYMENT" has the meaning ascribed to it in Clause 3.7;
"REAL PROPERTY" means any real estate, land, building, condominium, town
house, structure or other real property of any nature, all shares of stock
or other ownership interests in cooperative or condominium associations or
other forms of ownership interest through which interests in real estate
may be held, and all appurtenant and ancillary rights thereto, including,
but not limited to, easements, covenants, water rights, sewer rights and
utility rights;
"RETURNS" has the meaning ascribed to it in Clause 7.2(j);
"RETURN PERIODS" has the meaning ascribed to it in Clause 7.2(j);
"RMB" and "RENMINBI" means the lawful currency of the People's Republic of
China;
"SSC" means Guangzhou Singshine Entertainment and Advertising Co., Ltd., a
company incorporated under the laws of the PRC with registration number
4401022006490 and an address at 3A, Fuli Real Estate Building, No. 19,
Jiaochangdong Lu, Yuexiu District, Guangzhou, the PRC, the particulars of
which are set out under Schedule B;
"SSC COVENANTORS" means, collectively, Xxxx Xxx, He, Lu and Zhang;
"SSC EQUITY INTERESTS" means all of the equity interest in SSC as at the
date hereof, particulars of which are set out under Schedule B;
"SSC EQUITY TRANSFER DOCUMENTS" means all the documents, agreements and
instruments as set out under Schedule J under the heading "SSC Equity
Transfer Documents";
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"SSC EQUITY TRANSFERS" has the meaning ascribed to it in Clause 3.1(a);
"SSC NOMINEE" means Jiang Gweibin, a PRC national and holder of PRC
identity card number 310102198001060011;
"SSC PAYMENT" has the meaning ascribed to it in Clause 3.1(a);
"SSMS" means Shanghai Singshine Marketing Services Co., Ltd., a company
incorporated under the laws of the PRC with registration number
3102292045297 and an address at Xxxx 0X-000, Xx. 000 Xxxxxxxx Xx, Xxxxxx
District, Shanghai, the PRC, the particulars of which are set out under
Schedule B;
"SSMS BEIJING" means the Beijing branch of SSMS, a branch office
established under the laws of the PRC with an address at Xx. 0, Xxxxxxxx
Xxxxxxxxxx Xxxxxxxx, Xxxx Xxxx, Xxxxxx Xxxxxxxx, Xxxxxxx, the particulars
of which are set out under Schedule B;
"SSMS GUANGZHOU" means the Guangzhou branch of SSMS, a branch office
established under the laws of the PRC with an address at Rooms 1112 and
1113, Fifth Zhongshan Avenue, Yuexiu District, Guangzhou, the particulars
of which are set out under Schedule B;
"SSMS EQUITY INTERESTS" means all of the equity interest in SSMS at the
date hereof, particulars of which are set out under Schedule B;
"SSMS EQUITY TRANSFERS" has the meaning ascribed to it under Clause 3.3(a);
"SSMS NOMINEES" means, collectively, Nominee 1 and Nominee 2;
"SSMS PAYMENT" has the meaning ascribed to it under Clause 3.3(a);
"SSMS EQUITY TRANSFER DOCUMENTS" means all the documents, agreements and
instruments as set out under Schedule J under the heading "SSMS Equity
Transfer Documents";
"TANGIBLE PROPERTY" means any furniture, fixtures, leasehold improvements,
vehicles, office equipment, computer equipment, other equipment, machinery,
tools, spare parts, forms, supplies or other tangible personal property of
any nature;
"US$" and "US DOLLARS" means the lawful currency of the United States of
America;
"WFOE" means Guangzhou Excellent Consulting Service Company Ltd., a wholly
foreign owned enterprise established in the PRC as a wholly-owned
subsidiary of the Company with a registered address at Xxxx 000X, Xx. 000,
Xxxxxxxx Xx Xxx, Xxxxxxxx Development District, Guangzhou, the PRC, the
details of which are set out in Schedule B;
"XFM SHARES" means the Class A common shares in the share capital of XFM
with a par value of US$0.001 each;
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"ZHANG" means Xxxxx Xxxxxx, holder of People's Republic of China identity
card number 000000000000000000;
"2007 AMOUNT" has the meaning ascribed to it in Clause 5.1(a);
"2007 FINANCIALS", "2008 FINANCIALS" and "2009 FINANCIALS" mean SSMS's
audited financial statements attributable to the business of SSMS for the
year ending on December 31 of each of 2007, 2008 and 2009, respectively, in
each case prepared before March 31 of each of 2008, 2009 and 2010,
respectively, in accordance with IFRS by a firm of international
accountants selected by XFM;
"2007 NET INCOME", "2008 NET INCOME" and "2009 NET INCOME" mean SSMS's
profit or loss attributable to the business of SSMS being carried on as a
going concern in the ordinary course set out in the 2007 Financials, 2008
Financials and 2009 Financials, respectively, prepared in accordance with
IFRS and audited by an independent auditor appointed by XFM, in each case
excluding extraordinary items. In determining the net income for the
relevant period, the net income:
(a) shall not take into account any expenses or provision made or gain
recognised relating to amortization, written-off, impairment loss or
adjustment of goodwill which arise from acquisitions or disposal of
companies or business by SSMS in the preparation of the 2007
Financials, 2008 Financials and 2009 Financials, respectively;
(b) shall be determined after taxation based on the lowest available
applicable rates provided that any net difference as a result of the
applicable of this rate and the applicable of the nationally rate
shall be recorded as non-operating income for the relevant period;
(c) shall include the net amount of any excess where the company has
incurred, in compliance with applicable laws, salaries expenses higher
than the maximum allowed to be deducted as an expense and the excess
is deemed to be taxable income;
"2007 PAYMENT DATE" has the meaning ascribed to it in Clause 5.1(a);
"2008 AMOUNT" has the meaning ascribed to it in Clause 5.1(b);
"2008 PAYMENT DATE" has the meaning ascribed to it in Clause 5.1(b);
"2009 AMOUNT" has the meaning ascribed to it in Clause 5.1(c); and
"2009 PAYMENT DATE" has the meaning ascribed to it in Clause 5.1(c).
1.2 Interpretation. In this Agreement:
(a) the headings are inserted for convenience only and shall not affect
the construction of this Agreement;
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(b) references to statutory provisions shall be construed as references to
those provisions as amended or re-enacted or as their application is
modified by other statutory provisions (whether before or after the
date hereof) from time to time and shall include any provisions which
are re-enactments (whether with or without modification);
(c) all time and dates in this Agreement shall be Beijing time and dates
except where otherwise stated;
(d) unless the context requires otherwise, words incorporating the
singular shall include the plural and vice versa and words importing a
gender shall include every gender; and
(e) references herein to Clauses, Recitals and Schedules are to clauses
and recitals of and schedules to this Agreement.
1.3 Recitals, Schedules. All recitals and schedules form part of this Agreement
and shall have the same force and effect as if expressly set out in the
body of this Agreement and any reference to this Agreement shall include
the recitals and schedules.
1.4 Joint Obligations. Warranties, covenants, indemnities or other obligations
expressed in this Agreement to be given by more than one party shall be
deemed to be given by such parties on a joint and several basis unless
otherwise expressly provided for.
2. SALE AND PURCHASE
2.1 Purchase and Sale of Company Shares. Subject to the terms and conditions
set out in this Agreement:
(a) XFM (relying on the representations, warranties, agreements,
covenants, undertakings and indemnities hereinafter referred to)
agrees with He to purchase at Company Closing, and He agrees to sell
and cause to be sold to XFM at Company Closing, all of his direct and
indirect interests in the He Shares for the consideration of Five
Thousand Five Hundred Hong Kong Dollars (HK$5,500) (the "HE SHARES
CONSIDERATION"); and
(b) XFM (relying on the representations, warranties, agreements,
covenants, undertakings and indemnities hereinafter referred to) agree
with Lu to purchase at Company Closing, and Lu agrees to sell and
cause to be sold to XFM at Company Closing, all of his direct and
indirect interests in the Lu Shares for the consideration of Four
Thousand Five Hundred Hong Kong Dollars (HK$4,500) (the "LU SHARES
CONSIDERATION"),
in each case with effect from the Company Closing Date free from all
options, liens, charges, pledges, claims, agreements, encumbrances,
equities and other third party
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rights of any nature whatsoever and together with all rights of any nature
whatsoever now or hereafter attaching or accruing to them including all
rights to any dividends or other distribution declared, paid or made in
respect of them after the Company Closing Date.
2.2 Payment. XFM shall pay the He Shares Consideration to He and the Lu Shares
Consideration to Lu on the date of the Company Closing.
2.3 Company Closing. Upon the conditions set out in Clause 2.5 having been
satisfied or waived on or before the expiration of the time period herein
for the fulfilment of such conditions, the completion of the purchase and
sale of the Company Shares (the "COMPANY CLOSING") shall take place upon
the payment of the considerations for He Shares and Lu Shares. The date and
time of the Company Closing are herein referred to as the "COMPANY CLOSING
DATE".
2.4 Deferral of Company Closing.
(a) Without prejudice to any other remedies available to XFM, if any
provision of Clause 2.5 has not been complied with by the Vendors on
the Company Closing Date (except if the Vendors' failure to comply is
caused by XFM or Force Majeure), XFM may:
(i) proceed to Company Closing so far as practicable (without
prejudice to its rights hereunder); or
(ii) rescind its obligations to purchase the interests in the Company
Shares under this Agreement without prejudice to any other remedy
and without incurring any liability to the Vendors or the
Company.
2.5 Conditions to Company Closing. The obligations of XFM under this Agreement
to complete the purchase of the Company Shares and to pay the consideration
therefor are subject to the satisfaction or waiver on or before the Company
Closing Date of all of the Conditions to the extent they relate to the
Company and the WFOE.
2.6 Vendors Company Closing Obligations. Upon the Company Closing, the Vendors
shall deliver or procure to be delivered to XFM the following documents in
respect of the Company Shares:
(a) duly completed and signed undated instrument of transfers of the
Company Shares by the registered holders thereof in favour of XFM or
any entity as it may direct together with the share certificates
representing the applicable Company Shares;
(b) duly completed and signed bought and sold notes of the Company Shares
by the registered holders thereof in favour of XFM or any entity as it
may direct;
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(c) duly completed and signed documents required for the resignation of
existing directors and appointment of new directors of the Company
consisting of the following:
(i) Form 2A;
(ii) letters of resignation from existing directors of the Company;
and
(iii) shareholders' and directors' resolution of the Company approving
the resignation of the existing directors and company secretary,
the appointment of the persons as nominated by XFM to be new
directors and company secretary and the transfer of the Company
Shares and the change of the registered office of the Company;
(d) all books and records of the Company;
(e) shareholders' and directors' resolution of WFOE approving the
resignation of He as the executive director and legal representative
of the WFOE and appointment of such person as XFM may nominate as the
executive director and legal representative of the WFOE and any other
documents as may be required to effect the foregoing;
(f) all books and records of WFOE; and
(g) all other documents that may be reasonably required by XFM for the
purposes herein, including but not limited to, all documents required
to be signed, submitted to and/or registered with any Governmental
Entity.
3. PROCUREMENT OF PRC SHARES
3.1 SSC Equity Interests. Each of the Vendors shall procure and guarantee and
each of the SSC Covenantors covenants to complete each of the following as
soon as practicable following the execution and delivery of this Agreement:
(a) sell and transfer all of the SSC Equity Interests by the SSC
Covenantors to the SSC Nominee (the "SSC EQUITY TRANSFERS") for the
total consideration of One Million Ten Thousand Renminbi
(RMB1,010,000) (the "SSC PAYMENT") and the performance of all actions
required or contemplated under this Agreement by all of the holders of
the SSC Equity Interests including, but not limited to, the execution
and submission of all the SSC Equity Transfer Documents;
(b) tender the resignation as directors and legal representatives of SSC
of each of the following:
Director: Lu
Legal Representative: Lu
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(c) appoint the following as executive director and legal representative
of SSC:
Executive Director: SSC Nominee
Legal Representative: Such person as XFM may nominate
(d) change the bank account signatories of all bank accounts of SSC to
person(s) nominated by XFM; and
(e) register the ownership of the SSC Equity Interests in the name of the
SSC Nominee; and
(f) amend the Articles of Association of SSC to provide for different
persons to be the executive director and legal representative.
3.2 Covenants of XFM Re SSC. XFM shall procure the SSC Nominee and all other
Persons nominated by XFM to take, in a timely manner, all actions required
for the Vendors to complete the matters set out in Clause 3.1 including,
without limitation, executing all documents and information as necessary.
3.3 SSMS Equity Interests. Each of the Vendors and Xxxx Xxx shall procure and
guarantee and each of the holders of the SSMS Equity Interests covenants to
complete each of the following as soon as practicable following the
execution and delivery of this Agreement:
(a) sell and transfer of the SSMS Equity Interests by the holders of the
SSMS Equity Interests to the Nominees as to 50% in favour of each of
the SSMS Nominees (the "SSMS EQUITY TRANSFERS") for the total
consideration of One Million Renminbi (RMB1,000,000) (the "SSMS
PAYMENT") and the performance of such actions required or contemplated
under this Agreement by all of the holders of the SSMS Equity
Interests including, but not limited to, the signing and submission of
all the SSMS Equity Transfer Documents;
(b) tender the resignation as directors and legal representatives of SSMS
of each of the following:
Director: He
Director: Lu
Director: Lu Hang
Director: Yin Zijian
Director: Xxxx Xxx
Legal Representative: He
(c) appoint the following as directors and legal representative of SSMS:
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Director: Nominee 2
Legal Representative: Such person as XFM may nominate
(d) change the bank account signatories of all bank accounts of SSMS to
person(s) nominated by XFM; and
(e) register the ownership of the SSMS Equity Interests in the name of the
SSMS Nominees in the following proportions:
(i) Nominee 1: 50% Five Hundred Thousand Renminbi (RMB500,000).
(ii) Nominee 2: 50% Five Hundred Thousand Renminbi (RMB500,000).
(f) amend the Articles of Association of SSMS to provide for one (1)
executive director.
3.4 Covenant to Transfer. Each of the Vendors and each of the Covenantors
hereby jointly and severally undertakes to XFM that as soon as practicable
after the execution and delivery of this Agreement they shall:
(a) execute and deliver and procure the due execution and delivery of all
documents required to be executed and delivered by the Vendors, all
other holders of SSC Equity Interests or any other party necessary to
vest in the SSC Nominee all property and rights in SSC and the SSC
Equity Interests as are intended to be vested in them in consideration
of the SSC Payment by or pursuant to this Agreement and the Ancillary
Agreements;
(b) execute and deliver and procure the due execution and delivery of all
documents required to be executed and delivered by the Vendors, all
other holders of SSMS Equity Interests or any other party necessary to
vest in the SSMS Nominees in equal shares all property and rights in
SSMS and the SSMS Equity Interests as are intended to be vested in
them in consideration of the SSMS Payment by or pursuant to this
Agreement and the Ancillary Agreements;
(c) file and submit and procure the filing and submission of all documents
required to effect the SSC Equity Transfers and SSMS Equity Transfers
and the change of directors and legal representatives of SSC and SSMS
as contemplated in this Agreement with the relevant Governmental
Entities;
(d) procure the execution and delivery of the Employment Agreements by the
individual parties thereto;
(e) cause and procure SSMS to retain a minimum of three (3) months'
working capital of Ten Million Renminbi (RMB10,000,000) and which
amount shall be confirmed by XFM and its auditors;
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(f) cause and procure SSC to retain all cash amounts set out in the April
30, Statements and which amount shall be confirmed by XFM and its
auditors.
3.5 Covenants of XFM Re SSMS. XFM shall procure each of the SSMS Nominees and
any other Person nominated by XFM to take, in a timely manner, all actions
required for the Vendors to complete the matters set out in Clause 3.3
including, without limitation, executing all documents and information as
necessary.
3.6 Ancillary Agreements. Each of the Vendors shall jointly and severally
procure and guarantee the execution and delivery of the Employment
Agreements by the individual parties to them with the WFOE, SSC, SSMS or a
new company formed or to be formed as a subsidiary of either of them or
such other party as XFM may direct and the delivery of the services and
fulfilment of the obligations by each of the individual parties as set out
in the respective Employment Agreements.
3.7 Procurement Payment. Upon the fulfilment or waiver of the conditions set
out in Clause 3.8, XFM shall pay, in respect of the matters set out in
Clauses 3.1, 3.3 and 3.4, the following amounts (collectively, the
"PROCUREMENT PAYMENT"):
(a) to He: (i) Four Million Three Hundred Fifty Thousand US Dollars
(US$4,350,000) into escrow in accordance with Clause 3.11; (ii) Twenty
Seven Thousand Five Hundred (27,500) XFM Shares within twenty (20)
Business Days from the date the Conditions have been fulfilled or
waived; and (iii) Twenty Seven Thousand Five Hundred (27,500) XFM
Shares in accordance with Clause 3.12; and
(b) to Lu: (i) Three Million Five Hundred Sixty Thousand US Dollars
(US$3,560,000) into escrow in accordance with Clause 3.11; (ii) Twenty
Two Thousand Five Hundred (22,500) XFM Shares within twenty (20)
Business Days from the date the Conditions have been fulfilled or
waived; and (iii) Twenty Two Thousand Five Hundred (22,500) XFM Shares
in accordance with Clause 3.12.
3.8 Conditions to Payment. XFM's obligation to pay the Procurement Payment
shall be subject to the completion of all steps for and confirmation of the
completion or waiver of all matters set out in Clauses 3.1, 3.3, 3.4 and
3.6, inclusive, and Clause 9 including the transfers of the SSC Equity
Interest and the SSMS Equity Interests, the execution and delivery of
Employment Agreements and all other steps, procedures, registrations, and
the execution, delivery and filing of all other documents contemplated in
and necessary to effect the above (the "GROUP CLOSING"). For greater
certainty, XFM shall not be obliged to pay any amount of the Procurement
Payment unless all the conditions set forth in Clauses 3.1, 3.3, 3.4 and
3.6, inclusive, and Clause 9 are fulfilled or waived.
3.9 XFM Shares. If for any reason that XFM Shares or the ADRs representing them
payable to the Vendors are not actively traded on NASDAQ or a comparable
public trading market or that the issuance of such XFM Shares and the ADRs
representing them are in any way prohibited or restricted under any
applicable laws and
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regulations, then XFM shall so notify the Vendors, and the Vendors may, by
written notice to XFM, elect to receive money in US dollars equal to the
Market Value of the XFM Shares in lieu of such XFM Shares. Notwithstanding
any of the foregoing or in this Agreement, XFM shall have the right to
elect to pay an amount in US dollars equal to the Market Value of the XFM
Shares in lieu of any XFM Shares issuable hereunder as Procurement Payment,
Earnouts or otherwise.
3.10 Working Capital. The parties agree and acknowledge that One Million Six
Hundred Thirty Thousand US Dollars (US$1,630,000) of the cash portion of
the Procurement Payment is payable on the condition that SSMS has at least
Ten Million Renminbi (RMB10,000,000) in working capital as of the Group
Closing. Any shortfall shall be deducted from the 2007 Amount and the 2008
Amount if the 2007 Amount is not sufficient to deduct the shortfall.
3.11 Escrow. XFM shall pay the cash portion of the Procurement Payment to K&L
Gates within three (3) Business Days after the PRC Equity Transfer
Documents have been submitted to the relevant State Administration of
Industry and Commerce and receipts for same have been issued. The Vendors
and XFM shall enter into an escrow agreement with K&L Gates in the form as
set out under Schedule M (the "ESCROW AGREEMENT") pursuant to which the
cash portion of the Procurement Payment shall be released to the Vendors or
to such accounts as they may direct upon the joint instructions of He (as
the representative of the Vendors) and the representative of XFM (the
"GROUP CLOSING INSTRUCTION"). XFM and the Vendors shall issue the Group
Closing Instruction upon the issuance of new business licenses evidencing
the completion of the PRC Equity Transfers.
3.12 Share Portion of Procurement Payment. XFM shall issue Twenty Seven Thousand
Five Hundred (27,500) XFM Shares to He and Twenty Two Thousand Five Hundred
(22,500) XFM Shares to Lu within twenty (20) Business Days from the date
when the PPO License is issued and a copy of the same has been received by
XFM.
4. SSC PAYMENT AND SSMS PAYMENT
4.1 Funding to Nominees. Within five (5) Business Days after XFM receives a
confirmation from the State Administration of Industry and Commerce of the
change in the ownership of the PRC Equity Interests to reflect the
completion of the transactions herein, XFM shall fund, loan or otherwise
provide an amount not less than SSC Payment and SSMS Payment to the Company
or the WFOE and cause WFOE to lend to the Nominees (or such other persons
as the Nominees may direct) such loans in the aggregate amount equal to the
SSC Payment and SSMS Payment such that each of the Nominees receives such
necessary amount of the relevant payment the proceeds of which shall be
used to purchase SSC Equity Interests and SSMS Equity Interests.
4.2 SSC Transfer. XFM shall, within five (5) Business Days from the date of
payment in Clause 4.1 above, procure the SSC Nominee or such other person
as the SSC
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Nominee may direct to pay the SSC Payment to the SSC Covenantors or such
other person as each of them may direct in accordance with the following:
(a) He: Four Hundred Twenty-nine Thousand Two Hundred Fifty Renminbi
(RMB429,250) for the transfer of all of He's SSC Equity Interest
(representing 42.5% of the total registered capital of SSC);
(b) Lu: Four Hundred Twenty-nine Thousand Two Hundred Fifty Renminbi
(RMB429,250) for all of Lu's SSC Equity Interest (representing 42.5%
of the total registered capital of SSC); and
(c) Zhang: One Hundred Fifty-one Thousand Five Hundred Renminbi
(RMB151,500) for all of Zhang's SSC Equity Interest (representing 15%
of the total registered capital of SSC).
4.3 SSMS Transfer. XFM shall, within five (5) Business Days from the date of
payment in Clause 4.1 above, procure the SSMS Nominees or such other person
as the SSMS Nominees may direct, to pay the SSMS Payment to the holders of
the SSMS Equity Interests or such other person as each of them may direct
in accordance with the following:
(a) He: Four Hundred Eighty Thousand Renminbi (RMB480,000) for all of He's
equity interest in SSMS (representing 48% of the total registered
capital of SSMS);
(b) Lu: One Hundred Eighty Thousand Renminbi (RMB180,000) for all of Lu's
equity interest in SSMS (representing 18% of the total registered
capital of SSMS);
(c) Lu Hang: Sixty Thousand Renminbi (RMB60,000) for all of Lu Hang's
equity interest in SSMS (representing 6% of the total registered
capital of SSMS);
(d) Chen Qingyang: One Hundred Five Thousand Renminbi (RMB105,000) for all
of Chen Xxxx Xxxx'x equity interest in SSMS (representing 10.5% of the
total registered capital of SSMS);
(e) Hu: One Hundred Thousand Renminbi (RMB100,000) for all of Hu Xxxxx
Xxxxx'x equity interest in SSMS (representing 10% of the total
registered capital of SSMS):
(f) Zhang: Fifteen Thousand Renminbi (RMB15,000) for all of Zhang Jinyu's
equity interest in SSMS (representing 1.5% of the total registered
capital of SSMS); and
(g) Yin Zijian: Sixty Thousand Renminbi (RMB60,000) for all of Yin
Zijian's equity interest in SSMS (representing 6% of the total
registered capital of SSMS).
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4.4 Vendors Transfer Obligations. Upon the completion of the SSC Equity
Transfers and the SSMS Equity Transfers, the Vendors shall deliver to and
shall procure the delivery to XFM or such other parties as XFM may direct
the following:
(a) Employment Agreements;
(b) written confirmation from both Vendors that they are not aware of any
matter or thing which is in breach of or inconsistent with any of the
representations, warranties and undertakings herein contained;
(c) shareholders' and directors' resolution of SSC approving the
resignation of Lu as director and as legal representative of SSC and
the appointment of SSC Nominee to be the new executive director of SSC
and such person as XFM may nominate to be new legal representative of
SSC and the change of bank account signatories as nominated by XFM and
any other documents as may be required to effect the foregoing
(d) all books and records of SSC;
(e) shareholders' and directors' resolution of SSMS approving the
resignation of He, Lu, Lu Hang, Yin Zijian and Xxxx Xxx as directors
and He as legal representative of SSMS and the appointment of the
Nominee 2 to be the new director of SSMS and such person as XFM may
nominate to be new legal representative of SSMS and the change of bank
account signatories as nominated by XFM and any other documents as may
be required to effect the foregoing;
(f) all books and records of SSMS;
(g) all powers of attorney or other authorities under which the transfers
of the Company Shares have been executed (if any);
(h) such necessary waivers, consents and other documents as XFM may
reasonably require to give to XFM or its nominees good title to the
Company Shares and the PRC Equity Interests and to enable XFM or its
nominees to become the registered holders thereof; and
(i) such other papers and documents as XFM may reasonably require.
4.5 SSC Working Capital. As soon as practicable following the completion of all
of the transactions contemplated herein (but in no event later than two
calendar months from the Group Closing), and as permitted by PRC laws and
regulations, XFM shall contribute a further One Million US Dollars
(US$1,000,000) to SSC to fund the working capital requirements of SSC.
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5. EARNOUTS
5.1 Earnouts. Subject to Clauses 5.2 and 5.5, XFM shall pay the following
amounts (in RMB or its US$ equivalent calculated based on the Foreign
Exchange Rate) to the Vendors or such other party designated by the
Vendors:
(a) an amount (the "2007 AMOUNT") equal to the product of ((A) 2007 Net
Income and (B) 8.5 and (C) 55%) minus US$5,000,000) which shall be
paid by XFM no later than fifteen (15) Business Days after the date of
determination of the 2007 Net Income (the date such payment is
required to be made being the "2007 PAYMENT DATE");
(b) an amount (the "2008 AMOUNT") equal to the product of ((A) 2008 Net
Income and (B) 8.5 and (C) 25%) which shall be paid by XFM no later
than fifteen (15) Business Days after the date of determination of the
2008 Net Income(the date such payment is required to be made being the
"2008 PAYMENT DATE"); and
(c) an amount (the "2009 AMOUNT") equal to the product of ((A) 2009 Net
Income and (B) 8.5 and (C) 20%) which shall be paid by XFM no later
than fifteen (15) Business Days after the date of determination of the
2009 Net Income (the date such payment is required to be made being
the "2009 PAYMENT DATE").
5.2 Cash Payment. The 2007 Amount, 2008 Amount and 2009 Amount shall be paid in
cash.
5.3 Payment Date. On each of the 2007 Payment Date, 2008 Payment Date and 2009
Payment Date, XFM shall pay to the Vendors or any other person jointly
designated by the Vendors the 2007 Amount, the 2008 Amount and 2009 Amount,
respectively.
5.4 Manner of Payment. Notwithstanding any other provision contained herein, at
least fifteen (15) Business Days in advance of the respective 2007 Payment
Date, 2008 Payment Date and 2009 Payment Date, the Vendors shall, in
writing, advise XFM of the manner in which XFM shall pay such 2007 Amount,
2008 Amount or 2009 Amount. Specifically, the Vendors shall advise XFM of
the persons and necessary account information where such payments shall be
made.
5.5 Minimum Payment. If any of the 2007 Net Income, 2008 Net Income and 2009
Net Income shall be less than One Million Three Hundred Thousand US Dollars
(US$1,300,000), the 2007 Amount, 2008 Amount and 2009 Amount, respectively,
calculated in accordance with Clause 5.1 shall be calculated using One
Million Three Hundred Thousand US Dollars (US$1,300,000) as the 2007 Net
Income, 2008 Net Income and 2009 Net Income PROVIDED THAT:
(a) the top five clients of the Group shall be internationally recognized
brands and market leaders equivalent to Diageo, Philips and Sony; and
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(b) each of the Employment Agreements of the Vendors and Xxxx Xxx shall
remain in full force and in effect and there has been no material
default by any of them except where any of the Employment Agreements
was terminated:
(i) by the Vendors or Xxxx Xxx pursuant to the Employment Agreement;
or
(ii) by XFM, SSC, SSMS or other parties under XFM's control, as the
case may be, other than pursuant to the terms of the Employment
Agreement.
5.6 Maximum Payment. Notwithstanding anything to the contrary herein, the
aggregate of Five Million US Dollars (US$5,000,000), SSMS Payment, the 2007
Amount, 2008 Amount and 2009 Amount shall not exceed Eighteen Million US
Dollars (US$18,000,000). For greater certainty, XFM shall not and shall not
have any obligation to pay any amount in excess of Eighteen Million US
Dollars (US$18,000,000) in the aggregate to the Vendors, the holders of the
PRC Equity Interests or assets hereunder.
5.7 Preparation of Financials. XFM shall instruct one of Deloitte, Ernst &
Young, KPMG or PriceWaterhouseCoopers as the auditors to:
(a) based on a scope of work determined by XFM acting reasonably, prepare
and issue the 2007 Financials, 2008 Financials and 2009 Financials
within 90 days from the end of each of the financial years ended
December 31, 2007, December 31, 2008 and December 31, 2009,
respectively; and
(b) provide a copy of the 2007 Financials, 2008 Financials and 2009
Financials to XFM, the Vendors and the Covenantors as soon as they are
issued.
XFM shall bear all costs of or related to the preparation of the 2007
Financials, 2008 Financials and 2009 Financials.
5.8 Calculation of the 2007 Amount, 2008 Amount and 2009 Amount. Within five
(5) days of the delivery to XFM of the 2007 Financials, 2008 Financials and
2009 Financials, respectively, XFM shall deliver to the Vendors and
Covenantors its calculation of the 2007 Amount, 2008 Amount and 2009
Amount, respectively, which notice shall include reasonable detail of the
basis of such calculations to enable the parties and/or their advisors to
review the applicable calculations. If the Vendors and Covenantors (acting
together) do not dispute in a written notice to XFM the calculation of 2007
Amount, 2008 Amount and 2009 Amount, as the case may be, within ten (10)
days of receiving the same, or if the Vendors and Covenantors jointly
advise XFM in writing that they accept the calculation within such ten (10)
day period, then the 2007 Amount, 2008 Amount and 2009 Amount shall for all
purposes be considered final, accepted and approved by all parties. If the
Vendors and Covenantors shall raise any dispute regarding the calculation
of the 2007 Amount, 2008 Amount and 2009 Amount within such ten (10) day
period, then the parties shall endeavour to resolve such dispute amicably
within an
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additional period of ten (10) days. If successful, the 2007 Amount, 2008
Amount and 2009 Amount, as the case may be, as adjusted to so resolve such
dispute, shall for all purposes be considered final, accepted and approved
by all parties. If the parties do not reach an agreement with respect to
the calculation within such ten (10)-day period, then the matter shall be
referred to arbitration in accordance with this Agreement for final
determination. If the arbitration award determines the disputed amount
should be more than fifteen per cent (15%) than the original amount, XFM
shall bear all parties' costs and expenses of the arbitration. If the
arbitration award determines the disputed amount should not be more than
fifteen per cent (15%) than the original amount, the Vendors shall jointly
and severally bear all parties' costs and expenses of the arbitration. In
both cases, the amount determined by the arbitration award shall be deemed
to be final, accepted and approved by all parties and used to determine the
2007 Amount, 2008 Amount or 2009 Amount, as the case may be.
5.9 Conditions of Payment of Earnouts. XFM's obligations to pay the Earnouts
are conditional on the following being true as of the scheduled date of
payment:
(a) each of the Employment Agreements with the Vendors and Xxxx Xxx shall
be in full force and effect (except where any of the Employment
Agreements was terminated:(i) by the Vendors or Xxxx Xxx pursuant to
the Employment Agreement; or (ii) by XFM, SSC, SSMS or other parties
under XFM's control, as the case may be, other than pursuant to the
terms of the Employment Agreement.) and there has been no material
default under any of them; and
(b) there has not occurred any material breach of this Agreement by any of
the Vendors or Covenantors.
5.10 Breach of Payment. If XFM breaches its obligation to pay any of the 2007
Amount, 2008 Amount or 2009 Amount when due and fails to pay such amount
within thirty (30) days of the due date, the Vendors and the Covenantors
may, upon notice to XFM, without prejudice to other remedies available to
them, terminate their obligations under the Employment Agreement and Clause
10 of this Agreement and XFM shall henceforth be released from its
obligations to pay any payments to the Vendors which are not yet payable or
accrued including, but not limited to, any further Minimum Payment and
Earnouts not already payable by it under this Agreement. In the event the
parties resort to arbitration pursuant to Clause 14.5 with respect to XFM's
failure to pay the said amount, if the outcome of the arbitration is in
favour of the Vendors, XFM shall pay to the Vendors interest at the rate of
8% per annum on the amounts outstanding by XFM and the interest shall
accrue from the date the said amounts became due and payable.
6. COVENANTS
6.1 GZ Consultation. As soon as practicable and by no later than 31 December
2007, the Vendors and the Covenantors shall take all steps to ensure and
shall procure that Guangzhou Singshine Plan and Consultation Co., Ltd.
ceases to carry on business and take all steps necessary to wind up
Guangzhou Singshine Plan and
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Consultation Co., Ltd. including the filing of all necessary documents with
all relevant Governmental Entities.
6.2 Further Covenants. Each of the Vendors and each of the Covenantors hereby
irrevocably covenant and undertake to XFM to execute and deliver and
procure the due execution and delivery of all such further documents
required to be signed by the Vendors or members of the Group as are
necessary to vest in XFM or its nominees all such property and rights as
are intended to be vested in them by or pursuant to this Agreement. The
relevant expenses shall be borne by the relevant signing parties.
6.3 Board of Directors and Legal Representatives. Each of the parties hereto
shall do and shall procure to be done all actions necessary to ensure that
the sole director of the Company, SSC, SSMS and the WFOE, the legal
representatives of SSC, SSMS and the WFOE and the bank account signatories
of the Company, SSC, SSMS and WFOE shall be parties nominated by XFM.
6.4 Limitation on Transfer of Interests. None of the parties to this Agreement
shall sell, give, assign, hypothecate, pledge, encumber, grant a security
interest in or otherwise dispose of (whether by operation of law or
otherwise) (each a "TRANSFER") any Company Shares, any interests in
subsidiaries or branches of SSMS including SSMS Beijing, SSMS Guangzhou,
Shanghai Liangdian Zhongduan Zhanshi Co., Ltd., Shanghai Heju Advertising
Co., Ltd. and Shanghai Fenghuo Advertising Co., Ltd. or PRC Equity
Interests or any right, title or interest therein or thereto, except to an
Affiliate of such party or in connection with fundraising activities of XFM
and in accordance with the memorandum and articles of association of the
Company, SSC and SSMS, as applicable, and any attempt to transfer any
Company Shares, any interests in subsidiaries or branches of SSMS including
SSMS Beijing, SSMS Guangzhou, Shanghai Liangdian Zhongduan Zhanshi Co.,
Ltd., Shanghai Heju Advertising Co., Ltd. and Shanghai Fenghuo Advertising
Co., Ltd. or PRC Equity Interests or any rights under any of them in
violation of the preceding sentence shall be null and void ab initio.
6.5 Joint and Several Liability. Unless otherwise stated herein, all
obligations and liabilities of the Vendors or any one of them hereunder,
howsoever stated, shall be the joint and several obligations and
liabilities of the Vendors.
6.6 Operations and Reorganization. Prior to December 31, 2009 or such earlier
date of termination of this Agreement by XFM, XFM shall not:
(a) disrupt the management of the business of SSMS or SSC in the ordinary
course PROVIDED THAT the business is carried on in a lawful manner in
all respects and in the best interests of the shareholders of XFM and
subject to the reasonable oversight of the XFM Board;
(b) undertake any change of control of XFM which has an adverse effect on
the business operations of SSMS or SSC; or
(c) effect any change of control of SSC or SSMS.
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6.7 Radio & Television Program Production and Operation Licence. The Vendors
shall procure the issuance of the Radio and Television Program Production
and Operation Licence issued by the State Administration of Radio, Film and
Television to SSC to allow SSC to produce and provide radio programs to
Guangdong Station issued (the "PPO LICENCE") within one (1) year after the
working capital increase as contemplated in Clause 4.5 has been made and
provided that at least Three Million Renminbi (RMB3,000,000) working
capital has been maintained for a six-month period. The parties agree that
they shall ensure that SSC maintain such working capital amount for a one
year period from the date or the increase in working capital. If PPO
Licence is been issued in accordance with the above, XFM shall issue such
number of XFM Shares in accordance with Clause 3.12.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE VENDORS
Each of the Vendors hereby jointly and severally represents and warrants to
XFM that the following statements are true and correct as of the Group
Closing Date:
7.1 The Company. In respect of the Company:
(a) Organization, Standing, and Power. It is a company duly organized,
validly existing, and in good standing under the laws of Hong Kong,
has all requisite corporate power and authority to carry on its
businesses, and is duly qualified and in good standing to do business
in each jurisdiction in which it conducts business. It has made
available to XFM complete and correct copies of its articles of
incorporation, bylaws, registers and/or other organizational documents
("COMPANY CHARTER DOCUMENTS") of it, in each case, as amended to the
date hereof.
(b) Corporate Records. Its minute books and corporate records, complete
and correct copies of which have been made available to XFM, contain
correct and complete records of all proceedings and actions taken at
all meetings of, or effected by written consent of its shareholders
and its board of directors and all original issuances and subsequent
transfers, repurchases, and cancellations of its shares.
(c) Capital Structure.
(i) Immediately prior to and following Group Closing its issued share
capital will be as set out in Schedule B and Schedule C,
respectively.
(ii) There are no options, warrants, calls, conversion rights,
commitments, agreements, contracts, restrictions, or rights of
any character to which it is a party or by which it may be bound
obligating company to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares, or obligating it to
grant, extend or enter into any such option, warrant, call,
conversion right,
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commitment, agreement, contract, understanding, restriction,
arrangement or right. It does not have outstanding any bonds,
debentures, notes or other indebtedness.
(d) Subsidiaries. It does not presently own or control, directly or
indirectly, any interest in any other corporation, association, or
other business entity, and is not a participant in any joint venture,
partnership, or similar arrangement, except as set out in Schedule B.
Its particulars as set out in Schedule B are true and accurate in all
respects and the percentage of its share capital shown therein as
owned or controlled by it is beneficially owned and clear of all
Encumbrances. There is no agreement or arrangement in force which
calls for the present or future issue or sale of, or grant to any
person the right (whether conditional or otherwise) to call for the
issue, sale or transfer of any of its share or loan capital (including
any of its option, notes, warrants or other securities or rights
convertible or ultimately convertible into shares or equity
interests).
(e) Authority. The execution, delivery, and performance of this Agreement
have been duly authorized by all necessary action of its board of
directors. Certified copies of the resolutions adopted by its board of
directors approving this Agreement and transactions contemplated
hereby and thereby have been provided to XFM.
(f) Execution. Its execution and delivery of this Agreement shall
constitute valid, binding, and enforceable obligations of it in
accordance with their terms, except to the extent that enforceability
may be limited by applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding at law or in
equity.
(g) Compliance with Laws and Other Instruments. It holds, and at all times
has held, all licences, permits, and authorizations from all
governmental entities necessary for the lawful conduct of its business
pursuant to all applicable statutes, laws, ordinances, rules, and
regulations of all such authorities having jurisdiction over it or any
part of its operations. There are no violations or claimed violations
of any such licence, permit, or authorization, or any such statute,
law, ordinance, rule or regulation.
(h) Corporate Governance. Neither the execution and delivery of nor the
performance by it of its obligations under this Agreement will (i)
conflict with or result in any breach of its Company Charter
Documents; (ii) require any Consent, (iii) conflict with, result in a
breach or default of, or give rise to any right of termination,
cancellation or acceleration or result in the creation of any lien,
charge, encumbrance, or restriction upon any of the properties or
assets of it or its shares under, any law, statute, rule, regulation,
judgment, decree, order, government permit, licence or order or any
mortgage, indenture, note, licence, trust, agreement or other
agreement, instrument or obligation to which it is a party.
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(i) No Liabilities and No Business Activities. Save as contemplated under
this Agreement, it has no liabilities of any nature howsoever arising,
is not involved in any litigation whether as plaintiff or defendant,
has no assets and is not carrying on any business of any nature.
(j) No Contracts. Save as contemplated under this Agreement, the company
is not a party to or bound by any agreement, contract, legal
arrangement or documentation of any type or nature.
(k) Compliance with PRC Laws. Except as set out in Disclosure Schedule,
all laws of the PRC have been complied with in its incorporation,
organization, management, control and funding including any laws,
rules or regulations promulgated by the Ministry of Commerce,
State-owned Assets Supervision and Administration Commission of the
State Council, State Administration of Taxation, State Administration
for Industry and Commerce, China Securities Regulatory Commission and
State Administration of Foreign Exchange.
(l) Bank. Schedule G contains a complete and correct list of the names and
locations of all banks in which the company has accounts or safe
deposit boxes, the designation of each such account and safe deposit
box, and the names of all persons authorized to draw on or have access
to each such account and safe deposit box.
7.2 The PRC Companies. In respect of each of the WFOE, PRC Companies and their
branches and subsidiaries:
(a) Organization, Standing, and Power. The company is a company duly
organized, validly existing, and in good standing under the laws of
the PRC, have all requisite corporate power and authority to carry on
its businesses, and is duly qualified and in good standing to do
business in each jurisdiction in which it conducts business. The
company has made available to XFM complete and correct copies of the
company's articles of incorporation ("PRC CHARTER DOCUMENTS"), in each
case, as amended to the date hereof.
(b) Corporate Records. The complete and correct copies of the minute books
and corporate records of the company which has been filed with the
local authorities including, but not limited to, the Industry and
Commerce have been made available to XFM and are materially complete,
correct and accurate.
(c) Capital Structure.
(i) Immediately prior to Closing, the capital structure of each of
the PRC Companies shall be as set out in Schedule B.
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(ii) There are no options, warrants, calls, conversion rights,
commitments, agreements, contracts, restrictions, or rights of
any character to which the company is a party or by which the
company may be bound obligating to issue, deliver or sell, or
cause to be issued, delivered or sold, additional equity
interest, or obligating the company to grant, extend or enter
into any such option, warrant, call, conversion right,
commitment, agreement, contract, understanding, restriction,
arrangement or right. The company has outstanding any bonds,
debentures, notes or other indebtedness.
(iii) The SSC Covenantors are the owners of all interests in and to
SSC free and clear of all Encumbrances and, except any rights in
favour of XFM in this Agreement, no other party has any rights,
now existing or contingent, whether or not exercised or claimed
and whether or not by exercise of the power of any Governmental
Entity, to any interest in the company.
(iv) The SSMS Covenantors are the owners of all interests in and to
SSMS free and clear of all Encumbrances and, except any rights
in favour of XFM in this Agreement, no other party has any
rights, now existing or contingent, whether or not exercised or
claimed and whether or not by exercise of the power of any
Governmental Entity, to any interest in the company.
(d) Subsidiaries. The company does not presently own or control, directly
or indirectly, any interest in any other corporation, association, or
other business entity, and is not a participant in any joint venture,
partnership, or similar arrangement, except as set out in Schedule B.
The particulars of the company set out in Schedule B are true and
accurate in all respects and the percentage of the equity interest
shown therein as owned or controlled by any party is beneficially
owned free from any Encumbrance. There is no agreement or arrangement
in force which calls for the present or future issue or sale of, or
grant to any person the right (whether conditional or otherwise) to
call for the issue, sale or transfer of any share or loan capital of
the company (including any option, notes, warrants or other securities
or rights convertible or ultimately convertible into shares or equity
interests in the company).
(e) Compliance with Laws and Other Instruments. The companies hold all
material licences, permits, and authorizations from all governmental
entities necessary for the lawful conduct of its business pursuant to
all applicable statutes, laws, ordinances, rules, and regulations of
all such authorities having jurisdiction over it or any part of its
operations or the failure to obtain which shall have a Material
Adverse Change on the business or assets of the company. Each of the
PRC Company has duly and promptly performed all requisite inspections,
including but not limited to, annual inspections by any Governmental
Entity for the lawful conduct of its business and its operation and
for it to validly and legally hold all its licences, permits and
authorizations.
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(f) Corporate Governance. Neither the execution and delivery of this
Agreement nor the performance by the company of its obligations under
this Agreement will (i) conflict with or result in any breach of the
PRC Charter Documents; (ii) require any Consent by any Governmental
Entity, (iii) conflict with, result in a breach or default of, or give
rise to any right of termination, cancellation or acceleration or
result in the creation of any lien, charge, encumbrance, or
restriction upon any of the properties or assets of the company or
equity interest in the company under any law, statute, rule,
regulation, judgment, decree, order, government permit, licence or
order or any mortgage, indenture, note, licence, trust, agreement or
other agreement, instrument or obligation to which the company is a
party.
(g) Technology and Intellectual Property Rights. Except as set out in
Disclosure Schedule,
(i) Schedule D contains a list of the Intellectual Property which
includes the following:
(A) all patents, domain names, trademarks, trade names, trade
dress and service marks, and any applications and
registrations for any of the foregoing, that is included in
the Owned Intellectual Property;
(B) all registered copyrights, and applications for registered
copyrights for any Owned Intellectual Property;
(C) all material products and services that currently are
published and/or offered by the company, or that are
currently under development by the company and scheduled to
be commercially released or offered within six (6) months of
the Group Closing Date;
(D) all material licences and sublicenses of Owned Intellectual
Property;
(E) all Licensed Intellectual Property (other than licence
agreements for standard "shrink wrapped, off the shelf,"
commercially available, third party products used by the
company) and any sublicenses thereto; and
(F) any material obligation of exclusivity, non-competition,
non-solicitation, first negotiation or "most favoured
nation" or "equally favoured nation" (e.g. obligating the
company to provide terms as favourable or more favourable as
granted to others) to which the company is subject under any
agreement that does not fall within the ambit of (D) or (E)
in this paragraph.
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(ii) The company owns or has the right to use all Intellectual
Property used or held for use in the conduct of its business
without any conflict with the rights of others. All products
and technology that have been or currently are published and/or
offered by the company or are under development by the company,
and all products and/or technology underlying any and all
services that have been or currently are offered by the company
or are under development by the company is either: (1) owned by
the company, (2) in the public domain, or (3) rightfully used
by the company pursuant to a valid written licence or other
agreement.
(iii) The company is not, as a result of the execution or delivery of
the this Agreement, nor performance of the company's
obligations under this Agreement will the company be in
violation of any licence, sublicense or other agreement
relating to the Intellectual Property or of any non-disclosure
agreement to which the company is a party or otherwise bound.
(iv) The company is not obligated to provide any financial
consideration or other consideration to any third party, nor is
any third party otherwise entitled to any financial
consideration or other consideration, with respect to any
exercise of rights by the company or its successors in the
Intellectual Property.
(v) The company's use, reproduction, modification, distribution,
licensing, sublicensing, sale, or any other exercise of rights
in any Owned Intellectual Property by the company or its
licencees does not infringe, misappropriate or violate any
copyright, patent, trade secret, trademark, service xxxx, trade
name, firm name, logo, trade dress, database right, moral
rights, rights to use likeness, other intellectual property
rights, right of privacy, right of publicity or right in
personal or other data of any person. Further, the use,
reproduction, modification, distribution, licensing,
sublicensing, sale, or any other exercise of rights in any
Licensed Intellectual Property or any other authorized exercise
of rights in or to Licensed Intellectual Property by the
company or their licencees does not infringe, misappropriate or
violate any copyright, patent, trade secret, trademark, service
xxxx, trade name, firm name, logo, trade dress, moral right,
database right, other intellectual property right, right of
privacy, right of publicity or right in personal or other data
of any person. Further, the distribution, licensing,
sublicensing, sale, or other provision of products and services
by the company or its resellers or licencees does not infringe,
misappropriate or violate any copyright, patent, trade secret,
trademark, service xxxx, trade name, firm name, logo, trade
dress, moral right, database right, other intellectual property
right, right of privacy, right of publicity or right in
personal or other data of any person.
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(vi) No action, suit or proceeding (i) challenging the validity,
enforceability, or ownership by the company of any of Owned
Intellectual Property or (ii) to the effect that the use,
reproduction, modification, manufacturing, distribution,
licensing, sublicensing, sale or any other exercise of rights
in any Owned Intellectual Property by the company or its
licencees infringes, misappropriate or violates any
intellectual property or other proprietary or personal right of
any person is pending or is threatened by any person. Further,
no claim to the effect that the distribution, licensing,
sublicensing, sale or other provision of products and services
by the company or its resellers or licencees infringes,
misappropriates or violates any intellectual property or other
proprietary or personal right of any person is pending or, to
the knowledge of the Vendors, is threatened by any person.
There is no unauthorized use, infringement or misappropriation
of any of Owned Intellectual Property by any third party,
employee or former employee to the best knowledge of the
Vendors.
(vii) No other party has any security interests in any Intellectual
Property.
(viii) The company has secured from all parties who have created any
portion of, or otherwise have any rights in or to, Owned
Intellectual Property, other than employees of the company
whose work product was created by them entirely within the
scope of their employment by the company and constitutes work
made for hire owned by the company, valid written assignments
or licences of any such work or other rights to the company
that are enforceable by the company and has made available true
and complete copies of such assignments or licences to XFM.
(ix) The company owns all right, title and interest in and to all
data the company collect from or discloses about users of its
products and services. The company's practices regarding the
collection and use of consumer personal information are in
accordance in all respects with applicable laws and regulations
of all jurisdictions in which the company operates.
(x) No officer, director, stockholder or employee of the company,
nor any spouse, or relative thereof, owns directly or
indirectly, in whole or in part, any Intellectual Property.
(h) Financial Statements. There are no liabilities, claims or obligations
of any nature in excess of Five Thousand US Dollars (US$5,000),
whether absolute, contingent, anticipated or otherwise, whether due or
to become due, that are not shown in the Financial Statements.
(i) Accounts Receivable. All of the accounts receivable shown in the
Financial Statements as of the Group Closing Date will have arisen out
of bona fide transactions of the company in the ordinary course of
business and have
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been collected or are good and collectible in the aggregate recorded
amounts thereof (less the allowance for doubtful accounts also
appearing in such Financial Statements and net of returns and payment
discounts allowable by the company's policies) and can reasonably be
anticipated to be paid in full without outside collection efforts
within ninety (90) days of the due date.
(j) Taxes. Except as set out in Disclosure Schedule,
(i) The company has timely filed (or caused to be filed) all tax
returns ("RETURNS") required to be filed by it. All taxes
required to be paid (whether or not shown on any Return) in
respect of the periods covered by such Returns ("RETURN PERIODS")
have been paid or fully accrued up until Group Closing. The
Vendors have made available to XFM true and correct copies of all
Returns, and all material correspondence with any taxing
authority.
(ii) No deficiencies or adjustments for any tax of the company has
been claimed, proposed or assessed or threatened in writing and
not paid. There is currently no claim outstanding by an authority
in a jurisdiction where the company does not file Returns that
the company is or may be subject to taxation by that
jurisdiction. The company is not subject to any pending or
threatened tax audit or examination. The company has not entered
into any agreements, waivers or other arrangements in respect of
the statute of limitations in respect of its taxes or Returns.
(iii) For the purposes of this Agreement, the terms "tax" and "taxes"
shall include all taxes, assessments, duties, tariffs,
registration fees, and other governmental charges in the nature
of taxes including, all income, franchise, property, production,
sales, use, payroll, licence, windfall profits, value added,
severance, withholding, excise, gross receipts and other taxes,
as well as any interest, additions or penalties relating thereto
and any interest in respect of such additions or penalties.
(v) There are no liens for taxes upon the assets of the company
except for taxes that are not yet payable. The company has
withheld all taxes required to be withheld in respect of wages,
salaries and other payments to all employees, officers and
directors and any taxes required to be withheld from any other
person and has timely paid all such amounts withheld to the
proper taxing authority.
(vi) There has not been any underpayment of tax and all taxes have
been fully paid in accordance with all applicable laws.
(vii) The company has made all require tax filings and reporting and
all such filings and reporting have been complete and accurate
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including any reporting of salaries and employees and the company has
made all necessary withholding required by law.
(k) Absence of Certain Changes and Events. Since the date of the Financial
Statements, there has not been:
(i) Any transaction involving more than One Thousand US Dollars
(US$1,000) entered into by the company other than in the ordinary
course of business;
(ii) Any declaration, payment, or setting aside of any dividend or
other distribution to or for any of the holders of any equity
interest;
(iii) Any termination, modification, or rescission of, or waiver by
the company of rights under, any contract having or reasonably
likely to have a Material Adverse Change on the business of the
company;
(iv) Any discharge or satisfaction by the company of any lien or
encumbrance, or any payment of any obligation or liability
(absolute or contingent) other than liabilities shown on the
Financial Statements and liabilities incurred since the date of
the Financial Statements in the ordinary course of business;
(v) Any mortgage, pledge, imposition of any security interest, claim,
encumbrance, or other restriction created on any of the assets,
tangible or intangible, of the company having or reasonably
likely to have a Material Adverse Change on the business of the
company;
(vi) Any settlement amount of any claim, dispute, suit, proceeding or
investigation regarding the company; or
(vii)Any event or condition resulting in a Material Adverse Change on
the business of the company.
(l) Leases in Effect; Real Estate. All real property leases and subleases
to which the company is a party and any amendments or modifications
thereof are listed in Schedule E (each a "LEASE" and, collectively,
the "LEASES"). The company has a valid leasehold interest under such
Leases. There are no existing defaults, and the company has not
received or given any written notice of default or claimed default
with respect to any Lease and there is no event that with notice or
lapse of time, or both, would constitute a default thereunder. All
real property occupied by the company is subject to a written lease.
The company holds no interest in real property other than the Leases.
The company has filed and registered all Leases with all applicable
Governmental Entities.
(m) Personal Property. The company has valid title, free and clear of all
title defects, security interests, pledges, options, claims, liens,
and encumbrances of any nature whatsoever to all inventory,
receivables, furniture, machinery,
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equipment, and other personal property, tangible or otherwise,
reflected on the Financial Statements, except for acquisitions and
dispositions since the date of the Financial Statements in the
ordinary course of business and not exceeding One Thousand US Dollars
(US$1,000).
(n) Litigation and Other Proceedings. None of the company nor any of its
past or present officers, directors, or employees, is a party to any
pending or, threatened action, suit, labour dispute (including any
union representation proceeding), proceeding, investigation, or
discrimination claim in or by any court or governmental board,
commission, agency, department, or officer, or any arbitrator, arising
from the actions or omissions of the company or affecting any
properties, assets or capital of the company, nor is there any
reasonable basis for any such action, suit, labour dispute,
proceeding, investigation or discrimination claim, or, in the case of
an individual, from acts in his or her capacity as an officer,
director, employee, agent or contractor of the company. The company is
not a named party to any order, writ, judgment, decree, or injunction.
(o) No Defaults. The company is and has not received written notice that
it would be with the passage of time, in default or violation of any
term, condition, or provision of (i) its PRC Charter Documents; (ii)
any judgment, decree, or order to which the company is a named party;
or (iii) any loan or credit agreement, note, bond, mortgage,
indenture, contract, agreement, lease, licence, or other instrument to
which the company is now a party or by which it or any of its
properties or assets is bound, except for defaults and violations
which have been cured or, individually or in the aggregate, would not
have a Material Adverse Change on the business of the company.
(p) Material Contracts. Except for the agreements set out in Schedule F
(the "MATERIAL CONTRACTS") the company is not a party to or bound by:
(i) Any employment contract or arrangement providing for annual
salary in excess of Thirty Thousand US Dollars (US$30,000) with
any officer or employee or with any consultant or director
providing for annual compensation in excess of Thirty Thousand US
Dollars (US$30,000);
(ii) Any plan or contract or arrangement, written or oral, providing
for bonuses, pensions, deferred compensation, retirement
payments, profit-sharing, severance, acceleration of vesting of
benefits, payments upon change of control events, or the like;
(iii) Any joint venture contract or arrangement or any other agreement
that has involved or is expected to involve a sharing of profits;
(iv) Reseller or distribution agreement, volume purchase agreement,
corporate end user sales or service agreement, reproduction or
replication agreement or manufacturing agreement in which the
amount involved exceeds annually, One Hundred Twenty Thousand
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US Dollars (US$120,000) or pursuant to which the company has
granted or received manufacturing rights, most favoured nation
pricing provisions, or exclusive marketing, reproduction,
publishing or distribution rights related to any product, group
of products or territory;
(v) Any agreement, franchise, or indenture where the amount of
consideration payable thereunder is greater than Fifty Thousand
US Dollars (US$50,000) in any year during the term of such
agreement, franchise or indenture and which has not been
terminated or performed in its entirety and not renewed which may
be, by its terms, terminated, impaired, or adversely affected by
reason of the execution of this Agreement, Group Closing, or the
consummation of the transactions contemplated;
(vi) Any licence, permit, or authorization which has not been
terminated or performed in its entirety and not renewed which may
be, by its terms, terminated, impaired, or adversely affected by
reason of the execution of this Agreement, the Group Closing or
the consummation of the transactions contemplated;
(vii)Except for trade indebtedness incurred in the ordinary course of
business, any instrument evidencing or related in any way to
indebtedness incurred in the acquisition of companies or other
entities or indebtedness for borrowed money by way of direct
loan, sale of debt securities, purchase money obligation,
conditional sale, guarantee, or otherwise which individually is
in the amount of Five Thousand US Dollars (US$5,000) or more; or
(viii)Any contract containing covenants purporting to limit the
company's freedom to compete in any line of business in any
geographic area
which has not been completed in its entirety and there are no disputes
arising or which could arise therefrom.
All Material Contracts are valid and in full force and effect and the
company has not, nor has any other party thereto, breached any
material provisions of, or entered into default in any material
respect under the terms thereof other than such beaches or defaults
that have been cured or that would not cause a Material Adverse Change
to the assets or business of the company. The Vendor has made
available to XFM a copy of each Material Contract specified in
Schedule F together with all amendments, material written waivers or
other material written changes thereto.
(q) Assets. The company has legal and beneficial ownership of all assets
owned, possessed or used by the company as indicated in the Financial
Statements free and clear of any Encumbrances. No other Person owns
any such property and assets which are being used by the company
except for
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the leased property and personal property leased by the company
pursuant to the Material Contracts.
(r) Business. The Cooperation Agreements is in full force and effect and
there exists no breach, default or non-compliance thereunder by any
party and Guangdong Station has not alleged any default on the part of
SSC and has not notified SSC or the Vendors of any intention to
terminate the Cooperation Agreements.
(s) Material Relations. To Vendor's knowledge, none of the parties to any
of the Material Contracts have terminated or in any way expressed to
the company or the Vendors any intent to reduce the amount of or
terminate its business with the company in the future.
(t) Insurance and Banking Facilities. Schedule G contains a complete and
correct list of (i) all contracts of insurance or indemnity of the
company in force at the date of this Agreement (including name of
insurer or indemnitor, agent, annual premium, coverage, deductible
amounts, and expiration date) and (ii) the names and locations of all
banks in which the company has accounts or safe deposit boxes, the
designation of each such account and safe deposit box, and the names
of all persons authorized to draw on or have access to each such
account and safe deposit box. All premiums and other payments due from
the company with respect to any such contracts of insurance or
indemnity have been paid, and there are no act, or failures to act
that has or might cause any such contract to be cancelled or
terminated. All known claims for insurance or indemnity have been
presented.
(u) Employees. The company has no written or oral contract of employment
or other employment agreement with any of its employees (including any
contracts relating to the temporary use or loaning of employees) that
are not terminable at will by the company without payment of severance
or termination payments or benefits other than such payment which are
prescribed by the laws of the PRC (and not contractual). Except as
would not have a Material Adverse Change on the business or assets of
the company, the company is not a party to any pending or threatened
labour dispute concerning the company's business or employment
practices or the subject of any organizing drive, labour grievance or
petition to certify a labour union. The company has complied with all
applicable laws, treaties, ordinances, rules, and regulations and
requirements relating to the employment of labour. Except as would not
have a Material Adverse Change on the business or assets of the
company, there are no claims pending or to the best of the knowledge
of the Vendors, threatened to be brought against the company, in any
court or administrative agency by any former or current employees of
the company. The company has made all required contributions under the
laws of the PRC in respect of wages, salaries and other payments to
all employees, officers and directors and has timely paid all such
amounts to the proper PRC authority except as would not have a
Material Adverse Change on the business or assets of the company.
Except as set out in Disclosure Schedule, the company has fully
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reported all employees and made all necessary filings, reporting and
deductions and withholdings to the relevant Governmental Entities in
respect of all employees.
(v) Certain Agreements. Neither the execution and delivery of this
Agreement nor the performance of its obligations contained in them
will: (i) result in any payment by the company (including severance,
unemployment compensation, parachute payment, bonus or otherwise)
becoming due to any director, employee, or independent contractor of
the company under any employee benefit plan, agreement, or otherwise,
(ii) increase any benefits otherwise payable under any employee
benefit plan or agreement, or (iii) result in the acceleration of the
time of payment or vesting of any such benefits.
(w) Guarantees and Suretyships. The company has no powers of attorney
outstanding and the company has no obligations or liabilities
(absolute or contingent) as guarantor, surety, co-signer, endorser,
co-maker, or otherwise respecting the obligations or liabilities of
any person, corporation, partnership, joint venture, association,
organization, or other entity other than as an endorser of negotiable
instruments in the ordinary course of business.
(x) Absence of Questionable Payments. None of the company nor any of its
respective Affiliates, directors, officers, agents, employees or other
persons acting on its behalf, has used any corporate or other funds
for unlawful contributions, payments, gifts, or entertainment, or made
any unlawful expenditures relating to political activity to government
officials or others or established or maintained any unlawful or
unrecorded funds. None of the company nor any of its respective
Affiliates, directors, officers, agents, employees or other persons
acting on their behalf, has accepted or received any unlawful
contributions, payments, gifts, or expenditures.
7.3 General
(a) The Closing Deliverable Agreements. On or before Closing, each of the
Closing Deliverable Agreements will have been duly executed by the
parties thereto and, as at Group Closing, will be in full force and
effect and will constitute the valid and legally binding obligations
of the parties thereto enforceable in accordance with their terms at
Group Closing.
(b) Full Disclosure. (i) The Vendors are not aware of any facts which
could materially adversely affect it, any member of the Group, the PRC
Companies or which are likely in the future to materially adversely
affect any of them and which have not been disclosed by or on behalf
of the Vendors in connection with or pursuant to this Agreement. (ii)
No representation or warranty in this Agreement, nor any statement or
certificate furnished or to be furnished to XFM pursuant to or in
connection with this Agreement contains or will contain any untrue
statement of
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material fact, or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not
misleading.
(c) Financials. The April 30 Statements reflect accurately and fairly the
financial position of the PRC Group as of such date and fully disclose
all financial information relating to the PRC Group including all
inter-company transactions between SSC and SSMS and all account
receivables which are outstanding for more than 360 days.
(d) Reliance. The representations and warranties are made by the Vendors
with the knowledge and expectation that XFM are placing reliance
thereon.
7.4 The Vendors. In respect of the Vendors:
(a) Organisation and Qualification. It is a person or a legal entity duly
organised and validly existing under the laws of its jurisdiction of
incorporation.
(b) Authorisation and Authority. It has taken all corporate or other
action required to authorise, and has duly authorised, the execution,
delivery and performance of this Agreement and upon due execution and
delivery the same will constitute its legal, valid and binding
obligations enforceable in accordance with its terms.
(c) Power and Authority. It has full power and authority to make the
covenants and representations referred to herein and to sale the
Company Shares and to execute, deliver and perform this Agreement.
(d) Compliance with Laws and Other Instruments. It holds, and at all times
has held all licences, permits, and authorizations from all
governmental entities necessary for the lawful conduct of its business
pursuant to all applicable statutes, laws, ordinances, rules, and
regulations of all such authorities having jurisdiction over it or any
part of its operations. There are no violations or claimed violations
of any such licence, permit, or authorization, or any such statute,
law, ordinance, rule or regulation, except for those violations which
will not cause Material Adverse Change to the business or assets of
the PRC Companies.
(e) Corporate Governance. Neither the execution and delivery of this
Agreement nor the performance by it of its obligations under this
Agreement will (i) conflict with or result in any breach of its
charter documents; (ii) require any Consents by Governmental Entity,
(iii) conflict with, result in a breach or default of, or give rise to
any right of termination, cancellation or acceleration or result in
the creation of any lien, charge, encumbrance, or restriction upon any
of the properties or assets of it or its shares under, any law,
statute, rule, regulation, judgment, decree, order, government permit,
licence or order or any mortgage, indenture, note, licence, trust,
agreement or other agreement, instrument or obligation to which it is
a party.
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8. REPRESENTATIONS, WARRANTIES AND COVENANTS OF XFM
XFM hereby represents, warrants and covenants to the Vendors that each of
the following statements is true and correct as of the date of this
Agreement:
8.1 Organisation and Qualification. It is a person or a legal entity duly
organised and validly existing under the laws of its jurisdiction of
incorporation.
8.2 Authorisation. It has taken all corporate or other action required to
authorise, and has duly authorised, the execution, delivery and performance
of this Agreement and upon due execution and delivery the same will
constitute its legal, valid and binding obligations enforceable in
accordance with its terms.
8.3 Power and Authority. It has full power and authority to make the covenants
and representations referred to herein and to make the Loan and to purchase
the Company Shares and to execute, deliver and perform this Agreement.
8.4 Compliance with Laws and Other Instruments. It holds, and at all times has
held all licences, permits, and authorizations from all governmental
entities necessary for the lawful conduct of its business pursuant to all
applicable statutes, laws, ordinances, rules, and regulations of all such
authorities having jurisdiction over it or any part of its operations.
There are no violations or claimed violations of any such licence, permit,
or authorization, or any such statute, law, ordinance, rule or regulation.
8.5 Corporate Governance. Neither the execution and delivery of this Agreement
and Ancillary Agreements nor the performance by it of its obligations under
this Agreement and Ancillary Agreements will (i) conflict with or result in
any breach of its charter documents; (ii) require any Consents by
Governmental Entity, (iii) conflict with, result in a breach or default of,
or give rise to any right of termination, cancellation or acceleration or
result in the creation of any lien, charge, encumbrance, or restriction
upon any of the properties or assets of it or its shares under, any law,
statute, rule, regulation, judgment, decree, order, government permit,
licence or order or any mortgage, indenture, note, licence, trust,
agreement or other agreement, instrument or obligation to which it is a
party.
8.6 Board Approval. XFM's board of directors shall have authorized and approved
the execution and delivery of the Agreement and the Ancillary Agreements
and a certified copy of the extract of the relevant resolution or minutes
of the board have been delivered to the Vendors.
9. CONDITIONS OF XFM'S OBLIGATIONS TO MAKE PAYMENTS
The obligations of XFM under this Agreement to pay the Procurement Payment
are subject to the satisfaction or waiver on or before the Group Closing
Date of each of the following (each a "CONDITION" and, collectively, the
"CONDITIONS"):
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9.1 Representations and Warranties. All representations and warranties shall be
true and correct on and as of Group Closing Date with the same effect as
though such representations and warranties had been made on and as Group
Closing.
9.2 Due Diligence. XFM has completed its due diligence review of the Group and
is satisfied with the results thereof.
9.3 Performance. Each member of the Group shall have performed and complied
with all agreements, obligations and conditions contained in this
Agreement, the Ancillary Agreements that are required to be performed or
complied with by it on or before the Closing.
9.4 No Material Adverse Change. There has not occurred any Material Adverse
Change in the Group's business, financial condition, assets or
operations since the date of signing of this
Agreement.
9.5 Deliverables. All transactions set out in Clauses 2.6, 3.1, 3.3, 3.4, 3.6
and 4.4, inclusive, are completed and all document set out therein have
been delivered to XFM.
9.6 Board Approval. XFM's board of directors shall have authorized and approved
the execution and delivery of the Agreement and the Ancillary Agreements.
9.7 PRC Equity Transfers. The SSC Equity Transfer and the SSMS Equity Transfer
have been duly completed and all documents required to be filed with or
delivered to Governmental Entity have been so filed or delivered and all
approvals, registration and permits for the SSC Equity Transfer and SSMS
Equity Transfer has been duly obtained and completed.
9.8 Company Board Composition. All documents required to change the directors
of the Company to XFM's nominees shall have been duly completed and signed
and, where applicable, filed, submitted to or registered with the relevant
Governmental Entity.
9.9 WFOE Board Composition. All documents required to change the directors of
the WFOE to XFM's nominees shall have been duly completed and signed and,
where applicable, filed, submitted to or registered with the relevant
Governmental Entity.
9.10 SSC Board Composition. All documents required to change the directors of
SSC to XFM's nominees shall have been duly completed and signed and, where
applicable, filed, submitted to or registered with the relevant
Governmental Entity.
9.11 SSMS Board Composition. All documents required to change the directors of
SSMS to the parties contemplated herein shall have been duly completed and
signed and, where applicable, filed, submitted to or registered with the
relevant Governmental Entity.
9.12 Employment Agreements. The persons, particulars of which are set out in
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Schedule I have entered into the Employment Agreements with XFM, WFOE, SSC,
SSMS or other party designated by XFM and shall fulfil their obligations
specified under the Employment Agreements.
9.13 Other Conditions. The transactions and conditions contemplated and set out
under Clauses 3.1, 3.3, 3.4, 3.6, 4.2, 4.3 and 4.4 have been completed and
fulfilled.
10. NON-COMPETITION
10.1 Non Competition. Each of the Vendors hereby jointly and severally and each
of the Covenantors severally agrees that he and his Affiliates shall not
(without the written consent of XFM) during the period from the Group
Closing hereof and until 31 March 2011 in accordance with the terms thereof
(the "NON-COMPETE PERIOD"):
(a) either on his own account or through any of his Affiliates, or in
conjunction with or on behalf of any other person, will on or be
engaged, concerned or interested directly or indirectly whether as
shareholder, director, employee, partner, agent or otherwise carry on
any business in competition with the businesses carried on by the
Group during the Non-Compete Period; and
(b) either on his own account or through any of his Affiliates or in
conjunction with or on behalf of any other Person, employ, solicit or
entice away or attempt to employ, solicit or entice away from the
Group any person for the purpose of carrying on any business in
competition with the business carried on by the Group during the
Non-Compete Period who is or shall have been at the date of or within
twelve (12) months prior to such cessation a director, officer, legal
representative, manager or employee of the Group whether or not such
person would commit a breach of contract by reason of leaving such
employment.
10.2. Nonsolicitation of Clients. During the Non-Compete Period, each of the
Vendors jointly and severally and each of the Covenantors severally shall
not other than in connection with his or her employment with and for the
benefit of the Group, directly or indirectly, either individually or as a
principal, partner, member, manager, agent, employee, employer, consultant,
independent contractor, stockholder, joint venturer or investor, or as a
director or officer of any corporation, limited liability company,
partnership or other entity, or in any other manner or capacity whatsoever,
(a) solicit or divert or attempt to solicit or divert from the Group any
business with any Client;
(b) solicit or divert or attempt to solicit or divert from the Group any
business with any person or entity who was being solicited as a Client
by the Group;
(c) induce or cause, or attempt to induce or cause, any salesperson,
supplier, vendor, representative, independent contractor, broker,
agent or other person transacting business with the Group to terminate
or modify such
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relationship or association or to represent, distribute or sell
services or products in competition with services or products of the
Group; or
(d) otherwise provide any services or products to any Client that are or
have been provided by the Group.
10.3. Consideration. In consideration for each of the Vendors and the
Covenantors entering into and performing the obligations under this
Agreement, XFM agrees to enter into Employment Agreements with each of the
Vendors and the Covenantors and, in addition, to give certain amount of
compensation to the Vendors and the Covenantors pursuant to their
respective Employment Agreement. Both XFM and each of the Vendor and the
Covenantors confirm that the compensation has been included in payment
under the Employment Agreement entered into by the PRC Companies and the
Vendors or the Covenantors is reasonable for the covenants set out herein.
10.4. Separate Obligations. Each and every obligation under Clauses 10.1 and
10.2 shall be treated as a separate obligation and shall be severally
enforceable as such and in the event of any obligation or obligations being
or becoming unenforceable in whole or in part such part or parts as are
unenforceable shall be deleted from Clauses 10.1 or 10.2 and any such
deletion shall not affect the enforceability of all such parts of Clauses
10.1 and 10.2 as remain not so deleted.
10.5. Reasonableness. While the restrictions contained in Clauses 10.1 and 10.2
are considered by the parties to be reasonable in all the circumstances,
all of the parties to this Agreement recognized that restrictions of the
nature in question may fail and, accordingly, each party hereby agree and
declare that if any of such restrictions shall be adjudged to be void as
going beyond what is reasonable in all the circumstances for the protection
of the interests of the PRC Companies and XFM but would be valid if part of
the wording thereof were deleted or the periods thereof reduced or the
range of activities or area dealt with thereby reduced in scope the said
restriction shall apply with such modifications as may be necessary to make
it valid and effective. Each party hereto further acknowledges that the
consideration contained in Clause 10.3 is reasonable and adequate.
10.6. Equitable Relief. Each of the Vendors and the Covenantors agrees that
XFM's rights under this Clause are special and unique, and that any
violation thereof by him would not be adequately compensated by money
damages and there is not an adequate remedy at law for any such violation,
and each of the Vendors and the Covenantors hereby grants to any relevant
Person the right to specifically enforce (including injunctive relief or
analogous proceedings) the terms of this Clause. In any proceeding, in
equity or law, the Vendors and the Covenantors specifically waives any
defence that there is an adequate remedy at law for any violations of the
terms of this Agreement.
10.7 Existing Interests. XFM acknowledges that He, Lu and Yin Zijian has an
equity interest in Guangzhou Randian Exhibition Co., Ltd. and Hu Shengzhong
has an equity interest in Guangzhou Shenze Advertising Co., Ltd., Guangzhou
Randian Exhibition Co., Ltd. and Guangzhou Shenze Advertising Co., Ltd.,
collectively, the "COMPETING
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COMPANIES"). Each of He and Lu jointly and severally and Yin ijian and Hu
Shengzhong severally represent and warrant that their respective interests
are as passive investors only and covenant that they shall not participate
in the management, control or operations of the Competing Companies and
shall not provide any information of or relating to the Group or any member
thereof or its business, plans to the Competing Companies.
11. INDEMNITY
11.1 Indemnity of XFM. Notwithstanding any disclosure made herein or otherwise
or any facts known to XFM, the Vendors will jointly and severally indemnify
and will keep indemnified and save harmless XFM and its nominees from and
against the following (collectively, the "LOSSES"):
(a) any and all losses, claims, damages, liabilities and costs incurred or
suffered by XFM or its Affiliates or their nominees by reason of,
resulting from, in connection with, or arising in any manner
whatsoever:
(i) from any matter disclosed in the Disclosure Schedule whether such
matter arose or is continuing before or after the Company Closing
Date or Group Closing Date; and;
(ii) out of the breach of any warranty, representation or covenant or
the inaccuracy of any representation made in respect of any the
Group contained or referred to in this Agreement in connection
therewith including, but not limited to, any diminution in the
value of the assets of and any payment made or required to be
made by XFM and any costs and expenses incurred as a result of
such breach provided that the indemnity contained in this Clause
shall be without prejudice to any other rights and remedies
available to XFM; or
(b) any and all losses, claims, damages, liabilities and costs incurred or
suffered by XFM, WFOE, SSC or SSMS or their nominees by reason of,
resulting from, in connection with, or arising in any manner
whatsoever out of the breach or termination by the parties thereto of
the Employment Agreements prior to their expiration (with respect to
the termination of Employment Agreement prior to expiry, except where
any of the Employment Agreements was terminated:(i) by the Vendors or
Xxxx Xxx pursuant to the Employment Agreement; or (ii) by XFM, SSC,
SSMS or other parties under XFM's control, as the case may be, other
than pursuant to the terms of the Employment Agreement.); and
(c) save as disclosed in the Financial Statements, any and all losses,
claims, damages liabilities and costs incurred or suffered by any
member of the Group by reason of, resulting from, in connection with,
or arising in any manner whatsoever out of or from any action,
inaction or omission prior to Group Closing including, but not limited
to, any diminution in the value of the assets of any of the member of
the Group and any payment made or required to be made by the member of
the Group and any costs and expenses incurred as a result of such
breach provided that the indemnity
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contained in this Clause shall be without prejudice to any other
rights and remedies available to XFM.
11.2 Costs. For the purposes of this Clause, "costs" includes reasonable
lawyers' (on a solicitor and his own client's basis) and accountants' fees
and expenses, court costs and all other out-of-pocket expenses.
11.3 Survival of Indemnification. The representations and warranties of the
parties to this Agreement and the rights to indemnification under this
Agreement with respect thereto will survive Group Closing for four (4)
years from the date hereof.
11.4 Third Party Claims. A party entitled to indemnification hereunder (an
"INDEMNIFIED PARTY") shall notify promptly the indemnifying party (the
"INDEMNIFYING PARTY") in writing of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to this Agreement to provide the Indemnifying Party with the
opportunity to rectify or compensate for any loss. In case any claim,
action or proceeding is brought against an Indemnified Party and the
Indemnified Party notifies the Indemnifying Party in writing of the
commencement thereof, the Indemnifying Party shall be entitled to
participate therein and to assume the defense thereof, to the extent that
it chooses, with counsel reasonably satisfactory to such Indemnified Party,
and after notice from the Indemnifying Party to such Indemnified Party that
it so chooses, the Indemnifying Party shall not be liable to such
Indemnified Party for any legal or other expenses subsequently incurred by
such Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that (i) if the
Indemnifying Party fails to take reasonable steps necessary to defend
diligently the action or proceeding within twenty (20) calendar days after
receiving notice from such Indemnified Party that the Indemnified Party
reasonably believes it has failed to do so; or (ii) if such Indemnified
Party who is a defendant in any claim or proceeding which is also brought
against the Indemnifying Party reasonably shall have concluded that there
may be one or more legal defenses available to such Indemnified Party which
are not available to the Indemnifying Party; or (iii) if representation of
both parties by the same counsel is otherwise inappropriate under
applicable standards of professional conduct, then, in any such case, the
Indemnified Party shall have the right to assume or continue its own
defense as set forth above (but with no more than one firm of counsel for
all Indemnified Parties in each jurisdiction), and the Indemnifying Party
shall be liable for any reasonable expenses therefor.
11.5 Settlement of Claims.
(a) No Indemnifying Party shall, without the written consent of the
Indemnified Party, effect the settlement or compromise of, or consent
to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification may be
sought hereunder (whether or not the Indemnified Party is an actual or
potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the
Indemnified Party from all liability arising out of such action or
claim, (ii) does not include a statement as to or an
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admission of fault, culpability or a failure to act, by or on behalf
of any Indemnified Party and (iii) does not include any injunctive or
other non-monetary relief;
(b) the Indemnified Party may, in its sole discretion after giving the
Indemnifying Party an opportunity to provide compensation within a
reasonable period, offset against any payment (including, where
relevant, Procurement Payments and Earnouts) any and all losses,
claims, damages, liabilities and costs incurred or suffered by the
Indemnifying Party and for which the Indemnifying Party is entitled to
be indemnified in this Agreement and pay the remainder of any amount
payable to the Indemnifying Party;
(c) Notwithstanding any other provisions of this Agreement, the Company
and the Vendors' aggregate liability under this Agreement shall not
exceed 100% of the total amount paid by XFM hereunder; and
(d) Notwithstanding anything to the contrary herein, (i) Losses shall not
include indirect, incidental, consequential, special, punitive or
exemplary damages; and (ii) in no event shall the obligations of the
Vendors and the Covenantors in aggregate under this Agreement exceed
an amount equal to the total amounts paid to the Vendors hereunder and
subject to XFM's right to set off any obligations not met by the total
amounts paid against future amounts payable but in no event shall the
amount of the obligations of the Vendors and Covenantors exceed the
aggregate amounts payable under this Agreement.
11.6 Certain Tax Matters.
(a) Each of the Vendors shall jointly and severally indemnify XFM and hold
it harmless from and against any loss, claim, liability, expense, or
other damage attributable to (i) any and all taxes (or the non-payment
thereof) of any member of the Group or the Company or any subsidiary
of the Company for all taxable periods ending on or before the Group
Closing Date ("PRE-CLOSING TAX PERIOD"), (ii) all taxes of any member
of an affiliated, consolidated, combined or unitary group of which any
member of the Group (or any predecessor of any of the foregoing) is or
was a member on or prior to the Group Closing Date, and (iii) any and
all taxes of any person (other than any member of the Group) imposed
on any member of the Group as a transferee or successor, by contract
or pursuant to any law, rule, or regulation, which taxes relate to an
event or transaction occurring before the Group Closing.
(b) In the case of any taxable period that ends on or before the Group
Closing Date (a "STRADDLE PERIOD"), the amount of any taxes based on
or measured by income or receipts of the Group or any member thereof
for the Pre-Closing Tax Period shall be determined based on an interim
closing of the books as of the close of business on the Group Closing
Date, and the amount of other taxes of the Group for a Straddle Period
which relate to the
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Pre-Closing Tax Period shall be deemed to be the amount of such tax
for the entire taxable period multiplied by a fraction the numerator
of which is the number of days in the taxable period ending on the
Group Closing Date and the denominator of which is the number of days
in such Straddle Period.
(c) If any member of the Group receives an assessment, reassessment,
demand, claim or other requirement to pay additional amounts whether
as tax, interest, penalties or otherwise as a result of such entity
making a filing of taxes based on a rate of taxes other than the
nationally prescribed rate or for which it has received written
confirmation from the relevant tax bureau as being applicable to it,
each of the Vendors shall jointly and severally indemnify XFM and hold
it harmless from and against any loss, claim, liability, expense, or
other damage attributable to such assessment, reassessment, demand,
claim or other requirement.
(d) Payment in full of any amount due from the Vendors under this Clause
11.6 shall be made to XFM in immediately available funds at least two
Business Days before the date payment of the taxes to which such
payment relates is due, or, if no tax is payable, within fifteen days
after written demand is made for such payment. Notwithstanding the
foregoing, (i) XFM shall provide the Vendors and the Covenantors with
reasonably prompt written notice of any proposed tax adjustment that
may give rise to the Vendors and Covenantors' indemnification
obligation hereunder (if any), shall cooperate with the Vendors and
permit the Vendors to participate, at their own expense, in the audit
or other proceeding. Notwithstanding the preceding sentence, in the
event that Vendors want to accept a proposed settlement of a tax claim
for which they have an indemnity obligation pursuant to this Clause
11.6 (the "TAX SETTLEMENT OPTION") and XFM determines that it prefers
to pursue the tax claim further, XFM may pursue the tax claim without
the participation of Vendors or the Covenantors PROVIDED THAT in such
case the maximum amount of liability of the Vendors under such tax
claim shall not exceed the amount for which they would have been
liable if the Tax Settlement Option were accepted. XFM shall also be
entitled to offset any amount payable by the Vendors under this Clause
11.6 against any amount payable to the Vendors by XFM.
12. TERMINATION
12.1 Termination. This Agreement may be terminated at any time prior to the
Group Closing:
(a) by XFM if, between the date hereof and the 2009 Payment Date: (i)
there is a Material Adverse Change caused by the Vendors breach of any
provision of this Agreement or the Ancillary Agreements, (ii) any
representations and warranties made by the Vendors as contained in
this Agreement shall not have been materially true and correct when
made, (iii) the Vendors shall not have complied in all material
respects with the covenants or agreements contained in this Agreement
to be complied with by it or (iv) the PRC Companies who is a party to
any of the Ancillary Agreements before
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Closing makes a general assignment for the benefit of creditors, or
any proceeding shall be instituted by or against the PRC Companies
seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding up or reorganization, arrangement, adjustment,
protection, relief or composition of its debts under any law related
to bankruptcy, insolvency or reorganization;
(b) by the Vendors if, between the date hereof and the Relevant Date: (i)
any representations and warranties made by XFM contained in this
Agreement shall not have been materially true and correct when made,
(ii) XFM shall not have complied in all material respects with the
covenants or agreements contained in this Agreement to be complied
with by it (For the avoidance of any doubt, any delay of payment by
XFM exceeding thirty (30) days shall be deemed not complying in
materially respect with its covenants contained herein), or (iii) XFM
makes a general assignment for the benefit of creditors, or any
proceeding shall be instituted by or against XFM seeking to adjudicate
XFM in question bankrupt or insolvent, or seeking liquidation, winding
up or reorganization, arrangement, adjustment, protection, relief or
composition of its debts under any law related to bankruptcy,
insolvency or reorganization;
(c) by XFM or the Vendors in the event that any competent governmental
authority in the PRC shall have issued an order, decree or ruling or
taken any other action restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement or the proposed
business and operation of the Group; or
(d) by the written consent of XFM and the Vendors.
12.2 Effect of Termination. In the event of termination of this Agreement as
provided in Clause 12.1, this Agreement shall forthwith become void
provided that nothing herein shall relieve any party hereto from liability
for any breach of this Agreement.
13. CONFIDENTIALITY AND XXX-XXXXXXXXXX
00.0 Xxx-Xxxxxxxxxx of Terms. The terms and conditions of this Agreement and the
Ancillary Agreements, including their existence, shall be considered
confidential information and shall not be disclosed by any party hereto to
any third party except in accordance with the provisions set forth below;
provided that such confidential information shall not include any
information that is in the public domain other than by the breach of the
confidentiality obligations hereunder. This Clause shall survive the
termination of this Agreement.
13.2 Press Releases, Etc. Any press release issued by any party hereto or any
member of the Group in relation to this Agreement shall be approved in
advance in writing by the each Party to this Agreement, whose consent shall
not be unreasonably withheld. No other announcement regarding any of the
terms set out in this Agreement in a press release, conference,
advertisement, announcement, professional or trade publication, mass
marketing materials or otherwise to the
-45-
general public may be made without the prior written consent of each Party
to this Agreement, whose consent shall not be unreasonably withheld.
13.3 Permitted Disclosures. Notwithstanding the foregoing, any party may
disclose any of the terms set out in this Agreement to its current or bona
fide, employees, bankers, lenders, partners, accountants and attorneys and
other professional advisers, in each case only where such persons or
entities are under appropriate non-disclosure obligations.
13.4 Legally Compelled Disclosure. In the event that any party is requested or
becomes legally compelled (including without limitation, pursuant to
securities laws and regulations) to disclose the existence or terms of this
Agreement or the Ancillary Agreements in contravention of the provisions of
this Clause, such party (the "DISCLOSING PARTY") shall provide the other
parties (the "NON-DISCLOSING PARTIES") with prompt written notice of that
fact and use all reasonable efforts to seek (with the cooperation and
reasonable efforts of the other parties) a protective order, confidential
treatment or other appropriate remedy. In such event, the Disclosing Party
shall furnish only that portion of the information which is legally
required and shall exercise reasonable efforts to keep confidential such
information to the extent reasonably requested by any Non-Disclosing Party.
If disclosure is required then to the extent that disclosure of the
Ancillary Agreements complies such disclosure requirement then this
Agreement shall remain confidential.
13.5 Other Information. The provisions of this Clause shall be in addition to,
and not in substitution for, the provisions of any separate nondisclosure
agreement executed by any of the parties hereto with respect to the
transactions contemplated hereby.
14. MISCELLANEOUS
14.1 Survival of Warranties. The representations, warranties and covenants
contained in or made pursuant to this Agreement shall survive the execution
and delivery of this Agreement and payment of the Earnouts and shall in no
way be affected by any investigation of the subject matter thereof made by
or on behalf of XFM.
14.2 Successors and Assigns. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
14.3 Set-off. Subject to Clause 11.5, XFM shall have the right to set off any
and all losses, claims, damages liabilities and costs incurred or suffered
by XFM, WFOE, SSC, SSMS or its nominees by reason of, resulting from, in
connection with, or arising in any manner whatsoever out of the breach of
this Agreement or any Ancillary Agreements against any amount payable by
XFM, WFOE, SSC, SSMS to any of the other parties to this Agreement and the
Ancillary Agreements.
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14.4 Governing Law and Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of Hong Kong.
14.5 Arbitration. Any dispute, controversy or claim arising out of or relating
to this Agreement, or the breach, termination or invalidity thereof, shall
be settled by binding arbitration in accordance with the UNCITRAL
Arbitration Rules as present in force in the manner set forth in this
Clause 14.5:
(a) The procedures of this Clause 14.5(a) may be initiated by a written
notice (a "Dispute Notice") given by one party (a "Claimant") to the
other, but not before thirty (30) days have passed during which the
parties have been unable to reach a resolution. The Dispute Notice
shall be accompanied by (i) a statement of the Claimant describing the
dispute in reasonable detail and (ii) documentation, if any,
supporting the Claimant's position on the dispute. Within twenty (20)
days after the other party's (the "RESPONDENT") receipt of the Dispute
Notice and accompanying materials, the dispute shall be resolved by
binding arbitration in Hong Kong under the UNCITRAL Arbitration Rules.
All arbitration procedures pursuant to this paragraph (a) shall be
confidential and treated as compromise and settlement negotiations and
shall not be admissible in any arbitration or other proceeding.
(b) The parties shall agree on a single arbitrator to resolve the dispute.
If the Parties fail to agree on the designation of an arbitrator
within a twenty (20)-day period the Hong Kong International
Arbitration Centre shall be requested to designate the single
arbitrator. If the arbitrator becomes disabled, resigns or is
otherwise unable to discharge the arbitrator's duties, the
arbitrator's successor shall be appointed in the same manner as the
arbitrator was appointed.
(c) Any award arising out of arbitration (i) shall be binding and
conclusive upon the parties; (ii) shall be limited to a holding for or
against a party, and affording such monetary remedy as is deemed
equitable, just and within the scope of this Agreement; (iii) may not
include special, indirect, incidental, consequential, special,
punitive or exemplary damages or diminution in value; (iv) may in
appropriate circumstances include injunctive relief; and (v) may be
entered in a court.
(d) Arbitration shall not be deemed a waiver of any right of termination
under this Agreement, and the arbitrator is not empowered to act or
make any award other than based solely on the rights and obligations
of the parties prior to termination in accordance with this Agreement.
(e) The arbitrator may not limit, expand or otherwise modify the terms of
this Agreement.
(f) Subject to Clause 5.8, each party shall bear its own expenses incurred
in any arbitration or litigation, but any expenses related to the
compensation and the costs of the arbitrator shall be borne equally by
the parties to the dispute.
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(g) If any action or proceeding is commenced to construe or enforce this
Agreement or the rights and duties of the parties hereunder, then the
party prevailing in that action, and any appeal thereof, shall be
entitled to recover its reasonable attorney's fees and costs in that
action or proceeding, as well as all costs and fees of any appeal or
action to enforce any judgment entered in connection therewith.
14.6 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
14.7 Titles and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
14.8 Notices. Unless otherwise provided, any notice required or permitted under
this Agreement shall be given in writing and shall be deemed effectively
given upon personal delivery to the party to be notified or upon postal
service delivery, by registered or certified mail, postage prepaid and
addressed to the party to be notified at the address indicated for such
party on the signature page hereof or by facsimile at the facsimile number
set out on the signature page hereof, or at such other address or facsimile
number as such party may designate by ten (10) days' advance written notice
to the other parties.
14.9 Expenses. Each of the parties hereto shall be responsible for its own costs
and expenses incurred in the preparation, negotiation and execution of this
Agreement.
14.10 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if
such provision was so excluded and shall be enforceable in accordance with
its terms.
14.11 Language. This Agreement shall be executed in English.
NEXT PAGE IS THE FIRST EXECUTION PAGE
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EXECUTION
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
THE PURCHASER
For and on behalf of XINHUA FINANCE MEDIA LIMITED
By: /s/ Xxxxx Xxxx
---------------------------------
Name: Xxxxxxx Xxxxx Xxxx
Title: Chief Executive Officer
Address of XFM:
Suite 3905-09, 0 Xxxxx Xxxxxxx
0 Xxxxxxxx Xx
Xxxxxxxx 000000
Xxxxx
Telephone:
00-00-0000-0000
Facsimile:
00-00-0000-0000
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THE COMPANY
For and on behalf of SINGSHINE (HOLDINGS) HONGKONG LIMITED
By: /s/
---------------------------------
Name:
-------------------------------
Title: Director
Address of the Company:
Xxxx X, 00/X,
Xxxxxxx Commercial Xxxxxxxx
000-000 Xxxxxxxx Xxxx,
Xxxxxxx, Xxxx Xxxx
Telephone:
-------------------------
Facsimile:
--------------------------
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THE VENDORS
By HE ZHIHAO
/s/ He Zhihao
-------------------------------------
Name: He Zhihao
Address:
c/o Shanghai Singshine Marketing
Services Co., Ltd.
Room 1201, 12/F,
Xxxxxxx Xxxxx, Xx. 00 Xxx Xx Xxxx,
Xxxxxxxx, Xxxxx.
Telephone:
--------------------------
Facsimile:
--------------------------
By LU QIBO
/s/ Lu Qibo
-------------------------------------
Name: Lu Qibo
Address:
c/o Guangzhou Singshine Communication
Co., Ltd.
Room 1412, 14/F, CTS Center
Zhongshan Wu Road, No. 219
Guangzhou, PRC (Zip 510030)
Telephone:
--------------------------
Facsimile:
--------------------------
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THE COVENANTORS
By XXXXX XXXXXX
/s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Address:
----------------------------
Telephone:
--------------------------
Facsimile:
--------------------------
By HU SHENGZHONG
/s/ Hu Shengzhong
-------------------------------------
Name: Hu Shengzhong
Address:
----------------------------
Telephone:
--------------------------
Facsimile:
--------------------------
By YIN ZIJIAN
/s/ Yin Zijian
-------------------------------------
Name: Yin Zijian
Address:
----------------------------
Telephone:
--------------------------
Facsimile:
--------------------------
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By LU HANG
/s/ Lu Hang
-------------------------------------
Name: Lu Hang
Address:
----------------------------
Telephone:
--------------------------
Facsimile:
--------------------------
By XXXX XXX
/s/ Xxxx Xxx
-------------------------------------
Name: Xxxx Xxx
Address:
00/X, Xxxxx 0
Xxxxxxx Xxxxx, Xxxxx Xxxxxxxx,
Xxxxxxxx, Xxxxx.
Telephone:
00-0000-0000
Facsimile:
00-0000-0000
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SCHEDULE A
DETAILS OF COMPANY SHARES
PURCHASER VENDOR NO. OF COMPANY SHARES AMOUNT PAYABLE AT CLOSING
--------- ------ --------------------- -------------------------
XFM He 550 HK$5,500
XFM Lu 450 HK$4,500
TOTAL: 1000 HK$10,000.00
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SCHEDULE B
CORPORATE DETAILS OF THE GROUP AS AT THE DATE OF SIGNING OF THIS AGREEMENT
A. THE COMPANY
NAME SINGSHINE (HOLDINGS) HONGKONG LIMITED
DATE AND PLACE OF INCORPORATION 10 September 2003, Hong Kong
REGISTERED ADDRESS Unit A, 16th Floor, Success Xxxxxxxxxx Xxxxxxxx, 000-000
Xxxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx
AUTHORIZED CAPITAL HK$1,000,000 divided into 100,000 shares of par value
HK$10
ISSUED CAPITAL HK$10,000 divided into 1,000 shares of par value HK$10
SHAREHOLDER NAME NUMBER OF ORDINARY SHARES
---- -------------------------
He 550
Lu 450
TOTAL: 1000
DIRECTOR(S) He and Lu
COMPANY SECRETARY Everford Comsec Limited
B. WFOE
NAME Guangzhou Excellent Consulting Service Company Ltd.
DATE AND PLACE OF INCORPORATION 24 January 2007, PRC
REGISTERED ADDRESS Xxxx 000X, Xx. 000, Xxxxxxxx Xxxxxxxx, Xxxxxxxxx
Economic Technology Zone
REGISTERED CAPITAL US$200,000
SHAREHOLDER NAME SHAREHOLDING
---- ------------
Singshine (Holdings) 100%
Hong Kong Limited
LEGAL REPRESENTATIVE He
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BUSINESS SCOPE Providing investment consulting and marketing
information consulting services
BUSINESS TERM 24 January 2007 to 24 January 2057
C. SSC
NAME Guangzhou Singshine Communication Co., Ltd.
DATE AND PLACE OF INCORPORATION 4 July 1997, PRC
REGISTRATION NUMBER 4401042017070
REGISTERED ADDRESS Rooms 1412, 1413, No. 219, Zhongshan Fifth Avenue,
Yuexiu District, Guangzhou
REGISTERED CAPITAL RMB1,010,000
SHAREHOLDER NAME SHAREHOLDING
---- ------------
He RMB429,250 (42.5%)
Lu RMB429,250 (42.5%)
Zhang RMB151,500 (15%)
TOTAL: RMB1,010,000 (100%)
LEGAL REPRESENTATIVE Lu
BUSINESS SCOPE Production of stage lightings, cultural communication
service (except for those monitored by the government).
Design, production, distribution, agency of local or
overseas advertisements. Information consulting service.
BUSINESS TERM Unlimited
D. SSMS
NAME Shanghai Singshine Marketing Co., Ltd.
DATE AND PLACE OF INCORPORATION 18 July 2002, PRC
REGISTRATION NUMBER 3102292045297
REGISTERED ADDRESS Room 7A to 293, Xx. 000, Xxxxxxxx Xxxx, Xxxxxx Xxxxxxxx,
Xxxxxxxx
REGISTERED CAPITAL RMB1,000,000
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SHAREHOLDER NAME SHAREHOLDING
---- ------------
Chen Qingyang RMB105,000 (10.5%)
He RMB480,000 (48%)
Hu RMB100,000 (10%)
Lu RMB180,000 (18%)
Lu Hang RMB60,000 (6%)
Zhang RMB15,000 (1.5%)
Yin Zijian RMB60,000 (6%)
TOTAL: RMB1,000,000 (100%)
LEGAL REPRESENTATIVE He
BUSINESS SCOPE Design, production, agency and distribution of different
types of advertisements, designing marketing plans for
enterprises, exhibition organization, gifts and
artifacts, display items, decorative materials and sales
of commodities. (with permits for scopes requiring
administrative permits)
BUSINESS TERM 18 July 2002 to 31 July 2013
SUBSIDIARIES Shanghai Heju Advertising Co., Ltd.
Shanghai Fenghua Marketing Consulting Co., Ltd.
Shanghai Singshine Marketing Co., Ltd. (Beijing branch)
Shanghai Singshine Marketing Co., Ltd. (Guangzhou
branch)
Shanghai Liangdian Zhongduan Zhanshi Co., Ltd.
E. SSMS BEIJING
NAME Shanghai Singshine Marketing Co., Ltd. (Beijing branch)
DATE AND PLACE OF INCORPORATION February 18, 2004 PRC
REGISTRATION NUMBER 1102221646155
REGISTERED ADDRESS Xx. 0, Xxxxxxxx Xxxxxxxxxx Xxxxxxxx, Xxxx Xxxx, Xxxxxx
Xxxxxxxx, Xxxxxxx
LEGAL REPRESENTATIVE He Zhihao
BUSINESS SCOPE Design and production of advertisements, designing
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marketing plans, exhibition display; sale of artifacts
(except for those requiring government approvals) and
decorative materials
BUSINESS TERM 18 July 2002 to 31 July 2013
F. SSMS GUANGZHOU
NAME Shanghai Singshine Marketing Co., Ltd. (Guangzhou
branch)
DATE AND PLACE OF INCORPORATION 7 July 2006, PRC
REGISTRATION NUMBER (Branch) 4401042017256
REGISTERED ADDRESS Rooms 1112 and 1113, Zhongshan Fifth Avenue, Yuexiu
District, Guangzhou
LEGAL REPRESENTATIVE Yin Zijian
BUSINESS SCOPE Design, production, agency and distribution of different
types of advertisements, designing marketing plans for
enterprises, exhibition organization, gifts and
artifacts, display items, decorative materials and sales
of commodities. (with permits for scopes requiring
administrative permits)
BUSINESS TERM 7 December, 2006 to 31 July, 2013
G. SHANGHAI LIANGDIAN ZONGDUAN ZIANGSHI CO., LTD.
NAME Shanghai Liangdian Zhongduan Zhanshi Co., Ltd.
DATE AND PLACE OF INCORPORATION 14 June 2004, PRC
REGISTRATION NUMBER 3102292067982
REGISTERED ADDRESS Xxxx 0X-000, Xx. 000 Xxxxxxxx Xx, Xxxxxx District,
Shanghai, the PRC
REGISTERED CAPITAL RMB1,000,000
SHAREHOLDER NAME SHAREHOLDING
---- ------------
SSMS RMB600,000 (60%)
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Hu RMB300,000 (30%)
Xxxx Xxxxx RMB 100,000 (10%)
Total: RMB1,000,000 (100%)
LEGAL REPRESENTATIVE He
BUSINESS SCOPE Window display in shopping centers, exhibition
organization, design and production of exhibition items,
design, producton and agency of various advertisements,
sale of display items, advertisement materials and
decorative materials (with permits for scopes requiring
administrative permits)
BUSINESS TERM 2004 (CHINESE CHARACTERS) 6 (CHINESE CHARACTERS) 14
(CHINESE CHARACTERS) 2014 (CHINESE CHARACTERS) 6
(CHINESE CHARACTERS) 13 (CHINESE CHARACTERS)
H. SHANGHAI HEJU MARKETING CONSULTING CO., LTD.
NAME Shanghai Heju Marketing Consulting Co., Ltd.
DATE AND PLACE OF INCORPORATION February 1, 2007, PRC
REGISTRATION NUMBER 3102292102681
REGISTERED ADDRESS Room 603-16, Xx. 0 Xxxxxxxx, Xx. 000 Xxxxxxxx Xx, Xxxxxx
District, Shanghai, the PRC
REGISTERED CAPITAL RMB500,000
SHAREHOLDER NAME SHAREHOLDING
---- ------------
SSMS RMB500,000 (100%)
Total: RMB500,000 (100%)
LEGAL REPRESENTATIVE Chen Qingyang
BUSINESS SCOPE Marketing and sales plans, exhibition display service,
design, producton and agency of various advertisements,
sale of gifts and artifacts, display items and
decorative materials (with permits for scopes requiring
administrative permits)
BUSINESS TERM February 1, 2007 to January 31, 2017
I. SHANGHAI FENGHUO MARKETING CONSULTING CO., LTD.
NAME Shanghai Fenghuo Marketing Consulting Co., Ltd.
DATE AND PLACE OF INCORPORATION February 1, 2007, PRC
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REGISTRATION NUMBER 3102292102675
REGISTERED ADDRESS Room 603-15, Xx. 0 Xxxxxxxx, Xx. 000 Xxxxxxxx Xx, Xxxxxx
District, Shanghai, the PRC
REGISTERED CAPITAL RMB500,000
SHAREHOLDER NAME SHAREHOLDING
---- ------------
SSMS RMB500,000 (100%)
Total: RMB500,000 (100%)
LEGAL REPRESENTATIVE He
BUSINESS SCOPE Marketing and sales plans, exhibition display service,
design, producton and agency of various advertisements,
sale of gifts and artifacts, display items and
decorative materials (with permits for scopes requiring
administrative permits)
BUSINESS TERM February 1, 2007 to January 31, 2017
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SCHEDULE C
CORPORATE DETAILS OF THE GROUP IMMEDIATELY FOLLOWING CLOSING
A. THE COMPANY
NAME SINGSHINE (HOLDINGS) HONGKONG LIMITED
DATE AND PLACE OF INCORPORATION 10 September 2003, Hong Kong
REGISTERED ADDRESS 35/F., Two International Finance Centre, 0 Xxxxxxx
Xxxxxx, Xxxxxxx, Xxxx Xxxx
AUTHORIZED CAPITAL HK$1,000,000 divided into 100.000 shares of par value
HK$10
ISSUED CAPITAL HK$10,000 divided into 1,000 shares of par value HK$10
SHAREHOLDER NAME NUMBER OF ORDINARY SHARES
---- -------------------------
Nominee 1 550
Nominee 2 450
TOTAL: 1000
DIRECTOR(S) Two directors nominated by
XFM
COMPANY SECRETARY Kings Secretaries Limited
B. WFOE
NAME Guangzhou Excellent Consulting Service Company Ltd.
DATE AND PLACE OF INCORPORATION 24 January 2007, PRC
REGISTERED ADDRESS Xxxx 000X, Xx. 000, Xxxxxxxx Xxxxxxxx, Xxxxxxxxx Economic Technology Zone
REGISTERED CAPITAL US$200,000.00
SHAREHOLDER NAME SHAREHOLDING
---- ------------
Singshine (Holdings) Hong
Kong Limited 100%
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LEGAL REPRESENTATIVE Such person as XFM may
nominate
BUSINESS SCOPE Providing investment consulting and marketing
information consulting services
BUSINESS TERM 24 January 2007 to 24 January 2057
C. SSC
NAME Guangzhou Singshine Communication Co., Ltd.
DATE AND PLACE OF INCORPORATION 4 July 1997, PRC
REGISTRATION NUMBER 4401042017070
REGISTERED ADDRESS Rooms 1412, 1413, No. 219, Zhongshan Fifth Avenue,
Yuexiu District, Guangzhou
REGISTERED CAPITAL RMB1,010,000
SHAREHOLDER NAME SHAREHOLDING
---- ------------
SSC Nominee RMB1,010,000 (100%)
Total: RMB1,010,000 (100%)
LEGAL REPRESENTATIVE Such person as XFM may nominate
BUSINESS SCOPE Production of stage lightings, cultural communication
service (except for those monitored by the government).
Design, production, distribution, agency of local or
overseas advertisements. Information consulting service.
BUSINESS TERM Unlimited
D. SSMS
NAME Shanghai Singshine Marketing Co., Ltd.
DATE AND PLACE OF INCORPORATION 18 July 2002, PRC
REGISTRATION NUMBER 3102292045297
REGISTERED ADDRESS Room 7A to 293, Xx. 000, Xxxxxxxx Xxxx, Xxxxxx Xxxxxxxx,
Xxxxxxxx
REGISTERED CAPITAL RMB1,000,000
SHAREHOLDER NAME SHAREHOLDING
---- ------------
Nominee 1 RMB500,000 (50%)
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Nominee 2 RMB500,000 (50%)
Total: RMB1,000,000 (100%)
LEGAL REPRESENTATIVE
BUSINESS SCOPE Design, production, agency and distribution of different
types of advertisements, designing marketing plans for
enterprises, exhibition organization, gifts and
artifacts, display items, decorative materials and sales
of commodities. (with permits for scopes requiring
administrative permits)
BUSINESS TERM 18 July 2002 to 31 July 2013
SUBSIDIARIES Shanghai Heju Advertising Co., Ltd.
Shanghai Fenghua Marketing Consulting Co., Ltd.
Shanghai Singshine Marketing Co., Ltd. (Beijing branch)
Shanghai Singshine Marketing Co., Ltd. (Guangzhou branch)
Shanghai Liangdian Zhongduan Zhanshi Co., Ltd.
E. SSMS BEIJING
NAME Shanghai Singshine Marketing Co., Ltd. (Beijing branch)
DATE AND PLACE OF INCORPORATION February 18, 2004 PRC
REGISTRATION NUMBER 1102221646155
REGISTERED ADDRESS Xx. 0, Xxxxxxxx Xxxxxxxxxx Xxxxxxxx, Xxxx Xxxx, Xxxxxx
Xxxxxxxx, Xxxxxxx
LEGAL REPRESENTATIVE He
BUSINESS SCOPE Design and production of advertisements, designing
marketing plans, exhibition display; sale of artifacts
(except for those requiring government approvals) and
decorative materials
BUSINESS TERM 18 July 2002 to 31 July 2013
F. SSMS GUANGZHOU
NAME Shanghai Singshine Marketing Co., Ltd. (Guangzhou branch)
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DATE AND PLACE OF INCORPORATION 7 July 2006, PRC
REGISTRATION NUMBER (Branch) 4401042017256
REGISTERED ADDRESS Rooms 1112 and 1113, Zhongshan Fifth Avenue, Yuexiu
District, Guangzhou
LEGAL REPRESENTATIVE Yin Zijian
BUSINESS SCOPE Design, production, agency and distribution of different
types of advertisements, designing marketing plans for
enterprises, exhibition organization, gifts and
artifacts, display items, decorative materials and sales
of commodities. (with permits for scopes requiring
administrative permits)
BUSINESS TERM 7 December, 2006 to 31 July, 2013
G. SHANGHAI LIANGDIAN ZONGDUAN ZIANGSHI CO., LTD.
NAME Shanghai Liangdian Zongduan Ziangshi Co., Ltd.
DATE AND PLACE OF INCORPORATION June 14, 2004, PRC
REGISTRATION NUMBER 3102292067982
REGISTERED ADDRESS Xxxx 0X-000, Xx. 000 Xxxxxxxx Xx, Xxxxxx District,
Shanghai, the PRC
REGISTERED CAPITAL RMB1,000,000
SHAREHOLDER NAME SHAREHOLDING
---- ------------
SSMS RMB600,000 (60%)
Hu RMB300,000 (30%)
Xxxx Xxxxx RMB100,000 (10%)
Total RMB1,000,000 (100%)
LEGAL REPRESENTATIVE He:
BUSINESS SCOPE Window display in shopping centers, exhibition
organization, design and production of exhibition items,
design, producton and agency of various advertisements,
sale of display items, advertisement materials and
decorative materials (with permits for scopes requiring
administrative permits)
BUSINESS TERM Unlimited
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H. SHANGHAI HEJU MARKETING CONSULTING CO., LTD.
NAME Shanghai Heju Marketing Consulting Co., Ltd.
DATE AND PLACE OF INCORPORATION February 1, 2007, PRC
REGISTRATION NUMBER 3102292102681
REGISTERED ADDRESS Room 603-16, Xx. 0 Xxxxxxxx, Xx. 000 Xxxxxxxx Xx,
Xxxxxx District, Shanghai, the PRC
REGISTERED CAPITAL RMB500,000
SHAREHOLDER NAME SHAREHOLDING
---- ------------
SSMS RMB500,000 (100%)
Total: RMB500,000 (100%)
LEGAL REPRESENTATIVE Chen Qingyang
BUSINESS SCOPE Marketing and sales plans, exhibition display service,
design, producton and agency of various advertisements,
sale of gifts and artifacts, display items and
decorative materials (with permits for scopes requiring
administrative permits)
BUSINESS TERM February 1, 2007 to January 31, 2017
I. SHANGHAI FENGHUO MARKETING CONSULTING CO., LTD.
NAME Shanghai Fenghuo Marketing Consulting Co., Ltd.
DATE AND PLACE OF INCORPORATION February 1, 2007, PRC
REGISTRATION NUMBER 3102292102675
REGISTERED ADDRESS Room 603-15, Xx. 0 Xxxxxxxx, Xx. 000 Xxxxxxxx Xx, Xxxxxx
District, Shanghai, the PRC
REGISTERED CAPITAL RMB500,000
SHAREHOLDER NAME SHAREHOLDING
---- ------------
SSMS RMB500,000 (100%)
Total: RMB500,000 (100%)
LEGAL REPRESENTATIVE He
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BUSINESS SCOPE Marketing and sales plans, exhibition display service,
design, producton and agency of various advertisements,
sale of gifts and artifacts, display items and
decorative materials (with permits for scopes requiring
administrative permits)
BUSINESS TERM February 1, 2007 to January 31, 2017
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SCHEDULE D
INTELLECTUAL PROPERTY
This is a list of domain names, trademarks, tradenames and material services and
products owned by SSC and SSMS.
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SCHEDULE E
LEASES
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SCHEDULE F
MATERIAL CONTRACTS
This is a list of material contracts.
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SCHEDULE G
INSURANCE AND BANK
This is a list of bank accounts and insurance policies.
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SCHEDULE H
FORM OF EMPLOYMENT AGREEMENT
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SCHEDULE I
LIST OF MANAGEMENT ENTERING INTO EMPLOYMENT AGREEMENTS
1. He Zhihao
2. Lu Qibo
3. Hu Shengzhong
4. Lu Hang
5. Xxxx Xxx
6. Zhang
7. Yin Zijian
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SCHEDULE J
PRC EQUITY TRANSFER DOCUMENTS
SSC EQUITY TRANSFER DOCUMENTS
Equity transfer agreement among He, Lu, Zhang, Nominee 1 and Nominee 2.
SSMS EQUITY TRANSFER DOCUMENTS
Equity transfer agreement among Chen Qingyang, He, Hu, Lu, Lu Hang, Xxxxx, Xxx
Zijian, Nominee 1 and Nominee 2.
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SCHEDULE K
DISCLOSURE SCHEDULE
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SCHEDULE L
COOPERATION AGREEMENTS
Attachment: The 107.6 agreement entered into between SSC and Guangzhou station
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SCHEDULE M
ESCROW AGREEMENT
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