Share Transfer Agreement
SMART
LEAD ENTERPRISES LIMITED
and
MobiZone
Holdings Limited
2010年[ ]月[ ]日
TABLE
OF CONTENTS
DEFINITION
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4
|
|
ARTICLE
2
|
SHARE
TRANSFER
|
6
|
ARTICLE
3
|
TRANSFER
CONSIDERATION AND CLOSING; ADJUSTMENT TO THE TRANSFER
PRICE
|
6
|
ARTICLE
4
|
REPRESENTATIONS,
COVENANTS AND WARRANTS OF EACH PARTY
|
10
|
ARTICLE
5
|
BOARD
OF DIRECTORS AND MANAGEMENT
|
14
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ARTICLE
6
|
DEFAULT
AND INDEMNIFICATION
|
15
|
ARTICLE
7
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TERMINATION
|
15
|
ARTICLE
8
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FORCE
MAJEURE
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16
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CONFIDENTIALITY
|
17
|
|
ARTICLE 10
|
MISCELLANEOUS
|
18
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This
Share Transfer Agreement (“Agreement”) is entered into on
June [ ], 2010 (“Execution Date”) in
[ ] by and between the following parties:
(1)
|
Smart Lead Enterprises
Limited (the “Transferor”), a
limited liability company duly incorporated and validly existing under the
laws of the British Virgin Islands with its address at X.X. Xxx 0000, Xxxx
Xxxx, Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx;
and
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(2)
|
MobiZone Holdings
Limited, (the “Transferee”), a limited
liability company duly incorporated and validly existing under the laws of
Cayman Islands with its address at 7A-D Hong Kong Industrial Building,
444-452 Des Voeux Road West, Hong
Kong.
|
In this
Agreement, the forgoing parties shall be hereinafter referred to as a “Party”
respectively, and as the “Parties collectively.
Whereas
A.
|
The
Transferor is a limited liability company incorporated in the British
Virgin Islands, which acquires various licenses of mobile phone game and
entertainment product trough authorized license and conducts value-add
telecommunication business regarding to mobile phone in Mainland
China;
|
B.
|
The
Transferor has executed the following agreements with Hunan Internet and
Value-add Business Department of China Telecom Corporation Limited (“Hunan
Telecom”):
|
1. The
Mobile Value-add Business (JAVA game, 3G mobile phone game and intelligent 3G
mobile phone game platform business ) Cooperation Agreement executed
on April 29, 2009; and
2. August
19, 2009: The Game Business Authorization and Agent Agreement of Smart Lead
Enterprises Limited (above agreements shall be collectively referred to as
“Hunan Telecom
Contracts”).
C.
|
Viva
Red Company Limited (“Viva Red”) is a limited
liability company duly incorporated and validly existing under the laws of
the British Virgin Islands with its address at X.X. Xxx 0000, Xxxx Xxxx,
Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx; As of the Execution Date, 100% of the
Viva Red is held by the Transferor
|
3
D.
|
On
7th
July, 2010, the Transferor and the Viva Red entered into a Business
Transfer Agreement, subject to which, the Transferor will transfer to Viva
Red the business contemplated under Hunan Telecom Contracts;
and
|
E.
|
The
Transferor agrees to transfer 51% shares of Viva Red as now held to
MobiZone according to terms and conditions of this Agreement, and MobiZone
agrees to acquire such shares subject to terms and conditions of this
Agreement.
|
Whereby,
the Parties conclude terms hereof as follows:
Article
1 Definition
1.1
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Transferor
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means
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Smart
Lead Enterprises Limited
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1.2
|
MobiZone
or Transferee
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means
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MobiZone
Holdings Limited
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1.3
|
Viva
Red
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means
|
Viva
Red Company Limited
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1.4
|
Objective
Shares
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means
|
51%
shares of Viva Red currently held by the Transferor and proposed to be
transferred to MobiZone, including ownership, interests distribution
right, assets distribution right and other rights shall be owned by
shareholders of the Viva Red according to Articles of Association and
applicable laws.
|
1.5
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Transfer
of Objective Shares
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means
|
the
Transferor transfer the Objective Shares as now held to
MobiZone according to this Agreement
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1.6
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Closing
Date
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means
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The
date on which the Objective Shares are transferred according to Article
3.6 hereof, and the MobiZone shall pay the price of the second installment
to the Transferee on the Closing Date.
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1.7
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Mainland
China
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means
|
The
territory within PRC, except for Hong Kong Special Administrative Region,
Macau Special Administrative Region and Taiwan
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1.8
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Transfer
Consideration
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means
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The
price of the Objective Shares transferred by the Transferor to MobiZone,
which shall be adjusted according to Article 3.9 hereof, details please
refer to Articles 3 of this Agreement,
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1.9
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Cash
Consideration
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means
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The
cash payment in Transfer Consideration, the total amount of which shall be
US$1,000,000
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1.10
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First
Cash Consideration
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means
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49%
of Cash Consideration, please refer to Article 3.3
hereof
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4
1.11
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Second
Cash Consideration
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means
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51%
of the Cash Consideration with deducting RMB1,000,000 of the deposit paid
by MobiZone subject to Article 3.2 of this Agreement, which shall by paid
at the Closing Date
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1.12
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Stock
Consideration
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means
|
Stock
of the MobiZone’s parent company in Transfer Consideration, amounting to
1,200,000 shares, the total value of which is
US$3,000,000
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1.13
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Audit
Report
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means
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Any
Audit Report with respect to conducting audit to Viva Red, which is
issued by accounting firm designated by
MobiZone
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1.14
|
Hunan
Telecom Contracts
|
means
|
Contracts
set forth in part B of Whereas articles of this
Agreement
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1.15
|
Business
Transfer Agreement
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means
|
Business
Transfer Agreement executed by the Transferor and Viva Red on
[ ], 2010, attached as Exhibit 2 hereof
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1.16
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Transferred
Business
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means
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Any
and all the businesses contemplated under Hunan Contracts and transferred
to Viva Red by the Transferor according to Business Transfer
Agreement
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1.17
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Intellectual
Property
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means
|
Any
and all the Intellectual Property licensed to Viva Red subject
to Business Transfer Agreement, including but not limited to all the
games, procedure, software copyright, platform, domain name and trademark
for engaging in the business proposed to be transferred, including
but not limited to the domain name and use right of 189 game mall
website
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1.18
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WFOE
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means
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A
wholly foreign owned enterprise established or acquired by Viva Red in
Mainland China, which shall control the domestic company through
contractual controlling.
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1.19
|
Domestic
Company
|
means
|
A
domestic company contractually controlled by the WFOE which is established
or acquired by Viva Red in Mainland China. Such Domestic Company has all
the governmental approval, registration, permit, authorization and license
required to engage in the Business Proposed to be Transferred, including
but not limited to the valid Value-add Telecom Business Operation
Certificate with respect to engaging in the transferred business; the
domestic company can be Shenzhen Alar Technology Limited (深圳市明宣科技有限公司)
or other company designated by MobiZone
|
5
1.20
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MobiZone’s
Parent Company
|
means
|
MoqiZone
Holding Corporation, an US listing company (OTCBB: MOQZ), who own 100%
shares of MobiZone on the date hereof
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1.21
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Security
Interest
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means
|
Any
mortgage, pledge, lien, limitation, priority, preemption, any third
party’s right, any other security interest, and other prior arrangements
in other similar forms.
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1.22
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Affiliate
|
means
|
With
respect to a specific person, partnership, organization or entity directly
indirectly (through one or more agent) controlling, controlled by, or
under common control with, such Party from time to time. “Control” means
ownership of absolute majority shares of more than 50%, or comparative
majority shares below 50%, or dominant power trough agreements, director
appointment and other non-agreements
way
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Article
2 Share Transfer
2.1
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The
Transferor agrees to transfer to MobiZone, and MobiZone agrees to acquire
from the Transferor the objective
shares.
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2.2
|
The
Parties unanimously agree that, with respect to the undistributed profits
(if any) of Viva Red before the Closing Date, including but not limited to
any profits arising from engaging in the Business Proposed to be
Transferred, the Transferor shall not distribute or not consent Viva Red
to distribute such profits without written consent of
MobiZone.
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2.3
|
Within
or prior to 5 business days of the execution date, Viva Red shall be
responsible for, and the Transferor shall urge the Viva Red to, register
the Objective Share contemplated hereunder at the registration department
of British Virgin Islands, including but not limited to amending Register
of Members, Register of Directors and Articles of Association (if
required) of Viva Red, and delivery of stock corresponding to Objective
Shares to MobiZone. The Transferor agrees to, and agrees to urge Viva Red
to, execute any necessary document and take any necessary action, to
ensure the consummation of the forgoing
registration.
|
Article
3 Transfer Consideration and Closing; Adjustment to the Transfer
Price
3.1
|
The
Parties hereby agree that, the transfer price of Objective Share is
US$4,000,000 (“Transfer
Consideration”), including US$1,000,000 paid in cash (“Cash Consideration”) and
common stock of MobiZone’s parent company, amounting to 1,200,000 shares
and worth US$3,000,000 (“ Stock Consideration”).
The Transfer Consideration shall be adjusted according to Article 3.9. The
valuation of MobiZone’s parent company shall be calculated subject to
US$2.5 per share. In the event of a split or combination of MobiZone’s
parent company before Closing Date, the amount of the stock corresponding
to Stock Consideration shall also be
adjusted.
|
6
3.2
|
As
of the execution of this Agreement, MobiZone shall pay RMB1,000,000. which
is part of Cash Consideration, to the Transferor as the
deposit.
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3.3
|
Within
7 business days of consummation or written waiver of the following
conditions by MobiZone, MobiZone shall pay the First Cash Consideration,
amounting to 49% of the total Cash Consideration and worth US$490,000, to
the Transferor as the share transfer price of the first
installment:
|
|
(1)
|
This
Agreement has been duly executed by the Parties and approved by competent
authority of each Party; the Transferor and other parties have executed
all the contracts, agreements and relevant documents required by the
transfer of Objective Shares contemplated
hereunder;
|
|
(2)
|
The
Shareholders’ meeting of Viva Red has passed the resolution to approve the
transfer of Objective Shares to MobiZone, amendment of Register of
Members, Register of Directors and Articles of Association of Viva Red,
and delivery of Original Stock Certificate of Viva Red, with
respect to the Objective Shares. to
MobiZone;
|
|
(3)
|
The
Transferor has, cooperating with MobiZone, fished the business, finance
and legal due diligence to Viva Red, and MobiZone has been satisfied with
the result of such due diligence, the problems found in which has been
resolved subject to requirement of
MobiZone;
|
|
(4)
|
All
the approval, registration and filing required by Objective Share has been
completed;
|
|
(5)
|
The
Business Transfer Agreement has been duly executed, and as of the payment
date of share transfer price of first installment, there is no amendment
and termination without written consent of MobiZone, or any other default
events, failure to performance, or any other
changes.
|
|
(6)
|
The
Transferor has executed the Loan Agreement attached as Exhibit 1 of this
Agreement with Viva Red;
|
|
(7)
|
As
of the payment date of share transfer price of the first installment,
there is no material changes (e.g. changes of law, tax or market
environment) to Viva Red, which may lead to a material adverse effect to
financial condition, prospectus, operation performance or ordinary
operation condition of Viva Red, or to the expected transaction
contemplated hereunder, as well as no event and fact leading to any such
changes or influences;
|
|
(8)
|
Neither
of business of Viva Red has been and will be terminated, invalid or unable
to continue to be conducted because of the change of the shareholder of
Viva Red.
|
|
(9)
|
As
of the payment date of share transfer price of first installment, the
Transferor’s statements, representations and warrants contemplated
hereunder shall be true, complete and
sufficient.
|
7
3.4
|
The
Transferor agrees to execute the Loan Agreement attached as Exhibit 1
hereof while executing this Agreement, and agrees to lend all of the First
Cash Consideration provided in Article 3.3 to Viva Red as an operation
expenses. MobiZone is entitled to pay directly the First Cash
Consideration to Viva Red’s account upon informing the Transferor, which
shall be deemed as the Transferor has performed such loan payment
obligation contemplated under Loan
Agreement.
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3.5
|
MobiZone
agrees to deliver, the Second Cash Consideration, namely 51% of the Cash
Consideration, which is US$510,000 deducting RMB1,000,000 of the
deposit provided according to Article 3.2, to a law firm designated by the
Transferor for escrow within 30 business days after payment of the First
Cash Consideration, and MobiZone has the co-signature right of such escrow
account.
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3.6
|
Within
7 business days of consummation or a written waiver of the following
conditions by MobiZone, MobiZone shall pay the Second Cash Consideration,
which has been delivered to a law form for escrow, to the Transferor. The
date of payment of second share transfer price is the Closing Date
hereof:
|
|
(1)
|
the
payment condition of the first share transfer price provided in Article
3.3 hereof has been fully realized or waived in writing by
MobiZone;
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|
(2)
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the
parties of Business Transfer Agreement have been fully complying with and
performing all the provisions contemplated under such Business Transfer
Agreement. The works of business transfer and Intellectual Property
license provided under Business Transfer Agreement have been successfully
completed. As of the payment date f the second share transfer price, there
is no amendment , termination or any other default events, failure to
perform, or any other changes without prior written consent of
MobiZone;
|
|
(3)
|
as
of the payment date f the second share transfer price, the business
transferred to Viva Red is in a good condition and operation; the
Intellectual Property licensed to Viva Red in accordance with Business
Transfer Agreement is in a good condition; there is no tort claim,
default, dispute, suit, arbitration with respect to above business and
Intellectual Property, and Viva Red, relying on such licensed Intellectual
Property, can engage in and have engaged in the transferred business
independently, normally and
successfully;
|
|
(4)
|
neither
of the business of Viva Red is terminated, invalid or unable to continue
to be conducted because of alteration of shareholders of Viva
Red;
|
|
(5)
|
Hunan
Telecom has successfully transferred all the receivables obtained by the
Transferor subject to Hunan Telecom Contracts as of the first quarter of
2010 to Viva Red’s account or other account designated by Viva
Red;
|
|
(6)
|
as
of the payment date of the second share transfer price, the statement,
representations and warrants made by the Transferor under this Agreement
is true, complete and sufficient.
|
8
If due to
the reason of MobiZone and/ or Viva Red which is actually controlled by
MobiZone, one or more of the above conditions is not fulfilled, such condition
shall be deemed as having been fulfilled.
3.7
|
Within
3 months of the Closing Date, MobiZone shall pay the Stock Consideration
to the Transferor as the third share transfer
price:
|
|
(1)
|
the
payment condition of first share transfer price provide in Article 3.3 and
the payment condition of second share transfer price provided in
Article 3.6 have been completed fulfilled or been waived in writing by
MobiZone
|
|
(2)
|
Hunan
Telecom has transferred all the receivables obtained by the Transferor
subject to Hunan Telecom Contracts to Viva Red’s account or other accounts
designated by Viva Red;
|
|
(3)
|
as
of the payment date f the third share transfer price, the business
transferred to Viva Red is in a good condition and operation; the
Intellectual Property licensed to Viva Red in accordance with Business
Transfer Agreement is in a good condition; there is no tort claim,
default, dispute, suit, arbitration with respect to above business and
Intellectual Property; as of the payment date of the third share transfer
price, there is no amendment , termination or any other default events,
failure to perform, or any other changes without prior written consent of
MobiZone;
|
|
(4)
|
as
of the payment date of the third share transfer price, the statement,
representations and warrants made by the Transferor under this Agreement
is true, complete and sufficient.
|
If due to
the reason of MobiZone and/ or Viva Red which is actually controlled by
MobiZone, one or more of the above conditions is not fulfilled, such condition
shall be deemed as having been fulfilled.
3.8
|
The
Transferor agrees to enter into a 2-year Stock Lock-up Agreement with
respect to the stock of Article 3.7 when MobiZone pays the Stock
Consideration of Article 3.7.
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3.9
|
Adjustment
of Transfer Consideration
|
|
(1)
|
the
Parties agree that, during the term of this Agreement, in the event of
occurrence of the following events, MobiZone will not have the obligation
to deliver any Cash Consideration and Stock Consideration undelivered, or
is entitled to adjust the cash and Stock Consideration paid to Transferor
according to the proportion of losses
incurred.
|
(i) the
Hunan Telecom Contract and/ or Business Transfer Agreement are amended,
terminated, cancelled, identified to be invalid, or unable to be normally
conducted, for the reason can not attributable to MobiZone and / or Viva Red
actually controlled by MobiZone;
9
(ii) the
Transferor materially violates the obligations, representations, warrants or
covenants contemplated under hereunder and/ or Business Transfer Agreement, and
fails to effectively redress such default within 30 days of written notice of
MobiZone.
|
(2)
|
the
Hunan Telecom Contract and/ or Business Transfer Agreement are amended,
terminated, cancelled, identified to be invalid, or unable to be normally
conducted, for the reason can not attributable to MobiZone and / or
Viva Red actually controlled by MobiZone within 2 years of the execution
date hereof, the Transferor promises and agrees to unconditionally refund
all the Stock Consideration paid to the Transferor by MobiZone, amounting
to 1,200,000 common shares of MobiZone’s parent Company, in accordance
with Article 3.7. At the same time, MobiZone shall refund 51% of shares of
Viva Red to the Transferor.
|
|
(3)
|
MobiZone
shall deliver to the Transferor cash and/ or Stock Consideration adjusted
subject to provisions hereof, which shall be deemed as MobiZone has
completely performed the payment obligation of transfer consideration
contemplated hereunder. The Transferor shall not, at any time, by any
reason and in any form, require MobiZone further to issue any stock,
deliver any cash or make any other compensation to the Transferor or any
third party, as well as not propose any claim or request to MobiZone or
any affiliate.
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3.10
|
Form
of Transfer Consideration Payment
|
|
(1)
|
Cash
Consideration shall be remitted into the following account by
MobiZone in US dollar currency (except for the part that shall
be paid to Viva Red’s account subject to Article 3.4
)
|
Information
of the Transferor’s account
Account
Name: _______________________________
Bank:
_______________________________
Account
No.: _______________________________
|
(2)
|
MobiZone
shall procure its parent company to issue the Stock Consideration to the
Transferor.
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3.11
|
The
Transferor shall provide MobiZone with confirmation document respect
to receipt of share transfer price within 1 business day upon receipt of
share transfer price of each
installment
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Article
4 Representations, Covenants and Warrants of Each Party
4.1
|
The
Transferor, unconditionally, jointly and irrevocably make representations
, covenants and warrants to MobiZone as follows: ( the “Viva Red ”
referred hereunder, if applicable, shall include any and all the branch,
subsidiaries and Domestic Company )
|
10
|
(1)
|
the
Transferor execute and perform this Agreement within its capacity for
civil rights and civil conduct, and execution and performance of this
Agreement shall not conflict, restrict and violate any applicable laws,
regulations, Articles of Association and other constitutional documents,
contracts, agreements and other legal documents; Upon execution, this
Agreement shall be legally and effectively binding to the Transferor and
shall be enforceable according
hereto;
|
|
(2)
|
the
Transferor shall strictly comply with all the obligations provided by
Articles of Association, and there is no circumstance which shall
influence the legal status of MobiZone as the shareholder of Viva
Red;
|
|
(3)
|
the
Transfer has complete, valid and sufficient ownership and disposition to
Objective Share of Viva Red held by it, and there is no circumstance of
security interest and freeze, as well as no any disputes, suits,
arbitration and other administrative, judicial enforcement to Objective
Shares, and neither of any third party is able to propose any right claim
to Objective Shares;
|
|
(4)
|
the
Transferor has disclose to MobiZone all the materials and information
which may have material adverse effect to performance of obligation
contemplated hereunder and to MobiZone’s intention of executing this
Agreement;
|
|
(5)
|
the
Transferor hereby represent that, the account book and financial statement
of Viva Red provided to MobiZone is complete and truly, fairly and
completely reflect the financial statues and performance at the ending of
relevant fiscal period;
|
|
(6)
|
the
Transferor represent that, the liabilities of Viva Red occurring before
execution date of this Agreement (including the company liabilities
occurring before such date, however claimed by creditor or found by
MobiZone afterwards) shall be assumed by the Transferor, including but not
limited to any bank loan, shareholder loan, payable salary and premium of
employees, and payable social insurance and housing fund of employees
(even the request to settle the said debt is raised after the Execution
Date) ; in the event that Viva Red or MobiZone pay any price to any third
party or assume any losses due to the forgoing debt, the Transferor shall
indemnify jointly and severally to Viva Red or
MobiZone;
|
|
(7)
|
the
Transferor represents that, Viva Red has a complete ownership and use
right to its assets and there is no mortgage, pledge, lien, real estate
mortgage, security interest, charge, or disputes o its assets; In the
event that Viva Red and MobiZone pay any price or assume any losses to the
third party due to the untrue representation, the Transferor shall
indemnify jointly and severally to Viva Red or
MobiZone;
|
|
(8)
|
the
Transferor represents that, at or prior to the execution date hereof ,
Vive Red has not been, and will not be, involved in any claims, suits,
arbitration, administrative penalty or other proceedings arising from
contract performance, tort, labor, employee social insurance, welfare and
other reasons occurred before the execution date; In the event of any
claim, suit, arbitration, administrative penalty or other proceedings
pending against, or any losses incurred by Viva Red and MobiZone arising
from any third party’s request, the Transferor shall be responsible for
responding to suit or dealing with relevant penalties or proceedings, or
coordinate Vive Red to do the same; With respect to any price paid or
losses assumed by the Company or MobiZone to the third party due to the
forgoing reasons, the Transferor shall indemnify jointly and severally to
Viva Red or MobiZone;
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11
|
(9)
|
the
Transferor represents that, Viva Red never conduct any behavior violating
applicable laws and having material adverse effect to the transactions
contemplated hereunder. The Transferor and Viva Red never be involved in
any pending suit, arbitration, other disputes or administrative penalties
may having adverse effect to transactions contemplated
hereunder;
|
|
(10)
|
the
Transferor represents that, as of establishment, Viva Red has been
complying with all the tax laws and regulations, have paid all the
taxation and charges required by taxation authorities, never received any
reminder letters issued by taxation authority or other competent
authorities and was never subject to any penalties, pending taxation
investigation or dispute constituting adverse effect to transactions
contemplated hereunder.
|
|
(11)
|
the
Transferor represents that, the Transferor shall strictly comply with
taxation laws and regulations, and shall pay taxes with respect to the
obtained Transfer Consideration contemplated
hereunder;
|
|
(12)
|
the
Transferor represents that, all the patent, patent application, copyright
(including but not limited to software copyright ), know-how (including
industry secret and non-patent proprietary, confidential information
system or program ), trademark, service xxxx and trade name (including but
not limited to the “Intellectual Property” defined hereunder) owned by and
relevant to the business conducted by Viva Red are legitimately owned and
used by Viva Red; With respect to the forgoing Intellectual Property,
neither Viva Red nor other related parties have received tort notices or
any notice of conflicting with rights claimed by others; There is nothing
infringement act of Viva Red, which is in the progress or may happen, to
any patent, patent application, copyright (including but not limited to
software copyright ), trademark, service xxxx and trade name registered in
Mainland China;
|
|
(13)
|
if
the Transferor realizes that there is any representation, covenant or
warrant become untrue, incomplete or inaccurate when or prior to paying
Transfer Price of each installment, the Transferor shall inform MobiZone
immediately and take necessary remedy measures according to reasonable
requirement of MobiZone.
|
|
(14)
|
the
Transferor represents that, upon businesses under Hunan Telecom Contracts
is transferred to Viva Red, Viva Red is entitled to normally operate
businesses under such contracts; the Transferor may not, directly or
indirectly, compete with any Transferred Business conducted by Viva Red
and its subsidiaries (including the Domestic Company ), or may not impede,
destroy and prevent operation of such Transferred Business; In the event
that the Transferor obtain opportunities of engaging in mobile network
value-add telecom business relevant to mobile phone game in any province
except for Hunan and has the intention to cooperate with the other party,
MobiZone has the priority of cooperation under same condition, and the
details of which shall be negotiated by the
parties.
|
12
|
(15)
|
the
Parties agree that, as of the execution date hereof, without prior written
consent of MobiZone, Viva Red and it subsidiaries (including but not
limited to the Domestic Company) may not, and the Transferor shall urge
Viva Red not to:
|
|
(i)
|
change
authorized shares capital of Viva Red, alter the par value of share of
Viva Red, issue any type of share, option, purchase right and bond of Viva
Red, and increase, decrease or amend rights and obligations on any type of
share of Viva Red;
|
|
(ii)
|
amend
Articles of Association or other constitutional documents of Viva
Red
|
|
(iii)
|
approve,
change or annul any ESOP or other share purchase plan of Viva Red, or
issue share of Viva Red to any individual or entity subject existed
plan;
|
|
(iv)
|
redemption
of shares of Viva Red;
|
|
(v)
|
approve
or urge Viva Red to dissolve, liquidate, be bankrupt or enter into similar
proceedings;
|
|
(vi)
|
approve
and alter business plan or financial budget of Viva
Red;
|
|
(vii)
|
alter
and terminate conducted Transferred Business, or add other main
businesses
|
|
(viii)
|
approve
occurrence or undertaking of debt, securities or other liabilities (except
for business plan approved by the Board), each installment of which
exceeds US$20,000 or annual accumulated amounts of which
exceeds US$20,000.
|
|
(ix)
|
set
any security interest with respect to any asset, share interest of Viva
Red;
|
|
(x)
|
related
transaction with any affiliate;
|
|
(xi)
|
provide
security of any form or assume any liability for any third
party;
|
|
(xii)
|
appoint
and remove directors, supervisors, offices of Viva Red, decide their
remuneration, or change constituent numbers of the
Board;
|
|
(xiii)
|
distribute
bonus or others with respect of share of Viva
Red;
|
|
(xiv)
|
Viva
Red conducts foreign investment of any form, or Viva Red (or its major
asset or business) is required by any third
party;
|
|
(xv)
|
Viva
Red transfers or license any Intellectual Property to any third party, or
terminates any authorization or permit in aspect of Intellectual Property
licensed by any third party;
|
|
(xvi)
|
execute
any business contract (except for business plan approved by the Board),
the amount of which exceeds
US$100,000
|
|
(xvii)
|
hire
or dismiss auditing firm, accounting firm, investment bank of Viva
Red
|
(xviii)
|
terminate,
alter, transfer or dispose in other ways the Loan Agreement attached as
Exhibit 1, or return any loan contemplated under Loan Agreement ahead of
schedule, or use such loan in the purpose not conforming to Loan
Agreement;
|
|
(xix)
|
terminate,
alter, transfer or dispose in other ways the Business Transfer Agreement
executed with the Transfer;
|
13
|
(xx)
|
conduct
any act or negative act which may lead to above
provisions.
|
|
(16)
|
Above
representations, covenant or warrants of the Transferor is true, accurate,
complete, sufficient, unconditional and without
reserve.
|
4.2
|
MobiZone,
unconditionally and irrevocably, make the following representations,
covenants and warrants to the Transferor that, as of the Closing
Date:
|
|
(1)
|
MobiZone
is a limited liability company duly incorporated and validly existing
under the laws of Cayman Islands
|
|
(2)
|
MobiZone
executes and performs this Agreement within its power and has obtained
necessary authorization of the Company, without violating laws,
regulations, Articles of Association, other constitutional documents and
contracts binding to it; this Agreement is legally, effectively binding to
MobiZone, and is enforceable subject to provisions of this Agreement upon
execution and effectiveness.
|
|
(3)
|
MobiZone has
not been, and will not be, involved in any pending suits, arbitration or
other legal or administrative proceedings claimed by any third party,
which may have a material adverse effect to the transfer of Objective
Shares contemplated hereunder;
|
|
(4)
|
prior
to or at the Closing Date, in the event that MobiZone realize there is any
representation, covenant or warrant made in this Agreement become untrue,
incomplete or inaccurate, MobiZone shall inform the Transferor immediately
and take necessary remedy measures according to reasonable requirement of
the Transferor;
|
|
(5)
|
Above
representations, covenant or warrants of the MobiZone is true, accurate,
complete, sufficient, unconditional and without
reserve
|
4.3
|
The
Transferor represents that, it will not, directly or indirectly, engage or
invest in any business regarding to Hunan Telecom Contracts, or promote
any third party and Hunan Telecom to engage in any business regarding to
Hunan Telecom Contracts, and will not compete with Viva Red with respect
to mobile phone game of Hunan.
|
Article
5 Board of Directors and Management
5.1
|
Prior
to or at the Closing, the Transferor shall urge Viva Red to amend Register
of Directors and file the renewed Register of Directors at company
registration authority of British Virgin Islands, to realize: Board of
Directors of Viva Red shall consist of 3 directors, 2 of whom shall be
appointed by MobiZone, 1 of whom shall be appointed by the Transferor. The
Board of Directors of Viva Red may not be held, and none resolution shall
be passed, unless at least 2 directors are at present. Issues provided in
Article 4.1(17) shall not be passed unless consent by at least 1 director
appointed by MobiZone
|
5.2
|
The
constitution of the Board of any subsidiaries of Viva Red (including but
not limited to the WFOE and Domestic Company) shall be as same as
which of Viva Red, and shall (i) The Board of Directors may not be held,
and none resolution shall be passed, unless at least 2 directors are at
present; (ii) Issues provided in Article 4.1(17) shall not be passed
unless consent by at least 1 director appointed by
MobiZone.
|
14
5.3
|
General
Manager, Chief Finance Officer of any subsidiaries of Viva Red (including
but not limited to the WFOE and Domestic Company) and the auditor shall be
appointed by MobiZone.
|
Article
6 Default and Indemnification
6.1
|
The
Transferor shall assume a joint and several liability to any
representation and warrant made by it; if such representation and warrant
is not true, accurate, complete and sufficient, and such circumstance is
realized by MobiZone prior to the payment of Share Transfer Price,
MobiZone is entitled to refuse to pay such price (including Cash
Consideration and Stock Consideration), if such circumstance is realized
by MobiZone after the payment of Share Transfer Price, MobiZone is
entitled to request the Transferor to return the paid Share Transfer
Price, to indemnify all the expenses paid by MobiZone for this share
purchase project (e.g. auditing fees, attorney’s fess, transfer
formalities fees and travel expenses etc.), and to be reliable for any
liabilities, losses incurred by MobiZone arising from such untrue,
inaccurate, incomplete and insufficient representations and
warrants.
|
6.2
|
As
to any losses incurred by MobiZone, arising from any suit, arbitration,
claim, administrative proceeding and other proceedings against MobiZone,
with respect to or due to the Objective Share occurred before execution
date, the Transferor shall indemnify to
MobiZone
|
6.3
|
The
Parties of this Agreement shall perform obligations contemplated hereunder
in good faith. Except as otherwise provided hereby, in the event that a
Party fails to perform or violates any provision, condition , obligation,
representation and warrant of this Agreement, the non-breaching party is
entitled to request the breaching part to indemnify for all the losses,
damage, suit expenses, and other expenses arising
herefrom.
|
6.4
|
In
the event that the Transferor distributes the undistributed profit prior
to the execution date without written consent of MobiZone, MobiZone can
deduct corresponding amount from the un-paid Share Transfer
Price.
|
Article
7 Termination
7.1
|
this
Agreement shall be terminated in the event of the following
reasons
|
|
(1)
|
The
Parties negotiate amicably, and consent unanimously in writing to
terminate this Agreement;
|
|
(2)
|
In
the event that a Party materially violates any provision of this
Agreement, or there is any false representation, covenant or warrant
exists in this Agreement, the non-breaching party can issue a written
notice to the breaching party, requesting the breaching party to
remedy and redress such nonperformance; if the breaching party fails to
take measures satisfying to the non-breaching party within 30 days of
issuance of above written notice by the non-breaching, the non-breaching
party can terminate this Agreement
immediately;
|
15
|
(3)
|
Impossibility
to performing this Agreement due to the new promulgated laws and
regulations;
|
|
(4)
|
Occurrence
of Force Majeure provided in Article 8, which continues over 6 months
and leads to an impossibility of performing this
Agreement
|
7.2
|
Upon
termination of this Agreement, a Party shall return relevant records,
documents and materials submitted by the other party according hereto, to
the submitting Party, no matter such records, documents and materials are
submitted before or after
execution.
|
7.3
|
If
this Agreement is terminated for consent of the Parties or a Force
Majeure, however, the Transferor has returned all the Share Transfer Price
obtained subject to Article 3 to MobiZone, the relationship among the
Parties, between the Parties and Viva Red or related parties can be
recovered to the status before execution of this Agreement: the Transferor
can still own 100% shares of Viva
Red.
|
7.4
|
In
the event that this agreement is terminated due to default of a Party, the
breaching party must indemnify losses to the non-breaching party, losses
shall include but not limited to direct losses (e.g. auditing fees,
attorney’s fess, transfer formalities fees and travelling expenses etc.)
and indirect interest losses.
|
7.5
|
Under
necessary circumstances, the Parties shall jointly perform the
registration procedures with respect to terminating this Agreement; in the
event that relationship among the Parties, between the Parties and Viva
Red or related parties will be recovered to the status before execution of
this Agreement, which need the parties to otherwise execute any agreements
and documents, the parties shall coordinate to conduct such execution. Any
taxes and expenses arising from executing and performing this Agreement
including but not limited to taxes and expenses with respect to the
transfer of Objective Shares, governmental expenses, intermediary
expensed, attorney’s fees, shall be assumed by the breaching party; if
there is no breaching party exists, such expensed shall be assumed
respectively by the Parties.
|
7.6
|
The
liabilities of default compensation hereunder shall not be terminated due
to the termination of this
Agreement.
|
Article
8 Force Majeure
8.1
|
Force
Majeure shall mean all events which are beyond the control of the Parties
to this Agreement, and which are unforeseen, unavoidable or
insurmountable, and which prevent total or partial performance by either
of the Parties. Such events shall include earthquakes, typhoons, flood,
fire, war, strikes, riots or any other instances which cannot be foreseen,
prevented or controlled, including instances which are accepted as Force
Majeure in general international
practice.
|
16
8.2
|
n
the event of Force Majeure occurs, a Party’s contractual obligations
affected by such event under this Agreement shall be suspended during the
period of delay caused by the Force Majeure without penalty or liability.
The Party claiming Force Majeure shall promptly inform the other Party in
writing and shall furnish within 15 days thereafter sufficient proof of
the occurrence and duration of such Force
Majeure.
|
8.3
|
In
the event of Force Majeure, the Parties shall use all reasonable endeavour
to minimize the consequences of such Force
Majeure.
|
8.4
|
In
the event of Force Majeure, the Parties shall consult with each other in
order to find a equitable solution.
|
8.5
|
In
the event that Force Majeure occurred after violating this Agreement
by a Party, liabilities of such Party can not be exempted because of Force
Majeure.
|
Article
9 Confidentiality
9.1
|
Any
of the Party may disclosed or need to disclose to other Parties the status
of business, finance, other confidentiality and proprietary materials.
Except as otherwise provided in other Confidentiality Agreement, each
Party received above materials (including written and unwritten material,
collectively the “Confidential Material”)
shall:
|
|
(1)
|
maintain
confidentiality to the forgoing Confidential
Material;
|
|
(2)
|
Shall
not disclose any Confidential Material to any third party except for
employees of the Parties who need to know the Confidential Material for
the purpose of performing their work
responsibility.
|
9.2
|
Provisions
contemplated in Article 9.1 is not applicable to Confidential Material as
follows:
|
|
(1)
|
materials
can be proved to have been known by the acceptor trough the written
record made before the discloser disclose to the
acceptor;
|
|
(2)
|
such
information is or will be in the public domain not for violating this
Agreement;
|
|
(3)
|
materials
obtained by the acceptor from the third party who do not have
confidentiality duties; or
|
|
(4)
|
Materials
included in the documents having been disclosed in the process of Transfer
of Objective Shares.
|
9.3
|
Each
Party shall guarantee itself, directors, officers and employees regarding
to this Transfer of Objective Shares to comply with the confidentiality
duties contemplated under Article
9.
|
17
9.4
|
Provisions
contemplated under Article 9 shall not be applicable to disclosure of such
Confidential Material to affiliates, intermediary, employees and
consultant of each Party; however, under such circumstance, such materials
can only be disclosed to individuals and entities who need to know such
materials for the purpose of performing work
responsibility.
|
9.5
|
Provisions
contemplated under Article 9 shall not be applicable to disclosure of such
Confidential Material to any governmental authority. However, the Party
required to make above disclosure shall promptly inform such requirement
and provisions to the other Party before such
disclosure.
|
9.6
|
Provisions
contemplated under Article 9 shall not impede the disclosure which is made
by one Party subject to principle of good faith and according to laws and
regulations.
|
Article
10 Miscellaneous
10.1
|
This
Agreement shall become effective upon the execution of this Agreement by
authorized representatives of the
Parties.
|
10.2
|
Governing
Law and Dispute Resolution
|
In the
event of any dispute with respect to the construction and performance of this
Agreement, the Parties shall first resolve the dispute through friendly
negotiations. In the event the Parties fail to reach an agreement on
the dispute, either Party may submit the relevant dispute to the Hong Kong
International Arbitration Center for arbitration, in accordance with its then
effective arbitration rules. The arbitration award shall be final and binding on
the Parties
10.3
|
Language
and Text
|
This
Agreement shall be written in Chinese language in three copies, each Party
having one copies with equal legal validity, and one copy for filing by Viva
Red. Each copy shall be deemed as originals and the same version
10.4
|
Severability
|
If any
provision of this Agreement be determined to be invalid, illegal or
unenforceable by any competent authority, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
10.5
|
Amendment
and Supplement to this Agreement
|
This
Agreement may be amended or supplemented in a written form by the Parties. Such
written amended agreement and/or supplementary agreement executed by the Parties
are an integral part of this Agreement, and shall have the same legal validity
as this Agreement.
18
10.6
|
Right
Exercise
|
Any
non-exercise or delayed exercise of a right provided herein shall not be deemed
as a waiver of such right; any single or partial exercise of the forgoing rights
shall not hinder further exercise of such rights. Any waiver of claim for any
default hereunder shall be made in written form, and for the Transferor and
MobiZone, it shall be executed by their
authorized representative.
10.7
|
Transfer
of Rights and Obligations
|
Except as
otherwise provided herein, neither this Agreement, nor any right and obligation
contemplated hereunder, shall be totally or partially transferred by any
Party without prior written consent of the other Party.
10.8
|
Notices
|
All
notices and other communications required or permitted to be given pursuant to
this Agreement shall be written in Chinese and be delivered personally or sent
by registered mail, by a commercial courier service or by facsimile transmission
to the address of such Party set forth below. Any Party can change the
following address by written notice:
Transferor:
Smart Lead Enterprises Limited
Address: 0X,
Xxxxxx Xxxxx, 0 Xxxxxx Xxxxxx, Tsim sha tsui, Kowloon, Hong Kong
Phone: (000)
00000000
Facsimile: (000)
00000000
Attn: Shi
Sha Li
MobiZone:MobiZone
Holdings Limited
Address:
7A-D Hong Kong Industrial Building, 000-000 Xxx Xxxxx Xxxx Xxxx, Xxxx
Xxxx.
Phone:
(000) 00000000
Facsimile:
(000) 00000000
Attn:
Xxxxxxxx Xxxxxx/Xxxxxxxx Xxxx
The
delivery date of any notice or written notice refers to:
|
(1)
|
Notices
given by personal delivery, shall be deemed effectively given on the date
of delivery to the address set forth
herein.
|
|
(2)
|
Notices
given by commercial courier service, shall be deemed effectively given on
the third day of delivery to the address;
or
|
|
(3)
|
Notices
given by facsimile transmission shall be deemed effectively given on the
date of successful transmission.
|
[The remainder of this page has
intentionally been left blank]
19
IN
WITNESS WHEREOF, the Parties have caused their authorized representatives to
execute this Agreement as of the date first above written.
Smart
Lead Enterprises Limited
|
|
Signature
|
|
Name:
|
|
Title:
|
|
MobiZone
Holdings Limited
|
|
Signature
|
|
Name:
|
|
Title:
|
20
Exhibit
1:Loan
Agreement
21
Exhibit
2:Business
Transfer Agreement
22