EXHIBIT 4.63
XINHUA FINANCE MEDIA LIMITED
(CHINESE CHARACTERS)
and
EAST ALLIANCE LIMITED
and
OTHER PARTIES SET OUT HEREIN
-------------------------
PURCHASE AGREEMENT
IN RESPECT OF
SHARES IN THE CAPITAL OF
EAST ALLIANCE LIMITED
AND
OTHER ASSETS SET OUT HEREIN
--------------------------
4 JUNE, 2007
(XXXXXXXXXXX & XXXXXXXX XXXXXXX XXXXX XXXXX LOGO)
Xxxxxxxxxxx & Xxxxxxxx Xxxxxxx Xxxxx Xxxxx
(CHINESE CHARACTERS)
xxx.xxxxxxx.xxx
Our ref.: 55762-00006/CSMN/EWCM
THIS PURCHASE AGREEMENT (this "AGREEMENT") is made on the 4th day of June 2007
BETWEEN
1. XINHUA FINANCE MEDIA LIMITED (CHINESE CHARACTERS), 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. EAST ALLIANCE LIMITED, a company incorporated under the laws of the British
Virgin Islands with incorporation number 1031254 and its registered address
located at ATC Trustees (BVI) Limited of 0xx Xxxxx, Xxxxxx Xxxxxxxx, Xxxx
Xxxx, Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx (the "COMPANY");
3. DIVINE PROSPECT LIMITED, a company incorporated under the laws of the
British Virgin Islands with incorporation number 1023035 and its registered
address located at 0xx Xxxxx, Xxxxxx Xxxxxxxx, Xxxx Xxxx, Xxxxxxx, Xxxxxxx
Virgin Islands, as vendor ("SHAREHOLDER A");
4. MULTI INTERACTIVE COMMUNICATION LIMITED, a company incorporated under the
laws of the British Virgin Islands with incorporation number 610908 and its
registered address located at Akara Building, 00 Xx Xxxxxx Xxxxxx, Xxxxxxxx
Cay 1, Road Town, Tortola, British Virgin Islands, as vendor ("SHAREHOLDER
B, collectively with Shareholder A, the "VENDORS");
5. XIAO JIANBING, holder of PRC identity card number 131082197006120772, as
covenantor ("COVENANTOR A"); and
6. XIAO QINGPING, holder of PRC identity card number 482501196410010612, as
covenantor ("COVENANTOR B", collectively with Covenantor A, the
"COVENANTORS")).
WHEREAS
A. The Vendors hold all of the legal and beneficial interest in the Company
whereby Shareholder A holds 42,500 Company Shares (representing 85% of the
total issued share capital for the Company) and Shareholder B holds 7,500
Company Shares (representing 15% of the total issued share capital for the
Company).
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 subject to the terms and conditions set out in this Agreement.
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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, the Vendors and the Covenantors 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 Group Structure Agreements,
the Equity Transfer Documents, the Management Contracts, the Non-compete
Deeds and any other agreements contemplated in this Agreement;
"APRIL 30 STATEMENTS" means the Financial Statements of M-In as of April
30, 2007 provided by the Vendors and confirmed by XFM attached hereto as
Schedule O;
"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, Contract Rights 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;
"BRANCHES" means the branches and subsidiaries of M-In, particulars of
which are set out under Schedule C;
"CLOSING" has the meaning ascribed to it in Clause 2.4;
"CLOSING DATE" has the meaning ascribed to it in Clause 2.3;
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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 conditions to Closing;
"CLOSING PAYMENT" has the meaning ascribed to it in Clause 2.2;
"COMPANY CHARTER DOCUMENTS" has the meaning ascribed to it in Clause
6.1(a);
"COMPANY SHARES" means all of the share capital of the Company being
ordinary shares each with a par value of US$1.00 in the capital of the
Company comprising of the Shareholder A Shares and Shareholder B Shares;
"CONDITIONS" means the conditions to the completion of the transactions
described herein as set out in Clause 8;
"CONSENT" means any consent, approval, permit, license, 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;
"DISCLOSING PARTY" has the meaning ascribed to it in Clause 11.4;
"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 encumbrance, priority or security
interest or arrangement of whatsoever nature over or in the relevant
property;
"EQUITY INTERESTS" means all of the equity interest in M-In as at the date
hereof, particulars of which are set out under Schedule C;
"EQUITY TRANSFER DOCUMENTS" means all the documents, agreements and
instruments as set out under Schedule M;
"EQUITY TRANSFERS" has the meaning ascribed to it in Clause 3.2;
"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;
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"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 STRUCTURE AGREEMENTS" means contracts, agreements and documents set
out in Schedule B;
"HOLDBACK AMOUNT" has the meaning ascribed to it in Clause 9.6.
"HONG KONG" means the Hong Kong Special Administrative Region of the PRC;
"IFRS" means the International Financial Reporting Standards issued by the
International Accounting Standards Board from time to time;
"INDEMNIFICATION CERTIFICATE" has the meaning ascribed to it in Clause 9.6.
"INDEMNIFIED PARTY" has the meaning ascribed to it in Clause 9.4;
"INDEMNIFYING PARTY" has the meaning ascribed to it in Clause 9.4;
"INTELLECTUAL PROPERTY" means, collectively, the Owned Intellectual
Property and the Licensed Intellectual Property;
"LEASE" has the meaning ascribed to it in Clause 6.2 (l) and the
particulars of which are set out in Schedule F;
"LICENSES" means all the licenses set out under Schedule N;
"LICENSED INTELLECTUAL PROPERTY" means any and all license rights granted
to the PRC Company 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 Company 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;
"M-IN" means Beijing Mobile Interactive Co., Ltd. (CHINESE CHARACTERS), a
company incorporated under the laws of the PRC with registration number
1101052628368 and an address at Room 3A15, Xx. 0, Xxxxx Xxxxx 0 Xxxx,
Xxxxxxxx Xxxxxxxx, Xxxxxxx, the PRC, the particulars of which are set out
under Schedule C;
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"M-IN NI" has the meaning ascribed to it in the definition of "2007 Net
Income";
"MANAGEMENT CONTRACTS" means the management contract in the form set out in
Schedule I and executed and delivered by each of the persons set out in
Schedule J;
"MARKET VALUE" shall mean, with respect to XFM Shares, the average of the
closing price of XFM Shares or their equivalent in ADRs on NASDAQ 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 Company taken as a whole or that would materially affect the ability of
any of the companies in the Group or any of the Covenantors who is a party
to any of the Group Structure Agreements to perform its material
obligations under any of the Group Structure Agreements, but excluding any
material adverse change caused by XFM or its nominees, officers, directors
or agents;
"MATERIAL CONTRACTS" means the material contracts the particulars of which
are set out in Schedule G;
"NASDAQ" means the National Association of Securities Dealers Automated
Quotations;
"NOMINEE 1" means Gao Fei (CHINESE CHARACTERS), a PRC national and holder
of PRC identity card number 31010719731200820;
"NOMINEE 2" means Cui Qiwei (CHINESE CHARACTERS), a PRC national and holder
of PRC identity card number 310106198011160812;
"NOMINEES" means, collectively, Nominee 1 and Nominee 2;
"NON-COMPETE DEED" means the non-compete deed in the form set out in
Schedule K and executed and delivered by each of the persons set out in
Schedule L;
"NON-DISCLOSING PARTIES" has the meaning ascribed to it in Clause 11.4;
"OWNED INTELLECTUAL PROPERTY" means any and all of the following that are
owned (including joint ownership) or held by the PRC Company 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,
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reissue, continuation or division rights, applications and/or registrations
for any of the foregoing;
"PAYMENT DATE" has the meaning ascribed to it in Clause 4.4;
"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;
"PRC" means the People's Republic of China;
"PRC CHARTER DOCUMENTS" has the meaning ascribed to it in Clause 6.2(a);
"PRC CLOSING" has the meaning ascribed to it in Clause 3.1(a);
"PRC COMPANY" means, collectively, M-In and the Branches;
"PRC GROUP" means, collectively, the PRC Company and the WFOE;
"PURCHASE PRICE" means the Closing Payment and each Subsequent Payment;
"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.
"RETURN PERIODS" has the meaning ascribed to it in Clause 6.2(j);
"RETURNS" has the meaning ascribed to it in Clause 6.2(j);
"RMB" or "RENMINBI" means the lawful currency of the PRC;
"SERVICES AGREEMENT" means the services agreement between WFOE and M-In for
the provision of certain services by the WFOE;
"SHAREHOLDER A SHARES" means 42,500 Company Shares held by Shareholder A
representing 85% of the total issued share capital of the Company to be
sold by Shareholder A to XFM, particulars of which are set out under
Schedule C;
"SHAREHOLDER B SHARES" means 7,500 Company Shares held by Shareholder B
representing 15% of the total issued share capital of the Company to be
sold by Shareholder B to XFM, particulars of which are set out under
Schedule C;
"SUBSEQUENT PAYMENTS" means the amount payable by XFM in accordance with
Clause 4;
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"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 Wuxianshijie (Beijing) Information Technology Co., Ltd.
(CHINESE CHARACTERS), a wholly foreign owned enterprise established in the
PRC as a wholly-owned subsidiary of the Company with a registered address
at (CHINESE CHARACTERS), the details of which are set out in Schedule C;
"XFM CONTRIBUTION" means the revenue of M-In generated from XFM, its
Affiliates or any party introduced to M-In by XFM or its Affiliates
determined in accordance with Clause 4.7;
"XFM SHARES" means the Class A common shares in the share capital of XFM
with a par value of US$0.001 each;
"2007 AMOUNT" has the meaning ascribed to it in Clause 4.1(a);
"2007 FINANCIALS" means the audited financial statements for each of the
WFOE and M-IN for the financial year ended 2007, in each case prepared in
accordance with IFRS by one of Deloitte, Ernst & Young, KPMG or
PricewaterhouseCoopers selected by the Vendors in accordance with Section
4.2;
"2008 FINANCIALS" mean the audited financial statements for the PRC Group
for the financial year ended 2008 prepared in accordance with IFRS by one
of Deloitte, Ernst & Young, KPMG or PricewaterhouseCoopers selected by the
Vendors in accordance with Section 4.2;
"2007 NET INCOME" means an amount determined by the following:
2007 Net Income = 2007 M-In NI + 2007 XFM NI
Where: 2007 XFM NI = 50%(30%(2007 XFM Contribution))
2007 XFM CONTRIBUTION = XFM Contribution for 2007
2007 M-IN NI = M-In's income or loss and WFOE's net income, each
as set out in the 2007 Financials prepared in accordance with
IFRS excluding:
(1) extraordinary items;
(2) any XFM Contribution and any related costs and expenses;
(3) any expenses or provision made or gain recognised relating
to amortization, written-off, impairment loss or adjustment
of
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goodwill which arises from acquisitions or disposal of
companies or business by M-In in the preparation of the 2007
Financials;
"2008 AMOUNT" has the meaning ascribed to it in Clause 4.1(b); and
"2008 NET INCOME" means an amount determined by the following:
2008 Net Income = 2008 M-In NI + 2008 XFM NI
Where: 2008 XFM NI = 50%(30%(2008 XFM Contribution))
2008 XFM CONTRIBUTION = XFM Contribution for 2008
2008 M-IN NI = PRC Group's net income set out in the 2008
Financials prepared in accordance with IFRS excluding:
(1) extraordinary items;
(2) any XFM Contribution and any related costs and expenses;
(3) any expenses or provision made or gain recognised relating
to amortization, written-off, impairment loss or adjustment
of goodwill which arises from acquisitions or disposal of
companies or business by M-In in the preparation of the 2008
Financials.
1.2 Interpretation. In this Agreement:
(a) the headings are inserted for convenience only and shall not affect
the construction of this Agreement;
(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 of
which they are re-enactments (whether with or without modification);
(c) all time and dates in this Agreement shall be Hong Kong 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.
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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, XFM (relying on the representations, warranties,
agreements, covenants, undertakings and indemnities hereinafter referred
to) agrees with the Covenantors, Shareholder A and Shareholder B to
purchase for the the Purchase Price, and the Covenantors agree to procure
Shareholder A and Shareholder B, and Shareholder A and Shareholder B agree,
to sell and cause to be sold to XFM or its nominee at Company Closing, all
of Shareholder A and Shareholder B's direct and indirect interests in the
Shareholder A Shares and Shareholder B Shares with effect from the Closing
Date free from all options, liens, charges, pledges, claims, agreements,
encumbrances, equities and other third party 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 Closing Date.
2.2 Closing Payment.
The "CLOSING PAYMENT": shall be in cash to be paid as follows:
(a) Eight Million Nine Hundred Seventeen Thousand Two Hundred Forty Nine
US Dollars (US$8,917,249) within three (3) Business Days from the
Closing Date with eighty-five per cent (85%) and fifteen per cent
(15%) of such amount, respectively, to such accounts as may be
directed in writing jointly by the Vendors on the day following the
signing of this Agreement; and
(b) Ten Million Renminbi (RMB10,000,000) within three (3) Business Days
from the date of the completion of the filings and registration of the
Equity Transfers with Five Million One Hundred Thousand Renminbi
(RMB5,100,000) to Xiao Jianbing or such account as he may direct and
Four Million Nine Hundred Thousand Renminbi (RMB4,900,000) to Xiao
Qingping or such account as he may direct in writing which directions
shall be issued on the day following the signing of this Agreement.
2.3 Subsequent Payments
XFM shall pay to the Vendors the Subsequent Payments in accordance with
Clause 4.
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2.4 Closing. The completion of the purchase and sale of the Company Shares (the
"CLOSING") shall take place at the offices of M-In or at such other place
as may be agreed upon by the Parties on the date that is immediately
following confirmation from XFM that the Conditions have been satisfied or
waived. The date and time of the Closing are herein referred to as the
"CLOSING DATE". For greater certainty, XFM shall not be obliged to pay any
amount of the Closing Payment unless all the Conditions are fulfilled or
waived by XFM. Without prejudice to any other remedies available to XFM,
XFM may defer Closing and the payment of the Closing Payment until all
Conditions are fulfilled or waived. Subject to the foregoing, the
completion of the Closing and the payment of the Closing Payment shall be
made.
2.5 Conditions to Closing. The obligations of XFM under this Agreement to
complete the purchase of the Company Shares and to pay the Closing Payment
therefor are subject to the satisfaction or waiver on or before the Closing
Date of all of the Conditions.
2.6 Vendors Closing Obligations. On the Closing Date, the Vendors and the
Covenantors shall deliver or procure to be delivered to XFM the following
documents:
(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 letters of resignation from existing
directors and company secretary (where applicable) of the Company;
(c) where applicable, shareholders' and directors' resolution of the
Company approving the resignation of the existing directors and
company secretary (where applicable), the appointment of the persons
nominated by XFM to be new directors and company secretary, the
transfer of the Company Shares and change of principal office of the
Company;
(d) any books and records of the Company (if any);
(e) written notice in the form to the satisfactory of XFM issued to the
BVI agent of the Company notifying them of the change in authorised
contact person;
(f) where applicable, shareholders' and director's resolution of WFOE
approving the amendment of the articles of association of WFOE in a
form satisfactory to XFM, the resignation of Xu Xxxxx Xx as the
executive director and legal representative of WFOE and appointment of
the persons nominated by XFM to be the new executive director and
legal representative of WFOE and any other documents as may be
required to effect the foregoing;
(g) any books and records of WFOE;
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(k) the Ancillary Agreements executed by the parties thereto other than
XFM or its Nominees in the forms as set out in the Schedules; and
(l) all other documents that may be required by XFM for the purposes
herein, including but not limited to, all documents required to be
signed, submitted to and/or registered with to any Governmental
Entity.
2.8 Delays in Payment. If any party to this Agreement defaults in the payment
of any amounts payable under the terms of this Agreement, such partyshall
pay to the party to whom payment is due (the "NON DEFAULTING PARTY")
interest on such overdue amounts thereafter until payment in full at the
rate of 12% per annum provided that such remedies contained in this Clause
shall be without prejudice to any other rights and remedies available to
the Non Defaulting Party.
2.8 WFOE Registered Capital. For greater certainty, the Vendors and the
Covenantors shall not be responsible for the payment of the capital
contribution of the WFOE.
3. COVENANTS OF THE VENDORS
3.1 Equity Interests. The Vendors and the Covenantors shall jointly and
severally procure and guarantee each of the following as soon as
practicable following the execution and delivery of this Agreement and
prior to Closing:
(a) the sale and transfer of the Equity Interests by all current holders
thereof to the Nominees as to 50% in favour of each of the Nominees
for the total consideration of Ten Million Renminbi (RMB10,000,000)
(the "PRC PAYMENT") and the performance of all actions required or
contemplated under this Agreement by all of the holders of the Equity
Interests (the "PRC CLOSING");
(b) the resignation of Xu Xxxxx Xx as executive director of M-In;
(c) the amendment of the articles of association of M-In to provide for a
board of three (3) directors of which two (2) shall be persons
nominated by XFM and one (1) shall be nominated by the Covenantors,
and appointment of new legal representative and bank account signatory
of M-In nominated by XFM and any other documents as may be required to
effect the foregoing PROVIDED THAT the Covenantors' right to nominate
a director of M-In shall terminate and the Covenantors shall cause
such director to tender his resignation on December 31, 2008 or
earlier termination of this Agreement by XFM; and
(d) the registration of the ownership of the Equity Interests in the name
of the Nominees in the following proportions:
(i) Nominee 1: 50% (RMB5,000,000)
(ii) Nominee 2: 50% (RMB5,000,000).
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3.2 Transfer of Equity Interests. As soon as practicable after the execution
and delivery of this Agreement and at or prior to Closing, the Vendors and
the Covenantors shall complete the transfer and procure the completion of
the transfer of (as the case may be) all of the Equity Interests from the
existing holders thereof to the Nominees as to 50% of the total Equity
Interests in favour of each of the Nominees (the "EQUITY TRANSFERS"),
including, but not limited to, the signing and submission of all the Equity
Transfer Documents.
3.3 Equity Transfer. The Vendors and the Covenantors shall, within three (3)
Business Days from the date of the completion of the filings and
registration of the Equity Transfers, procure the payment of the PRC
Payment in the aggregate to the holders of the Equity Interests or such
other person as each of them may direct in accordance with the following:
(a) Xiao Jianbing: Five Million One Hundred Thousand Renminbi
(RMB5,100,000) for the transfer of all of Xiao Jianbing's Equity
Interests (representing 51% of the total registered capital of M-In);
and
(b) Xiao Qingping: Four Million Nine Hundred Thousand Renminbi
(RMB4,900,000) for the transfer of all of Xiao Qingping's Equity
Interests (representing 49% of the total registered capital of M-In).
3.4 Transfer Procedures. The Vendors and the Covenantors hereby jointly and
severally undertake to XFM that as soon as practicable after the execution
and delivery of this Agreement and prior to Closing 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 the Equity Interests or any other party necessary to
vest in the Nominees their interests in all property and rights in
M-In and the Equity Interests as are intended to be vested in them in
consideration of the PRC Payment by or pursuant to this Agreement and
the Ancillary Agreements; and
(b) file and submit and procure the filing and submission of all documents
required to effect the Equity Transfers with the relevant Governmental
Entities in the form satisfactory to XFM.
3.5 Governance. Upon the completion of the Equity Transfers, the Vendors and
the Covenantors shall and shall procure the following:
(a) deliver to XFM or such parties nominated by XFM written confirmation
from the Vendors and the Covenantors 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;
(b) deliver to XFM or such parties nominated by XFM shareholders'
resolution of M-In approving the resignation of the executive director
and the legal representative and bank account signatory of M-In and
the establishment of a
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board of directors of three (3) directors of which two (2) shall be
persons nominated by XFM and one (1) shall be nominated by the
Covenantors, and appointment of new legal representative and bank
account signatory of M-In and any other documents as may be required
to effect the foregoing provided, however, that the Covenantors' right
to nominate a director of M-In shall terminate and the Covenantors
shall cause such nominee to tender his resignation December 31, 2008;
(c) all books and records of M-In;
(d) any books and records of each of the Branches;
(e) all powers of attorney or other authorities under which the transfers
of the Equity Interests have been executed (if any);
(f) such waivers, consents and other documents as XFM may require to give
to XFM or its nominees good title to the Equity Interests and to
enable XFM or its nominees to become the registered holders thereof;
and
(g) such other papers and documents as XFM may reasonably require.
4. SUBSEQUENT PAYMENTS
4.1 Subsequent Payments. Subject to Clause 4.2, XFM shall pay the following
amounts (in RMB or its USD equivalent calculated based on the Foreign
Exchange Rate) to the Vendors or such other party designated by the
Vendors:
(a) an aggregate amount (the "2007 AMOUNT") equal to the product of ((A)
2007 Net Income and (B) 8.5 and (C) 35%)); and
(b) an aggregate amount (the "2008 AMOUNT") equal to the product of ((A)
2008 Net Income and (B) 9.5 and (C) 30%); but
(c) PROVIDED THAT if the M-In NI for 2007 is less than Three Million Four
Hundred Thirty Thousand US Dollars (US$3,430,000), the following
amount (the "ADJUSTMENT") shall be deducted from the cash portion of
the 2007 Amount and, should there be any excess Adjustment thereafter,
the excess Adjustment shall be deducted from the 0000 Xxxxxx:
Adjustment = (35%)(7.5)(US$3,430,000 -- 2007 M-In NI)
4.2 Preparation of 2007 and 2008 Financials. The Vendors 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 and 2008 Financials within 180 days from
the end of each of the financial years ended December 31, 2007 and
December 31, 2008, respectively; and
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(b) provide a copy of the 2007 Financials and 2008 Financials to XFM, the
Vendors and the Covenantors as soon as they are issued..
The Vendors shall bear all costs of or related to the preparation of the
2007 Financials and 2008 Financials.
4.3 Calculation of the 2007 Amount and 2008 Amount. Within five (5) days of the
delivery to XFM of the 2007 and 2008 Financials, respectively, XFM shall
deliver to the Vendors and Covenantors its calculation of the 2007 Amount
and 2008 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 the 2007 Amount or the 2008 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 and 2008 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 and 2008 Amount within such ten (10) day
period, then the parties shall endeavour to resolve such dispute amicably
within an additional period of ten (10) days. If successful, the 2007
Amount and 2008 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; provided, that upon resolution of such matter by
arbitration, the Party that was unsuccessful in the arbitration with
respect to such matter shall be solely responsible for all reasonable fees,
costs and expenses relating to the arbitration.
4.4 Payment. XFM shall pay the 2007 Amount and 2008 Amount or its US dollar
equivalent determined with the Foreign Exchange Rate in a combination of
(A) money in US Dollars in an amount equal to 60% of such sum, and (B)
delivery of XFM Shares, rounded up to the nearest whole share, with an
aggregate Market Value equal to 40% of such sum. Notwithstanding the
foregoing, XFM may, in its sole discretion, deliver to the Vendors or any
other person(s) designated by the Vendors money in US Dollars in lieu of
all or a portion of the 2007 Amount or 2008 Amount otherwise deliverable to
the Vendors in XFM Shares. Notwithstanding the foregoing, if for any reason
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 regulations, then
XFM shall so notify the Vendors, and the Vendors may, by written notice to
XFM, elect to receive money in US Dollars in lieu of the portion of the
2007 Amount or 2008 Amount otherwise deliverable to the Vendors in XFM
Shares.
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4.5 Payment Date. XFM shall pay the cash portion of the 2007 Amount and 2008
Amount to the Vendors or any other person jointly designated by the Vendors
within five (5) Business Days following the final determination of the 2007
Amount and the 2008 Amount respectively (the "FINAL DETERMINATION DATE"),
and issue the XFM Shares portion of the 2007 Amount and 2008 Amount within
twenty (20) Business Days following Final Determination Date (each such
cash payment or share issuance date being a "PAYMENT DATE").
4.6 Manner of Payment. Notwithstanding any other provision contained herein, at
least five (5) Business Days in advance of each Payment Date, the Vendors
shall, in writing, advise XFM of the manner in which XFM shall pay such
2007 Amount and 2008 Amount. Specifically, the Vendors shall advise XFM of
the persons and necessary account information where such payments shall be
made and how such shares should be issued.
4.7 Maximum Payment. Notwithstanding anything to the contrary herein, the
aggregate of the Closing Payment, the 2007 Amount and 2008 Amount and any
other amounts payable under the Ancillary Agreements shall not exceed
Fifty-six Million Two Hundred Thousand US Dollars (US$56,200,000). For
greater certainty, XFM shall not and shall not have any obligation to pay
any amount in excess of Fifty-six Million Two Hundred Thousand US Dollars
(US$56,200,000) in the aggregate under this Agreement and the Ancillary
Agreements.
4.8 XFM Contribution. To determine the XFM Contribution, XFM or the general
manager of M-In may submit a business plan to the other party setting out
the costs and expenses budgeted to serve the particular new business
required to be introduced by XFM or its Affiliates along with the
anticipated revenue therefrom. The business plan shall be negotiated and
confirmed in writing by both XFM and the general manager of M-In. The
determination of XFM Contribution shall be based on actual revenues and
expenses associated with the business approved in accordance with the
above.
4.9 2007 Financials and 2008 Financials. Notwithstanding any other provision
herein and absent manifest error, the 2007 Financials and 2008 Financials
shall be final conclusive and binding on all parties and shall not be
subject to further dispute, arbitration or other reassessment or
calculation or determination.
4.10 If a dispute arises regarding the determination of any Subsequent Payment,
such dispute will be resolved in accordance with Section 4.3; provided,
however, that XFM shall pay any undisputed portion of the applicable
Subsequent Payment on the earlier of the applicable Payment Date or within
ten (10) days of the date on which the Vendors and the Covenantors (acting
together) advise XFM in writing of the substance of the dispute regarding
such determination.
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5. COVENANTS
5.1 Further Covenants. The Vendors and 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 and the Group Structure Agreements.
Each of the signing parties shall bear the expenses incurred by it.
5.2 Directors. Each of the parties hereto shall do and shall procure to be done
all actions necessary to ensure that the directors of the Company shall be
such persons to be nominated by XFM and the board of directors of M-In
shall be comprised of three (3) directors of which two (2) shall be persons
nominated by XFM and one (1) shall be nominated by the Covenantors
provided, however, that the Covenantors' right to nominate a director of
M-In shall terminate and the Covenantors shall cause such nominee to tender
his resignation on December 31, 2008.
5.3 Limitation on Transfer of Interests. Prior to Closing Date, 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 or
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 and M-In, as applicable, and any attempt to transfer any
Company Shares or Equity Interests or any rights under any of them in
violation of the preceding sentence shall be null and void ab initio.
5.4 Joint and Several Liability. All obligations and liabilities of the Vendors
and the Covenantors or any one of them hereunder, howsoever stated, shall
be the joint and several obligations and liabilities of each Vendor and
each Covenantor.
5.5 Senior Management. The Covenantors may nominate the General Manager, the
Chief Financial Officer and Chief Operating Officer for M-In for the
approval of XFM shall whose approval shall not be unreasonably withheld for
a period until 31 December 2008 and whose employment can only be terminated
in accordance with the Management Contract. XFM shall bear its own expenses
arising from the employment of any persons nominated solely by XFM.
5.6 Operations and Reorganization. Prior to December 31, 2008 or such earlier
date of termination of this Agreement by XFM, XFM shall not:
(a) disrupt the management of the business of M-In in the ordinary course
(including their control over operating expenses, employment matters
and pricing) 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;
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(b) undertake any reorganization of the ownership of M-In or merger of
M-In with any other business which has an adverse effect on the
business operations of M-In;
(c) Impose any expenses on the WFOE without the prior written approval of
General Manager of M-In.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE VENDORS AND THE
COVENANTORS
The Vendors and the Covenantors hereby jointly and severally represent and
warrant and covenant to XFM that the following statements are true and
correct as of the date hereof:
6.1 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 British
Virgin Islands, 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 Closing Date its issued share
capital will be as set out in Schedule C and Schedule D,
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, commitment, agreement, contract,
understanding, restriction, arrangement or right. It does not
have outstanding any bonds, debentures, notes or other
indebtedness.
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(iii) No shares in the Company are beneficial owned or controlled by
any Chinese nationals or residents.
(d) Branches. 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 C.
Its particulars as set out in Schedule C 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 licenses, 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 license, 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, license or order or any
mortgage, indenture, note, license, 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 and as disclosed in the Disclosure Schedule, 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, it has not
entered into any agreement, contract, legal arrangement or
documentation of any type or nature.
6.2 PRC Company. In respect of the PRC Company (where applicable):
(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 Date, the capital structure of each
of the PRC Company shall be as set out in Schedule C.
(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 no outstanding bonds,
debentures, notes or any indebtedness.
(iii) Xiao Jianbing and Xiao Qingping are the owners of all interests
in and to M-In 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.
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(d) Branches. 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 C.
The particulars of the company set out in Schedule C 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, save as contained in the Group
Structure Agreements. Save as expressly provided in the Group
Structure Agreements, 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 company holds all
material licenses, 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 including without limitation the Licences as set out under
Schedule N or the failure to obtain such licenses shall have a
Material Adverse Change on the business or assets of the company.
Except as set forth in the Disclosure Schedule, The 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 licenses, permits and authorizations.
(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, license or
order or any mortgage, indenture, note, license, trust, agreement or
other agreement, instrument or obligation to which the company is a
party.
(g) Technology and Intellectual Property Rights.
(i) Schedule E 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
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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 Closing Date;
(D) all material licenses and sublicenses of Owned Intellectual
Property;
(E) all Licensed Intellectual Property (other than license
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.
(ii) Except as set forth in the Disclosure Schedule, 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 license or other agreement.
(iii) The company is not, as a result of the execution or delivery of
the Group Structure Agreements, nor performance of the company's
obligations under the Group Structure Agreements will the
company be in violation of any license, 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) Except as set forth in the Disclosure Schedule, 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
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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
licensees 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, except as set
forth in the Disclosure Schedule, 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 licensees
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 licensees 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.
(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 licensees
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 licensees 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.
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(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 licenses 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 licenses 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.
(y) Except as set forth in the Disclosure Schedule, the Company has
not transferred, assigned, disposed in any manner of any
Intellectual Property.
(h) Financial Statements. There are no liabilities, claims or obligations
against the company of any nature in excess of US$5,000, whether
absolute, contingent, anticipated or otherwise, whether due or to
become due, that are not shown in the April 30 Statements.
(i) Accounts Receivable. Except as set forth in the Disclosure Schedule,
all of the accounts receivable shown in the April 30 Statements as of
the Closing Date will have arisen out of bona fide transactions of the
company in the ordinary course of business and have been collected or
are good and collectible in the aggregate recorded amounts thereof
(less the allowance for doubtful accounts also appearing in such April
30 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 two hundred seventy
(270) days of the due date.
(j) Taxes.
(i) Except as set forth in the Disclosure Schedule, 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 Closing Date. The company has not
requested or been granted any extension of time to
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file any Return. 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. Except as set forth in the Disclosure
Schedule, 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, license, 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.
(iv) 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.
(k) Absence of Certain Changes and Events. Since the April 30 Statements,
there has not been:
(i) Any transaction involving more than US$8,000 for a single
transaction and a series of transactions involving in aggregate
more than US$200,000 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
April 30 Statements and
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liabilities incurred since the date of the April 30 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) Except as set forth in the Disclosure Schedule, 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 F (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.
(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, equipment, and other personal
property, tangible or otherwise, reflected on the April 30 Statements,
except for acquisitions and dispositions since the date of the April
30 Statements in the ordinary course of business and not exceeding
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. Except as set
forth in the Disclosure Schedule, 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
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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, license, 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 G
(the "MATERIAL CONTRACTS") the company is not a party to or bound by:
(i) Except as set forth in the Disclosure Schedule, any employment
contract or arrangement providing for annual salary in excess of
US$30,000 with any officer or employee or with any consultant or
director providing for annual compensation in excess of
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, US$50,000 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 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, Closing Date, or the consummation of the
transactions contemplated;
(vi) Any license, 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
Closing Date or the consummation of the transactions
contemplated;
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(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 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.
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 G together with all amendments, material written waivers or
other material written changes thereto. All the material contracts as
set out under Part A of Schedule G are valid and in full force and
effect and the Vendors are not aware of any facts or events which may
result in any of the Material Contracts to be terminated prior to
expiry by the relevant parties. All Material Contracts listed in Part
B of Schedule G are valid and in full force and effect and the Vendors
are not aware of any facts or events which may result in any of such
contracts not being renewed.
(q) Assets. The company has legal and beneficial ownership of all assets
owned, possessed or used by the company as indicated in the April 30
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 the leased property and personal property leased by the
company pursuant to the Material Contracts.
(r) Material Relations. None of the parties to any of the Material
Contracts have 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. In particular, all the contracts and
arrangement with China Mobile (CHINESE CHARACTERS) which entitle M-In
to conduct business nation wide with respect to (i) multimedia message
service; (iii) wireless application protocol; (iv) interactive voice
response; and (v) mobile game (Java) and at individual provinces with
respect to (i) short message service; and (ii) mobile color ring bank
tone shall be valid and in full force and effect and shall be
renewable at the discretion of the company throughout until the
Closing Date. There is no Material Adverse Change on the company's
cooperation with China Mobile (CHINESE CHARACTERS).
(s) Insurance and Banking Facilities. Schedule H 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
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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.
(t) 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. 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 in all material
aspects 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. Except as set forth in the
Disclosure Schedule, 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.
(u) 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.
(v) 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.
(w) 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
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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.
6.3 General
(a) The Group Structure Agreements. In respect of the parties or persons
under the Control of the Vendors (i) Each of the Group Structure
Agreements has been duly executed by the parties thereto, are in full
force and effect and constitutes the valid and legally binding
obligation of the parties thereto, enforceable in accordance with its
terms, except (1) as limited by applicable bankruptcy, insolvency,
reorganisation, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally, and (2) as
limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable principles. (ii) The execution,
delivery and performance of each of the Group Structure Agreements by
the parties thereto do not conflict with or violate any existing and
publicized law, regulation or governmental order in the PRC. (iii)
Except as set forth in the Disclosure Schedule, the execution,
delivery and performance of each of the Group Structure Agreements by
the parties thereto do not and will not require any other consent,
approval, authorization or other order of, action by, filing with or
notification to, any governmental authority in the PRC or, if any such
consent, approval, authorization, order, action, filing or
notification is required, they have been obtained or made or will be
obtained or made prior to the Closing Date.
(b) The Closing Deliverable Agreements. On or before Closing Date, each of
the Closing Deliverable Agreements will have been duly executed by the
parties thereto and, as at Closing Date, 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
Closing Date.
(c) Full Disclosure. (i) The Vendors are not aware of any facts which
could materially adversely affect it, any member of the Group, the PRC
Company 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 material fact, or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not
misleading.
(d) Reliance. The representations and warranties are made by the Vendors
with the knowledge and expectation that XFM are placing reliance
thereon.
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6.4 Vendors and Covenantors
(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 licenses, 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 license, 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 Company.
(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, license or order or any mortgage, indenture,
note, license, trust, agreement or other agreement, instrument or
obligation to which it is a party.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF XFM
XFM hereby represents, warrants and covenants to the Vendors that each of
the following statements is true:
7.1 Organisation and Qualification. It is a person or a legal entity duly
organised and validly existing under the laws of its jurisdiction of
incorporation.
7.2 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.
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7.3 Power and Authority. It has full power and authority to make the covenants
and representations referred to herein and to purchase the Company Shares
and to execute, deliver and perform this Agreement. It has the capacity to
pay the Company Shares Consideration and other payment as provided in this
Agreement to the Vendors.
7.4 Compliance with Laws and Other Instruments. It holds, and at all times has
held all licenses, 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 license, permit,
or authorization, or any such statute, law, ordinance, rule or regulation.
7.5 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,
license or order or any mortgage, indenture, note, license, trust,
agreement or other agreement, instrument or obligation to which it is a
party.
8. CONDITIONS OF XFM'S OBLIGATIONS TO MAKE THE CLOSING PAYMENT AND THE PRC
PAYMENT
The obligations of XFM under this Agreement to complete the purchase of the
Company Shares and pay the Closing Payment are subject to the satisfaction
or waiver of each of the following (each a "CONDITION" and, collectively,
the "CONDITIONS"):
8.1 Representations and Warranties. All representations and warranties shall be
true on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and at such date.
8.2 Due Diligence. XFM has completed its due diligence review of the Group and
is satisfied with the results thereof.
8.3 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 Date.
8.4 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.
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8.5 Deliverables. All matters and transactions contemplated in Clause 3 have
been completed to the satisfaction of XFM and all documents contemplated to
be executed and delivered in Clauses 3.1 and 3.5 have been delivered in the
forms required.
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.
8.7 Group Structure Agreements. All the Group Structure Agreements have been
duly executed and delivered by all parties thereto other than XFM, its
Affiliates or Nominees.
8.8 Equity Transfer. The Equity Transfer has 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 Equity Transfer has been duly obtained and completed pursuant to
Clause 3.
8.10 M-In Board Composition. All documents required to change the directors of
M-In to nominees of XFM shall have been duly completed and signed and,
where applicable, filed, submitted to or registered with the relevant
Governmental Entity.
8.11 Licenses. All Licenses shall be valid and in full force and shall be
renewable solely by M-In or its branch throughout the period from the date
of signing of this Agreement Closing Date.
8.12 Company Minimum Funds.
(a) The Company has at least US$120,000 (the "Company Minimum Funds") at
the date of its incorporation of which a portion of the said amount
remains in its bank account (the "Company Minimum Funds").
(b) If the amount in the Company's bank account at Closing is less than
the Company Minimum Funds, the Vendors and the Covenantors shall
provide to XFM the bank statements, receipts or other evidence of
expenses to the satisfaction of XFM of the use of the Company's funds
since incorporation of the Company And:
(i) if the Company incurred all expenses to the satisfaction of XFM,
XFM may deduct any shortfall between the aggregate of the actual
amount in the Company's account and US$100,000 from the 2007
Amount; and
(ii) in any other case, XFM may deduct any shortfall between the
aggregate of the actual amount in the Company's account and
US$100,000 from the 0000 Xxxxxx.
9. INDEMNITY
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9.1 Indemnity of XFM. The Vendors and the Covenantors will jointly and
severally indemnify and will keep indemnified and save harmless XFM and its
nominees from and against the following (collectively, the "LOSSES"),
expect to the extent any such Losses are caused by the wilful misconduct or
gross negligence of XFM :
(a) any and all losses, claims, damages (including damages, interest,
penalties, fines and monetary sanctions) liabilities and costs
incurred or suffered by XFM or its nominees by reason of, resulting
from, in connection with, or arising in any manner whatsoever out of
the breach of any warranty, representation or covenant given under and
subject to Section 6 or the inaccuracy of any representation given
under and subject to Section 6 made in respect of any the Group
contained or referred to in this Agreement in connection therewith
provided that the indemnity contained in this Clause shall be without
prejudice to any other rights and remedies available to XFM;
(b) the non-fulfilment or breach of any covenant, undertaking, agreement
or other obligation of any member of the Group to any of the Group
Structure Agreements prior to Closing Date;
(c) save as disclosed in the April 30 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 Closing Date 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 contained in this Clause shall be
without prejudice to any other rights and remedies available to XFM;
or
(d) any claims arising from or in connection with any of the matters
disclosed in Section 6.2(g) II or 6.2(g) III of the Disclosure
Schedule.
(e) 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 holdback under Clause 9.6 and set off any
obligations not met by the total amounts paid against future amounts
payable but in no event should the amount of the obligations of the
Vendors and Covenantors exceed the aggregate amounts to be paid to the
Vendors under this Agreement.
9.2 Costs. For the purposes of this Clause, "costs" includes reasonable
lawyers' and accountants' fees and expenses, court costs and all other
out-of-pocket expenses.
9.3 Survival of Warranties and Indemnity. The representations and warranties of
the Covenantors and the Vendors to this Agreement given under and subject
to Section 6 and the rights to indemnification under this Agreement with
respect to them shall survive until 31 March 2009.
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9.4 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. 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
expenses therefor.
9.5 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 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.
9.6 Hold back.
(a) Upon the timely receipt by the Indemnifying Party of a certificate
signed by an officer of the Indemnified Party (an "INDEMNIFICATION
CERTIFICATE"): (a) stating (i) that the Indemnified Party has paid,
properly accrued or otherwise sustained, a Loss; (ii) or made a
reasonable determination in good faith that it will sustain, have to
pay, or accrue Loss(es), and (b) specifying in reasonable detail the
individual items of Loss(es) included in the amount so stated, the
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date each such item was sustained, paid, accrued, or the basis for
such anticipated Loss, and the nature of the breach of representation,
warranty or covenant to which such item is related, the Indemnifying
Party shall, subject to the provisions hereof (including, without
limitation, Clause 9.6(b), (c), (d) hereof), deliver to the
Indemnified Party, in cash, an amount equal to such Loss(es). In case
the Indemnified Party is XFM, XFM shall be entitled to holdback the
same amount from the 2007 Amount or 2008 Amount ("HOLDBACK AMOUNT").
(b) If the Indemnifying Party objects in writing to any claim made in an
Indemnification Certificate within ten (10) Business Days after
delivery of the Indemnification Certificate, both Parties shall
attempt in good faith for ten (10) Business Days after delivery of the
Indemnifying Party's written objection to agree to the settlement of
such claims. If the Parties should so agree, a memorandum setting
forth such agreement shall be prepared and signed by all such Parties.
(c) If no such agreement can be reached during such ten (10)-Business
Days, either Party may submit the dispute to arbitration under this
Agreement.
9.7 Certain Tax Matters. The Vendors and the Covenantors 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 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 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 Closing. Payment in full of any amount due
from the Vendors and/or Covenantors under this Clause 9.7 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, shall cooperate with the Vendors and
Covenantors and permit the Vendors and/or the Covenantors to participate,
at their own expense, in the audit or other proceeding. Notwithstanding the
preceding sentence, in the event that Vendors and/or Covenantors want to
accept a proposed settlement of a tax claim for which they have an
indemnity obligation pursuant to this Clause 9.6 (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 and the Covenantors under such tax claim shall not
exceed the amount for which they would have been liable if the Tax
Settlement Option were accepted.
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In the case of any taxable period that ends on or before the 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 Closing Date, and the amount of other taxes
of the Group for a Straddle Period which relate to the 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 Closing Date and the denominator
of which is the number of days in such Straddle Period.]
10. TERMINATION
10.1 Termination. This Agreement may be terminated at any time prior to the
Closing Date:
(a) by XFM if, between the date hereof and the Closing 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 Company who is a party to
any of the Group Structure Agreements makes a general assignment for
the benefit of creditors, or any proceeding shall be instituted by or
against the PRC Company 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 Closing Date: (i)
any representations and warranties made by XFM contained in this
Agreement shall not have been materially true and correct, (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 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 the Group Structure Agreements;
or
-36-
(d) by the written consent of XFM and the Vendors.
10.2 Effect of Termination. In the event of termination of this Agreement as
provided in Clause 10.1, this Agreement shall forthwith become void
provided that nothing herein shall relieve any party hereto from liability
for any breach of this Agreement. If, on the date of termination of this
Agreement, without prejudice to any other rights and remedies of XFM
hereunder, any Equity Interests have been transferred to the Nominees, if
requested by the Vendors, XFM shall procure the Nominees to transfer the
Equity Interests to the Vendors and take such actions as are necessary for
XFM or its Nominees to assign the Equity Interests back to vendors thereof.
XFM shall procure its nominees to grant the vendors of the Equity Interests
a limited power of attorney to conduct all legal procedures in order to
consummate the forgoing actions, where such representation is legally
permissible, without restrictions towards legal entities and natural
persons, public authorities and courts, to do, sign under hand (or, as
required, under personal seal), deliver, receive and perform all and any
acts, matters, statements and things which may be necessary to put the
vendors of the Equity Interests in ownership, possession, and operating
control of the Equity Interests, including execution, acknowledgment and
recordation of specific assignments, oaths, declarations and other
documents on a country-by-country basis and such other instruments of sale,
transfer, conveyance, and assignment as may be required for this purpose.
11. 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.
11.2 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 general public may be made without
the prior written consent of each Party to this Agreement, whose consent
shall not be unreasonably withheld.
11.3 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.
11.4 Legally Compelled Disclosure. In the event that any party is requested or
becomes legally compelled (including without limitation, pursuant to
securities laws and
-37-
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.
11.5 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.
12. MISCELLANEOUS
12.1 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.
12.2 Governing Law and Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of Hong Kong.
12.3 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 12.3:
(a) The procedures of this Clause 12.3(b) 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)-
-38-
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) 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.
(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 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.
12.4 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.
12.5 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.
12.6 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
-39-
facsimile number as such party may designate by ten (10) days' advance
written notice to the other parties.
12.7 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.
12.8 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.
12.9 Language. This Agreement shall be executed in English.
-40-
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: Xxxxx Xxxx
Title: Director
Address of XFM:
Xxxxx 0000-00, 0 Xxxxx Xxxxxxx
0 Xxxxxxxx Xx
Xxxxxxxx 00000
Telephone: 00-00-0000-0000
Facsimile: 00-00-0000-0000
-41-
THE COMPANY
For and on behalf of EAST ALLIANCE LIMITED
By:
/s/ Pang Hon Pan
Name: Pang Hon Pan
Title: Director
Address of the Company:
0xx Xxxxx, Xxxxxx Xxxxxxxx
Xxxx Xxxx, Xxxxxxx
Xxxxxxx Xxxxxx Xxxxxxx
Telephone:
Facsimile:
-42-
THE VENDORS
For and on behalf of DIVINE PROSPECT LIMITED
By:
/s/ Pang Hon Pan
Name: Pang Hon Pan
Title: Authorized Signatory
Address of the Company:
0xx Xxxxx, Xxxxxx Xxxxxxxx
Xxxx Xxxx, Xxxxxxx
British Virgin Islands
Telephone:
Facsimile:
For and on behalf of MULTI INTERACTIVE COMMUNICATION
LIMITED
By:
/s/ Xxxxxxx Xxxxxx Xxxxxxxx Suzuma Jonstromer
Name: Xxxxxxx Xxxxxx Xxxxxxxx Suzuma Jonstromer
Title: Director
Address of the Company:
Akara Building, 00 Xx Xxxxxx Xxxxxx,
Xxxxxxxx Cay 1, Road Town,
Tortola, British Virgin Islands
Telephone:
Facsimile:
-43-
THE COVENANTORS
By XIAO JIANBING
/s/ Xiao Jianbing
Name: XIAO JIANBING
Address:
Telephone:
Facsimile:
By XIAO QINGPING
/s/ Xiao Qingping
Name: XIAO QINGPING
Address:
Telephone:
Facsimile:
-44-
SCHEDULE A
DETAILS OF COMPANY SHARES
PURCHASER VENDOR NO. OF COMPANY AMOUNT PAYABLE AT COMPANY
SHARES CLOSING
XFM Divine Prospect Limited 42,500 US$42,500
XFM Multi Interactive 7,500 US$ 7,500
Communication Limited
50,000 US$50,000
-45-
SCHEDULE B
GROUP STRUCTURE AGREEMENTS
1. Loan Agreement to be signed by Nominee 1, Nominee 2 and WFOE.
2. Equity Pledge Agreement to be entered into amongst Nominee 1, Nominee 2,
M-In and WFOE and representing pledge of [50]% of equity interest in M-In
by Nominee 1 and pledge of another 50% by Nominee 2 in favour of WFOE.
3. Capital Contribution Certificate and Shareholders' Registry to be issued to
Nominee 1 and Nominee 2.
4. Exclusive Equity Purchase Option Agreement to be entered into by and among
Nominee 1, Nominee 2, M-In and WFOE.
5. Equity transfer agreement signed in blank by Nominee 1.
6. Equity transfer agreement signed in blank by Nominee 2.
7. Authorisation letter signed in blank by Nominee 1.
8. Authorization letter signed in blank by Nominee 2.
9. Subrogation Agreement to be entered into amongst Nominee 1, Nominee 2, WFOE
and M-In.
10. Authorisation letter signed in blank by Nominee 1 approving appointment of
attorney.
11. Authorization letter signed in blank by Nominee 2 approving appointment of
attorney.
12. Letter of resignation to be signed in blank by Xu Xxxxx Xx for acting as
executive director of M-In.
13. Shareholders' resolution to be signed in blank approving resignation of Xu
Xxxxx Xx as executive director.
SERVICE AGREEMENT
-46-
SCHEDULE C
CORPORATE DETAILS OF THE GROUP AS AT THE DATE OF SIGNING OF THIS AGREEMENT
A. THE COMPANY
--------------------------------------------------------------------------------
NAME EAST ALLIANCE LIMITED
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 2 June, 2006, British Virgin Islands
--------------------------------------------------------------------------------
INCORPORATION NUMBER 1031254
--------------------------------------------------------------------------------
REGISTERED ADDRESS ATC Trustees (BVI) Limited of 0xx Xxxxx,
Xxxxxx Xxxxxxxx, Xxxx Xxxx, Xxxxxxx,
Xxxxxxx Xxxxxx Xxxxxxx
--------------------------------------------------------------------------------
AUTHORIZED CAPITAL US$50,000 divided into 50,000 shares of
par value US$1.00
--------------------------------------------------------------------------------
ISSUED CAPITAL 50,000 ordinary shares
--------------------------------------------------------------------------------
SHAREHOLDER NAME NUMBER OF
ORDINARY SHARES
--------------------------------------------------------------------------------
Divine Prospect Limited 42,500
--------------------------------------------------------------------------------
Multi Interactive 7,500
Communication Limited
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL: 50,000
--------------------------------------------------------------------------------
DIRECTOR(S) NIE Xiao Xxxx
XXXX Hon Pan
Xxxxxxx Xxxxxx M SUZUMA JONSTRoMER
--------------------------------------------------------------------------------
COMPANY SECRETARY ATC Trustees (BVI) Limited
--------------------------------------------------------------------------------
B. WFOE
--------------------------------------------------------------------------------
NAME Wuxianshijie (Beijing) Information
Technology Co., Ltd.
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION May 30th, 2007, PRC
--------------------------------------------------------------------------------
REGISTERED ADDRESS 109, Xx. 000, Xxxxxxxxx Xxxx, Xxxxxxx
Xxxxxxxx and Technology Development Zone,
Beijing, PRC
--------------------------------------------------------------------------------
REGISTERED CAPITAL US$100,000
--------------------------------------------------------------------------------
SHAREHOLDER NAME SHAREHOLDING
--------------------------------------------------------------------------------
East Alliance Limited 100%
--------------------------------------------------------------------------------
LEGAL REPRESENTATIVE Xu Changji
--------------------------------------------------------------------------------
BUSINESS SCOPE Development and production of computer
softwares; sale of self-produced products;
provide transfer of self-developed
technology, technology consulting and
technology service
--------------------------------------------------------------------------------
-47-
C. M-IN
--------------------------------------------------------------------------------
NAME Beijing Mobile Interactive Co., Ltd.
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 19 November 2003, PRC
--------------------------------------------------------------------------------
REGISTRATION NUMBER 1101052628368
--------------------------------------------------------------------------------
REGISTERED ADDRESS Xxxx 0X00, Xx.0, Xxxxx Xxxxx 0 Xxxx,
Xxxxxxxx Xxxxxxxx, Xxxxxxx
--------------------------------------------------------------------------------
REGISTERED CAPITAL RMB10,000,000
--------------------------------------------------------------------------------
SHAREHOLDER NAME SHAREHOLDING
--------------------------------------------------------------------------------
Xiao Jianbing RMB5,100,000 (51%)
--------------------------------------------------------------------------------
Xiao Qingping RMB4,900,000 (49%)
--------------------------------------------------------------------------------
TOTAL: RMB10,000,000 (100%)
--------------------------------------------------------------------------------
LEGAL REPRESENTATIVE Xu Changji
--------------------------------------------------------------------------------
DIRECTOR & MANAGEMENT Xu Changji (Executive Director & Manager)
Xiao Jianbing (Supervisor)
Xiao Qingping (Supervisor)
--------------------------------------------------------------------------------
BUSINESS SCOPE Information services of the second type of
telecom value-added services (exclusive of
fixed network telecom information
services);
Internet information services (except
contents of news, publication, education,
medical health, medicine, medical
treatment instruments and BBS);
The Company shall not operate business
prohibited by laws, regulations and State
Council;
Where laws, regulations and State Council
specify business shall be subjected to
permission, the Company shall operate
business after being permitted by relevant
authorities and registered with AIC;
The Company may freely choose business
projects and operate business, where there
is no requirement by government authority
under relevant laws and regulations.
--------------------------------------------------------------------------------
BUSINESS TERM 19 November 2003 to 18 November 2013
--------------------------------------------------------------------------------
-48-
D. THE BRANCHES
1. BEIJING BRANCH
--------------------------------------------------------------------------------
NAME Beijing Branch of Beijing Mobile
Interactive Co., Ltd.
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 28 October 2005, PRC
--------------------------------------------------------------------------------
REGISTRATION NUMBER 0000000000000(1-1)
--------------------------------------------------------------------------------
REGISTERED ADDRESS Xxxx 0000, Xxxxxx North District, Dawang
Road, West Chaoyang District, Beijing
--------------------------------------------------------------------------------
LEGAL REPRESENTATIVE Xu Changji
--------------------------------------------------------------------------------
BUSINESS SCOPE Beijing Branch shall not operate
businesses prohibited by laws,
administrative regulations and State
Council of the People's Republic of China;
Where laws, regulations and State Council
specify business shall be subjected to
permission, Company shall operate business
after being permitted by relevant
authorities and registered with AIC;
Beijing Branch may freely choose projects
and operate businesses, where there is no
requirement by relevant authorities under
laws, regulations and decisions by State
Council of the PRC.
--------------------------------------------------------------------------------
2. CHENGDU BRANCH
--------------------------------------------------------------------------------
NAME Chengdu Branch of Beijing Mobile
Interactive Co., Ltd.
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 21 March 2005, PRC
--------------------------------------------------------------------------------
REGISTRATION NUMBER 5101092900744
--------------------------------------------------------------------------------
REGISTERED ADDRESS Xx. 00, Xxxxx Xxxx Xxxx, Xxxx Xxx
Xxxxxxxxxx Xxxx, Xxxxxxx
--------------------------------------------------------------------------------
LEGAL REPRESENTATIVE Xxxxx Xxx
--------------------------------------------------------------------------------
BUSINESS SCOPE Mobile network value-added telecom
services;
Internet information services (except
contents of news, publication, education,
medical treatment and health care,
medicine, medical instrument and BBS);
Other legitimate projects where there is
no requirement on permission or approval
by relevant authorities.
--------------------------------------------------------------------------------
-49-
3. LANZHOU BRANCH
--------------------------------------------------------------------------------
NAME Lanzhou Branch of Beijing Mobile
Interactive Co., Ltd.
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION August 2005, PRC
--------------------------------------------------------------------------------
REGISTRATION NUMBER 6201022302048 (1-1)
--------------------------------------------------------------------------------
REGISTERED XXXXXXX Xx. 00, Xxxx Xxxx Xxxx Xxxxxxx, Xxxxxxxxx
Xxxxxxxx, Xxxxxxx
--------------------------------------------------------------------------------
LEGAL REPRESENTATIVE Xxxxx Xxx
--------------------------------------------------------------------------------
BUSINESS SCOPE Information services of the second type of
value added telecom services (except fixed
network telecom information services);
Internet information services (except
contents of news, publication, education,
medical treatment and health care,
medicine, medical instrument and
electronic bulletin services).
--------------------------------------------------------------------------------
4. SHANGHAI BRANCH
--------------------------------------------------------------------------------
NAME Shanghai Branch of Beijing Mobile
Interactive Co., Ltd.
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 2 August 2005, PRC
--------------------------------------------------------------------------------
REGISTRATION NUMBER 31011520234399000
--------------------------------------------------------------------------------
REGISTERED XXXXXXX Xxxxx X, Xxxx 000, Xx. 00, Xxxx Xxx Xxxx,
Xxx Xxxxxx Xxxxxxxx, Xxxxxxxx
--------------------------------------------------------------------------------
LEGAL REPRESENTATIVE Xxxxx Xxx
--------------------------------------------------------------------------------
BUSINESS SCOPE Information services (exclusive of fixed
network telephone information services);
Value term: until 8 September 2009);
Operating business upon service licenses.
--------------------------------------------------------------------------------
-50-
5. SHENYANG BRANCH
--------------------------------------------------------------------------------
NAME Shenyang Branch of Beijing Mobile
Interactive Co., Ltd.
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 10 May 2005, PRC
--------------------------------------------------------------------------------
REGISTRATION NUMBER 2101052202023 (1-1)
--------------------------------------------------------------------------------
REGISTERED XXXXXXX Xx. 00, Xxxxxxx Xxxx, Xxxxxx Xxxxxxxx,
Xxxxxxxx
--------------------------------------------------------------------------------
LEGAL REPRESENTATIVE Xxxxx Xxx
--------------------------------------------------------------------------------
BUSINESS SCOPE Information services of the second type of
value added telecom services
(non-exclusive of fixed network telecom
information services).
--------------------------------------------------------------------------------
6. SHENZHEN BRANCH
--------------------------------------------------------------------------------
NAME Shenzhen Branch of Beijing Mobile
Interactive Co., Ltd.
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 14 June 2004, PRC
--------------------------------------------------------------------------------
REGISTRATION NUMBER 4403011145125
--------------------------------------------------------------------------------
REGISTERED ADDRESS Xxxx 000, Xxxxx 0, Xx Xxx Xxxxx,
Xxx Xxxx Xxxxx Road, Nanshan District,
Shenzhen
--------------------------------------------------------------------------------
LEGAL REPRESENTATIVE Xu Changji
--------------------------------------------------------------------------------
BUSINESS SCOPE Technology developments and sales of
computer software, hardware and electronic
products;
Domestic business;
Supplies and sales of materials (except
commodities subjected to monopoly rights,
monopolized controls and restricted
projects).
--------------------------------------------------------------------------------
-51-
SCHEDULE D
CORPORATE DETAILS OF THE GROUP IMMEDIATELY FOLLOWING CLOSING DATE
A. THE COMPANY
--------------------------------------------------------------------------------
NAME EAST ALLIANCE LIMITED
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 2 June 2006, British Virgin Islands
--------------------------------------------------------------------------------
INCORPORATION NUMBER 1031254
--------------------------------------------------------------------------------
REGISTERED ADDRESS ATC Trustees (BVI) Limited of 0xx Xxxxx,
Xxxxxx Xxxxxxxx, Xxxx Xxxx, Xxxxxxx,
Xxxxxxx Xxxxxx Xxxxxxx
--------------------------------------------------------------------------------
AUTHORIZED CAPITAL US$50,000 divided into 50,000 shares of
par value US$1.00
--------------------------------------------------------------------------------
ISSUED CAPITAL 50,000 ordinary shares
--------------------------------------------------------------------------------
SHAREHOLDER NAME NUMBER OF ORDINARY
SHARES
--------------------------------------------------------------------------------
XFM 50,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL: 50,000
--------------------------------------------------------------------------------
DIRECTOR(S) PANG Hon Pan
NIE Xiao Xxxx
Xxxxxxx Xxxxxx M SUZUMA JONSTRoMER
--------------------------------------------------------------------------------
COMPANY SECRETARY ATC Trustees (BVI) Limited
--------------------------------------------------------------------------------
B. WFOE
--------------------------------------------------------------------------------
NAME Wuxianshijie (Beijing) Information
Technology Co., Ltd.
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION May 30th, 2007, PRC
--------------------------------------------------------------------------------
REGISTERED ADDRESS 109, Xx. 000, Xxxxxxxxx Xxxx, Xxxxxxx
Xxxxxxxx and Technology Development Zone,
Beijing, PRC
--------------------------------------------------------------------------------
REGISTERED CAPITAL US$100,000
--------------------------------------------------------------------------------
SHAREHOLDER NAME SHAREHOLDING
--------------------------------------------------------------------------------
East Alliance Limited 100%
--------------------------------------------------------------------------------
LEGAL REPRESENTATIVE Xu Changji
--------------------------------------------------------------------------------
BUSINESS SCOPE Development and production of
computer softwares; sale of self-produced
products; provide transfer of self-
developed technology, technology
consulting and technology service
--------------------------------------------------------------------------------
-52-
C. M-IN
--------------------------------------------------------------------------------
NAME Beijing Mobile Interactive Co., Ltd.
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 19 November 2003, PRC
--------------------------------------------------------------------------------
REGISTRATION NUMBER 1101052628368
--------------------------------------------------------------------------------
REGISTERED ADDRESS Xxxx 0X00, Xx.0, Xxxxx Xxxxx 0 Xxxx,
Xxxxxxxx Xxxxxxxx, Xxxxxxx
--------------------------------------------------------------------------------
REGISTERED CAPITAL RMB10,000,000
--------------------------------------------------------------------------------
SHAREHOLDER NAME SHAREHOLDING
--------------------------------------------------------------------------------
Nominee 1 RMB5,000,000 (50%)
--------------------------------------------------------------------------------
Nominee 2 RMB5,000,000 (50%)
--------------------------------------------------------------------------------
Total: RMB10,000,000 (100%)
--------------------------------------------------------------------------------
DIRECTOR & MANAGEMENT Nominee of the Vendors (Director & Legal
Representative)
Nominee 1 (Director & Chairman)
Nominee 2 (Director)
--------------------------------------------------------------------------------
BUSINESS SCOPE Information services of the second type of
telecom value-added services (exclusive of
fixed network telecom information
services);
Internet information services (except
contents of news, publication, education,
medical health, medicine, medical
treatment instruments and BBS);
The Company shall not operate business
prohibited by laws, regulations and State
Council;
Where laws, regulations and State Council
specify business shall be subjected to
permission, the Company shall operate
business after being permitted by relevant
authorities and registered with AIC;
The Company may freely choose business
projects and operate business, where there
is no requirement by government authority
under relevant laws and regulations.
--------------------------------------------------------------------------------
BUSINESS TERM 19 November 2003 to 18 November 2013
--------------------------------------------------------------------------------
-53-
D. THE BRANCHES
1. BEIJING BRANCH
--------------------------------------------------------------------------------
NAME Beijing Branch of Beijing Mobile
Interactive Co., Ltd.
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 28 October 2005, PRC
--------------------------------------------------------------------------------
REGISTRATION NUMBER 0000000000000(1-1)
--------------------------------------------------------------------------------
REGISTERED ADDRESS Xxxx 0000, Xxxxxx North District, Dawang
Road, West Chaoyang District, Beijing
--------------------------------------------------------------------------------
LEGAL REPRESENTATIVE Xu Changji
--------------------------------------------------------------------------------
BUSINESS SCOPE Beijing Branch shall not operate
businesses prohibited by laws,
administrative regulations and State
Council of the People's Republic of China;
Where laws, regulations and State Council
specify business shall be subjected to
permission, Company shall operate business
after being permitted by relevant
authorities and registered with AIC;
Beijing Branch may freely choose projects
and operate businesses, where there is no
requirement by relevant authorities under
laws, regulations and decisions by State
Council of the PRC.
--------------------------------------------------------------------------------
2. CHENGDU BRANCH
--------------------------------------------------------------------------------
NAME Chengdu Branch of Beijing Mobile
Interactive Co., Ltd.
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 21 March 2005, PRC
--------------------------------------------------------------------------------
REGISTRATION NUMBER 5101092900744
--------------------------------------------------------------------------------
REGISTERED ADDRESS Xx. 00, Xxxxx Xxxx Xxxx, Xxxx Xxx
Xxxxxxxxxx Xxxx, Xxxxxxx
--------------------------------------------------------------------------------
LEGAL REPRESENTATIVE Xxxxx Xxx
--------------------------------------------------------------------------------
BUSINESS SCOPE Mobile network value-added telecom
services;
Internet information services (except
contents of news, publication, education,
medical treatment and health care,
medicine, medical instrument and BBS);
Other legitimate projects where there is
no requirement on permission or approval
by relevant authorities.
--------------------------------------------------------------------------------
-54-
3. LANZHOU BRANCH
--------------------------------------------------------------------------------
NAME Lanzhou Branch of Beijing Mobile
Interactive Co., Ltd.
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION August 2005, PRC
--------------------------------------------------------------------------------
REGISTRATION NUMBER 6201022302048 (1-1)
--------------------------------------------------------------------------------
REGISTERED XXXXXXX Xx. 00, Xxxx Xxxx Xxxx Xxxxxxx, Xxxxxxxxx
Xxxxxxxx, Xxxxxxx
--------------------------------------------------------------------------------
LEGAL REPRESENTATIVE Xxxxx Xxx
--------------------------------------------------------------------------------
BUSINESS SCOPE Information services of the second type of
value added telecom services (except fixed
network telecom information services);
Internet information services (except
contents of news, publication, education,
medical treatment and health care,
medicine, medical instrument and
electronic bulletin services).
--------------------------------------------------------------------------------
4. SHANGHAI BRANCH
--------------------------------------------------------------------------------
NAME Shanghai Branch of Beijing Mobile
Interactive Co., Ltd.
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 2 August 2005, PRC
--------------------------------------------------------------------------------
REGISTRATION NUMBER 31011520234399000
--------------------------------------------------------------------------------
REGISTERED XXXXXXX Xxxxx X, Xxxx 000, Xx. 00, Xxxx Xxx Xxxx,
Xxx Xxxxxx Xxxxxxxx, Xxxxxxxx
--------------------------------------------------------------------------------
LEGAL REPRESENTATIVE Xxxxx Xxx
--------------------------------------------------------------------------------
BUSINESS SCOPE Information services (exclusive of fixed
network telephone information services);
Value term: until 8 September 2009);
Operating business upon service licenses.
--------------------------------------------------------------------------------
-55-
5. SHENYANG BRANCH
--------------------------------------------------------------------------------
NAME Shenyang Branch of Beijing Mobile
Interactive Co., Ltd.
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 10 May 2005, PRC
--------------------------------------------------------------------------------
REGISTRATION NUMBER 2101052202023 (1-1)
--------------------------------------------------------------------------------
REGISTERED XXXXXXX Xx. 00, Xxxxxxx Xxxx, Xxxxxx Xxxxxxxx,
Xxxxxxxx
--------------------------------------------------------------------------------
LEGAL REPRESENTATIVE Xxxxx Xxx
--------------------------------------------------------------------------------
BUSINESS SCOPE Information services of the second type of
value added telecom services
(non-exclusive of fixed network telecom
information services).
--------------------------------------------------------------------------------
6. SHENZHEN BRANCH
--------------------------------------------------------------------------------
NAME Shenzhen Branch of Beijing Mobile
Interactive Co., Ltd.
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 14 June 2004, PRC
--------------------------------------------------------------------------------
REGISTRATION NUMBER 4403011145125
--------------------------------------------------------------------------------
REGISTERED ADDRESS Xxxx 000, Xxxxx 0, Xx Xxx Xxxxx, Xxx Xxxx
Xxxxx Road, Nanshan District, Shenzhen
--------------------------------------------------------------------------------
LEGAL REPRESENTATIVE Xu Changji
--------------------------------------------------------------------------------
BUSINESS SCOPE Technology developments and sales of
computer software, hardware and electronic
products;
Domestic business;
Supplies and sales of materials (except
commodities subjected to monopoly rights,
monopolized controls and restricted
projects).
--------------------------------------------------------------------------------
-56-
SCHEDULE E
INTELLECTUAL PROPERTY
A. DOMAIN NAMES OWNED BY M-IN
----------------------------------------------------------------------------------------------------------------
NO. DOMAIN NAME REGISTRATION DATE EXPIRY DATE CERTIFICATE
----------------------------------------------------------------------------------------------------------------
1. Xxxxxxxxxxx.xxxx 29 July 2005 29 July 2007 Certificate of Generic
Top Level Domain Name
----------------------------------------------------------------------------------------------------------------
2. Xxxxx.xx 12 May 2006 24 May 2008 CNNIC Internet Domain
Name Certificate
----------------------------------------------------------------------------------------------------------------
3. Xxxxx.xx 15 May 2006 24 May 2008 CNNIC Internet Domain
Name Certificate
----------------------------------------------------------------------------------------------------------------
4. Xxxxx.xx 15 May 2006 24 May 2008 CNNIC Internet Domain
Name Certificate
----------------------------------------------------------------------------------------------------------------
5. Xxxxxxxx00.xxx 6 September 2006 6 September 2007 Certificate of Generic
Top Level Domain Name
----------------------------------------------------------------------------------------------------------------
6. Xxxxxxxx00.xx 6 September 2006 6 September 2007 CNNIC Internet Domain
Name Certificate
----------------------------------------------------------------------------------------------------------------
7. 00xxxxxx.xxx 12 December 2006 12 December 2007 Certificate of Generic
Top Level Domain Name
----------------------------------------------------------------------------------------------------------------
8. 00xxxxxx.xxx.xx 12 December 2006 12 December 2007 CNNIC Internet Domain
Name Certificate
----------------------------------------------------------------------------------------------------------------
9. 00xxxxxx.xxx.xx 12 December 2006 12 December 2007 CNNIC Internet Domain
Name Certificate
----------------------------------------------------------------------------------------------------------------
10. 00xxxxxx.xx 12 December 2006 12 December 2007 CNNIC Internet Domain
Name Certificate
----------------------------------------------------------------------------------------------------------------
11. 00xxxxxx.xxx 11 December 2006 11 December 2007 Certificate of Generic
Top Level Domain Name
----------------------------------------------------------------------------------------------------------------
12. Xxxxx.xx 12 December 2006 23 February 2008 CNNIC Internet Domain
Name Certificate
----------------------------------------------------------------------------------------------------------------
13. Xxxxxx.xx 12 December 2006 23 February 2008 CNNIC Internet Domain
Name Certificate
----------------------------------------------------------------------------------------------------------------
14. xxxxxx.xx 9 March 2007 9 March 2008 CNNIC Internet Domain
Name Certificate
----------------------------------------------------------------------------------------------------------------
15. x-xx.xx 19 March 2007 9 April 2009 CNNIC Internet Domain
Name Certificate
----------------------------------------------------------------------------------------------------------------
16. x-xx.xxx.xx 19 March 2007 9 April 2009 CNNIC Internet Domain
Name Certificate
----------------------------------------------------------------------------------------------------------------
17. x-xx.xxx.xx 19 March 2007 9 April 2009 CNNIC Internet Domain
Name Certificate
----------------------------------------------------------------------------------------------------------------
-57-
B. TRADEMARKS OWNED OR APPLIED FOR BY M-IN
----------------------------------------------------------------------------------------------------------------
APPLICATION NUMBER/ TRADEMARK CURRENT TYPE OF
REGISTRATION NUMBER SITUATION APPLICATION
----------------------------------------------------------------------------------------------------------------
1. 4444829/ M-In BOARD and IN design Waiting for Trademark
approval registration
----------------------------------------------------------------------------------------------------------------
2. 4444828/ M-In BOARD and IN design Waiting for Trademark
approval registration
----------------------------------------------------------------------------------------------------------------
3. 4444827/ M-In BOARD and IN design Waiting for Trademark
approval registration
----------------------------------------------------------------------------------------------------------------
4. 4444826/ IN design Waiting for Trademark
approval registration
----------------------------------------------------------------------------------------------------------------
5. 4444825/ IN design Waiting for Trademark
approval registration
----------------------------------------------------------------------------------------------------------------
6. 4444824/ IN design Waiting for Trademark
approval registration
----------------------------------------------------------------------------------------------------------------
7. 4444830/ M-In Waiting for Trademark
approval registration
----------------------------------------------------------------------------------------------------------------
8. 4444832/ M-In Waiting for Trademark
approval registration
----------------------------------------------------------------------------------------------------------------
9. 4444831/ M-In Waiting for Trademark
approval registration
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
-58-
SCHEDULE F
LEASES
WFOE
[M-IN TO COMPLETE.]
----------------------------------------------------------------------------------------------------------------
TENANT LANDLORD DATE OF ADDRESS ACTUAL TERM
AGREEMENT OCCUPIER
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
M-IN
----------------------------------------------------------------------------------------------------------------
LESSOR LESSEE LOCATION AREA/USAGE VALID RENT
TERM
----------------------------------------------------------------------------------------------------------------
1 Wufan M-In Rm. 1601 and 15F, 1315.32 m(2) 23 April RMB163,363.00
Lanbao International /Office 2005 to 22 per month
Xxxxxx Xxxxxx Xxxxxxxx, Xxxxx 0000
Xxxx Xxxxxx Xxxx,
Xxxxxxxx District, Beijing
----------------------------------------------------------------------------------------------------------------
2 Beijing M-In Xx. 0X00, Xxxxxxxxx 62 m(2) 23 November RMB4,903.17 per
Taifude Office Building, /Office 2005 to 22 month
Property November
Management 2006
Co., Ltd.
----------------------------------------------------------------------------------------------------------------
3 M-In Good Some rooms of 15F, 1 November RMB80,000.00 per
Media Lanbao International 2005 to 31 month
Center Office Building, December
Xxxx Xxxxxx Xxxx, 0000
Xxxxxxxx Xxxxxxxx, Xxxxxxx
----------------------------------------------------------------------------------------------------------------
THE BRANCHES
----------------------------------------------------------------------------------------------------------------
TENANT LANDLORD DATE OF ADDRESS ACTUAL TERM
AGREEMENT OCCUPIER
----------------------------------------------------------------------------------------------------------------
Xu Xxxxx Xx Xx Xxx 19 April 2007 Room 207, San Shenzhen From 20 April
Cun, Xxxxx Xxxx, Branch of 2007 to 20 April
Huaqiao City, M-In 2008
Nansan District,
Shenzhen
----------------------------------------------------------------------------------------------------------------
M-In Shi Xianhua 10 March 2005 [Chengdu] Chengdu From 10 March
Branch of 2005 to 9 March
M-In 2006
----------------------------------------------------------------------------------------------------------------
Shenyang Li Gang 1 March 2007 No. 44, Taishan Shenyang From 1 March
Branch Road, Huanggu Branch of 2007 to 29
District, Shenyang M-In February 2008
----------------------------------------------------------------------------------------------------------------
-59-
SCHEDULE G
MATERIAL CONTRACTS
This is a list of material contracts.
-60-
SCHEDULE H
INSURANCE AND BANK
[JCTD TO COMPLETE.]
1. M-IN
This is a list of bank accounts.
2. THE BRANCHES
None.
-61-
SCHEDULE I
FORM OF MANAGEMENT CONTRACT
-62-
SCHEDULE J
LIST OF MANAGEMENT ENTERING INTO MANAGEMENT CONTRACT
1) Xx Xxxx
2) Xxxxx Xxx
3) Xu Changji
-63-
SCHEDULE K
FORM OF NON-COMPETE DEED
-64-
SCHEDULE L
LIST OF PERSONNEL ENTERING INTO NON-COMPETE DEED
1) Xx Xxxx
2) Xxxxx Xxx
3) Xu Changji
-65-
SCHEDULE M
EQUITY TRANSFER DOCUMENTS
-66-
SCHEDULE N
LICENSES / CERTIFICATE
----------------------------------------------------------------------------------------------------------------
LICENCE / ISSUING ISSUING VALID TERM TYPE OF SCOPE OF BUSINESS
CERTIFICATE AUTHORITY DATE BUSINESS
----------------------------------------------------------------------------------------------------------------
Value-added Ministry of 8 September 8 September Information Internet information
Telecom Information 2004 2004 to services of the services exclusive of
Services License Industry of the 8 September second type of news, publication,
People's 2009 telecom education, medical
[B2-20040215] Republic of China value-added health, medicine,
services medical treatment
(exclusive of instruments and BBS
fixed network
telephone
information
services)
----------------------------------------------------------------------------------------------------------------
Certificate of Beijing Science 17 January 17 January
Approval for and Technology 2006 2006 to 16
Establishment Committee January
of High 2008
Technology
Enterprise
----------------------------------------------------------------------------------------------------------------
Business Licence
----------------------------------------------------------------------------------------------------------------
Tax Beijing 14 December
Registration Municipal 2006
Certificate Office, State
Administration
[11010875674355X] of Taxation;
Beijing local
taxation Bureau
----------------------------------------------------------------------------------------------------------------
Social Beijing Haidian 9 March
Insurance District Social 2005
Registration Insurance Fund
Certificate Administration
Center
----------------------------------------------------------------------------------------------------------------
Organization General From 7
Code Certificate Administration December
of Quality 2005 to 7
Supervision, December
[75674355] Inspection and 2009
Quarantine of
PRC
----------------------------------------------------------------------------------------------------------------
-67-
SCHEDULE O
APRIL 30 STATEMENTS
-68-
DISCLOSURE SCHEDULE
-69-
