Asset Transfer Agreement
Exhibit
10.19
between
Kunming
Television Station
and
Kunming
Taishi Information Cartoon Co., Ltd.
May
2008
Table of
Contents
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Articles
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Pages | ||
|
Article
|
1
|
Definitions and
Interpretations
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2
|
|
Article
|
2
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Sale and
Purchase
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4
|
|
Article
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3
|
Assets to be
Transferred
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6
|
|
Article
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4
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Transferor’s Representations and
Warranties
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7
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|
Article
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5
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Transferor’s
Undertaking
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8
|
|
Article
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6
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Mutual Representations and
Warranties
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8
|
|
Article
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7
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Events of
Breach
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9
|
|
Article
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8
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Force
Majeure
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9
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|
Article
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9
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Termination
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10
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Article
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10
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Confidentiality
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11
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Article
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11
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Governing Law and Dispute
Resolution
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12
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Article
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12
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Notices
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12
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Article
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13
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Miscellaneous
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00
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Xxxxxxxx
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|||
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Xxxxxxxx
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List
of Assets
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||
This Asset Transfer Agreement
(Agreement) is entered
into on [•] 2008 in Kunming, Yunnan Province, People's Republic of China (PRC)
by
and between
|
(1)
|
Kunming Television Station
(Transferor), a PRC
television station with its registered address at Xx. 000, Xxxxxx Xxxxxx,
Xxxxxxx Xxxx, Xxxxxx Xxxxxxxx, PRC
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and
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(2)
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Kunming Taishi Information
Cartoon Co., Ltd. (Transferee), a company
established under PRC Law (as defined below) with its registered address
at [•], whose
legal representative is [•].
|
(Individually
a Party and collectively
the Parties).
WHEREAS
The
Transferor desires to sell to the Transferee, and the Transferee agrees to
purchase from the Transferor, the assets of Transferor related to the operation
of Business (as defined below).
NOW, THEREFORE, the Parties
have agreed as follows:
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Article
1 Definitions
and Interpretations
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1.1
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Definitions. Unless
otherwise stipulated herein, the following terms shall have the meaning
set forth below:
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Assets
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means
any assets transferred by the Transferor to the Transferee as set forth in
Appendix ;
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Business
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means
the advertising business that is operated by Transferor;
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Business
Contracts
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means
the agreements that relate to the Business;
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Force
Majeure
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any
earthquake, storm, fire, flood, war, changes to the relevant state and
administrative laws or regulations and policies, or any other significant
event of natural or human-caused disaster arising after the signing hereof
which is unforeseen, unavoidable and not possible to overcome,
and is beyond the control of any Party, and prevents the total or partial
performance of this Agreement by any
Party;
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Government
Authority
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the
competent government departments and authorities of the jurisdictions
where the Assets are located;
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PRC
Law
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all
laws and legislation of the PRC that are in effect, including laws,
regulations, decrees and orders of government agencies and other documents
of a legislative, administrative or judicial nature;
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RMB
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Renminbi,
the legal currency of the PRC;
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Tax
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all
forms of taxation, including, without limitation, enterprise income tax,
business tax, value-added tax, stamp duty and individual income tax levied
by the PRC tax authorities pursuant to PRC Law, as well as any penalty,
surcharge or fine in connection therewith;
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Trade
Secret
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any
information relating to this Agreement, the Transferor or the Transferee,
including, without limitation, any information regarding costs,
technologies, financial contracts, future business plans and any other
information deemed by the Parties to be confidential, and which is unknown
by the public, has practical value and is of economic benefit to
the Parties; and
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|
Transaction
Documents
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all
documents that are required to be signing under PRC Law in order to
complete the transactions contemplated under this Agreement.
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Working
Day
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any
business day of commercial banks in the territory of the
PRC.
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1.2
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Headings. All
headings used herein are for reference purposes only and do not affect the
meaning or interpretation of any provision
hereof.
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1.3
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Appendices. Any
reference herein to an Article or Appendix is to an article or appendix of
this Agreement.
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1.4
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Other
References. Unless otherwise indicated, a reference
herein to a day, month or year is to a calendar day, month or
year.
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Article 2
Sale and
Purchase
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2.1
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Assets
Appraisal. The Transferor shall, at its sole expense,
hire a qualified appraisal agent to conduct the appraisal on the Assets.
Such appraisal shall be completed no later than 1 March 2008 by the
Transferor.
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2.2
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Purchase Price. There
are no encumbrances on the Assets that the Transferor shall sell to the
Transferee. The consideration of such Assets transfer shall be in total
amount of RMB 150 million in cash (Purchase
Price).
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2.3
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Assets
Transfer.
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2.3.1
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The
Assets shall be subject to a one-time
transfer.
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2.3.2
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The
Transferor shall assist the Transferee in obtaining any and all prior
approvals, consents and (or) certificates, and shall make any and all
filings necessary for the transfer of Assets under PRC Law, which shall
include without limitation the approvals from or filings with the relevant
state-owned assets administration authorities, commerce departments,
administrative departments for industry and commerce and foreign exchange
administrative departments.
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2.4
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Payment
Method.
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2.4.1
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Initial Payment and
Conditions.
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As the
consideration for the Assets transfer, the Transferee shall pay 50% of Purchase
Price within 7 working days of the date of the satisfaction, or waiver by the
Transferee in writing, of the following conditions:
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2.4.1.1
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all
initial contributed assets have been fully transferred by the Transferor
to the Transferee in accordance with the relevant
agreements;
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2.4.1.2
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the
advertising company (Advertising Co), jointly
established by the Transferor and the affiliate of Transferee, has been
incorporated;
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2.4.1.3
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the
exclusive cooperation agreement, satisfactory to the Parties in both
substance and form, has been executed by the Transferor and the
Transferee;
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2.4.1.4
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the
exclusive service agreement, satisfactory to the Parties in both substance
and form, has been executed by the Advertising Co and the Transferee;
and
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2.4.1.5
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the
Transferor undertakes not to -
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(a)
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create
or permit to arise any lien, encumbrance, pledge, mortgage or any security
or other third party right or interest on or in respect of any of the
Assets or grant or issue, or agree to grant or issue, any
guarantee;
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|
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(b)
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enter
into any transaction or arrangement with respect to the
Assets;
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(c)
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enter
into any agreements or materially modify or terminate any agreements
related to the Business; or depart from the ordinary course of Transferor
or the Transferee’s daily business operations in any
form;
|
|
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(d)
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increase
or agree to increase the remuneration (including bonuses, commissions and
benefits in kind) of any of the members of the board of directors or
employees of the Transferee, or provide or agree to provide any gratuitous
payment or benefit to any such person or any of their dependents;
and
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(e)
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enter
into any agreement or arrangement to, or grant any power of attorney or
otherwise authorize any other person to do any of the
above.
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2.4.1.6
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the
Transferor and the Transferee shall jointly endeavor to obtain any and all
necessary governmental consent, permit or authorization in relation to the
execution, delivery or implementation hereof, or to make any and all
necessary applications for, filing and registration
with government
agencies.
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2.4.1.7
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any
other conditions agreed upon by the Parties in the Transaction
Documents.
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-4-
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2.4.2
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Remaining Purchase Price
Payment.
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The
remaining balance of the Purchase Price shall be paid within 12 months of the
initial payment, and shall occur subject to the satisfaction, or waiver by the
Transferee in writing, of the following conditions:
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2.4.2.1
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the
Transferor shall, at its sole expense, ensure that any applicable annual
inspection and (or) renewal of governmental authorizations are duly and
timely made, and all governmental authorizations remain in full force and
effect in accordance with the terms of the exclusive cooperation agreement
and exclusive service agreement;
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2.4.2.2
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the
Transferor shall use its best efforts to ensure that the Transferee and
Advertising Co obtain the governmental authorizations necessary for the
operation of the Business;
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2.4.2.3
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the
Transferor agrees to use its best commercial efforts to continue operating
the Business; and
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2.4.2.4
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all
other conditions that are agreed to by the Parties in the Transaction
Documents.
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2.5
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Offset Right.
Notwithstanding any provisions to the contrary, if the Transferor
shall pay the Transferee the damage penalty for breach of contract in
accordance with the provisions of Article 7 of this Agreement, the
Transferee shall have the right to offset the Purchase Price by the damage
penalty for breach of
contract.
|
The
Transferee has the right to deduct any amounts paid pursuant to the Assets
transfer, provided that the deduction shall be consistent with the due payment
of the Transferor. However, the transferee shall not have the right of offset in
the event of late payment of the Purchase Price.
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2.6
|
Continuous Transfer of Assets.
Upon the expiry of 2 years from the date of establishment of the
Transferee, the Transferor will continuously transfer assets to the
Transferee and the Transferee shall continuously purchase such assets,
provided that such purchased assets are necessary for the operational
activities of the Transferee and that such purchases are in accordance
with the Asset Transfer Agreement concluded separately by the
Parties.
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Article
3 Assets to be
Transferred
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3.1
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Ownership. The
ownership of and title to the Assets to be transferred shall pass to the
Transferee upon delivery of the Assets to be Transferred in accordance
with Article 3.2 and the full payment of the consideration therefor by
Party B.
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3.2
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Delivery and
Acceptance. Unless otherwise stipulated by law or agreed
by the Parties, the Transferor shall, at its own expense, deliver the
Assets to be transferred to the Transferee at the location, at any time
and in the manner specified by the Transferee in writing. The
delivery shall not be deemed to have occurred until Transferee has
reviewed and accepted, at its sole discretion, the Assets, and the Parties
have fulfilled the formalities in respect of delivery and acceptance
thereof.
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3.3
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Use. The
Transferor is entitled to continue using the Assets for the purpose of the
Business for no consideration other than liability for loss or damage (if
any), in accordance with Article
3.4.
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3.4
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Maintenance. Until
the Assets are delivered to the Transferee, the Transferor shall be
responsible for the custody and maintenance of the
Assets.
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Article
4 Transferor’s
Representations and
Warranties
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4.1
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Ownership of Assets. The
Transferor shall ensure that the Assets are free of any encumbrances, and
the Transferor is entitled to freely dispose of the
Assets.
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4.2
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Condition of
Assets. The Assets are in good and serviceable condition
(subject to normal wear and tear where applicable) and are generally
suitable for their intended
purposes.
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4.3
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Intellectual Property
Right. The Assets are not in the situation of infringing upon the
intellectual property rights and legal rights of any third
person.
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4.4
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Necessary Assets.
The Assets as listed in Appendix represent the Assets necessary
for the operation or promotion of the
Business.
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4.5
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Disputes. The
Transferor is not aware of any pending or threatened civil or criminal
claims, prosecutions, lawsuits, investigations or other proceedings
against the Transferor, which may affect this Agreement; nor is the
Transferor aware of any contractual provisions or executable court rulings
or injunctions that may be binding upon or affect the Transferor’ property
and that may affect this Agreement, including any intellectual property;
the Transferor’ execution and performance of this Agreement, and the
Transferee’s implementation or exercise of any right under this
Agreement, does not violate any mortgage rights, contracts, rulings,
decrees or laws that are binding upon the Transferor or the
Parties’ assets.
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The
Transferor has obtained any and all written approvals of any third party for the
execution, delivery and performance of this Agreement and said transactions set
forth in this Agreement.
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Article
5 Transferor’s
Undertaking
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5.1
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Reasonable
Assistance. The Transferor will provide such assistance
as may be requested by the Transferee from time to
time.
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5.2
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Registration. If the
transfer of any assets must be registered with a Government Authority, the
Transferor shall submit to such Government Authority all the registration
documents and take all reasonable actions needed for such transfer before
the delivery.
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5.3
|
Indemnity. The
Transferor shall indemnify the Transferee against any and all damages and
losses sustained by the Transferee that result from any third party action
against any or all of the Transferor or the Transferee which result or
arise from any activities involving any of the Transferors that occurred
prior to or on the delivery.
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Article
6 Mutual Representations
and Warranties
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The
Transferor represents and warrants to the Transferee, and the Transferee
represents and warrants to the Transferor the following:
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6.1
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It
is an independent legal entity formally established at its place of
incorporation, and has obtained all government approvals and registrations
necessary for its existence, which approvals and registrations are
continuing and effective and it has sufficient authority to conduct its
business in accordance with its business license, approval certificate,
articles of association or similar corporate
documents.
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6.2
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It
is fully authorized to sign this Agreement and to fulfill its obligations
hereunder.
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6.3
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Its
signing of this Agreement and performance of any of its obligations
hereunder will not violate:
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6.3.1
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its
business license, business registration, articles of association or
similar corporate documents;
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6.3.2
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any
applicable laws or regulations, or the conditions attached to any
authorization or approval granted by any governmental agency or body;
and
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6.3.3
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any
other agreement which is binding on
it.
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6.4
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There
is no lawsuit, arbitration or other legal or government procedure pending
or threatened against it which, based on its knowledge, could affect this
Agreement.
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6.5
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It
has disclosed to the other Party all documents issued by any government
authority that might have a material adverse effect on the performance of
its obligations under this
Agreement.
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6.6
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It
is not the subject of any liquidation or dissolution
proceedings.
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6.7
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It
has neither been declared bankrupt by a court of competent jurisdiction
nor entered into any bankruptcy
proceedings.
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Article
7 Liability for
Breach
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7.1
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Events. The
occurrence of 1 or both of the following events shall constitute a breach
of this Agreement:
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7.1.1
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any
of the Parties has materially breached the terms hereof or has failed to
perform in any material respect its obligations hereunder, and such breach
or nonperformance has not been remedied for a period of 10 days after
receipt of any other Party’s written notice requesting such remedy;
and
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7.1.2
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any
representation or warranty made by any of the Parties herein shall prove
to have been false or misleading in any material
respect.
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7.2
|
Transferor Breach.
Where
the Transferor commits a breach of this Agreement, the Transferor shall be
liable to compensate the Transferee for any and all damages caused to it
as a result of the breach.
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7.3
|
Transferee Breach. Where
the Transferee commits a breach of this Agreement, it shall be liable to
compensate the Transferor for any and all damages caused to them as a
result of the breach.
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Article
8 Force
Majeure
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8.1
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Consultation. In
the event of Force Majeure, the Parties shall promptly consult with each
other to find a solution to the
situation.
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8.2
|
Exemption. Should
the occurrence of a Force Majeure result in any Party’s failure to perform
its obligations under this Agreement in whole or in part, that Party may,
unless otherwise stipulated by law, be exempted from performing those
obligations to the extent of the effect of the Force Majeure in
question.
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8.3
|
Best
Efforts. Subject to this Article8, the Party affected by
Force Majeure may suspend the performance of its obligations under this
Agreement to the extent and for the duration thereof until the effect of
the Force Majeure no longer operates. However, that Party shall
exert its best efforts to remove any impediments resulting from the Force
Majeure and to minimize to the greatest possible extent any damages
incurred. With the agreement of the Parties, the term of
this Agreement shall be extended by the period of such suspension without
penalty to any Party.
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8.4
|
Written
Evidence. The Party claiming Force Majeure shall, as
soon as possible after the occurrence of the Force Majeure, inform the
other Parties of the situation and specify the reason for its failure to
perform this Agreement, so as to minimize the damages inflicted upon the
other Parties, and shall provide the other Parties with written evidence,
certified by the relevant government authority, of the occurrence of the
Force Majeure.
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8.5
|
Non-Exemption. A
Party shall not be exempted from performing its obligations under this
Agreement where Force Majeure occurs following the delay by that Party to
perform such obligations.
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8.6
|
Termination. If
Force Majeure prevails for a period of 30 days or more and has a material
adverse effect on this Agreement, this Agreement may be terminated in
accordance with Article 9.1.3.
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Article
9 Termination
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9.1
|
Conditions of
Termination. This Agreement may only be terminated as
listed below, namely:
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9.1.1
|
by
the Transferee if the Transferor, and by the Transferor if the
Transferee, commits a material breach of this Agreement which it fails to
remedy within 30 days after the receipt of written notice from the
non-breaching Party requesting such
remedy;
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9.1.2
|
by
the Transferee if the Transferor, and by the Transferor if the Transferee,
becomes insolvent or declares
bankruptcy;
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|
9.1.3
|
by
the Transferee delivering written notice to the Transferor if Force
Majeure prevails against the Transferor, and by the Transferor delivering
written notice to the Transferee if Force Majeure prevails against the
Transferee, in accordance with Article 8.6;
or
|
|
9.1.4
|
by
the Transferee if the Transferor, and by the Transferor if the Transferee,
expressly states or by its conduct indicates that it will not discharge
any of its obligations
hereunder.
|
Asset
Transfer Agreement
-9-
|
9.2
|
Effect of
Termination. The termination of this Agreement shall not
affect any rights and obligations which have accrued prior to the
termination; provided, however, that nothing herein shall relieve any
Party of any liability for any actions that occur before the termination
of this Agreement.
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9.3
|
Termination of the Relevant
Agreement. In the event of the termination hereof for
any reason, the Exclusive Cooperation Agreement concluded by the Parties
on [•] shall be terminated
accordingly.
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|
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Article
10 Confidentiality
|
|
10.1
|
Non
Disclosure. From the date hereof until 5 years
hereafter, the Transferor shall not disclose or communicate to any person,
other than to employees of the Parties and their respective affiliates for
the sole purpose of implementing the transactions contemplated hereunder
or as instructed by the Transferee, any Trade Secret which may be within
or may come into their knowledge.
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10.2
|
Breach of
Obligations. The Parties shall take all necessary
measures (including the signing of confidentiality agreements) to ensure
that their respective directors, employees, agents, contractors, suppliers
and advisors also comply with the confidentiality obligations set forth in
this Chapter, and shall arrange for the summary dismissal of any such
person who breaches these
obligations.
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10.3
|
Exceptions. The
disclosure of any Trade Secret by any Party shall not be deemed to be in
breach of this Article if any of the following circumstances
apply:
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10.3.1
|
the
information is in the public domain at the time of
disclosure;
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10.3.2
|
the
information is disclosed pursuant to the prior written agreement of the
Parties;
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10.3.3
|
the
information is required by any government authority or law to which a
Party, or its affiliate is subject;
or
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10.3.4
|
the
information is provided to any director, employee, agent, contractor,
supplier or advisor of an affiliate in the ordinary course of business
pursuant to the prior written agreement of the
Parties.
|
-10-
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|
Article
11 Governing Law and
Dispute Resolution
|
|
11.1
|
Governing
Law. This Agreement shall be governed by PRC Law.
Where PRC Law is silent on a particular matter relating to this Agreement,
reference shall be made to international commercial
practice.
|
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11.2
|
Dispute
Resolution.
|
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11.2.1
|
If
any dispute arises in connection with this Agreement, the Parties shall
attempt in the first instance to resolve such dispute through friendly
consultation or mediation.
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11.2.2
|
If
the dispute cannot be resolved in the above manner within thirty (30) days
after the commencement of consultations, either Party may submit the
dispute to arbitration as
follows:
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|
11.2.2.1
|
all
disputes arising out of or in connection with this Agreement shall be
submitted to China International Economic and Trade Arbitration Commission
which shall be conducted by three (3) arbitrators in Beijing in accordance
with the Commission’s arbitration rules;
and
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|
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11.2.2.2
|
the
arbitration shall be conducted in the Chinese language, with the arbitral
award being final and binding upon the Parties. The cost of
arbitration shall be allocated as determined by the
arbitrators.
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11.2.3
|
when
any dispute is submitted to arbitration the Parties shall continue to
perform this Agreement.
|
|
|
Article
12 Notices
|
|
12.1
|
Notice. All
notices and communications between the Parties shall be made in writing
and in the English and/or Chinese language by facsimile transmission,
delivery in person (including courier service) or registered mail to the
addresses set forth below:
|
|
If
to Transferor
|
:
|
Kunming
Television Station
|
|
Address
|
:
|
Xx.
000, Xxxxxx Xxxxxx, Xxxxxxx Xxxx, Xxxxxx
|
|
Xxxxxxxx;
|
||
|
Tel
|
:
|
0871-
|
|
Fax
|
:
|
0871-
|
|
Attn
|
:
|
Mr.
Yongping LV
|
Asset
Transfer Agreement
-11-
|
If
to Transferor
|
:
|
Kunming Taishi Information Cartoon Co., Ltd. |
|
Address
|
:
|
[•]
|
|
Tel
|
:
|
[•]
|
|
Fax
|
:
|
[•]
|
|
Attn
|
:
|
[•]
|
|
12.2
|
Time of Receipt. The
time of receipt of the notice or communication shall be deemed to
be:
|
|
12.2.1
|
the
time set
forth in the transmission journal, in the case of a facsimile
transmission, unless such facsimile transmission is sent after 5:00 p.m.,
in which event the date of receipt shall be deemed to be the following
business day in the place of
receipt;
|
|
12.2.2
|
the
time of signing of a receipt by the receiving Party in the case of
delivery in person (including courier service);
and
|
|
12.2.3
|
7
days from that shown on the official postal receipt, in the case of
registered mail.
|
|
|
Article
13 Miscellaneous
|
|
13.1
|
Entire
Agreement. This Agreement represents the full agreement
of the Parties as to the subject matter
hereof.
|
|
13.2
|
Amendment. This
Agreement can only be modified, altered or supplemented through written
agreements signed by the Parties.
|
|
13.3
|
No
Waiver. Unless otherwise provided by the PRC Law or
agreed by the Parties, any failure or delay on the part of any Party to
exercise any right under this Agreement shall not operate as a waiver
thereof.
|
|
13.4
|
Severability. The
invalidity of any provision of this Agreement shall not affect the
validity of any other provision of this Agreement which is unrelated to
that provision.
|
|
13.5
|
Language. This Agreement
has been prepared in Chinese in 6 sets of originals. Each Party shall hold
3 set of original.
|
|
13.6
|
No
Agency. The status of the Parties under this Agreement
shall be that of independent contractors, and no Party has the right to
make commitments for or on behalf of the other
Party.
|
|
13.7
|
Tax. The
Parties shall be responsible for its own tax obligations incurred in
connection with this Agreement.
|
-12-
|
13.8
|
Expenses. Unless
otherwise specified, each Party shall bear its own expenses incurred in
preparing and performing this
Agreement.
|
|
13.9
|
Further
Assurance. Upon the request of any Party, the Parties
shall execute such documents and do such things as are reasonably
necessary to give effect to the transactions contemplated
herein. If approvals from Government Authorities are required
for any transactions contemplated herein, the Transferor shall use its
best endeavors to obtain such
approvals.
|
|
13.10
|
Taking Effect. This
Agreement shall be effective upon signing by the Parties’ authorized
representatives and shall be affixed with their respective company
seals.
|
[The
space below is intentionally left blank.]
Asset
Transfer Agreement
-13-
IN WITNESS WHEREOF, the
Parties have arranged for this Agreement to be signed by their duly authorized
representatives on the date first indicated above.
|
For
and on behalf of
Kunming
Television Station
|
|
Signature
|
: | |
|
Name
|
: |
|
|
Title
|
: |
|
|
Company
Seal
|
:
|
|
For
and on behalf of
Kunming
Taishi Information Cartoon Co.,
Ltd.
|
|
Signature
|
: | |
|
Name
|
: |
|
|
Title
|
: |
|
|
Company
Seal
|
:
|
Asset
Transfer Agreement
-14-
Appendix
I
List
of Assets
Asset
Transfer Agreement
-15-
