Framework Agreement
[Reference
Translation]
by
and between
Hubei
Chutian Broadcasting and Television Network Co., Ltd.
and
Jinan
Youxiantong Network Technology Co., Ltd.
June
2008
Table
of Contents
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Chapter
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Page
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1
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Definitions
and Interpretations
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2
|
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2
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Assets
Transfer
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5
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3
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Establishment
of New Company
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7
|
|
4
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Transferred
Assets
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9
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5
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Financial
Arrangement
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10
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6
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Exclusive
Cooperation Rights of Business
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11
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7
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Representations
and Warranties
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12
|
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8
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Covenants
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13
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9
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Conditions
Precedent
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15
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10
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Closing
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15
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11
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Effective
Date and Termination
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16
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12
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Events
of Breach
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17
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13
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Force
Majeure
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18
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14
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Confidentiality
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19
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15
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Miscellaneous
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19
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1
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This
Framework
Agreement (Agreement)
is
entered into on June 05th,
2008 in
Wuhan, Hubei Province, People’s Republic of China (PRC)
by
and between
|
(1)
|
Hubei
Chutian Broadcasting and Television Network Co., Ltd. (Party
A),
a
legal entity established under the laws of the PRC with its registered
address at Special Xx.0 Xxxxx Xxxxxxx, Xxxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx,
Xxxxx Xxxx, Xxxxx 000000, the PRC;
and
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(2)
|
Jinan
Youxiantong Network Technology Co., Ltd.
(Party
B),
a legal entity established under the laws of the PRC with its registered
address at Suite 1014 Wenjiao Tower, Qingnian East Road, Jinan, Shandong
Province 250004, the PRC,.
|
(Party
A
and Party B each individually referred to as a Party
and
collectively as the Parties.)
RECITALS
Party
A
has already obtained the licenses necessary to conduct the Business (as defined
below) in the PRC and Party A intends to jointly establish Hubei Chutian Video
& Information Network (New
Company)
in
Hubei Province with Party B in order to promote the cooperative operation of
the
Business.
NOW,
THEREFORE,
the
Parties agree as follows:
Chapter
1 Definitions
and Interpretations
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1.1
|
Definitions
|
Unless
otherwise indicated, the following terms in this Agreement shall have the
meanings set forth below:
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Affiliate
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in
relation to an entity, means a company:
(a) in
which the entity holds, directly or indirectly, at least 10% of the
equity
interest or voting rights;
(b) which
is a Subsidiary of the Parent Company of the entity;
(c) which
owns or controls, directly or indirectly, the equity interest or
voting
rights of the Parent Company of the entity; or
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(d) which
is a Subsidiary of the Parent Company of the entity described in
(c)
above;
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2
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Appraisal
|
the
respective appraisal on the Assets, Contributed Assets or Transferred
Assets conducted by a qualified appraisal agent;
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Assets
|
the
assets relating to the Business as listed in Schedule I, which, for
the
avoidance of doubt, are free of all debts, correspond to the assets
of the
Business in relation to 800,000 of the registered subscribers to
Party A
and are valued at XXX 000
xxxxxxx (xx which the appraisal value of the physical assets shall
be XXX
000 million, and the appraisal value of the intangible assets value
relating to exclusive operating rights and network resources shall
be XXX
000 million);
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Contributed
Assets
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the
assets that are contributed to the New Company by Party A as capital
as
listed in Schedule II, which, for the avoidance of doubt, does not
include
any debts or the value of the proprietary rights and are valued at
XXX 00
million;
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Transferred
Assets
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the
assets to be transferred to the New Company subsequent to its
establishment by Party A as listed in Schedule III, which, for the
avoidance of doubt, are free of all debts and the value of intangible
rights, and are valued at XXX 000 million upon the agreement of the
Parties;
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Business
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Means
(within the Exclusive Cooperation Area):
l
any
business with respect to the design, construction and operation of
cable
TV projects and networks (including TV fee collection of distribution
net
and network leases);
l
any
business with respect to the management of construction, marketing
and
operation of the analog and digital TV networks and digital TVs (including
sale of set-top Boxes, sale of pay-per-program and digital TV fee
collection); and
l
value-added
network business;
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Closing
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Execution
and delivery of the transaction documents by the Parties and other
relevant parties upon the date of the fulfillment of all the conditions
precedent listed in Article 9.1 (unless waived in accordance with
Article
9.2.3) which shall occur no later than June 10th,
2008, unless extended in accordance with Article 9.2.2;
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3
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Force
Majeure
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any
earthquake, storm, fire, flood, war or other significant event of
natural
or human-caused disaster arising after signing hereof which is
unavoidable, not possible to overcome and is beyond the control of
either
party, and prevents the total or partial performance of this Agreement
by
either party;
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Government
Approvals
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as
defined in Article 7.2.5;
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Exclusive
Cooperation
Area
|
refers
to the all
the cable TV distribution networks that are fully owned through asset
or
equity purchase methods by Party A in all the following municipal
cities,
districts, counties, independent factories and mines that contain
800,000
registered subscribers: Xiantao City, Qianjiang City, Jinxiang Group,
Yicheng City, Gong’an County, Baokang County, Yuan’an County, Jingshan
County, Dangyang City, Shaxiang County, Guangshui City, Shennongjia
Forest
Area, Yingshan County, Qujialing Administration Zone, Tongcheng County,
Longganhu Administration Zone, and Zhongxiang City; in the event
that
Party B plans to expand the Exclusive Cooperation Area or to extend
the
cooperation regarding the other assets in relation to the Business,
Party
A shall execute the relevant documents with Party B (or its designated
party) so that the Parties may extend the Exclusive Cooperation Area
to
all the municipal cities, districts, counties, independent factories
and
mines in Hubei Province in which the cable distribution network is
acquired by Party A under the same conditions set forth hereunder,
in
which area the registered subscribers are no less than 1.6 million.
In the
event of no such expansion of the Exclusive Cooperation Area due
to Party
B, the cooperative operation related to the Business set forth hereunder
in the present Exclusive Cooperation Area may not be affected.
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Parent
Company
|
in
relation to a company, means a company of which the company is a
Subsidiary (as defined below);
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PRC
Laws
|
all
laws and legislation of the PRC that are in effect, including laws,
regulations, resolutions, decisions, decrees and orders of government
agencies and other documents of a legislative, administrative or
judicial
nature;
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RMB
|
Renminbi,
the lawful currency of the PRC;
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Subsidiary
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in
relation to a company, means a company in which another company holds,
directly or indirectly, 50% or more of the first company’s total equity
interest or voting rights;
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Tax
|
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
|
any
information relating to this Agreement or the parties, including
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;
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Transaction
Documents
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all
documents that require signing under PRC Law in order to complete
the
transactions contemplated under this Agreement;
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Transferred
Staff
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as
defined in Article 3.5.1.
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| 1.2 |
Interpretations
|
All
headings used herein are for reference purposes only and do not affect
the
meaning or interpretation of any provision hereof. Any reference herein
to an
Article, Chapter or Schedule is to an article, chapter or schedule of this
Agreement. Unless otherwise indicated, a reference herein to a day, month
or
year is to a calendar day, month or year. A reference to a business day
is to a
day on which commercial banks are open for business. The term “including”, shall
mean “including without limitation”.
Chapter
2 Assets
Transfer
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2.1
|
Asset
Appraisal
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2.1.1
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Party
A shall cause its Affiliates (Party A’s Affiliates in relation to the
Assets Transfer are listed in Schedule IV) to cause the Appraisal
of the
Assets.
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5
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2.1.2
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Party
A shall provide Party B in 10 days after the signing date of
this
Agreement with an Assets Appraisal report issued by the aforesaid
agent
.
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2.1.3
|
Where
the Assets Appraisal report is issued by the appraisal agency
appointed by
Party A and the appraisal amount is confirmed by the relevant
government
agencies, Party B undertakes to raise no objection to the appraisal
amount.
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2.2
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Assets
Transfer
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2.2.1
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Upon
the completion of the Appraisal stipulated in Article 2.1, Party
A shall
cause its Affiliates as listed in Schedule IV to each transfer
the
respective Assets to Party A.
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2.2.2
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Party
A shall obtain all Government Approvals necessary for the Assets
transfer
(including without limitation those Government Approvals for
the transfer
of state-owned assets) in accordance with Article 2.2.1. Party
A shall
ensure that all procedures with respect to Assets transfer will
be
completed , and it will have obtained the entire ownership of
the Assets
in accordance with PRC Law.
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2.2.3
|
Party
A shall ensure that the Assets obtained by Party A are free from
any
encumbrances, and that Party A is entitled to exploit its ownership
of the
Assets or dispose of the Assets freely pursuant to the relevant
laws and
regulations.
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Chapter
3 Establishment
of New Company
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3.1
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New
Company
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3.1.1
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As
soon as practicable after the completion of the Assets transfer
stipulated
in Chapter 2, the parties shall each contribute their registered
capital
in order to establish the New Company. After the establishment
of the New
Company, the New Company shall cooperate with Party A to operate
the
Business within the Exclusive Cooperation
Area.
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3.1.2
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The
registered capital of the New Company shall be RMB 100 million.
Party A
will contribute the Contributed Assets to the New Company and
obtain 51%
of the equity interests therein; Party B will make a cash contribution
of
XXX 00 million to the New Company, in which RMB 49 million is
contributed
to the registered capital and obtain 49% of the equity interests
therein,
and the remainder RMB 2 million is contributed to the capital
reserves and
jointly possessed by the Parties,.
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6
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| 3.2 |
Appraisal
of the Contributed Assets
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3.2.1
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Party
A shall, at its own cost, conduct the Appraisal of the Contributed
Assets,
these costs to be reimbursed by the New Company following its
establishment.
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3.2.2
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Party
A shall ensure that the Appraisal in Article 3.2.1 shall be completed
no
later than June 10th, 2008.
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3.3
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Establishment
of the New Company
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3.3.1
|
As
soon as practicable after the completion of the Appraisal stipulated
in
Article 3.2, Party A shall contribute the Contributed Assets
and Party B
shall contribute RMB 51 million to jointly establish the New
Company in
Wuhan, PRC.
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3.3.2
|
Party
A shall make advance payment to obtain any and all prior approvals
necessary for contributing the Contributed Assets to the New
Company and
obtaining 51% of the equity interests of the New Company under
PRC Law.
The New Company shall reimburse the foregoing expenses after
its
establishment.
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3.3.3
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The
amount of Party A’s contribution to the New Company’s registered capital
shall be in accordance with the appraised value of the Contributed
Assets
described in the Appraisal report. Should the appraised value
of the
Contributed Assets be less than XXX 00, million, Party A shall
pay the
difference by contributing other
assets.
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3.3.4
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The
New Company’s business scope shall include design, installation and
related business of the cable TV projects; design, construction,
management and maintenance of the cable TV network; management
of the
business with respect to the analog TV, digital networks and
digital TV,
consultation, software, system integration and construction and
other
value-added business with respect to the cable digital TV as
determined by
the parties.
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3.4
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Registration
of the New Company
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| 3.4.1 |
Party
A shall make advance payment to cause the New Company to obtain
the
business license , the tax registration certificate and all other
necessary certificates and filings necessary for the establishment
and
contemplated operation of the New Company under PRC Law. The
New Company
shall pay back the foregoing expenses after its
establishment.
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| 3.4.2 |
In
the event that the documents related to the Parties’ contribution are
fully prepared, Party A shall ensure that New Company shall obtain
all
certificates as described in Article 3.4.1 before June 10th,
2008.
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7
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3.5
|
Transfer
of Employees
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Upon
the
establishment of New Company, Party A shall:
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3.5.1
|
provide
Party B with written notice as to which of Party A’s employees will be
retained by the New Company (Transferred Staff), which
personnel shall include the individuals listed in Schedule V;
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3.5.2
|
be
responsible for the payment of any costs related to any labor
disputes
that may arise from Transferred Staff in respect of their employment
relationship with Party A;
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3.5.3
|
ensure
that any arrangement made by Party A with the Transferred Staff
shall not
give rise to or result in any adverse impact on the employee
relations,
business, operations or financial or Tax position of Party A
or the New
Company; nor will any commitment be made, or additional obligation
or
liability be incurred, by the New Company;
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In
the
event that there is any such commitment, obligation or liability (including
liability in relation to Tax) in respect of the New Company as mentioned
in
Article 3.5.3, Party A shall indemnify the New Company from all losses,
claims,
damages, costs and expenses arising from any and all such commitment, obligation
or liability. Further, the rights and obligations between the staff of
the New
Company and the New Company shall be determined in accordance with the
rules and
regulations of the New Company. Any legal disputes arising hereunder shall
be
resolved in accordance with the Labor
Law
and the
Employment
Contract Law.
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3.5.4
|
make
its best effort to cause the Transferred Staff to enter into
standard
employment contracts to the satisfaction of Party B, or to enter
into
employee secondment contracts to the satisfaction of Party B
containing
non-competition and confidentiality commitments, so as to second
the
Transferred Staff to work in the New Company.
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3.6
|
Corporate
Governance
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|
3.6.1
|
The
New Company shall establish a board of directors (Board),
consisting of 5 directors. Party B shall appoint 2 directors,
and Party A
shall appoint 3 directors.
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3.6.2
|
The
New Company’s general manager shall be appointed by Party A upon the prior
written consent of Party B. The CFO shall be appointed by Party
B upon the
prior written consent of Party A.
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8
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3.7
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Exclusive
Cooperation
|
During
the term of this Agreement, Party A shall not, and shall ensure that its
shareholders shall not, directly or indirectly cooperate with any 3rd parties
(except for Party B and the New Company) with respect to the Business,
including
by establishing any entity within the Exclusive Cooperation Area.
Chapter
4 Transferred
Assets
|
4.1
|
Transferred
Assets
|
|
4.1.1
|
Within
5 days after the establishment of the New Company, Party A and
the New
Company shall enter into an assets transfer agreement, under
which Party A
shall sell to the New Company all of the Transferred Assets in
installments. All the Transferred Assets shall be transferred
to the New
Company within 6 months after the Closing. The asset transfer
agreement
referred to in this Section 4.1.1 shall include a specific plan
for the
transferred assets in installments (Transfer Plan), which
shall be formulated on the basis of the requirements of the New
Company’s
business operation and as agreed upon by the Parties. For the
avoidance of
doubt, the Parties acknowledge and agree that the Contributed
Assets plus
the Transferred Assets shall correspond to the Assets of 800,000
of the
registered subscribers listed in Appendix I.
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4.1.2
|
Party
A shall, at its own expense, obtain any and all Government Approvals
necessary for the Transferred Assets (including all approvals
necessary
for the transfer of state-owned assets) as described in Article
4.1.1.
Party A shall ensure that all procedures with respect to the
transfer of
each part of Transferred Assets will be completed, and the New
Company
will have obtained the entire ownership of each part of Transferred
Assets
within 30 days after such part of the Transferred Assets is transferred
according to the transfer schedule in the assets transfer agreement,
in
accordance with PRC Law.
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4.1.3
|
Party
A shall ensure that the Transferred Assets obtained by the New
Company are
free from any encumbrances, and that the New Company is entitled
to
exploit its ownership of the Transferred Assets or dispose of
the
Transferred Assets freely pursuant to the relevant laws and regulations.
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| 4.1.4 |
In
the event that Party B plans to expand the Exclusive Cooperation
Area or
to extend the cooperation regarding the other assets in relation
to the
Business, Party A shall execute the relevant documents with Party
B (or
its designated party) so that the Parties may extend the Exclusive
Cooperation Area to all the municipal cities, districts, counties,
independent factories and mines in Hubei Province in which the
cable
distribution network is acquired by Party A under the same conditions
set
forth hereunder, in which area the registered subscribers are
no less than
1.6 million.
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Framework
Agreement
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9
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4.2
|
Consideration
|
Party
A
acknowledges and agrees that as the consideration for the Transferred Assets
the
New Company shall make payment in the amount of RMB 363 million in installments.
The first installment of RMB 140 million will be payable within 5 days
of the
execution of the related asset transfer agreement and the Service Agreement
under Section 5.2.2; the remainder of the consideration valued at XXX 000
xxxxxxx xxxxx xx paid within 6 months after the Closing. The specific time
and
method of the payment mentioned herein shall be pursuant to the Transfer
Plan
set forth under the assets transfer agreement entered into by the
Parties.
Chapter
5 Financial
Arrangement
|
5.1
|
Initial
Financial Support from Party B
|
|
In
order to enable the New Company to pay for the Transferred Assets
,Party B
shall extend to the New Company initial financial support in
the amount of
RMB 140 million by a method agreed between the Parties. The terms
of the
agreement for such financial support entered into by the New
Company and
Party B shall be confirmed by Party
A.
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5.2
|
Further
Financial Support of Party B and Service
Agreement
|
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5.2.1
|
In
addition to the initial financial support prescribed in Section
5.1,
within 6 months after the Closing, Party B shall extend to the
New Company
financial support in the full amount of RMB 223 million by a
method agreed
between the Parties. Upon the completion of said further financial
support, Party B shall have extended to the New Company RMB 414
million in
total,
of
which XXX 00 xxxxxxx xxxxx xx the registered capital and capital
reserves,
and XXX 000 xxxxxxx xxxxx xx the supporting funds. The New Company
shall
use the said RMB 363 million as consideration for the Transferred
Assets,
and the remaining XXX 00 million provided by Party B shall be
used as the
New Company’s operation funds.
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|
5.2.2
|
Party
A acknowledges and agrees that one of the conditions for the
provision of
the said financial support to the New Company by Party B in accordance
with Article 5.2.1 is that the New Company shall enter into an
exclusive
technology service agreement with Party B (Service
Agreement). In accordance with the Service Agreement, the New
Company shall only hire Party B to provide exclusive technology
service
during the term of this Agreement. In accordance with the Service
Agreement, the New Company shall pay 11% of its net profits to
Party B, as
consideration for the exclusive technology services. The profits
of the
New Company shall be apportioned to Party A and Party B at the
rate of 40%
and 60% respectively. Other specific terms of the Service Agreement
shall
be separately determined by the parties . The term of the Service
Agreement shall be 20 years and Party B shall enjoy a right of
first
refusal to extend the aforesaid term for another 10 years upon
expiration.
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Framework
Agreement
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10
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Chapter
6 Exclusive
Cooperation Rights of Business
|
6.1
|
Exclusive
Cooperation Agreement
|
Upon
the
establishment of the New Company, Party A and the New Company shall enter
into
an exclusive cooperation agreement (Exclusive
Cooperation Agreement).
The
term of the Exclusive Cooperation Agreement shall be 20 years and the New
Company shall enjoy a right of first refusal to extend the aforesaid term
for
another 10 years upon expiration.
|
6.2
|
Cooperation
Scope
|
Party
A
shall help the New Company to obtain all possible support and most-favored
treatment with respect to the Business, including exclusive operation with
Party
B to provide any services related to the Business within the Exclusive
Cooperation Area.
|
6.3
|
Exclusive
|
|
6.3.1
|
Party
A shall not, and shall ensure that its shareholders shall not,
directly or
indirectly (i) encourage or ask other individual or entity related
to any
business or services under the Exclusive Cooperation Agreement
to address
enquiries; (ii) accept such enquiries from the aforesaid individual
or
entity; (iii) communicate, negotiate with the aforesaid individual
or
entity; or (iv) provide the aforesaid individual or entity with
information.
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6.3.2
|
Should
Party A or its shareholders receive any invitation or other documents
regarding entering into any transaction or service agreement
under the
Exclusive Cooperation Agreement from any 3rd parties, Party A
shall
promptly notify Party B. Party A shall ensure that its shareholders
comply
with Article 6.3.1 and be liable for any breach by its shareholders
of
Article 6.3.1.
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Framework
Agreement
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11
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Chapter
7 Representations
and Warranties
|
7.1
|
Joint
Representations and Warranties
|
|
Each
of the parties represents and warrants
that:
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|
7.1.1
|
it
has all necessary power and authority to execute, deliver and
perform this
Agreement and all Transaction Documents to which it is a party;
|
|
7.1.2
|
the
execution and performance of this Agreement and any Transaction
Documents
to which it is a party have been duly and validly authorized
by all
necessary corporate action; and
|
|
7.1.3
|
the
execution, delivery and performance of this Agreement or any
Transaction
Documents to which it is a party will not contravene, conflict
with, or
result in a violation of any provision of its organizational
documents or
any contract, agreement, understanding, other legal arrangement,
law or
order to which it is subject.
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7.2
|
Representations
and Warranties of Party A
|
|
Party
A further represents and warrants to Party B
that:
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|
7.2.1
|
the
Assets, Contributed Assets and Transferred Assets are free from
any
encumbrances;
|
|
7.2.2
|
there
is no lawsuit, third party claim, order or investigation pending
against
itself relating to Assets, Contributed Assets, Transferred Assets
or
Business by any third party, court, or governmental or arbitral
body;
and
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|
7.2.3
|
all
agreements with third parties, including employees and customers,
have at
all times been honored completely and timely by
itself;
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|
7.2.4
|
the
Assets, Contributed Assets and Transferred Assets constitute
all of the
assets used in or necessary for the operation of the Business;
and
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|
7.2.5
|
all
the consents, permissions, approvals and registrations as required
by PRC
Law (Government Approvals, including those listed in
Schedule VI) have been obtained from the relevant competent administration
agencies and such Government Approvals are
valid.
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7.3
|
Independent
Effect of Representations and
Warranties
|
The
representations and warranties shall be separate and independent and, save
as
expressly provided, shall not be limited by reference to any of the other
representations and warranties or anything in this Agreement.
Framework
Agreement
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12
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Chapter
8 Covenants
|
8.1
|
Duties
in Respect of the Transferred
Staff
|
Prior
to
the New Company’s hire of the Transferred Staff, Party A shall:
|
8.1.1
|
fully
settle the severance payments or enter into relevant agreements
with the
Transferred Staff, as required by PRC
Law;
|
|
8.1.2
|
pay
all required social insurance premiums for the Transferred Staff
during
the period, in which such Transferred Staff work with Party A,
in full and
on time, or attend to all necessary procedures to obtain exemptions
or
waivers of such obligations from relevant government authorities
and (or)
the Transferred Staff to the extent necessary, to ensure that
the
Transferred Staff may be employed by the New
Company;
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|
8.1.3
|
fully
pay all wages, allowances, subsidies (including medical subsidies),
bonuses or other outstanding payments or benefits to any of the
Transferred Staff during the period, in which such Transferred
Staff work
with Party A; and
|
|
8.1.4
|
withhold,
file and pay the individual income tax payable on wages, bonuses,
allowances, subsidies, or other payments or benefits received
in respect
of the Transferred Staff.
|
|
8.2
|
Duties
in Respect of the New Company / the
Assets
|
Party
A
covenants that it shall not authorize any other party, without the prior
written
consent of Party B, to:
|
8.2.1
|
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, Contributed Assets and Transferred Assets or grant or
issue or
agree to grant or issue any
guarantee;
|
|
8.2.2
|
enter
into any transaction or arrangement with respect to the Assets,
Contributed Assets and Transferred
Assets;
|
|
8.2.3
|
depart
from the ordinary course of Party A or the New Company’s daily business
operations in either of the following
respects:
|
| 8.2.3.1 |
enter
into any agreements or materially modify or terminate any agreements
related to the Business; and
|
| 8.2.3.2 |
enter
into any agreements relating to the Business signed after the
date hereof
where the value or consideration of the proposed agreement exceeds
RMB 1
million or has a term of more than 3
months.
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8.2.4
|
increase
or agree to increase the remuneration (including bonuses, commissions
and
benefits in kind) of any of the members of the Board or employees
of the
New Company or provide or agree to provide any gratuitous payment
or
benefit to any such person or any of their dependents;
and
|
|
8.3
|
Transactions
|
Unless
otherwise provided hereunder, in respect of the transactions contemplated
under
this Agreement, Party A shall, at its own expense, obtain all consent,
approval
or authorization of, or declaration, filing or registration with, any
governmental authority in connection with the execution, delivery and
performance of this Agreement and any Transaction Documents to which it
is a
party.
|
8.4
|
Government
Approvals
|
Party
A
shall, using its own expenses, ensure its annual inspection and/or the
extension
of the Government Authorization (if applicable) appropriately and on time,
and
ensure the validity of Government Authorization during the term of Exclusive
Cooperation Agreement as prescribe by Article 6.1 as well as the term as
the
parties agree to extend.
|
8.5
|
Non-competition
|
After
Closing, unless obtaining the prior consent of Party B, Party A, within
the
Exclusive Cooperation Area, shall not, and shall ensure that its shareholders
shall not invest or manage any business directly or indirectly in competition
with the Business, or employ, engage or try to engage any Transferred
Staff.
|
8.6
|
Indemnification
|
Each
party hereby unconditionally and irrevocably agrees to indemnify indefinitely
the other party and hold it harmless from and against all losses, claims,
damages, expenses (including legal expenses) and liabilities which the
other
party may sustain, suffer or incur in connection with the transactions
contemplated under this Agreement and as a result of any breach of this
Agreement.
|
8.7
|
Notification
by parties
|
|
8.7.1
|
Party
A shall forthwith notify Party B upon becoming aware of any event
that may
show, reveal or cause any of its warranties hereunder to be incorrect,
untrue, misleading or breached in any material respect or that
may have
any material adverse effect on the assets or liabilities of Party
A.
|
|
8.7.2
|
Party
B shall forthwith notify Party A upon it becoming aware of any
event that
may show, reveal or cause any warranties given by Party B hereunder
as or
to be incorrect, untrue, misleading or breached in any material
respect.
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Chapter
9 Conditions
Precedent
|
9.1
|
Conditions
Precedent
|
Closing
is subject to the satisfaction of all of the following conditions
precedent:
|
9.1.1
|
the
confirmation of the Transaction Documents by all the parties
thereto;
|
|
9.1.2
|
the
representations and warranties of the Parties remaining true
and accurate
and being fully adhered to in all material respects at the time
of
Closing;
|
|
9.1.3
|
the
due completion of Party A’s covenants under Articles 2 and
3.3.2.
|
|
9.2
|
Satisfaction
and Waiver of Conditions
Precedent
|
|
9.2.1
|
Within
3 business days after the satisfaction of the conditions precedent
described in Article 9.1, Party A shall notify Party B. Within
3 business
days after the issuance of the said notification, Party B shall
confirm
the same in writing to Party A. Closing shall then be arranged
within 3
business days after receipt of Party B’s confirmation.
|
|
9.2.2
|
In
the event that the conditions precedent set forth in Article
9.1 are not
fulfilled (or waived as provided in Article 9.2.3) on or before
June 10th,
2008, or such later date as the parties may agree, this Agreement
(except
Chapter 11) shall become null and void and be of no further effect
whatsoever and all the obligations and liabilities of the parties
hereunder shall cease and terminate (save for any antecedent
breaches of
this Agreement).
|
|
9.2.3
|
One
or more of the conditions precedent listed in Article 9.1 may
be waived by
Party B at its sole discretion by sending a notice in writing
to Party
A.
|
Chapter
10 Closing
|
10.1
|
Closing
|
Subject
to the conditions precedent having been fulfilled (or waived as provided
in
Article 9.2.3), Closing shall be held at the offices of TransAsia Lawyers
Beijing Office (Suite 2218, China World Tower 1, Xx. 0 Xxxxxxxxxxxxx Xxxxxx,
Xxxxxxx, XXX) or at such other location as the parties shall agree.
At
Closing, to the extent not previously executed and delivered, the parties
shall
execute and deliver, and shall cause any of the other parties thereto to
execute
and deliver, the Transaction Documents.
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15
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10.2
|
Payment
of purchase price
|
Party
B
shall:
|
10.2.1
|
within
6 months after the establishment of the New Company, contribute
XXX 00
million to the New Company as the registered capital and capital
reserves;
|
|
10.2.2
|
after
the establishment of the New Company, provide the New Company
with initial
financial support in the aggregate amount of RMB 140 million;
and
|
| 10.2.3 |
in
addition to the financial support set forth under Section 10.2.2,
within 6
months after the Closing, provide financial support to the New
Company in
the full sum of RMB 223 million by a method agreed by the Parties,
subject
to the proper completion of the obligations of Party A under
Chapters 3 to
8.
|
Party
B
shall have fulfilled all of its obligations in relation to capital contribution
and payments. For the avoidance of doubt, Party B shall have made contribution
to the registered capital and capital reserves of the New Company in the
amount
of XXX 00 million and shall have provided to the New Company with financial
support in the aggregate amount of RMB 363 million. The New Company shall
use
said supporting funds to pay to Party A the consideration for the Transferred
Assets.
Chapter
11 Effective
Date and Termination
|
11.1
|
Effective
Date
|
This
Agreement shall be effective upon the date of its signing by the parties.
|
11.2
|
Termination
|
|
11.2.1
|
This
Agreement shall terminate with immediate effect if the parties
cannot
complete the negotiation and execution of the agreements necessary
for the
transactions contemplated under this Agreement above within 90
days after
the execution hereof unless such period is extended by the parties,
except
for the loan agreements in relation to the loan arrangements
in Article
5.3.1.
|
|
11.2.2
|
This
Agreement may be terminated with immediate effect by either party
by means
of written notice to the other parties under any of the following
circumstances:
|
| 11.2.2.1 |
where
Closing has not occurred on or before 30 June 2008 provided,
however, that
the right to terminate this Agreement shall not be available
to either
party whose failure in any material respect to fulfill any obligation
under this Agreement shall have been the cause of the failure
for any
condition precedent to Closing to be
satisfied;
|
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16
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| 11.2.2.2 |
where
the other party has committed a breach of this Agreement, as
described in
Article 12.1;
|
| 11.2.2.3 |
where
the other party becomes insolvent, if an order is made or resolution
passed for the administration, winding-up or dissolution of either
party
(otherwise than for the purposes of a solvent corporate reconstruction),
if an administrative or other receiver, manager, liquidator,
administrator, trustee or similar officer is appointed over all
or a
substantial part of the assets of such other party, or if such
other party
enters into or proposes any composition or arrangement with its
creditors
generally analogous to the foregoing;
or
|
| 11.2.2.4 |
where
Force Majeure prevails for a period of 30 days or more and has
a material
adverse effect on this Agreement.
|
|
11.3
|
Consequence
Upon Termination
|
Upon
termination hereof, this Agreement shall be of no further effect and no
party
shall have any right against any of the other parties in connection with
this
Agreement; provided, however, the Parties shall continue with the performance
of
any and all duties hereunder before the termination of this
Agreement.
Chapter
12 Events
of Breach
|
12.1
|
Events
of Breach
|
The
occurrence of any 1 or more of the following events shall constitute a
breach of
this Agreement:
|
12.1.1
|
either
party 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 the other party’s written notice requesting such remedy;
and
|
|
12.1.2
|
any
representation or warranty made by either party shall prove to
have been
false or misleading in any material
respect.
|
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Agreement
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12.2
|
Liabilities
for Breach
|
Where
either party commits a breach of this Agreement, it shall be liable to
compensate the other party for any and all damages caused to it as a result
of
the breach, excluding indirect or consequential damages.
Chapter
13 Force
Majeure
|
13.1
|
Consultation
|
In
the
event of Force Majeure, the parties shall promptly consult with each other
to
find a solution to the situation.
|
13.2
|
Relief
from Obligations
|
Should
the occurrence of a Force Majeure result in either 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.
|
13.3
|
Suspension
of Performance
|
Subject
to this Chapter 13, 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
either party.
|
13.4
|
Written
Evidence
|
The
party
claiming Force Majeure shall, as soon as possible after the occurrence
of the
Force Majeure, inform the other party of the situation and specify the
reason
for its failure to perform this Agreement, so as to minimize the damages
inflicted upon that party, and shall provide the other party with written
evidence, certified by the relevant government authority, of the occurrence
of
the Force Majeure.
|
13.5
|
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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Chapter
14 Confidentiality
|
14.1
|
Non-Disclosure
|
From
the
date hereof until 5 years hereafter, neither party shall disclose or communicate
to any person, other than to their respective employees and affiliates
for the
sole purpose of implementing the agreements contemplated hereunder or as
instructed by the other parties, any Trade Secret which may be within or
may
come into its knowledge.
|
14.2
|
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 without compensation of any such person who breaches
these
obligations.
|
14.3
|
Exceptions
|
The
disclosure of a Trade Secret by either party shall not be deemed to be
in breach
of this Chapter if any of the following circumstances apply:
|
14.3.1
|
the
information is in the public domain at the time of
disclosure;
|
|
14.3.2
|
the
information is disclosed pursuant to the prior written agreement
of the
parties;
|
|
14.3.3
|
the
information is required by any government authority or law to
which a
party, or its affiliate is subject;
or
|
|
14.3.4
|
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.
|
Chapter
15 Miscellaneous
|
15.1
|
Copies
|
|
15.1.1
|
This
Agreement shall be executed in 2 sets of originals in the Chinese
language, with 1 set of originals for each
party.
|
|
15.1.2
|
This
Agreement may be executed in 1 or more counterparts, each of
which will be
deemed to be an original copy of this Agreement and all of which,
when
taken together, will be deemed to constitute one and the same
instrument.
|
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19
-
|
15.2
|
Notice
|
|
All
notices and communications between the parties shall be made
in writing or
by fax, delivery in person (including by courier service) or
registered
mail letter to the appropriate correspondence addresses set forth
below:
|
If
to
Party A:
Hubei Chutian Broadcasting and Television Network Co.,
Ltd.
|
Address:
|
Special
Xx.0 Xxxxx Xxxxxxx, Xxxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxx
Xxxx, Xxxxx
000000, the PRC
|
|
Telephone:
|
[l]
|
|
Fax:
|
[l]
|
|
Attention:
|
XXXXX
Xxxxxxxx
|
If
to
Party B:
Jinan Youxiantong Network Technology Co., Ltd.
|
Suite
1014 Wenjiao Tower, Qingnian Xxxx Xxxx, Xxxxx, Xxxxxxxx Xxxxxxxx
000000,
the PRC
|
|
|
Telephone:
|
0000-00000000
|
|
0000-00000000
|
|
|
Attention:
|
PU
Yue
|
The
time
of receipt of the notice or communication shall be deemed to be:
|
15.2.1
|
if
by fax, at the time displayed in the corresponding transmission
record,
unless such facsimile is sent after 5:00 p.m. or on a non-business
day in
the place where it is received, in which case the date of receipt
shall be
deemed to be the following business
day;
|
|
15.2.2
|
if
in person (including courier service), on the date that the receiving
party signs for the document; or
|
|
15.2.3
|
if
by registered mail (including express mail), 7 days after the
issuance of
a receipt by the post office.
|
|
15.3
|
Governing
Law
|
|
The
formation of this Agreement, its validity, interpretation, execution
and
settlement of disputes hereunder will be governed by PRC
Law.
|
|
15.4
|
Dispute
Resolution
|
|
15.4.1
|
If
any dispute arises out of or in connection with this Agreement,
the
parties shall attempt in the first instance to resolve such dispute
through friendly consultation or
mediation.
|
|
15.4.2
|
If
the dispute cannot be resolved in the above manner within 30
days after
the commencement of consultations, either Party may submit the
dispute to
arbitration as follows:
|
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20
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| 15.4.2.1 |
All
disputes arising out of, or in regard to 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;
|
| 15.4.2.2 |
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 upon the determination of the
arbitrators.
|
|
15.4.3
|
When
any dispute is submitted to arbitration, the parties shall continue
to
perform their obligations under this Agreement.
|
|
15.5
|
Waiver
|
|
No
failure or delay on the part of either party in the exercise
of any right
hereunder shall impair such right or be construed to be a waiver
of such
right or acquiescence in any breach of any representation, warranty,
covenant or agreement herein, nor shall any single or partial
exercise or
waiver of any such right preclude other or further exercise thereof
or of
any other right.
|
|
15.6
|
Prior
Agreement
|
|
This
Agreement supersedes all prior agreements, whether written or
oral,
between or among the Parties with respect to its subject matter
and along
with the Transaction Documents and Supplemental Agreements, constitutes
the entire agreement among the Parties with respect to its subject
matter.
|
|
15.7
|
Amendment
|
No
amendment or other modification of this Agreement shall in any event be
effective unless the same shall be in writing and signed by an authorized
representative of each party hereto, and then such amendment or other
modification shall be an integral part of, and have the same effectiveness
as,
this Agreement.
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Agreement
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21
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|
15.8
|
Assignment
|
|
No
party may assign any of its rights and/or obligations under this
Agreement
without the prior written consent of the other parties. Subject
to the
preceding sentence, this Agreement will apply to, be binding
in all
respects upon, and inure to the benefit of, the successors, heirs,
personal representatives, executors and permitted assigns of
the
parties.
|
|
15.9
|
Severability
|
|
Where
any provision of this Agreement is subject to dispute or is determined
by
a competent court, arbitral body or government organization to
be invalid
or unenforceable, the remainder of this Agreement shall continue
in full
force and effect.
|
|
15.10
|
Cost
and Expense
|
|
Except
as otherwise expressly set forth herein or in any related documents,
all
fees, costs and expenses incurred in connection with the negotiation,
execution, delivery and performance of this Agreement and the
Transaction
Documents shall be paid by the party or parties incurring such
fees, costs
or expenses.
|
[The
space below is intentionally left blank.]
Framework
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-
22
-
IN
WITNESS WHEREOF,
the
parties hereto have duly executed this Agreement on the date first above
written.
Hubei
Chutian Broadcasting and Television Network Co., Ltd.
|
By:
|
|
|
Name:
Xxxxx Xxxx Ting
|
|
|
Title:
CEO/ With Chairman’s Authorization Letter
|
|
|
Company
seal
|
|
Jinan
Youxiantong Network Technology Co., Ltd.
|
By:
|
Pu
Yue
|
| Name: Pu Yue | |
| Title: Legal person | |
| Company seal: | |
Framework
Agreement
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23
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