ACQUISITION AGREEMENT
This
Acquisition Agreement (the “Agreement”)
is
made and entered into as of November 28, 2008, by and among:
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1.
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Legend
Media Inc.,
a
corporation incorporated under the Laws of the State of Nevada,
United
States of America ( “Legend”);
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2.
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Well
Chance Investments Limited, an international business company incorporated
under the Laws
of the British Virgin Islands (the
“Purchaser”);
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3.
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Music
Radio Limited, an international business company incorporated under
the
Laws of the British Virgin Islands (the "Seller"); and
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4.
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Ju
Baochun (巨宝春)
an individual holding PRC ID card No. __________________; and
Xxx Xxx (穥伟),
an individual holding PRC ID card No. __________________ (each
a
“Founder”
and collectively the “Founders”).
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The
Seller and the Founders are collectively referred to as the “Seller
Parties”,
and
each individually as a “Seller
Party”.
Legend, the Purchaser and the Seller Parties are referred to herein collectively
as the “Parties”
and
each individually as a “Party”.
Certain capitalized terms used in this Agreement are defined in Article 10
of
this Agreement.
RECITALS
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A.
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The
Purchaser is a wholly-owned subsidiary of
Legend.
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B.
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Legend
Media (Beijing) Information and Technology Co., Ltd. (乐君
(北京) 信息技术有榰公司),
is a wholly-owned subsidiary of CRI News Radio Limited, incorporated
in
the People's Republic of China ("PRC")
(“PRC
Subsidiary”).
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C.
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Beijing
Yinselingdong Advertising Co., Ltd. (北京栍綎灵动广告有榰公司)
is
a PRC company with limited liability (“YSLD”).
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D.
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Ju
Baochun and Xxx Xxx are the only shareholders of the Seller and
are
willing to cause the Seller to enter into this Agreement and complete
the
transaction contemplated herein.
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E.
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Xxx
Xxx and Ju Bingzhen (巨秉珍)
hold 60% and 40% of YSLD, respectively.
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| F. |
Ju
Baochun and Xxx Xxx hold 52% and 48% of Beijing Hongtenglianguang
Advertising Co., Ltd. (北京懁纂羬广广告有榰公司)
(“HTLG”),
respectively.
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G.
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On
the terms and subject to the conditions set forth herein, the Purchaser
desires to acquire, and the Seller Parties desire to transfer to
the
Purchaser, (i) effective control of YSLD by causing YSLD, Xxx Xxx
and Ju
Bingzhen to enter into Controlling Documents (as defined below)
with PRC
Subsidiary on or prior to Closing and (ii) transferred airline
advertising
business from HTLG to YSLD (collectively, the “Covenant”).
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NOW,
THEREFORE, the Parties hereby agree as follows:
Article
1
Share
Purchase and Sale
1.1 Acquisition
Price; Payment Schedule.
In
consideration for the Covenant made by the Seller Parties, at Closing, the
Purchaser shall deliver to Seller a copy of the certificate representing
5,033,680 shares of Series B Convertible Preferred Stock of Legend with an
aggregate Issue Price of USD equivalent to RMB275,000,000 calculated based
on
the exchange
rate
at
RMB 6.829 to 1 USD (the “Share
Consideration”).
The
per share "Issue
Price"
is
USD8.00. Each share of Series B Convertible Preferred Stock is automatically
convertible into 20 shares of common stock of Legend, subject to certain
future
adjustments, on such date that the Corporation's Articles of Incorporation
have
been amended so that there is a sufficient number of shares of common stock
of
Legend authorized by Legend to allow full conversion of all outstanding shares
of Series B Convertible Preferred Stock into common stock of Legend.
In
addition, Ju Baochun shall receive 10,000,000 warrants for the purchase of
common stock of Legend, 5,000,000 of the warrants will be 3 year warrants
with
an exercise price equal to the Issue Price divided by 20 and the remaining
5,000,000 will be 5 year warrants with an exercise price equal to the product
of
(i) the Issue Price divided by 20; and (ii) two.
The
Seller Parties hereby covenant that they shall, on or prior to Closing, cause
YSLD to enter into certain controlling documents with the PRC Subsidiary
in form
and content acceptable to Purchaser, and cause YSLD and PRC Subsidiary to
maintain effectiveness of such controlling documents to ensure the consolidation
of YSLD into Legend’s financial statements.
1.2 Closing;
Time and Place. Subject
to the satisfaction or waiver of the conditions set forth in Sections 5 and
6, the closing of the acquisition (the “Closing”)
shall
take place on November 28, 2008 at Xxxx 000, Xxxxxxxx X, Xxxxx Xxxxx, Xx.
0
Qinglong Hutong, Dongcheng District, Beijing, unless another place or time
is
agreed upon by the Purchaser and the Seller. The date upon which the Closing
actually occurs is herein referred to as the “Closing
Date”.
1.3 Deliveries
by the Purchaser. The
Purchaser shall deliver:
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(i)
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At
Closing, to
the Seller,
a copy of certificate representing the Share
Consideration; and
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| (ii) |
At
Closing, to the Seller, a true and correct copy of the resolutions
or
minutes of the meetings of the board of directors of the Purchaser,
and
where required by applicable Laws, the shareholders of the Purchaser,
or
other relevant internal document evidencing approval of this Agreement
and
the matters contemplated hereby, certified by an authorized officer
of the
Purchaser.
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1.4 Deliveries
by the Seller. At Closing, the following original certificates and documents
shall be delivered to the Purchaser:
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(i)
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Controlling
Documents. Executed Controlling Documents by YSLD, the PRC Subsidiary
and the Founders.
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(ii)
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Board/Shareholder
Resolutions of YSLD. The resolutions or minutes of a meeting of YSLD’s
board of directors, or shareholders as necessary, or other relevant
internal document evidencing approval of the Controlling Documents
and the
matters contemplated thereby, certified by an authorized officer
of
YSLD.
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(iii)
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Compliance
Certificate. Certificates signed by the Seller Parties (in form and
substance reasonably satisfactory to the Purchaser), dated as of
the
Closing Date, certifying that the matters set forth in Section 5.4
have been fulfilled and are accurate and
complete.
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1.5 Board
Composition. All the Parties agree that the members of Legend's board of
directors shall be increased from 5 to 7 and that the two created vacancies
shall be filled by Ju Baochun and an independent director nominated by Ju
Baochun but subject to approval of Legend's board of directors.
1.6 Management
Composition. All the Parties agree that Ju Baochun shall become the new CEO
of Legend with compensation to be determined by the board of Legend within
45
days after Closing, details of which shall be set forth in the related executive
employment agreement and Xxxxxxx Dash, the current CEO of Legend shall resign
and become a consultant to Legend with the responsibility of financial,
strategic planning and investor relations, with compensation to be determined
by
the board of Legend within 45 days after Closing. The change of the CEO shall
be
completed within 45 days subsequent to Closing. Both Ju Baochun and Xxxxxxx
Dash
hereby covenant to use their best efforts to recruit qualified professionals
to
act as COO and CFO of Legend with compensation to be determined by the board
of
Legend.
1.7 Reimbursement.
The Purchaser or Legend acknowledges that Ju Baochun has incurred certain
out-of-pocket expenses in the amount of RMB1.88 million (“Expenses”)
for
benefit of Legend and/or its Affiliates, including, without limitation, Beijing
Maihesi International Advertising Co., Ltd. and Tianjin Yinselingdong
Advertising Co., Ltd. (collectively, the “Group
Companies”),
in
the ordinary course of business of the Group Companies. Legend shall pay,
or
cause to be paid, such Expenses to Ju Baochun or his designated person within
7
days after Closing; provided that the Purchaser or Legend shall have sufficient
cash flow surplus to make such payment.
Article
2
Representations
and Warranties of the Seller
Parties
Subject
to the exceptions set forth in the Disclosure Schedule, the Seller Parties
hereby jointly and severally, represent and warrant to the Purchaser the
following at the date of this Agreement and at the Closing Date:
2.1 Authority.
There
is
no action, suit, investigation, complaint or other proceeding pending against
the Seller or, to the knowledge of the Seller, threatened against the Seller
or
any other Person that restricts in any respect or prohibits (or, if successful,
would restrict or prohibit) the exercise by any Party or beneficiary of its
rights under this Agreement or the performance by any Party of its obligations
under this Agreement.
Each
of
the Seller and YSLD has all requisite corporate or other power and authority
to
execute and deliver this Agreement, the
Assets Acquisition Agreement (as defined below)
and the
Controlling Documents to which it is a party and to perform the transactions
contemplated by this Agreement, the Controlling Documents and the Assets
Acquisition Agreement. The execution and delivery of this Agreement,
the
Assets Acquisition Agreement
and the
Controlling Documents to which such party is a party and the performance
by such
party of its obligations hereunder and thereunder, has been duly and validly
authorized and no other corporate action on the part of such party is necessary.
This Agreement, the
Assets Acquisition Agreement
and the
Controlling Documents, upon the execution and delivery by each of the Seller
Parties and YSLD (assuming due and valid execution and delivery by the
Purchaser), will constitute legal, valid and binding obligations enforceable
against such party in accordance with their terms.
2.2 Tax
Matters. Each of the Seller Parties represents and warrants that the Seller
Parties have had an opportunity to review with its own tax advisors the tax
consequences to the Seller Parties of the acquisition and the other transactions
contemplated by this Agreement. Each of the Seller Parties understands that
it
must rely solely on its advisors and not on any statements or representations
by
the Purchaser or its advisor. Each of the Seller Parties understands that,
unless otherwise required under this Agreement, it shall be responsible for
its
own tax liability under relevant Law that may arise from the acquisition
and the
other transactions contemplated by this Agreement.
2.3 Reliance
by the Purchaser. Each of the Seller Parties understands and acknowledges
that the Purchaser is entering into this Agreement in reliance upon the
representations and warranties and covenants of the Seller Parties made herein
(subject to the exceptions and disclosures contained in the Disclosure
Schedule).
2.4 YSLD.
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YSLD
is a corporation duly organized and validly existing under the
Laws of the
PRC, and has full corporate power and authority to conduct its
business as
now and proposed to be conducted and to own, use and lease its
Assets and
Properties.
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(ii)
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YSLD
is duly qualified, licensed or admitted to do business in the PRC.
The
registered capital of YSLD has been duly authorized and is fully
paid and
is owned by the holders thereof free and clear of all Liens. There
are no
outstanding Options with respect to YSLD. YSLD does not have any
subsidiaries, branches or representative offices.
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(iii)
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All
the equity interests in YSLD are owned by the Founders and are
not subject
to or issued in violation of any purchase option, call option,
right of
first refusal, preemptive right, subscription right or any similar
right
under any PRC Laws, the charter documents or any contract to which
YSLD or
the Seller Party is a party or otherwise bound.
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(iv)
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No
penalty has been imposed on YSLD by the relevant PRC governmental
authorities due to its failure to comply with applicable
Laws.
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2.5 Governmental
Approvals and Filings. No consent, approval or action of, filing with or
notice to any Governmental Authority on the part of the Seller Parties and
YSLD
is required in connection with the execution, delivery and performance of
this
Agreement, the
Assets Acquisition Agreement
or any
of the Controlling Documents to which it is a party or the consummation of
the
transactions contemplated hereby or thereby.
2.6 Compliance
with Laws and Orders. YSLD is not or has at any time received any notice
that it is or has at any time been, in any violation, breach or default of
any
term of its articles of association, or of any provision of Contract, or
any PRC
Laws applicable to or binding upon YSLD or its Assets and Properties (as
the
case may be).
2.7 Licenses.
All
consents, approvals, permits or Licenses required for the operation of the
business of YSLD have been obtained. YSLD has at all times carried on its
business in compliance with all applicable Laws. Neither YSLD nor any of
its
directors, shareholders, and officers has committed any criminal offence
or any
breach of the requirements or conditions of any statute, treaty, legislation
or
regulation in the course of carrying on YSLD’s business. YSLD is not the subject
of any ongoing or threatening inquiry that would have an adverse effect by
any
governmental or regulatory body.
Each
License is valid, binding and in full force and effect; and YSLD is not or
has
not at any time been, or has received any notice that it is or has at any
time
been, in default (or with the giving of notice or lapse of time or both,
would
be in default) under any such License.
2.8 Contracts.
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(i)
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Section
2.8 of the Disclosure Schedule contains a true and complete list of
each of the Contracts, to which YSLD is a party or by which any
of its
respective Assets and Properties is bound (including material Contracts
that have expired by their terms or otherwise terminated but have
liabilities that continue to attach to
YSLD):
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| (ii) |
The
Seller has delivered to the Purchaser true and complete copies
(or, if not
in writing, reasonably complete and accurate written descriptions)
of each
Contract or other arrangement required to be listed on Section
2.8 of the
Disclosure Schedule, together with all amendments and supplements
thereto.
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(iii)
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Each
Contract to which YSLD is a party is in full force and effect and
constitutes a legal, valid and binding agreement, enforceable in
accordance with its terms, of each party thereto; and neither YSLD
nor, to
the knowledge of the Seller Parties, any other party to such Contract
is,
or has received notice that it is, in violation or breach of or
default
under any such Contract (or with notice or lapse of time or both,
would be
in violation or breach of or default under any such Contract) or
that
another party to a Contract listed in Section 2.8 of the Disclosure
Schedule intends to cancel, terminate or refuse to renew such
Contract.
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(iv)
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YSLD
is not a party to or bound by any Contract that could result, individually
or in the aggregate with any other such Contracts, in a Business
Material
Adverse Effect.
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2.9 Real
Property.
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(i)
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YSLD
is in possession as lessee of each parcel of real property, together
with
all facilities, fixtures and other improvements thereon, and in
each case
such lease is, to the knowledge of the Seller Parties, free and
clear of
all Liens. To the knowledge of the Seller Parties, none of the
use of such
real property, facilities, fixtures or other improvements contravenes
or
violates any occupational safety and health or other applicable
Law in any
material respect.
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(ii)
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YSLD
has a valid and subsisting leasehold estate in and the right to
quiet
enjoyment of the real properties used by it for the full term of
the
lease. Each lease referred to in paragraph above is a legal, valid
and
binding agreement of YSLD, enforceable in accordance with its terms,
and
to the knowledge of the Seller Parties, is a legal, valid and binding
agreement of each other Person that is a party thereto, and YSLD
has not
received notice of any default (or any condition or event which,
after
notice or lapse of time or both, would constitute a default)
thereunder.
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(iii)
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Prior
to the execution of this Agreement, YSLD has delivered to the Purchaser
true and complete copies of all leases (including any amendments
and
renewal letters).
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(iv)
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YSLD
is not a lessor under any lease, sublease, tenancy or license of,
or
entered into any rental agreement with respect to, any portion
of the real
property referred to in this paragraph.
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2.10 Insurance.
No commercial insurance is used or necessary in the conduct of the business
of
YSLD.
2.11 Taxes.
All Tax
Returns required to be filed in respect of YSLD have been duly and timely
filed,
have been prepared in compliance with all applicable Laws, and are true,
correct
and complete. All Taxes due and payable by YSLD, whether or not shown as
due on
such Tax Returns, have been fully paid when due.
2.12 Legal
Proceedings. There are no:
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(i)
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actions
or Proceedings pending or, to the knowledge of the Seller Parties
or YSLD,
threatened against YSLD or any of their respective Assets and
Properties;
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(ii)
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Orders
outstanding against YSLD; or
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(iii)
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to
the knowledge of the Seller Parties, facts or circumstances known
to YSLD
that could reasonably be expected to give rise to any Action or
Proceeding
that would be required to be disclosed pursuant to clause (i) or
(ii) above.
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2.13 Affiliate
Transactions. Except for the Controlling Documents, as the date of this
Agreement, (i) there are no Liabilities between YSLD, on the one hand, and
either of the Seller Parties or the officer, director or Affiliate of Group
Companies, on the other, (ii) neither of the Seller Parties, nor any
officer, director or Affiliate of Group Companies provides or causes to be
provided any assets, services or facilities to YSLD, (iii) YSLD does not
provide
or causes to be provided any assets, services or facilities to the Seller
Parties or any officer, director or Affiliate of Group Companies and
(iv) YSLD does not beneficially own, directly or indirectly, any Investment
Assets of the Seller Parties or any such officer, director or Affiliate of
Group
Companies.
2.14 Employees;
Labor Relations.
YSLD
have
complied with all applicable Laws relating to the employment of
labor.
2.15 Bank
and Brokerage Accounts; Investment Assets. Section 2.15 of the Disclosure
Schedule sets forth a true and complete list of the names and locations
of all banks, trust companies, securities brokers and other financial
institutions at which YSLD has an account or safe deposit box or maintains
a
banking, custodial, trading or other similar relationship.
2.16 Brokers.
All
negotiations relative to this Agreement and the transactions contemplated
hereby
have been carried out by the Seller directly with the Purchaser without the
intervention of any Person on behalf of the Seller in such manner as to give
rise to any valid claim by any Person against the Purchaser, or the Seller
for a
finder’s fee, brokerage commission or similar payment.
2.17 Assets
and Properties. YSLD has good and marketable title to its owned properties
and assets free and clear of liens or encumbrance. All facilities, machinery,
equipment, fixtures, vehicle and other properties owned, leased or used by
YSLD
are in good operating condition and repair, ordinary wear and tear excepted,
and
are reasonably fit and usable for purposes for which they are being
used.
2.18 No
Insolvency. No order has been made or petition presented or resolution
passed for the winding up of YSLD. YSLD is not insolvent or unable to pay
its
debts as and when due.
2.19 No
Conflicts. The execution, delivery and performance by each of the Seller
Parties and YSLD of this Agreement, the
Assets Acquisition Agreement
and the
Controlling Documents to which such Person is a party and the consummation
of
the transactions contemplated hereby and thereby will not:
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(i)
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conflict
with or result in a violation or breach of any of the provisions
of the
memorandum and articles of association (or other comparable corporate
charter documents) of YSLD;
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(ii)
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conflict
with or result in a violation of any Law or Order applicable to
the Seller
and YSLD or any of its Assets and Properties; or
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(iii)
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(a) conflict
with or result in a violation of, (b) constitute (with or without
notice or lapse of time or both) a default under, (c) require the
Seller and YSLD to obtain any consent, approval or action of, make
any
filing with or give any notice to any Person as a result or under
the
terms of, (d) result in or give to any Person any right of
termination, cancellation, acceleration or modification in or with
respect
to or result in any loss of benefit under or with respect to,
(e) result in or give to any Person any additional rights or
entitlement to increased, additional, accelerated or guaranteed
payments
under, or (f) result in the creation or imposition of any Lien upon
YSLD or any of its respective Assets and Properties, under any
Contract or
License to which YSLD is a party or by which any of its respective
Assets
and Properties is bound or any Law or Order applicable to YSLD
or any of
its respective Assets and
Properties.
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2.20 No
Dividend or Other Distribution. No dividend or other distribution has
occurred since its establishment with respect to YSLD.
2.21 No
Undisclosed Liabilities. There are no Liabilities against, relating to or
affecting YSLD or any of its Assets and Properties, other than Liabilities
incurred in the ordinary course of business consistent with past practice.
YSLD
is not a guarantor, indemnitor, surety or other obligor of any indebtedness
of
any other Person.
YSLD
does not have any interest payment obligation, including, without limitation,
bank debt. Except as set forth in Section 2.21 of Disclosure Schedule,
there is no capital commitment (including, without limitation, off-balance
sheet
capital commitment) for YSLD.
2.22 No
Powers of Attorney. Except as set forth in Section 2.22 of the Disclosure
Schedule, YSLD does not have any powers of attorney or comparable
delegations of authority outstanding.
2.23 Absence
of Changes. Except for the execution and delivery of this Agreement and the
transactions to take place pursuant hereto on the Closing Date, since the
establishment of YSLD there has not been any Business Material Adverse Effect
on
YSLD and none of the actions set forth in Section 4.5 has occurred except
as
otherwise agreed in writing by the Purchaser or as requested by the Purchaser.
Without limiting the foregoing, there has not occurred since the establishment
of YSLD until the date hereof:
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(i)
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any
(a) amendment of the memorandum and articles of association (or other
comparable corporate charter documents) of, or (b) reorganization,
liquidation or dissolution of YSLD;
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(ii)
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any
capital expenditure, commitments for additions to property, plant,
equipment or license of YSLD constituting capital assets in an
aggregate
amount exceeding Ten Thousand US Dollars
(US$10,000);
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(iii)
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any
entry into any exclusive distribution, marketing, sales or other
similar
agreement with any third person whereby YSLD has granted any third
party
exclusivity right;
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(iv)
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any
material communication with a Governmental
Authority;
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(v)
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any
transaction by YSLD with the Seller, any officer, director of the
Affiliate of the Seller (a) outside the ordinary course of business
consistent with past practice or (b) other than on an arm’s-length
basis;
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(vi)
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any
material change in (a) any accounting, financial reporting, or Tax
practice or policy of YSLD or (b) the fiscal year of
YSLD;
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(vii)
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any
entering into of an agreement to do or engage in any of the foregoing
after the date hereof, except as contemplated by this Agreement;
or
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(viii)
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any
other transaction involving or affecting YSLD outside the ordinary
course
of business consistent with past
practice.
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2.24 Restricted
Securities. The Seller is an accredited investor as defined in Rule 501(a)
of Regulation D promulgated under the Securities Act (as defined below),
(i) is
acquiring the Share Consideration and the common stock of Legend issuable
upon
conversion of the Series B Convertible Preferred Stock for its own account,
(ii)
is not acquiring such securities with a view to any resale or distribution
thereof other than in accordance with the restrictions set forth below, and
(iii) is not a party to any agreement or arrangement to sell or transfer
any of
the Legend securities to any person. The Series B Convertible Preferred Stock
and the common stock of Legend issuable upon conversion thereof have not
been,
and will not be, registered under the Securities Act, will be “restricted
securities” under the Securities Act and under such laws and applicable
regulations such securities may be resold without registration under the
Securities Act only in accordance with the restrictions on transfer set forth
on
the legend set forth thereon.
2.25 Legend.
Each share certificate of Legend’s securities will bear a legend to the
following effect unless determines otherwise in compliance with applicable
law:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER
ANY
STATE SECURITIES OR BLUE SKY LAWS. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE OFFERED FOR SALE, TRANSFERRED, SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE ENCUMBERED OR DISPOSED OF (A "TRANSFER") EXCEPT
(A)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND
UNDER ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS OR (B) UPON RECEIPT
BY
THE ISSUER OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE ISSUER,
THAT
SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT PURSUANT
TO
REGULATIONS PROMULGATED THEREUNDER AND UNDER ANY APPLICABLE STATE SECURITIES
OR
BLUE SKY LAWS.
2.26 Disclosure.
The Seller Parties have provided the Purchaser with all information that
the
Purchaser has requested (for deciding whether to complete the acquisition).
The
Seller Parties have provided the Purchaser with all information that, to
the
best knowledge of the Seller Parties, may materially and adversely impact
the
business and financial condition of YSLD. The Seller Parties have not been
aware
of any fact which has not been disclosed to Purchaser, which could have a
Business Material Adverse Effect on YSLD. If any of the representations and
warranties by the Seller Parties in this Agreement, any of the other statements
or certificates or other materials made or delivered to the Purchaser at
any
time in connection herewith, or materials provided to the Purchaser in
connection with its due diligence, becomes untrue or misleading in any material
respect, the Seller Parties shall, and shall promptly notify the Purchaser
in
writing of such fact and of the reasons for such change.
No
representation or warranty contained in this Agreement, and no statement
contained in the Disclosure Schedule, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make
the
statements herein or therein, in the light of the circumstances under which
they
were made, not misleading.
Any
certificate, list or other writing furnished to the Purchaser and/or its
Affiliates and representatives is a genuine and truthful copy of the original
copy.
Article
3
Representations
and Warranties of the Purchaser
The
Purchaser hereby represents and warrants the following to the Seller as at
the
date of this Agreement and as at the Closing Date:
3.1 Authorization
by the Purchaser. The execution and delivery by the Purchaser of this
Agreement and the Controlling Documents to which it is a party, and the
performance by the Purchaser of its obligations hereunder and thereunder,
have
been duly and validly authorized by the board of directors of the Purchaser,
no
other corporate action on the part of the Purchaser or its shareholders being
necessary. This Agreement has been duly and validly executed and delivered
by
the Purchaser and constitutes (assuming due and valid execution and delivery
by
the Seller Parties and YSLD), and upon the execution and delivery by the
Purchaser of the Controlling Documents to which it is a party, such Controlling
Documents will constitute, legal, valid and binding obligations of the Purchaser
enforceable against the Purchaser in accordance with their terms.
3.2 Organization.
The Purchaser is a corporation duly organized, validly existing under the
Laws
of its jurisdiction of formation. On the Closing Date and subject to other
provisions of this Agreement, the Purchaser has full corporate power and
authority to execute and deliver this Agreement and the Controlling Documents
to
which it is a party, to perform its obligations hereunder and thereunder
and to
consummate the transactions contemplated hereby and thereby. The Purchaser
is
duly qualified, licensed or admitted to do business in all jurisdictions,
in
which the ownership, use or leasing of its Assets and Properties, or the
conduct
or nature of its business, makes such qualification, licensing or admission
necessary and in which the failure to be so qualified, licensed or admitted
could reasonably be expected to have an adverse effect on the validity or
enforceability of this Agreement or any of the Controlling Documents to which
it
is a party or on the ability of the Purchaser to perform its obligations
hereunder or thereunder.
3.3 No
Conflicts. The execution and delivery by the Purchaser of this Agreement
does not, and the execution and delivery by the Purchaser of the Controlling
Documents to which it is a party, the performance by the Purchaser of its
obligations under this Agreement and such Controlling Documents and the
consummation of the transactions contemplated hereby and thereby will
not:
|
(i)
|
conflict
with or result in a violation or breach of any of the terms, conditions
or
provisions of the organizational documents of the Purchaser, as
the case
may be;
|
|
(ii)
|
conflict
with or result in a violation or breach of any term or provision
of any
Law or Order applicable to the Purchaser or any of its respective
Assets
and Properties to the extent that such conflict, violation or breach
would
have a material adverse effect on the ability of the Purchaser
to perform
its obligations under this Agreement;
or
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|
(iii)
|
require
the Purchaser to obtain any consent, approval or action of, make
any
filing with or give any notice to any Person as a result or under
the
terms of any Contract or License to which the Purchaser is a party
or by
which any of its Assets and Properties is
bound.
|
3.4 No
Insolvency. No order has been made or petition presented or resolution
passed for the winding up of the Purchaser. The Purchaser is not insolvent
or
unable to pay its debts as and when due and there is no unfulfilled
insolvency-related decree or court order outstanding against the
Purchaser.
3.5 Brokers.
No broker, finder or investment banker is entitled to any brokerage, finder’s or
other fee or commission in connection with the transactions contemplated
by this
Agreement based upon arrangements made by or on behalf of the
Purchaser.
Notwithstanding anything to the contrary of this Agreement, the Purchaser
agrees
to bear its own cost for such finder’s fee, brokerage commission or similar
payment, if any.
3.6 Consideration
Shares. The Share Consideration has been duly authorized, and when delivered
in accordance with the terms of this Agreement, will be duly and validly
issued,
fully paid and non-assessable and will be free of restrictions on transfer
other
than the Lock-in and orderly market conditions or otherwise as contemplated
under this Agreement.
3.7 Litigation.
As at the date hereof, no Action by or against the Purchaser is pending or,
to
the knowledge of the Purchaser, threatened, which could affect the legality,
validity or enforceability of this Agreement, any of the Controlling Documents
or the consummation of the transactions contemplated hereby or
thereby.
Article
4
Covenants
of the Seller Parties
Except
as
expressly set forth in this Article 4 or otherwise consented to by the
Purchaser, the Seller Parties covenant and agree with the Purchaser that,
at all
times from and after the date hereof, except otherwise stipulated in this
Agreement, the Seller Parties will comply with all covenants and provisions
of
this Article 4. For the purposes of this Article 4, the Parties understand
and agree that under all circumstances where the Seller Parties covenant
to
cause YSLD to take, or refrain from taking a particular action, the Seller
Parties agree to exercise all control and power over YSLD available to the
Seller Parties (whether by virtue of office, directorship, shareholder status,
contract or otherwise) in order to cause YSLD to take, or refrain from taking,
the specified action, provided that neither of the Seller Parties shall be
obligated to exercise any control or power not available to it.
4.1 Investigation
by the Purchaser. The Seller Parties will, and will cause YSLD to,
(i) provide the Purchaser and its officers, directors, key employees,
agents, counsel, accountants, financial advisors, consultants and other
representatives with reasonable access, upon reasonable prior notice and
during
normal business hours, to all officers, employees, agents and accountants
of
YSLD and HTLG and their Assets and Properties and books and records related
to airline advertising business, and (ii) furnish the Purchaser and such
other Persons with all such information and data (including copies of Contracts
and other books and records) concerning the business and operations of YSLD
and
HTLG as the Purchaser or any of such other Persons may reasonably request
in
connection with such investigation.
4.2 Conduct
of Business. YSLD shall, and the Seller Parties shall
use
their best efforts to cause YSLD to, conduct business only in the ordinary
course consistent with past practice. Without limiting the generality of
the
foregoing, YSLD shall, and the Seller Parties
shall use their best efforts to cause YSLD to:
| (i) |
(a) preserve
intact the present business organization and reputation of YSLD,
(b) keep available (subject to dismissals, resignations and
retirements in the ordinary course of business consistent with
past
practice) the services of the present officers, employees and consultants
of YSLD, (c) maintain the Assets and Properties of YSLD in good
working order and condition, ordinary wear and tear excepted,
(d) maintain the goodwill of customers, suppliers, lenders and other
Persons to whom YSLD provide services or with whom YSLD otherwise
has a
significant business relationship, and (e) continue all current
sales, marketing and promotional activities relating to the business
and
operations of YSLD;
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|
(ii)
|
comply,
in all respects, with all Laws and Orders applicable to them and
promptly
following receipt thereof give the Purchaser copies of any notice
received
from any Governmental Authority or other Person alleging any violation
of
any such Laws or Order.
|
4.3 Post-Closing
Covenants. The Seller Parties covenant as follows:
|
(i)
|
From
the date hereof, the relevant Seller Parties shall use best efforts
to
assist YSLD to:
|
(a) promptly
procure and maintain all required Licenses to operate the business of YSLD
(including YSLD’s registration of its branch office and update of its business
license to reflect its branch offices) and shall not take or fail to take
any
action that results in, or would be reasonably likely to result in, the
revocation or non-renewal of the Licenses of YSLD, or that would otherwise
cause
or result in the commencement of Actions or Proceedings by any governmental
authorities that would be reasonably likely to result in a Business Material
Adverse Effect on YSLD; and
(b) unless
otherwise expressly agreed by the Purchaser in writing, promptly file with
the
applicable PRC tax authority all required submissions, applications and other
documents.
4.4 Assets
Acquisition Agreement. The Seller Parties shall cause HTLG to enter into an
Assets Acquisition Agreement with YSLD in form and content acceptable to
Purchaser, pursuant to which HTLG shall transfer to YSLD any and all of HTLG’s
assets/liabilities as selected, in the sole discretion of the Purchaser,
in
particular, those related to the airline advertising business (the “Assets
Acquisition Agreement”).
For
the purpose of this Agreement, all the account receivables of HTLG related
to
the airline advertising business that occurred on or prior to November 30,
2008
(the “Account
Receivables”),
though transferred to YSLD pursuant to the Assets Acquisition Agreement,
shall
still belong to the Founders, provided that the Founders shall refrain from
taking out any such money due to them from YSLD, until YSLD has sufficient
cash
flow surplus and to the extent such withdrawal of fund shall not have any
material adverse impact on the operation of YSLD.
Article
5
Conditions
to Obligations of the Purchaser
The
obligations of the
Purchaser hereunder are subject to the fulfillment, at or before the Closing,
of
each of the following conditions (all or any of which may be waived in whole
or
in part by the Purchaser in its sole discretion):
5.1 Regulatory
Consents and Approvals. As at the Closing Date, all consents, approvals and
actions of, filings with and notices to any Governmental Authority necessary
to
permit the Seller to perform its obligations under this Agreement, the
Assets Acquisition Agreement
and the
Controlling Documents and to consummate the transactions contemplated hereby
and
thereby (a) shall have been duly obtained, made or given, (b) shall be
in form and substance reasonably satisfactory to the Purchaser (c) shall
not be subject to the satisfaction of any condition that has not been satisfied
or waived and (d) shall be in full force and effect, and all terminations
or expirations of waiting periods imposed by any Governmental Authority
necessary for the consummation of the transactions contemplated by this
Agreement, the
Assets Acquisition Agreement
and the
Controlling Documents shall have occurred.
5.2 Orders
and Laws. There shall not be in effect on the Closing Date any Order or Law
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement, the
Assets Acquisition Agreement or any of the Controlling Documents or which
could
reasonably be expected to have a Business Material Adverse Effect on YSLD,
and
there shall not be pending or threatened on the Closing Date any Actions
or
Proceedings or any other action, statement or objection in, before or by
any
Governmental Authority which could reasonably be expected to result in the
issuance of any such Order or the enactment, promulgation or deemed
applicability to the Purchaser, YSLD or the transactions contemplated by
this
Agreement, the Assets Acquisition Agreement or any of the Controlling Documents
of any such Order or Law.
5.3 Third
Party Consents. The consents (or in lieu thereof waivers) and all other
consents (or in lieu thereof waivers) to the performance by the Seller Parties
and YSLD of their obligations under this Agreement, the Assets Acquisition
Agreement and the Controlling Documents or to the consummation of the
transactions contemplated hereby and thereby as are required under any Contract
to which any of the Seller Parties or YSLD is a party or by which any of
their
respective Assets and Properties are bound and where the failure to obtain
any
such consent (or in lieu thereof waiver) could reasonably be expected,
individually or in the aggregate with other such failures, to adversely affect
the Purchaser or have a Business Material Adverse Effect on YSLD, (a) shall
have been obtained, (b) shall be in form and substance reasonably
satisfactory to the Purchaser, (c) shall not be subject to the satisfaction
of any condition that has not been satisfied or waived and (d) shall be in
full force and effect.
5.4 Performance
of Obligations; Representations and Warranties. The Seller Parties shall
have performed and complied with all covenants, obligations and agreements
contained in this Agreement that are required to be performed or complied
with
by it prior to or at the Closing and each of the representations and warranties
made by the Seller Parties in this Agreement, the
Assets Acquisition Agreement and
in
each Controlling Documents to which it is a party, shall be true and correct
in
all respects on the date hereof and on and at the Closing Date as though
such
representation or warranty was made on and at the Closing Date, and any
representation or warranty made as at a specified date earlier than the Closing
Date shall have been true and correct in all respects on such earlier
date.
5.5 Closing
Deliveries. The Seller shall have delivered to the Purchaser all of the
documents and agreements set forth in Section 1.4.
5.6 Certificates.
The Purchaser shall have received certificates from each of the Seller Parties
dated the Closing Date in form and substance reasonably satisfactory to the
Purchaser, certifying that the conditions set forth herein have been
satisfied.
5.7 Proceedings.
All board and/or shareholder approvals to be obtained on the part of the
Seller
in connection with the transactions contemplated by this Agreement shall
be
reasonably satisfactory in form and substance to the Purchaser, and the
Purchaser shall have received copies of all such documents and other evidences
as the Purchaser may reasonably request in order to establish the consummation
of such transactions and the taking of all proceedings in connection
therewith.
5.8 No
Business Material Adverse Effect. There shall have been no Business Material
Adverse Effect.
5.9 Restructuring.
YSLD, PRC Subsidiary and the Founders shall have executed and delivered to
the
Purchaser all of the Controlling Documents set forth in Exhibit B hereto
to
which YSLD, PRC Subsidiary or the Founder is a party.
Article
6
Conditions
to Obligations of the Seller
Parties
The
obligations of the
Seller Parties hereunder are subject to the fulfillment, at or before the
Closing, of each of the following conditions (all or any of which may be
waived
in whole or in part by the Seller Parties in their sole
discretion):
6.1 Orders
and Laws. There shall not be in effect on the Closing Date any Order or Law
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement,
the
Assets Acquisition Agreement
or any
of the Controlling Documents or which could reasonably be expected to have
a
Business Material Adverse Effect on the Purchaser, or there shall not be
pending
or threatened on the Closing Date any Action or Proceeding or any other action
in, before or by any Governmental Authority which would result in the issuance
of any such Order or the enactment, promulgation or deemed applicability
to the
Seller or the transactions contemplated by this Agreement, the
Assets Acquisition Agreement
or any
of the Controlling Documents of any such Order or Law.
6.2 Regulatory
Consents and Approvals. All consents, approvals and actions of, filings with
and notices to any Governmental Authority necessary to permit the Purchaser
to
perform its obligations under this Agreement, the
Assets Acquisition Agreement
and the
Controlling Documents and to consummate the transactions contemplated hereby
and
thereby (a) shall have been duly obtained, made or given, (b) shall
not be subject to the satisfaction of any condition that has not been satisfied
or waived and (c) shall be in full force and effect, and all terminations
or expirations of waiting periods imposed by any Governmental Authority
necessary for the consummation of the transactions contemplated by this
Agreement, the
Assets Acquisition Agreement
and the
Controlling Documents shall have occurred.
6.3 Representations
and Warranties. The Purchaser shall have performed and complied with all
covenants, obligations and agreements contained in this Agreement that are
required to be performed or complied with by it prior to or at the Closing
and
each of the representations and warranties made by the Purchaser in this
Agreement shall be true and correct in all respects on and as at (i) the
date
hereof, and (ii) the Closing Date as though such representation or warranty
was
made on and as at the Closing Date, and any representation or warranty made
as
at a specified date earlier than the Closing Date shall have been true and
correct in all respects on and as at such earlier date.
6.4 Proceedings.
All board and/or shareholder approvals to be obtained by the Purchaser in
connection with the transactions contemplated by this Agreement and all
documents incidental thereto shall be reasonably satisfactory in form and
substance to the Seller, and the Seller shall have received copies of all
such
documents and other evidences as the Seller may reasonably request in order
to
establish the consummation of such transactions and the taking of all
proceedings in connection therewith.
Article
7
Tax
Matters and Post-Closing Taxes
The
Parties
shall pay their respective sales, use, value added, transfer, real property
transfer, recording, stamp stock transfer and other similar Taxes and fees
arising out of the transactions effected pursuant to this Agreement,
the
Assets Acquisition Agreement
and the
Controlling Documents.
Article
8
Survival
of Representations, Warranties and Covenants
Notwithstanding
any right of the Purchaser (whether or not exercised) to investigate the
affairs
of YSLD or any right of any Party (whether or not exercised) to investigate
the
accuracy of the representations and warranties of the other Party contained
in
this Agreement, and notwithstanding anything known by any such Party or the
fact
of the Closing, the Purchaser has the right to rely fully upon the
representations, warranties, covenants and agreements of the Seller Parties
contained in this Agreement (subject to the exceptions and disclosures contained
in the Disclosure Schedule). The
Representations, warranties, covenants and agreements contained herein shall
survive for a period of one (1) year after the Closing (the “Compensation
Period”).
Unless a Party gives a written request for indemnification to the other Parties
within one (1) year after the Closing Date, no indemnification claim may
be made
after the expiration of the Compensation Period.
Article
9
Indemnification
9.1 Indemnification
by
the
Seller Parties.
The
Seller Parties shall jointly and severally indemnify the Purchaser and its
officers, directors, employees, agents and Affiliates in respect of, and
hold
each of them harmless from and against, any and all Loss suffered, incurred
or
sustained by any of them or to which any of them becomes subject to, resulting
from or arising out of any of the following:
|
(i)
|
any
misrepresentation, breach of warranty or non-fulfillment of or
failure to
perform any covenant or agreement on the part of any of the Seller
Parties
contained in this Agreement, the
Assets Acquisition Agreement
or
in any Controlling Documents (subject always to the exceptions
and
disclosures contained in the Disclosure Schedule);
or
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|
(ii)
|
any
fraud or negligence by the Seller Parties with respect to the subject
matter of any of the representations, warranties, covenants or
agreements
contained or contemplated by this Agreement, the
Assets Acquisition Agreement
or
in any Controlling Documents
Contract.
|
9.2 Indemnification
by the Purchaser.
The
Purchaser shall indemnify the Seller Parties in respect of, and hold each
of
them harmless from and against, any and all Loss suffered, incurred or sustained
by any of them or to which any of them becomes subject to, resulting from
or
arising out of any of the following:
|
(i)
|
any
misrepresentation, breach of warranty or non-fulfillment of or
failure to
perform any covenant or agreement on the part of the Purchaser
contained
in this Agreement, the
Assets Acquisition Agreement
or
in any Controlling Documents; or
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|
(ii)
|
any
fraud or negligence by the Purchaser, or any of its employees,
officers,
directors or shareholders with respect to the subject matter of
any of the
representations, warranties, covenants or agreements contained
or
contemplated by this Agreement, the
Assets Acquisition Agreement
or
in any Controlling Documents.
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Article
10
Definitions
10.1 Definitions.
|
(i)
|
As
used in this Agreement, the following defined terms shall have
the
meanings indicated below:
|
“Actions
or Proceedings”
means
(i) any action, suit, proceeding, arbitration or (ii) any Governmental Authority
inquiry, investigation or audit.
“Affiliate”
means
any Person that directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the Person
specified. For the purposes of this definition, control of a Person means
the
power, direct or indirect, to direct or cause the direction of the management
and policies of such Person whether by Contract or otherwise and, in any
event
and without limitation of the previous sentence, any Person owning twenty
percent (20%) or more of the voting securities of a second Person shall be
deemed to control that second Person. For the purposes of this definition,
a
Person shall be deemed to control any of his or her immediate family members.
“Agreement”
has
the
meaning ascribed to it in the introductory paragraph.
“Assets
and Properties”
of
any
Person means all assets and properties of every kind, nature, character and
description (whether real, personal or mixed, whether tangible or intangible,
whether absolute, accrued, contingent, fixed or otherwise and wherever
situated), including the goodwill related thereto, operated, owned or leased
by
such Person, including cash, cash equivalents, Investment Assets, accounts
and
notes receivable, chattel paper, documents, instruments, general intangibles,
real estate, equipment, inventory, goods and intellectual property.
“Assets
Acquisition Agreement” has
the
meaning ascribed to it in Section 4.4 of this Agreement.
“Business
Day”
means
a
day other than Saturday, Sunday or any day on which banks located in the
PRC and
the U.S. are authorized or obligated to close.
“Business
Material Adverse Effect”
means
any material adverse effect on (i) the business, assets, condition
(financial or otherwise), or results of operations of YSLD taken as a whole,
or
(ii) the ability of the Seller Parties to perform their obligations under
this Agreement or any Controlling Documents in a timely manner or to consummate
the transactions contemplated by this Agreement or the Controlling Documents
without material delay. In determining whether there has been a Business
Material Adverse Effect, any event, circumstance, change or effect shall
be
considered both individually and together with all other events, circumstances,
changes or effects and any event, circumstance, change or effect that reasonably
could be expected to result in a Business Material Adverse Effect (individually
or together with one or more other events, circumstances, changes or effects)
shall be considered a Business Material Adverse Effect.
“BVI”
means
British Virgin Islands.
“Closing”
means
the closing of the transactions contemplated by Section 1.2 of this
Agreement.
“Closing
Date” has
the
meaning ascribed to it in Section 1.2 of this Agreement.
“Covenant”
has
the
meaning ascribed to it in the Recitals to this Agreement.
“Contract”
means
any agreement, lease, and evidence of Indebtedness, mortgage, indenture,
security agreement or other contract (whether written or oral).
“Controlling
Documents”
means
the Exclusive Technical, Operational, Business Consulting and Services
Agreement, Operating Agreement, Authorization Agreement and any other agreements
contemplated herein or therein, attached hereto as Exhibit
B.
“Disclosure
Schedule”
means
the Disclosure Schedule, including any document annexed to the Disclosure
Schedule, attached hereto as the Exhibit
A,
dated
as at the date hereof and as updated immediately prior to the Closing Date,
delivered to the Purchaser by the Seller in connection with this
Agreement.
“Expenses” has
the
meaning ascribed to it in Section 1.7 of this Agreement.
“Governmental
Authority”
means
any court, tribunal, arbitrator, authority, agency, commission, official
or
other instrumentality of the PRC, any foreign country or any domestic or
foreign
state, county, city or other political subdivision including but not limited
to
the Ministry of Commerce and their respective local and provincial branches
or
departments.
“Group
Companies” has
the
meaning ascribed to it in Section 1.7 of this Agreement.
“HKIAC”
means
Hong Kong International Arbitration Centre.
“Hong
Kong”
or
“HK”
means
the Hong Kong Special Administrative Region of the PRC.
“HTLG”
has
the
meaning ascribed to it in the Recitals to this Agreement.
“Indebtedness”
of
any
Person means all obligations of such Person (i) for borrowed money,
(ii) evidenced by notes, bonds, debentures or similar instruments,
(iii) for the deferred purchase price of goods or services (other than
trade payables, installment payments or accruals incurred in the ordinary
course
of business), (iv) under capital leases, or (v) in the nature of
guarantees of the obligations described in clauses (i) through
(iv) above of any other Person.
“Investment
Assets”
means
all debentures, notes and other evidences of Indebtedness, stocks, securities
(including rights to purchase and securities convertible into or exchangeable
for other securities), interests in joint ventures and general and limited
partnerships, mortgage loans and other investment or portfolio
assets.
“Issue
Price”
has
the
meaning ascribed to it in Section 1.1 of this Agreement.
“Laws”
means
all laws, statutes, rules, regulations, ordinances and other pronouncements
having the effect of law in the PRC, the United States, the British Virgin
Islands or any other country, or any domestic or foreign state, county, city
or
other political subdivision or of any Governmental Authority.
“Legend”
has
the
meaning ascribed to it in the forepart of this Agreement.
“Liabilities”
means
all Indebtedness, obligations and other liabilities of a Person (whether
absolute, accrued, contingent, fixed or otherwise, or whether due or to become
due).
“Licenses”
means
all licenses, permits, certificates of authority, authorizations, approvals,
registrations, franchises and similar consents granted or issued by any
Governmental Authority.
“Liens”
means
any mortgage, pledge, assessment, security interest, lease, lien, adverse
claim,
levy, charge or other encumbrance of any kind, or any conditional sale Contract,
title retention Contract or other Contract to give any of the
foregoing.
“Lock-in”
means
the prohibition of any sale or transfer of the Share Consideration.
“Loss”
means
any and all direct or indirect damages, fines, fees, penalties, losses and
expenses (including interest, court costs, and reasonable fees of attorneys,
accountants and other experts or other expenses of litigation or other
proceedings or of any claim, default or assessment), whether foreseeable
or not.
“Option”
with
respect to any Person means any security, right, subscription, warrant, option,
“phantom” stock right or other Contract that gives the right to
(i) purchase or otherwise receive or be issued any shares of capital stock
of such Person or any security of any kind convertible into or exchangeable
or
exercisable for any shares of capital stock of such Person or (ii) receive
any benefits or rights similar to any rights enjoyed by or accruing to the
holder of shares of capital stock of such Person, including any rights to
participate in the equity, income or election of directors or officers of
such
Person.
“Order”
means
(i) any writ, judgment, decree, injunction or (ii) any other decision, ruling,
order or statement of any Governmental Authority (in each such case whether
preliminary or final).
“Person”
means
any natural person, corporation, general partnership, limited partnership,
proprietorship, other business organization, trust, union, association or
Governmental Authority.
“PRC”
means
the People’s Republic of China, and for the purpose of this Agreement, not
including Hong Kong, Macau and Taiwan.
“PRC
Subsidiary”
has
the
meaning ascribed to it in the Recitals to this Agreement.
“Purchaser”
has
the
meaning ascribed to it in the forepart of this Agreement.
“Seller”
has
the
meanings ascribed to them in the forepart of this Agreement.
“Securities
Act”
has
the
meaning ascribed to Section 2.25 of this Agreement.
“Share
Consideration”
as
the
meaning ascribed to Section 1.1 of this Agreement.
“Tax
Return”
means
any declaration, statement, report, return, information return or claim for
refund relating to Taxes (including information required to be supplied to
a
governmental entity in respect of such report or return) including, if
applicable, combined or consolidated returns for any group of entities that
includes YSLD.
“Transactions”
means
(1) the execution and delivery of this Agreement, the Assets Acquisition
Agreement and the Controlling Documents, and (2) all of the transactions
contemplated hereunder and thereunder, and the performance by the Purchaser
and
the Seller Parties of their respective obligations hereunder.
“USD”,
“US$”
means
U.S. dollars, the lawful currency of the United States of America.
“US
GAAP”
means
the generally accepted accounting principles in the United States.
“YSLD”
has
the
meaning ascribed to it in the Recitals to this Agreement.
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(ii)
|
Unless
the context of this Agreement otherwise requires, (1) words of any
gender include each other gender; (2) words using the singular or
plural number also include the plural or singular number, respectively;
(3) the terms “hereof,” “herein,” “hereby” and derivative or similar
words refer to this entire Agreement; (4) the terms “Article”,
“Section” or “clause” refer to the specified Article, Section or clause of
this Agreement; and (5) the phrases “ordinary course of business” and
“ordinary course of business consistent with past practice” refer to the
business and practice of YSLD. All accounting terms used herein
and not
expressly defined herein shall have the meanings given to them
under
IFRS.
|
|
(iii)
|
As
used in this Agreement, the words “include” and “including”, and
variations thereof, shall not be deemed to be terms of limitation,
but
rather shall be deemed to be followed by the words “without limitation”.
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|
(iv)
|
As
used in this Agreement, a matter is "to the knowledge of" the Seller
Parties or YSLD (as the case may be) if the Seller Parties or YSLD
(as the
case may be) know or should have known such
matter.
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Article
11
Miscellaneous
11.1 Public
Announcements. Subject
to applicable Law, and the rules and regulations of any stock exchange on
which
the securities of Legend or its Affiliates are traded, none of the Seller
Parties shall, nor shall any Seller Parties permit any of its Affiliates
to,
issue any press release, publicity statement, communication with stockholders,
public notice or other public disclosure relating to this Agreement or the
transactions contemplated hereby without prior notice to, consultation with,
and
the consent of the Purchaser.
11.2 Communication.
None of the Seller Parties will undertake any communication with any
Governmental Authority prior to the Closing without the prior consent of
the
Purchaser.
11.3 Notices.
All notices, demands or other communications given hereunder (a) shall be
deemed to have been duly given and received (i) upon personal delivery,
(ii) if by facsimile, when confirmation of its error-free transmission has
been recorded by the sender's fax machine, or (iii) the second succeeding
Business Day after deposit with UPS or other equivalent air courier delivery
service, unless the notice is held or retained by the customs service, in
which
case the date shall be the fifth succeeding Business Day after such deposit
and
(b) must be in writing and delivered personally, by a recognized courier
service, by a recognized overnight delivery service, by facsimile or by
registered or certified mail, postage prepaid, at the following addresses
(or to
the attention of such other Person or such other address as any party may
provide to the other parties by notice in accordance with this
Section 11.3):
If
to the
Purchaser, to:
Address:
Xxxx 000, Xxxxxxxx X, Xxxxx Xxxxx, Xx. 0 Qinglong Hutong, Dongcheng District,
Beijing
Facsimile
No: 86-10-8487 7176
Attn:
Xxxxxxx Dash
If
to the
Seller, to
Address:
Room 0-0-000, Xxxxxxxx Xxxxx, Xx. 0 Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx,
Xxxxxxx.
Facsimile
No: 010-66126396
Attn:
Ju
Baochun
11.4 Expenses.
Except as otherwise expressly provided in this Agreement, whether or not
the
transactions contemplated hereby are consummated, each party will pay its
own
costs and expenses.
11.5 Confidentiality.
The Parties recognize that, in connection with the performance of this
Agreement, the
Assets Acquisition Agreement
and the
Controlling Documents, each Party (in such capacity, the “Disclosing
Party”)
may
disclose Confidential Information to the other party (the “Receiving
Party”).
The
Receiving Party agrees (x) not to use any such Confidential Information for
any purpose other than in the performance of its obligations under this
Agreement, the
Assets Acquisition Agreement
or any
Controlling Documents and (y) not to disclose any such Confidential
Information, except (1) to its employees who are reasonably required to
have the Confidential Information in connection herewith or with the
Assets Acquisition Agreement or
any of
the Controlling Documents, (2) to its agent, representatives, lawyers and
other advisers that have a need to know such Confidential Information and
(3) as required by, pursuant to, and to the extent of, Law or a request or
order by a Governmental Authority.
“Confidential Information” shall mean (i) the terms of this Agreement and
the Controlling Documents and proprietary information (whether owned by the
Disclosing Party or a third party to whom the Disclosing Party owes a
non-disclosure obligation) regarding the Disclosing Party’s business and
(ii) information which is marked as confidential at the time of disclosure
to the Receiving Party, or if in oral form, is identified as confidential
at the
time of oral disclosure and reduced in writing or other tangible (including
electronic) form including a prominent confidentiality notice and delivered
to
the Receiving Party within thirty (30) days of disclosure. “Confidential
Information” shall not include information which: (A) was known to the
Receiving Party at the time of the disclosure by the Disclosing Party;
(B) has become publicly known through no wrongful act of the Receiving
Party; (C) has rightfully been received by the Receiving Party from a third
party; or (D) has been independently developed by the Receiving
Party.
11.6 Waiver.
Any term or condition of this Agreement may be waived at any time by the
party
that is entitled to the benefit thereof, but no such waiver shall be effective
unless set forth in a written instrument duly executed by or on behalf of
the
party waiving such term or condition. No waiver by any Party of any term
or
condition of this Agreement, in any one or more instances, shall be deemed
to be
or construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion. All remedies, either under this Agreement
or
by Law or otherwise afforded, will be cumulative and not
alternative.
11.7 No
Third Party Beneficiary. The terms and provisions of this Agreement are
intended solely for the benefit of each Party hereto and their respective
successors or permitted assigns, and it is not the intention of the Parties
to
confer third-party beneficiary rights upon any Person.
11.8 No
Assignment; Binding Effect. Neither this Agreement nor any right, interest
or obligation hereunder may be assigned by any Party hereto without the prior
written consent of the other Party hereto and any attempt to do so will be
void,
except (i) for assignments and transfers by operation of Laws and
(ii) that the Purchaser may assign any or all of its rights, interests and
obligations hereunder (including its rights under Article 9) to a
subsidiary, provided that any such subsidiary agrees in writing to be bound
by
all of the terms, conditions and provisions contained herein. Subject to
the
preceding sentence, this Agreement is binding upon, inures to the benefit
of and
is enforceable by the parties hereto and their respective successors and
assigns.
11.9 Governing
Law. This Agreement, the rights and obligations of the parties hereto, and
any claims or disputes relating thereto, shall be governed by and construed
in
accordance with the Laws of the State of New York, without giving effect
to the
choice of law rules thereof.
11.10 Arbitration. Any
dispute, controversy or claim arising out of or relating to this Agreement,
or
the interpretation, breach, termination or validity hereof shall be resolved
through consultation. Such consultation shall begin immediately after one
Party
hereto has delivered to the other Parties hereto a written request for such
consultation. If within thirty (30) days following the date on which such
notice
is given the dispute cannot be resolved, the dispute shall be submitted to
arbitration upon the request of either Party with notice to the
other.
All
disputes arising out of or in connection with this Agreement shall be submitted
to the Hong Kong International Arbitration Centre (the “HKIAC”)
for
arbitration in Hong Kong, which shall be conducted in accordance with HKIAC’s
arbitration rules in effect at the time of applying for arbitration. The
arbitral tribunal shall comprise three arbitrators, two appointed by the
Purchaser and the Seller respectively and the third appointed jointly by
the two
arbitrators. The language of the arbitration shall be in
English.
11.11 Waiver
of Immunity. To the extent that the Purchaser or the Seller Parties
(including assignees of any such rights or obligations hereunder) may be
entitled, in any jurisdiction, to claim for itself or its revenues, assets
or
properties, immunity from service of process, suit, the jurisdiction of any
court, an interlocutory order or injunction or the enforcement of the same
against its property in such court, attachment prior to judgment, attachment
in
aid of execution of an arbitral award or judgment (interlocutory or final)
or
any other legal process, and to the extent that, in any such jurisdiction
there
may be attributed such immunity (whether claimed or not), the Purchaser and
the
Seller Parties hereby irrevocably waive such immunity. Any and all process
may
be served in any action, suit or proceeding arising in connection with this
Agreement by complying with the provisions of Section 11.10.
11.12 Entire
Agreement. This Agreement, the Assets Acquisition Agreement and the
Controlling Documents constitute the sole and entire agreement among the
parties
hereto with respect to the subject matter hereof and supersedes and renders
of
no force and effect all prior oral or written agreements, commitments and
undertakings among the parties with respect to the subject matter
hereof.
11.13 Amendment.
This Agreement may be amended, supplemented or modified only by a written
instrument duly executed by or on behalf of each of the Parties to
it.
11.14 Severability.
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future Laws, and if the rights or obligations
of any party hereto under this Agreement will not be materially and adversely
affected thereby, (a) such provision will be fully severable, (b) this
Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect
and
will not be affected by the illegal, invalid or unenforceable provision or
by
its severance herefrom and (d) in lieu of such illegal, invalid or
unenforceable provision, there will be added as a part of this Agreement
a
mutually acceptable legal, valid and enforceable provision as similar in
terms
to such illegal, invalid or unenforceable provision as may be
possible.
11.15 Headings.
The headings used in this Agreement have been inserted for convenience of
reference only and do not define or limit the provisions hereof.
11.16 Execution
of Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
11.17 Language.
This Agreement is prepared in both English and Chinese versions, with each
version having equal validity and legal effect. In the event of discrepancy
between the English and Chinese versions, the Chinese version shall
govern.
11.18 Taking
Effect.
This
Agreement shall take effect on the date and year first above
written.
[SIGNATURE
PAGES FOLLOW]
IN
WITNESS WHEREOF, the Parties hereto have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above
written.
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Signature:
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/s/
XXXXXXX DASH
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By:
Xxxxxxx Dash
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|
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Title:
Chief Executive Officer
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|
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Well
Chance Investments Limited
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Signature:
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/s/
XXXXXXX DASH
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By:
Xxxxxxx Dash
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Title:
President
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Music
Radio Limited
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Signature:
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/s/
JU BAOCHUN
|
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By:
Ju Baochun (巨宝春)
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Title:
Executive Director
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Signature:
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/s/
JU BAOCHUN
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|
Ju
Baochun (巨宝春)
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Signature:
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/s/
XUE XXX
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EXHIBIT
A
DISCLOSURE
SCHEDULE
Disclosure
Schedule
This
Disclosure Schedule sets forth the exceptions and explanations to the
representations and warranties made in Section 2 of the Share Purchase Agreement
(the “Agreement”)
dated
as of November 28, 2008, by and among Legend Media Inc.,
a
corporation incorporated under the Laws of the State of Nevada, United States
of
America, Well Chance Investments Limited(the “Purchaser”),
an
international business company incorporated under the Laws of the British
Virgin
Islands, Ju Baochun (巨宝春),
an
individual holding PRC ID card No. ______________, Xxx Xxx (穥伟),
an
individual holding PRC ID card No. ___________________, and Music Radio Limited
(the “Company”),
an
international business company incorporated under the Laws of the British
Virgin
Islands.
The
information and disclosures contained herein shall be deemed representations
and
warranties by the Seller Parties to the Purchaser, and shall be an integral
part
of Section 2 of the Agreement.
Section
and subsection references are references to the corresponding sections and
subsections of the Agreement to which the disclosed exceptions is most likely
to
relate, but any information specifically disclosed herein under any section
number shall be deemed to apply to any other representation or warranty in
Section of the Agreement to which it is reasonably apparent based on the
description of the matter contained in such section.
Capitalized
terms used herein and not otherwise defined herein shall have the meaning
ascribed to them in the Agreement.
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No.
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Disclosure
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2.4
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The
operating address is different from the registered address as reflected
on
the Business License of YSLD.
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2.8
|
Please
refer to Attachment
A.
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2.9
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The
Lease Agreement of the operating address of YSLD was expired on
May 31,
2008, but YSLD still conducts business under such lease without
any
written lease agreement.
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2.15
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YSLD
only has one bank account which is the basic bank account opened
with
Beijing Ping An li Branch of Bank of China (中国權瞴罟份有榰公司北京平安渴支瞴).
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2.21
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None
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2.22
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None
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Attachment
A
Material
Contracts
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No.
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Name
|
Period
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Parties
|
|||
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1.
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Advertisement
Release Business Agreement (广告发布业务合同)
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2008.4-2008.12
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Beijing
Yinse Lingdong Advertising Co., Ltd. (北京栍綎灵动广告有榰公司)
and
Sanya
Luhuitou Tourism Resort Development Co., Ltd. (三亚憁回头旅游区开发有榰公司)
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|||
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2.
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Advertisement
Release Agreement
(广告发布合同)
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2008.6-2008.10
2008.12
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Beijing
Yinse Lingdong Advertising Co., Ltd. (北京栍綎灵动广告有榰公司)
and
Beijing
Fortune Garden Real Estate Development Co., Ltd. (北京狞富絏园房地产开发有榰公司)
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|||
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3.
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Advertisement
Release Order of Xinhua Airline Magazine
(《新华緖空》杂志广告发布瑞单)
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2008.1-2008.12
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Beijing
Yinse Lingdong Advertising Co., Ltd. (北京栍綎灵动广告有榰公司)
and
Xxxxx
(万科)
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EXHIBIT
B
CONTROLLING
DOCUMENTS
Exclusive
Technical, Operational, Business Consulting and Services Agreement
Operating
Agreement
Authorization
Agreements
