Amendment Agreement to Investment Framework Agreement by and among Redgate Interactive Advertising (Beijing) Co., Ltd. and All Natural Persons Listed in Appendix I and Beijing Yanhuang Shengshi Advertising Co., Ltd. January 12, 2010
Exhibit 10.3.3
[Translation of Chinese original]
Amendment Agreement to Investment Framework Agreement
by and among
Redgate Interactive Advertising (Beijing) Co., Ltd.
and
All Natural Persons Listed in Appendix I
and
Beijing Yanhuang Shengshi Advertising Co., Ltd.
January 12, 2010
The Supplementary Agreement for Investment Framework Agreement (“Supplementary Agreement”) was
executed by the following parties hereto on January 12, 2010 in Beijing, China:
(1) Redgate Interactive Advertising (Beijing) Co., Ltd., a wholly foreign-owned company
incorporated and existing under the laws of China, with its registered address at Xxxx 000,
Xxxxxxxx 0, Xx. 00 Xxxxxxxxxxxxx Xxxxxx, Xxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxx (“Investor”);
(2) all natural persons listed in Appendix I (“Existing Shareholders”); and
(3) Beijing Yanhuang Shengshi Advertising Co., Ltd., a limited liability company incorporated and
existing under the laws of China, with its registered address at No. 320 South to Xxxxxxxxx Xxxxx,
Xxxxxxxxx Xxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxx (“Company”).
(The Investor, the Existing Shareholders and the Company are collectively referred to as the
“Parties” and individually as a “Party”.)
Whereas:
(A) The Investor is a wholly foreign-owned company incorporated and existing under the laws of
China and engages in advertisement-related businesses. The Company is a limited liability company
incorporated on April 19, 2000 in accordance with the Company Law of the People’s Republic of China
and the relevant laws and regulations of China. The Company’s Existing Shareholders held 100%
equity interest of the Company prior to August 3, 2008 as follows: Xxxxxx Xxxx, 75%; Xxx Xx, 10%;
Xxxxx Xxxx, 10%; and Xxxx Xx, 5%;
(B) The
Investment Framework Agreement (“Investment Framework
Agreement”) was executed on August 3,
2008 by and among the Investor, the Existing Shareholders and the Company, specifying the
Investor’s acquisition of 51% equity interest of the Company held by the Existing Shareholders, the
detailed operation mode and the Investor’s acquisition of the remaining equity interest held by
the Existing Shareholders;
(C) Since relevant matters to the Project have changed, the Investor and Existing Shareholders
decide through amiable negotiation to modify relevant articles of the Investment Framework
Agreement so that Investor may successfully acquire 51% of equity interest of the Company held by
the Existing Shareholders and the remaining equity interest held by the Existing Shareholders.
Now, therefore, the Parties agree through amiable negotiation on the principle of equality and
mutual benefit in accordance with the Company Law of the People’s Republic of China, the Contract
Law of the People’s Republic of China and other pertinent laws and regulations of China and on the
basis of the relevant terms, conditions, agreements of and acknowledgement by the Parties of
receipt of the considerations payable by the Investor as at the date of the Supplementary Agreement
and paid by the Investor in connection with 51% equity interest of the Company:
1. According to the background information as mentioned in “Whereas” Clause of the Supplementary
Agreement, the Parties agree to modify Article 2.1.(5) of the Investment Framework Agreement as
follows:
“2.1.(5). The Parties understand and agree that the Investor is obliged to make the following
arrangement for payment of the equity transfer price:
(a) The Investor shall be obliged to agree to pay RMB thirty-two million one hundred and thirty
thousand (RMB32,130,000) from the Domestic Co-managed Account to the Existing Shareholders or
their designated accounts on the delivery date of initial equity transfer;
(b) The Investor shall pay RMB nineteen million two hundred and seventy-eight thousand
(RMB19,278,000) to the Existing Shareholders or their designated domestic accounts within seven
(7) business days from the first anniversary of the delivery date of initial equity transfer or
prior to January 31, 2010, whichever is later;
(c) The Investor shall pay RMB ten million five hundred and fifty-two thousand (RMB10,552,000)
to the Existing Shareholders or their designated domestic accounts within seven (7) business
days from the second anniversary date of the delivery date of initial equity transfer
The Existing Shareholders shall, prior to the delivery date of initial equity transfer, provide
the information about their domestic accounts for collection of such payments.”
2. According to the background information as mentioned in “Whereas” Clause of the Supplementary
Agreement, the Parties agree to modify Article 4.5 of the Investment Framework Agreement as
follows:
The Existing Shareholders shall complete the procedures for alteration of industrial and
commercial registration in connection with the transfer of the remaining equity interest to the
Investor within twenty-five (25) working days after the Investor pays the first instalment for
the remaining equity interest to the Co-managed Account (defined as below).
3. According to the background information as mentioned in “Whereas” Clause of the Supplementary
Agreement, the Parties agree to modify Article 4.6 of the Investment Framework Agreement as
follows:
“4.6 Where the Investor or its related party/parties fail to realize the satisfactory overseas
listing within twelve (12) months from the delivery date of initial equity transfer but they
realize the goal thereafter, the Investor shall, after all the conditions precedent as specified in
Articles 4.6.1.1, 4.6.2.1 or 4.6.3.1 of the Agreement have been fulfilled, and qualified overseas
listing has been completed, pay the considerations by instalments for the remaining equity interest
of the Company to the Existing Shareholders or their designated third persons (whether domestic or
overseas) by means of payment in cash of equivalent value. The Parties understand and agree that
the Investor shall, after completion of all the conditions precedent (except for Paragraph iv) as
mentioned in Article 4.6.1.1, pay the first instalment for the remaining equity interest to the
account opened and managed jointly by the Investor and the Existing Shareholders (“Co-managed
Account”). The Co-managed Account is an account subject to co-signature procedure. Money withdrawal
from the Co-managed Account or other similar disposal shall be subject to the co-signature of the
Investor and the Existing Shareholder. The Existing Shareholders shall be obliged to transfer the
remaining equity interest to the Investor or its designated related party/parties according to the
terms and conditions of the Agreement and to cooperate in completing such transaction at the
Investor’s requirements. The performance of this Article involves conversion from RMB into USD, and
the “exchange rate” shall be the average mean price of the exchange rate of USD against RMB
published by the People’s Bank of China in the conversion year. The Investor shall pay the
consideration by instalments for the remaining equity interest of the Company to the Existing
Shareholders or their designated third persons according to the following schedule:
4.6.1 Payment of the first instalment for the remaining equity interest (“First Instalment for
Remaining Equity Interest”) in cash to the Existing Shareholders or their designated third persons
(whether domestic or overseas)
4.6.1.1 Conditions precedent for the Investor to permit the Existing Shareholders to withdraw
the First Instalment for Remaining Equity Interest from the Co-managed Account
The Parties understand and agree that the conditions precedent for the Investor’s payment of
the First Instalment for Remaining Equity Interest to the Existing Shareholders or their
designated third persons (whether domestic or overseas) include:
(i) All the conditions precedent as specified in Article 5.1 of the Agreement have been
fulfilled (or, if not, they have been waived by the Investor on or prior to the delivery date
of initial equity transfer);
(ii) Whether the Investor finds prior to the completion of initial equity transfer that (a)
the Existing Shareholders have performed their other obligations under the remaining articles
of the Agreement; or (b) (aa) although the Existing Shareholders have not performed their other
obligations under the remaining articles of the Agreement, and (bb) it thus causes material
adverse legal consequences or actual economic losses to the Company, and (cc) with the consent
of the Investor and Existing Shareholders, (aaa) the Existing Shareholders have
made full compensation to the Company in a way satisfactory to the Investor, or (bbb) the
Investor deducts the amount equivalent to the actual economic losses arising from the transfer
price of the remaining equity interest payable to the Existing Shareholders;
(iii) Whether the Investor finds prior to the completion of initial equity transfer that (a)
the statements and warranties made by the Existing Shareholders under the Agreement and all
appendices hereto are true and accurate on the delivery date of initial equity transfer, free
of false, misleading or material misstatements, and the Existing Shareholders have abided by
and performed in all aspects the statements and warranties under the Agreement and all
appendices hereto; or (b) (aa) although certain statements and warranties made by the Existing
Shareholders in the Agreement and all appendices hereto are untrue and incorrect on the
delivery date of initial equity transfer and contain false, misleading or material
misstatements, or the Existing Shareholders fail to abide by and perform the Agreement and all
appendices hereto (including the obligations thereunder); and (bb) the Existing Shareholders
fail to abide by and perform the Agreement and all appendices hereto (including statements,
warranties and obligations) in all aspects, which causes material adverse legal consequences or
actual economic losses to the Company; and (cc) with the consent of the Investor and Existing
Shareholders, (aaa) the Existing Shareholders have made full compensation to the Company in a
way satisfactory to the Investor, or (bbb) the Investor deducts the amount equivalent to the
actual economic losses arising from the transfer price of the remaining equity interest payable
to Existing Shareholders;
(iv) The procedures for alteration of industrial and commercial registration in connection
with the acquisition by the Investor or its related parties of the remaining equity interest of
the Company have been completed;
(v) The Existing Shareholders are still holding full-time positions in the Company and
providing management services in good faith and diligently in accordance with the requirements
of the Articles of Association of the Company;
(vi) The Existing Shareholders have performed all obligations and arrangements under the
Agreement or its supplementary agreements, without violation of the Agreement or its
supplementary agreements;
(vii) The Investor’s internal organ (the Shareholders’ Meeting or Board of Directors) has, in
accordance with the procedures of a listed company, approved the Investor’s acquisition of the
remaining equity interest by means of payment of the First Instalment for Remaining Equity
Interest to the Existing Shareholders.
4.6.1.2 Confirmation of the First Instalment for Remaining Equity Interest
Subject to Article 4.10 of the Agreement, the Investor shall, within fifteen (15) business days
after all the conditions precedent as specified in Article 4.6.1.1 are fulfilled or waived, pay
the First Instalment for Remaining Equity Interest to the Existing Shareholders as follows:
First
Instalment for Remaining Equity Interest =A x C x 49% x 30% – RMB2,450,000
Of which,
A = audited net profit of the Company in 2008 calculated according to US GAAP (“Company’s Net
Profit in 2008”). The Investor and the Existing Shareholders confirm that the Company’s Net
Profit in 2008 is RMB eighteen million and twenty thousand (RMB18,020,000)
C = 9.5
4.6.2 Payment of the second instalment for the remaining equity interest (“Second Instalment
for Remaining Equity Interest”) in cash to the Existing Shareholders or their designated third
persons (whether domestic or overseas)
4.6.2.1 Conditions precedent for payment of the Second Instalment for Remaining Equity Interest
to the Existing Shareholders or their designated third persons (whether domestic or overseas)
The Parties understand and agree that the conditions precedent for payment of the Second
Instalment for Remaining Equity Interest to the Existing Shareholders include:
(i) All the conditions precedent as specified in Article 5.1 hereof have been fulfilled (or,
if not, waived by the Investor on or prior to the delivery date of the initial equity
transfer);
(ii) All the conditions precedent as specified in Article 4.6.1.1 hereof have been fulfilled
(or, if not, waived by the Investor);
(iii) PWC has completed the audit upon the Company for 2009 according to US GAAP and issued
an unqualified opinion audit report of the Company for 2009 to the Investor and Existing
Shareholders; and, the audited profit after-tax is not less than RMB nineteen million
(RMB19,000,000);
(iv) The Existing Shareholders are still holding full-time positions in the Company,
providing management services and performing management duties in accordance with the Articles
of Association of the Company;
(v) The Investor’s internal organ (the Shareholders’ Meeting or Board of Directors) has, in
accordance with the procedures of a listed company, approved the Investor’s acquisition of the
remaining equity interest by means of payment of the Second Instalment for Remaining Equity
Interest to the Existing Shareholders.
4.6.2.2 Confirmation of the Second Instalment for Remaining Equity Interest
Subject to Article 4.10 of the Agreement, Investor shall, within fifteen (15) business days
after all the conditions precedent as specified in Article 4.6.2.1 are fulfilled or waived,
distribute the
second-stage common shares of the Listed Company or pay in cash of equivalent
value to the Existing Shareholders as follows:
Second Instalment for Remaining Equity Interest =A x C x 49% x 30%
Of which,
A = audited net profit of the Company in 2010 calculated according to US GAAP (“Company’s Net
Profit in 2009”)
C = 6 (if the Company’s net profit 2009 is less than RMB19,000,000) or 9.5 (if the Company’s
net profit 2009 is more than RMB19,000,000)
4.6.3 Payment of the third instalment for the remaining equity interest (“Third Instalment for
Remaining Equity Interest”) to the Existing Shareholders or their designated third persons (whether
domestic or overseas)
4.6.3.1 Conditions precedent for payment of the Third Instalment for Remaining Equity Interest
to the Existing Shareholders or their designated third persons (whether domestic or overseas)
The Parties understand and agree that the conditions precedent for payment of the Third
Instalment for Remaining Equity Interest to the Existing Shareholders include:
(i) All the conditions precedent as specified in Article 5.1 hereof have been fulfilled (or,
if not, waived by the Investor on or prior to the delivery date of the initial equity
transfer);
(ii) All the conditions precedent as specified in Article 4.6.2.1 hereof have been fulfilled
(or, if not, waived by the Investor);
(iii) PWC has completed the audit upon the Company in 2010 according to US GAAP and issued an
unqualified opinion audit report of the Company for 2010 to the Investor and Existing
Shareholders; and, the audited profit after-tax 2010 is not less than RMB twenty million
(RMB20,000,000);
(iv) The Existing Shareholders are still holding full-time positions in the Company,
providing management services and performing management duties in accordance with the Articles
of Association of the Company;
(v) The Investor’s internal organ (the Shareholders’ Meeting or Board of Directors) has, in
accordance with the procedures of a listed company, approved the Investor’s
acquisition of the
remaining equity interest by means of payment of the Third Instalment for Remaining Equity
Interest to the Existing Shareholders.
(vi) 75% of the amounts receivable by the Company 2010 have been collected.
4.6.3.2 Confirmation of the Third Instalment for Remaining Equity Interest
Subject to Article 4.10 of the Agreement, the Investor shall, within thirty (30) business days
after the Listed Company issues the audited report 2010 according to US GAAP or within twenty
(20) business days after all the conditions precedent as specified in Article 4.6.3.1 are
fulfilled or waived, whichever is later, pay the Third Instalment for Remaining Equity Interest
to the Existing Shareholders as follows:
Third Instalment for Remaining Equity Interest = A x C x 49% x 40%
Of which,
A = audited net profit of the Company in 2010 calculated according to US GAAP (“Company’s Net
Profit 2010”)
C = 6 (if the Company’s net profit 2010 is less than RMB20,000,000) or 9.5 (if the Company’s
net profit 2010 is more than RMB20,000,000) or 10 (if the Company’s net profit 2010 is more
than RMB25,000,000)
The Parties understand and agree that, if the Company’s net profit in 2010 is more than
RMB25,000,000, the number of C in the formulas as mentioned in Article 4.6.1.2 or 4.6.2.2 is
confirmed as 9.5 and the Investor has paid the First Instalment for Remaining Equity Interest and
the Second Instalment for Remaining Equity Interest according to the relevant calculation result
(“Original Calculation Result”), it is agreed to raise the number of C in the formulas as
mentioned in Article 4.6.1.2 or 4.6.2.2 from 9.5 to 10, and to recalculate according to the
formulas as mentioned in Article 4.6.1.2 or 4.6.2.2 (“New Calculation”), then the Investor shall
pay the difference between Original Calculation Result and New Calculation Result when the
Investor pays the Third Instalment for Remaining Equity Interest to the Existing Shareholders.
4. According to the background information as mentioned in “Whereas” Clause of the Supplementary
Agreement, the Parties agree to modify Article 4.7 of the Investment Framework Agreement as
follows:
4.7 The Company’s equity valuation shall be reduced appropriately according to the aforesaid
Articles 2.3, 2.4 and 2.5 when the audited profit after-tax during the periods for performance
calculation, 2009 or 2010 is less than that estimated by the Parties, namely, RMB eighteen million
(RMB18,000,000)., However, if within thirty (30) days after the Company’s annual audit report in
the previous year is issued according to the prevailing US GAAP in 2010 and 2011, the Existing
Shareholders fail to transfer the equity proportion calculated according to the aforesaid Articles
2.3, 2.4 and 2.5 to the Investor free of charge successfully, the Parties understand, agree and
emphasize that 49% in the formulas as mentioned Article 4.6.2.2 and 4.6.3.2 shall be replaced as
follows:
The equity proportion in lieu of 49% in the formula under Articles 4.6.2.2 =49%-{RMB sixty-one
million nine hundred and sixty thousand (RMB61,960,000)/[audited profit after-tax 2009 ×7
]×100%-51%};
The equity proportion in lieu of 49% in the formula under Articles 4.6.3.2 =49%-{RMB sixty-one
million nine hundred and sixty thousand (RMB61,960,000)/[audited profit after-tax 2010 ×7
]×100%-51%}”
5. The Investor and Existing Shareholders agree to enter into a equity transfer agreement
concerning acquisition of the Company’s remaining equity interest, of which the format and contents
shall be subject to Appendix 2 hereto, according to the contents of the Supplementary Agreement and
the Investment Framework Agreement when the Supplementary Agreement is executed, and to complete
the procedures for transfer of the Company’s remaining equity interest according to the terms and
conditions of the Supplementary Agreement and the Investment Framework Agreement.
6. In case of barriers in realization of the Equity Transfer and in performance of relevant payment
obligations under the Supplementary Agreement and the Investment Framework Agreement as a result of
domestic and foreign laws and regulations, especially, pertinent domestic and foreign laws and
regulations on foreign exchange administration, the Parties shall make active negotiation and
flexible treatment, and the Investor and the Existing Shareholders shall be obliged to find out,
jointly and actively, relevant possible suitable methods to complete the Equity Transfer and the
payment obligations under the Supplementary Agreement and the Investment Framework Agreement.
7. The Parties understand and agree that the Investor shall pay to the Existing Shareholders the
late fee at the daily rate of 0.4‰ of the corresponding instalment for the Remaining Equity
Interest as mentioned in this Article if the Investor or its related parties have realized the
qualified overseas listing but fail to pay any instalment for the Remaining Equity Interest
(including First Instalment for Remaining Equity Interest, Second Instalment for Remaining Equity
Interest and Thirty Instalment for Remaining Equity Interest) according to the Supplementary
Agreement within thirty (30) days after fulfillment of all the conditions precedent.
8. The remaining sections and articles of the Investment Framework Agreement shall be binding upon
the Parties according to the terms and conditions of the Investment Framework Agreement, except for
modifications to the Investment Framework Agreement in the Supplementary Agreement, including, but
not limited to, Articles 2.1.5, 4.5 and 4.7.
9. Unless otherwise defined herein, the terms used and defined or interpreted in the Investment
Framework Agreement shall have the same definitions or interpretations in the Supplementary
Agreement.
[Execution Page Below]
[Execution Page of the Supplementary Agreement for Investment Framework Agreement]
Redgate Interactive Advertising (Beijing) Co., Ltd.
| Signature: | /s/ Xxxx Xxx | [company seal] | ||
| Name: Xxxx Xxx | ||||
| Title: Legal Representative | ||||
| Xxxxxx Xxxx |
||||
| Signature: | /s/ Xxxxxxxx Xxxx | |||
| Xxx Xx |
||||
| Signature: | /s/ Xxx Xx | |||
| Xxxxx Xxxx |
||||
| Signature: | /s/ Xxxxx Xxxx | |||
| Xxxx Xx |
||||
| Signature: | /s/ Xxxx Xx | |||
| Beijing Yanhuang Shengshi Advertising Co., Ltd. |
||||
| Signature: | /s/ Xxxxxx Xxxx | [company seal] | ||
| Name: | ||||
| Title: | ||||
Appendix1
Existing Shareholders
1. Xxxxxx Xxxx, ID Card No.: 110221197109300016; Domicile: 5-3-303, Xx. 0 Xxxxx X. Xxxx, Xxxxxxxx
Xxxxxxxx, Xxxxxxx, Xxxxx
2. Xxx Xx, ID Card No.: 11010519650322412X; Domicile: 1-4-8, Xx. 0 Xxxxxxxxxxxx Xxxx, Xxxxxxxx
Xxxxxxxx, Xxxxxxx, Xxxxx
3. Xxxxx Xxxx, ID Card No.: 11010319730106123X; Domicile: Xx. 00 Xxxxxxxx Xxxxxxx, Xxxxxxxx
Xxxxxxxx, Xxxxxxx, Xxxxx
4. Xxxx Xx, ID Card No.: 000000000000000000; Domicile: 6-903, Building 0, Xxxxxxx Xxxxxxx, Xxxxxx
Xxxxxxxx, Xxxxxxx, Xxxxx
Appendix2
Equity Transfer Agreement
Appendix 2
Equity Transfer
Agreement
Agreement
In Connection with
Beijing Yanhuang Shengshi Advertising Co., Ltd.
By and among
Redgate Interactive Advertising (Beijing) Co., Ltd.
And
Xxxxxx Xxxx, Xxx Xx, Xxxxx Xxxx and Xxxx Xx
Equity Transfer Agreement
Transferors:
1. Xxxxxx Xxxx, ID Card No.: 110221197109300016; Domicile: 5-3-303, Xx. 0 Xxxxx X. Xxxx, Xxxxxxxx
Xxxxxxxx, Xxxxxxx, Xxxxx
2. Xxx Xx, ID Card No.: 11010519650322412X; Domicile: 1-4-8, Xx. 0 Xxxxxxxxxxxx Xxxx, Xxxxxxxx
Xxxxxxxx, Xxxxxxx, Xxxxx
3. Xxxxx Xxxx, ID Card No.: 11010319730106123X; Domicile: Xx. 00 Xxxxxxxx Xxxxxxx, Xxxxxxxx
Xxxxxxxx, Xxxxxxx, Xxxxx
4. Xxxx Xx, ID Card No.: 000000000000000000; Domicile: 6-903, Building 0, Xxxxxxx Xxxxxxx, Xxxxxx
Xxxxxxxx, Xxxxxxx, Xxxxx
Transferee:
Redgate Interactive Advertising (Beijing) Co., Ltd., a wholly foreign-owned company incorporated
and existing under the laws of China, with its registered address at Xxxx 000, Tower 2, Xx. 00
Xxxxxxxxxxxxx Xxxxxx, Xxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxx;
The Agreement is made by and between the Transferors and Transferee through amiable negotiation
concerning the transfer of the equity interest of Beijing Yanhuang Shengshi Advertising Co., Ltd.
(“Company”):
1. The Transferee shall purchase 49% equity interest of the Company held by Transferors in the
consideration of RMB two million four hundred and fifty thousand (RMB2,450,000), including 36.75%
held by Xxxxxx Xxxx, 4.9% by Xxx Xx, 4.9% by Xxxxx Xxxx and 2.45% by Xxxx Xx. The Transferee shall
make payment respectively to each and all Transferors within [15] day(s) from the date of the
Agreement.
2. Upon completion of the equity transfer, the Transferors and Transferee shall enjoy the rights
and assume the obligations as the Company’s shareholders in accordance with the Articles of
Association of the Company.
3. The Agreement shall take effect with signatures of the Parties.
(Execution page below)
[Execution Page of Equity Transfer Agreement]
Redgate Interactive Advertising (Beijing) Co., Ltd.
Signature: _________________________________
Name:
Title:
Xxxxxx Xxxx
Signature: _________________________________
Xxx Xx
Signature: _________________________________
Xxxxx Xxxx
Signature: _________________________________
Xxxx Xx
Signature: _________________________________
