EXCLUSIVE TECHNICAL, OPERATIONAL, BUSINESS CONSULTING AND SERVICES AGREEMENT
EXCLUSIVE
TECHNICAL, OPERATIONAL,
BUSINESS
CONSULTING AND SERVICES AGREEMENT
This
Exclusive Technical, Operational, Business Consulting and Services Agreement
(the "Agreement")
is
entered into as of November 28, 2008 by and among the following parties:
1.
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Legend
Media (Beijing) Information and Technology Co., Ltd. (乐君(北京)信息技术有榰公司),
a company incorporated in the People's Republic of China ("PRC")
with the registered office at Xxxx 000, Xxxxxxxx 0, Xx.0 Xxxxxx Xxxx,
Xxxxxxx Xxxx-xxxx Xxxx, Xxxxxxxxxxx Xxxxxxxx, Xxxxxxx (“Party
A”);
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2.
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Beijing
Yinselingdong Advertising Co., Ltd. (北京栍綎灵动广告有榰公司),
a
company incorporated in the PRC with the registered office at Xxxx
000,
Xxxx 00, Xxxxxxxx 0, Xxxxx 10 of Xin Xxx Xxx Xx Xx, Xicheng District,
Beijing (“Party
B”);
and
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3.
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Ju
Bingzhen (巨秉珍),
a PRC citizen with ID number of
_______________;
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Xxx
Xxx
(穥伟),
a PRC
citizen with ID number of __________________ (collectively “Party
C”).
Party
A,
Party B and Party C shall be collectively referred to as the “Parties”
and
each as a “Party”.
WHEREAS,
Party
A, a wholly foreign-owned enterprise registered under the PRC laws, itself
and
through its associated companies, own various human resource with extensive
experience and technologies in marketing, customer support, technical,
operational, business consulting and services.
WHEREAS,
Party
B, a domestic company registered under the PRC laws, is engaging in advertising
services.
WHEREAS,
Ju
Bingzhen and Xxx Xxx hold 40% and 60% equity interest in Party B,
respectively.
WHEREAS,
Party B
and Party C intend to retain Party A as the exclusive service provider to
provide the above-mentioned services in connection with the advertising business
and Party A agree to provide such services pursuant to the terms and conditions
herein.
NOW
THEREFORE,
the
Parties have reached the following agreements based on the principle of equal
and mutual benefit:
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1. SERVICES;
EXCLUSIVITY
During
the term of this Agreement and on the terms and conditions contained in this
Agreement, Party A, as Party B’s exclusive service provider, agrees to render
technical, operational, business consulting and services to Party B as fully
described in Appendix
I
(the
“Services”).
Party
B
and Party C hereby accept Party A as its exclusive service provider for the
Services. For the avoidance of any doubt, Party B agrees and Party C agree
to
cause Party B to, during the term of this Agreement and without the prior
written consent from Party A, refrain from:
a)
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engaging
in any business other than its current business conducted as of the
date
hereof;
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b)
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engaging
the services of, or otherwise utilizing, any third party to provide
such
marketing, customer support, technical, operational, business consulting
and services for the above-mentioned business.
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Party
A
shall be the owner of all rights to any and all intellectual property rights
arising from the performance of this Agreement, including, without limitation,
any copyright, patent, know-how and otherwise, irrespective of whether developed
by Party A or Party B.
2. PAYMENT
FOR THE SERVICES
Party B
and
Party C acknowledge the full support of Party A by providing in advance all
of
the Services and the risks associated therein, and agree to pay Party A the
Basic Service Fee (as fully described in Appendix
II).
To
provide proper incentive to Party A in connection with the Services provided
by
Party A, Party B and Party C agree to pay Party A the Bonus Service Fee (as
fully described in Appendix
II),
as
applicable.
Party
A
may from time to time and in response to market changes, in its sole discretion,
determine that the mechanism of calculating the Service Fee (as fully described
in Appendix
II)
becomes
unpractical or unreasonable and demand adjustment to be made to the calculation
mechanism, Party B shall discuss with Party A in good faith within seven (7)
business days upon receipt of such written request for an adjustment to modify
the existing calculation mechanism.
3. REPRESENTATIONS
AND WARRANTIES
Party
A
hereby represents and warrants as follows:
(a)
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Party
A is a company duly registered and validly existing under the PRC
laws;
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(c)
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This
Agreement constitutes a legal, valid and binding agreement of Party
A,
enforceable against Party A in accordance with the terms and conditions
of
this Agreement upon its execution.
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Party
B
and Party C hereby jointly and severally, represent and warrant as follows:
(a)
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Party
B is a company duly registered and validly existing under the PRC
laws and
has obtained all necessary approvals to engage in the businesses
as
specified in Party B’s business
license;
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(b)
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The
registered capital of Party B has been fully paid and the equity
interests
are owned by Party C free and clear of all liens 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 Party
B or
Party C is a party or otherwise
bound;
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(c)
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Each
of Party B and Party C has full right, power, authority, capacity
and all
consents as well as approvals of any other third party or government
authorization necessary to execute and perform this Agreement. The
execution and performance of this Agreement is not in violation of
any
applicable laws or in breach of any contract to which any member
of Party
B or Party C is a party;
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(d)
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This
Agreement constitutes a legal, valid and binding agreement of each
of
Party B and Party C, enforceable against each of Party B and Party
C in
accordance with the terms and conditions of this Agreement upon its
execution.
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4. CONFIDENTIALITY
Each
of
Party B and Party C agrees to use best efforts to protect and maintain the
confidentiality of Party A's confidential data and information acknowledged
or
received by either Party B or Party C during the process of provision of the
Services by Party A (collectively the "Confidential
Information").
Each
of Party B and Party C may not disclose or transfer any Confidential Information
to any third party without Party A's prior written consent. Upon termination
or
expiration of this Agreement, each of Party B and Party C shall, at Party A's
option and request, return all and any documents, information or software
containing any of such Confidential Information to Party A, or destroy or delete
all of such Confidential Information from any memory devices and cease to use
them.
The
above
Article shall survive after any amendment, termination or expiration of this
Agreement.
5. DUTIES
OF PARTIES
5.1
Duties
of Party A.
Party
A
agrees that during the term of this Agreement and on the terms and conditions
under this Agreement, it shall provide the Services in due
course.
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Party
A
agrees to bear all the cost associated with the provision of the
Services.
Party
A
shall maintain sufficient experienced personnel to adequately meet the
reasonable request of Party B on the Services from time to time.
5.2
Duties
of Party B.
Party
B
shall continue to engage in advertising services pursuant to the terms and
conditions of this Agreement, with the aim of developing and expanding the
business; Party
B
agrees to make all payments to Party A in due course pursuant to the terms
and
conditions of this Agreement;
Party
B
shall cause its representative to take appropriate, reasonable, and cautious
manner in using and operating any system and equipment relating to the Services
under this Agreement;
Party
B
shall grant Party A or any person authorized by Party A, access to visit and
inspect, during normal business hours, any of the properties, and to examine
the
books of account and records of Party B and discuss the affairs, finances and
accounts of Party B with its directors, officers, employees, agents,
accountants, legal counsels and investment bankers, as applicable;
In
order
for Party A to better provide the Services to Party B, Party B shall consult
with Party A and take into account Party A’s input before making any material
decision with respect to the business operations or other aspects of Party
B.
In
order
for Party A to better provide the Services to Party B, Party B shall timely
provide Party A any and all information and materials as may be reasonably
required by Party A.
In
order
for Party A to better provide the Services to Party B, Party B shall not appoint
any senior management without the prior written consent of Party A.
5.3
Duties
of Party C
Each
of
Party C hereby pledges his/her 100% equity interests in Party B (the
“Pledged
Equity”)
to
Party A as guarantee of fulfillment of all obligations of Party B and Party
C
under this Agreement, including, without limitation, payment for the Services
of
Party A. If Party B breaches any of its representations and warranties,
covenants or obligations under this Agreement, Party A is entitled to dispose
the Pledged Equity and retain the proceeds of such sale or require Party C
to
transfer the Pledged Equity to Party A (or a person designated by Party A),
to
the extent legally permitted under the PRC laws;
Party
C
hereby undertakes to properly register the above-mentioned pledge of the Pledged
Equity and file such corporate documents as necessary or desirable with relevant
government authorities for the purposes of perfecting the security interest
on
the date hereof;
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Party
C
hereby grants to Party A or its designated person an option to purchase any
or
all of the Pledged Equity at nominal value, to the extent legally permitted
under the PRC laws;
Party
C
may not dispose or encumber the Pledged Equity in any manner without the prior
written consent of Party A.
6. INDEMNITY
Both
Party B and Party C shall jointly and severally indemnify and hold harmless
Party A from and against any loss, damage, obligation and cost arising out
of
this Agreement due to the breach of this Agreement by Party B or Party
C.
Party
A
shall indemnify and hold harmless Party B and Party C from and against any
loss,
damage, obligation and cost arising out of this Agreement due to the breach
of
this Agreement by Party A.
7. EFFECTIVE
DATE AND TERM
This
Agreement shall be executed and come into effect as of the date first set forth
above.
The
term
of this Agreement is ten (10) years, unless otherwise terminated pursuant to
the
terms and conditions of this Agreement. Upon the expiration, the term of this
Agreement shall be renewed automatically for another ten (10) years unless
any
Party provides in writing that it does not wish to renew this Agreement.
Party
A
may review this Agreement on an annual basis and, in its sole discretion,
determine whether any amendment to the Agreement is necessary or desirable
in
response to the change of circumstances, business conducted by Party B as well
as the Services rendered.
8. TERMINATION
This
Agreement shall expire on the date due unless this Agreement is renewed as
set
forth above.
Articles
4 and 6 shall survive after the termination or expiration of this Agreement.
9. SETTLEMENT
OF DISPUTES
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.
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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 then in effect. The language of the arbitration shall be
in
Chinese. The arbitration award shall be final and binding upon the Parties
and
shall be enforceable in accordance with its terms.
During
the period when a dispute is being resolved, the Parties shall in all other
respects continue their performance of this Agreement other than the matter(s)
in dispute.
10. FORCE
MAJEURE
Force
Majeure, which includes acts of governments, acts of nature, fire, explosion,
typhoon, flood, earthquake, tide, lightning, war, means any event that is beyond
the party's reasonable control and cannot be prevented with reasonable care.
However, any shortage of credit, capital or finance shall not be regarded as
an
event of Force Majeure. The affected party who is claiming to be not liable
to
its failure of performing this Agreement by Force Majeure shall inform the
other
party, without delay, of the alternative approaches for the performance of
this
Agreement.
In
the
event that the affected party is delayed in or prevented from performing its
obligations under this Agreement by Force Majeure, only within the scope of
such
delay or prevention, the affected party will not be responsible for any damage
by reason of such a failure or delay of performance. The affected party shall
take appropriate means to minimize or remove the effects of Force Majeure and
attempt to resume performance of the obligations delayed or prevented by the
event of Force Majeure. After the event of Force Majeure is removed, Parties
shall agree to resume performance of this Agreement with their best efforts.
11. 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
Article):
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If
to
Party A, 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
Party B or Party C, to
Address:
Room 0-0-000, Xxxxxxxx Xxxxx, Xx. 0 Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx,
Xxxxxxx.
Facsimile
No: 010-66126396
Attn:
Ju
Baochun
12. NO
ASSIGNMENT
None
of
the Parties may assign any of its rights or obligations under this Agreement
to
any party without the prior written consent of the other Parties.
13. SEVERABILITY
Any
provision of this Agreement that is invalid or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability, without affecting in any way the remaining provisions
hereof in such jurisdiction or rendering that any other provision of this
Agreement invalid or unenforceable in any other jurisdiction.
14. GOVERNING
LAW
This
Agreement shall be governed by and construed in accordance with the PRC laws.
15. LANGUAGE
This
Agreement is executed in both English and Chinese, with equal validity and
legal
effect.
16. NO
THIRD PARTY BENEFICIARY
This
agreement shall only be binding upon the parties hereto and their respective
permitted successors and transferees, without giving any beneficiary right
to
any third party.
17. HEADINGS
The
captions, titles and headings included in this Agreement are for convenience
only, and do not affect this Agreement’s construction or
interpretation.
[SIGNATURE
PAGES FOLLOW]
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IN
WITNESS THEREOF, the Parties hereto have caused this Agreement to be duly
executed on their behalf by a duly authorized representative as of the date
first set forth above.
PARTY
A
Legend
Media (Beijing) Information and Technology Co., Ltd. (乐君(北京)信息技术有榰公司)
(chop)
Signature:
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/s/
XXXXXXX DASH
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Name:
Xxxxxxx Dash
Title:
Legal Representative
PARTY
B
Beijing
Yinselingdong Advertising Co., Ltd.
(chop)
Signature:
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/s/
XXX XXX
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Name:
Xxx
Xxx (穥伟)
Title:
Legal Representative
PARTY
C
Signature:
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/s/
JU BINGZHEN
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Name:
JU
BINGZHEN (巨秉珍)
Signature:
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/s/
XXX XXX
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Name:
XXX
XXX (穥伟)
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APPENDIX
I
THE
SCOPE OF SERVICES
The
Services to be provided by Party A to Party B shall include:
(e)
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overall
management and administrative services, including, without limitation,
the
accounting and human resources;
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(f)
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market
research, data collection and analysis, including, without limitation,
feasibility report and marketing consulting service;
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(g)
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design
and execution of marketing development strategy, including, without
limitation, organizing sales force and providing marketing support,
client
development as well as relationship
management;
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(h)
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technical
support and service, including, without limitation, the daily maintenance,
supervision and problem-solving of equipments used in the ordinary
course
of business of Party B, and timely response to any urgent request
in case
of any sudden failure of such equipments;
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(i)
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personnel
secondment to meet human resource need of Party B on a temporary
or
fixed-term basis; and
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(j)
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Any
other services related to the business of Party B as reasonably requested
by Party B and agreed by Party A from time to
time.
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APPENDIX
II
CALCULATION
AND PAYMENT OF THE SERVICES FEE
The
service fee for the Services shall be calculated and paid as follows (the
“Service
Fee”):
1.
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The
Service Fee for the related fiscal year payable by Party B to Party
A
shall consist of (i) the Basic Service Fee and (ii) the Bonus Service
Fee;
where:
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a)
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The
Basic Service Fee shall equal to 40% of the Total Revenue (as defined
below) of Party B;
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b)
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In
case that the Gross Margin for the related fiscal year (the “Actual
Margin”)
is more than 40% (the “Benchmark
Margin”),
then the Bonus Service Fee shall equal to the product of (i) 40%
of the
Total Revenue times (ii) the difference of Actual Margin minus the
Benchmark Margin.
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For
the
purpose of this Agreement,
a)
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The
Total Revenue means the aggregate revenue of the Party B for the
related
fiscal year;
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b)
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The
Gross Margin means the percentage, the denominator of which being
the
Total Revenue minus the cost of the Contracts (as defined below) for
the related fiscal year and the nominator being the Total Revenue;
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c)
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The
Contracts means the Exclusive Advertising Agency Contract For Xxx
Xxx Airlines(《新华緖空》广告总代理合同)
by and between YSLD and Bejing Huoli Huanxiang Advertising Co., Ltd.
(北京活力幻像广告有榰公司).
.
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2.
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The
Services Fee shall be payable by Party B to Party A on a monthly
basis.
The estimated monthly pro rata Service Fee for any given fiscal year
shall
be 10% of the Service Fee of the preceding fiscal year, while Party
A
shall consult with Party B and in good faith determine the estimated
monthly pro rata Service Fee for the first fiscal year. The monthly
Service Fee shall be payable on or prior to the first calendar day
of each
month.
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3.
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If
the Service Fee actually paid for any given fiscal year is more than
the
Service Fee payable for such fiscal year calculated above, then any
extra
amount paid shall be used to deduct any Service Fee for the immediately
succeeding fiscal year; or If the Service Fee actually paid for any
given
fiscal year is less than the Service Fee payable for such fiscal
year
calculated above, then the shortage amount shall be immediately payable
to
Party A.
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