EXCLUSIVE TECHNICAL, OPERATIONAL, BUSINESS CONSULTING AND SERVICES AGREEMENT
Execution
Version
EXCLUSIVE
TECHNICAL, OPERATIONAL,
BUSINESS
CONSULTING AND SERVICES AGREEMENT
This
Exclusive Technical, Operational, Business Consulting and Services Agreement
(the "Agreement")
is
entered into as of July 3, 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 Room 573, Xxxxxxxx 0, Xx.0 Xxxxxx Xxxx,
Xxxxxxx Xxxx-xxxx Xxxx, Xxxxxxxxxxx Xxxxxxxx, Xxxxxxx (“Xxxxx
X”);
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2.
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Beijing
Maihesi Advertising International Co., Ltd. (北京慚犕思国榻广告有榰公司)
,
a company incorporated in the PRC with the registered office at Room
401,
Beijing Lanxi Hotel, No.1 South of Yuhui South Road, North Fourth
Ringô Chaoyang
District, Beijing (xxxxxxxxxxxxx
0
x北京xxxx000x)
(“Xxxxx
X”);
and
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3.
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Ju
Baochun (xxx),
a PRC citizen;
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Xue
Wei
(穥伟),
a PRC
citizen (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
Baochun and Xue Wei hold 90% and 10% 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.
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NOW
THEREFORE,
the
Parties have reached the following agreements based on the principle of equal
and mutual benefit:
1. SERVICES;
EXCLUSIVITY
1.1 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”).
1.2 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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1.3 Each
Party 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
2.1 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).
2.2 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.
2.3 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
3.1 Party
A
hereby represents and warrants as follows:
3.1.1
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Party
A is a company duly registered and validly existing under the PRC
laws;
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3.1.2
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Party
A has full right, power, authority and capacity and all consents
and
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 Party A is a party;
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3.1.3
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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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3.2 Party
B
and Party C hereby jointly and severally, represent and warrant as follows:
3.2.1
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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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3.2.2
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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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3.2.3
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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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3.2.4
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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
4.1 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.
4.2 Article
4.1 shall survive after any amendment, termination or expiration of this
Agreement.
5. DUTIES
OF PARTIES
5.1 Duties
of Party A.
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5.1.1
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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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5.1.2
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Party
A agrees to bear all the cost associated with the provision of the
Services.
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5.1.3
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Party
A shall maintain sufficient experienced personnel to adequately meet
the
reasonable request of Party B on the Services from time to
time.
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5.2
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Duties
of Party B.
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5.2.1
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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;
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5.2.2
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Party
B agrees to make all payments to Party A in due course pursuant to
the
terms and conditions of this Agreement;
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5.2.3
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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;
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5.2.4
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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;
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5.2.5
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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.
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5.2.6
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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.
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5.2.7
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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.
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5.3
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Duties
of Party C
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5.3.1
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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;
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5.3.2
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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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5.3.3
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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;
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5.3.4
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Party
C may not dispose or encumber the Pledged Equity in any manner without
the
prior written consent of Party A.
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6. INDEMNITY
6.1 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.
6.2 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
7.1 This
Agreement shall be executed and come into effect as of the date first set forth
above.
7.2 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.
7.3 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
8.1 This
Agreement shall expire on the date due unless this Agreement is renewed as
set
forth above.
8.2 Articles
4 and 6 shall survive after the termination or expiration of this Agreement.
9. SETTLEMENT
OF DISPUTES
9.1 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.
9.2 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
English. The arbitration award shall be final and binding upon the Parties
and
shall be enforceable in accordance with its terms.
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9.3 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
10.1 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.
10.2 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):
If
to
Party A, to:
Address:
Room 601-602, Tower C, Baoding Center, NO.7, DongDaMoChang Street, Chongwen
District, Beijing
Facsimile
No: 010-67082707
Attn:
Shao Changjian
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If
to
Party B or Party C, to
Address:
Room 8-3-101, Guanyuan Plaza, No. 1 Cuihua Street, Xicheng District,
Beijing.
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. In the event of any discrepancy between the English and Chinese
versions, the English version shall prevail.
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:
/s/ Xxxxxxx
Wei
Xxx
Name:
Xxxxxxx Wei Xxx
Title:
LEGAL REPRESENTATIVE
PARTY
B
Beijing
Maihesi Advertising International Co., Ltd.
(chop)
Authorized
Signature: /s/ Ju
Baochun
Name:
JU
BAOCHUN (xxx)
PARTY
C
Signature:
/s/
Ju
Baochun
Name:
JU
BAOCHUN (xxx)Signature:
/s/ Xue
Wei
Name:
XUE
WEI (穥伟)
[SIGNATURE
PAGE OF TBSA]
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APPENDIX
I
THE
SCOPE OF SERVICES
The
Services to be provided by Party A to Party B shall include:
(a)
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overall
management and administrative services, including, without limitation,
the
accounting and human resources;
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(b)
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market
research, data collection and analysis, including, without limitation,
feasibility report and marketing consulting service;
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(c)
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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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(d)
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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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(e)
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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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(f)
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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 Agent Contract (as amended)
entered into between Beijing Guoguang
Guangrong Advertising Co., Ltd. (北京xxx粝广告有榰公司)
(“Guoguang”)
and Beijing Hongtenglianguang Advertising Co., Ltd. (北京懁纂羬广广告有榰公司)
(“Hongteng”)
dated May 5, 2008.
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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 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 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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