EXHIBIT 10.14
EQUITY INTEREST TRANSFER AGREEMENT
This Equity Interest Transfer Agreement ("AGREEMENT") is made and entered into
as of April 5, 2004 by and between:
00XXX.XXX, INC. ("TRANSFEROR"), a company organized under the laws of the
British Virgin Islands, with its registered office at x/x X.X. Xxx 000, Xxxxxxxx
Xxxxxxxxxxxxx Centre, Road Town, Tortola, British Virgin Islands, and its legal
representative as ZHEN Xxxx Xxx;
WUHAN XXX XXX XXXX XXXXX ADVERTISING COMPANY LIMITED ("TRANSFEREE"), a company
organized under the laws of the People's Republic of China, with its registered
office at Room 4202 World Trade Building, 344 Xxx Xxxx Avenue, Jianghan
District, Wuhan, and its legal representative as XXXX Xxx, and a part of equity
interests of the Transferee controlled, indirectly, by Xxxx Xxx Network
Information Technology (Shanghai) Company Limited.
WHEREAS:
1. Xxxx Xxx Network Information Technology (Shanghai) Company Limited
("COMPANY"), a Chinese-Foreign joint venture company organized under the
laws of the People's Republic of China by the Transferor and Beijing Xxxx
Xxxxx Si Jin Advertising Company Limited ("XXXX XXXXX SI JIN"), of which
the registered capital is US$5,000,000.00, with its registered office at
Suite 2307 Lucky Mansion, 000 Xxxxxxxxxx Xxxx, Xxxxxx Xxx Xxxxxxxx,
Xxxxxxxx, Xxxxx, with its business license number of Xxxxxxxxxxxxxxxx
Xx.000000 (Xxxxxx), with its legal representative of ZHEN Ronghui, and the
Transferor and Xxxx Xxxxx Si Jin owns 99% and 1% equity interests of the
Company, respectively;
2. Transferor agrees to transfer to the Transferee, and the Transferee agrees
to accept 48% equity interests of the Company owned by the Transferor;
3. Xxxx Xxxxx Si Jin has waived its first right of refusal for the aforesaid
48% equity interests of the Company, and agrees that the Transferee may
purchase the aforesaid equity interests as set out in the Consent Letter
provided in Appendix I;
4. After the Transferee obtains the aforesaid equity interests from the
Transferor, upon the approval of relevant approval authorities and the
terms, conditions, and of the transaction comply with the requirements of
the Transferor, then subject to the laws of the PRC the Transferor has the
right to redeem the aforesaid equity interests obtained by the Transferee
in accordance with this Agreement, and the Transferee shall warrant to the
Transferor that it will transfer the aforesaid equity interests to the
Transferor by then.
NOW THERFORE, in accordance with the relevant PRC laws and regulations, through
friendly consultations, and based on a principle of mutual benefits, the parties
hereof agree as follows:
ARTICLE I DEFINITION
1.1 Unless otherwise defined above or below, the following terms shall have
the following meanings:
"SHARE" or "EQUITY INTEREST" means the equity interest which investor holds by
contributing to the registered capital of the company or purchasing or otherwise
lawfully acquiring the capital contribution of the original investor of the
company. The percentage of the equity shares held by a shareholder in the
Company shall be equal to his or her proportionate contribution to the
registered capital of the company;
"REDEMPTION" means, after the Transferor transfers the 48% equity interests of
the Company in accordance with this Agreement, Transferor and/or its designee
redeems the aforesaid equity interests transferred to Transferee in accordance
with this Agreement, upon the approval of the relevant approval authorities and
subject to PRC laws;
"PRC LAWS" means all the laws, regulations and decisions made and promulgated by
any PRC legislature, and all the administrative regulations, rules and measures
and other binding official documents;
"APPROVAL" means any approval, consent, license, permit obtained from and/or
issued by any PRC administrative authority in accordance with the PRC Law,
including but not limited to the approval of the administration for commerce
regarding the establishment of foreign invested enterprises ("FIE") and any
changes thereof;
"REGISTRATION" means any application in accordance with PRC Law for legal
registration with relevant PRC authorities, including but not limited to the
registration with a relevant administration for industry and commerce for the
establishment and change of the FIEs;
"PRC" means the People's Republic of China;
"US DOLLAR" or "US$" or "USD" means the legal currency of the United States;
"RENMINBI" or "RMB" means the legal currency of the People's Republic of China;
"PARTY" means any party of this Agreement and "PARTIES" mean the Transferor and
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the Transferee collectively.
1.2 Unless otherwise defined, references to articles, clauses, and Appendix
are to the articles, clauses of and appendix to, this Agreement.
1.3 Headings are for ease of reference only and shall not affect the
interpretation of this Agreement.
ARTICLE II SHARE TRANSFER
2.1 Transferor hereof agrees to transfer 48% equity interests of the Company
and the relevant rights and benefits attached to the Shares to the
Transferee in accordance with the terms and conditions hereof, and the
Transferee agrees to accept such Shares. After the completion of the Share
transfer, the Transferor will hold 51% equity interests of the Company and
Xxxx Xxxxx Si Jin will hold 1% equity interest of the Company.
ARTICLE III TRANSFER PRICE AND REGISTERED CAPITAL
3.1 Parties hereof agree that, for the 48% equity interests transferred to the
Transferee, Transferee shall pay Transferor RMB1,000,000.00. After the
completion of the transfer, the registered capital of the company will
remain the same.
ARTICLE IV COMPLETION AND PAYMENT
4.1 Parties hereof agree that, upon the date when all the conditions as
provided hereunder are fulfilled, the Transferee will hold the 48% equity
interests originally owned by the Transferor, after which the Transferor
holds 51% equity interests, and the Transferee holds 48% equity interests
of the Company, and the Parties shall enjoy the respective rights and bear
respective responsibilities in accordance with their proportionate equity
interest ratio:
(a) Approval regarding this Agreement having been issued by the relevant
approval authority;
(b) relevant industry and commerce administration registration
procedures regarding the Share transfer as provided hereof having
been completed.
4.2 Transferee agrees that it will submit the entire transfer price as
provided in Article 3.1 within three (3) months upon the execution of this
Agreement.
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ARTICLE V REDEMPTION OBLIGATION UPON COMPLETION
5.1 Parties hereof agree that, after the Transferee obtains 48% equity
interests of the Company from the Transferor in accordance with this
Agreement, subject to PRC Law and upon the Approval of the relevant
authority, Transferor and/or its designee shall, at any time within the
effective term of this Agreement, redeem the 48% equity interests from the
Transferee in a lump sum or in installments in accordance with this
Agreement and other agreements entered into by the Parties, in the event
that Transferor is satisfied with the terms and conditions of the
transaction. Transferee warrants to agree to transfer the Share to the
Transferor and/or its designee.
5.2 Upon the redemption described above by the Transferor and/or its designee,
the Transferor and/or its designee shall issue a written notice for the
Share Redemption. Upon the issuance of the notice, Transferee shall
transfer the Shares as set out in the notice to the Transferor and/or its
designee in accordance with this Agreement, the notice and other
agreements entered into by the Parties.
5.3 Transferee shall, within 60 days of the issuance of the written Redemption
notice of the Transferor and/or its designee, assist the Transferor and/or
its designee to complete all necessary Approval and Registration
procedures for the Redemption of Shares that are held by the Transferee.
ARTICLE VI REPRESENTATIONS AND WARRANTIES
6.1 Transferor hereof undertakes and warrants that:
(a) it is a company duly organized and validly existing under the laws
of the British Virgin Islands;
(b) at the time of the execution of this Agreement, it owns 99% equity
interests of the Company, and it has full right, power and
authorization to execute and perform this Agreement;
(c) at the time of the execution of this Agreement, the equity interests
it owns in the Company are free from any mortgage, pledge, or any
other security interests or encumbrance in other forms, or any
undertakings of similar third party interests;
(d) after its authorized representative executes this Agreement, the
provisions hereof shall constitute the legal, effective and
enforceable
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obligations upon the Transferor;
(e) neither the execution of this Agreement, nor the performance of the
obligations under this Agreement, conflicts or violates any laws and
regulations or any governmental or administrative approval, or any
agreement entered into between Transferor and any third party;
(f) to its knowledge, no litigation, arbitration, or governmental,
administrative or other investigation, or governmental investigation
is pending or is threatened to be initiated, which is related to the
matters hereof, or would have an adverse effect upon the execution
or the performance of this Agreement; and
(g) it has disclosed all the documents related to the transaction
stipulated hereof which are owned and controlled by the Transferor,
and the documents it provided do not contain any false statements
and representations or omissions as to the material matters.
6.2 Transferee hereof undertakes and warrants that:
(a) it is a company duly organized and validly existing under the PRC
laws;
(b) it has full right, power and authorization to execute and perform
this Agreement, and it has all the right, authorization, and
approvals to fully perform each of its obligations under this
Agreement;
(c) after its authorized representative executes this Agreement, the
provisions hereof shall constitute the legal, effective and
enforceable obligations upon the Transferee;
(d) neither the execution of this Agreement, nor the performance of the
obligations under this Agreement, conflicts or violates any laws and
regulations or any governmental or administrative approval, or any
agreement entered into between Transferee and any third party;
(e) to its knowledge, no litigation, arbitration, or governmental,
administrative or other investigation, or governmental investigation
is pending or is threatened to be initiated, which is related to the
matters hereof, or would have an adverse effect upon the execution
or the performance of this Agreement; and
(f) it has disclosed all the documents related to the transaction
stipulated hereof which are owned and controlled by the Transferee,
and the
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documents it provided do not contain any false statements and
representations or omissions as to the material matters.
ARTICLE VII LIABILITIES FOR BREACH OF CONTRACT
7.1 Occurrence of any of the following circumstances constitutes a breach to
this Agreement:
(a) breaching of any provisions hereof;
(b) violation of any statements, warranties or undertakings made in this
Agreement, or the making of any false or inaccurate representations,
warranties or undertakings hereof; and
(c) transfer any rights and obligations under this Agreement without the
other Party's prior written consent.
7.2 Except as stipulated in Article 7.3 hereof, in the event that any Party
commits any default or breach of the provisions in Article 7.1, the other
Party has the right to request the breaching Party for the compensation
for any losses and damages caused by such breach.
7.3 Except as stipulated in Article 7.2, if the Transferee fails to fulfill
its obligations for the entire payment of the transfer price as stipulated
in Article 3.1 hereof, then the Transferor shall have the right to either
redeem the Share as provided in Article 5 hereof, or terminate this
Agreement without any compensation to the Transferee, which shall not
affect the Transferor's rights to request compensation from the Transferee
for any losses caused by the Transferee's breach.
ARTICLE VIII CONFIDENTIALITY
8.1 Either Party shall be obligated to keep confidential all the commercial
information in any form whatsoever in connection with the other Party
obtained from the other Party for the execution and performance of this
Agreement, including any content of this Agreement and other cooperation
matters proposed by the Parties. Either Party may disclose the aforesaid
information to its employee, agent, distributor, supplier, and advisor
(including its accountant and attorneys) as necessary to perform its
obligations under this Agreement.
8.2 This clause does not apply to the disclosure of the following commercial
information:
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(a) that which is available and accessible to the public at the time of
disclosure;
(b) that which is available and accessible to the public after
disclosure for any reason other than the receiving party's fault;
(c) that which the receiving party can prove was in the possession of
the receiving party prior to the disclosure of such information, and
not obtained directly or indirectly from the other party; or
(d) that which is obligated to be disclosed to relevant government
authorities, or stock exchange market in accordance with the laws,
or disclosed to its immediate attorneys or financial advisors as
needed in the ordinary course of business.
8.3 Parties shall cause its director, officer, and other employee and the
director, officer and other employee of its subsidiary (if any) to comply
with the obligations under this confidentiality clause, and shall request
certain key employees to execute confidentiality agreements.
ARTICLE IX FORCE MAJEURE EVENT
9.1 The Force Majeure Event refers to events uncontrollable or unforeseeable
by either Party hereof, or foreseeable but unpreventable by either Party,
and which occurs after the date of execution of this Agreement causing
either Party to be unable to completely or partially fulfill any
stipulation hereof. The Force Majeure Event includes but is not limited to
strike, riot, explosion, fire, earthquake, and other acts of God, war,
civil disturbance, vandalism, expropriation, confiscation, governmental
acts, any change in law, or failure to obtain the approval from the
government authority for any reason other than the fault of either Party,
and other major or sudden event.
9.2 In the event of a Force Majeure Event, the party affected by such event
shall immediately notify the other party, and shall provide a detailed
written report within fifteen (15) days of the occurrence of the event.
The party affected by the event shall take all appropriate measures to
eliminate or minimize the effect of the Force Majeure Event and minimize
the loss to the over party arising thereof. Parties shall, in accordance
with the effects of the event upon the performance of this Agreement,
determine whether to terminate this Agreement, or postpone the performance
of this Agreement, or waive in part or whole the obligations of the party
affected under this Agreement.
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ARTICLE X EFFECTIVENESS
10.1 This Agreement shall become effective after the respective authorized
representative execute this Agreement and/or affix the company seals on
this Agreement and upon the approval of relevant competent authorities.
The term of this Agreement is ten (10) years, and it may be extended upon
the agreement of the Parties in writing.
ARTICLE X TERMINATION
11.1 This Agreement shall terminate upon the occurrence of any of the following
circumstances:
(a) in the event that Parties reach the agreement in writing;
(b) in the event that either Party ("Defaulting Party") violate any
provision hereunder, and upon the receipt of a default notice from
the other Party ("Non-Defaulting Party"), the violation has not been
cured within the time stipulated by the notice;
(c) in the event of any false or inaccurate statement and representation
by either party;
(d) in the event that this Agreement becomes void and null, or
unenforceable, or is announced to be void and null, or enforceable,
or is required to be amended by any government authority and such
amendment is not acceptable to either Party;
(e) in the event that the Transferee fails to pay the entire transfer
price in accordance with Article 3.1 and 4.2, or in the event of any
bankruptcy, liquidation, dissolution, suspension or cessation of
business, or insolvency occurring to Transferee;
(f) in the event that the occurrence or effect of a force majeure event
adversely affects the ability of either Party to perform this
Agreement, and the Parties fail to find a reasonable solution to
solve the matter within thirty (30) days of the occurrence of the
force majeure event.
11.2 In the event of an occurrence stipulated in Article 11.1(a), (b), (e) or
(g), any Party has the right to terminate this Agreement with a written
notice to the other Party; in the event of the occurrence stipulated in
the foresaid Article
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11.1(c), or (d), then only the Non-Defaulting Party has the right to
terminate this Agreement with a written notice to the other Party; and in
the event of the occurrence of the foresaid Article 11.1(f), then only the
Transferor has the right to terminate this Agreement with a written notice
to the other Party.
11.3 The termination notice becomes effective on the fifteen (15) days after
the notice is served to the noticed party as stipulated in Article 13.
11.4 In the event of the termination of this Agreement for a reason as set out
in this Article 11, then:
(a) either Party shall return any shares or share transfer price
obtained from the other Party as a result of the performance of this
Agreement;
(b) the Party at fault shall compensate the other Party for any losses
caused due to its fault, and in the event that both Parties are at
fault, each Party shall compensate the other Party to the extent of
its respective fault liability.
11.5 The right to termination this Agreement under this Article 11 shall not
adversely affect any other rights or remedies available under this
Agreement to the party requesting the termination.
ARTICLE XII GOVERNING LAW AND DISPUTES RESOLUTION
12.1 The execution, effectiveness, interpretation, performance, and
enforceability of this Agreement, and dispute resolution in connection
with this Agreement shall be governed by PRC Law.
12.2 Any disputes arising from the interpretation or performance of this
Agreement shall be resolved through friendly consultations between the
Parties hereof. If such dispute has not been settled within sixty (60)
days after commencement of friendly consultation, or within a longer
period of time as agreed to by the Parties, either Party may submit the
dispute to China International Economic and Trade Arbitration Commission
("CIETAC") in Beijing for arbitration in accordance with then effective
arbitration rules of CIETAC. The arbitration award shall be final and
binding upon both parties hereto. During the course of any dispute or
arbitration of any dispute, both parties hereto shall continue to perform
the duties and obligations under this Agreement not the subject of the
disputes.
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ARTICLE XIII NOTICE
13.1 Any notice hereunder shall be delivered by hand or via facsimile or
registered airmail to the following addresses and numbers, unless a Party
has notified the other Party of its changed addresses and numbers. Notices
sent by registered airmail shall be deemed as being effectively served on
the fifth day after the date dispatched. Notices delivered by hand or sent
via facsimile shall be deemed as being effectively served on the next day
after the delivery or transmission. If transmitted by facsimile, the
original copy of the notices shall be sent by registered airmail or
delivered by hand to the other Party immediately after the transmission.
TRANSFEROR: 00XXX.XXX INC.
Address: Xxxxx 0000, Xxx Xxxxxx, 00 Xxxxx'x Xxxx Xxxxxxx, Xxxx Xxxx
Attention: Xxxx Xxx
Phone Number: 000-00000000
Facsimile: 852-29077881
TRANSFEREE: WUHAN XXX XXX XXXX XXXXX ADVERTISING COMPANY LIMITED
Attention: Xx. XXXX Xxx
Address: x/x Xxxxxxxxxxx Xxxxxxxx 00X, 000 Xxxxxxx xxxx, Xxxxxxxx
Xxxxxxxx, Xxxxxxx
Postal Code: 100022
Phone Number: 0000-00000000
Facsimile: 8610-65669199
ARTICLE XIV MISCELLANEOUS
14.1 This Agreement may not be changed, modified or amended without the written
agreements between the Parties signed by the authorized representatives,
after which the amendment shall become an integral part of this Agreement
and shall have the same legal effect upon the approval from the original
approval authority.
14.2 Any tolerance or allowance granted by one Party to the other Party for any
breach caused by the other Party, or any postponement in the exercise of a
right or power enjoyed hereunder by one Party for the breach caused by the
other Party, shall not be deemed as a waiver of such Party's rights and
power and shall not prejudice, affect or otherwise restrict other rights
and power enjoyable by such Party in accordance with this Agreement and
relevant PRC
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laws and regulations. Any separate or partial exercise of any rights,
power or remedies enjoyed by one Party hereunder shall not prejudice such
Party's further exercise of such right, power or remedy, and shall not
prejudice such Party's exercise of other rights, powers or remedies.
14.3 The invalidity, nullity and unenforceability of any provision hereof shall
not affect or prejudice the validity, effectiveness and enforceability of
other provisions hereof. However, the Parties hereto shall cease the
performance of such invalid, null and unenforceable provision and shall
avoid the effects of such invalidity, nullity, and unenforceability to
this Agreement to the maximum extent, as in accordance with the purposes
of this Agreement.
14.4 This Agreement shall be transcribed in Chinese, written in five (5)
counterparts, each Party shall hold one counterpart and the remaining
copies shall be submitted to the approval authorities.
IN WITNESS WHEREOF, the Parties or their respective authorized representative
execute and sign this Agreement as of the day and year first above written.
TRANSFEROR: 00XXX.XXX, INC.
By: _____________________________
Authorized representative:
TRANSFEREE: WUHAN XXX XXX XXXX XXXXX ADVERTISING COMPANY LIMITED
By: _____________________________
Authorized representative:
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APPENDIX I CONSENT LETTER
To: 00xxx.xxx Inc.
Wuhan Xxx Xxx Xxxx Xxxxx Advertising Company Limited
Regarding the 48% equity interests of Xxxx Xxx Network Information Technology
(Shanghai) Company Limited owned and transferred by 00xxx.xxx Inc., we as a
shareholder of the joint venture company hereof waive our first right of refusal
for the aforesaid 48% equity interests, and we hereof agree for Wuhan Xxx Xxx
Xxxx Xxxxx Advertising Company Limited to purchase such shares.
Beijing Xxxx Xxxxx Si Jin Advertising Company Limited (seal)
_______________________________
Date: April 5, 2004
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