Framework Agreement
Exhibit
10.15
[Reference
Translation]
between
Kunming
Television Station
and
Advertising
Networks Limited
February 2008
[Reference
Translation]
Table of
Contents
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Chapters
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Pages
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Chapter
1
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Definitions
and Interpretations
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2
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Chapter
2
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New
Co Establishment
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5
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Chapter
3
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Advertising
Co Establishment
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6
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Chapter
4
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Inter-Company
Relationship
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8
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Chapter
5
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Assets
Purchase
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11
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Chapter
6
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Representations
and Warranties
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12
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Chapter
7
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Covenants
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13
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Chapter
8
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Conditions
Precedent
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15
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Chapter
9
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Closing
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16
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Chapter
10
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Effectiveness
and Termination
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16
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Chapter
11
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Events
of Breach
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18
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Chapter
12
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Force
Majeure
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18
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Chapter
13
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Confidentiality
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19
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Chapter
14
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Miscellaneous
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20
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Schedules
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A.
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List of
Assets
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B.
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List of Party A’s Key
Staff
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C.
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List of Governmental Authorizations
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This
Framework Agreement
(Agreement) is
entered into on 23 February 2008 in Kunming, People’s Republic of China (PRC)
by
and between
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(1)
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Kunming Television Station
(Party A), a PRC television station with its registered address at
Xx. 000, Xxxxxx Xxxx, Xxxxxxx Xxxx, Xxxxxx Xxxxxxxx;
and
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(2)
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Advertising Networks
Limited (广告网络有限公司)(Party B), a company
established under the laws of Hong Kong (as defined below) with its
registered address at 12/F, Xxxxxxxxx Xxxxx, 00 Xxxxxxx XX, Xxxxxxx, Xxxx
Xxxx.
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(individually
a Party, and
collectively, the Parties)
WHEREAS
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(1)
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Party
B has established an Affiliate(as defined below),i.e., Beijing Guangwang
Hetong Advertising & Media Co., Ltd in Beijing,
PRC;
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(2)
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Party
A will establish a new company (New Co) jointly with
Party B through the contribution of Contributed Assets (as defined below),
in cooperation with Party B in respect of the Business (as defined
below);
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(3)
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Party
A is engaged in the provision of the Business and has obtained the
licenses necessary to operate the Business in the PRC, and is willing to
transfer the advertisement operations to the New Co for consideration;
and
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(4)
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Party
B will establish an advertising company (Advertising Co) jointly
with Party A via Beijing Guangwang Hetong Advertising & Media Co.,
Ltd, which shall cooperate with the New Co in respect of advertisement
operations in the Business.
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NOW, THEREFORE, the
Parties agree as follows:
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Chapter
1 Definitions and Interpretations
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1.1
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Definitions
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Unless
otherwise indicated, the following terms in this Agreement shall have the
meanings set forth below:
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Affiliate
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in
relation to an entity, means an entity:
(1)
in which the entity holds, directly or indirectly, at least 10% of the
equity interest or voting rights;
(2)
which is a Subsidiary of the entity’s Parent Company;
(3)
which owns or controls, directly or indirectly, the entity;
(4)
which owns or controls, directly or indirectly, any equity interest or
voting rights of the Parent Company of the entity; or
(5)
which is a Subsidiary of the Parent Company of the entity described in (4)
above.
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Appraisal
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the
appraisal on the Contributed Assets and Transferred Assets conducted by a
qualified appraisal agent;
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Assets
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the
aforesaid Contributed Assets and Transferred Assets,
collectively;
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Business
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the
advertisement operations of Party A;
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Closing
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the
date of fulfillment of all the conditions precedent as listed in Article
8.1 (unless waived in accordance with Article 8.2.3), unless extended in
accordance with Article 8.2.2;
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Contributed
Assets
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any
assets as listed in Part 1 of Schedule A;
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Exclusive
Cooperation Agreement
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see
Article 4.1.1;
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Force
Majeure
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any
earthquake, storm, fire, flood, war and changes to the relevant state
and/or government laws, regulations and policies or other significant
event of natural or human-caused disaster arising after signing hereof
which is unavoidable, not possible to overcome, beyond the control of any
party and prevents the total or partial performance of this Agreement by
either party;
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Governmental
Authorizations
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as
defined in Article 6.2.3;
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Hong
Kong
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the
Hong Kong Special Administrative Region of PRC;
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Parent
Company
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in
relation to an entity, means an entity of which a company is a Subsidiary
(as defined below);
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PRC
Law
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all
laws and legislation of the PRC that are in effect, including laws,
regulations, resolutions, decisions, decrees and orders of government
agencies and other documents of a legislative, administrative or judicial
nature;
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Purchase
Price
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as
defined in Article 5.3;
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RMB
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Renminbi,
the lawful currency of the PRC;
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Subsidiary
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in
relation to a corporate entity, means an entity in which another company
holds, directly or indirectly, 50% or more of the entity’s total equity
interest or voting rights;
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Tax
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all
forms of taxation, including without limitation enterprise income tax,
business tax, value-added tax, stamp duty and individual income tax levied
by the PRC tax authorities pursuant to PRC Law, as well as any penalty,
surcharge or fine in connection therewith;
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Transferred
Assets
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any
assets as listed in Part 2 of Schedule A;
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Transferred
Staff
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the
staff of Party A relating to the operation of the Business and retained
for employment by the Advertising Co, as listed in Schedule
B;
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Trade
Secret
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any
information relating to this Agreement or the parties, including any
information regarding costs, technologies, financial contracts, future
business plans and any other information deemed by the parties to be
confidential, and which is unknown by the public, has practical value and
is of economic benefit to the parties;
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Transaction
Documents
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all
documents that require signing under PRC Law in order to complete the
transactions contemplated under this Agreement; and
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US$
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United
States Dollar, the lawful currency of the United States of
America.
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1.2 Interpretations
All
headings used herein are for reference purposes only and do not affect the
meaning or interpretation of any provision hereof. Any reference herein to an
Article, Chapter or Schedule is to an article, chapter or schedule of this
Agreement. The use of the plural shall include the use of the
singular, and vice versa. Unless otherwise indicated, a reference herein to a
day, month or year is to a calendar day, month or year. A reference to a
business day is to a day on which commercial banks are open for business in the
PRC. The use of the masculine shall include the use of the feminine,
and vice versa.
Chapter
2 New Co Establishment
2.1 Contributed Assets
Appraisal
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2.1.1
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Party
A shall, at its sole expense, hire a qualified appraisal agent to conduct
the Appraisal of the Contributed Assets. The value of the
Contributed Assets is anticipate to be XXX 000 million, which shall be the
value so appraised as confirmed by Party B and shall be deemed to be the
value of the Contributed Assets from Party
A.
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2.1.2
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Party
A covenants that such Appraisal shall be completed no later than 1 March
2008.
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2.2
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Establishment of New
Co
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2.2.1
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As
soon as practicable after the completion of the Appraisal and the
obtaining of approval certificates by the New Co, Party A shall contribute
40% of the Contributed Assets along with Party B’s cash investment in US$,
valued at XXX 00 million, as the initial contribution in order to jointly
establish the New Co in Kunming City, PRC. The subsequent contributions
from the Parties shall be completed within 6 months after the date of
obtaining the business license.
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2.2.2
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The
registered capital of the New Co is anticipated to be XXX 000 million,
subject to the final confirmation by the Parties. The percentage of the
contribution by Party A and Party B shall be 50%, respectively, and each
Party shall hold 50% of the equity interest in New
Co.
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2.2.3
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The
contribution of the Contributed Assets to the New Co’s registered capital
shall be made in accordance with the appraised value of the Contributed
Assets as stated in the Appraisal
report.
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2.2.4
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The
New Co’s business scope shall include consulting services for
advertisement operations, technical support and related
services.
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2.2.5
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The
operating term of the New Co shall be 20
years.
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2.3 Governmental
Approvals
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Party
A shall assist the New Co to obtain any and all prior approvals, consents
and (or) certificates, and shall make any and all filings necessary for
the establishment of the New Co under PRC Law. Party B shall
provide all necessary assistance in this
regard.
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2.4 Corporate
Governance
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2.4.1
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The
New Co shall establish a board of directors, which shall consist of 5
directors. Party A shall appoint 2 directors and Party B shall appoint 3
directors.
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2.4.2
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The
Chairman of the New Co’s board of directors shall be appointed by Party A.
The general manager and the finance officer shall be appointed by Party
B.
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2.5
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Profit
Consolidation
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To the
extent permitted by the applicable law, Party A agrees that Party B and (or) its
Affiliates may consolidate the profits of New Co in the financial statements for
purposes of financial statements. For this purpose, it is permissible,
with Party A’s consent, to amend the documents relating to the New Co (including
the articles of association) if and when necessary; provided that such
consolidation or amendment shall not impair the interests of Party
A.
Chapter
3 Advertising Co Establishment
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3.1
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Establishment of
Advertising Co
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3.1.1
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Party
A shall, along with Beijing Guangwang Hetong Advertising & Media Co.,
Ltd as designated by Party B, jointly establish an Advertising Co in
Kunming City, PRC.
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3.1.2
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The
registered capital of Advertising Co shall be RMB 1,000,000 and the
percentage of the contribution paid by Party A and the Beijing Guangwang
Hetong Advertising & Media Co., Ltd shall be 50%,
respectively. Each of Party A and the Affiliated Co shall hold
50% of the equity interest in the Advertising Co,
respectively.
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3.1.3
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The
business scope of the Advertising Co shall include the design, production,
publishing and agency services in regards to advertisements and so
on.
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3.2
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Governmental
Approvals
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Party A
shall assist the Advertising Co in obtaining any and all prior approvals,
consents and (or) certificates, and shall make any and all filings necessary for
the establishment of the Advertising Co under PRC Law. Party B shall provide all
necessary assistance in this regard.
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3.3
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Retention / Dismissal
of Employees
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3.3.1
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Prior
to Closing, Party A shall provide Party B with written notice as to which
of Transferred Staff shall be retained by the Advertising Co. The said
Transferred Staff retained by the Advertising Co shall include the key
staff members listed in Schedule B.
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3.3.2
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Prior
to Closing, Party A shall make its best efforts to encourage the
Transferred Staff to enter into standard employment contracts with the
Advertising Co that are satisfactory to the Parties or cause the
Transferred Staff to sign secondment contracts containing the
non-competition and confidentiality commitments that are required under
PRC law and which are satisfactory to the Parties in order to establish
secondment arrangements for the Transferred Staff to work in the
Advertising Co.
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3.3.3
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The
Advertising Co and the Transferred Staff shall establish employment
relationships in accordance with the Applicable
Laws.
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3.3.4
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Where
the staff of the Advertising Co are originally employed by Party A, Party
A shall bear sole responsibility for the existing employment relationship
with such staff prior to the establishment of new employment relationship
with the Advertising Co.
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3.4 Corporate
Governance
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3.4.1
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The
Advertising Co shall establish a board of directors at incorporated date,
which shall consist of 5 directors. The Beijing Guangwang Hetong
Advertising & Media Co., Ltd shall appoint 3 directors and Party A
shall appoint 2 directors.
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3.4.2
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The
Chairman of the Advertising Co’s board of directors shall be appointed by
Party A. The general manager and the finance officer shall be appointed by
Beijing Guangwang Hetong Advertising & Media Co.,
Ltd.
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Chapter
4 Inter-Company Relationship
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4.1
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Exclusive Cooperation
Agreement
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4.1.1
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Execution
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As soon
as practicable after the establishment of the New Co, at the same time as
executing an assets transfer agreement with the New Co, Party A shall execute an
exclusive cooperation agreement (Exclusive Cooperation
Agreement) with the New Co, which shall be satisfactory in both substance
and form to the Parties. The Exclusive Cooperation Agreement shall be effective
during the term of the existence of New Co.
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4.1.2
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Granting
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To the
extent permitted by PRC law, the New Co shall only be permitted to grant its
rights and obligations under the Exclusive Cooperation Agreement to the
Advertising Co to exercise.
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4.1.3.
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Cooperation
Scope
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Under the
Exclusive Cooperation Agreement:
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4.1.3.1
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In
accordance with the Exclusive Cooperation Agreement, Party A shall
authorize to the New Co the exclusive rights for advertisement operations
on 6 channels of Kunming Television Station, i.e., General Channel,
Life Channel, Entertainment Channel, Economic Channel, Film & TV
Channel and Public Channel (collectively, the Channels). If Party A
set up new channels in the future, Party A shall also authorize to the New
Co the exclusive rights for advertisement operations of the
same.
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4.1.3.2
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Party
A shall provide full support and most favorable treatment to
the New Co with respect to the Business. In addition, Party A shall
exclusively share their respective resources relating to the Business with
the New Co.
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4.1.4
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Exclusivity
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4.1.4.1
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Party
A shall not, either directly or indirectly (through agents or otherwise),
send to any third party, or encourage or solicit any third party to send,
or accept from any third party a proposal, or engage in any discussions or
negotiations with, or furnish any information to any third party,
regarding the transactions or services under the Exclusive Cooperation
Agreement.
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4.1.4.2
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If
Party A receive any proposal or other communication from a third party in
respect of a proposed cooperation that is similar to or related to any of
the transactions or services set forth under the Exclusive Cooperation
Agreement, Party A shall promptly communicate to Party B the
substance of such proposal or communication. Party A shall cause its
shareholders (except for the state or a government agency) to observe the
terms of this Article
4.1.4.2.
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4.2
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Exclusive Service
Agreement
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4.2.1
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Execution
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As soon
as practicable after the establishment of the Advertising Co, Party A and Party
B shall cause the New Co and the Advertising Co to execute an exclusive service
agreement (Exclusive Service
Agreement), which shall be satisfactory in both substance and form to the
Parties. The Exclusive Service Agreement shall be effective during the term of
the existence of the Advertising Co.
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4.2.2.
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Service
Scope
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Under the
Exclusive Service Agreement:
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4.2.2.1
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The
Advertising Co shall retain the New Co as its exclusive technical services
company. The New Co shall provide the Advertising Co with all technical
support, management support, management service and any other services in
exchange for service fees. These arrangements shall provide the channels
to transfer to the New Co the revenue arising from the advertising
business operated by the Advertising
Co.
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Framework
Agreement
- 9
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[Reference
Translation]
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4.2.2.2
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The
New Co shall exclusively authorize the Advertising Co to provide
advertisement agency services in respect of the above-referenced exclusive
right of advertisement marketing on the Channel, as set forth in the
Exclusive Cooperation Agreement. The Advertising Co shall be
responsible for the solicitation of advertisements for the Channel, and
shall enter into the contracts related to the production and publishing of
these advertisements with the clients in its own name. The New Co shall
pay service fees to the Advertising
Co.
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4.2.3
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Exclusivity
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4.2.3.1
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Both
Parties should ensure that the Advertising Co appoint New Co as its
exclusive provider of technical services. During the term of Exclusive
Service Agreement, the Advertising Co shall not engage any third party to
provide any services similar to exclusive technical services arising from
the Exclusive Service Agreement without the prior written consent of the
Parties or the New Co.
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4.2.3.2
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Both
Parties should ensure that the New Co appoint the Advertising Co as its
exclusive provider of advertisement agent services. During the term of
Exclusive Service Agreement, the New Co shall not engage any third party
to provide any services similar to exclusive advertisement agent services
arising from the Exclusive Service Agreement without the prior written
consent of the Parties or the Advertising Co
.
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4.3
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Revenue
Transfer
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All the
pre-Tax revenues (less the relevant turnover tax) of the Advertising Co
generated during the term of the Exclusive Service Agreement and relating to
advertisement marketing and other operations shall be paid by the Advertising Co
to the New Co as technical service fees under the Exclusive Service
Agreement.
Framework
Agreement
- 10
-
[Reference
Translation]
Chapter
5 Assets Purchase
5.1 Transferred Assets
Appraisal
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5.1.1
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As
soon as practicable after the establishment of the New Co, Party A shall,
at its sole expense, hire a qualified appraisal agent to conduct the
Appraisal of the Transferred Assets. The appraisal value of the
Transferred Assets is anticipated to be valued at approximately XXX 000
million.
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5.1.2
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Party
A covenants that such Appraisal shall be completed no later than 1 March
2008.
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5.2 Assets
Transfer
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5.2.1
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As
soon as practicable after the completion of the Appraisal, Party A and the
New Co shall execute an asset transfer agreement, which shall be
satisfactory in both substance and form to the Parties, whereby Party A
shall sell to the New Co, and the New Co shall purchase from Party A the
Transferred Assets (Asset
Transfer).
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5.2.2
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The
completion of the Asset Transfer and the payment of consideration by the
New Co as set forth in Article 5.3 shall be subject to the
fulfillment of certain pre-conditions as set forth in Article
8.1.
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5.2.3
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Party
A shall assist the New Co to obtain any and all prior approvals, consents
and (or) certificates, and shall make any and all filings necessary for
the Asset Transfer under PRC Law, including without limitation the filings
with related state-owned assets administration bureau, bureau of commerce,
administration of industry and commerce and administration of foreign
exchange.
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5.3 Consideration and
Payment
As
consideration for the Asset Transfer, the New Co shall disburse to Party A the
amount of XXX 000 xxxxxxx (Xxxxxxxx Price), as
follows:
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5.3.1
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40%
of the Purchase Price shall be paid within 3 days upon Closing;
and
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5.3.2
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60%
of the Purchase Price shall be paid within 6 months after Closing, subject
to the satisfactory completion of Party A’s covenants under Articles 7.3,
7.4 and 7.5, and certain conditions to be further agreed to by the
Parties.
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Framework
Agreement
- 11
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[Reference
Translation]
5.4 Continuous Transfer of
Assets
Upon the
second anniversary of the establishment of the New Co, Party A shall
continuously transfer other assets to the New Co and the New Co shall
continuously purchase such assets from Party A; provided that such purchase
shall be necessary for the operation of the Parties and subject to an assets
purchase agreement executed by the Parties separately.
Chapter
6 Representations and Warranties
6.1 Mutual Representations and
Warranties
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Each
of the Parties represents and warrants
that:
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6.1.1
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it
has all necessary power and authority to execute, deliver and perform this
Agreement and all Transaction Documents to which it is a party
to;
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6.1.2
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the
execution and performance of this Agreement and any Transaction Documents
to which it is a party to have been duly and validly authorized by any and
all necessary corporate actions;
and
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6.1.3
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the
execution, delivery and performance of this Agreement or any Transaction
Documents to which it is a party to will not contravene, conflict with, or
result in a violation of any provision of its organizational documents or
any contract, agreement, understanding, other legal arrangement, law or
order to which it is subject to.
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6.2
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Representations and
Warranties of Party A
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Party
A further represents and warrants to Party B
that:
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6.2.1
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the
Assets are free of any
encumbrances;
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6.2.2
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there
is no lawsuit, third party claim, order or investigation pending against
itself relating to the Assets or Business by any third party, court, or
governmental or arbitral body, which may impair the cooperation between
the Parties;
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6.2.3
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all
consents or approvals (Governmental
Authorizations), (which includes the items listed in Schedule C)
required under PRC Law for the due and proper operation of the Business,
have been duly obtained from the appropriate authorities for its lawful
establishment, existence and operation and are in full force and
effect.
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Framework
Agreement
- 12
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[Reference
Translation]
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6.3
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Representations and
Warranties of Party B
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Party B
further represents and warrants to Party A that:
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6.3.1
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its
capital source is lawful and Party A will not suffer any loss because of
the capital source.
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6.4
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Independent Effect of
Representations and
Warranties
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The representations and warranties
shall be separate and independent and, save as expressly provided, shall not be
limited by reference to any of the other representations and warranties or
anything in this Agreement.
Chapter
7 Covenants
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7.1
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Assets / New Co /
Advertising Co. Covenants
|
At any
time prior to Closing, Party A covenants that it shall not, without the prior
written consent of Party B:
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7.1.1
|
create
or permit to arise any lien, encumbrance, pledge, mortgage or any security
or other third party right or interest on or in respect of any of the
Assets or grant or issue, or agree to grant or issue, any
guarantee;
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7.1.2
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enter
into any transaction or arrangement with respect to the
Assets;
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7.1.3
|
it
will not enter into any agreements or materially modify or terminate any
agreements related to the Business; and depart from the ordinary course of
Party A or the New Co’s daily business operations in any
form;
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7.1.4
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increase
or agree to increase the remuneration (including bonuses, commissions and
benefits in kind) of any of the members of the board of directors or
employees of the New Co / Advertising Co., or provide or agree to provide
any gratuitous payment or benefit to any such person or any of their
dependents; and
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7.1.5
|
enter
into any agreement or arrangement to, or grant any power of attorney or
otherwise authorize any other person to do any of the
above.
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Framework
Agreement
- 13
-
[Reference
Translation]
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7.2
|
Transactions
Covenants
|
In
respect of the transactions contemplated under this Agreement, the Parties shall
jointly work to obtain all necessary consents, approvals or authorizations of,
or make all necessary declarations, filings or registrations with, any
governmental authority in connection with the execution, delivery and
performance of this Agreement and any Transaction Documents to which it is a
party to. The New Co and the Advertising Co shall each be responsible for such
costs incurred after their establishment.
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7.3
|
Governmental
Authorizations Covenants
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7.3.1
|
Party
A shall, at its sole expense, ensure that the annual inspection and (or)
renewal of Governmental Authorizations (where applicable) are duly and
timely made and all Governmental Authorizations are in full force and
effect throughout the term under the Exclusive Cooperation Agreement and
Exclusive Service Agreement as described herein and any terms extended by
the parties thereunder.
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7.3.2
|
To
the extent permitted by PRC Law, Party A shall immediately, and using its
best efforts, cause the New Co / Advertising Co to obtain the Governmental
Authorizations required for the operation of the
Business.
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7.4
|
Business
Covenants
|
The
Parties agree to use best commercial efforts to continue the operation of the
Business until the Parties agree otherwise.
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7.5
|
Non-Competition
|
After
Closing, Party A shall not, and shall cause its shareholders (except for the
state or a government agency) to not, without first obtaining the written
approval of Party B, invest in or manage any business that competes directly or
indirectly with the Business, nor shall it employ, recruit or attempt to recruit
any of the Transferred Staff, except for the Transferred Staff who have signed
employment contracts with Party A and have been seconded at Closing to the
Advertising Co to work.
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7.6
|
Indemnification
|
Each Party hereby unconditionally and irrevocably
agrees to perpetually indemnify the other Party and its Affiliates and
Subsidiaries, and hold them harmless from and
against, any and all losses, claims, damages, expenses
(including legal expenses) and liabilities which any of Party A and its Affiliates and
Subsidiaries may sustain,
suffer or incur in connection with the Transactions contemplated under this Agreement and
as a result of any breach
of this Agreement or the
Transaction Documents.
Framework
Agreement
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[Reference
Translation]
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7.7
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Notification
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7.7.1
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Party A shall promptly notify Party B upon becoming aware of any event that
may show, reveal or cause any of the representations or warranties of Party A hereunder to have been or be incorrect, untrue, misleading
or breached in any
material respect.
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7.7.2
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Party B shall promptly notify Party A upon becoming aware of any event
that may show, reveal or cause any representations or warranties given by Party
B hereunder as or to be incorrect, untrue,
misleading or breached in any material
respect.
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Chapter
8 Conditions Precedent
8.1 Conditions
Precedent
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|
The
Closing is subject to the satisfaction of all of the following conditions
precedent:
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8.1.1
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the
execution and delivery of the Transaction Documents by all the parties
thereto;
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8.1.2
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the
representations and warranties of Party A remaining true and accurate and
being fully adhered to in all material respects at the time of
Closing;
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|
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8.1.3
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the
due performance of Party A’s covenants under Articles 7.1 and
7.2;
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|
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8.1.4
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employment
contracts or secondment contracts having been entered into between the
Transferred Staff and the New Co in such form and substance as to be
acceptable to the Parties.
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8.1.5
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the
due performance of Party A’s covenants under Articles 2.2, 3.1, 4.1 and
4.2.
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8.2 Satisfaction and Waiver of
Conditions Precedent
Framework
Agreement
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[Reference
Translation]
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8.2.1
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Within
3 working days after the satisfaction of the conditions precedent
described in Article 8.1, Party B shall notify Party A upon the satisfaction of all conditions precedent described in Article
8.1. Within 3 business days after
the said notification, Party A shall confirm the same in writing
to Party
B. The Closing shall then be arranged within
3 working days after receipt of Party A’s confirmation.
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|
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8.2.2
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In
the event that the conditions precedent set forth in Article 8.1 are not
fulfilled (or waived as provided in Article 8.2.3) before a date agreed by
the Parties, or such later date as the parties may subsequently agree,
this Agreement (except Chapter 13, Articles 14.3 and 14.4) shall become
null and void and be of no further effect whatsoever and all the
obligations and liabilities of the parties hereunder shall cease and
terminate (save for any antecedent breaches of this
Agreement).
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|
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8.2.3
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One
or more of the conditions precedent listed in Article 8.1 may be waived by
Party B at its sole discretion by sending a notice in writing to Party A
and New Co.
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Chapter
9 Closing
9.1 Closing
Subject
to the conditions precedent having been fulfilled (or waived as provided in
Article 8.2.3), Closing shall be held at Kunming Television
Station.
At
Closing, to the extent not previously executed and delivered, the Parties shall
cause each party thereto to execute and deliver the Transaction
Documents.
9.2 Payment
of Purchase Price
New Co.
shall pay the Purchase Price after Closing in accordance with Article
5.3.
Chapter
10 Effectiveness and
Termination
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10.1
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Effective
Date
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This
Agreement shall be effective upon the date of its signing by the
Parties.
Framework
Agreement
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[Reference
Translation]
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10.2
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Termination
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10.2.1
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This
Agreement shall terminate with immediate effect if the parties cannot
complete the negotiation and execution of the agreements necessary for the
transactions contemplated under this Agreement above within 90 days after
the execution hereof unless such period is extended by the
parties.
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10.2.2
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This
Agreement may be terminated with immediate effect by any party by means of
written notice to all of the other parties under any of the following
circumstances:
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|
10.2.2.1
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where
Closing has not occurred on or before the date agreed by the Parties,
provided, however, that the right to terminate this Agreement shall not be
available to any party whose failure in any material respect to fulfill
any obligation under this Agreement shall have been the cause of the
failure for any condition precedent to Closing to be
satisfied;
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10.2.2.2
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where
the other party has committed a breach of this Agreement, as described in
Article 11.1;
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10.2.2.3
|
where
the other party becomes insolvent, if an order is made or resolution
passed for the administration, winding-up or dissolution of any party
(otherwise than for the purposes of a solvent corporate reconstruction),
if an administrative or other receiver, manager, liquidator,
administrator, trustee or similar officer is appointed over all or a
substantial part of the assets of such other party, or if such other party
enters into or proposes any composition or arrangement with its creditors
generally analogous to the foregoing;
or
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10.2.2.4
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where Force Majeure prevails for a period of
30 days or more and has a material
adverse effect on
this Agreement.
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|
10.3
|
Consequence Upon
Termination
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Framework
Agreement
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[Reference
Translation]
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Upon
termination hereof, this Agreement shall be null and void and
no Party shall have any right against any of the other Parties in
connection with this Agreement; provided, however, that nothing herein
shall relieve any party of any liability incurred before the termination
of this Agreement.
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Chapter
11 Events of Breach
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11.1
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Events of
Breach
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|
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The
occurrence of any 1 or more of the following events shall constitute a
breach of this Agreement:
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11.1.1
|
either
party has materially breached the terms hereof or has failed to perform in
any material respect its obligations hereunder, and such breach or
nonperformance has not been remedied for a period of 10 days after receipt
of the other party’s written notice requesting such remedy;
and
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11.1.2
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any
representation or warranty made by either party shall prove to have been
or become false or misleading in any material
respect.
|
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11.2
|
Liabilities for
Breach
|
|
11.2.1
|
Where
either Party commits a breach of this Agreement, it shall be liable to
compensate the other Party for any and all damages caused to it as a
result of the breach, excluding indirect or consequential
damages.
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|
11.2.2
|
Where
either Party commits a breach of this Agreement and fails to rectify such
breach within 60 days after the other Party serves a notice of
default, the non-defaulting Party shall be entitled to terminate this
Agreement. The defaulting Party shall pay to the non-defaulting Party a
penalty of US$ 100,000, together with compensation for the breach as contemplated in Article
11.2.1.
|
Chapter
12 Force Majeure
12.1
Consultation
In the event of Force Majeure, the Parties shall promptly consult with each other to find a solution to
the situation.
12.2
Relief
from Obligations
Should the occurrence of a Force Majeure result in any party’s failure to perform its obligations
under this Agreement in whole or in part, that party may, unless otherwise stipulated by law, be exempted from
performing those obligations to the extent of the effect of the Force Majeure in question.
Framework
Agreement
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[Reference
Translation]
12.3 Suspension of Performance
Subject to this Chapter 11, the Party affected by Force Majeure may suspend the performance of its obligations under this
Agreement to the extent and
for the duration thereof until the effect of the Force Majeure no longer operates. However,
that Party shall exert its best efforts to remove
any impediments resulting from the Force Majeure and to minimize to the greatest possible
extent any damages incurred. With
the agreement of the Parties, the term of this
Agreement shall be extended
by the period of such suspension without penalty to either Party.
12.4 Written
Evidence
The Party claiming Force Majeure shall, as soon as possible after the
occurrence of the Force
Majeure, inform
the other Party of the situation and specify the reason
for its failure to perform this Agreement, so as to minimize the damages
inflicted upon that Party, and shall provide the other Party with written evidence, certified by the
relevant government authority, of the occurrence of the Force Majeure.
12.5
Non-Exemption
A Party shall not be exempted from
any of its liability under this Agreement where Force Majeure occurs following the delay by that
Party to perform such
obligations.
Chapter
13 Confidentiality
13.1
Non-Disclosure
From the date hereof until 5 years hereafter, neither Party shall disclose or communicate to any
person, other than to their
respective employees and the employees of their respective
Affiliates for the sole
purpose of implementing the agreements contemplated hereunder or as instructed
by the other
parties, any Trade Secret
which may be within or may come into its knowledge.
13.2
Breach of
Obligations
The
Parties shall take all necessary measures (including the signing of
confidentiality agreements) to ensure that their respective directors,
employees, agents, contractors, suppliers and advisors also comply with the
confidentiality obligations set forth in this chapter, and shall arrange for the
summary dismissal of any such person who breaches these
obligations.
Framework
Agreement
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[Reference
Translation]
13.3 Exceptions
The disclosure of a Trade Secret by either Party shall not be deemed to be in breach of
this Chapter if any of the following circumstances apply:
|
13.3.1
|
the information is in the public domain at the time of
disclosure;
|
|
13.3.2
|
the information is disclosed pursuant to the prior
written agreement of the Parties;
|
|
13.3.3
|
the information is required
by any government authority or law to which a Party, or its affiliate
is subject;
or
|
|
13.3.4
|
the information is provided to any
director, employee, agent, contractor, supplier or advisor of an
Affiliate in the ordinary course of
business pursuant to the prior written agreement of the Parties.
|
Chapter
14 Miscellaneous
|
14.1
|
Copies
|
|
14.1.1
|
This
Agreement shall be executed in 2 sets of original, in the Chinese
languages, with 1 set of original for each
party.
|
|
14.1.2
|
This
Agreement may be executed in 1 or more counterparts, each of which will be
deemed to be an original copy of this Agreement and all of which, when
taken together, will be deemed to constitute one and the same
instrument.
|
|
14.2
|
Notice
|
All
notices and communications between the parties shall be made in
writing and in the English and Chinese languages by facsimile transmission,
delivery in person (including courier service) or registered airmail letter to
the appropriate correspondence addresses set forth below:
Framework
Agreement
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[Reference
Translation]
If to
Party A: Kunming Television Station
|
|
Address:
|
Xx.
000, Xxxxxx Xxxx, Xxxxxxx Xxxx, Xxxxxx
Xxxxxxxx
|
|
|
Telephone:
|
(0000)
0000000
|
|
|
Fax:
|
(0000)
0000000
|
|
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Attention:
|
Lv
Yongping
|
If to
Party B: Advertising Networks Limited
|
|
Address:
|
Suite
A-16E, Oriental Kenzo, Xx. 00, Xxxxxxxxxxxxx Xxxxxx, Xxxxxxxxx Xxxxxxxx,
Xxxxxxx
|
|
|
Telephone:
|
(00)-000-00000000
|
|
|
Fax:
|
(00)-000-00000000
|
|
|
Attention:
|
Xx.
Xx Shuangqing
|
The time
of receipt of the notice or communication shall be deemed to be:
|
14.2.1
|
if
by facsimile transmission, at the time displayed in the corresponding
transmission record, unless such facsimile is sent after 5:00 p.m. or on a
non-business day in the place where it is received, in which case the date
of receipt shall be deemed to be the following working
day;
|
|
14.2.2
|
if
in person (including courier service), on the date that the receiving
party signs for the document; or
|
|
14.2.3
|
if
by registered mail (including express mail), 7 days after the issuance of
a receipt by the post office.
|
|
14.3
|
Governing
Law
|
|
|
The
formation of this Agreement, its validity, interpretation, execution and
settlement of disputes hereunder will be governed by PRC
Law.
|
|
14.4
|
Dispute
Resolution
|
|
14.4.1
|
If
any dispute arises out of or in connection with this Agreement, the
Parties shall attempt in the first instance to resolve such dispute
through friendly consultation or
mediation.
|
|
14.4.2
|
If
the dispute cannot be resolved in the above manner within 30 days after
the commencement of consultations, either Party may submit the dispute to
China International Economic Trade Arbitration Commission for arbitration.
The award shall be final and binding to the
Parties.
|
Framework
Agreement
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[Reference
Translation]
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14.4.3
|
For the period during which any dispute has been submitted to
arbitration, the Parties shall continue to perform
their obligations
under this
Agreement.
|
14.5
Waiver
|
|
No
failure or delay on the part of either party in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of such
right or acquiescence in any breach of any representation, warranty,
covenant or agreement herein, nor shall any single or partial exercise or
waiver of any such right preclude other or further exercise thereof or of
any other right, except as otherwise stipulated by law or covenanted by
the parties concerned.
|
14.6
Entire
Agreement
|
|
This
Agreement, along with the Transaction Documents, constitutes the entire
agreement between the parties with respect to its subject
matter.
|
14.7
Amendment
|
|
No
amendment or other modification of this Agreement shall be effective
unless the same shall be in writing and signed by an authorized
representative of each party hereto, and then such amendment or other
modification shall be an integral part of, and have the same effectiveness
as, this Agreement.
|
14.8
Assignment
|
|
No
party may assign any of its rights and/or obligations under this Agreement
without the prior written consent of the other party. Subject
to the preceding sentence, this Agreement will apply to, be binding in all
respects upon, and inure to the benefit of, the successors, heirs,
personal representatives, executors and permitted assigns of the
parties.
|
14.9
Severability
|
|
Where
any provision of this Agreement is subject to dispute or is determined by
a competent court, arbitral body or government organization to be invalid
or unenforceable, the remainder of this Agreement shall continue in full
force and effect.
|
Framework
Agreement
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[Reference
Translation]
14.10
Cost and
Expense
|
|
Except
as otherwise expressly set forth herein or in any related documents, all
fees, costs and expenses incurred in connection with the negotiation,
execution, delivery and performance of this Agreement and the Transaction
Documents shall be paid by the Party or Parties incurring such fees, costs
or expenses.
|
[The
space below is intentionally left blank.]
Framework
Agreement
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[Reference
Translation]
IN WITNESS WHEREOF, the
Parties hereto have duly executed and affixed their company’s seal on this
signature page and the perforation of this Agreement on the date first above
written.
|
Kunming
Television Station
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
Advertising
Networks Limited.
|
||
|
By:
|
||
|
Name:
Xxxxx Xx
|
||
|
Title:
Chairman
|
||
|
Advertising
Networks Limited.
|
||
|
By:
|
||
|
Name:
Li Shuangqing
|
||
|
Title:
CEO
|
||
Framework
Agreement
- 24
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[Reference
Translation]
Schedule
A
List
of Assets
List
of Contributed Assets
List
of Transferred Assets
Framework
Agreement
- 25
-
[Reference
Translation]
Schedule
B
List
of Party A’s Key Staff
Framework
Agreement
- 26
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[Reference
Translation]
Schedule
C
List
of Governmental Authorizations
Framework
Agreement
- 27
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