EXHIBIT 10
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EXECUTION VERSION
NONCOMPETITION COVENANT AND AGREEMENT
THIS NONCOMPETITION COVENANT AND AGREEMENT (this "AGREEMENT") is
made and entered into as of this January 11, 2008, by Mr. MA Qing, an individual
residing in the city of Beijing in the People's Republic of China (the "PRC"),
(PRC ID No. 000000000000000000) ("EXECUTIVE") for the benefit of the party
listed in Schedule I attached hereto (the "PURCHASER").
RECITALS
WHEREAS, Executive serves as the Director, Secretary and
President of China Mobile Media Technology Inc. (the "COMPANY"), a
company established and existing under the laws of the State of Nevada,
the United States;
WHEREAS, Executive is also a direct or indirect shareholder
of the Company;
WHEREAS, pursuant to the securities purchase agreement (the
"PURCHASE AGREEMENT") dated of even date herewith among the Company, Magical
Insight Investments Limited, a British Virgin Islands corporation ("MAGICAL
INSIGHT"), the wholly-owned subsidiaries of Magical Insight, and the Purchaser
respectively, and other related documents pertaining to such purchase
(collectively, the "TRANSACTION DOCUMENTS"), Magical Insight shall issue and
sell to Purchaser, and Purchaser shall purchase Magical Insight's Guaranteed
Senior Notes due 2014 (the "NOTES"), and the Company shall issue and sell to the
Purchaser warrants (the "WARRANTS") representing the right to purchase a certain
number of shares of the Company's common stock;
WHEREAS, to induce the Purchaser to consummate the transactions
under the Transaction Documents and to preserve for the Purchaser the valuable
rights procured by Purchaser pursuant to the Transaction Documents related to
the transaction as contemplated thereunder, the Executive agreed to certain
covenants to be made by Executive for the benefit of the Purchaser regarding
certain future activities and actions by Executive;
AGREEMENT
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in accordance with the General
Principles of Civil Law of the PRC, Contract Law of the PRC, and other
applicable laws and regulations, the parties hereto, intending to be legally
bound, hereby agree as follows:
SECTION 1. DEFINITIONS. Capitalized terms used in this Agreement shall
have the meanings set forth below.
1.1 "AGREEMENT" is defined in the Preamble.
1.2 "BUSINESS" shall mean integrated multi-channel sales and
marketing in the PRC, including but not limited to, proprietary-branded digital
mobile devices, including through TV-based direct response platforms and
off-line distribution networks.
1.3 "COMPANY" is defined in the Recitals.
1.4 "COMPANY AFFILIATE" shall mean any entity engaged in the
Business which is controlled, directly or indirectly, by the Company (including
without limitation the Group Companies as defined under the Purchase
Agreements).
1.5 "COMPETITIVE BUSINESS" shall mean any business that (i) is in
the Business and (ii) competes, directly or indirectly, with the Company or any
Company Affiliate.
1.6 "EXECUTIVE" is defined in the Preamble.
1.7 "NOTES" is defined in the Recitals.
1.8 "PRC" is defined in the Preamble.
1.9 "PURCHASER" is defined in the Preamble.
1.10 "TERM" is defined in Section 2.1.
1.11 "TRADE SECRET" shall mean any information, including, but not
limited to, technical or nontechnical data, formulas, patterns, compilations,
programs, devices, methods, techniques, drawings, processes, financial data,
financial plans, product plans, actual or future services, or lists of actual or
potential customers or suppliers that (i) are not generally known to, and not
readily ascertainable by proper means by, other persons who can obtain economic
value from their disclosure or use and (2) are the subject of efforts that are
reasonable under the circumstances to maintain their secrecy.
1.12 "TRANSACTION DOCUMENTS" is defined in the Recitals.
1.13 "WORK PRODUCT" shall mean all intellectual property rights,
including all Trade Secrets, U.S. and international copyrights, patentable ideas
or inventions, discoveries and improvements, and other intellectual property
rights, in any documentation, programming, technology, or other work that
relates to the business and interests of the Company and that was or is
conceived or developed by Executive, or delivered by Executive to the Company at
any time during the term of Executive's employment with the Company.
SECTION 2. COVENANTS.
2.1 Noncompetition and Nonsolicitation. During the period
commencing as of the date hereof and until the Purchaser or its assignees
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neither beneficially own any Notes nor beneficially own at least 2% of the
Company's common stock (such period, the "TERM"), Executive hereby agrees that
Executive (including his spouse, infant children, siblings, any company or
undertaking in which he holds a controlling interest, or any person related by
marriage or consanguinity) will not, directly or indirectly, engage in, or have
any interest in, any person, firm, corporation, or business (whether as an
executive, officer, director, agent, security holder, employee, consultant,
investor or similar position) that engages in or render services to a
Competitive Business, or otherwise interfere with the business of the Company or
Company Affiliates, including without limitation:
(a) either on his own behalf or on behalf of any other person,
solicit business similar to the Business from any customer, supplier,
distributor of, or a person in a similar commercial relationship with, the
Company or Company Affiliates; and
(b) either on his own behalf or on behalf of any other person,
solicit, employ or otherwise engage as an employee, independent contractor, or
otherwise any person who is and was, at any time during one year prior to such
solicitation, employment or engagement, an employee of the Company or Company
Affiliates, or in any manner induce any employee of the Company or Company
Affiliates to terminate his or her employment therewith.
Notwithstanding the foregoing paragraphs of this Section 2.1:
(i) Executive may own, directly or indirectly, as an
investor, securities of any company engaging in a Competitive Business, so long
as Executive's aggregate holdings in each such corporation shall not constitute
more than three percent (3%) of such corporation's voting stock;
(ii) Executive represents that the entities identified in
Schedule II represent the pre-existing relationships disclosed by the Company
pursuant to the Purchase Agreement which form part of the Transaction Documents
and do not engage in a Competitive Business and for the foregoing reason, the
Executive may continue his involvement as a shareholder, officer or director of
such entities so long as such entities do not engage in a Competitive Business
during such involvement; and
(iii) Executive may serve as a shareholder, director or
officer of any entity that is not engaged in a Competitive Business.
2.2 Confidentiality and Other Covenants. Executive agrees that:
(a) he shall keep confidential any information, including Trade
Secrets, relating to the Company, Company Affiliates, and the Business (unless
such disclosure is permitted in writing by the Company, required under law or by
order of any governmental or regulatory authority, or relates to information
already in the public domain, or to a third party who has rightfully obtained
such Trade Secrets without breach of any confidentiality obligation);
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(b) all Work Product of Executive conceived (whether solely or
jointly with others) within the scope of his employment with the Company belongs
to the Company and any and all of his rights to such Work Product, to the extent
not yet assigned, are hereby assigned to the Company;
(c) upon the termination of his employment with the Company, at
the request of the Company, he shall return to the Company all of the Company's
proprietary items in his possession or under his control and shall not retain
any copies or other physical embodiment of any of such items; and
(d) upon the termination of his employment with the Company, he
shall not hold himself out as an employee, agent or representative of the
Company.
2.3 Termination. The parties agree that the Term shall terminate,
and this Agreement shall be deemed terminated and of no further effect, without
necessity of further action by Executive or the Purchaser, upon the expiration
of the Term.
2.4 Specific Enforcement. Upon a breach by Executive of Section
2.1 or 2.2, in addition to such damages as the Purchaser can show they have
sustained, directly or indirectly, by reason of said breach and in addition to
any other remedies to which Purchaser may be entitled under the laws of the PRC,
the Purchaser shall be entitled to injunctive relief against Executive if such
relief is applicable and available, as monetary compensation alone would be
inadequate and insufficient. Nothing in this Agreement shall be construed as
limiting the Purchaser's remedies in any way.
SECTION 3. MISCELLANEOUS.
3.1 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, in each case,
to the extent permitted by applicable law, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable, to the extent
permitted by applicable law.
3.2 Counterparts. This may be executed in counterparts, each of
which shall be deemed to be an original, and all such counterparts together
shall constitute but one and the same instrument.
3.3 Governing Law; Arbitrations. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF PEOPLE'S REPUBLIC OF CHINA. Any
dispute, controversy or claim arising out of or in connection with
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this Agreement shall be settled through negotiation between the parties; if the
parties fail to resolve such dispute within sixty (60) days after the date such
negotiation was first requested in writing by either party, it shall be settled
by arbitration at the Hong Kong International Arbitration Center (the "HKIAC")
under the UNCITRAL Arbitration Rule. In the case of any conflict between the
terms of this Agreement and the International Chamber of Commerce International
Arbitration Rules ("ICC RULES"), the terms of this Agreement shall prevail. The
arbitral tribunal shall consist of three arbitrators, with one appointed by the
Executive, one appointed by the Purchaser and a third neutral arbitrator to be
appointed by the other two party-appointed arbitrators, who shall not be a
citizen of the PRC and who shall act as the chairman of the tribunal. The
parties agree to the appointment of arbitrators who are not on HKIAC's Panel of
Arbitrators. If either party fails to appoint an arbitrator within the time
specified in the ICC Rules or if the two party-appointed arbitrators fail to
jointly appoint the third neutral arbitrator within the time specified in the
ICC Rules, the Chairman of HKIAC shall make such an appointment. The arbitration
shall be conducted on a confidential basis. All arbitration proceedings shall be
held in English. Any arbitration award made by the arbitration panel shall be
final and binding on the parties and may be entered and enforced in any court of
competent jurisdiction. The parties shall submit to the jurisdiction of any such
court for purposes of the enforcement of any such award. Notwithstanding the
foregoing agreement to arbitrate, the parties expressly reserve the right to
seek provisional relief from any court of competent jurisdiction to preserve
their respective rights pending arbitration.
3.4 Assignment. Executive agrees that this Agreement shall inure
to the benefits of all holders of the Notes or Warrants, whether or not the
Purchaser.
3.5 Notice. Any notices to be given hereunder by either party to
the other may be effectuated either by personal delivery in writing or by mail,
postage prepaid, with return receipt requested. Notices shall be addressed to
the parties as follows:
If to the Purchaser:
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The addresses of the Purchaser as indicated in Schedule I
If to Executive:
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Mr. MA Qing Address:
0xx Xxxxx, Xxxxx C, Intell-Center,
Xx. 00 Xxxxxxxxxxxx Xxxx Xxxx,
Xxxxxxx Xxxxxxxx,
Xxxxxxx, Xxxxx 100083
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c/o China Mobile Media Technology Inc.
Suite 1503, Sino Plaza,
000-000 Xxxxxxxxxx Xxxx,
Xxxxxxxx Xxx,
Xxxx Xxxx
Fax: + 000 0000 0000
or to such other address as either the parties may designate by written notice
to each other. Notices delivered personally shall be deemed duly given on the
date of actual receipt; mailed notices shall be deemed duly given as of the
fifth day after the date so mailed. Notices hereunder may be delivered by
electronic facsimile transmission (fax) if confirmation by sender is made within
three business days by mail or personal delivery.
3.6 Third Party Beneficiary Rights. This Agreement has been made
and is made solely for the benefit of, and shall be binding upon, the Purchaser
(and their respective successors and assigns, including the holders of the Notes
or Warrants) and Executive, and no other person shall acquire or have any rights
under or by virtue of this Agreement.
3.7 Attorney's Fees. If any party shall bring a procedure to
enforce this Agreement, unless otherwise decided by the arbitration tribunal,
the prevailing party shall be entitled to recover the reasonable attorneys' fees
and costs incurred by such party from the unsuccessful party.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this
Noncompetition Covenant and Agreement as of the date first set forth above.
EXECUTIVE:
/s/ Ma Qing
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Mr. MA Qing
Accepted by:
PURCHASER:
ABAX LOTUS LTD.
By: /s/ Xxxx Xxxxxxxxx
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Name: Xxxx Xxxxxxxxx
Title: Authorized Signatory
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SCHEDULE I
PURCHASER AND NOTICE ADDRESSES
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Abax Lotus Ltd.
x/x Xxxx Xxxxxx Xxxxxxx (Xxxx Xxxx) Limited
Suite 6708, 67/F Two International Finance Centre
0 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxx Xxxx SAR
Attn: Chairman of the Board
Fax: x000 00000000
SCHEDULE II
PRE-EXISTING RELATIONSHIPS
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None