Asset Transfer Agreement
[Reference
Translation]
by
and between
Hubei
Chutian Broadcasting and Television Network Co., Ltd.
and
Hubei
Chutian Video Communication Network Co., Ltd.
June
2008
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Table
of Contents
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Articles
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Pages
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Definitions
and Interpretations
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2
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2
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Transfer
and Purchase
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2
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3
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Assets
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2
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4
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Transferor’
Representations and Warranties
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2
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5
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Transferor
and Transferee’ Undertaking
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2
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6
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Mutual
Representations and Warranties
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2
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7
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Events
of Breach
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2
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8
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Force
Majeure
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2
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9
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Termination
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2
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10
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Confidentiality
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2
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11
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Governing
Law and Dispute Resolution
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2
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Notices
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2
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13
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Miscellaneous
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2
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Appendix
I List
of
Assets
Appendix
II Assets
Transfer Schedule
Appendix
III Payment
Schedule
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1 -
THIS
ASSET TRANSFER AGREEMENT
(Agreement)
is
entered into on June 5th,
2008 in
Wuhan, People's Republic of China (PRC)
by
and between:
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(1)
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Hubei
Chutian Broadcasting and Television Network Co., Ltd. (Party A or
Transferor),
a
legal entity established under the relevant laws and regulations
with its
legal address at Special ▇▇.▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, the PRC, whose legal representative
is
WEN Chengguo; and
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and
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(2)
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Hubei
Chutian Video Communication Network Co., Ltd. (Party B or
Transferee),
a
legal entity established under the relevant laws and regulations
with its
registered address at 12th Floor, Block B, Chutian Urban Garden,
1
Zhongbei Avenue, Wuchang, Wuhan, Hubei Province, the PRC, whose legal
representative is ▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
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(individually
a Party
and
collectively the Parties).
WHEREAS
The
Transferor desires to transfer to the Transferee, and the Transferee wishes
to
purchase from the Transferor, the assets related to the Business (as defined
below).
NOW,
THEREFORE,
the
Parties have agreed as follows:
I. Definitions
and Interpretations
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1.1
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Definitions.
Unless
otherwise stipulated herein, the following terms shall have the meaning
set forth below:
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Assets
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the
assets set forth in Appendix I with respect to the operation of the
Business; the assets under this Assets Transfer Agreement, which,
for the
avoidance of doubt, are free of all debts, correspond to the partial
assets of the Business in relation to the 800,000 registered subscribers
to Party A and are valued at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (▇▇ which the total
sum of
the assets corresponding to the assets of the Business in relation
to
800,000 of the registered subscribers to Party A shall be ▇▇▇ ▇▇▇
million,
the appraisal value of the physical assets shall be RMB 414 million,
including the capital contribution of ▇▇▇ ▇▇ million, and the appraisal
value of the intangible assets relating to the exclusive operating
rights
and network resources shall be ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇.)
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2 -
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Business
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The
Transferred Assets located in the area
any business with respect to the design, construction, operation
and
maintenance of cable TV projects and networks (including TV fee collection
of distribution net and network leases); any business with respect
to the
management of construction, marketing and operation of the analog
and
digital TV networks and digital TVs (including sale of set-top Boxes,
sale
of pay-per-program and digital TV fee collection); and value-added
network
business;
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Business
Contracts
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the
agreements that relate to the Business;
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Force
Majeure
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any
earthquake, storm, fire, flood, war or other significant event of
natural
or human-caused disaster arising after signing hereof which is unforeseen,
unavoidable and not possible to overcome, and is beyond the control
of any
Party, and prevents the total or partial performance of this Agreement
by
any Party;
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Government
Authority
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the
competent government departments and authorities of the jurisdictions
where the Assets (defined below) are located;
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PRC
Law
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all
laws and legislation of the PRC that are in effect, including laws,
regulations, decrees and orders of government agencies and other
documents
of a legislative, administrative or judicial nature;
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RMB
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Renminbi,
the legal currency of the PRC;
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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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Trade
Secret
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any
information relating to this Agreement, the Transferor or the Transferee,
including, without limitation, 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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3 -
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1.2
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Headings.
All
headings used herein are for reference purposes only and do not affect
the
meaning or interpretation of any provision
hereof.
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| 1.3 |
Appendices.
Any
reference herein to an Article or Appendix is to an article or appendix
of
this Agreement.
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| 1.4 |
Other
References. Unless
otherwise indicated, a reference herein to a day, month or year is
to a
calendar day, month or year.
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II.
Transfer of
Assets
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| 2.1 |
Purchase
Price. The
Transferor shall transfer to the Transferee, and the Transferee shall
purchase from the Transferor, the Assets free from any encumbrances
for a
total consideration of physical assets equivalent to the cash value
of ▇▇▇
▇▇▇
▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇ Price).
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2.2
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Transfer
of Assets
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| 2.2.1 |
The
Assets shall be transferred in installments. The transfer procedure
for
the Assets shall be in accordance with the Assets Transfer Schedule
as set
forth in Appendix II).
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| 2.2.2 |
Party
A shall obtain all Government Approvals necessary for the transfer
of
Assets (including approvals that are necessary for the transfer of
state-owned assets) in accordance with Article 2.2.1.
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| 2.2.3 |
In
the event that Party A intends to continue to transfer its other
assets in
relation to the Business, Party B is entitled to the first refusal
under
the same conditions.
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2.3
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Payment
Schedule.
The first installment of ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ payable within
5 days
after the execution of this Agreement and
the execlusive service agreement between Party B and Jinan Youxiantong
Network Technology Co., Ltd.; the remainder of the consideration
shall be
payable in accordance with the Payment Schedule as set forth in Appendix
III within 6 months after the execution hereof. The Transferee shall
remit
the Purchase Price in RMB to the bank account(s) designated by the
Transferor. Any banking costs incurred from the payment of the Purchase
Price shall be borne solely by the Transferor. The Transferor shall
provide the Transferee with a formal invoice or receipt reflecting the
receipt of the Purchase Price.
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2.4
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Offset
Right.
Notwithstanding anything herein to the contrary, the Transferee shall
be
entitled to offset against the Purchase Price any amount which the
Transferor owes to the Transferee for any reason, including pursuant
to
damages from a breach of this Agreement as set forth in Article 7.
Without
limiting the generality of the foregoing, the Transferee shall be
entitled
to reduce the payments otherwise payable after the transfer of Assets
by
an amount equal to the aggregate amount due and payable by the Transferor
to the Transferee.
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4 -
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III.
Assets to be
Transferred
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3.1
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Ownership.
The ownership of and title to the Assets to be transferred shall
pass to
the Transferee upon delivery of the Assets pursuant to Article
3.2.
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3.2
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Delivery
and Acceptance.
The Transferor shall, at their own expense, deliver the Transferred
Assets
to the Transferee at the location, at any time and in the manner
specified
by the Transferee in writing. The delivery shall not be deemed to
have
occurred until Transferee has reviewed and accepted, at its sole
discretion, the Assets. The ownership of the Transferred Assets after
delivery shall be transferred to Transferee, unless otherwise stipulated
in the law or agreed to hereunder by the
Parties.
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| 3.3 |
Utilization. Except
in the event of loss of or damage to the Assets set forth in Article
3.4
(if any), the Transferor, for the purposes of the Business, is entitled
to
continue with the free utilization of the
Assets.
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3.4
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Maintenance.
Until the Assets are delivered to the Transferee, the Transferor
shall be
responsible for the custody and maintenance of the Assets. Any material
loss of or damage to the Assets shall be deemed as the Transferor’ failure
to deliver the Assets and shall constitute a material breach of this
Agreement, irrespective of whether such loss or damage is actually
caused
by or attributable to the Transferor.
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IV.
Transferor’s Representations and
Warranties
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The
Transferor represents and warrants as follows:
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4.1
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Ownership
of Assets.
Party A shall ensure that the Assets obtained by Party B are free
from any
encumbrances, and that Party A is entitled to freely dispose of the
Assets.
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4.2
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Condition
of Assets.
The Assets are in good and serviceable condition (subject to normal
wear
and tear where applicable) and are generally suitable for their intended
purposes.
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4.3
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Intellectual
Property Right
The Assets are not in the situation of infringing upon the intellectual
property rights and legal rights of any third
person.
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5 -
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4.4
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All
Necessary Assets.
The intangible assets listed in Appendix I represent all of the intangible
assets owned by Party A necessary for the operation or promotion
of the
Business, and there are no intangible assets which have been used
in the
ordinary operation of the Business that are not included in Appendix
I.
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4.5
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Disputes.
There are no pending or threatened civil or criminal claims, prosecutions,
lawsuits, investigations or other proceedings against the Transferor;
nor
is the Transferor aware of any contractual provisions or executable
court
rulings or injunctions that may be binding upon or affect the Transferor’
property, including any intellectual property; the Transferor’ execution
and performance of this Agreement, and the Transferee’s implementation or
exercise of any right under this Agreement, does not violate any
mortgage
rights, contracts, rulings, decrees or laws that are binding upon
the
Transferor or the Parties’ assets.
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4.6
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Others.
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| 4.6.1 |
The
Transferor has obtained any and all written approvals of any third
party
for the execution, delivery and performance of this Agreement and
said
transactions set forth in this
Agreement.
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V.
Transferor’s and Transferee’s
Undertaking
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The
Transferor shall
undertake the following:
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5.1
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Reasonable
Assistance.
The Transferor will provide such assistance as may be requested by
the
Transferee.
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| 5.2 |
Registration.
If
the transfer of any Assets must be registered with a Government Authority,
the Transferor shall submit to such Government Authority all the
registration documents and take all reasonable actions needed before
the
date of such transfer.
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| 5.3 |
Indemnity.
The Transferor shall indemnify the Transferee against any and all
damages
and losses sustained by the Transferee that result, directly or
indirectly, from third party action against any or all of the Transferor
or the Transferee which result or arise from any activities involving
any
of the Transferors
that occurred prior to or on the date
of
such transfer.
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The
Transferee shall undertake the following:
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5.4
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Fund
Provision.
The Transferee shall make timely payments according to the Payment
Schedule, Section 2.3 hereunder. The Transferee
shall indemnify the Transferor against any and all damages and losses
sustained by the Transferor that result, directly or indirectly,
from
third party action against the Transferor due to the Transferee’s failure
to make the said payments according to the Payment Schedule, which
result
or arise from any activities involving the Transferor
that occurred prior to the date
of
such transfer.
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6 -
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VI.
Mutual Representations and
Warranties
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The
Transferor represents and warrants to the Transferee, and the Transferee
represents and warrants to the Transferor, that:
| 6.1 |
it
is a formally and lawfully established independent legal entity,
and has
obtained all necessary government approvals and registrations, which
approvals and registrations are continuing and effective and it has
sufficient authority to conduct its business in accordance with its
business license, approval certificate, articles of association or
similar
corporate documents;
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| 6.2 |
it
is fully authorized to sign this Agreement and to fulfill its obligations
hereunder;
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| 6.3 |
its
signing of this Agreement and performance of any of its obligations
hereunder will not violate:
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| 6.3.1 |
its
business license, approval certificate, articles of association or
similar
corporate documents;
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| 6.3.2 |
any
applicable laws or regulations, or the conditions attached to any
authorization or approval granted by any governmental agency or body;
and
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| 6.3.3 |
any
other agreement which is binding on
it;
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| 6.4 |
there
is no lawsuit, arbitration or other legal or government procedure
pending
or threatened against it which, based on its knowledge, could materially
and adversely affect its performance of this
Agreement;
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6.5
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it
has disclosed to the other Party all documents issued by any government
authority that might have a material adverse effect on the performance
of
its obligations under this
Agreement;
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6.6
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it
is not the subject of any liquidation or dissolution proceedings;
and
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6.7
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it
has neither been declared bankrupt by a court of competent jurisdiction
nor entered into any bankruptcy
proceedings.
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VII. Events
of Breach
| 7.1 |
Events. The
occurrence of 1 or both of the following events shall constitute
a breach
of this Agreement:
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7.1.1
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any
of the Parties 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 any other Party’s written notice requesting such remedy;
and
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7.1.2
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any
representation or warranty made by any of the Parties herein shall
prove
to have been false or misleading in any material
respect.
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| 7.2 |
Transferor
Breach. Where
the Transferor commits a breach of this Agreement, the Transferor
shall be
liable to compensate the Transferee for any and all damages caused
to it
as a result of the breach.
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7.3
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Transferee
Breach.
Where the Transferee commits a breach of this Agreement, it shall
be
liable to compensate the Transferor for any and all damages caused
to them
as a result of the breach.
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VIII.
Force
Majeure
| 8.1 |
Consultation.
In
the event of Force Majeure, the Parties shall promptly consult with
each
other to find a solution to the situation.
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| 8.2 |
Exemption.
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.
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| 8.3 |
Best
Efforts.
Subject to this Article 8, 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 any
Party.
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| 8.4 |
Written
Evidence.
The Party claiming Force Majeure shall, as soon as possible after
the
occurrence of the Force Majeure, inform the other Parties of the
situation
and specify the reason for its failure to perform this Agreement,
so as to
minimize the damages inflicted upon the other Parties, and shall
provide
the other Parties with written evidence, certified by the relevant
government authority, of the occurrence of the Force
Majeure.
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8.5
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Non-Exemption.
A
Party shall not be exempted from performing its obligations under
this
Agreement where Force Majeure occurs following the delay by that
Party to
perform such obligations.
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8.6
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Termination.
If Force Majeure prevails for a period of 30 days or more and has
a
material adverse effect on this Agreement, this Agreement may be
terminated in accordance with Article
9.1.3.
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8 -
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IX.
Termination
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| 9.1 |
Conditions
of Termination. This
Agreement may only be terminated as listed below,
namely:
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| 9.1.1 |
by
the Transferee if the Transferor, and by the Transferor if the Transferee,
commits a material breach of this Agreement which it fails to remedy
within 10 days after the receipt of written notice from the non-breaching
Party requesting such remedy;
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| 9.1.2 |
by
the Transferee if the Transferor, and by the Transferor if the Transferee,
becomes insolvent or declares
bankruptcy;
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| 9.1.3 |
by
the Transferee delivering written notice to the Transferor if Force
Majeure prevails against the Transferor, and by the Transferor delivering
written notice to the Transferee if Force Majeure prevails against
the
Transferee, as stipulated in Article 8.6;
or
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| 9.1.4 |
by
the Transferee if the Transferor, and by the Transferor if the Transferee,
expressly states or by its conduct indicates that it will not discharge
any of its obligations hereunder.
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9.2
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Effect
of Termination.
The termination of this Agreement shall not affect any rights and
obligations which have accrued prior to the termination; provided,
however, that nothing herein shall relieve any Party of any liability
for
any actions that occur before the termination of this
Agreement.
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X.
Confidentiality
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10.1
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Non
Disclosure.
From the date hereof until 5 years hereafter, the Transferor shall
not
disclose or communicate to any person, other than to employees of
the
Parties and their respective affiliates for the sole purpose of
implementing the transactions contemplated hereunder or as instructed
by
the Transferee, any Trade Secret which may be within or may come
into
their knowledge.
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10.2
|
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.
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10.3
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Exceptions.
The disclosure of any Trade Secret by any Party shall not be deemed
to be
in breach of this Article if any of the following circumstances
apply:
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| 10.3.1 |
the
information is in the public domain at the time of
disclosure;
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9 -
| 10.3.2 |
the
information is disclosed pursuant to the prior written agreement
of the
Parties;
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| 10.3.3 |
the
information is required by any government authority or law to which
a
Party, or its affiliate is subject;
or
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| 10.3.4 |
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.
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|
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XI.
Governing Law and Dispute
Resolution
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| 11.1 |
Governing
Law.
This Agreement shall be governed by PRC Law. Where PRC Law is silent
on a particular matter relating to this Agreement, reference shall
be made
to international commercial
practice.
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| 11.2 |
Dispute
Resolution.
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| 11.2.1 |
If
any dispute arises in connection with this Agreement, the Parties
shall
attempt in the first instance to resolve such dispute through friendly
consultation or mediation.
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| 11.2.2 |
If
the dispute cannot be resolved in the above manner within thirty
(30) days
after the commencement of consultations, either Party may submit
the
dispute to arbitration as follows:
|
| 11.2.2.1 |
all
disputes arising out of or in connection with this Agreement shall
be
submitted to China International Economic and Trade Arbitration Commission
which shall be conducted by three (3) arbitrators in Beijing in accordance
with the Commission’s arbitration rules;
and
|
| 11.2.2.2 |
the
arbitration shall be conducted in the Chinese language, with the
arbitral
award being final and binding upon the Parties. The cost of
arbitration shall be allocated as determined by the arbitrators.
|
| 11.2.3 |
when
any dispute is submitted to arbitration the Parties shall continue
to
perform this Agreement.
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XII.
Notices
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12.1
|
Notice.
All notices and communications between the Parties shall be made
in
writing by facsimile transmission, delivery in person (including
courier
service) or registered mail to the addresses set forth
below:
|
The
Transferor: Hubei
Chutian Broadcasting and Television Network Co., Ltd.
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10 -
Address : Special
▇▇.▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
the PRC
|
Tel
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:
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[·]
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Fax
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:
|
[·]
|
|
Attn
|
:
|
[·]
|
The
Transferee: Hubei
Chutian Video Communication Network Co., Ltd.
Address : 12th
Floor, Block B, Chutian Urban Garden, 1 Zhongbei Avenue, Wuchang, Wuhan, Hubei
Province, the PRC
|
Tel
|
:
|
[·]
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Fax
|
:
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[·]
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Attn
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:
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[·]
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12.2
|
Time
of Receipt. The
time of receipt of the notice or communication shall be deemed to
be:
|
| 12.2.1 |
the
time set
forth in the transmission journal, in the case of a facsimile
transmission, unless such facsimile transmission is sent after 5:00
p.m.,
in which event the date of receipt shall be deemed to be the following
business day in the place of
receipt;
|
| 12.2.2 |
the
time of signing of a receipt by the receiving Party in the case of
delivery in person (including courier service);
and
|
| 12.2.3 |
7
days from that shown on the official postal receipt, in the case
of
registered mail.
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|
|
XIII.
Miscellaneous
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| 13.1 |
Entire
Agreement.
This Agreement represents the full agreement of the Parties as to
the
subject matter hereof, and shall supersede all prior discussions,
proposals, negotiations and
agreements.
|
| 13.2 |
Amendment.
This Agreement can only be modified, altered or supplemented through
written agreements signed by the
Parties.
|
| 13.3 |
No
Waiver.
Failure or delay on the part of any Party to exercise any right under
this
Agreement shall not operate as a waiver
thereof.
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| 13.4 |
Severability.
The invalidity of any provision of this Agreement shall not affect
the
validity of any other provision of this Agreement which is unrelated
to
that provision.
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| 13.5 |
Language.
This Agreement has been prepared in Chinese in 2 sets of originals.
Each
Party shall hold 1 set of original.
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11 -
| 13.6 |
No
Agency.
The status of the Parties under this Agreement shall be that of
independent contractors, and no Party has the right to make commitments
for or on behalf of the other
Party.
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| 13.7 |
Tax.
The Parties shall be responsible for its own tax obligations incurred
in
connection with this Agreement.
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| 13.8 |
Expenses.
Unless
otherwise specified, each Party shall bear its own expenses incurred
in
preparing and performing this
Agreement.
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| 13.9 |
Further
Assurance.
Upon the request of any Party, the Parties shall execute such documents
and do such things as are reasonably necessary to give effect to
the
transactions contemplated herein. If approvals from Government Authorities
are required for any transactions contemplated herein, the Transferor
shall use its best endeavors to obtain such
approvals.
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| 13.10 |
Taking
Effect. This
Agreement shall be effective upon signing by the Parties’ authorized
representatives and shall be affixed with their respective company
seals.
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space below is intentionally left blank.]
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12 -
IN
WITNESS WHEREOF, the
Parties have arranged for this Agreement to be signed by their duly authorized
representatives on the date first indicated above.
|
For
and on behalf of
Hubei
Chutian Broadcasting and Television Network Co.,
Ltd.
|
||
|
Signature
|
:
|
|
|
Name
|
:
|
Xianting,
▇▇▇▇▇
|
|
Title
|
:
|
CEO
|
|
Company
Seal
|
:
|
|
|
For
and on behalf of
Hubei
Chutian Video Communication Network Co., Ltd.
|
||
|
Signature
|
:
|
|
|
Name
|
:
|
▇▇▇▇▇,
Zen
|
|
Title
|
:
|
General
Manager
|
|
Company
Seal
|
:
|
|
Asset
Transfer Agreement
-
13 -
[Appendix
I]
List
of Assets
-
14 -
[Appendix
II]
Assets
Transfer Schedule
|
Date
|
Total
Sum of Assets
|
|
|
June
10th, ▇▇▇▇
|
▇▇▇
200 million
(including
the physical assets and the value of the proprietary rights)
|
|
|
Within
6 months
|
RMB
389 million
(including
the physical assets and the value of the proprietary rights)
|
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15 -
[Appendix
III]
Payment
Schedule
|
Date
|
Sum
|
Note
|
||
|
Within
5 days of the execution hereof
|
RMB
140
million
|
|||
|
Within
6 months of the execution hereof
|
▇▇▇
▇▇▇
▇▇▇▇▇▇▇
|
|||
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16 -