Exhibit 4.62
XINHUA FINANCE MEDIA LIMITED
and
FLASH STAR WORLDWIDE LIMITED
and
PROFITOWN DEVELOPMENT LIMITED
and
CHOW CHI YAN
--------------------------------------------
PURCHASE AGREEMENT
IN RESPECT OF
SHARES IN THE CAPITAL OF
PROFITOWN DEVELOPMENT LIMITED
AND
OTHER ASSETS SET OUT HEREIN
--------------------------------------------
26 NOVEMBER 2007
(K&L | GATES COMPANY LOGO)
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇.▇▇▇▇▇▇▇.▇▇▇
THIS PURCHASE AGREEMENT (this "AGREEMENT") is made on the 26th day of November
2007
BETWEEN
1. XINHUA FINANCE MEDIA LIMITED, a company incorporated under the laws of
the Cayman Islands with registration number 157511 and its registered
address located at Cricket Square, ▇▇▇▇▇▇▇▇ Drive, P.O. Box 2681,
Grand Cayman KY1-1111, Cayman Islands, British West Indies, as
purchaser ("XFM");
2. FLASH STAR WORLDWIDE LIMITED, a company incorporated under the laws of
the British Virgin Islands with incorporation number 1393132 and its
registered address located at Trident ▇▇▇▇▇▇▇▇, P.O. Box 146, Road
Town, Tortola, British Virgin Islands (the "VENDOR");
3. PROFITOWN DEVELOPMENT LIMITED, a company incorporated under the laws
of the British Virgin Islands with incorporation number 1404040 and
its registered address located at Trident ▇▇▇▇▇▇▇▇, P.O. Box 146, Road
Town, Tortola, British Virgin Islands (the "COMPANY"); and
4. CHOW CHI YAN, holder of Hong Kong identity card number ▇▇▇▇▇▇▇(▇)
of 8/F., Yick Fat Mansion, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, as
covenantor ("CHOW").
WHEREAS
A. The Vendor legally and beneficially owns one (1) share in the capital of
the Company, representing the entire issued share capital of the Company.
B. The Company owns all of the legal and beneficial interest in the share
capital of JCBN HK.
C. JCBN HK owns all of the legal and beneficial interest in the share capital
of JTT.
D. XFM desires to purchase from the Vendor and the Vendor wishes to sell to
XFM all of the shares in the capital of the Company subject to the terms
and conditions set forth in this Agreement.
E. XFM's desire to purchase all of the shares in the capital of the Company
under the condition that the Vendor and Chow shall procure certain parties
controlled by them to sell certain other assets to XFM Entity subject to
the terms and conditions set forth in this Agreement.
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NOW, THEREFORE, in consideration of the premises and the mutual covenants set
forth herein, the sufficiency, adequacy and receipt of which are hereby
acknowledged, XFM, the Company, the Vendor and Chow hereby agree as follows:
1. DEFINITIONS
1.1 Definitions. The following terms when used herein shall have the meanings
ascribed to them below:
"ACCOUNTS RECEIVABLES" means (a) any right to payment for goods sold,
leased or licensed or for services rendered,
whether or not it has been earned by
performance, whether billed or unbilled, and
whether or not it is evidenced by any contract
or agreement or otherwise; (b) any note
receivable; or (c) any other receivable or
right to payment of any nature;
"ADRS" means American Depositary Receipts;
"AFFILIATES" means, in respect of a specified Person, any
other Person that, directly or indirectly,
through one or more intermediaries, Controls,
is Controlled by, or is under common Control
with, such specified Person or, in the case of
a natural Person, such Person's spouse,
parents and descendants (whether by blood or
adoption and including stepchildren);
"ASSETS" means any real, personal, mixed, tangible,
intangible or other property of any nature,
including, but not limited to, cash or cash
equivalents, inventory, prepayments, deposits,
escrows, Accounts Receivables, Tangible
Property, Intellectual Property, Real
Property, software and goodwill, and claims,
causes of action and other legal rights and
remedies of any nature whatsoever;
"BUSINESS DAY" means any Monday, Tuesday, Wednesday, Thursday
and Friday on which banks in Hong Kong or the
PRC are required or permitted by laws to be
open;
"CHARTER DOCUMENTS" means, in respect of a company, its memorandum
of association, articles of association,
articles of incorporation, bylaws, business
license, registers and other constitutional
and organizational documents, in each case, as
amended as of the date hereof;
"CLOSING RECEIVABLES" has the meaning ascribed to it in Clause 3(c)
of Schedule F;
"CONDITIONS" means, the conditions to the completion of
JCBN Company Closing and JCBN Group Closing as
set forth in Clauses 2 and 8;
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"CONSENT" means any consent, approval, permit, license,
order, or authorization of or registration,
declaration, or filing with or exemption by
Governmental Entity;
"CONTROL", "CONTROLS", means the possession, directly or indirectly,
"CONTROLLED" (or any of the power to direct or cause the direction
correlative term) of the management of a Person, whether through
the ownership of voting securities, by
contract, credit arrangement or proxy, as
trustee, executor, agent or otherwise. For the
purpose of this definition, a Person shall be
deemed to Control another Person if such first
Person, directly or indirectly, owns or holds
more than 50% of the voting equity interests
in such other Person;
"DEPOSIT" has the meaning ascribed to it in Clause
2.2(a)(i);
"DISCLOSING PARTY" has the meaning ascribed to it in Clause 11.4;
"ENCUMBRANCE" means and includes any interest or equity of
any person (including, without prejudice to
the generality of the foregoing, any right to
acquire, option or right of pre-emption) or
any mortgage, charge, pledge, right, lien or
assignment or any other encumbrance, priority
or security interest or arrangement of
whatsoever nature over or in the relevant
property;
"FINANCIAL STATEMENTS" means the results of the financial due
diligence conducted by XFM in respect of the
financial condition of members of the JCBN
Group as at 31 October 2007, copies of which
are attached as Schedule Q;
"FOREIGN EXCHANGE RATE" means the average of the closing middle
exchange rates posted on the website of the
State Administration of Foreign Exchange at
▇▇▇.▇▇▇▇.▇▇▇.▇▇ for the conversion of RMB to
USD on the close of the fifteen trading days
prior to any date of payment under this
Agreement;
"GOVERNMENTAL ENTITY" means any court, regulatory body,
administrative agency or commission or other
governmental authority or instrumentality,
whether domestic or foreign;
"HONG KONG" means the Hong Kong Special Administrative
Region of the PRC;
"IF DESIGN" means Shanghai IF Advertisement Design and
Production Co., Ltd., a company incorporated
under the laws of the PRC with a registered
address at ▇▇▇▇ ▇▇, ▇▇.▇-▇, ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, the PRC;
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"INDEMNIFIED PARTY" has the meaning ascribed to it in Clause 9.4;
"INDEMNIFYING PARTY" has the meaning ascribed to it in Clause 9.4;
"INTELLECTUAL PROPERTY" means, collectively, the Owned Intellectual
Property and the Licensed Intellectual
Property;
"JCBN ANCILLARY means the JCBN Equity Transfer Documents, the
AGREEMENTS" JCBN Employment Agreements to be entered into
by all persons set forth under Schedule M, the
Non-compete Deeds to be entered into by all
persons set forth under Schedule M and any
other agreements contemplated in this
Agreement;
"JCBN CHINA" means Shanghai Paxi Advertising Co., Ltd., a
company incorporated under the laws of the PRC
with a registered address at ▇▇.▇-▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, the PRC;
"JCBN CLOSING means all the agreements or documents required
DELIVERABLES" to be delivered by any member of the JCBN
Group, Chow or the Vendor under this
Agreement;
"JCBN COMPANY has the meaning ascribed to it in Clause 2.3;
CLOSING"
"JCBN COMPANY has the meaning ascribed to it in Clause 2.5;
CLOSING CONDITIONS"
"JCBN COMPANY has the meaning ascribed to it in Clause 2.3;
CLOSING DATE"
"JCBN COMPANY means all of the issued share capital in the
SHARES" Company being one ordinary share with a par
value of US$1.00 in the capital of the
Company;
"JCBN COMPANY has the meaning ascribed to it in Clause 2.2;
SHARES CONSIDERATION"
"JCBN EARNOUTS" has the meaning ascribed to it in Clause
4.1(b);
"JCBN EMPLOYMENT means the employment agreements duly signed by
AGREEMENTS" the persons set forth in Schedule M and the
form of which is set forth under Schedule O;
"JCBN EQUITY means all of the equity interest in JCBN China
INTERESTS" as at the date hereof, particulars of which
are set forth under Schedule D;
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"JCBN EQUITY has the meaning ascribed to it in Clause 3.2;
TRANSFER"
"JCBN EQUITY TRANSFER means all the documents, agreements and
DOCUMENTS" instruments as set forth under Schedule N;
"JCBN FINAL has the meaning ascribed to it in Clause 4.4;
DETERMINATION DATE"
"JCBN GROUP" means, collectively, the Company, JCBN HK, JTT
and JCBN PRC Group;
"JCBN GROUP CLOSING" has the meaning ascribed to it in Clause
3.1(a);
"JCBN HK" means JCBN Company Limited, a company
incorporated under the laws of Hong Kong with
incorporation number 0879989 and its
registered address located at Rooms 1103-5,
▇▇▇▇ ▇▇▇▇▇, ▇▇.▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇;
"JTT" means jtt Advertising Limited, a company
incorporated under the laws of Hong Kong with
incorporation number 0733247 and its
registered address located at Room 24.2-3, Wah
Hing ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇;
"JCBN LEASE" has the meaning ascribed to it under Schedule
F and the particulars of which are set forth
in Schedule I;
"JCBN LICENSES" means all the licenses set forth under
Schedule L;
"JCBN LOSSES" has the meaning ascribed to it under Clause
9.1;
"JCBN PAYMENT DATE" has the meaning ascribed to it in Clause 4.4;
"JCBN PERMITTED has the meaning ascribed to it in Clause 5.5;
BUSINESSES"
"JCBN PRC GROUP" means, collectively, JCBN China, Tianyi and IF
Design;
"JCPN PRC PAYMENT" has the meaning ascribed to it in Clause
3.1(a);
"LICENSED INTELLECTUAL means any and all license rights granted to
PROPERTY" any member of the JCBN Group in any third
party intellectual property or other
proprietary or personal rights, including any
and all of the following that are licensed to
any member of the JCBN
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Group anywhere in the world: (1) trademarks,
trade names, service marks and trade dress,
and all goodwill associated with trademarks,
trade names, service marks and trade dress;
(2) patents; (3) mask works; (4) utility
models; (5) domain names; (6) copyrights and
copyrightable works; (7) databases; (8)
graphics; (9) schematics; (10) marketing,
sales and user data; (11) technology; (12)
trade secrets, including confidential
know-how, inventions, specifications and
processes; (13) computer software programs of
any kind (in both source and object code
form); (14) application programming
interfaces; (15) protocols; and (16) any
renewal, extension, reissue, continuation or
division rights, applications and/or
registrations for any of the foregoing;
"MARKET VALUE" means, with respect to XFM Shares, the average
of the closing price of XFM Shares or their
equivalent in ADRs on NASDAQ for the fifteen
(15) trading days up to and including the
third trading day prior to the applicable date
(adjusted to give effect to any splits,
consolidations, dividends or other
recapitalizations occurring during such
fifteen-day period);
"MATERIAL ADVERSE means any event or circumstance that occurs
CHANGE" which might reasonably be expected to have a
material adverse effect on the prospects,
business, operations or financial condition of
any member of the JCBN Group individually or
the JCBN Group taken as a whole or that would
materially affect the ability of any of the
companies in the JCBN Group or any Person who
is a party to any of the JCBN Ancillary
Agreements or this Agreement to perform its
obligations under any of the JCBN Ancillary
Agreements or this Agreement;
"MATERIAL CONTRACTS" means the material contracts the particulars
of which are set forth in Schedule J;
"NASDAQ" means the National Association of Securities
Dealers Automated Quotations;
"NON-COMPETE DEEDS" means the Non-compete Deeds signed by the
persons set forth in Schedule M and the form
of which is set forth in Schedule P;
"NON-DISCLOSING has the meaning ascribed to it in Clause 11.4;
PARTIES"
"OWNED INTELLECTUAL means any and all of the following that are
PROPERTY" owned (including joint ownership) or held by
any member of the JCBN Group
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anywhere in the world: (1) trademarks, trade
names, service marks and trade dress, and all
goodwill associated with trademarks, trade
names, service marks and trade dress; (2)
patents; (3) mask works; (4) utility models;
(5) domain names; (6) copyrights and
copyrightable works; (7) databases; (8)
graphics; (9) schematics; (10) marketing,
sales and user data; (11) technology; (12)
trade secrets, including confidential
know-how, inventions, specifications and
processes; (13) computer software programs of
any kind (in both source and object code
form); (14) application programming
interfaces; (15) protocols; and (16) any
renewal, extension, reissue, continuation or
division rights, applications and/or
registrations for any of the foregoing;
"PERSON" or "PERSONS" means any natural person, corporation,
company, association, partnership,
organization, business, firm, joint venture,
trust, unincorporated organization or any
other entity or organization, and shall
include any governmental authority;
"PRC" means the People's Republic of China;
"PRE-CLOSING TAX has the meaning ascribed to it in Clause
PERIOD" 9.1(c);
"REAL PROPERTY" means any real estate, land, building,
condominium, town house, structure or other
real property of any nature, all shares of
stock or other ownership interests in
cooperative or condominium associations or
other forms of ownership interest through
which interests in real estate may be held,
and all appurtenant and ancillary rights
thereto, including, but not limited to,
easements, covenants, water rights, sewer
rights and utility rights;
"RELEVANT DATE" has the meaning ascribed to it in Clause 8;
"RETURN PERIODS" means the relevant periods covered by the
Returns;
"RETURNS" means all tax returns required to be filed by
a company;
"RMB" means Renminbi, the lawful currency of the
PRC;
"STRADDLE PERIOD" has the meaning ascribed to it in Clause
9.1(e);
"TANGIBLE PROPERTY" means any furniture, fixtures, leasehold
improvements, vehicles, office equipment,
computer equipment, other equipment,
machinery, tools, spare parts, forms, supplies
or other tangible personal property of any
nature;
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"TAX SETTLEMENT has the meaning ascribed to it in Clause
OPTION" 9.1(d);
"TIANYI" means (CHINESE CHARACTERS), a company
incorporated under the laws of the PRC with a
registered address at ▇▇▇▇ ▇▇▇,▇▇.▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, the
PRC;
"TRANSFER" means to sell, give, assign, hypothecate,
pledge, encumber, grant a security interest in
or otherwise dispose of (whether by operation
of law or otherwise);
"USGAAP" means the generally accepted accounting
principles established by the Financial
Accounting Standards Board of the United
States, as amended from to time;
"US$" and "US DOLLARS" means the lawful currency of the United States
of America;
"XFM ENTITY" means Beijing ▇▇▇▇▇ Advertising Co., Ltd., a
company incorporated under the laws of the
PRC;
"XFM SHARES" means the Class A common shares in the share
capital of XFM with a par value of US$0.001
each;
"2008 JCBN AMOUNT" has the meaning ascribed to it in Clause
4.1(a);
"2008 JCBN means the proforma consolidated audited
FINANCIALS" and "2009 financial statements for the JCBN Group for
JCBN FINANCIALS" the financial year from 1 January 2008 to 31
December 2008 and from 1 January 2009 to 31
December 2009, respectively, in each case
prepared in accordance with USGAAP by a firm
of international accountants selected by
mutual agreement of XFM and the Vendor;
"2008 JCBN NET means the proforma consolidated net income of
INCOME" and "2009 the JCBN Group as set forth in the 2008 JCBN
JCBN NET INCOME" Financials and 2009 JCBN Financials,
respectively, prepared in accordance with
USGAAP excluding the extraordinary items and
any expenses or provisions made or gain
recognised relating to amortization,
write-off, impairment loss or adjustment of
goodwill which arise from acquisitions or
disposal of companies or business by JCBN
Group or incurred in the preparation of the
2008 JCBN Financials or 2009 JCBN Financials;
and
"2009 JCBN AMOUNT" has the meaning ascribed to it in Clause
4.1(a).
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1.2 Interpretation. In this Agreement:
(a) the headings are inserted for convenience only and shall not affect
the construction of this Agreement;
(b) references to statutory provisions shall be construed as references to
those provisions as amended or re-enacted or as their application is
modified by other statutory provisions (whether before or after the
date hereof) from time to time and shall include any provisions of
which they are re-enactments (whether with or without modification);
(c) all time and dates in this Agreement shall be Hong Kong time and dates
except where otherwise stated;
(d) unless the context requires otherwise, words incorporating the
singular shall include the plural and vice versa and words importing a
gender shall include every gender; and
(e) references herein to Clauses, Recitals and Schedules are to clauses
and recitals of and schedules to this Agreement.
1.3 Recitals, Schedules. All recitals and schedules form part of this Agreement
and shall have the same force and effect as if expressly set forth in the
body of this Agreement and any reference to this Agreement shall include
the recitals and schedules.
1.4 Joint Obligations. Warranties, covenants, indemnities or other obligations
expressed in this Agreement to be given by more than one party shall be
deemed to be given by such parties on a joint and several basis unless
otherwise expressly provided for.
2. SALE AND PURCHASE OF COMPANY SHARES
2.1 Purchase and Sale of JCBN Company Shares. Subject to the terms and
conditions set forth in this Agreement, XFM (relying on the
representations, warranties, agreements, covenants, undertakings and
indemnities hereinafter referred to) agrees with the Vendor to purchase and
the Vendor agrees to sell to XFM or an Person designated by XFM at JCBN
Company Closing, all of its direct and indirect interests in the JCBN
Company Shares with effect from the JCBN Company Closing Date free from all
Encumbrances and together with all rights of any nature whatsoever now or
hereafter attaching or accruing to them including all rights to any
dividends or other distribution declared, paid or made in respect of them
after the JCBN Company Closing Date.
2.2 Payment.
(a) The purchase price for the JCBN Company Shares shall be US$43,067,000
(the "JCBN COMPANY SHARES CONSIDERATION") payable as follows:
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(i) US$6,000,000 (the "DEPOSIT") of the JCBN Company Shares
Consideration shall be payable as a deposit on the JCBN Company
Shares Consideration on the fulfilment or waiver of the
conditions provided under Clause 2.5A;
(ii) US$4,200,000 of the JCBN Company Shares Consideration for the
Closing Receivables shall be payable at the JCBN Company Closing
Date;
(iii) US$32,867,000 of the JCBN Company Shares Consideration shall be
payable at the JCBN Group Closing.
(b) The JCBN Company Shares Consideration shall be payable in cash.
(c) If the completion of the JCBN Company Closing and the JCBN Group
Closing shall not have occurred on or before 29 February 2008 as a
result of the failure of the Vendor or Chow to fulfil any of the
Conditions or the Agreement shall have been terminated by XFM pursuant
to Clause 10.1, the Deposit shall forthwith be returned to XFM. If the
completion of the JCBN Company Closing and the JCBN Group Closing
shall not have occurred on or before 29 February 2008 as a result of
the breach of this Agreement by XFM, the Deposit shall be forfeited to
the Vendor. Upon the completion of the JCBN Company Closing and the
JCBN Group Closing, the Deposit shall be applied toward and form part
of the JCBN Company Shares Consideration.
2.3 JCBN Company Closing. Upon the JCBN Company Closing Conditions having been
satisfied or waived on or before the expiration of the time period herein
for the fulfilment of such conditions, the completion of the purchase and
sale of the JCBN Company Shares (the "JCBN COMPANY CLOSING") shall take
place at the offices of XFM in Hong Kong or at such other place as may be
agreed upon by the Parties immediately following confirmation from XFM that
the said conditions have been satisfied or waived. The date and time of the
JCBN Company Closing are herein referred to as the "JCBN COMPANY CLOSING
DATE". For greater certainty, save for the payment of the Deposit, XFM
shall not be obliged to pay any amount of the JCBN Company Shares
Consideration unless all the JCBN Company Closing Conditions are fulfilled
or waived by XFM.
2.4 Deferral of JCBN Company Closing. Without prejudice to any other remedies
available to XFM, if any provision of Clause 2.5 has not been complied with
by the Vendor or Chow on the JCBN Company Closing Date (except if the
Vendor's or Chow's failure to comply is caused by XFM), XFM may:
(a) proceed to JCBN Company Closing so far as practicable (without
prejudice to its rights hereunder);
(b) defer JCBN Company Closing and the payment of the balance of the JCBN
Company Shares Consideration to another Business Day that is not more
than
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twenty eight (28) Business Days later until all JCBN Company Closing
Conditions are fulfilled or waived; or
(c) rescind its obligations to purchase the JCBN Company Shares under this
Agreement without prejudice to any other remedy and without incurring
any liability to the Vendor, Chow or the Company.
2.5 Conditions to JCBN Company Closing. The obligations of XFM under this
Agreement to complete the purchase of the JCBN Company Shares and to pay
the balance of the JCBN Company Shares Consideration (except for the
Deposit which is provided under Clause 2.5A) are subject to the
satisfaction or waiver on or before the JCBN Company Closing Date of all of
the conditions and the delivery of all of the documents pursuant Clause 2.6
and the completion of the JCBN Group Closing (collectively, the "JCBN
COMPANY CLOSING CONDITIONS"). If the JCBN Company Closing Conditions are
not fulfilled or waived by 29 February 2008, this Agreement shall
absolutely terminate and be of no further effect and the rights and
obligations of Chow or the Vendor under this Agreement shall lapse and Chow
or the Vendor shall be released from all obligations hereunder without any
liability, save for their obligation to return the Deposit forthwith
pursuant to Clause 2.2(c) and any liability for any antecedent breach
hereof.
2.5A Conditions to payment of the Deposit. The obligation of XFM to pay the
Deposit is subject to the Vendor and Chow delivering to XFM such evidence
to the reasonable satisfaction of XFM issued by the local Administration of
Industry and Commerce acknowledging its receipt of all documents required
for the transfer of the JCBN Equity Interests to XFM Entity, the
appointment of new executive directors and supervisors of and amendment of
articles of association of each member of the JCBN PRC Group.
2.6 JCBN Company Closing Obligations. Upon or prior to the JCBN Company
Closing, the Vendor and Chow shall deliver or procure to be fulfilled or
delivered to XFM the following conditions or documents in respect of the
JCBN Company Shares:
(a) duly completed and executed undated instrument of transfer of the JCBN
Company Shares by the registered holders thereof in favour of XFM or a
Person designated by XFM together with the share certificate(s)
representing the applicable JCBN Company Shares issued in the name of
XFM or a Person designated by XFM;
(b) duly completed and executed documents (if required) for the
resignation of existing director and appointment of new director(s) of
the Company including, but not limited to, letter of resignation from
existing director of the Company;
(c) duly completed and executed documents required for the resignation of
existing company secretary and appointment of new company secretary of
the Company including, but not limited to, letters of resignation from
existing company secretary of the Company;
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(d) written notice in a form reasonably satisfactory to XFM, addressed and
delivered to and confirmed received by the BVI registered agent of the
Company notifying it of the change in authorised contact person of the
Company;
(e) resolutions of the shareholders and directors of the Company approving
the resignation of the existing directors and (if applicable) company
secretary, the appointment of the persons nominated by XFM to be new
directors and (if applicable) company secretary, the transfer of the
JCBN Company Shares and change of principal office of the Company;
(f) shareholders' and directors' resolution of the Vendor approving the
transfer of the Company Shares;
(g) all books and records of the Company (including its company chop and
seal);
(h) original certificate of incumbency of the Company issued by the BVI
registered agent in a form reasonably satisfactory to XFM;
(i) duly completed and executed documents required for the change in the
bank account signatories of all bank accounts of the Company to
parties designated by XFM;
(j) duly completed and executed documents required for the resignation of
existing directors and company secretary and appointment of new
directors and company secretary of JCBN HK consisting of, but not
limited to, the following:
(i) Form D2A;
(ii) letters of resignation from the existing directors and company
secretary of JCBN HK; and
(iii) shareholders' and directors' resolution of JCBN HK approving the
resignation of the existing directors and company secretary, the
appointment of the persons as nominated by XFM to be new
directors and company secretary and the change of the registered
office of JCBN HK;
(k) all books and records of JCBN HK (including its company chop and
seal);
(l) duly completed and executed documents required for the change in the
bank account signatories of all bank accounts of JCBN HK to parties
designated by XFM;
(m) duly completed and executed documents required for the resignation of
existing directors and company secretary and appointment of new
directors and company secretary of JTT consisting of, but not limited
to, the following:
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(i) Form D2A;
(ii) letters of resignation from existing directors and company
secretary of JTT; and
(iii) shareholders' and directors' resolution of JTT approving the
resignation of the existing directors and company secretary, the
appointment of the persons as nominated by XFM to be new
directors and company secretary and the change of the registered
office of JTT;
(n) all books and records of JTT (including its company chop and seal);
(o) duly completed and executed documents required for the change in the
bank account signatories of all bank accounts of JTT to parties
designated by XFM;
(p) written confirmation from the Vendor and Chow that they are not aware
of any matter or thing which is in breach of or inconsistent with any
of the representations, warranties and undertakings herein; and
(q) all other documents that may reasonably be required by XFM for the
purposes herein including, but not limited to, all documents required
to be signed, submitted to and/or registered with to any Governmental
Entity.
2.7 JCBN Company Closing Obligations. Upon or prior to the JCBN Company
Closing, XFM shall deliver or procure to be delivered to the Vendor the
following documents:
(a) directors' resolution of XFM approving this Agreement and all the
transactions contemplated herein;
(b) payment of the balance of the JCBN Company Shares Consideration in the
manner stipulated in Clause 2.2; and
(c) the JCBN Employment Agreements effective from the day immediately
prior to the JCBN Company Closing Date and duly completed and signed
by such member of the JCBN Group controlled by XFM as XFM may direct.
3. PROCURMENT OF JCBN EQUITY INTERESTS
3.1 JCBN Equity Interests. The Vendor and Chow shall jointly and severally
procure and guarantee each of the following as soon as practicable
following the execution and delivery of this Agreement:
(a) the completion of the sale and transfer of the JCBN Equity Interests
by all current holders thereof to XFM Entity for the total
consideration of One Million Renminbi (RMB1,000,000) (the "JCBN PRC
PAYMENT") and the performance of all actions required or contemplated
under this Agreement by
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all the holders of the JCBN Equity Interests to register such
interests in the name of XFM Entity (the "JCBN GROUP CLOSING");
(b) the resignation as director and legal representative of JCBN China of
the following:
Executive Director and Legal Representative: ▇▇▇▇▇ ▇▇▇▇▇▇▇
(c) the appointment of such person designated by XFM as director(s) of
JCBN China;
(d) the change in the bank account signatories of all bank accounts of
JCBN China to parties designated by XFM;
(e) the amendment of the articles of association of JCBN China to appoint
a new executive director and any other documents as may be required to
effect the foregoing;
(f) the registration of the ownership of the JCBN Equity Interests in the
name of the XFM Entity;
(g) the resignation as director of Tianyi of the following:
Executive Director: Ji Xiuli
(h) the appointment of such person designated by XFM as director of
Tianyi;
(i) the change in the bank account signatories of all bank accounts of
Tianyi to parties designated by XFM;
(j) the amendment of the articles of association of Tianyi to appoint a
new executive director and any other documents as may be required to
effect the foregoing;
(k) the resignation as director and supervisor of IF Design of the
following:
Executive Director: ▇▇▇▇ ▇▇▇▇▇
Supervisor: Yuan Huxian
(l) the appointment of such persons designated by XFM as director and
supervisor of IF Design;
(m) the change in the bank account signatories of all bank accounts of IF
Design to parties designated by XFM;
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(n) the amendment of the articles of association of IF Design to appoint a
new executive director and supervisor and any other documents as may
be required to effect the foregoing;
(o) duly completed and executed JCBN Employment Agreements effective from
the date immediately prior to the JCBN Company Closing Date and duly
completed, signed and delivered by the Persons set forth under
Schedule M and such member of the JCBN Group as XFM may direct;
(p) duly completed and executed Non-compete Deeds effective from the JCBN
Company Closing Date by each of the Persons set forth under Schedule
M;
(q) all powers of attorney or other authorities under which the transfers
of the JCBN Equity Interests have been executed (if any);
(r) such waivers, consents and other documents as XFM may reasonably
require to give to XFM or the XFM Entity good title to the JCBN Equity
Interests and to enable XFM or the XFM Entity to become the registered
holders thereof;
(s) such other papers and documents as XFM may reasonably require;
(t) duly executed documents reasonably required to be executed and
delivered by the holders of the JCBN Equity Interests or any other
party necessary to vest in the XFM Entity its interest in all property
and rights in the JCBN Equity Interests as are intended to be vested
in it in consideration of the JCBN PRC Payment by or pursuant to this
Agreement and the JCBN Ancillary Agreements;
(u) evidence to the reasonable satisfaction of XFM that the bank facility
granted by the Bank of East Asia in favour of JTT has been cancelled
and all and any amount outstanding or due thereunder have been duly
repaid;
(v) completed and executed payment directions from the shareholders of
JCBN China in a form mutually agreed by XFM and the Vendor authorizing
and directing XFM to pay the JCBN PRC Payment to such Person or
Persons as the Vendor may direct;
(w) completed and executed declarations from all key management personnel
of each member of the JCBN Group in form reasonably satisfactory to
XFM representing and warranting that he or she would not be involved
in the management or operation of any other companies other than the
members of the JCBN Group; and
(x) all other documents that may reasonably be required by XFM for the
purposes herein including, but not limited to, all documents required
to be signed, submitted to and/or registered with to any Governmental
Entity.
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3.2 Transfer of JCBN Equity Interests. As soon as practicable after the
execution and delivery of this Agreement and at or prior to JCBN Group
Closing, the Vendor and Chow shall complete the transfer and procure the
completion of the transfer of (as the case may be) all of the JCBN Equity
Interests from the existing holders thereof to the XFM Entity (the "JCBN
EQUITY TRANSFER"), including, but not limited to, the execution, submission
and registration to the relevant Governmental Entities of all the JCBN
Equity Transfer Documents in the name of XFM Entity.
3.3 JCBN PRC Payment. Upon the fulfilment or waiver of the conditions set forth
in Clause 3.4, XFM shall procure the payment of the JCBN PRC Payment to a
bank account(s) designated by the Vendor in accordance with payment
directions provided in Clause 3.1(v) within fifteen (15) days of the JCBN
Group Closing.
3.4 Conditions to JCBN PRC Payment. XFM's obligation to pay the JCBN PRC
Payment shall be subject to the completion of all steps for and
confirmation of the completion or waiver of all matters set forth in
Clauses 3.1, 3.2 and 8, inclusive, including the transfers of the JCBN
Equity Interests, the execution and delivery of the JCBN Employment
Agreements duly completed, signed and delivered by all the persons set
forth under Schedule M, Non-compete Deeds duly completed, signed and
delivered by all Persons set forth under Schedule M and all other steps,
procedures, registrations and the execution, delivery and filing of all
other documents contemplated in and reasonably necessary to effect the
above. For greater certainty, XFM shall not be obliged to pay any amount of
the JCBN PRC Payment unless all the conditions set forth in Clauses 3.1,
3.2 and 8, inclusive, are fulfilled or waived.
4. EARNOUT PAYMENTS
4.1 JCBN Earnout Payments. Subject to Clause 4.2 and 4.3, XFM shall pay the
following amounts (in RMB or its US$ equivalent calculated based on the
Foreign Exchange Rate) to the Vendor or such other party or parties
designated by the Vendor:
(a) an amount (the "2008 JCBN AMOUNT") calculated as follows:
2008 JCBN Amount = 2008 Income Multiple - US$16,500,000 - Net
Receivables
(b) an aggregate amount (the "2009 JCBN AMOUNT") calculated as follows:
2009 JCBN Amount = 2009 Income Multiple - US$16,500,000 - Net
Receivables (if applicable)
(2008 JCBN Amount and 2009 JCBN Amount, collectively, the "JCBN
EARNOUTS")
Where:
Net Receivables = Closing Receivables - Closing Receivables received
by the Group within six (6) months from the JCBN
Group Closing
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2008 Income Multiple = 12 x (2008 JCBN Net Income) x (60%)
2009 Income Multiple = 12 x (2009 JCBN Net Income) x (40%)
PROVIDED THAT:
(i) if the 2008 Income Multiple or 2009 Income Multiple calculated above
is less than zero, such amount shall be deemed to be zero;
(ii) the 2008 Income Multiple shall not exceed US$41,200,000;
(iii) the 2009 Income Multiple shall not exceed US$28,700,000; and
(iv) any Net Receivables shall be first deducted from the 2008 Income
Multiple and to the extent the Net Receivables exceed the 2008 Income
Multiple, such excess shall be deducted from the 2009 Income
Multiple.
4.2 Calculation of 2008 JCBN Amount and 2009 JCBN Amount. Within five (5) days
of the delivery to XFM of the 2008 JCBN Financials and 2009 JCBN
Financials, respectively, XFM shall deliver to the Vendor its calculation
of the 2008 JCBN Amount and 2009 JCBN Amount, respectively, which notice
shall include reasonable details of the basis of such calculations to
enable the Vendor to review the accuracy of the calculations. If, within
ten (10) days of receiving the calculation, the Vendor does not dispute the
calculation of the 2008 JCBN Amount or 2009 JCBN Amount (as the case may
be); or advises XFM in writing that it accepts the calculation, then the
2008 JCBN Amount or 2009 JCBN Amount (as the case may be) shall for all
purposes be considered final, accepted and approved by the Vendor. If the
Vendor disputes the calculation of the 2008 JCBN Amount or 2009 JCBN Amount
(as the case may be) within the said ten (10) day period, then the parties
shall endeavour to resolve such dispute amicably within an additional
period of ten (10) days. If successfully resolved, the 2008 JCBN Amount or
2009 JCBN Amount (as the case may be) so adjusted by the resolution of the
dispute shall, for all purposes, be considered final, accepted and approved
by the Vendor and XFM. If the parties shall be unable to reach any
resolution within the said additional ten (10) day period, the dispute
shall be referred to arbitration for final determination in accordance with
the provisions of this Agreement; provided that upon determination of such
dispute by arbitration, the party that is unsuccessful in the arbitration
shall be solely responsible for all reasonable fees, costs and expenses
relating to the arbitration.
4.3 Payment. XFM shall pay the 2008 JCBN Amount and 2009 JCBN Amount or its US
dollar equivalent determined with the Foreign Exchange Rate in a
combination of (A) money in US Dollars in an amount equal to Sixty Per Cent
(60%) of such sum, and (B) XFM Shares or ADRs representing such shares,
rounded up to the nearest whole share or ADR, with an aggregate Market
Value equal to Forty Per Cent (40%) of such sum. Notwithstanding the
foregoing, XFM may, in its sole discretion, deliver to the Vendor or any
other person(s) designated by the Vendor money in US Dollars in lieu of all
or a portion of the 2008 JCBN Amount or 2009 JCBN Amount otherwise
deliverable to the Vendor in XFM Shares or ADRs.
17
4.4 Payment Date. XFM shall pay the cash portion of the 2008 JCBN Amount and
2009 JCBN Amount to the Vendor or any other Person designated by the Vendor
within five (5) Business Days following the final determination of the 2008
JCBN Amount or 2009 JCBN Amount (as the case may be) (the "JCBN FINAL
DETERMINATION DATE"), and issue the XFM Shares portion thereof within
twenty (20) Business Days following the JCBN Final Determination Date (each
such cash payment or share issuance date a "JCBN PAYMENT DATE").
4.5 Manner of Payment. Notwithstanding any provision herein, the Vendor shall
advise XFM in writing of the payees to whom XFM shall pay the 2008 JCBN
Amount and 2009 JCBN Amount at least three (3) Business Days before each
JCBN Payment Date. Specifically, the Vendor shall advise XFM of the
Person(s) and necessary account information to whom and where the payments
shall be made and how the XFM Shares or ADRs shall be issued.
4.6 2008 JCBN Financials and 2009 JCBN Financials. XFM shall procure that the
2008 Financials and 2009 Financials shall be delivered to XFM not later
than one hundred and eighty (180) days after the end of the relevant year.
Notwithstanding any other provision herein and absent manifest error, the
2008 JCBN Financials and 2009 JCBN Financials shall be final conclusive and
binding on all parties and shall not be subject to further dispute,
arbitration or other reassessment or calculation or determination.
4.7 Intentionally deleted.
4.8 Conditions of Payment of JCBN Earnouts. XFM's obligation to pay the JCBN
Earnouts is conditional on the following being true as of the scheduled
date of payment:
(a) the representations and warranties of the Vendor and Chow shall be
true and correct as of the date of the payment;
(b) each of the JCBN Employment Agreements with the Persons set out under
Schedule M shall not have been unilaterally terminated and there shall
not have been any default by the said Persons before the expiration of
the same or shall not have been terminated by the respective employer
or XFM thereunder for cause;
(c) Each of the JCBN Non-compete Deeds shall be valid and in full force
and effect and there shall not be any default under any of them;
(d) there has not occurred any breach of this Agreement by any of the
Vendor or Chow;
(e) the businesses of each member of the JCBN Group remains substantially
the same as the JCBN Permitted Businesses carried on by each
respective member as at the date hereof, save and except any change of
business requested by XFM as resolved by its board of directors; and
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(f) all of the JCBN Conditions remained fulfilled.
5. COVENANTS
5.1 JCBN Further Covenants. The Vendor and Chow hereby irrevocably covenant and
undertake to XFM to execute and deliver and procure the due execution and
delivery of all such further and necessary documents reasonably required to
be signed by the Vendor or members of the JCBN Group as are necessary to
vest in XFM or a Person designated by XFM or XFM Entity all such property
and rights as are intended to be vested in them by or pursuant to this
Agreement. Each of the signing parties shall bear the expenses incurred by
it.
5.2 Directors. Each of the parties hereto shall do and shall procure to be done
all actions necessary to ensure that the directors of each member of the
JCBN Group shall be such persons nominated by XFM.
5.3 Limitation on Transfer of Interests. Prior to JCBN Group Closing Date, none
of the parties to this Agreement shall Transfer any JCBN Company Shares,
JCBN Equity Interests or interests in any member of the JCBN Group or any
right, title or interest in or to any of them save for the transactions
contemplated under this Agreement, and any attempt to transfer any JCBN
Company Shares, JCBN Equity Interests or interests in any member of the
JCBN Group or any right, title or interest in or to any of them in
violation of the preceding sentence shall be null and void ab initio.
5.4 Joint and Several Liability. All obligations and liabilities of the Vendor
and Chow or any one of them hereunder, howsoever stated, shall be the joint
and several obligations and liabilities of the Vendor and Chow.
5.5 No change in Businesses. Prior to the Payment Date of the 2009 JCBN Amount,
the Vendor and Chow hereby irrevocably covenant and undertake to XFM that
each member of the JCBN Group shall continue to carry on the businesses
they respectively carry on as at the date hereof as permitted by their
respective business licences (the "JCBN PERMITTED BUSINESSES"), save and
except any change of business requested by XFM as resolved by its board of
directors. The prior written consent of XFM is required if any member of
the JCBN Group proposes to carry out any businesses other than the JCBN
Permitted Businesses. All expenses incurred and revenues generated from
businesses other than the JCBN Permitted Businesses shall not be taken into
account when calculating the 2008 JCBN Net Income and 2009 JCBN Net Income.
5.6 XFM Share Consideration. If, for any reason, XFM Shares or the ADRs
representing them payable to the Vendor hereunder are not listed on NASDAQ
or a comparable public trading market or the issuance of such XFM Shares
and the ADRs representing them are in any way prohibited or restricted
under any applicable laws and regulations, then XFM shall so notify the
Vendor, and the Vendor may, by written notice to XFM, elect to receive
money in US Dollars in lieu of the portion of the 2008 JCBN Amount or 2009
JCBN Amount (as the case may be) otherwise deliverable to the Vendor in XFM
Shares. If the Vendor elects to have the 2008 JCBN Amount or 2009 JCBN
19
Amount (as the case may be) paid in cash, XFM shall not be entitled to
deliver to the Vendor or any other person(s) designated by the Vendor any
XFM Shares or ADRs in respect of such part of the 2008 JCBN Amount or 2009
JCBN Amount (as the case may be) already paid in cash.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE VENDOR AND CHOW
The Vendor and Chow hereby jointly and severally represent and warrant and
covenant to XFM that (a) the statements set out under Schedule F are true
and correct as at the Relevant Date and (b) the following statements are
true and correct with respect to the Company as at the date hereof and at
the JCBN Company Closing:
6.1 Organization, Standing, and Power. It is a company duly organized, validly
existing, and in good standing under the laws of British Virgin Islands,
has all requisite corporate power and authority to carry on its businesses,
and is duly qualified and in good standing to do business in each
jurisdiction in which it conducts business. It has made available to XFM
complete and correct copies of its Charter Documents.
6.2 Corporate Records. Its minute books and corporate records, complete and
correct copies of which have been made available to XFM, contain correct
and complete records of all proceedings and actions taken at all meetings
of, or effected by written consent of its shareholders and its board of
directors and all original issuances and subsequent transfers, repurchases,
and cancellations of its shares.
6.3 Capital Structure.
(a) Immediately prior to and following the JCBN Company Closing Date and
JCBN Group Closing Date, its issued share capital will be as set forth
in Schedule B and Schedule C, respectively.
(b) There are no options, warrants, calls, conversion rights, commitments,
agreements, contracts, restrictions, or rights of any character to
which it is a party or by which it may be bound obligating company to
issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares, or obligating it to grant, extend or enter into any
such option, warrant, call, conversion right, commitment, agreement,
contract, understanding, restriction, arrangement or right. It does
not have outstanding any bonds, debentures, notes or other
indebtedness.
(c) None of the Company Shares are beneficially owned or Controlled
directly or indirectly by any nationals or residents of the PRC.
6.4 Subsidiaries and Branches. It does not presently own or Control, directly
or indirectly, any interest in any other corporation, association, or other
business entity, and is not a participant in any joint venture,
partnership, or similar arrangement, except as set forth in Schedule D. Its
particulars as set forth in Schedule D are true and accurate in all
respects and the percentage of its share capital shown therein as
20
owned or Controlled by it is beneficially owned and free and clear of all
Encumbrances. There is no agreement or arrangement in force which calls for
the present or future issue or sale of, or grant to any person the right
(whether conditional or otherwise) to call for the issue, sale or transfer
of any of its share or loan capital (including any of its option, notes,
warrants or other securities or rights convertible or ultimately
convertible into shares or equity interests).
6.5 Authority. The execution, delivery, and performance of this Agreement by
the Company have been duly authorized by all necessary action of its board
of directors. Certified copies of the resolutions adopted by the Company's
board of directors approving this Agreement and transactions contemplated
hereby and thereby have been provided to XFM.
6.6 Execution. The Company's execution and delivery of this Agreement shall
constitute valid, binding, and enforceable obligations of it in accordance
with their terms, except to the extent that enforceability may be limited
by applicable bankruptcy, reorganization, insolvency, moratorium or other
laws affecting the enforcement of creditors' rights generally and by
general principles of equity, regardless of whether such enforceability is
considered in a proceeding at law or in equity.
6.7 Compliance with Laws and Other Instruments. It holds, and at all times has
held, all licenses, permits, and authorizations from all governmental
entities necessary for the lawful conduct of its business pursuant to all
applicable statutes, laws, ordinances, rules, and regulations of all such
authorities having jurisdiction over it or any part of its operations.
There are no violations or claimed violations of any such license, permit,
or authorization, or any such statute, law, ordinance, rule or regulation.
6.8 Corporate Governance. Neither the execution and delivery of nor the
performance by it of its obligations under this Agreement will (i) conflict
with or result in any breach of its Charter Documents; (ii) require any
Consent, (iii) conflict with, result in a breach or default of, or give
rise to any right of termination, cancellation or acceleration or result in
the creation of any lien, charge, encumbrance, or restriction upon any of
the properties or Assets of it or its shares under, any law, statute, rule,
regulation, judgment, decree, order, government permit, license or order or
any mortgage, indenture, note, license, trust, agreement or other
agreement, instrument or obligation to which it is a party.
6.9 No Liabilities and No Business Activities. Save as contemplated under this
Agreement, it has no liabilities of any nature howsoever arising, is not
involved in any litigation whether as plaintiff or defendant, has no Assets
and is not carrying on any business of any nature.
6.10 No PRC Shareholders. There are no persons who are nationals or residents of
the PRC who are shareholders or directors of the Company.
21
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF XFM
XFM hereby represents warrants and covenants to the Vendor that each of the
following statements are true and correct with respect to XFM as at the
date hereof and at the JCBN Company Closing and JCBN Group Closing
respectively:
7.1 Organisation and Qualification. It is a person or a legal entity duly
organised and validly existing under the laws of the Cayman Islands, and
that ADRs representing the Shares are listed on the NASDAQ.
7.2 Authorisation. It has taken all corporate or other action required to
authorise, and has duly authorised, the execution, delivery and performance
of this Agreement and upon due execution and delivery the same will
constitute its legal, valid and binding obligations enforceable in
accordance with its terms.
7.3 Power and Authority. It has full power and authority to make the covenants
and representations referred to herein and to purchase the Company Shares
and to execute, deliver and perform this Agreement. It has the capacity to
pay the Company Shares Consideration and other payment as provided in this
Agreement to the Vendor.
7.4 Compliance with Laws and Other Instruments. It holds, and at all times has
held all licenses, permits, and authorizations from all governmental
entities necessary for the lawful conduct of its business pursuant to all
applicable statutes, laws, ordinances, rules, and regulations of all such
authorities having jurisdiction over it or any part of its operations.
There are no violations or claimed violations of any such license, permit,
or authorization, or any such statute, law, ordinance, rule or regulation.
7.5 Corporate Governance. Neither the execution and delivery of this Agreement
and Ancillary Agreements nor the performance by it of its obligations under
this Agreement and Ancillary Agreements will (i) conflict with or result in
any breach of its charter documents; (ii) require any Consents by
Governmental Entity, (iii) conflict with, result in a breach or default of,
or give rise to any right of termination, cancellation or acceleration or
result in the creation of any lien, charge, encumbrance, or restriction
upon any of the properties or Assets of it or its shares under, any law,
statute, rule, regulation, judgment, decree, order, government permit,
license or order or any mortgage, indenture, note, license, trust,
agreement or other agreement, instrument or obligation to which it is a
party.
7.6 Management. From the date hereof until the payment of the 2009 JCBN Amount,
provided that all of the JCBN Employment Agreements, Non-compete Deeds,
this Agreement and the JCBN Ancillary Agreements have been complied with
and have not been otherwise terminated, XFM shall procure that, subject to
applicable laws and regulations, the management of JCBN Group remains the
same as that at JCBN Group Closing.
8. CONDITIONS OF XFM'S OBLIGATIONS TO MAKE PAYMENTS
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General. The obligations of XFM under this Agreement to complete the
purchase of the Company Shares and pay the Company Shares Consideration and
JCBN PRC Payment are subject to the satisfaction or waiver on or before the
applicable payment date (the "RELEVANT DATE") of each of the conditions set
out under Schedule G.
9. INDEMNITY
9.1 Indemnity of XFM by the Vendor and Chow. The Vendor and Chow shall jointly
and severally indemnify and will keep indemnified and save harmless XFM and
XFM Entity from and against the following (collectively, the "JCBN
LOSSES"):
(a) any and all losses, claims, damages (including damages, interest,
penalties, fines and monetary sanctions) liabilities and costs
incurred or suffered by XFM or XFM Entity by reason of, resulting
from, in connection with, or arising in any manner whatsoever out of
the breach of any warranty, representation or covenant given under and
subject to Clause 6 or the inaccuracy of any representation given
under and subject to Clause 6 made in respect of any member of the
JCBN Group contained or referred to in this Agreement in connection
therewith provided that the indemnity contained in this Clause shall
be without prejudice to any other rights and remedies available to
XFM;
(b) save as shown on the Financial Statements, any and all losses, claims,
damages liabilities and costs incurred or suffered by any member of
the JCBN Group by reason of, resulting from, in connection with, or
arising in any manner whatsoever out of or from any action, inaction
or omission prior to JCBN Group Closing Date including, but not
limited to, any diminution in the value of the Assets of any of the
member of the JCBN Group and any payment made or required to be made
by the member of the JCBN Group and any costs and expenses incurred as
a result of such breach provided that the indemnity contained in this
Clause shall be without prejudice to any other rights and remedies
available to XFM; and
(c) any and all losses, claims, liabilities, expenses, or other damages
attributable to:
(i) any and all taxes (or the non-payment thereof) of any member of
the JCBN Group or any subsidiary of the Company for all taxable
periods ending on or before the JCBN Closing Date ("PRE-CLOSING
TAX PERIOD");
(ii) all taxes of any member of an affiliated, consolidated, combined
or unitary group of which any member of the JCBN Group (or any
predecessor of any of the foregoing) is or was a member on or
prior to the JCBN Closing Date, and
(iii) any and all taxes of any person (other than any member of the
JCBN Group) imposed on any member of the JCBN Group as a
transferee or successor, by contract or pursuant to any law,
rule, or regulation, which
23
taxes relate to an event or transaction occurring before the JCBN
Group Closing. Payment in full of any amount due from the Vendor
and/or Chow under this Clause 9.1(c) shall be made to XFM in
immediately available funds at least two (2) Business Days before the
date of payment of the taxes to which such payment relates is due, or,
if no tax is payable, within fifteen days after written demand is made
for such payment.
(d) Notwithstanding the foregoing Clauses 9.1(a) to (c), XFM shall provide
the Vendor and Chow with reasonably prompt written notice of any
proposed tax adjustment required by any Governmental Entities that may
give rise to the Vendor and Chow' indemnification obligation
hereunder, shall cooperate with the Vendor and Chow and permit the
Vendor and/or Chow to participate, at their own expense, in the audit
or other proceeding. Notwithstanding the preceding sentence, in the
event that the Vendor and/or Chow wish to accept a proposed settlement
of a tax claim for which they have an indemnity obligation pursuant to
this Clause 9.1 (the "TAX SETTLEMENT OPTION") and XFM determines that
it prefers to pursue the tax claim further, XFM may pursue the tax
claim PROVIDED THAT in such case the maximum amount of liability of
the Vendor and Chow under such tax claim shall not exceed the amount
for which they would have been liable if the Tax Settlement Option
were accepted.
(e) In the case of any taxable period that ends on or before the JCBN
Group Closing Date (a "STRADDLE PERIOD"), the amount of any taxes
based on or measured by income or receipts of the JCBN Group or any
member thereof for the Pre-Closing Tax Period shall be determined
based on an interim closing of the books as of the close of business
on the JCBN Group Closing Date, and the amount of other taxes of the
JCBN Group for a Straddle Period which relate to the Pre-Closing Tax
Period shall be deemed to be the amount of such tax for the entire
taxable period multiplied by a fraction the numerator of which is the
number of days in the taxable period ending on the JCBN Group Closing
Date and the denominator of which is the number of days in such
Straddle Period.
9.2 Costs. For the purposes of this Clause, "costs" includes reasonable
lawyers' and accountants' fees and expenses, court costs and all other
out-of-pocket expenses.
9.3 Survival of Warranties and Indemnity.
The representations and warranties of Chow and the Vendor under Clauses 1,
2, 3(b)-(e), 3(j)-(p) and 5 under Schedule F shall survive JCBN Group
Closing in perpetuity and those given under Clauses 3(a), 3(f) to 3(i),
3(q) and 4 under Schedule F which shall survive JCBN Group Closing for a
period of three (3) years.
9.4 Third Party Claims. A party entitled to indemnification hereunder (an
"INDEMNIFIED PARTY") shall notify promptly the indemnifying party (the
"INDEMNIFYING PARTY") in writing of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to this Agreement. In case any claim, action or proceeding is
brought against an Indemnified Party and the
24
Indemnified Party notifies the Indemnifying Party in writing of the
commencement thereof, the Indemnifying Party shall be entitled to
participate therein and to assume the defense thereof, to the extent that
it chooses, with counsel reasonably satisfactory to such Indemnified Party,
and after notice from the Indemnifying Party to such Indemnified Party that
it so chooses, the Indemnifying Party shall not be liable to such
Indemnified Party for any legal or other expenses subsequently incurred by
such Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that:
(a) if the Indemnifying Party fails to take reasonable steps necessary to
defend diligently the action or proceeding within twenty (20) calendar
days after receiving notice from such Indemnified Party that the
Indemnified Party reasonably believes it has failed to do so; or
(b) if such Indemnified Party who is a defendant in any claim or
proceeding which is also brought against the Indemnifying Party
reasonably shall have concluded that there may be one or more legal
defenses available to such Indemnified Party which are not available
to the Indemnifying Party; or
(c) if representation of both parties by the same counsel is otherwise
inappropriate under applicable standards of professional conduct,
then, in any such case, the Indemnified Party shall have the right to
assume or continue its own defense as set forth above (but with no more
than one firm of counsel for all Indemnified Parties in each jurisdiction),
and the Indemnifying Party shall be liable for any expenses therefor.
9.5 Settlement of Claims.
(a) No Indemnifying Party shall, without the written consent of the
Indemnified Party, effect the settlement or compromise of, or consent
to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification may be
sought hereunder (whether or not the Indemnified Party is an actual or
potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the
Indemnified Party from all liability arising out of such action or
claim, (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act, by or on behalf of any
Indemnified Party and (iii) does not include any injunctive or other
non-monetary relief.
(b) the Indemnified Party may, in its sole discretion, offset against any
payment it required or contemplated hereunder (including, where
relevant, the Earnout Payments) any JCBN Losses incurred or suffered
by the Indemnified Party and for which the Indemnified Party is
entitled to be indemnified in this Agreement (including the JCBN
Earnout Payments).
25
9.6 Hold Back
(a) Upon the timely receipt by the Indemnifying Party of a certificate
signed by an officer of the Indemnified Party (an "INDEMNITY
CERTIFICATE"); (i) stating (a) that the Indemnified Party has paid,
properly accrued or otherwise sustained a JCBN Loss; (b) or made a
reasonable determination in good faith that it will sustain, have to
pay, or accrue a JCBN Loss, and (ii) specifying in reasonable detail
the individual items of JCBN Loss included in the amount so stated,
the date each such item was sustained, paid, accrued, or the basis for
such anticipated JCBN Loss, and the nature of breach of
representation, warranty or covenant to which such item relates, the
Indemnifying Party shall, subject to the provisions hereof (including
without limitation Clauses 9.6(a) and (b) hereof), deliver to the
Indemnified Party, in cash, an amount equivalent to such JCBN Loss.
(b) If the Indemnifying Party objects in writing to any claim made in an
Indemnity Certificate within ten (10) Business Days after delivery of
the Indemnity Certificate, both parties shall attempt in good faith
for ten (10) Business Days after delivery of the written objection by
the Indemnifying Party to agree to the settlement of such claim. If
the parties shall agree, a memorandum setting forth such agreement
shall be prepared and signed by all the relevant parties.
(c) If no such agreement can be reached during such ten (10) Business Day
period, either party may submit the claim to arbitration in accordance
with the provisions of this Agreement.
9.7 No Liability. No liability shall attach to the Vendor or Chow under this
Agreement howsoever in respect of:
(a) any matter or claim which would not have arisen but for an alteration,
enactment or re-enactment of any ordinance, law, regulation, other
legislative act, or generally accepted administrative practice of any
government or governmental or regulatory authority which occurs after
the date of execution of this Agreement (including without limitation
any alteration in rates of tax or any imposition of taxation not in
effect on the date of execution of this Agreement) and whether or not
such alteration, enactment or re-enactment has retrospective effect,
or a change in the interpretation of tax law after the date of this
Agreement; or
(b) any liability to the extent that provision or reserve in respect
thereof has been adequately made in the JCBN Financial Statements or
to the extent that actual payment or discharge of such liability has
been taken into account therein; or
(c) any act, omission or transaction of a member of the JCBN Group or its
directors, employees or agents done or omitted to be done on or before
JCBN Company Closing Date or JCBN Group Closing at the written
request, or with the written consent, of XFM (including that done or
omitted to be done pursuant to the transactions contemplated under
this Agreement) where XFM has been informed by the Vendor in writing
prior to JCBN Company Closing or JCBN Group
26
Closing that such act, omission or transaction will give rise to a
breach of a representation, warranty, or covenant under this
Agreement; or
(d) any matter which may affect the Company or any member of the JCBN
Group and which has been disclosed to XFM in writing in the form of a
disclosure letter on or before the JCBN Company Closing or JCBN Group
Closing provided that such matter shall not give rise to any Material
Adverse Change to the businesses, operations and financial position of
the Company or any member of the JCBN Group; or
(e) to the extent XFM is entitled to recover compensation for any JCBN
Loss under a policy of insurance maintained by any member of the JCBN
Group, the amount of JCBN Loss XFM shall be entitled to claim against
the Vendor or Chow shall be reduced by the net amount actually
received by XFM under the said policy.
9.8 No claim for breach under this Agreement shall be made against the Vendor
or Chow unless the aggregate amount of all claims for which the Vendor or
Chow would otherwise be liable under this Agreement exceeds US$100,000 (and
in which case XFM shall be entitled to claim the entire amount of the
claims and not just the excess).
9.9 Notwithstanding anything contained in this Agreement, the maximum aggregate
liability of the Vendor and Chow in respect of all and any claims for JCBN
Loss(es) or otherwise for breach under this Agreement shall not in any
event exceed US$39,000,000 provided that such liability or JCBN Loss(es)
shall not arise from (i) any breach of any of the representations and
warranties as set out under Clauses 1, 2, 3(b)-(e), 3(j) to (p) and 5 under
Schedule F or (ii) any gross negligence, wilful misconduct or fraud of the
Vendor or Chow.
9.10 If the Vendor and/or Chow shall have paid to XFM any amount by way of
compensation or damages for any JCBN Loss or breach under this Agreement
and XFM or the JCBN Group subsequently recovers from a third party any
amount as compensation or damages for such JCBN Loss or breach, XFM shall
forthwith repay to the Vendor and/or Chow such amount as received by XFM
from such third party but does not exceed the amount paid by the Vendor
and/or Chow to XFM, subject to any deduction of reasonable costs and
expenses incurred or to be incurred by the JCBN Group or XFM in respect of
such recovery including any insurance premium, loading, deductible or other
insurance policy and recovery costs and expenses.
10. TERMINATION
10.1 Termination. This Agreement may be terminated at any time prior to the JCBN
Group Closing:
(a) by XFM if, between the date hereof and JCBN Group Closing: (i) there
is a Material Adverse Change caused by any of the Vendor's or Chow's
breach of any provision of this Agreement or the Ancillary Agreements,
(ii) the Vendor or Chow has made any disclosure pursuant to Clause
9.7(d) which has a Material Adverse Change over the businesses,
operations and financial
27
positions of the JCBN Group; (iii) any representations and warranties
made by the Vendor or Chow as contained in this Agreement shall not
have been materially true and correct when made, (iv) the Vendor and
Chow shall not have complied in all material respects with the
covenants or agreements contained in this Agreement to be complied
with by it or him, or (v) any member of the JCBN Group makes a general
assignment for the benefit of creditors, or any proceeding shall be
instituted by or against the company seeking to adjudicate it bankrupt
or insolvent, or seeking liquidation, winding up or reorganization,
arrangement, adjustment, protection, relief or composition of its
debts under any law related to bankruptcy, insolvency or
reorganization;
(b) by the Vendor if, between the date hereof and JCBN Group Closing: (i)
any representations and warranties made by XFM contained in this
Agreement shall not have been materially true and correct, (ii) XFM
shall not have complied in all material respects with the covenants or
agreements contained in this Agreement with respect of the particular
Vendor to be complied with by it or (iii) XFM makes a general
assignment for the benefit of creditors, or any proceeding shall be
instituted by or against XFM seeking to adjudicate XFM in question
bankrupt or insolvent, or seeking liquidation, winding up or
reorganization, arrangement, adjustment, protection, relief or
composition of its debts under any law related to bankruptcy,
insolvency or reorganization;
(c) by XFM or the Vendor in the event that any competent governmental
authority in the PRC shall have issued an order, decree or ruling or
taken any other action restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement or the proposed
business and operation of the JCBN Group; or
(d) by the parties hereto with the written consent of XFM and the Vendor.
10.2 Effect of Termination. In the event of termination of this Agreement as
provided in Clause 10.1, this Agreement shall forthwith become void
provided that nothing herein shall relieve any party hereto from liability
for any breach of this Agreement.
11. CONFIDENTIALITY AND ▇▇▇-▇▇▇▇▇▇▇▇▇▇
▇▇.▇ ▇▇▇-▇▇▇▇▇▇▇▇▇▇ of Terms. The terms and conditions of this Agreement and the
Ancillary Agreements, including their existence, shall be considered
confidential information and shall not be disclosed by any party hereto to
any third party except in accordance with the provisions set forth below;
provided that such confidential information shall not include any
information that is in the public domain other than by the breach of the
confidentiality obligations hereunder.
11.2 Press Releases, Etc. Any press release issued by any party hereto or any
member of the JCBN Group in relation to this Agreement shall be approved in
advance in writing by the each Party to this Agreement, whose consent shall
not be unreasonably withheld. No other announcement regarding any of the
terms set forth in this Agreement in a press release, conference,
advertisement, announcement, professional
28
or trade publication, mass marketing materials or otherwise to the general
public may be made without the prior written consent of each Party to this
Agreement, whose consent shall not be unreasonably withheld.
11.3 Permitted Disclosures. Notwithstanding the foregoing, any party may
disclose any of the terms set forth in this Agreement to its current or
bona fide, employees, bankers, lenders, partners, accountants and attorneys
and other professional advisers, in each case only where such persons or
entities are under appropriate non-disclosure obligations.
11.4 Legally Compelled Disclosure. In the event that any party is requested or
becomes legally compelled (including without limitation, pursuant to
securities laws and regulations) to disclose the existence or terms of this
Agreement or the Ancillary Agreements in contravention of the provisions of
this Clause, such party (the "DISCLOSING PARTY") shall provide the other
parties (the "NON-DISCLOSING PARTIES") with prompt written notice of that
fact and use all reasonable efforts to seek (with the cooperation and
reasonable efforts of the other parties) a protective order, confidential
treatment or other appropriate remedy. In such event, the Disclosing Party
shall furnish only that portion of the information which is legally
required and shall exercise reasonable efforts to keep confidential such
information to the extent reasonably requested by any Non-Disclosing Party.
If disclosure is required then to the extent that disclosure of the
Ancillary Agreements complies such disclosure requirement then this
Agreement shall remain confidential.
11.5 Other Information. The provisions of this Clause shall be in addition to,
and not in substitution for, the provisions of any separate nondisclosure
agreement executed by any of the parties hereto with respect to the
transactions contemplated hereby.
12. MISCELLANEOUS
12.1 Successors and Assigns. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
12.2 Governing Law, Jurisdiction and Service Agent. This Agreement shall be
governed by and construed in accordance with the laws of Hong Kong.
12.3 Arbitration. Any dispute, controversy or claim arising out of or relating
to this Agreement, or the breach, termination or invalidity thereof, shall
be settled by binding arbitration in accordance with the UNCITRAL
Arbitration Rules as present in force in the manner set forth in this
Clause 12.3:
(a) The procedures of this Clause 12.3(a) may be initiated by a written
notice (a "DISPUTE NOTICE") given by one party (a "CLAIMANT") to the
other, but not before thirty (30) days have passed during which the
parties have been unable
29
to reach a resolution. The Dispute Notice shall be accompanied by (i)
a statement of the Claimant describing the dispute in reasonable
detail and (ii) documentation, if any, supporting the Claimant's
position on the dispute. Within twenty (20) days after the other
party's (the "RESPONDENT") receipt of the Dispute Notice and
accompanying materials, the dispute shall be resolved by binding
arbitration in Hong Kong under the UNCITRAL Arbitration Rules. All
arbitration procedures pursuant to this paragraph (a) shall be
confidential and treated as compromise and settlement negotiations and
shall not be admissible in any arbitration or other proceeding.
(b) The parties shall agree on a single arbitrator to resolve the dispute.
If the Parties fail to agree on the designation of an arbitrator
within a twenty (20)-day period the Hong Kong International
Arbitration Centre shall be requested to designate the single
arbitrator. If the arbitrator becomes disabled, resigns or is
otherwise unable to discharge the arbitrator's duties, the
arbitrator's successor shall be appointed in the same manner as the
arbitrator was appointed.
(c) Any award arising out of arbitration (i) shall be binding and
conclusive upon the parties; (ii) shall be limited to a holding for or
against a party, and affording such monetary remedy as is deemed
equitable, just and within the scope of this Agreement; (iii) may not
include special, indirect, incidental, consequential, special,
punitive or exemplary damages or diminution in value; (iv) may in
appropriate circumstances include injunctive relief; and (v) may be
entered in a court.
(d) Arbitration shall not be deemed a waiver of any right of termination
under this Agreement, and the arbitrator is not empowered to act or
make any award other than based solely on the rights and obligations
of the parties prior to termination in accordance with this Agreement.
(e) The arbitrator may not limit, expand or otherwise modify the terms of
this Agreement.
(f) Each party shall bear its own expenses incurred in any arbitration or
litigation, but any expenses related to the compensation and the costs
of the arbitrator shall be borne equally by the parties to the
dispute.
(g) If any action or proceeding is commenced to construe or enforce this
Agreement or the rights and duties of the parties hereunder, then the
party prevailing in that action, and any appeal thereof, shall be
entitled to recover its attorney's fees and costs in that action or
proceeding, as well as all costs and fees of any appeal or action to
enforce any judgment entered in connection therewith.
12.4 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
30
12.5 Titles and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
12.6 Notices. Unless otherwise provided, any notice required or permitted under
this Agreement shall be given in writing and shall be deemed effectively
given upon personal delivery to the party to be notified or upon postal
service delivery, by registered or certified mail, postage prepaid and
addressed to the party to be notified at the address indicated for such
party on the signature page hereof or by facsimile at the facsimile number
set forth on the signature page hereof, or at such other address or
facsimile number as such party may designate by ten (10) days' advance
written notice to the other parties.
12.7 Expenses. Each of the parties hereto shall be responsible for its own
costs and expenses incurred in the preparation, negotiation and execution
of this Agreement.
12.8 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if
such provision was so excluded and shall be enforceable in accordance with
its terms.
12.9 Language. This Agreement shall be executed in English.
12.10 Further Assurances. The parties agree to execute such further instruments
and documents and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement. The parties agree to
cooperate affirmatively with XFM to the extent reasonably requested by
them to enforce rights and obligations pursuant hereto.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
31
EXECUTION
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
THE PURCHASER
For and on behalf of XINHUA FINANCE MEDIA LIMITED
By:
/s/ ▇▇▇▇▇ ▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Chief Executive Officer
Address of XFM:
3905-3909, 1 Grand Gateway
1 HongQiao lu
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
Telephone: 8621-6113-5900
Facsimile: 8621-6448-4955
THE COMPANY
For and on behalf of PROFITOWN DEVELOPMENT LIMITED
By:
/s/ Chow Chi Yan
--------------------------------------------------
Name: Chow Chi Yan
Title: Director
Address of the company:
Telephone:
Facsimile:
THE VENDOR
For and on behalf of FLASH STAR WORLDWIDE LIMITED
By:
/s/ Chow Chi Yan
-------------------------------------------------
Name: Chow Chi Yan
Title: Director
Address of the company:
Telephone:
Facsimile:
THE COVENANTOR
By CHOW ▇▇▇ ▇▇▇▇
/s/ Chow ▇▇▇ ▇▇▇▇
-----------------------------------------------
Address:
8/F., Yick Fat Mansion
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
Telephone:
Facsimile:
SCHEDULE A
DETAILS OF COMPANY SHARES
PURCHASER VENDOR NO. OF COMPANY SHARES
(% OF TOTAL ISSUED SHARE CAPITAL)
XFM Flash Star Worldwide Limited One (1)
(100%)
SCHEDULE B
CORPORATE DETAILS OF THE COMPANY AS AT THE DATE OF SIGNING OF THIS AGREEMENT AND
IMMEDIATELY BEFORE JCBN GROUP CLOSING
----------------------------------------------------------------------------------------------------
NAME PROFITOWN DEVELOPMENT LIMITED
----------------------------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 10 May 2007, British Virgin Islands
----------------------------------------------------------------------------------------------------
INCORPORATION NUMBER 1404040
----------------------------------------------------------------------------------------------------
REGISTERED ADDRESS Trident ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------------------------------------------------------
AUTHORIZED CAPITAL US$50,000 divided into 50,000 Shares at US$1.00 each
----------------------------------------------------------------------------------------------------
ISSUED CAPITAL One (1) Share
----------------------------------------------------------------------------------------------------
SHAREHOLDER NAME NUMBER OF
ORDINARY SHARES
----------------------------------------------------------------------------------------------------
Flash Star Worldwide Limited One (1) (100%)
----------------------------------------------------------------------------------------------------
TOTAL: ONE (1)
----------------------------------------------------------------------------------------------------
DIRECTOR(S) Chow Chi Yan
----------------------------------------------------------------------------------------------------
SCHEDULE C
CORPORATE DETAILS OF THE COMPANY IMMEDIATELY FOLLOWING JCBN GROUP CLOSING
-----------------------------------------------------------------------------------------------------------
NAME PROFITOWN DEVELOPMENT LIMITED
-----------------------------------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 10 May 2007, British Virgin Islands
-----------------------------------------------------------------------------------------------------------
INCORPORATION NUMBER 1404040
-----------------------------------------------------------------------------------------------------------
REGISTERED ADDRESS Trident ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------------------------------------------------------------------------
AUTHORIZED CAPITAL US$50,000 divided into 50,000 Shares at US$1.00 each
-----------------------------------------------------------------------------------------------------------
ISSUED CAPITAL One (1) Share
-----------------------------------------------------------------------------------------------------------
SHAREHOLDER NAME NUMBER OF
ORDINARY SHARES
-----------------------------------------------------------------------------------------------------------
Xinhua Finance Media Limited One (1) (100%)
-----------------------------------------------------------------------------------------------------------
TOTAL: ONE (1)
-----------------------------------------------------------------------------------------------------------
DIRECTOR(S) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------------------------------------------------------------------------
SCHEDULE D
CORPORATE DETAILS OF THE JCBN GROUP AS AT THE DATE OF SIGNING OF THIS AGREEMENT
AND IMMEDIATELY PRIOR TO JCBN COMPANY CLOSING AND JCBN GROUP CLOSING
1. JCBN HK
------------------------------------------------------------------------------------------------------------
NAME JCBN Company Limited
------------------------------------------------------------------------------------------------------------
DATE AND ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇
------------------------------------------------------------------------------------------------------------
INCORPORATION NUMBER 0879989
------------------------------------------------------------------------------------------------------------
REGISTERED ADDRESS Rooms 1103-5, ▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
------------------------------------------------------------------------------------------------------------
REGISTERED CAPITAL HK$10,000.00 divided into 10,000 shares of HK$1.00 each
------------------------------------------------------------------------------------------------------------
ISSUED CAPITAL Two (2) Shares
------------------------------------------------------------------------------------------------------------
SHAREHOLDER NAME NUMBER OF
ORDINARY SHARES
------------------------------------------------------------------------------------------------------------
Profitown Development Limited Two (2)
------------------------------------------------------------------------------------------------------------
TOTAL: TWO (2)
------------------------------------------------------------------------------------------------------------
DIRECTOR(S) 1. Chow Chi Yan
2. Ko ▇▇▇ ▇▇▇
------------------------------------------------------------------------------------------------------------
COMPANY SECRETARY Sun Forest Secretaries Limited
------------------------------------------------------------------------------------------------------------
2. JTT
----------------------------------------------------------------------------------------------------------
NAME jtt Advertising Limited
----------------------------------------------------------------------------------------------------------
DATE AND ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇
----------------------------------------------------------------------------------------------------------
INCORPORATION NUMBER 0733247
----------------------------------------------------------------------------------------------------------
REGISTERED ADDRESS Room 24.2-3, Wah Hing ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
----------------------------------------------------------------------------------------------------------
REGISTERED CAPITAL HK$10,000.00 divided into 10,000 shares of HK$1.00 each
----------------------------------------------------------------------------------------------------------
ISSUED CAPITAL One Thousand (1,000) Shares
----------------------------------------------------------------------------------------------------------
SHAREHOLDER NAME NUMBER OF
ORDINARY SHARES
----------------------------------------------------------------------------------------------------------
JCBN Company Limited One Thousand
(1,000)
----------------------------------------------------------------------------------------------------------
TOTAL: One Thousand
(1,000)
----------------------------------------------------------------------------------------------------------
DIRECTOR(S) 1. ▇▇▇ ▇▇ ▇▇▇, ▇▇▇▇▇
2. Tam ▇▇▇ ▇▇▇
----------------------------------------------------------------------------------------------------------
COMPANY SECRETARY Holy & Associates Limited
----------------------------------------------------------------------------------------------------------
3. JCBN CHINA
--------------------------------------------------------------------------------------------------------
NAME Shanghai Paxi Advertising Co., Ltd.
--------------------------------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 17 March 2004, the PRC
--------------------------------------------------------------------------------------------------------
REGISTRATION NUMBER 3102262041088
--------------------------------------------------------------------------------------------------------
REGISTERED ADDRESS ▇▇.▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, the PRC
--------------------------------------------------------------------------------------------------------
REGISTERED CAPITAL RMB1,000,000
--------------------------------------------------------------------------------------------------------
SHAREHOLDER NAME SHAREHOLDING
--------------------------------------------------------------------------------------------------------
Zhang Shunkang 90%
(RMB900,000)
--------------------------------------------------------------------------------------------------------
Zhu Tianying 10%
(RMB100,000)
--------------------------------------------------------------------------------------------------------
TOTAL: RMB1,000,000
--------------------------------------------------------------------------------------------------------
LEGAL REPRESENTATIVE ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------------------------------------------------------------------
EXECUTIVE DIRECTOR & ▇▇▇▇▇ ▇▇▇▇▇▇▇ (Executive Director)
SUPERVISOR Zhu Tianying (Supervisor)
--------------------------------------------------------------------------------------------------------
BUSINESS SCOPE Design, production, publication and acting as an agent of all
types of advertisements in China, service for exhibition and
conference matters, enterprise image scheme, market sales scheme,
etiquette service, computer graphic design and production,
business information consulting, wholesale and retail business
in craftwork, enterprise management consulting, human resource
management consulting, labor service (exclusive of job agency),
(application for license is necessary if license is required to
conduct the above-mentioned business).
--------------------------------------------------------------------------------------------------------
BUSINESS TERM 17 March 2004 to 16 March 2014
--------------------------------------------------------------------------------------------------------
4. TIANYI
--------------------------------------------------------------------------------
NAME Beijing Jinjiu Tianyi
Tianjiu Lianhe Advertising Co., Ltd
--------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 28 September 2004, PRC
--------------------------------------------------------------------------------
REGISTRATION NUMBER 110112007528406
--------------------------------------------------------------------------------
REGISTERED ADDRESS ▇▇▇▇ ▇▇▇, ▇▇.▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, the PRC
--------------------------------------------------------------------------------
REGISTERED CAPITAL RMB500,000
--------------------------------------------------------------------------------
SHAREHOLDER NAME SHAREHOLDING
--------------------------------------------------------------------------------
JCBN China 100% (RMB500,000)
--------------------------------------------------------------------------------
TOTAL: RMB500,000
--------------------------------------------------------------------------------
LEGAL REPRESENTATIVE Ji Xiuli
--------------------------------------------------------------------------------
EXECUTIVE DIRECTOR Ji Xiuli
--------------------------------------------------------------------------------
BUSINESS SCOPE Design, production, acting as an agent and
publishing advertising in China for
domestic and foreign clients; Undertaking
exhibit.
--------------------------------------------------------------------------------
BUSINESS TERM 28 September 2004 to 27 September 2024
--------------------------------------------------------------------------------
5. IF DESIGN
------------------------------------------------------------------------------------------
NAME Shanghai If Advertisement Design and Production
Co., Ltd.
------------------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 26 July 2005
------------------------------------------------------------------------------------------
REGISTRATION NUMBER 310103000165204
------------------------------------------------------------------------------------------
REGISTERED ADDRESS ▇▇▇▇ ▇▇, ▇▇.▇-▇, ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, the PRC
------------------------------------------------------------------------------------------
REGISTERED CAPITAL RMB500,000
------------------------------------------------------------------------------------------
SHAREHOLDER NAME SHAREHOLDING
------------------------------------------------------------------------------------------
JCBN China 100%
(RMB500,000)
------------------------------------------------------------------------------------------
TOTAL: RMB500,000
------------------------------------------------------------------------------------------
LEGAL REPRESENTATIVE ▇▇▇▇ ▇▇▇▇▇
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EXECUTIVE DIRECTOR & SUPERVISOR ▇▇▇▇ ▇▇▇▇▇ (Executive Director)
Yuan Huxiang (Supervisor)
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BUSINESS SCOPE Design, produce and act as
agent for kinds of advertising; sale
of commodity, knitgoods, textile,
craftwork, and hardware; Indoor
decoration and design. Where the
business is subject to administrative
licence, the company shall operate
business by licence.
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BUSINESS TERM 26 July 2005 to 25 July 2015
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SCHEDULE E
CORPORATE DETAILS OF THE JCBN GROUP IMMEDIATELY FOLLOWING JCBN GROUP CLOSING
1. JCBN HK
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NAME JCBN Company Limited
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DATE AND ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇
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INCORPORATION NUMBER 0879989
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REGISTERED ADDRESS Rooms 1103-5, ▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
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REGISTERED CAPITAL HK$10,000.00 divided into 10,000 shares of
HK$1.00 each
--------------------------------------------------------------------------------------
ISSUED CAPITAL Two (2) Shares
--------------------------------------------------------------------------------------
SHAREHOLDER NAME NUMBER OF
ORDINARY SHARES
--------------------------------------------------------------------------------------
Profitown Development Two (2)
Limited
--------------------------------------------------------------------------------------
TOTAL: Two (2)
--------------------------------------------------------------------------------------
DIRECTOR(S) 1. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
2. ▇▇▇▇▇▇ ▇▇▇▇▇
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2. JTT
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NAME jtt Advertising Limited
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DATE AND ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇
-----------------------------------------------------------------------------------------------------
INCORPORATION NUMBER 0733247
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REGISTERED ADDRESS Room 24.2-3, Wah Hing ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
-----------------------------------------------------------------------------------------------------
REGISTERED CAPITAL HK$10,000.00 divided into 10,000 shares of HK$1.00 each
-----------------------------------------------------------------------------------------------------
ISSUED CAPITAL One Thousand (1,000) Shares
-----------------------------------------------------------------------------------------------------
SHAREHOLDER NAME NUMBER OF
ORDINARY SHARES
-----------------------------------------------------------------------------------------------------
JCBN Company Limited One Thousand
(1,000)
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
TOTAL: One Thousand
(1,000)
-----------------------------------------------------------------------------------------------------
DIRECTOR(S) 1. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
2. ▇▇▇▇▇▇ ▇▇▇▇▇
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3. JCBN CHINA
-----------------------------------------------------------------------------------------------------
NAME Shanghai Paxi Advertising Co., Ltd.
-----------------------------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 17 March 2004, the PRC
-----------------------------------------------------------------------------------------------------
REGISTRATION NUMBER 3102262041088
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REGISTERED ADDRESS ▇▇.▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, the PRC
-----------------------------------------------------------------------------------------------------
REGISTERED CAPITAL RMB 1,000,000
-----------------------------------------------------------------------------------------------------
SHAREHOLDER NAME SHAREHOLDING
-----------------------------------------------------------------------------------------------------
Entity designated by XFM 100%
(RMB1,000,000)
-----------------------------------------------------------------------------------------------------
TOTAL: RMB1,000,000
-----------------------------------------------------------------------------------------------------
LEGAL REPRESENTATIVE Party nominated by XFM
-----------------------------------------------------------------------------------------------------
DIRECTOR & MANAGEMENT Parties nominated by XFM
-----------------------------------------------------------------------------------------------------
BUSINESS SCOPE Design, production, publication and acting as an agent of all
types of advertisements in China, service for exhibition and
conference matters, enterprise image scheme, market sales
scheme, etiquette service, computer graphic design and
production, business information consulting, wholesale and
retail business in craftwork, enterprise management
consulting, human resource management consulting, labor
service (exclusive of job agency), (application for license
is necessary if license is required to conduct the
above-mentioned business)
-----------------------------------------------------------------------------------------------------
BUSINESS TERM 17 March 2004 to 16 March 2014
-----------------------------------------------------------------------------------------------------
4. TIANYI
---------------------------------------------------------------------------------------
NAME Beijing Jinjiu Tianyi Tianjiu
Lianhe Advertising Co., Ltd.
---------------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 28 September, 2004, PRC
---------------------------------------------------------------------------------------
REGISTRATION NUMBER 110112007528406
---------------------------------------------------------------------------------------
REGISTERED ADDRESS ▇▇▇▇ ▇▇▇, ▇▇.▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
---------------------------------------------------------------------------------------
REGISTERED CAPITAL RMB 500,000
---------------------------------------------------------------------------------------
SHAREHOLDER NAME SHAREHOLDING
---------------------------------------------------------------------------------------
JCBN China 100%
(RMB500,000)
---------------------------------------------------------------------------------------
TOTAL: RMB500,000
---------------------------------------------------------------------------------------
LEGAL REPRESENTATIVE Ji Xiuli
---------------------------------------------------------------------------------------
EXECUTIVE DIRECTOR Parties nominated by XFM
---------------------------------------------------------------------------------------
BUSINESS SCOPE Design, production, acting as an agent and
publishing advertising in China for domestic and
foreign clients; Undertaking exhibit.
---------------------------------------------------------------------------------------
BUSINESS TERM 28 September 2004 to 27 September 2024
---------------------------------------------------------------------------------------
5. IF DESIGN
-------------------------------------------------------------------------------------------------
NAME Shanghai If Advertisement Design and Production Co., Ltd.
-------------------------------------------------------------------------------------------------
DATE AND PLACE OF INCORPORATION 26 July 2005, the PRC
-------------------------------------------------------------------------------------------------
REGISTRATION NUMBER 310103000165204
-------------------------------------------------------------------------------------------------
REGISTERED ADDRESS ▇▇▇▇ ▇▇, ▇▇.▇-▇, ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, the PRC
-------------------------------------------------------------------------------------------------
REGISTERED CAPITAL RMB 500,000
-------------------------------------------------------------------------------------------------
SHAREHOLDER NAME SHAREHOLDING
-------------------------------------------------------------------------------------------------
JCBN China 100%
(RMB500,000)
-------------------------------------------------------------------------------------------------
TOTAL: RMB500,000
-------------------------------------------------------------------------------------------------
LEGAL REPRESENTATIVE ▇▇▇▇ ▇▇▇▇▇
-------------------------------------------------------------------------------------------------
DIRECTOR & MANAGEMENT Parties nominated by XFM
-------------------------------------------------------------------------------------------------
BUSINESS SCOPE Design, produce and act as agent for kinds of advertising;
sale of commodity, knitgoods, textile, craftwork, and
hardware; Indoor decoration and design. Where the business
is subject to administrative licence, the company shall
operate business by licence
-------------------------------------------------------------------------------------------------
BUSINESS TERM 26 July 2005 to 25 July 2015
-------------------------------------------------------------------------------------------------
SCHEDULE F
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE VENDOR AND CHOW
1. JCBN HK and JTT. In respect of each of JCBN HK and JTT:
(a) Organization, Standing, and Power. It is a company duly organized,
validly existing, and in good standing under the laws of Hong Kong,
has all requisite corporate power and authority to carry on its
businesses, and is duly qualified and in good standing to do business
in each jurisdiction in which it conducts business. It has made
available to XFM complete and correct copies of its Company Charter
Documents.
(b) Corporate Records. Its minute books and corporate records, complete
and correct copies of which have been made available to XFM, contain
correct and complete records of all proceedings and actions taken at
all meetings of, or effected by written consent of its shareholders
and its board of directors and all original issuances and subsequent
transfers, repurchases, and cancellations of its shares save and
except that in respect of JCBN HK, it has not held any annual general
meetings, or compiled any audited accounts since its incorporation.
The Vendor and Chow represent and warrant that JCBN HK has held an
extraordinary general meeting to resolve to rectify the foregoing
non-compliance.
(c) Capital Structure.
(i) Immediately prior to and following the JCBN Company Closing
Date and JCBN Group Closing Date its issued share capital will
be as set forth in Schedule B and Schedule C, respectively.
(ii) There are no options, warrants, calls, conversion rights,
commitments, agreements, contracts, restrictions, or rights of
any character to which it is a party or by which it may be
bound obligating it to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares, or obligating it
to grant, extend or enter into any such option, warrant, call,
conversion right, commitment, agreement, contract,
understanding, restriction, arrangement or right. It does not
have outstanding any bonds, debentures, notes or other
indebtedness.
(d) Subsidiaries and Branches. It does not presently own or Control,
directly or indirectly, any interest in any other corporation,
association, or other business entity, and is not a participant in any
joint venture, partnership, or similar arrangement, except as set
forth in Schedule B. Its particulars as set forth in Schedule D are
true and accurate in all respects and the percentage of its share
capital shown therein as owned or Controlled by it is beneficially
owned and clear of all Encumbrances. There is no agreement or
arrangement in force which calls for the present or future issue or
sale of, or grant to any person the
right (whether conditional or otherwise) to call for the issue, sale
or transfer of any of its share or loan capital (including any of its
option, notes, warrants or other securities or rights convertible or
ultimately convertible into shares or equity interests).
(e) Compliance with Laws and Other Instruments. It holds, and at all times
has held, all licenses, permits, and authorizations from all
governmental entities necessary for the lawful conduct of its business
pursuant to all applicable statutes, laws, ordinances, rules, and
regulations of all such authorities having jurisdiction over it or any
part of its operations. There are no violations or claimed violations
of any such license, permit, or authorization, or any such statute,
law, ordinance, rule or regulation save and except that in respect of
JCBN HK, it has not held any annual general meetings or compiled any
audited accounts since its incorporation. However, the Vendor and Chow
represent and warrant that JCBN HK has held an extraordinary general
meeting to resolve and rectify the foregoing non-compliance.
(f) Corporate Governance. Neither the execution and delivery of nor the
performance by it of its obligations under this Agreement will (i)
conflict with or result in any breach of its charter documents; (ii)
require any Consent, (iii) conflict with, result in a breach or
default of, or give rise to any right of termination, cancellation or
acceleration or result in the creation of any lien, charge,
encumbrance, or restriction upon any of the properties or Assets of it
or its shares under, any law, statute, rule, regulation, judgment,
decree, order, government permit, license or order or any mortgage,
indenture, note, license, trust, agreement or other agreement,
instrument or obligation to which it is a party.
(g) No Liabilities and No Business Activities. Save as contemplated under
this Agreement, it has no liabilities of any nature howsoever arising,
is not involved in any litigation whether as plaintiff or defendant.
In respect of JCBN HK only, it has no Assets and is not carrying on
any business of any nature.
(h) No Contracts. Save as contemplated under this Agreement and in respect
of JCBN HK only, it has not entered into any agreement, contract,
legal arrangement or documentation of any type or nature. In respect
of JTT, all contracts material to its business and operations are
listed under Schedule J hereto.
(i) No PRC Shareholders. There are no persons who are nationals or
residents of the PRC who are shareholders or directors of the Company.
2. In respect of each member of the PRC Group and its branches and
subsidiaries (if any):
(a) Organization, Standing, and Power. It is a company duly organized,
validly existing, and in good standing under the laws of the PRC, have
all requisite corporate power and authority to carry on its
businesses, and is duly qualified
and in good standing to do business in each jurisdiction in which it
conducts business. It has made available to XFM complete and correct
copies of its Charter Documents.
(b) Corporate Records. The complete and correct copies of the minute books
and corporate records of the company which has been filed with the
local authorities including, but not limited to, the Administration of
Industry and Commerce have been made available to XFM and are
materially complete, correct and accurate.
(c) Capital Structure.
(i) Immediately prior to Equity Transfer, the capital structure of
each of the member of the PRC Group is as set forth in
Schedule D.
(ii) There are no options, warrants, calls, conversion rights,
commitments, agreements, contracts, restrictions, or rights of
any character to which it is a party or by which it may be
bound obligating to issue, deliver or sell, or cause to be
issued, delivered or sold, additional equity interest, or
obligating it to grant, extend or enter into any such option,
warrant, call, conversion right, commitment, agreement,
contract, understanding, restriction, arrangement or right. It
has no outstanding any bonds, debentures, notes or other
indebtedness.
(iii) Zhang Shunkang and Zhu Tianying are the owners of all interests
in and to JCBN China free and clear of all Encumbrances and,
except any rights in favour of XFM in this Agreement, no other
party has any rights, now existing or contingent, whether or
not exercised or claimed and whether or not by exercise of the
power of any Governmental Entity, to any interest in JCBN
China.
(d) Subsidiaries. It does not presently own or Control, directly or
indirectly, any interest in any other corporation, association, or
other business entity, and is not a participant in any joint venture,
partnership, or similar arrangement, except as set forth in Schedule
D. Its particulars set forth in Schedule D are true and accurate in
all respects and the percentage of the equity interest shown therein
as owned or Controlled by any party is beneficially owned free from
any Encumbrance. There is no agreement or arrangement in force which
calls for the present or future issue or sale of, or grant to any
person the right (whether conditional or otherwise) to call for the
issue, sale or transfer of any share or loan capital of the company
(including any option, notes, warrants or other securities or rights
convertible or ultimately convertible into shares or equity interests
in it).
(e) Compliance with Laws and Other Instruments. It holds all material
licences, permits, and authorizations from all governmental entities
necessary for the lawful conduct of its business pursuant to all
applicable statutes, laws, ordinances, rules, and regulations of all
such authorities having jurisdiction
over it or any part of its operations or the failure to obtain which
shall have a Material Adverse Change on the business or Assets of the
company. It has duly and promptly performed all requisite inspections
(if applicable), including but not limited to, annual inspections by
any Governmental Entity for the lawful conduct of its business and its
operation and for it to validly and legally hold all its licences,
permits and authorizations.
(f) Corporate Governance. Neither the execution and delivery of this
Agreement nor the performance by it of its obligations under this
Agreement will (i) conflict with or result in any breach of the
Charter Documents; (ii) require any Consent by any Governmental
Entity, (iii) conflict with, result in a breach or default of, or give
rise to any right of termination, cancellation or acceleration or
result in the creation of any lien, charge, encumbrance, or
restriction upon any of its properties or Assets or equity interest in
it under any law, statute, rule, regulation, judgment, decree, order,
government permit, licence or order or any mortgage, indenture, note,
licence, trust, agreement or other agreement, instrument or obligation
to which the company is a party.
3. In respect of each member of the JCBN Group and its branches and
subsidiaries (if any):
(a) Technology and Intellectual Property Rights.
(i) Schedule H contains a list of its Intellectual Property which
includes the following:
(A) all patents, domain names, trademarks, trade names, trade
dress and service marks, and any applications and
registrations for any of the foregoing, that is included
in the Owned Intellectual Property;
(B) all registered copyrights, and applications for registered
copyrights for any Owned Intellectual Property;
(C) all material products and services that currently are
published and/or offered by it, or that are currently
under development by it and scheduled to be commercially
released or offered within six (6) months of the JCBN
Company Closing Date and JCBN Group Closing Date;
(D) all material licenses and sublicenses of Owned
Intellectual Property;
(E) all Licensed Intellectual Property (other than license
agreements for standard "shrink wrapped, off the shelf,"
commercially available, third party products used by the
company) and any sublicenses thereto; and
(F) any material obligation of exclusivity, non-competition,
non-solicitation, first negotiation or "most favoured
nation" or "equally favoured nation" (e.g. obligating the
company to provide terms as favourable or more favourable
as granted to others) to which it is subject under any
agreement that does not fall within the ambit of (D) or
(E) in this paragraph.
(ii) It owns or has the right to use all Intellectual Property used
or held for use in the conduct of its business without any
conflict with the rights of others. All products and technology
that have been or currently are published and/or offered by it
or are under development by it, and all products and/or
technology underlying any and all services that have been or
currently are offered by it or are under development by it is
either: (1) owned by it, (2) in the public domain, or (3)
rightfully used by it pursuant to a valid written license or
other agreement.
(iii) It is not and will not, as a result of the execution or
delivery of this Agreement, nor performance of the parties'
obligations under this Agreements be in violation of any
license, sublicense or other agreement relating to the
Intellectual Property or of any non-disclosure agreement to
which it is a party or otherwise bound.
(iv) Save such licences for Licensed Intellectual Property for use
in the ordinary course of business of any member of the JCBN
Group, it is not obligated to provide any financial
consideration or other consideration to any third party, nor is
any third party otherwise entitled to any financial
consideration or other consideration, with respect to any
exercise of rights by it or its successors in the Intellectual
Property.
(v) Its use, reproduction, modification, distribution, licensing,
sublicensing, sale, or any other exercise of rights in any
Owned Intellectual Property by the company or its licensees
does not infringe, misappropriate or violate any copyright,
patent, trade secret, trademark, service ▇▇▇▇, trade name, firm
name, logo, trade dress, database right, moral rights, rights
to use likeness, other intellectual property rights, right of
privacy, right of publicity or right in personal or other data
of any person. Further, the use, reproduction, modification,
distribution, licensing, sublicensing, sale, or any other
exercise of rights in any Licensed Intellectual Property or any
other authorized exercise of rights in or to Licensed
Intellectual Property by the company or their licensees does
not infringe, misappropriate or violate any copyright, patent,
trade secret, trademark, service ▇▇▇▇, trade name, firm name,
logo, trade dress, moral right, database right, other
intellectual property right, right of privacy, right of
publicity or right in personal or other data of any person.
Further, the distribution, licensing, sublicensing, sale, or
other provision of products and services by the company or its
resellers or licensees does not infringe, misappropriate or
violate any copyright, patent, trade secret, trademark, service
▇▇▇▇, trade name, firm name,
logo, trade dress, moral right, database right, other
intellectual property right, right of privacy, right of
publicity or right in personal or other data of any person.
(vi) No action, suit or proceeding (A) challenging the validity,
enforceability, or ownership by it of any of Owned Intellectual
Property or (B) to the effect that the use, reproduction,
modification, manufacturing, distribution, licensing,
sublicensing, sale or any other exercise of rights in any Owned
Intellectual Property by it or its licensees infringes,
misappropriate or violates any intellectual property or other
proprietary or personal right of any person is pending or is
threatened by any person. Further, no claim to the effect that
the distribution, licensing, sublicensing, sale or other
provision of products and services by it or its resellers or
licensees infringes, misappropriates or violates any
intellectual property or other proprietary or personal right of
any person is pending or, to the knowledge of the Vendor and
Chow, is threatened by any person. There is no unauthorized
use, infringement or misappropriation of any of Owned
Intellectual Property by any third party, employee or former
employee to the best knowledge of the Vendor and Chow.
(vii) No other party has any security interests in any Intellectual
Property.
(viii) It has secured from all parties who have created any portion
of, or otherwise have any rights in or to, Owned Intellectual
Property, other than employees of the company whose work
product was created by them entirely within the scope of their
employment by the company and constitutes work made for hire
owned by the company, valid written assignments or licenses of
any such work or other rights to it that are enforceable by it
and has made available true and complete copies of such
assignments or licenses to XFM.
(ix) It owns all right, title and interest in and to all data it
collects from or discloses about users of its products and
services. Its practices regarding the collection and use of
consumer personal information are in accordance in all respects
with applicable laws and regulations of all jurisdictions in
which it operates.
(x) None of its officers, directors, stockholders or employees or
any spouse, or relative thereof, owns directly or indirectly,
in whole or in part, any Intellectual Property.
(xi) It has not transferred, assigned, disposed in any manner of any
Intellectual Property.
(b) Financial Statements. There are no liabilities, claims or obligations
against it of any nature in excess of US$5,000, whether absolute,
contingent, anticipated or otherwise, whether due or to become due,
that are not shown in the Financial Statements.
(c) Accounts Receivable. All of the accounts receivable shown in the
Financial Statements as of the JCBN Company Closing Date and JCBN
Group Closing Date will have arisen out of its bona fide transactions
in the ordinary course of business and have been collected or are good
and collectible in the aggregate recorded amounts thereof (less the
allowance for doubtful accounts also appearing in such Financial
Statements and net of returns and payment discounts allowable by the
company's policies) and can reasonably be anticipated to be paid in
full without outside collection efforts within ninety (90) days of the
due date. There shall be in the JCBN Group a minimum of US$4,200,000
of accounts receivables from non-members of the JCBN Group (the
"CLOSING RECEIVABLES").
(d) Taxes.
(i) It has timely filed (or caused to be filed) all Returns
required to be filed by it. All taxes required to be paid
(whether or not shown on any Return) in respect of the Return
Periods have been paid or fully accrued up until JCBN Company
Closing and JCBN Group Closing save and except that in respect
of JCBN HK, it has filed one tax return dated 21 September 2005
for the period from 19 January 2004 to 31 March 2005 indicating
that it has had no business to the Hong Kong Inland Revenue
Department since its incorporation. It has not requested or
been granted any extension of time to file any Return (if
applicable). The Vendor and Chow have made available to XFM
true and correct copies of all Returns, and all material
correspondence with any taxing authority (if any).
(ii) No deficiencies or adjustments for any tax of the company has
been claimed, proposed or assessed or threatened in writing and
not paid. There is currently no claim outstanding by any
authority in a jurisdiction where it does not file Returns that
it is or may be subject to taxation by that jurisdiction. It is
not subject to any pending or threatened tax audit or
examination. It has not entered into any agreements, waivers or
other arrangements in respect of the statute of limitations in
respect of its taxes or Returns.
(iii) For the purposes of this Agreement, the terms "tax" and "taxes"
shall include all taxes, assessments, duties, tariffs,
registration fees, and other governmental charges in the nature
of taxes including, all income, franchise, property,
production, sales, use, payroll, license, windfall profits,
value added, severance, withholding, excise, gross receipts and
other taxes, as well as any interest, additions or penalties
relating thereto and any interest in respect of such additions
or penalties.
(iv) There are no liens for taxes upon its Assets except for taxes
that are not yet payable. It has withheld all taxes required to
be withheld in respect of wages, salaries and other payments to
all employees, officers and directors and any taxes required to
be withheld from any other person and has timely paid all such
amounts withheld to the proper taxing authority.
(e) Absence of Certain Changes and Events. Since the date of the Financial
Statements, there has not been:
(i) Any transaction involving more than US$5,000 for a single
transaction and a series of transactions involving in aggregate
more than US$100,000 entered into by it other than in the
ordinary course of business;
(ii) Any declaration, payment, or setting aside of any dividend or
other distribution to or for any of the holders of any equity
interest;
(iii) Any termination, modification, or rescission of, or waiver by
the company of rights under, any contract having or reasonably
likely to have a Material Adverse Change on its business;
(iv) Any discharge or satisfaction by it of any lien or encumbrance,
or any payment of any obligation or liability (absolute or
contingent) other than liabilities shown on the Financial
Statements and liabilities incurred since the date of the
Financial Statements in the ordinary course of business;
(v) Any mortgage, pledge, imposition of any security interest,
claim, encumbrance, or other restriction created on any of its
Assets, tangible or intangible, having or reasonably likely to
have a Material Adverse Change on its business;
(vi) Any settlement amount of any claim, dispute, suit, proceeding
or investigation regarding it or its business; or
(vii) Any event or condition resulting in a Material Adverse Change
on it or its business.
(f) Leases in Effect; Real Estate. All real property leases and subleases
to which it is a party and any amendments or modifications thereof are
listed in Schedule I (each a "LEASE" and, collectively, the "LEASES").
It has a valid leasehold interest under such Leases. There are no
existing defaults, and it has not received or given any written notice
of default or claimed default with respect to or received any order,
notice, or other notification from any Governmental Entity in respect
of any Lease or property related thereto and there is no event that
with notice or lapse of time, or both, would constitute a
default thereunder. All real property occupied by it is subject to a
written lease. It holds no interest in real property other than the
Leases. It has filed and registered all Leases with all applicable
Governmental Entities.
(g) Personal Property. It has valid title, free and clear of all title
defects, security interests, pledges, options, claims, liens, and
encumbrances of any nature whatsoever to all inventory, receivables,
furniture, machinery, equipment, and other personal property, tangible
or otherwise, reflected on the Financial Statements, except for
acquisitions and dispositions since the date of the Financial
Statements in the ordinary course of business and not exceeding
US$1,000.
(h) Litigation and Other Proceedings. Neither it nor any of its past or
present officers, directors, or employees, is a party to any pending
or, threatened action, suit, labour dispute (including any union
representation proceeding), proceeding, investigation, or
discrimination claim in or by any court or governmental board,
commission, agency, department, or officer, or any arbitrator, arising
from its actions or omissions or affecting its properties, Assets or
capital, nor to the best of the knowledge of the Vendor or Chow is
there any reasonable basis for any such action, suit, labour dispute,
proceeding, investigation or discrimination claim, or, in the case of
an individual, from acts in his or her capacity as its officer,
director, employee, agent or contractor. It is not a named party to
any order, writ, judgment, decree, or injunction.
(i) No Defaults. It is and has not received written notice that it would
be, with the passage of time, in default or violation of any term,
condition, or provision of (i) its Charter Documents; (ii) any
judgment, decree, or order to which it is a named party; or (iii) any
loan or credit agreement, note, bond, mortgage, indenture, contract,
agreement, lease, license, or other instrument to which it is now a
party or by which it or any of its properties or Assets is bound,
except for defaults and violations which have been cured or,
individually or in the aggregate, would not have a Material Adverse
Change on its business.
(j) Material Contracts. Except for the agreements set forth in Schedule J
(the "MATERIAL CONTRACTS"), it is not a party to or bound by:
(i) Any employment contract or arrangement providing for annual
salary in excess of US$100,000 with any officer or employee or
with any consultant or director providing for annual
compensation in excess of US$100,000;
(ii) Any plan or contract or arrangement, written or oral, providing
for bonuses, pensions, deferred compensation, retirement
payments, profit-sharing, severance, acceleration of vesting
of benefits, payments upon change of control events, or the
like;
(iii) Any joint venture contract or arrangement or any other
agreement that has involved or is expected to involve a sharing
of profits;
(iv) Reseller or distribution agreement, volume
purchase agreement,
corporate end user sales or service agreement, reproduction or
replication agreement or manufacturing agreement in which the
amount involved exceeds annually, US$50,000 or pursuant to
which the company has granted or received manufacturing rights,
most favoured nation pricing provisions, or exclusive
marketing, reproduction, publishing or distribution rights
related to any product, group of products or territory;
(v) Any agreement, franchise, or indenture where the amount of
consideration payable thereunder is greater than US$50,000 in
any year during the term of such agreement, franchise or
indenture and which has not been terminated or performed in its
entirety and not renewed which may be, by its terms,
terminated, impaired, or adversely affected by reason of the
execution of this Agreement, JCBN Group Closing, or the
consummation of the transactions contemplated;
(vi) Any license, permit, or authorization which has not been
terminated or performed in its entirety and not renewed which
may be, by its terms, terminated, impaired, or adversely
affected by reason of the execution of this Agreement, the JCBN
Group Closing or the consummation of the transactions
contemplated;
(vii) Except for trade indebtedness incurred in the ordinary course
of business, any instrument evidencing or related in any way to
indebtedness incurred in the acquisition of companies or other
entities or indebtedness for borrowed money by way of direct
loan, sale of debt securities, purchase money obligation,
conditional sale, guarantee, or otherwise which individually is
in the amount of US$5,000 or more; or
(viii) Any contract containing covenants purporting to limit its
freedom to compete in any business in any geographic area.
All Material Contracts are valid and in full force and effect and to
the best of the knowledge of the Vendor or Chow, it has not, nor has
any other party thereto, breached any material provisions of, or
entered into default in any material respect under the terms thereof
other than such beaches or defaults that have been cured or that would
not cause a Material Adverse Change to the Assets or business of the
company. The Vendor and Chow has made available to XFM a copy of each
Material Contract specified in Schedule J together with all
amendments, material written waivers or other material written changes
thereto. All the material contracts as set forth under Schedule J are
valid and in full force and effect and the Vendor and Chow are not
aware of any facts or events which may result in any of the Material
Contracts to be terminated or not being renewed prior to or upon
expiry by the relevant parties.
(k) Assets. It has legal and beneficial ownership of all Assets it owns,
possesses or uses as indicated in the Financial Statements free and
clear of any Encumbrances. No other Person owns any such property and
Assets which it is using except for the leased property and personal
property it lease pursuant to the Material Contracts.
(l) Material Relations. None of the parties to any of the Material
Contracts have in any way expressed to it, the Vendor or any Chow any
intent to reduce the amount of or terminate the business with it.
(m) Insurance and Banking Facilities. Schedule K contains a complete and
correct list of (i) all contracts of insurance or indemnity of the
company in force at the date of this Agreement (including name of
insurer or indemnitor, agent, annual premium, coverage, deductible
amounts, and expiration date) and (ii) the names and locations of all
banks in which it has accounts or safe deposit boxes, the designation
of each such account and safe deposit box, and the names of all
persons authorized to draw on or have access to each such account and
safe deposit box. All premiums and other payments due from the company
with respect to any such contracts of insurance or indemnity have been
paid, and neither the Vendor nor Chow is aware of any act, or failures
to act that has or might cause any such contract to be cancelled or
terminated. All known claims for insurance or indemnity have been
presented. The bank facility granted by the Bank of East Asia in
favour of JTT has been cancelled and all and any amount outstanding or
due thereunder have been duly repaid.
(n) Employees. It has no written or oral contract of employment or other
employment agreement with any of its employees (including any
contracts relating to the temporary use or loaning of employees) that
are not terminable at will by the company without payment of severance
or termination payments or benefits. It is not a party to any pending
or threatened labour dispute concerning its business or employment
practices or the subject of any organizing drive, labour grievance or
petition to certify a labour union. It has complied with in all
material aspects all applicable laws, treaties, ordinances, rules, and
regulations and requirements relating to the employment of labour.
There are no claims pending or, to the best of the knowledge of the
Vendor and Chow, threatened to be brought against it in any court or
administrative agency by any of its former or current employees. It
has made all required contributions under the applicable laws in
respect of wages, salaries and other payments to all employees,
officers and directors and has timely paid all such amounts to the
proper Governmental Entity except as would not have a Material Adverse
Change on its business or Assets.
(o) Certain Agreements. Neither the execution and delivery of this
Agreement nor the performance of its obligations contained in them
will: (i) result in any payment by it (including severance,
unemployment compensation, parachute payment, bonus or otherwise)
becoming due to any director, employee, or independent contractor of
the company under any employee benefit plan, agreement, or otherwise,
(ii) increase any benefits otherwise payable under any
employee benefit plan or agreement, or (iii) result in the
acceleration of the time of payment or vesting of any such benefits.
(p) Guarantees and Suretyships. It has no powers of attorney outstanding
and it has no obligations or liabilities (absolute or contingent) as
guarantor, surety, co-signer, endorser, co-maker, or otherwise
respecting the obligations or liabilities of any person, corporation,
partnership, joint venture, association, organization, or other entity
other than as an endorser of negotiable instruments in the ordinary
course of business.
(q) Absence of Questionable Payments. Neither it nor any of its respective
Affiliates, directors, officers, agents, employees or other persons
acting on its behalf, has used any corporate or other funds for
unlawful contributions, payments, gifts, or entertainment, or made any
unlawful expenditures relating to political activity to government
officials or others or established or maintained any unlawful or
unrecorded funds. Neither it nor any of its respective Affiliates,
directors, officers, agents, employees or other persons acting on
their behalf, has accepted or received any unlawful contributions,
payments, gifts, or expenditures.
4. General.
(a) The Closing Deliverable Agreements. On or before JCBN Group Closing,
each of the JCBN Closing Deliverable Agreements will have been duly
executed by the parties thereto and, as at JCBN Group Closing, will be
in full force and effect and will constitute the valid and legally
binding obligations of the parties thereto enforceable in accordance
with their terms at JCBN Group Closing.
(b) Full Disclosure. (i) The Vendor and Chow are not aware of any facts
which could materially adversely affect it or any member of the JCBN
Group which are likely in the future to materially adversely affect
any of them and which have not been disclosed by or on behalf of the
Vendor or Chow in connection with or pursuant to this Agreement; (ii)
No representation or warranty in this Agreement, nor any statement or
certificate furnished or to be furnished to XFM pursuant to or in
connection with this Agreement contains or will contain any untrue
statement of material fact, or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not
misleading.
(c) Reliance. The representations and warranties are made by the Vendor
and Chow with the knowledge and expectation that XFM are placing
reliance thereon.
5. The Vendor and Chow hereby further jointly and severally represent, warrant
and covenant to XFM that each of the following statements with respect to
the Vendor and each of Chow, as applicable, is true:
(a) Organisation and Qualification. The Vendor is a person or a legal
entity duly organised and validly existing under the laws of its
jurisdiction of incorporation.
(b) Authorisation and Authority. The Vendor has taken all corporate or
other action required to authorise, and has duly authorised, the
execution, delivery and performance of this Agreement and upon due
execution and delivery the same will constitute its legal, valid and
binding obligations enforceable in accordance with its terms.
(c) Power and Authority. It or he has full power and authority to make the
covenants and representations referred to herein and to sell the
Company Shares and to execute, deliver and perform this Agreement.
(d) Compliance with Laws and Other Instruments. It or he holds, and at all
times has held all licenses, permits, and authorizations from all
governmental entities necessary for the lawful conduct of its or his
business pursuant to all applicable statutes, laws, ordinances, rules,
and regulations of all such authorities having jurisdiction over it or
any part of its or his operations. There are no violations or claimed
violations of any such license, permit, or authorization, or any such
statute, law, ordinance, rule or regulation, except for those
violations which will not cause Material Adverse Change to the
business or Assets of the members of the JCBN Group.
(e) Corporate Governance. Neither the execution and delivery of this
Agreement nor the performance by it or him of its or his obligations
under this Agreement will (i) conflict with or result in any breach of
its charter documents in the case of or the Vendor; (ii) require any
Consents by Governmental Entity, (iii) conflict with, result in a
breach or default of, or give rise to any right of termination,
cancellation or acceleration or result in the creation of any lien,
charge, encumbrance, or restriction upon any of the properties or
Assets of it or him or its or his shares under, any law, statute,
rule, regulation, judgment, decree, order, government permit, license
or order or any mortgage, indenture, note, license, trust, agreement
or other agreement, instrument or obligation to which it is a party.
(f) Investor Representation. The Vendor would be acquiring XFM Shares or
ADRs thereof for its own account, not as a nominee or agent and for
investment only and not with a view toward or for sale in the United
States connection with any distribution thereof, or with any present
intention of distributing or selling the XFM Shares or ADRs thereof in
the United States. The Vendor understands and acknowledges that the
XFM Shares or ADRs thereof are not being registered under the U.S.
securities laws, any U.S. state securities laws or otherwise. The
Vendor understands that the XFM Shares or ADRs thereof cannot be sold
in the United States unless they are subsequently registered under the
U.S. securities laws and applicable state securities laws or an
exemption from such registration is available. For the avoidance of
doubt, the foregoing representations are limited to sales and
distributions of XFM
Shares or ADRs thereof in the United States and shall not be construed
as a representation or restrictive covenants in connection with sales
or distributions by the Vendor of XFM Shares or ADRs thereof outside
the United States.
SCHEDULE G
CONDITIONS OF XFM'S OBLIGATIONS TO JCBN GROUP CLOSING
1. Representations and Warranties. All representations and warranties of the
Vendor and Chow shall be true on and as of the JCBN Company Closing or JCBN
Group Closing or the date of payment with the same effect as though such
representations and warranties had been made on and at such date.
2. Due Diligence. XFM has completed its due diligence review of the JCBN Group
and is satisfied with the results thereof.
3. Performance. Each member of the JCBN Group shall have performed and
complied with all agreements, obligations and conditions contained in this
Agreement (if applicable), the JCBN Ancillary Agreements that are required
to be performed or complied with by it on or before the JCBN Company
Closing, JCBN Group Closing or the date of payment.
4. No Material Adverse Change. There has not occurred any Material Adverse
Change in the JCBN Group's business, financial condition, Assets or
operations since the date of signing of this Agreement.
5. Deliverables. All matters and transactions contemplated in Clauses 2 and 3
of the Agreement have been completed to the satisfaction of XFM and all
documents contemplated to be executed and delivered in Clauses 2 and 3 of
the Agreement have been delivered in the forms required.
6. Board Approval. XFM's board of directors shall have authorized and approved
the execution and delivery of the Agreement and the Ancillary Agreements.
7. JCBN Equity Transfer. The Equity Transfer has been duly completed and all
documents required to be filed with or delivered to Governmental Entity
have been so filed or delivered and all approvals, registration and permits
for the Equity Transfer has been duly obtained and completed.
8. Board Composition. All documents required to change the legal
representative or directors of each member of the JCBN Group to nominees of
XFM shall have been duly completed and signed and, where applicable, filed,
submitted to or registered with the relevant Governmental Entity.
9. Licenses. All Licenses shall be valid and in full force and shall be
renewable solely by each member of the JCBN Group (as applicable) or its
branch throughout the period from the date of signing of this Agreement to
the JCBN Company Closing Date, JCBN Group Closing or date of payment.
10. Working Capital. The JCBN Group has at least RMB7,600,000 in available
funds or accounts receivables at the JCBN Group Closing. Any shortfall
shall be deducted from the 2008 JCBN Amount and, if the 2008 JCBN Amount is
not sufficient to deduct the shortfall, such excess from the 2009 JCBN
Amount.
11. Employment Agreements. The persons, particulars of which are set forth in
Schedule M, have entered into the JCBN Employment Agreements with XFM and
shall fulfil their obligations specified under the JCBN Employment
Agreements, and shall not unilaterally terminate the JCBN Employment
Agreements before the expiration of the same.
12. Non-compete Deeds. The persons, particulars of which are set forth in
Schedule M, have entered into the Non-compete Deeds with XFM and shall
fulfil their obligations specified under the Non-compete Deeds.
13. Bank Facility. The overdraft facility granted by Bank of East Asia in
favour of JTT has been repaid in full and cancelled and there is no amount
outstanding or due thereunder by the Group.
14. Motor Vehicle. None of JCBN HK or JTT owns or leases any motor vehicles.
All hire purchase, insurance or other contracts or arrangements with
respect to any such motor vehicle previously owned or leased by JCBN HK or
JTT have been cancelled and there is no amount outstanding or due
thereunder by any member of the JCBN Group.
SCHEDULE H
JCBN INTELLECTUAL PROPERTY
A. DOMAIN NAMES OWNED BY MEMBERS OF THE JCBN GROUP:
NO. OWNER OF DOMAIN NAME REGISTRATION EXPIRY CERTIFICATE
DOMAIN DATE DATE
--- --------- ---------------- ------------ ---------- ------------------
1. JTT ▇▇▇.▇▇▇.▇▇ 23/04/2001 01/11/2008 HK12876491
2. JCBN ▇▇▇▇.▇▇▇.▇▇ 15/05/2004 15/12/2008 21.192.103.250
China (▇▇▇▇.▇▇▇▇▇▇▇.▇▇▇)
3. IF Design ▇▇-▇▇▇▇▇▇.▇▇▇.▇▇ 21/09/2006 21/09/2009 20060921s10011s
76857642-cn
B. TRADEMARKS OWNED OR APPLIED FOR BY MEMBERS OF THE JCBN GROUP: NIL
SCHEDULE I
JCBN LEASES
THE COMPANY : NIL
JCBN HK : NIL
JTT :
List of leases of JTT.
JCBN CHINA :
List of leases of JCBN China
TIANYI :
List of leases of Tianyi
IF :
List of leases of IF
SCHEDULE J
MATERIAL CONTRACTS
This is a list material contracts of jtt Advertising Limited and Tianyi.
SCHEDULE K
INSURANCE AND BANK
INSURANCE :
1. JTT ADVERTING LIMITED :
(a) PRU Choice Small Office Extra Insurance Policy No.900000379129 dated
18/10/2007 for year 2007 with The Prudential Assurance Co. Ltd. for
Small office Insurance Coverage
(b) Policy No.900000379129 with The Prudential Assurance Co. Ltd. for
Employees Compensation
BANK :
This is a list of bank accounts.
SCHEDULE L
JCBN LICENSES / CERTIFICATE
1. JCBN HK
---------------------------------------------------------------------------------------------------------------
LICENCE / ISSUING ISSUING VALID TYPE OF SCOPE OF
CERTIFICATE AUTHORITY DATE TERM BUSINESS BUSINESS
---------------------------------------------------------------------------------------------------------------
Business Business 19/01/2007 One year Advertising Advertising, design,
Registration Registration to production,
Certificate Office 18/01/2008 distribution and
No.34230962 agency. Trading and
consulting services
---------------------------------------------------------------------------------------------------------------
2. JTT ADVERTING LIMITED
---------------------------------------------------------------------------------------------------------------
LICENCE / ISSUING ISSUING VALID TYPE OF SCOPE OF
CERTIFICATE AUTHORITY DATE TERM BUSINESS BUSINESS
---------------------------------------------------------------------------------------------------------------
Business Business 03/10/2007 One year Advertising Advertising
Registration Registration to
Certificate Office 02/10/2008
No.31268796
---------------------------------------------------------------------------------------------------------------
3. JCBN CHINA
---------------------------------------------------------------------------------------------------------------
LICENCE / ISSUING ISSUING OPERATION TYPE OF SCOPE OF
CERTIFICATE AUTHORITY DATE TERM BUSINESS BUSINESS
---------------------------------------------------------------------------------------------------------------
Business Fengxian 17/08/2006 10 years Limited Design,
Licence Branch of from Liability production,
(Business Shanghai 17/03/2004 Company publication and
License) No.: Administration acting as an agent
31022620410 for Industry of all types of
88 and advertisements in
Commerce China, service for
exhibition and
conference
matters, enterprise
image scheme,
) market sales
scheme, etiquette
service, computer
graphic design and
production,
business
information
consulting,
wholesale and
retail business in
craftwork,
enterprise
management
consulting, human
resource
management
consulting, labor
service (exclusive
of job agency),
(application for
license is
necessary if
license is required
to conduct the
above-mentioned
business)
---------------------------------------------------------------------------------------------------------------
4. TIANYI
---------------------------------------------------------------------------------------------------------------
LICENCE / ISSUING ISSUING OPERATION TYPE OF SCOPE OF
CERTIFICATE AUTHORITY DATE TERM BUSINESS BUSINESS
---------------------------------------------------------------------------------------------------------------
Business Tongzhou 19/06/2007 20 years Limited Design,
Licence Branch of from Liability production, acting
(Business Beijing 28/09/2004 Company as an agent and
License) No.: Administration publishing
11011200752 for Industry advertising in
8406 and China for domestic
Commerce and foreign
clients;
Undertaking
exhibit
---------------------------------------------------------------------------------------------------------------
5. IF DESIGN
---------------------------------------------------------------------------------------------------------------
LICENCE / ISSUING ISSUING OPERATION TYPE OF SCOPE OF
CERTIFICATE AUTHORITY DATE TERM BUSINESS BUSINESS
---------------------------------------------------------------------------------------------------------------
Business Luwan 13/08/2007 10 years Limited Design, produce
Licence Branch of from Liability and act as agent
(Business Shanghai 26/07/2005 Company for kinds of
License) No.: Administration advertising; sale of
31010300016 for Industry commodity,
5204 and knitgoods, textile,
Commerce craftwork, and
hardware; Indoor
decoration and
design. Where the
business is subject
to administrative
license, the
company shall
operate business
by license
---------------------------------------------------------------------------------------------------------------
SCHEDULE M
1. LIST OF MANAGEMENT ENTERING INTO JCBN EMPLOYMENT AGREEMENT
(a) Chow Chi Yan;
(b) ▇▇▇ ▇▇ ▇▇▇, ▇▇▇▇▇
(c) ▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇
(d) ▇▇▇▇ ▇▇▇▇▇, Ian
(e) Cao ▇▇▇▇, ▇▇▇▇
(f) Guo Hong
2. LIST OF PERSONNEL ENTERING INTO NON-COMPETE DEED
(a) Chow Chi Yan;
(b) ▇▇▇ ▇▇ ▇▇▇, ▇▇▇▇▇
(c) ▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇
(d) ▇▇▇▇ ▇▇▇▇▇, lan
(e) Cao ▇▇▇▇, ▇▇▇▇
(f) Guo Hong
(g) ▇▇▇▇ ▇▇▇▇
SCHEDULE N
JCBN EQUITY TRANSFER DOCUMENTS
1. JCBN CHINA
(a) equity transfer agreement entered into between Zhang Shunkang and XFM
Entity;
(b) equity transfer agreement entered into between Zhu Tianying and XFM
Entity;
(c) shareholders' resolution of JCBN China executed by Zhang Shunkang and
Zhu Tianying;
(d) shareholder's resolution of XFM Entity; and
(e) amended Articles of Association of JCBN China.
2. IF DESIGN
(a) shareholder's resolution of IF Design; and
(b) amended Articles of Association of IF Design.
3. TIANYI
(a) shareholder's resolution of Tianyi.
SCHEDULE O
FORMS OF EMPLOYMENT AGREEMENT
SCHEDULE P
FORMS OF NON-COMPETE DEED
SCHEDULE Q
FINANCIAL STATEMENTS