exv10w4w2






			
	[Translation of Chinese original]
	 	Exhibit 10.4.2






Execution Version






 






Equity Transfer and Capital Increase Agreement




of



Shanghai Hongmen Advertising Co., Ltd.



 





By and among




Pacific Asia Mode Cube Limited



Redgate Media AD Co., Ltd.



Shanghai Yuqing Advertising Broadcasting Co., Ltd.



Weidong Zhu



and



Shanghai Hongmen Advertising Co., Ltd.



December 19, 2007



Shanghai Office

King & Wood PRC Lawyers



Equity Transfer Agreement A and Capital Increase A








 









 






Table of Contents




	 	 	 	 	 
	Article Heading	 	Page
	 
	 	 	 	 
	1.     Definitions

	 	 	1	 
	 
	 	 	 	 
	2.     Equity Transfer

	 	 	5	 
	 
	 	 	 	 
	3.     Capital Increase

	 	 	6	 
	 
	 	 	 	 
	4.     Conditions Precedent

	 	 	6	 
	 
	 	 	 	 
	5.     Undertakings

	 	 	9	 
	 
	 	 	 	 
	6.     Completion of Equity Transfer and Capital Increase

	 	 	11	 
	 
	 	 	 	 
	7.     Warranties

	 	 	13	 
	 
	 	 	 	 
	8.     Confidentiality

	 	 	15	 
	 
	 	 	 	 
	9.     Assignment

	 	 	16	 
	 
	 	 	 	 
	10.    Termination and Rescission

	 	 	16	 
	 
	 	 	 	 
	11.    Governing Law and Dispute Settlement

	 	 	16	 
	 
	 	 	 	 
	12.    Notice

	 	 	16	 
	 
	 	 	 	 
	13.    Expenses

	 	 	18	 
	 
	 	 	 	 
	14.    Entire Agreement

	 	 	18	 
	 
	 	 	 	 
	15.    Severability

	 	 	18	 
	 
	 	 	 	 
	16.    Waiver

	 	 	18	 
	 
	 	 	 	 
	17.    Liability for Breach of Contract

	 	 	19	 
	 
	 	 	 	 
	Appendix 1 Balance Sheet

	 	 	1	 
	 
	 	 	 	 
	Appendix 2 Warranty

	 	 	1	 
	 
	 	 	 	 
	Appendix 3 Disclosure Letter

	 	 	1	 
	 
	 	 	 	 
	Appendix 4 Equity Transfer and Capital Increase Agreement (for Industrial and
Commercial Registration)

	 	 	2	 
	 
	 	 	 	 
	Appendix 5 List of Debts Repayable

	 	 	1	 
	 
	 	 	 	 
	Appendix 6 Employment Contract

	 	 	3	 
	 
	 	 	 	 
	Appendix 7 Confidentiality Agreement

	 	 	1	 
	 
	 	 	 	 
	Appendix 8 Intellectual Property Agreement

	 	 	1	 
	 
	 	 	 	 
	Appendix 9 Non-competition Agreement (to be executed with Party C)

	 	 	1	 
	 
	 	 	 	 
	Appendix 10 Party C’s Capital Increase Termination Agreement

	 	 	1	 
	 
	 	 	 	 
	Appendix 11 Fixed-income Right Termination Agreement

	 	 	1	 






 









 





The Equity Transfer and Capital Increase Agreement (“the Agreement”) is made on December 19,
2007 in Beijing, China by and among the following parties:





	(1)	 	Pacific Asia Mode Cube Limited, a limited liability company duly incorporated and existing in
accordance with the laws of Hong Kong SAR, with the registered address at Room 2703, 27/F, The
Centrium, 60 Wyndham Street, Central, Hong Kong, China (“Party A”);
	 
	(2)	 	Redgate Media AD Co., Ltd., a limited liability company duly incorporated and existing in
accordance with the laws of China, with the registered address at Room 1807, 15/F, Tower B,
Jianwai SOHO, No. 39 East 3rd Ring Road Central, Chaoyang District, Beijing, China (“Party B”,
Party A and Party B are hereinafter collectively referred to as “PAMC Group”);
	 
	(3)	 	Shanghai Yuqing Advertising Broadcasting Co., Ltd., a limited liability company duly
incorporated and existing in accordance with the laws of China, with the registered address at
Room 1533, 15/F, No. 728 Yan’an Road West, Changning District, Shanghai, China (“Party C”);
	 
	(4)	 	Weidong Zhu, a Chinese citizen, with the ID card number of 310110197006105018 (“Party D”,
Party C and Party D are hereinafter collectively referred to as “Existing Shareholders”); and
	 
	(5)	 	Shanghai Hongmen Advertising Co., Ltd., a limited liability company duly incorporated and
existing in accordance with the laws of China, with the registered office at P-1 Building,
7523 Beiqing Road, Chonggu Town, Qingpu District, Shanghai, China (“Company”).




(Party A, Party B, Party C, Party D and the Company are hereinafter collectively referred to as the
“Parties” and individually referred to as a “Party”.)




Whereas,





	(A)	 	The Company was established on June 9, 2004, with the registered capital of RMB five million
two hundred thousand (RMB5,200,000) as of the date of the Agreement.
	 
	(B)	 	Both the Company and Existing Shareholders agree that Party B increase the Company’s capital
according to the terms and conditions of the Agreement, and in addition, Party C desires to
sell the Equity Interest to Be Transferred (defined as below) and Party B desires to purchase
the Equity Interest to Be Transferred.
	 
	(C)	 	The Existing Shareholders and the Company agree to make certain representations, Warranties
and undertakings concerning the Equity Transfer and Capital Increase.




It is agreed as follows:





	1.	 	Definitions






	1.1	 	Terms used in the Agreement shall have the following meanings:




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	 	 	“Warranties” means representations and warranties made by the Existing Shareholders to Party
B as mentioned in Appendix 2 hereto;
	 
	 	 	“Party C’s Capital Increase Documents” means the documents as mentioned in Article 4.1.13
hereof;
	 
	 	 	“Party C’s Capital Increase Termination Agreement” means the agreement as mentioned in
Article 4.1.13 hereof;
	 
	 	 	“Equity Interest to Be Transferred” means all the equity interest of the Company held by
Party C to be purchased by Party B according to the Agreement, totally 39.42%;
	 
	 	 	“Encumbrance” means any mortgage, pledge, lien, option, right to sell, priority, preemptive
right and security interest of any nature;
	 
	 	 	“Board of Directors” means the Company’s board of directors;
	 
	 	 	“Expenses” means any kind of liabilities, losses, damages, costs (including legal costs) and
expenditures (including Taxes and duties);
	 
	 	 	“Administration for Industry and Commerce” means Shanghai Administration for Industry and
Commerce Qingpu Sub-bureau, and any other administration for industry and commerce empowered
to handle the procedures for the Company’s Equity Transfer and Capital Increase;
	 
	 	 	“Related Party” means, in respect of any party hereto, any company, partnership or other
entity which controls, is controlled by or is under common control with, that party directly
or indirectly; if such party is a natural person, Related Party means his/her spouse or
relatives. (For the purpose of this definition, the word “Control” means having the control
right over that party by direct or indirect ownership of voting rights and interests of that
party, or by means of agreement or other arrangement);
	 
	 	 	“Equity Transfer” means Party B’s purchase and ownership of the Transferred Equity of the
Company according to the Agreement;
	 
	 	 	“Completion Date of Equity Transfer and Capital Increase” means the date on which Party B
confirms that all Debts Repayable have been paid off according to Article 6.6 hereof;
	 
	 	 	“Offshore Co-Managed Account” means special co-managed bank account opened abroad by Party A
and Party C in the name of Party A with                      Bank, where the seal of Party C’s
representative (namely, Gang Zhen) is reserved, with A/C.:                     ;
	 
	 	 	“Onshore Conversion Price” means the conversion considerations to be paid by Party B to the
onshore account designated by Party C in writing as mentioned in Article 2.2 hereof;




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	 	 	“Offshore Conversion Price” means the conversion considerations to be paid by Party A abroad
to the offshore account designated by Party C in writing as mentioned in Article 2.2 hereof;






	 	 	“U.S. Dollar” means the legal currency of the United States of America;
	 
	 	 	“Mosquito-Control Light Box Project” means the project commenced in 2004 and completed in
two stages, which plans to set up 1,500 to 2,000 Mosquito-Control Light Boxes in Shanghai’s
colleges, universities and communities prior to June, 2006 and another time approved by the
relevant governmental authority;
	 
	 	 	“Disclosure Letter” means a letter signed and delivered to Party B by the Existing
Shareholders prior to or on the date of the Agreement to disclose exceptions from
Warranties, provided that all matters disclosed must be specific and complete and correspond
to the relevant reference numbers of Appendix 2 (see Appendix 3 hereto);
	 
	 	 	“Renminbi” or “RMB” means the legal currency of the People’s Republic of China;
	 
	 	 	“Lawsuit” includes claims, legal actions, legal proceedings, suits, litigations,
prosecution, investigation, inquiry or arbitration in which the Company is involved
(exclusive of Lawsuits to which the Company is a plaintiff to recover debts and liabilities
in the normal business operation);
	 
	 	 	“Remaining Capital Increase Amount” means the balance of the Capital Increase Amount as
mentioned in Article 6.5 hereof minus the Increased Registered Capital;
	 
	 	 	“Social Insurance” means pension, house accumulation fund, unemployment insurance,
industrial injury insurance, medical insurance and comprehensive insurance which the Company
must pay for its staff members and workers in accordance with the state and Shanghai laws
and policies and any other social security fund required by the Chinese government;
	 
	 	 	“Taxes” means any and all taxes and duties payable (including, but not limited to, any
income tax, sales tax, stamp duty and other kinds of tax, tariff, fees, expenditures,
deductions, fines or withholding Tax which are imposed, collected or apportioned).
“Taxation” shall be construed correspondingly;
	 
	 	 	“Investment Amount” means the amount invested by PAMC Group for the purpose of Equity
Transfer and Capital Increase, totally RMB eleven million five hundred and sixty-two
thousand nine hundred and forty-three (RMB11,562,943);
	 
	 	 	“Unregistered Capital Increase” means the amount of RMB one million nine hundred thousand
(RMB1,900,000) invested by Party C in the Company on June 27, 2007 as mentioned in Article
4.1.13 hereof;
	 
	 	 	“Default Amount” means the amount as mentioned in Article 5.3 hereof;
	 
	 	 	“Restated Articles of Association” means the restated Articles of Association or
Modifications to the Articles of Association signed on the date of the Agreement;




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	 	 	“Increased Registered Capital” means the amount of registered capital increased to the
Company as mentioned in Article 3.1 hereof;
	 
	 	 	“Conditions Precedent” means the conditions as specified in Article 4 hereof;
	 
	 	 	“License” means those licenses, consents, authorizations, orders, warranties, confirmations,
permits, certificates and approvals which are necessary or required for the existing, past
and future operation activities of the Company;
	 
	 	 	“Debts Repayable” means all debts and liabilities of the Company to be paid off as mentioned
in Article 3.2 hereof;
	 
	 	 	“Business Day” means, for the purpose of the Agreement and according to the context, a day
on which banks in China or Hong Kong are open to the public, exclusive of Saturdays, Sundays
and statutory holidays, namely, Business Day means a day on which banks in Hong Kong are
open to the public as to offshore payments, and the like;
	 
	 	 	“Accounts” means the accounting books of the Company for the financial period as of the
Balance Sheet Date;
	 
	 	 	“Balance Sheet” means the balance sheet as of the Balance Sheet Date as listed in Appendix 1
hereto;
	 
	 	 	“Balance Sheet Date” means August 31, 2007;
	 
	 	 	“Government Approvals” means all approval documents issued by the Chinese governmental
authorities concerning the issues mentioned herein;
	 
	 	 	“Key Management Personnel” means Weidong Zhu (General Manager) and Yun Yang (Director of the
Business Development Department);
	 
	 	 	“Total Conversion Price” means the sum of the Onshore Conversion Price and the Offshore
Conversion Price;
	 
	 	 	“Intellectual Property” includes patents, patent applications, utility models, trademarks,
service logos, registered designs, copyrights, technical drawings, trade names, database
rights, domain names, brand names, computer software programs and systems, know-how,
inventions, creations, confidential information and other industrial or commercial
intellectual property rights (whether they are registered or not or whether they can be
registered or not), and all application documents for registration or protection of such
items;
	 
	 	 	“Capital Increase” means the capital increase of RMB seven million three hundred and
fifty-seven thousand three hundred and seventy-seven point seventy (RMB7,357,377.70)
(“Capital Increase Amount”) to be made by Party B to the Company according to the Agreement;




4









 






	 	 	“China” means, for the purpose of the Agreement, the mainland of the People’s Republic of
China, exclusive of Hong Kong SAR, Macao SAR and Taiwan Region.






	1.2	 	Headings
	 
	 	 	The headings of all Articles are inserted only for reference and shall not affect the
interpretation of the Agreement.






	1.3	 	Reference
	 
	 	 	Reference to Chinese laws includes reference to any laws, regulations, and policies with
legal force or other subsidiary legislations within the territory of China. Reference
to laws includes reference to their respective amendments or modifications. Reference
to the Agreement or any contract includes reference to modified, amended or renewed
contracts.






	1.4	 	Appendices
	 
	 	 	The appendices comprise such appendices as listed in the Table of Contents hereof. The
appendices shall be integral part hereof and have equal legal force herewith.






	2.	 	Equity Transfer






	2.1	 	If the Conditions Precedent are fulfilled, Party C agrees to sell to Party B 39.42% of the
Company’s equity (equal to RMB two million and fifty thousand (RMB2,050,000) of the registered
capital), and Party B agrees to purchase the said Transferred Equity free of any Encumbrance,
including all existing and future rights relating to the Transferred Equity.
	 
	2.2	 	Unless all Parties agree to adjust the Total Conversion Price through negotiation, the Total
Conversion Price shall be RMB four million two hundred and five thousand five hundred and
sixty-five point thirty (RMB4,205,565.30), of which the Onshore Conversion Price is RMB two
million and fifty thousand (RMB2,050,000), and the Offshore Conversion Price is to be paid in
an amount of U.S. dollars equivalent to RMB two million one hundred and fifty-five thousand
five hundred and sixty-five point thirty (RMB2,155,565.30) (for the purpose of the Agreement,
RMB against U.S. dollar exchange rate applicable to Party A’s payment of the Offshore
Conversion Price according to Article 6 hereof shall be subject to the middle exchange rate
published by the People’s Bank of China on the date of Party A’s payment).




5









 












	3.	 	Capital Increase






	3.1	 	If the Conditions Precedent are fulfilled, Party B shall invest in the Company according
to the Agreement, and an amount of RMB one million two hundred and ten thousand
(RMB1,210,000) shall be accounted into the Company’s registered capital (“Increased
Registered Capital”), and the remaining amount of RMB six million one hundred and
forty-seven thousand three hundred and seventy-seven point seventy (RMB6,147,377.70) shall
be accounted into the Company’s capital reserves. After completion of the Capital Increase
and Equity Transfer as mentioned herein, the shareholders of the Company, capital
contributions and share proportion of shareholders shall be as follows:





	 	 	 	 	 	 	 	 	 
	 	 	Capital Contributed	 	Proportion in
	Shareholders	 	(RMB)	 	Registered Capital
	Redgate Media AD Co., Ltd.
	 	 	3,260,000	 	 	 	50.86	%
	Weidong Zhu
	 	 	3,150,000	 	 	 	49.14	%
	Total
	 	 	6,410,000	 	 	 	100	%







	3.2	 	The Company agrees that the Company must, according to Party B’s written instructions,
use the Capital Increase Amount as mentioned in Article 3 hereof to repay the following
debts of the Company as of the date of the Balance Sheet Date (collectively called “Debts
Repayable”):






	 	3.2.1	 	All amounts payable recorded in the Balance Sheet are RMB four million four
hundred and seventeen thousand five hundred and fifty-five point ninety-nine
(RMB4,417,555.99), including loans of RMB three million three hundred and sixty-two
thousand nine hundred and forty-three (RMB3,362,943) in total from all Party C’s
shareholders and other debts of RMB one million and fifty-four thousand six hundred and
twelve point ninety-nine (RMB1,054,612.99) in total (refer to Appendix 5 for details);
and
	 
	 	3.2.2	 	Amount of RMB two million nine hundred and thirty-nine thousand eight hundred
and twenty-one point seventy-one (RMB2,939,821.71) payable (including, but not limited
to, fixed incomes payable to Chengye Guo and other amounts payable) not recorded in the
Balance Sheet, which result or may result from 800 light boxes under the
Mosquito-Control Light Box Project which have been installed (refer to Appendix 5 for
details).






	4.	 	Conditions Precedent






	4.1	 	Transactions as mentioned in Articles 2 and 3 hereof may not be completed until the
following conditions are fulfilled or PAMC Group waives in writing:






	 	4.1.1	 	The Company’s shareholders’ meeting has adopted all necessary resolutions to:






	 	(i)	 	Approve the transactions as mentioned herein;




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	 	(ii)	 	Approve Party C to sell the Transferred Equity to Party B
according to the Agreement;
	 
	 	(iii)	 	Approve Party B to invest in the Company according to the
Agreement;
	 
	 	(iv)	 	Approve amendments to the original Articles of Association of
the Company; and
	 
	 	(v)	 	Other shareholders of the Company respectively waive their
pre-emptive right.






	 	4.1.2	 	Each party has signed the Restated Articles of Association;
	 
	 	4.1.3	 	The Warranties made hereunder are true, accurate and complete and are not
misleading on the date of the Agreement and the Completion Date of Equity Transfer and
Capital Increase;
	 
	 	4.1.4	 	The Company has obtained all necessary government approvals (including
subsequent approvals or alteration approvals which are required from time to time in
term of the actual progress of the Project) for implementation of the Mosquito-Control
Light Box Project;
	 
	 	4.1.5	 	The Parties have reached an agreement on the legal documents required for
Equity Transfer and Capital Increase (including, but not limited to, the Equity
Transfer and Capital Increase Agreement required for industrial and commercial
registration as mentioned in Appendix 4 hereto), and any modification to legal
documents according to the requirements of governmental authorities has been accepted
by the Parties;
	 
	 	4.1.6	 	Approvals by the relevant Chinese authorities and all Approval Documents from
relevant authorities (if applicable) concerning Equity Transfer and Capital Increase
have been obtained; the Company has completed the procedures for change of industrial
and commercial registration concerning Equity Transfer and Capital Increase and has
obtained the Business License which reflects that the Company’s registered capital
amounts to RMB six million four hundred and ten thousand (RMB6,410,000); the Company’s
register of shareholders has been modified correspondingly, and Party B has obtained
the Certificate of Capital Contributions issued by the Company;
	 
	 	4.1.7	 	The Company has set up the Board of Directors which comprises five (5)
directors, of which, three (3) directors to be appointed by Party B, namely, BRACK,
Peter Bush, Ying Zhu and Yue Jin, have bee duly appointed and registered as the
Company’s directors, and Yue Jin has been registered as the Company’s legal
representative;
	 
	 	4.1.8	 	PAMC Group and Party D have reached an agreement concerning subsequent
restructuring and business plans of the Company;
	 
	 	4.1.9	 	PAMC Group has satisfactorily finished due diligence over the Company in such
aspects of business, legal and financial affairs (including, but not limited to, the
fact that the persons appointed by PAMC Group have finished field inspection over the
800 light boxes which have been installed under the Mosquito-Control Light Box Project
and PAMC Group is satisfied with the inspection result;




7









 






	 	4.1.10	 	The Company has executed with all its staff members and workers (including those who
have actual service relationship with the Company) the employment contracts in the form
which meet the requirements of PAMC Group. The Company has executed with all Key
Management Personnel the employment contracts (which specify that the employment term
is not less than three (3) years) in the form as mentioned in Appendix 6 hereto;
	 
	 	4.1.11	 	The Company has executed with all its staff members and workers the confidentiality
agreements in the form as mentioned in Appendix 7 hereto. The Company has executed with
all Key Management Personnel the Intellectual Property Agreements in the form as
mentioned in Appendix 8 hereto and the non-competition agreements which meet the
requirements of PAMC Group;
	 
	 	4.1.12	 	Party C has executed with the Company the non-competition agreement (as mentioned in
Appendix 9 hereto) which meet the requirements of PAMC Group, warranting and
undertaking that it shall not, within three (3) years after completion of Equity
Transfer, engage in, independently or through any of its related parties, any business
which is similar to or may be competitive with the Mosquito-Control Light Box Project,
or hold any direct or indirect rights and interests in the fields which may be
competitive with the Company’s mosquito-control light box business;
	 
	 	4.1.13	 	Party C has reached and executed with relevant parties the agreement (“Party C’s
Capital Increase Termination Agreement”) (refer to Appendix 10 hereto for the form)
which meet the requirements of PAMC Group, according to which:






	 	(i)	 	Party C and relevant parties agree to terminate the Capital
Increase Agreement (including all appendices attached thereto) executed on
April 3, 2006 concerning Party C’s investment in the Company, the
Supplementary Agreement of ‘Equity Transfer and Capital Increase Agreement’
executed on July 3, 2006, the Supplementary Agreement for Hongmen’s Investment
(including all appendices attached thereto) executed in 2007 and other
relevant legal documents (hereinafter collectively referred to “Party C’s
Capital Investment Documents”);
	 
	 	(ii)	 	Party C agrees to convert the Capital Increase Amount,
namely, RMB one million nine hundred thousand (RMB1,900,000) (“Unregistered
Capital Increase”) which Party C remitted into the Company’s Capital Increase
account (A/C.: 216140100100068164) on June 27, 2007 according to Party C’s
Capital Investment Documents, into a loan granted to the Company by Party C,
and the Company shall make repayment on schedule. Therefore, Party C and the
Company shall take all legal and feasible measures, including, but not limited
to, a) altering the Company’s accounting books, Balance Sheets and other
financial statements; b) revoking the Capital Verification Report of Shanghai
Hongmen Advertising Co., Ltd. issued on July 4, 2007 by Shanghai Qinye CPA
Firms, and amendments to the Articles of Association, resolutions of
shareholders’ meeting and other relevant documents signed by related parties;
c) applying to the administration for industry and commerce for withdrawing
all relevant information materials submitted by the Company for the said
Unregistered Capital Increase and terminating all procedures concerned; and
	 
	 	(iii)	 	Party C shall undertake to PAMC Group and the Company that,
after the Company repays the Unregistered Capital Increase Amount and loans
owed to




8









 






	 	 	 	Party C as mentioned in Article 3.2.1 hereof, a) the Company shall not have
any other debt owed to Party C any more; b) Party C shall have no rights
under Party C’s Capital Investment Documents and shall not claim against
PAMC Group and the Company by virtue of any question concerning matters with
respect to Party C’s Capital Investment Documents; c) Party B shall not
assume any of Party C’s obligations under Party C’s Capital Investment
Documents as a result of taking over the Transferred Equity. Party C shall
be liable for all losses incurred by Party B relating to Party C’s Capital
Investment Documents as a result of taking over the Transferred Equity.






	 	4.1.14	 	The Company has executed with Chengye Guo the Agreement for Fixed-income Right
Termination as mentioned in Appendix 11 hereto, confirming termination of all legal
documents (including, but not limited to, the Income Right Agreement executed on
September 27, 2004 and the Income Right Transfer Agreement executed on April 11, 2006
by and between Guo and the Company) concerning fixed-income right of Chengye Guo.






	4.2	 	Existing Shareholders undertake to make all reasonable efforts to ensure that the
Conditions Precedent as mentioned in Article 4.1 hereof are fulfilled as soon as possible
and in any event, they shall be fulfilled within three (3) months from the date of the
Agreement.
	 
	4.3	 	Party B shall have the right to waive all or part of the Conditions Precedent as
mentioned in Article 4.1 hereof at its own discretion with a written notice to the Company.






	5.	 	Undertakings
	 
	5.1	 	After execution of the Agreement but before the Completion Date of Equity Transfer and
Capital Increase, unless agreed in writing by Part B or otherwise stipulated herein,
Existing Shareholders and the Company shall ensure that:






	 	5.1.1	 	The Company shall take all reasonable steps to preserve and protect all its
assets;
	 
	 	5.1.2	 	They shall disclose rapidly all information to Party B which the Company or
Existing Shareholders are aware of and may constitute facts or events (whether they
exist on or prior to or after the date of the Agreement) in breach of Warranties made
then in term of facts and circumstances on the Completion Date of Equity Transfer and
Capital Increase;
	 
	 	5.1.3	 	The Company shall not conduct any activity which may obstruct seriously or
delay improperly the completion of the transaction as mentioned herein or which may
constitute violation of Warranties hereunder;
	 
	 	5.1.4	 	The Company shall not conduct any activity which is subject to the consent of
the shareholders’ meeting or the Board of Directors in accordance with laws or the
Articles of Association except for the aforesaid consents;
	 
	 	5.1.5	 	The Company shall not enter into any other agreement, contract or
arrangement, or make any transaction unless in the normal course of business and with
Party B’s written consent; and




9









 






	 	5.1.6	 	The Company shall be responsible for all necessary procedures for government
approval, registration and so on according to the requirements of relevant government
authorities (if any) for the actual progress of the Mosquito-Control Light Box Project.






	5.2	 	If prior to the Completion Date of Equity Transfer and Capital Increase, Existing
Shareholders and the Company materially breach their respective undertakings or Warranties
under Article 5 hereof or other obligations hereunder, Party B shall have the right to
rescind the Agreement unconditionally without taking any liability and require Party C and
the Company to refund all investment amount paid by Party B (if any), no matter whether the
Total Conversion Price and Capital Increase Amount have been paid.
	 
	5.3	 	Existing Shareholders acknowledge that they are aware that Party B’s transaction
arrangement concerning take-over of the Transferred Equity and increase of the Company’s
capital rely on the following important representations and warranties made by Existing
Shareholders:






	 	(i)	 	The fund invested by Party C in the Company (including the equity transfer
considerations that Party C initially paid for the Equity Transferred by Cui Yuan, a
former shareholder of the Company and the amounts paid to the Company by means of
shareholder’s loan or Capital Increase (including capital contributions paid in advance
for Party D, but excluding Unregistered Capital Increase)) shall not be less than RMB
nine million five hundred and sixty-two thousand nine hundred and forty-three
(RMB9,562,943); and
	 
	 	(ii)	 	The Debts Repayable as listed in Article 3.2 hereof include all Debts Repayable
by the Company up to the Balance Sheet Date and the amounts payable which result or may
result from 800 light boxes under the Mosquito-Control Light Box Project which have
been installed.






Therefore, if after the Completion Date of Equity Transfer and Capital Increase, Party B
finds that a) the fund invested by Party C in the Company is less than the amount as
mentioned in Article 5.3(i) hereof, and/or b) the sum of all Debts Repayable by the Company
as of the Balance Sheet Date and the amounts payable which result or may result from 800
light boxes under the Mosquito-Control Light Box Project which have been installed exceeds
the Debts Repayable, or there is any liability or loss to any third person as a result of
such exceeding amount (for the purpose of the Agreement, the insufficient amount under Item
a) and/or exceeding amount under Item b) as well as liability and loss to a third person
arising therefrom are collectively referred to as “Default Amount”), Existing Shareholders
undertake to assume joint and several liabilities for such Default Amount in proportion to
their capital contribution to the Company prior to the Equity Transfer. Party B shall have
the right to deduct the Default Amount directly from the remaining Investment Amount which
has not been paid or require Existing Shareholders to pay the Default Amount to Party B.




	5.4	 	Existing Shareholders are aware that there has been non-compliance in the Company since
the date of establishment, such as irregular financial management, incorrect contribution
entities, failure to enter into employment contracts timely with its workers and staff
members and failure to perform obligations sufficiently to pay the Social Insurance for its
workers and staff members. Therefore, Existing Shareholders undertake to assume joint and
several liabilities in proportion to their capital contribution to the Company prior to the
Equity Transfer in case of any liability and loss arising from the aforesaid circumstances
which have existed before the Completion Date of Equity Transfer and Capital Increase.




10









 












	5.5	 	The Company shall, within three (3) months after the Completion Date of Equity Transfer
and Capital Increase, make the registered address consistent with its actual business place
in a way acceptable to Party B.
	 
	6.	 	Completion of Equity Transfer and Capital Increase
	 
	6.1	 	Party B agrees to pay the Increased Registered Capital, namely, RMB one million two
hundred and ten thousand (RMB1,210,000) to the RMB account designated by the Company in
writing within ten (10) Business Days from the date of the Agreement for the purpose of
handling the procedures for verification of the Company’s Increased Registered Capital and
change of industrial and commercial registration. The Company shall issue a written letter
of acknowledgement within two (2) Business Days after receiving such amount, confirming its
receipt, and appoint a Chinese CPA acceptable to Party B to verify the capital and issue a
capital verification report.
	 
	6.2	 	All the parties agree to prepare immediately after execution of the Agreement all
application materials concerning the industrial and commercial registration of Equity
Transfer and Capital Increase and, according to the requirements of the administration for
industry and commerce, make relevant modifications and supplementations (any modification
which is inconsistent with the provisions hereof or deviates from the Parties’ original
purposes for execution of the Agreement shall be subject to written consents of all
Parties). The Company shall be responsible for all necessary procedures, such as change of
industrial and commercial registration, in which the other parties concerned shall render
assistance and cooperation.
	 
	6.3	 	After executing the Agreement, Existing Shareholders and the Company shall take measures
immediately to fulfil the Conditions Precedent as mentioned in Article 4.1 hereof. Within
three (3) Business Days after fulfilment (or waiver) of the Conditions Precedent other than
those as mentioned in Article 4.1.6 hereof, each party concerned shall issue a written
notice to the other parties, together with certification documents. At latest within three
(3) Business Days after issuing the written notice or on another agreed date, the Parties
shall make a written confirmation whether all Conditions Precedent (except for those in
Article 4.1.6 hereof) have been fulfilled.
	 
	6.4	 	The Parties shall make a settlement through amiable negotiation where the Conditions
Precedent as mentioned in Article 4.1 hereof have not been or cannot be fulfilled within
three (3) months from the date of the Agreement or by another agreed date. If no agreement
is made within fifteen (15) Business Days after negotiation, Party B shall not be obliged to
complete Equity Transfer and Capital Increase and may, at its own discretion, notify
Existing Shareholders and the Company in writing:






	 	6.4.1	 	To terminate the Agreement without taking any legal liability. In such case,
Party B shall have the right to require the Company to refund the Increased Registered
Capital paid by Party B and the Company and Existing Shareholders shall assist in
handling all necessary procedures for refunding such Increased Registered Capital
(including, but not limited to, presenting the seal of the Company’s legal
representative, signing all necessary documents and so on). After the Company has
refunded the Increased Registered Capital, Party B shall cooperate with the Company and
Existing Shareholders in signing all relevant legal documents and completing all
necessary industrial and commercial procedures, and restoring the Company’s registered
capital and shareholders’ equity proportion to the original status when the Agreement
is signed; or




11









 






	 	6.4.2	 	To perform the Agreement prior to a later date provided that the Company and
Existing Shareholders can perform their respective unfinished obligations (including
fulfillment of relevant Conditions Precedent). Party B may: i) specify one or more
dates on which the Company and Existing Shareholders shall fulfill their unfinished
obligations; or ii) exempt the Company and Existing Shareholders from part of
unfinished obligations, and specify a deadline prior to which the remaining unfinished
obligations shall be performed; or iii) exempt the Company and Existing Shareholders
from all their unfinished obligations; or
	 
	 	6.4.3	 	To extend the performance of the Agreement to another date that may be
specified in the notice. In such case, if the Company or Existing Shareholders still
fail to perform their obligations by such a later date, Party B may choose to apply the
provisions of Article 6.4 hereof.






	6.5	 	All the parties agree that Party B shall pay the balance of Capital Increase Amount
minus Increased Registered Capital paid, namely, RMB six million one hundred and forty-seven
thousand three hundred and seventy-seven point seventy (RMB6,147,377.70) (“Remaining Capital
Increase Amount”) to the RMB account designated by the Company in writing within ten (10)
Business Days after the Company completes the procedures for the change of industrial and
commercial registration concerning Equity Transfer and Capital Increase (subject to the date
when the administration for industry and commerce issues a new business license) or after
the Parties as mentioned in Article 6.3 make a written confirmation that all Conditions
Precedent have been fulfilled, whichever is later. The Company shall issue a written letter
of acknowledgement to Party B within two (2) Business Days after receiving the aforesaid
amount, confirming its receipt. Both the Company and Existing Shareholders agree to use,
according to Party B’s written instruction, the Capital Increase Amount to repay the Debts
Repayable as mentioned in Article 3.2 hereof and require relevant creditors to issue
receipts and confirm that the Company shall not have any Debts Repayable to them. Neither
the Company nor Existing Shareholders may use the Capital Increase Amount in any way, except
with Party B’s written consent. If Party B finds that Existing Shareholders and the Company
are in breach of the provisions of the Agreement in the use of Capital Increase Amount,
Party B may issue a written notice to them at its own discretion:






	 	(i)	 	To stop performing the Agreement until Existing Shareholders and the Company
correct their defaulting acts; or
	 
	 	(ii)	 	To terminate the Agreement without taking any legal liability and require the
Company to refund the Capital Increase Amount paid by Party B, if any, and to pay the
penalty equal to the Capital Increase Amount paid, if any. In such case, the Company
and Existing Shareholders shall assist in handling all necessary procedures for
refunding such Capital Increase Amount paid (including, but not limited to, presenting
the seal of the Company’s legal representative, signing all necessary documents and so
on). After the Company has refunded such Capital Increase Amount and paid the penalty,
Party B shall cooperate with the Company and Existing Shareholders in signing all
relevant legal documents and completing all necessary industrial and commercial
procedures and restoring the Company’s registered capital and shareholders’ equity
proportion to the original status when the Agreement is signed






	6.6	 	The Company and Existing Shareholders shall, after settling all Debts Repayable
according to the Agreement, issue a written notice to Party B and provide relevant
certification documents. Party B shall make a written confirmation within three (3) Business
Days after receiving such written notice. Within three (3) Business Days after Party B
confirms in writing, Party A shall:




12









 












	 	(i)	 	Pay in U.S. dollars the balance of 70% of Investment Amount minus the Capital
Increase Amount, namely, the amount equivalent to RMB seven hundred and thirty-six
thousand six hundred and eighty-two point forty (RMB736,682.40), to the Offshore
Account designated by Party C in writing; Party C shall issue a written letter of
acknowledgement to Party B within two (2) Business Days after receiving such amount,
confirming its receipt; and
	 
	 	(ii)	 	Pay in U.S. dollars the balance of 30% of Investment Amount minus the Onshore
Conversion Price, namely, the amount equivalent to RMB one million four hundred and
eighteen thousand eight hundred and eighty-two point ninety (RMB1,418,882.90), to the
Offshore Co-Managed Account.






	6.7	 	If within three (3) months after the Completion Date of Equity Transfer and Capital
Increase, a) Party B finds that the Company has not any non-disclosed debt which exists
prior to the Completion Date of Equity Transfer and Capital Increase; b) there is not any
false or misleading information in any representation or warranty made by Party C and the
Company; c) there is not any event which may have materially adverse impacts on the
Transferred Equity and the Company’s operation activities, within ten (10) Business Days
from the expiry date of the three-month period as mentioned in this Article,






	 	(i)	 	Party A shall pay all amounts in the Offshore Co-Managed Account to the
Offshore Account designated by Party C in writing, and Party C shall issue a written
letter of acknowledgement to Party A within two (2) Business Days after receiving such
amount, confirming its receipt; and
	 
	 	(ii)	 	Party B shall pay the Onshore Conversion Price to the Onshore Account
designated by Party C in writing, and Party C shall issue a written letter of
acknowledgement to Party B within two (2) Business Days after receiving such amount,
confirming its receipt.






	6.8	 	All the parties agree that as to offshore payment arrangement as specified in Article 6
hereof, Party C shall be responsible for handling all necessary procedures for government
examination, approval, registration and filing, as well as Tax declaration. Party B shall
have the right to withhold and remit all applicable Taxes from relevant payments.
	 
	7.	 	Warranties
	 
	7.1	 	Existing Shareholders and the Company warrant that:






	 	7.1.1	 	Existing Shareholders and the Company make representations and warranties to
Party B according to the terms of Appendix 2 hereto;
	 
	 	7.1.2	 	Existing Shareholders and the Company acknowledge that Party B’s execution of
the Agreement relies on these undertakings as mentioned in Article 5. Each undertaking
or warranty shall be deemed independent from others and (unless otherwise expressed)
shall not be limited or restricted by any other warranties or undertakings or any other
provisions of the Agreement;
	 
	 	7.1.3	 	Warranties shall be deemed to be made on the basis of the existing facts and
circumstances on the date of the Agreement and prior to the Completion Date of Equity
Transfer and Capital Increase;






13











 






	 	7.1.4	 	Existing Shareholders undertake to notify Party B in writing immediately when
they are aware of any fact or event which may cause any warranty to be untrue or
incorrect or misleading in any aspect; and
	 
	 	7.1.5	 	Existing Shareholders agree to assume all economic and legal liabilities and
compensate Party B for any direct or indirect losses in case of breach of their
undertakings or Warranties hereunder.






	7.2	 	PAMC Group warrants that:






	 	7.2.1	 	Party A and Party B are entities duly incorporated and existing in accordance
with the laws of the places where they are registered; Party A and Party B are related
parties in the interests and the parties acting in concert in the performance of the
Agreement; Both the parties shall share equally the liabilities for payment and others
as mentioned herein and guarantee mutually for the liabilities assumed by them.
	 
	 	7.2.2	 	Execution and performance of the Agreement by Party A and Party B:






	 	(i)	 	Are within their respective power and business scope;
	 
	 	(ii)	 	Necessary activities and procedures have been taken,
including, but not limited to, authorization, examination, approval, internal
decisions and any other approval have been obtained in accordance with the
law; and
	 
	 	(iii)	 	Shall not violate any law or contract binding upon them.






	 	7.2.3	 	The Agreement shall, once executed, constitute legal and effective obligations
binding upon Party A and Party B;
	 
	 	7.2.4	 	Party A and Party B make undertakings to Party C that they shall abide by all
provisions of the Agreement;
	 
	 	7.2.5	 	Party A and Party B shall assume all economic and legal liabilities and
compensate Party C for the losses as a result of their violation of the aforesaid
Warranties and undertakings;
	 
	 	7.2.6	 	If Party A and Party B fail to pay Party C the Total Conversion Price
according to Article 6 hereof (except for non-payment under the circumstances as
specified in Article 6 hereof), Party C may issue a written notice to Part A and Party
B,






	 	(i)	 	Requiring Party A and/or Party B to perform its/their
obligations continually; or
	 
	 	(ii)	 	Terminating the Agreement, in which case, Party B shall be
entitled to require the Company to refund the Capital Increase Amount paid by
Party B, and the Company and Existing Shareholders shall assist in handling
all necessary procedures for refunding such Capital Increase Amount paid.
After the Company has refunded such Capital Increase Amount paid, Party B
shall cooperate with the Company and Existing Shareholders in signing all
relevant legal documents and completing all necessary industrial and
commercial




14









 






	 	 	 	procedures and restoring the Company’s registered capital and shareholders’
equity proportion to the original status when the Agreement is signed.





8. Confidentiality





	8.1	 	Without prior written consents of the other parties (such consent may not be withheld
without any justified reason), any party may not make any public statement concerning the
Agreement or any other or subsequent document executed concerning the Equity Transfer and
Capital Increase as mentioned herein.
	 
	8.2	 	Unless otherwise stipulated in Articles 8.1 and 8.3 hereof, the Parties shall deem any
information received or acquired as a result of execution of the Agreement, which is in
connection with the following contents, as confidential information and may not disclose or
use:






	 	8.2.1	 	The provisions of the Agreement and the provisions of any agreement made on the
basis of the Agreement;
	 
	 	8.2.2	 	Negotiations in connection with the Agreement (and other relevant agreements or
legal documents); and
	 
	 	8.2.3	 	Business, financial affairs or other issues (including future plans and
objectives) relating to any party hereto.






	8.3	 	Under any of the following circumstances, restricted disclosure or use of the
information as specified in Article 8.2 hereof shall not apply:






	 	8.3.1	 	The information to be disclosed or used as required by laws, or rules or
regulations of any regulatory organization or any stock exchange;
	 
	 	8.3.2	 	The information required to be disclosed or used in order to empower the Parties
with all interests under the Agreement;
	 
	 	8.3.3	 	The information required to be disclosed or used by any legal proceedings
resulting from the Agreement or any other agreement which is made according to the
Agreement; or information concerning Taxation issues of the disclosing party to be
reasonably disclosed to the Tax agency;
	 
	 	8.3.4	 	The information to be disclosed to one party’s professional advisors, provided
that the party shall require the professional advisors to abide by the provisions of
Article 8.2 hereof on protection of such information as if they were the parties to the
Agreement;
	 
	 	8.3.5	 	The information already in public domain other than as a result of breach of the
Agreement;
	 
	 	8.3.6	 	The information that other parties have obtained a prior written approval to
disclose or use; and




15









 












	 	8.3.7	 	The information developed by one party independently after completion of the
Equity Transfer and Capital Increase.






	9.	 	Assignment






	 	 	Any party may not assign any of its rights and interests hereunder without the prior written
consent of the other parties.
	 
	10.	 	Termination and Rescission
	 
	 	 	Unless otherwise stipulated herein, if the Agreement is terminated or rescinded, the Parties
shall take necessary steps immediately to cause the funds in the Offshore Co-Managed Account
to be available for Party A’s use at its own discretion, and Capital Increase Amount and
Equity Transfer Amount paid by PAMC Group shall be refunded to PAMC Group.
	 
	11.	 	Governing Law and Dispute Settlement
	 
	11.1	 	Governing Law
	 
	 	 	The Agreement shall be governed by and interpreted in accordance with the laws of the
People’s Republic of China.
	 
	11.2	 	Arbitration






	 	11.2.1	 	Each party shall do its utmost to settle any and all disputes arising from or relating
to the Agreement through amiable negotiation. If a dispute cannot be settled in an
amiable way within sixty (60) days after one party notifies the other parties, such
dispute (including disputes over effectiveness or existence of the Agreement) shall be
submitted to China International Economic and Trade Arbitration Commission Shanghai
Sub-Commission for arbitration according to the prevailing arbitration rules.
	 
	 	11.2.2	 	Arbitral awards shall be final and binding upon the Parties and may be enforced
according to the relevant rules.
	 
	 	11.2.3	 	Arbitration fee shall be borne by the losing party/parties or the party/parties
specified by the arbitration tribunal. If one party deems it necessary to enforce
arbitral awards via any kind of Lawsuit, the breaching party/parties shall be responsible
for all reasonable expenses and costs, including, but not limited to, reasonable legal
fee and costs for any additional Lawsuit or arbitration arising from the enforcement of
arbitral awards by non-breaching party/parties.
	 
	 	11.2.4	 	Each and all Parties shall perform the Agreement continually in all aspects during
dispute settlement except for those in dispute.






	12.	 	Notice




16









 












	12.1	 	Any and all notices shall be written in Chinese and served to the following addresses
or fax numbers (as the case may be) by hand, by registered airmail or by fax:






	 	 	Pacific Asia Mode Cube Limited

Add.: 8/F, Tower B, International Plaza, No.19, Jianguomenwai Avenue, Beijing

Attn.: Ying Zhu

Tel: 010-58692980

Fax: 010-58692960
	 
	 	 	Redgate Media AD Co., Ltd.

Add.: 8/F, Tower B, International Plaza, No. 19, Jianguomenwai Avenue, Beijing

Attn.: Ying Zhu

Tel: 010-58692980

Fax: 010-58692960
	 
	 	 	Shanghai Yuqing Advertising Broadcasting Co., Ltd.

Add.: Room 3303, Junling Plaza, 500 Chengdu Road N., Shanghai

Attn.: Gang Zheng

Tel: 021-63618021

Fax: 021-63606195
	 
	 	 	Weidong Zhu

Add.: 2/F, 1A Tower, No. 345 Lane, Xinhua Road, Shanghai

Tel: 13901729948

Fax: 021-52540919


Shanghai Hongmen Advertising Co., Ltd.

Add.: 2/F, 1A Tower, No. 345 Lane, Xinhua Road, Shanghai

Attn.: Yun Yang

Tel: 021-62810161

Fax: 021-52540919






	12.2	 	As to any notice, correspondence or document made or sent under Article 12 hereof,






	 	12.2.1	 	It shall be deemed as served on a Business Day of the destination when it is delivered
by hand with a written receipt at or prior to 17:00 on the same day, or at 9:00 of the
next Business Day of the destination when it is delivered later than 17:00 on a Business
Day or at any time on a non-Business Day; or
	 
	 	12.2.2	 	It shall be deemed as served on the fifth (5th) Business Day after mailing
if it is sent within the territory of China by postage prepaid EMS service; or




17









 












	 	12.2.3	 	It shall be deemed as served on the tenth (10th) Business Day after mailing
if it is sent to or from any place out of the territory of China by postage prepaid
international courier service; or
	 
	 	12.2.4	 	It shall be deemed as served upon transmission by fax, with a transmission report which
confirms successful transmission and an oral acknowledgement (the addressee shall keep
the record which bears his/her signature), or at 9:00 of the next Business Day of the
destination when it is delivered later than 17:00 on a Business Day or at any time on a
non-Business Day.






	12.3	 	During the term of the Agreement, each party has the right to change its contact
address or fax number with a written notice to other parties hereto.
	 
	13.	 	Expenses
	 
	 	 	Each party shall be responsible for the costs and expenses in connection with its
negotiation, preparation and performance of the Agreement.
	 
	14.	 	Entire Agreement
	 
	14.1	 	The Agreement, as well as all agreements and/or documents as mentioned or expressly included
herein, shall be the entire agreement among the Parties concerning the subject matter hereof
and supersede all prior written or oral agreements, contracts, understandings and
correspondences among the Parties concerning the subject matter.
	 
	14.2	 	For the purpose of the Agreement, the Parties shall take all necessary steps to apply to
relevant governmental authorities for approval of the Equity Transfer and Capital Increase
hereunder and to complete relevant procedures for Industrial and Commercial Registration,
including, but not limited to, execution of all necessary documents according to the
requirements of the Administration for Industry and Commerce (including the Equity Transfer
and Capital Increase Agreement as mentioned in Appendix 4 hereto). If it is necessary to
execute other agreements or documents in order to obtain the government approvals or to
complete alteration procedures for implementing the Equity Transfer under the Agreement, the
contents of such agreements or documents shall be consistent with those of the Agreement;
otherwise, the Agreement shall prevail.
	 
	15.	 	Severability
	 
	 	 	If any of the provisions of the Agreement is held invalid or unenforceable, such provision
shall not be implemented to the extent of invalidity or unenforceability and shall be deemed
excluded from the Agreement; however, such invalidity or unenforceability shall not
invalidate the remaining provisions hereof. The Parties shall do their reasonable utmost to
supersede such invalid and unenforceable provisions with effective and enforceable
provisions, and the validity of the superseding provisions shall be the same with original
validity of such invalid and unenforceable provisions as far as possible.
	 
	16.	 	Waiver




18









 












	 	 	Any party’s failure to exercise, or delay in exercise of, any right or remedy hereunder
shall not be deemed a waiver or alteration of such right or remedy. Any party’s rights and
remedies hereunder or according to the Agreement shall be accumulative.
	 
	17.	 	Liability for Breach of Contract
	 
	 	 	Unless otherwise stipulated herein, in case of breach of the Agreement, the breaching
party/parties shall compensate losses incurred by non-breaching party/parties arising
therefrom (if the Agreement is terminated or rescinded, the breaching party/parties shall
reimburse the costs and expenses incurred to the non-breaching party/parties as mentioned in
Article 13 hereof).




The Agreement is written in Chinese and has been signed in Beijing, China by duly authorized
representatives of the Parties. The Agreement is made in eight (8) copies, one (1) for each party
and the remaining kept by the Company for filing.






19









 








Execution Page




	 	 	 	 	 
	Pacific Asia Mode Cube Limited [company seal]

 	 	 
	Signature:
 	/s/ Peter Bush Brack
 	 	 
	 	Name:  	BRACK, Peter Bush 	 
	 	Title:  	CEO 	 	 
	 
	Redgate Media AD Co., Ltd. [company seal]

 	 	 
	Signature:
 	/s/ Yue Jin
 	 	 
	 	Name:  	Yue Jin 	 	 
	 	Title:  	Chairman of the Board 	 	 
	 
	Shanghai Yuqing Advertising Broadcasting Co., Ltd. [company seal]

 	 	 
	Signature:
 	/s/ Cuiping Xu
 	 	 
	 	Name:  	Cuiping Xu 	 	 
	 	Title:  	Chairman of the Board 	 	 
	 
	Weidong Zhu

 	 	 
	Signature:
 	/s/ Weidong Zhu
 	 	 
	 	 	 
	 	 	 
	 
	Shanghai Hongmen Advertising Co., Ltd. [company seal]

 	 	 
	Signature:
 	/s/ Cuiping Xu
 	 	 
	 	Name:  	Cuiping Xu 	 	 
	 	Title:  	Legal Representative 	 	 



 









 






	 	 	 	 	 



Appendix 1

Balance Sheet




Appendix 1





 









 








2007 Shanghai Monthly Accounting Statements of Commercial Enterprises




Balance Sheet




	 	 	 	 	 
	Competent Authority:

	 	 	 	Kuai Shang Di Yue Sheet 01
	Name of Company: Shanghai Hongmen Advertising Co., Ltd.

	 	August 31st, 2007
	 	Unit: RMB Yuan






	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Opening Balance	 	 	Closing Balance	 
	Assets	 	Line No.	 	 	of Year	 	 	of Year	 
	Current Assets:
	 	 	 	 	 	 	 	 	 	 	 	 
	Monetary Fund
	 	 	1	 	 	 	241,772.81	 	 	 	182,670.47	 
	Short-term Investment
	 	 	2	 	 	 	 	 	 	 	 	 
	Accounts Receivable
	 	 	3	 	 	 	43,800.00	 	 	 	-175,100.00	 
	Manufacturing Accounts Receivable
	 	 	4	 	 	 	 	 	 	 	 	 
	Less: Bad Debts Reserves
	 	 	5	 	 	 	 	 	 	 	 	 
	Net Accounts Receivable
	 	 	6	 	 	 	43,800.00	 	 	 	-175,100.00	 
	Prepayment
	 	 	7	 	 	 	 	 	 	 	 	 
	Subsidy Payments Receivable
	 	 	8	 	 	 	 	 	 	 	 	 
	Futures Margin
	 	 	9	 	 	 	 	 	 	 	 	 
	Other Receivables
	 	 	10	 	 	 	 	 	 	 	 	 
	Inventories
	 	 	11	 	 	 	 	 	 	 	 	 
	Including: State Order Grain and Oil (Grain
Enterprises)
	 	 	12	 	 	 	 	 	 	 	 	 
	Purchased Grain at Protective Price
	 	 	13	 	 	 	 	 	 	 	 	 
	Grain and Oil Reserves
	 	 	14	 	 	 	 	 	 	 	 	 
	Other Business Expenses to be Transferred
	 	 	15	 	 	 	 	 	 	 	 	 
	Deferred Expenses
	 	 	16	 	 	 	519,020.79	 	 	 	291,297.35	 
	Current Assets Losses in Suspense
	 	 	17	 	 	 	 	 	 	 	 	 
	Long-term Bonds Investment due within a Year
	 	 	18	 	 	 	 	 	 	 	 	 
	Other Current Assets
	 	 	19	 	 	 	 	 	 	 	 	 
	Total Current Assets
	 	 	20	 	 	 	804,593.60	 	 	 	298,867.82	 
	Long-term Investment:
	 	 	 	 	 	 	 	 	 	 	 	 
	Long-term Investment:
	 	 	21	 	 	 	 	 	 	 	 	 
	Fixed Assets:
	 	 	 	 	 	 	 	 	 	 	 	 
	Original Value of Fixed Assets
	 	 	24	 	 	 	4,391,800.00	 	 	 	5,358,430.00	 
	Less: Accumulated Depreciation
	 	 	25	 	 	 	213,634.21	 	 	 	596,285.38	 
	Net Value of Fixed Assets
	 	 	26	 	 	 	4,178,165.79	 	 	 	4,762,144.62	 
	Liquidation of fixed assets
	 	 	27	 	 	 	 	 	 	 	 	 
	Construction in Process
	 	 	28	 	 	 	 	 	 	 	 	 
	Net Losses of Fixed Assets in Suspense
	 	 	29	 	 	 	 	 	 	 	 	 
	Total Fixed Assets
	 	 	35	 	 	 	4,178,165.79	 	 	 	4,762,144.62	 
	Intangible Assets and Deferred Assets:
	 	 	 	 	 	 	 	 	 	 	 	 
	Intangible Assets
	 	 	36	 	 	 	 	 	 	 	 	 
	Deferred Assets
	 	 	37	 	 	 	 	 	 	 	 	 
	Total Intangible Assets and Deferred Assets
	 	 	40	 	 	 	 	 	 	 	 	 
	Other long-term Assets:
	 	 	 	 	 	 	 	 	 	 	 	 
	Long-term Deferred Expenses
	 	 	41	 	 	 	 	 	 	 	 	 
	Deferred Tax:
	 	 	 	 	 	 	 	 	 	 	 	 
	Deferred Tax Debits
	 	 	42	 	 	 	 	 	 	 	 	 
	Total Assets
	 	 	45	 	 	 	4,982,759.39	 	 	 	5,061,012.44	 






Appendix 1




 









 








	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	Opening	 	 	Closing Balance of	 
	Liabilities and Owner’s Equity	 	Line No.	 	 	Balance of Year	 	 	Year	 
	Current Liabilities:
	 	 	 	 	 	 	 	 	 	 	 	 
	Short-term Loans
	 	 	46	 	 	 	 	 	 	 	 	 
	Including: Order Price Grain Loans (Grain Enterprises)
	 	 	47	 	 	 	 	 	 	 	 	 
	Protective Price Grain Loans
	 	 	48	 	 	 	 	 	 	 	 	 
	Notes Payable
	 	 	49	 	 	 	 	 	 	 	 	 
	Accounts Payable
	 	 	50	 	 	 	136,861.00	 	 	 	42,275.00	 
	Accounts Received in Advance
	 	 	51	 	 	 	 	 	 	 	 	 
	Other Payables
	 	 	52	 	 	 	4,551,958.89	 	 	 	4,406,851.89	 
	Accrued Payroll
	 	 	53	 	 	 	 	 	 	 	 	 
	Welfare Benefits Payable
	 	 	54	 	 	 	 	 	 	 	 	 
	Taxes Payable
	 	 	55	 	 	 	1,777.50	 	 	 	-2,274.00	 
	Profits Payable
	 	 	56	 	 	 	 	 	 	 	 	 
	Other Expenses Payables
	 	 	57	 	 	 	1,201.50	 	 	 	12,978.10	 
	Accrued Expenses
	 	 	58	 	 	 	 	 	 	 	 	 
	Long-term Liabilities due within a Year
	 	 	59	 	 	 	 	 	 	 	 	 
	Other Current Liabilities
	 	 	60	 	 	 	 	 	 	 	 	 
	Total Current Liabilities
	 	 	65	 	 	 	4,691,798.89	 	 	 	4,459,830.99	 
	Long-term Liabilities:
	 	 	 	 	 	 	 	 	 	 	 	 
	Long-term Loans
	 	 	66	 	 	 	 	 	 	 	 	 
	Including: Grain and Oil Loans (Grain Enterprises)
	 	 	67	 	 	 	 	 	 	 	 	 
	Including: State Special Grain and Oil Reserves Loans
	 	 	68	 	 	 	 	 	 	 	 	 
	Bonds Payable
	 	 	69	 	 	 	 	 	 	 	 	 
	Long-term Payables
	 	 	70	 	 	 	 	 	 	 	 	 
	Other long-term Loans
	 	 	71	 	 	 	 	 	 	 	 	 
	Including: Housing Revolving Funds
	 	 	72	 	 	 	 	 	 	 	 	 
	Total long-term Liabilities
	 	 	76	 	 	 	 	 	 	 	 	 
	Deferred Tax Credits:
	 	 	 	 	 	 	 	 	 	 	 	 
	Deferred Tax Credits
	 	 	77	 	 	 	 	 	 	 	 	 
	Total Liabilities
	 	 	80	 	 	 	4,691,798.89	 	 	 	4,459,830.99	 
	Owner’s Equity:
	 	 	 	 	 	 	 	 	 	 	 	 
	Paid-up Capital
	 	 	81	 	 	 	3,000,000.00	 	 	 	5,200,000.00	 
	Capital Reserves
	 	 	82	 	 	 	1,520,000.00	 	 	 	1,520,000.00	 
	Surplus Reserves
	 	 	83	 	 	 	 	 	 	 	 	 
	Including: Public Welfare Funds
	 	 	84	 	 	 	 	 	 	 	 	 
	Undistributed Profits
	 	 	85	 	 	 	-4,229,039.50	 	 	 	-6,118,818.55	 
	Current Year Profits
	 	 	 	 	 	 	 	 	 	 	 	 
	Total Owner’s Equity
	 	 	88	 	 	 	290,960.50	 	 	 	601,181.45	 
	Total Liabilities and Owner’s Equity
	 	 	90	 	 	 	4,982,759.39	 	 	 	5,061,012.44	 






Supplementary Information:



1. Commercial Acceptance Bill Discounted: RMB ;



2. Original value of fixed assets under financing lease included in the historical
value of fixed assets: RMB ;



3. Closing balance of entrusted loans: RMB ;



4. Closing balance of commodity stocks



5. Closing balance of commodity price-cutting reserves: RMB.




	 	 	 	 	 	 	 
	Enterprise Administrative Principal:

	 	Chief Accountant:
	 	Accounting Manager:
	 	Prepared by:






Appendix 1




 









 








Shanghai Monthly Accounting Statements of Commercial Enterprises




Statement of Main Taxes Payable




					
	Competent Authority:
	 	 	 	Kuai Shang Di Yue Sheet 01 Attached List
	Name of Company: Shanghai Hongmen Advertising Co., Ltd.
	 	September, 2007
	 	Monetary Unit: RMB Yuan






	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Current Year	 
	 	 	Line	 	 	Amount of	 	 	Cumulative	 
	Item	 	No.	 	 	Current Month	 	 	Amount	 
	I. Advertising Revenue
	 	 	 	 	 	 	 	 	 	 	 	 
	1. Advertising Sales
	 	 	 	 	 	 	 	 	 	 	 	 
	(1) Amount not deducted at the beginning of the period
(presented by “-”)
	 	 	1	 	 	 	 	 	 	 	 	 
	(2) Output VAT
	 	 	2	 	 	 	 	 	 	 	 	 
	 
	 	 	3	 	 	 	 	 	 	 	 	 
	 
	 	 	5	 	 	 	 	 	 	 	 	 
	(3) Input VAT
	 	 	6	 	 	 	 	 	 	 	 	 
	 
	 	 	7	 	 	 	 	 	 	 	 	 
	 
	 	 	8	 	 	 	 	 	 	 	 	 
	 
	 	 	9	 	 	 	 	 	 	 	 	 
	 
	 	 	10	 	 	 	 	 	 	 	 	 
	(4) Amount not deducted at the end of the period
(presented by “-”)
	 	 	11	 	 	 	 	 	 	 	 	 
	2. VAT Payable
	 	 	 	 	 	 	 	 	 	 	 	 
	(1) Amount unpaid at the beginning of the period
	 	 	12	 	 	 	 	 	 	 	 	 
	(2) Transfer-in amount of current period
	 	 	13	 	 	 	 	 	 	 	 	 
	(3) Amount paid of current period
	 	 	14	 	 	 	 	 	 	 	 	 
	(4) Amount unpaid at the end of the period
	 	 	15	 	 	 	 	 	 	 	 	 
	II. Business Tax:
	 	 	 	 	 	 	 	 	 	 	 	 
	1. Amount unpaid at the beginning of the period
	 	 	16	 	 	 	 	 	 	 	 	 
	2. Amount payable of current period
	 	 	17	 	 	 	 	 	 	 	 	 
	3. Amount paid of current period
	 	 	18	 	 	 	 	 	 	 	 	 
	4. Amount unpaid at the end of the period
	 	 	19	 	 	 	 	 	 	 	 	 
	III. Consumption Tax:
	 	 	 	 	 	 	 	 	 	 	 	 
	1. Amount unpaid at the beginning of the period
	 	 	20	 	 	 	 	 	 	 	 	 
	2. Amount payable of current period
	 	 	21	 	 	 	 	 	 	 	 	 
	3. Amount paid of current period
	 	 	22	 	 	 	 	 	 	 	 	 
	4. Amount unpaid at the end of the period
	 	 	23	 	 	 	 	 	 	 	 	 
	IV. Urban Maintenance and Construction Tax
	 	 	 	 	 	 	 	 	 	 	 	 
	1. Amount unpaid at the beginning of the period
	 	 	24	 	 	 	 	 	 	 	 	 
	2. Amount payable of current period
	 	 	25	 	 	 	 	 	 	 	 	 
	3. Amount paid of current period
	 	 	26	 	 	 	 	 	 	 	 	 
	4. Amount unpaid at the end of the period
	 	 	27	 	 	 	 	 	 	 	 	 
	V. Income Tax:
	 	 	 	 	 	 	 	 	 	 	 	 
	1. Amount unpaid at the beginning of the period
	 	 	28	 	 	 	 	 	 	 	 	 
	2. Amount payable of current period
	 	 	29	 	 	 	 	 	 	 	 	 
	3. Amount paid of current period
	 	 	30	 	 	 	 	 	 	 	 	 
	4. Amount unpaid at the end of the period
	 	 	31	 	 	 	 	 	 	 	 	 
	Enterprise Administrative Principal:
	 	 	 	 	 	 	 	 	 	 	 	 






Appendix 1




 









 








Shanghai Monthly Accounting Statements of Commercial Enterprises




Income Statement




Kuai Shang Di Yue Sheet 02




Monetary Unit: RMB Yuan




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Current Year	 
	 	 	Line	 	 	Amount of	 	 	Cumulative	 
	Item	 	No.	 	 	Current Month	 	 	Amount	 
	I. Commodity Sales Revenue
	 	 	1	 	 	 	 	 	 	 	739,050.00	 
	Including: Sales Revenue from Collecting and Storage Business of Grain and Oil
	 	 	2	 	 	 	 	 	 	 	 	 
	Less: Sales Discount and Allowance
	 	 	3	 	 	 	 	 	 	 	 	 
	Net Revenue from Commodity Sales
	 	 	4	 	 	 	 	 	 	 	 	 
	Less: Cost of Commodity Sales
	 	 	5	 	 	 	 	 	 	 	 	 
	Including: Costs of Sales from Collecting and Storage Business of Grain and Oil
	 	 	6	 	 	 	 	 	 	 	 	 
	Operating Expenses
	 	 	7	 	 	 	113,641.10	 	 	 	1,223,855.84	 
	Including: Operating Costs from Collecting and Storage Business of Grain and Oil
	 	 	8	 	 	 	 	 	 	 	 	 
	Tax and Extra Charges on Commodity Sales
	 	 	9	 	 	 	 	 	 	 	68,731.66	 
	 
	 	 	10	 	 	 	 	 	 	 	 	 
	II. Profits on Commodity Sales
	 	 	11	 	 	 	-113,641.10	 	 	 	-553,537.50	 
	Add: Income from purchase and sales commission
	 	 	12	 	 	 	 	 	 	 	 	 
	 
	 	 	13	 	 	 	 	 	 	 	 	 
	III. Main Operating Profits
	 	 	14	 	 	 	-113,641.10	 	 	 	-553,537.50	 
	Add: Other Business Profits
	 	 	15	 	 	 	 	 	 	 	 	 
	 
	 	 	16	 	 	 	 	 	 	 	 	 
	Less: Administrative Expenses
	 	 	17	 	 	 	202,483.84	 	 	 	1,315,779.23	 
	Including: Administrative Expenses from Collecting and Storage Business of Grain and Oil
	 	 	18	 	 	 	 	 	 	 	 	 
	Financial Expenses
	 	 	19	 	 	 	 	 	 	 	 	 
	Including: Financial Expenses from Collecting and Storage Business of Grain and Oil
	 	 	20	 	 	 	7.00	 	 	 	-3,926.33	 
	Exchange Losses
	 	 	21	 	 	 	 	 	 	 	 	 
	 
	 	 	22	 	 	 	 	 	 	 	 	 
	 
	 	 	23	 	 	 	 	 	 	 	 	 
	IV. Operating Profits
	 	 	24	 	 	 	-316,131.94	 	 	 	-1,865,390.40	 
	Add: Investment Proceeds
	 	 	25	 	 	 	 	 	 	 	 	 
	Futures Return
	 	 	26	 	 	 	 	 	 	 	 	 
	Subsidy Income
	 	 	27	 	 	 	 	 	 	 	 	 
	Non-operating Income
	 	 	28	 	 	 	 	 	 	 	 	 
	Less: Non-operating Expenses
	 	 	29	 	 	 	 	 	 	 	 	 
	Add: Profit and Loss Adjustment of Former Years
	 	 	30	 	 	 	 	 	 	 	 	 
	 
	 	 	31	 	 	 	 	 	 	 	 	 
	 
	 	 	32	 	 	 	 	 	 	 	 	 
	V. Total Profits
	 	 	33	 	 	 	-316,131.94	 	 	 	-1,865,390.40	 
	Including: Total Profits from Collecting and Storage Business of Grain and Oil
	 	 	34	 	 	 	 	 	 	 	 	 
	Less: Income Tax
	 	 	35	 	 	 	 	 	 	 	24,388.65	 
	 
	 	 	36	 	 	 	 	 	 	 	 	 
	 
	 	 	37	 	 	 	 	 	 	 	 	 
	VI. Net Profits
	 	 	38	 	 	 	-316,131.94	 	 	 	-1,889,779.05	 
	Accounting Executive:
	 	 	 	 	 	 	 	 	 	 	 	 






Appendix 1





 











 





Appendix 2

Warranty





	1	 	Power and Capability of Existing Shareholders and Company
	 
	1.1	 	Establishment and Power to Execute the Agreement
	 
	 	 	Existing Shareholders and the Company have legal rights, all powers and authorizations to
execute and perform the Agreement. Existing Shareholders will execute any other documents
according to or in connection with the Agreement. Once executed, such documents shall become
an effective and binding obligation of Existing Shareholders and the Company according to
the provisions thereof.
	 
	1.2	 	Non-conflict
	 
	 	 	Execution of the Agreement, performance of the obligations hereunder, execution of any other
document according to or in connection with the Agreement or performance of the obligations
under such documents by Existing Shareholders and the Company will not violate any
agreement, permit or document, or empower any third party to terminate or modify agreements,
permits or other documents, or violate any judgment or ruling issued or made by any court or
governmental authority.
	 
	1.3	 	Company’s Registered Capital






	 	1.3.1	 	The Company’s registered capital has been paid up in full amount.
	 
	 	1.3.2	 	As a legal holder of the Transferred Equity, Party C’s acquisition of the
Transferred Equity will not result in any dispute. Any third person, except for Party
C, shall not have any right or interest in connection with the Transferred Equity.
	 
	 	1.3.3	 	Party C has the right to sell and transfer all rights in connection with the
Transferred Equity to Party B without the consent of any third person (except for
government approval).
	 
	 	1.3.4	 	The Company has the right to accept investments of Party B without the consent
of any third person (except for government approval).






	1.4	 	Company’s Business






	 	1.4.1	 	Any and all activities conducted by the Company in connection with the
Mosquito-Control Light Box Project, such as application, implementation and operation,
comply with all pertinent laws, regulations and administrative documents (including,
but not limited to, the Administrative Regulations on Outdoor Advertisements, No 25
Order of the State Administration for Industry and Commerce, effective as of July 1,
2006; the Measures of Shanghai Municipality for the Administration of Outdoor
Advertising Facilities, No. 43 Order of Shanghai People’s Government, effective as of
April 1, 2005; 





Appendix 2



 









 






	 	 	 	and Several Opinions of Shanghai Administration for Industry and
Commerce on
Implementing Registration Administration of Outdoor Advertisements, No. HGSG [2006]
178, effective as of July 28, 2006). The Company has obtained all necessary
government approvals and permits.






	 	1.4.2	 	The Company has installed at least 800 Mosquito-Control Light Boxes and
completed advertisement release in 800 light boxes, both of which have been approved by
relevant government authorities. Item 1.4.2 of the Disclosure Letter lists all
government approvals and permits (hereinafter referred to as “Approval Documents”),
including, but not limited to, the Letter on Consent to Set up Mosquito-Control Light
Boxes in Communities, Colleges, Universities and Other Areas in Shanghai issued on
January 4, 2005 by Shanghai Municipal City Appearance and Environmental Sanitation, No.
HRHF [2004]283; the Letter of Shanghai Decision on Approval of Administrative License
of City Appearance and Environmental Sanitation and the Planning Permit for
Construction Project (for Scattered Projects) which the Company obtains for all
completed Mosquito-Control Light Boxes; and the Registration Certificate of Outdoor
Advertisement obtained for all Mosquito-Control Light Boxes in which advertisements
have been released obtained by the Company concerning the Mosquito-Control Light Box
Project, and all Approval Documents are effective and issued for each respective
Mosquito-Control Light Box. According to the Approval Documents, the Company has the
right to continually install at least 1,200 Mosquito-Control Light Boxes and release
advertisements therein to complete the Mosquito-Control Light Box Project, for which
the Company need not apply for any other government approval. There is not any limit
imposed by any relevant government authority upon the time for completing the
Mosquito-Control Light Box Project.
	 
	 	1.4.3	 	The right to use positions which the Company has received concerning the
installed Mosquito-Control Light Boxes is legal and valid, and all advertisements
released are under legal and valid authorizations and have been approved by competent
authorities. Item 1.4.3 of the Disclosure Letter lists all contracts, agreements,
documents and other relevant instruments under which the Company obtains the rights to
use positions of and release advertisements in the light boxes. Such documents are
issued for each Mosquito-Control Light Box and are valid and enforceable according to
the provisions thereof. There is no inconsistency or conflict with the Approval
Documents.
	 
	 	1.4.4	 	The proportions of community service advertisements released in light boxes by
the Company to the whole advertisement area comply with any and all laws, regulations,
government decrees (including Approval Documents), permits, contracts and other similar
documents which are binding upon the Company, unless incompliance will not have any
adverse effect upon the Company and the Mosquito-Control Light Box Project.






	1.5	 	Options, etc.
	 
	 	 	No one has the right to require the Company to issue, sell or transfer any equities to it.
There is no Encumbrance or arrangement or obligation of Encumbrance or judicial preservation
measures on the Company’s equities, and there is no existing or potential legal dispute or
controversy on the Company’s equities.
	 
	1.6	 	Competitive Interests
	 
	 	 	Existing Shareholders or their respective related parties do not hold any direct or indirect
interests in any field that is or may be competitive with the businesses of the Company.





Appendix 2




 









 












	1.7	 	Investments, Joint Ventures and Affiliates
	 
	 	 	The Company has not invested in any other company, enterprise, partnership, joint venture or
other unincorporated organization, institute or firm, or established any branch,
representative office, business unit or any permanent office.
	 
	2	 	Accuracy and Sufficiency of Information Disclosed to Party B
	 
	 	 	The information included herein and other information rendered or provided by the Company
and Existing Shareholders to PAMC Group or any of its representatives, employees or
professional advisors in the negotiation of the Agreement or for the background check or
other investigations by Party B (or its representatives) prior to the date of the Agreement
was (at the time of provision) and are true, complete and accurate in all aspects, not
misleading. No facts, affairs or circumstances which may cause any of such information to
become untrue, incorrect or misleading have been disclosed to Party B. There is no fact,
affair or circumstance which might reasonably affect Party B’s intention for purchasing the
Transferred Equity and investing in the Company or which might reasonably affect the terms
and conditions on which Party B intends to purchase the Transferred Equity and invest in the
Company once such fact, affair or circumstance is disclosed.
	 
	3	 	Accounts and Records
	 
	3.1	 	Current Accounts
	 
	 	 	The Company has prepared Accounts in accordance with Chinese laws and accounting principles,
standards and practices generally adopted in China on the date of the Agreement in order to
truly and fairly reflect the Company’s assets, liabilities and operations up to the Balance
Sheet Date, the Company’s profits or losses during relevant periods, and the provision for
bad and doubtful debts made by the Company on the Balance Sheet Date according to accounting
practices.
	 
	3.2	 	Company’s Accounts
	 
	 	 	The Company’s Accounts truly and fairly reflect the Company’s assets, liabilities and
operations up to the Balance Sheet Date, the Company’s profits or losses during relevant
periods, and the provision for bad and doubtful debts made by the Company on the Balance
Sheet Date according to accounting practices.
	 
	3.2	 	Profit
	 
	 	 	Profits reflected in the Accounts up to the Balance Sheet Date and the profit trends
indicated in the Accounts will not be affected by extraordinary item expenditures, abnormal
or special transactions, transactions made out of regular business terms or any other factor
which are included in the Accounts, and will not thus cause all or any part of the Company’s
profits to be on the high or low side exceptionally, except for those disclosed reasonably
in the Accounts.





Appendix 2




 









 












	3.3	 	Loans and Debts
	 
	 	 	The Company has not any loan which has not been settled, or any kind of financing
which needs not to be indicated or reflected in the Accounts or any debt which has not
been repaid.
	 
	3.4	 	Changes since the Balance Sheet Date (except with Party B’s written consent)
	 
	 	 	For the purpose of the Company, since the Balance Sheet Date:






	 	3.4.1	 	There is not any material adverse change in the Company’s financial
conditions, transaction conditions, prospects or sales volume, or any existing or
potential fact, condition or circumstance which will or may result in such facts,
conditions or circumstances;
	 
	 	3.4.2	 	The Company engages in its businesses in a normal or usual way; there is not
any interruption or change in nature, business scope or manner of the Company’s
businesses; the Company conducts operation activities consecutively at all times;
	 
	 	3.4.3	 	The Company has not made any other transaction, or assumed or incurred any
liability (including contingent liability), or omitted any payment in the Accounts;
	 
	 	3.4.4	 	The Company’s profits will not be affected as a result of changes or
inconsistencies of accounting treatments, any extraordinary item expenditures, abnormal
or special transactions, transactions made out of regular business terms or any other
factor which causes the Company’s profits to be on the high or low side exceptionally;
	 
	 	3.4.5	 	There is not any material adverse impact upon the Company’s business resulting
from loss of any important clients or any abnormal factor which affects similar
business in the similar degree, and there is not any fact which may result in such kind
of impacts. For the purpose of this Article, the Company’s important client means a
client who contributes at least 5% of the Company’s sales volume prior to the Balance
Sheet Date;
	 
	 	3.4.6	 	Unless otherwise indicated in the Accounts, the Company did not declare, make
or pay any bonus or other distributions to its shareholders;
	 
	 	3.4.7	 	The Company did not reduce or agreed to reduce the registered capital;
	 
	 	3.4.8	 	The Company has not been refused for any insurance claim, or settled any claim
at the benefit of less than the amount claimed;
	 
	 	3.4.9	 	Compared with the information disclosed in the Accounts, there is not any
material adverse change in client relationship of the mentioned businesses, the
businesses or the Company’s financial conditions or current situation, prospects,
assets or debts, or any damage or loss of the mentioned businesses or assets of the
Company (whether insured or not);





Appendix 2




 









 






	 	3.4.10	 	The Company did not purchase, sell, assign or dispose otherwise any kind of assets,
or withdraw, waive or release or discount all or any part of its debts or claims,
except for those during the normal course of business;
	 
	 	3.4.11	 	The Company did not waive or release any right of important or substantial value;
	 
	 	3.4.12	 	The Company has not paid any capital expenditure exceeding RMB1 million in total, or
made any capital commitment exceeding RMB1 million in total;
	 
	 	3.4.13	 	The Company has not adopted any resolution which may reduce substantially net asset
value of the Company, or during affair handling or management taken any step which may
reduce substantially the net asset value of the Company; and
	 
	 	3.4.14	 	The Company need not assume any absolute or contingent liability or obligation,
except for existing liabilities and obligations under the contracts which are made in
the ordinary business course.






	4	 	Legal Affairs
	 
	4.1	 	Compliance with Laws
	 
	 	 	None of the Company’s past and present businesses and operations may violate any of Chinese
laws. The Company has not violated its memorandum of association. Since the date of
establishment, the Company has not been investigated or inquired by any court, arbitrator,
government agency or regulatory organ, has not any pending or anticipated ruling, arbitral
award, decision or judgment, and has not received any notice or other communications
(official or otherwise) issued by any court, arbitrator, government agency or regulatory
organ concerning any person’s Lawsuit against the Company for actual or potential violation
of and/or incompliance with any law or its memorandum of association.
	 
	4.2	 	Permits and Approval Documents
	 
	 	 	All permits have been obtained, are fully valid, and have been or are being observed. There
is not any pending or anticipated investigation or inquiry which may suspend, revoke, modify
or cancel any permit. No permit is violated and may in no case be suspended, revoked,
modified or cancelled (no matter whether it is due to execution or performance of the
Agreement or otherwise).
	 
	4.3	 	Lawsuits and Disputes






	 	4.3.1	 	The Company has not received any claim for damages or other demands.
	 
	 	4.3.2	 	The Company (or each person to whom the Company shall assume vicarious
liability for act or default) has not been involved in any claim, legal action, legal
proceedings, Lawsuit, charge, investigation, inquiry or arbitration (as a plaintiff, a
defendant or other party), or any kind of pending or threatened claim, legal action,
legal proceedings, Lawsuit, charge, investigation, inquiry or arbitration which is made
by the Company (or





Appendix 2




 









 






	 	 	 	each person to whom the Company shall assume vicarious liability for act or
default) against a third person, or by a third person against the Company (or each
person to whom the Company shall assume vicarious liability for act or default) or
the assets held by the Company.
	 
	 	4.3.3	 	The Company is not involved in any investigation, administrative sanction,
enforcement arrangement or other circumstance concerning claim, legal action, legal
proceedings, Lawsuit, charge, investigation, inquiry or arbitration which may result in
any dispute or dissension.
	 
	 	4.3.4	 	Disputes disclosed by the Company will not have material adverse effects upon
ordinary business of the Company.
	 
	 	4.3.5	 	In particular, but without prejudice to general principles of the aforesaid
clause, the Company is not involved in any dispute with its clients or employees about
the Company’s facilities or work, or about any loss, damage or injury arising
therefrom.
	 
	 	4.3.6	 	There is not any pending judgment, court order or arbitral award in connection
with the Company. Any of the Company’s businesses or assets is not subject to any
seizure, enforcement or procedure.






	4.4	 	Bankruptcy






	 	4.4.1	 	There is no ruling or the Company has not made applications, adopted
resolutions or held meetings concerning dissolution or bankruptcy (or shutout,
distribution of the Company’s assets to its creditors and/or shareholders or other
contributors, or any other procedure). The Company is not involved in any case or legal
proceedings on bankruptcy or reorganization, or in any event which may provide legal
basis for such cases or legal proceedings in accordance with Chinese laws.
	 
	 	4.4.2	 	The Company is not insolvent, or incapable of repaying its debts due.






	5	 	Transactions and Contract Arrangements
	 
	5.1	 	Capital Commitments
	 
	 	 	The Company did not and will not make any capital commitment.
	 
	5.2	 	Arrangements with Related Parties






	 	5.2.1	 	There is not any actual or contingent debt, or any arrangement for
compensation, warranty or guarantee, between the Company and Existing Shareholders or
any of related parties.





Appendix 2




 









 






	 	5.2.2	 	The Company is not and has not been a party to any contract, arrangement or
understanding: i) with Existing Shareholders or any of related parties; or ii) under
which Existing Shareholders or any of related parties enjoy direct or indirect
interests.
	 
	 	5.2.3	 	There is not any existing contract or arrangement between the Company and/or
Existing Shareholders and/or any of related parties.






	5.3	 	Arrangements with Related Parties






	 	5.3.1	 	There is not any actual or contingent debt, or any arrangement for
compensation, warranty or guarantee, between the Company and any of its present or
former employees, directors or consultants or any party relating to the aforesaid
persons.
	 
	 	5.3.2	 	The Company is not and has not been a party to any contract, arrangement or
understanding: i) with any of its present or former employees, directors or consultants
or any party relating to the aforesaid persons; or ii) under which any of its present
or former employees, directors or consultants or any party relating to the aforesaid
persons enjoy direct or indirect interests.
	 
	 	5.3.3	 	There is not any existing contract or arrangement between the Company and/or
any of its present or former employees, directors or consultants or any party relating
to the aforesaid persons.






	5.4	 	Consequences of Equity Transfer and Capital Increase
	 
	 	 	Execution and fulfilment of, and compliance with, the Agreement will not and cannot make the
Company lose any of its present rights or preferences, or make any person who conducts
normal transactions with or grants credit loans to the Company terminate transactions with
or credit loans to the Company on the same basis, or cause any of the Company’s directors or
senior officers to resign. Attitudes or behaviours of any of the Company’s clients,
employees and other persons will not be affected adversely thereby.
	 
	5.5	 	Contracts






	 	5.5.1	 	The Company is not, and has not been, a party to the following contracts,
arrangements or commitments which:






	 	(i)	 	are made out of ordinary business course;
	 
	 	(ii)	 	are not made on the basis of fair business transaction in all
aspects;
	 
	 	(iii)	 	are in a loss nature, that is to say, the Company is aware that
fulfilment of the contracts, arrangements or commitments will result in
losses;





Appendix 2




 









 






	 	(iv)	 	cannot be performed or fulfilled on schedule without any
difficulty except with enormous or special expenditures or efforts;
	 
	 	(v)	 	make the Company agree to be a party of any joint venture,
consortium, partnership or other unincorporated organization (except for
recognized industrial associations), unless those have been disclosed to Party
B in the Disclosure Letter.






	 	5.5.2	 	No contract, obligation, agreement or arrangement to which the Company is one
party or which is binding upon the Company will be invalid, illegal or unenforceable,
or is required to be registered or amended, in accordance with laws or regulations or
as a result of conflicts with laws or regulations.
	 
	 	5.5.3	 	No agreement with respect to the Company will be or has been terminated due to
changes in the Company’s control right or in members of the Board of Directors, and no
rights of any person concerned will be affected materially and adversely.






	5.6	 	Compliance with the Agreement
	 
	 	 	Item 5.6 of the Disclosure Letter lists all effective contracts or agreements to
which the Company is one party, covering the target price of equal to or more than
RMB500,000. All contracts to which the Company is one party and all kinds of agreements
with respect of installation of mosquito killer light-boxes, media lease, billboard
setup and advertising release are effective, binding and enforceable upon the parties
thereto, and the Company and other parties concerned have complied with the terms
thereof. The Company has no reason to rescind, avoid or waive any contract or such kind
of agreement. The Company has not received any notice concerning rescission or proposed
rescission of any such document. The Company did not delay in paying or fail to pay any
contract price due and payable.
	 
	 	 	In particular, but without prejudice to general principles of the aforesaid
clause, cooperative arrangements as specified in the cooperation agreement between the
Company and Shanghai Pest Control Corporation are exclusive and irrevocable, and any
provision (including areas of public interest advertisements in light boxes) thereof
which are inconsistent with the government approvals (including Approval Documents),
permits, contracts and other similar documents which are binding upon the Company will
not impair the validity of such cooperation agreement, or have any adverse impact upon
the Company.
	 
	5.7	 	Guarantee






	 	5.7.1	 	There is not any pending warranty, compensation, guarantee or comfort (whether
it is legally binding or not) made by or in favour of the Company.
	 
	 	5.7.2	 	Neither the Company nor its representative has offered, made or incurred any
loan, warranty, pledge, mortgage, lien, bond, Encumbrance or unusual debt, or granted
any loan to any of the Company’s directors or shareholders. Directors or other persons
have not made any warranty or guarantee for any of the Company’s finance or other
obligations.





Appendix 2




 









 












	6	 	Employees, etc.
	 
	6.1	 	Employments and Employment Term






	 	6.1.1	 	Each and all agreements and arrangements in connection with employment of the
Company’s directors and senior officers are made by the parties concerned on the basis
of fair business transaction, and the terms thereof are fair and reasonable in
comparison with recognized market practices in China.
	 
	 	6.1.2	 	The following contents are absence from the Company’s employment clauses,
consulting agreements or director appointment terms: changes in the Company’s control
right or shareholders (control right is to be specified in relevant documents, if any)
will empower such employees, consultants or directors to deem the aforesaid changes as
a default, or to receive any fund or any kind of interest, or to deem that they have
been dismissed by the Company or exempted from any obligation.
	 
	 	6.1.3	 	There is not any past or present, threatened or contingent dispute between the
Company and any kind of its employees. There is not any arrangement between the Company
and any trade union or organization on behalf of such employees.
	 
	 	6.1.4	 	There is not any circumstance which requires or may require the Company to pay
compensations as a result of any of its former employees, or to reemploy its former
employees or to recover their posts.






	6.2	 	Amounts Payable upon Termination of Employment Contract
	 
	 	 	Unless otherwise disclosed in the Accounts,






	 	6.2.1	 	The Company has not assumed and will not assume any liability for violation of
any employment or consulting contract with any of its employees or consultants,
including, but not limited to, redundancy payment, damages for illegal rescission of
any employment contract, and penalties for incompliance with rulings on post recovery
or reemployment of any employee; and
	 
	 	6.2.2	 	As for proposed termination or suspension of employment of any present or
former employee, or modifications to any employment contract concerning such present or
former employee, or modifications to any consulting agreement concerning any present or
former consultant, the Company did not pay or agreed to pay any amount or offer any
interest to such present or former employee or any dependent or to such present or
former consultant.






	6.3	 	Labour Dispute
	 
	 	 	The Company is not involved in any labour dispute, and no circumstances may result in any
labour dispute. The Company has not been under any dispute or negotiation over any major
claim with any trade union, employees’ association, any other similar organization or
institution on behalf of employees.





Appendix 2




 









 












	6.4	 	Reward System
	 
	 	 	The Company has not any arrangement for option incentive, stock option, profit sharing or
other similar incentives in connection with the Company, any of its present or former
employees.
	 
	6.5	 	Social Insurance






	 	6.5.1	 	The Company is not in breach of any obligation to pay Social Insurance
premiums for its employees.
	 
	 	6.5.2	 	Except for the Social Insurance, there is not any pension, accumulation fund
or pension and welfare fund, scheme or arrangement under which the Company is obligated
to (whether moral or contractual obligation) offer any kind of retirement benefits
(including benefits payable for retirement, demission, death and deformity, and any
other benefit which is usually offered according to accumulation fund or pension
scheme) of the same degree to any of the Company’s present or former employees, or
their respective spouses or other relatives.






	7	 	Taxes
	 
	7.1	 	The Company has not participated in any transaction which has imposed or may impose
liabilities for Tax payment upon the Company (or, failure to make any remedy, reduction,
exemption or setoff will or may result in such liability), except for those in ordinary
business course.
	 
	7.2	 	The Company has not any major dispute with any Tax authority about Tax affairs since the date
of establishment. All Tax preferences and financial subsidies which the Company has enjoyed
are obtained in accordance with laws. There is no circumstance where Company is required to
make up Taxes or relevant interests, refund subsidies or assume other relevant liabilities.
	 
	7.3	 	The Company has paid in time all Taxes and government fees, made all declarations, issued all
notices and provided all other materials to be provided to any Tax authority and other
government agencies within the period specified by laws. All aforesaid materials are kept
complete and accurate in all major aspects, and so are all declarations and notices, which are
made on appropriate basis. The Company need not make up Taxes, pay additional Tax or accept
other Tax investigation. No facts will result in Tax investigation against the Company. No
notices are received or issued concerning disputes about any third person’s right to recover
Taxes from the Company or to offer any Tax reduction or exemption to the Company. The Company
has no and will have no obligation to pay interests of any unpaid Tax.
	 
	7.4	 	Execution or performance of the Agreement will not:






	 	7.4.1	 	Result in losses to the Company, or offer any other Tax reduction or
exemption, deduction or setoff with respect to the Company’s profits, earnings or
revenues (or any amount deemed as profits, earnings or revenues) or increase relevant
discount for the purpose of Tax reduction or exemption; or
	 
	 	7.4.2	 	Result in the Company’s obligation to pay any Tax or additional Tax.





Appendix 2




 









 












	8	 	Assets
	 
	8.1	 	Ownership of Assets






	 	8.1.1	 	All assets of the Company (except for those to be disposed or repaid in
subsequent ordinary business course) are owned by the Company as of the Balance Sheet
Date. All such assets and all assets and debts purchased or incurred thereafter, are of
the Company’s properties in all aspects and are not the subject matters of any transfer
or Encumbrance (except for lien incurred legally in ordinary business course), or of
any instalment payment, conditional sales or credit sale agreement.
	 
	 	8.1.2	 	All such assets are occupied by or under the control of the Company, if
applicable, or the Company has the right to occupy or control such assets. All such
assets are within the territory of China.
	 
	 	8.1.3	 	The Company has no title to any land or real estate, but owns valid and
binding lease interest, which is complete, free of any Encumbrance. No third person
claims that it has the priority in such lease interest.
	 
	 	8.1.4	 	Item 8.1 of the Disclosure Letter lists all real estates and moveable property
leased or used by the Company. As to those properties or assets leased by the Company
which concern substantially operation activities, the Company shall abide by the lease
clauses and owns valid lease interests in such assets. There is not any lien,
Encumbrance, security interest or claim made by any person other than lessors of such
properties and assets.






	8.2	 	Sufficiency of Funds
	 
	 	 	Assets owned or leased by the Company constitute all properties, titles and assets required
for the Company’s sufficient and effective operation of its present businesses or for
convenient business operation.
	 
	8.3	 	Insurance






	 	8.3.1	 	The Company has taken out, in the full amount of replacement, insurance for
all its assets which other companies engaging in similar businesses or owning similar
kinds of assets effect usually, covering accident insurance, death-and-injury
insurance, third party liability insurance and other insurances which the same kind of
companies effect usually.
	 
	 	8.3.2	 	As for all such insurances,






	 	(i)	 	The Company has paid all premiums in time up to now;





Appendix 2




 









 






	 	(ii)	 	All the insurances covered by the Company on leased real estates
are valid. If the Company shall be responsible for further insurance, policies
shall conform to all requirements for lease of real estates in all aspects;
	 
	 	(iii)	 	All policies are valid completely. There is not any act,
omission, false statement or undisclosed event made by the Company or its
representative, which may make such policies withdrawn, or circumstance which
may make such policies invalid or unenforceable for illegal factors or other
reasons, or any activity in violation of terms, conditions and Warranties
under any policy, which empowers any insurer to refuse payment of whole or
partial benefits claimed under relevant policy;
	 
	 	(iv)	 	As to each policy, there are not any special or irregular limits,
terms, exceptions or restrictions, premium payable thereunder is in normal
rate and no circumstances may increase premiums; and
	 
	 	(v)	 	There is not any pending claim or any circumstance which may result
in any claim.






	8.4	 	Subsidy
	 
	 	 	The Company has neither applied for, nor received, any investment or subsidy, loan or
financial support from any governmental authority, regional organization, government agency
or local authority.
	 
	8.5	 	No Non-disclosed Debt
	 
	 	 	The Company has not any other debt except for: i) debts disclosed or listed in the Accounts;
ii) debts in the ordinary business course of the Company up to the Balance Sheet Date
(neither of the two kinds of debts will have material adverse effects upon the Company’s
financial affairs, transaction status, prospect or sales volume); or iii) debts disclosed
herein.
	 
	9	 	Intellectual Property
	 
	9.1	 	Ownership
	 
	 	 	All Intellectual Property rights (the Company shall list in Item 9.1 of the Disclosure
Letter all Intellectual Property rights which have been registered or are under registration
application and describe them in brief) which have been or can be used for the Company’s
operation and which are required for or in connection with the Company’s operation, and all
relevant registration applications:






	 	9.1.1	 	Are or will be owned legally by the Company as a beneficiary or may be used
legally with the owners’ consents or permits;
	 
	 	9.1.2	 	Are valid and enforceable;





Appendix 2




 









 






	 	9.1.3	 	Are not infringed, attacked or opposed by any person;
	 
	 	9.1.4	 	Are not restricted by any Encumbrance or any permit or authorization offered
to other persons;
	 
	 	9.1.5	 	As for the Intellectual Property rights which have been registered, or those
which are listed and described in brief in the Disclosure Letter and are under
registration application, all due costs for registration renewal have been paid, and
all measures required for maintenance and protection of the Intellectual Property
rights have been taken; and
	 
	 	9.1.6	 	The Company has not made any claim or pending application for claim, which
will have material impact upon the authenticity and accuracy of any of the aforesaid
contents if it is made or approved.





Appendix 2




 









 











Appendix 3

Disclosure Letter




[None]




Appendix 3




 









 





Appendix 4

Equity Transfer and Capital Increase Agreement (for Industrial and Commercial Registration)







2









 








Equity Transfer and Capital Increase Agreement



The Agreement was executed on December 19, 2007 in Shanghai, China by and among the following
parties:





	(6)	 	Redgate Media AD Co., Ltd., a limited liability company incorporated and existing
under the laws of China, with its registered address at Room 1807, 15/F, South Tower of
Building B, Jianwai SOHO, No.39 East 3rd Ring Road Central, Chaoyang District,
Beijing, China (“Party A”);
	 
	(7)	 	Shanghai Yuqin Advertising Co., Ltd., a limited liability company incorporated
and existing under the laws of China, with its registered address at Room 1533, 15/F,
No. 728 Yan’an West Road, Changning District, Shanghai, China (“Party B”);
	 
	(8)	 	Weidong Zhu, a Chinese citizen, with his ID card No.: 310110197006105018 (“Party
C”);
	 
	(9)	 	Shanghai Hongmen Advertising Co., Ltd., a limited liability company incorporated
and existing under the laws of China, with its registered address at P-1 Building, No. 7523
Beiqing Road, Zhonggu Town, Qingpu District, Shanghai, China (“Company”).




(Party A, Party B, Party C and the Company are hereinafter collectively referred to as the
“Parties” and individually referred to as a “Party”.)



The registered capital of the Company is RMB5,200,000, of which Party B contributed
RMB2,050,000, accounting for 39.42%; and Party C contributed RMB3,150,000, accounting for 60.58%.
The parties agree as follows through amiable negotiation and in accordance with pertinent laws and
regulations:



Article 1 Equity Transfer





1.1 Party B shall transfer 39.42% equity interest of the Company held by it to
Party A at the cost of RMB2,050,000.




1.2 The rights attached to the Equity Interest shall be transferred along with the Equity
Interest.



3









 






1.3 Party A shall pay the equity transfer price to Party B as agreed upon with Party B.




1.4 Party C agrees the aforesaid Equity Transfer and waives the pre-emptive right.



Article 2 Capital Increase





2.1 The Parties agree that Party A shall invest RMB7,357,377.7 in the Company, of which
RMB1,210,000 shall be used to subscribe for the increased registered capital of the Company and
RMB6,147,377.7 shall be included into the Company’s capital reserve.




2.2 Party A shall, within ten (10) working days from the date of the Agreement, pay to the
Company the amount of subscription for the increased registered capital, namely, RMB1,210,000.




2.3 After completion of the equity transfer and capital increase, the Company’s equity
structure will be changed as follows:



	 	 	 	 	 
	 	 	Capital Contribution	 	Proportion in
	Shareholders’ Name	 	Amount (RMB Yuan)	 	Registered Capital
	Redgate Media AD Co., Ltd.
	 	3,260,000
	 	50.86%
	Weidong Zhu
	 	3,150,000
	 	49.14%
	Total

	 	6,410,000
	 	100%







2.4 Party C agrees to the aforesaid capital increase and waives the pre-emptive
right.


Article 3 Warranties and Undertakings





3.1 Party B undertakes to Party A that the equity interest to be transferred is true, reliable
and complete.



4









 






3.2 Party B undertakes to Party A that it has full rights, powers and capabilities of act for
equity transfer, free of fraud.




3.3 The Company and Party C undertake to Party A that the Company has the full rights to accept
the Increased Capital Amount paid by Party A.


Article 4 Liability for Breach of Contract



Each party in breach of the Agreement shall assume the corresponding liability for breach of
contract.



Article 5 Methods of Dispute Settlement



Any and all disputes arising from the performance of the Agreement shall be settled through amiable
negotiation; where negotiation fails, any party may apply to China International Economic and Trade
Arbitration Commission Shanghai Sub-commission for arbitration.



Article 6 Miscellaneous





6.1 The Agreement shall be made in five (5) copies, one for each Party and the other for the
Company for the purpose of completion of relevant procedures.




6.2 The Agreement shall take effect with signatures of the Parties.


[Execution page below]









5









 








	 	 	 	 	 
	[Execution Page]


Redgate Media AD Co., Ltd. (seal)

 	 
	Signature:  	 	 
	 	Name:  	Yue Jin 	 
	 	Title:  	Chairman 	 
	 
	Shanghai Yuqin Advertising Co., Ltd. (seal)

 	 
	Signature:  	 	 
	 	Name:  	Cuiping Xu 	 
	 	Title:  	Chairman 	 
	 
	Weidong Zhu

 	 
	Signature:  	 	 
	 	 	 
	 	 	 
	 
	Shanghai Hongmen Advertising Co., Ltd. (seal)

 	 
	Signature:  	 	 
	 	Name:  	Cuiping Xu 	 
	 	Title:  	Legal Representative 	 
	 



Appenndix 4







 









 








Appendix 5

List of Debts Repayable



Details of amount payable recorded in the Balance Sheet up to August 31, 2007:




	 	 	 	 	 	 	 
	No.	 	Details	 	RMB	 
	1	 	Other amounts payable — Shanghai Yuqing Advertising Co., Ltd.
	 	 	3,362,943.00	 
	2	 	Other amounts payable — Starting Company/Exit and Entry
Company for Personal Reasons (Fogen Yang)
	 	 	1,043,908.89	 
	3	 	Taxes payable
	 	 	10,704.10	 
	 	 	 
	 	 	 
	 	 	Total
	 	 	4,417,555.99	 
	 	 	 
	 	 	 




Details of amount payable incurred from 800 light boxes not listed in the Balance Sheet up to
August 31, 2007




	 	 	 	 	 	 	 
	No.	 	Details	 	RMB	 
	1	 	Amounts payable — costs for completed works
	 	 	447,355.00	 
	 	 	Amounts payable — costs for completed works
	 	 	117,325.00	 
	 	 	Amounts payable -5% of reparation fund
	 	 	146,195.00	 
	 	 	 
	 	 	 
	 	 	Total
	 	 	710,875.00	 
	 	 	 
	 	 	 
	 
	2	 	Costs payable for light-cloth making
	 	 	15,892.00	 
	3	 	Costs payable for light-box maintenance & cleanness
	 	 	131,280.00	 
	 
	4	 	Costs payable for area development
	 	 	315,240.00	 
	5	 	Costs payable for area positions
	 	 	546,615.00	 
	6	 	Office expenses payable
	 	 	60,110.75	 
	7	 	Amount repayable to advance payments by original shareholders according to agreements
	 	 	559,808.96	 
	8	 	Interests payable to Chengye Guo
	 	 	600,000.00	 
	 	 	 
	 	 	 
	 	 	Total
	 	 	2,939,821.71	 
	 	 	 
	 	 	 





Appendix 5







 









 





Execution Version
 


Appendix 6

Employment Contract



Appendix VI to Equity Transfer Agreement A: Employment Contract (Weidong Zhu)




 








 





Employment Contract




















4









 








Execution Version



Party A (Employer): Shanghai Hongmen Advertising Co., Ltd.



Legal Representative: Cuiping Xu          Title: Chairperson



Legal Address: Building P-1, No. 7523 Bei-Qing Highway, Chonggu Town, Qingpu District



Party B (Employee): Weidong Zhu



ID card No.: 310110197006105018



Nationality and Passport No.: China (Passport No.: N/A)



Domicile: C801-802, No. 163 Puhuitang Road, Shanghai, China



In accordance with such relevant laws, regulations and rules as the Labor Law of the People’s
Republic of China, the Labor Contract Law of the People’s Republic of China and the Regulations of
Shanghai on Labor Contract, Party A hereby employs Party B as a full-time employee and, on an
equal, voluntary and consulting basis, the parties hereto conclude the Contract. The employment
relation of the parties hereto shall be subject to such relevant laws and regulations as the Labor
Law, the Employees’ Manual as amended by Party A from time to time and the terms and provisions in
other internal regulations and rules. The Employees’ Manual and internal regulations and rules of
Party A are filed at the personnel department of Party A, and Party B hereby states and undertakes:
(i) he is a laborer at the statutory age for employment and has not established an employment
relation with any third party in any form; (ii) before signing the Contract, he has carefully read
and understood the Employees’ Manual and all the regulations and rules of Party A; (iii) Party A’s
establishment of the employment relationship with Party B according to the Contract does not
violate any agreement or statutory obligations of Party B.



Appendix VI to Equity Transfer Agreement A: Employment Contract (Weidong Zhu)








 









 








Term of Contract



The Contract adopts the term of the contract specified in Paragraph 1 below.



The Contract is valid from September 1, 2007 to August 31, 2010, including a probation period
from ___ (month) ___ (day) ___ (year) to ___ (month) ___ (day) ___ (year).



The Contract is a contract with a flexible term from ___ (month)
___ (day) ___ (year), including a
probation period from ___ (month) ___ (day) ___ (year) to ___ (month) ___
(day) ___ (year).



The term of the contract shall be the period for completion of a certain job. The particular
tasks are as follows:




     
 




     
 



     
 



     
 






Job Description and Location



As per needs of production, Party A engages Party B as General Manager, working at
2/F, Block 1A, No. 345 Lane, Xinhua Road, Shanghai, China. Party B agrees that Party A may
adjust, at its discretion, the job, department and office location of Party B according to the
needs of work and the capacity and performance of Party B. Party B shall obey such arrangement of
Party A and complete the work specified for the job.




Labor Remuneration



According to the relevant regulations of China and Shanghai, Party A shall pay the salary of
Party B on a monthly basis, which shall be at least the minimum salary standard in Shanghai.



Party A shall pay the salary in currency on the 28th day of each month.



The particular payment method, standard and relevant content of the salary is agreed as follows:




     Party A shall monthly pay the salary to Party B by means of bank transfer;



     The monthly basic salary of Party B shall be determined separately by the Board of
Directors.


Party B agrees that Party A is entitled to adjust the remuneration of Party B according to the job
adjustment of Party B, as well as performance examination and contribution of Party B.




Working Hours, Rest and Leave



Party A implements the standard working-system for the Job of Party B. Party B shall
work for not more than eight (8) hours per day and not more than forty (40) hours per week.
Party A implements the overtime approval system and, without approval, overtime shall not be
deemed as extended working time. In case of needs for production and operation, Party A may
extend the working time according to law, but generally, it shall not exceed one (1) hour per
day; where the working time needs to be extended due to special reasons, it shall not exceed
three (3) hours per day and thirty-six (36) hours per week.



In case of extending the working time of Party B, Party A shall pay the remuneration for the
extended working time of Party B in accordance with the Labor Law of the People’s Republic of
China and relevant local regulations.



Party A warrants that Party B is entitled to all the rest and leaves according to the relevant
regulations of China and Shanghai. After working for one full year, Party B shall be entitled
to a paid annual


6









 






 leave of seven (7) days, which will be increased by one day for each additional year, but
shall not exceed fifteen (15) days accumulatively. Other leaves such as marriage leave and
maternity leave to which Party B is entitled shall be subject to the relevant regulations
and rules of Party A and the relevant local regulations.




Social Insurance and Welfare Benefits



According to the relevant regulations of China and Shanghai, the parties hereto shall
participate in and perform the obligation of paying the premiums for such social insurance as
endowment, unemployment, medical, industrial injury and family planning as well as housing
reserve fund, and ensure that Party B is entitled to the rights of different social insurance
and housing reserve fund; according to the relevant regulations of China, the individual
income tax, social insurance and housing reserve fund to be paid personally by Party B shall
be withheld and paid directly by Party A from the remuneration of Party B.



Rules for medical treatment period shall be applied to sickness or non-industrial injuries of
Party B. The medical treatment period and sick leave salary, disease redress expenses and
medical benefits within the medical treatment period, to which Party B is entitled, shall be
subject to the relevant national and local regulations.



Other insurance and welfare benefits are agreed as follows:




     ______N/A______



     ______N/A______



Labor Protection, Working Conditions and Occupational Hazard Protection



Party A shall, in strict accordance with the regulations of China and Shanghai on labor
protection, educate and train Party B in safe production and operating standards, endeavor to
improve the working conditions, prevent any accident from happening, reduce occupational
hazards and ensure the safety and health of Party B in production.



Party A shall provide Party B with labor protection articles according to the regulations of China
and Shanghai and arrange for health examination for Party B according to regulations.



During the work, Party B must strictly abide by the rules for safety, sanitation and operating.



Where Party B suffers from any occupational disease or industrial injury or death, Party A shall
grant all the benefits in accordance with the relevant regulations of China and Shanghai.



Labor Discipline



Party A has the right to formulate its regulations and rules in accordance with the relevant
regulations of China and Shanghai, and practice the management and rewards and punishments on
and for Party B according to the regulations and rules.



Party B shall carefully read, understand and abide by all the laws and regulations of China and
the regulations and rules formulated by Party A according to law; strictly abide by the labor
disciplines and guiding standards for work; take care of the properties of Party A and abide
by the occupational ethics; actively participate in the training organized by Party A to
improve the occupational skills.



Party B agrees that without the written consent from Party A, during the employment, Party B shall
not be employed by any third party, especially by the competitors of Party A directly or
indirectly, and shall not directly or indirectly compete or cause others to compete with the
businesses of Party A or its successors and transferees.









7









 








Alteration of the Contract



In any of the following circumstances, the parties hereto may alter the relevant content of
the Contract, but in a written form:



Upon negotiation, the parties hereto agree to alter part of the terms;



The Contract becomes unperformable due to any major change in objective conditions; or



The relevant regulations as the basis for concluding the Contract have been revised or abandoned.




Termination of the Contract



In any of the following circumstances, the Contract shall be terminated:



The conditions for terminating the Contract as agreed upon by the parities hereto are fulfilled
or the Contract expires;



Party B retires or resigns;



Party B is dead or declared by the people’s court as dead or missing;



Party A becomes bankrupted according to law;



Party A has its business license revoked, is ordered to close down, is dissolved, or decides for
an early dismissal; or



Other circumstances specified by the laws and regulations.




Renewal of the Contract





Upon its expiration, the Contract may be renewed upon agreement by and between the
parties hereto.



Rescission of the Contract



As per agreement by and between the parties hereto upon negotiation, the Contract may be
rescinded.



In any of the following circumstances, Party A may rescind the Contract:





Party B is proven to be disqualified for employment during the probation;




Party B violates materially the labor disciplines or the regulations and rules of
Party A, including but not limited to the following circumstances:




	 	(a)	 	The statement and undertaking made in the Contract or the process of
employment is untrue or misleading;
	 
	 	(b)	 	Violating the Employees’ Manual or the regulations and rules of Party
A;
	 
	 	(c)	 	Being dishonest and cheating (including stealing and faking);
	 
	 	(d)	 	Severely disobeying the arrangement or committing other material
malpractices;
	 
	 	(e)	 	Getting drunk and taking drugs at work;
	 
	 	(f)	 	Forging or intentionally making up any record and certificate;
	 
	 	(g)	 	Exchanging blows and fighting;
	 
	 	(h)	 	Behaving impolitely to the clients or colleagues;




8









 






	 	(I)	 	Being absent from the post, without any permission, consecutively for
three (3) days or accumulatively for fifteen (15) days in one month;
	 
	 	(j)	 	Being in reeducation through labor; and
	 
	 	(k)	 	Violating other due diligences to be undertaken to Party A






Party B materially neglects the duties or is engaged in malpractices for selfish
ends or discloses the business secrets of Party A, causing severe damages to Party A
(such severe damages include not limited to an economic loss of RMB 50,000 to
Party A and any damage to the goodwill of Party A);




Party B is simultaneously employed by other employers without obtaining any written
consent from Party A, or with a written consent from Party A, but causing a material
impact on completion of the task(s) assigned by Party A, or refusing to make
rectification though Party A directs to;




Party B is investigated for criminal liabilities according to law; or




Other circumstances specified by the relevant laws and regulations.


Where Party B is involved in any of the following circumstances, Party A may rescind the Contract,
but shall notify in writing Party B thirty (30) days in advance:





Party B can neither continue with the current job nor do any other job assigned by
Party A due to the sickness or non-industrial injury after the specified medical
treatment period expires, or the medical treatment exceeds the specified period;




Party B is not qualified for the job or fails to be qualified for the job even after
training or job reallocation; or




Where the objective conditions as the basis for concluding the Contract are subject
to a major change (including but not limited to relocation and merge of Party A, asset
transfer of Party A and adjustment of organization structure, operating conditions or
development strategy due to the needs of production and operation) and make it
impossible to continue with the original employment contract, the parties hereto fail
to reach an agreement on alternation of the Contract upon negotiation.


During the employment of Party B by Party A, in case of any of the following circumstances, Party A
has the right to cut down the residual employees:





Party A conducts the rectification pursuant to the Enterprise Bankruptcy Law;




Party A encounters material difficulties in production and operation;




Party A switches production, introduces a major technology innovation or revises its
business, and, after amendment of the employment contracts, still needs to reduce its
workforce; or




Other major changes have happed to the objective economic circumstances as the basis
for concluding the Contract rendering it unperformable.


Where Party A rescinds the Contract in compliance with the provisions of Articles 11.1, 11.3 and
11.4 herein, Party A shall pay economic compensation to Party B according to the relevant
national and local regulations.



Where Party B is involved in any of the following circumstances, Party A may not rescind the
Contract according to Articles 11.3 and 11.4:







9









 









Party B suffers from occupational disease or industrial injury or is verified as
total or partial loss of labor capacity by the labor appraisal committee of the labor
administration;




Party B is in the specified medical treatment period due to the sickness or
non-industrial injury;




Party B is a female employee is in the period of pregnancy; or




Other circumstances specified by the laws and administrative regulations.


To rescind the Contract, Party B shall:





Within the term of the Contract, notify in writing to Party A thirty (30) days in advance,
and, in case of violating the provisions herein, undertake the liabilities according to
law.




In case of any of the following circumstances, Party B may, at any time, notify
Party A to rescind the Contract:




	 	(a)	 	Party B is in the probation period;
	 
	 	(b)	 	Party A forces Party B to work by means of violence, threatening or
illegally constraining human freedom;
	 
	 	(c)	 	Party A fails to pay adequate labor remuneration according to the
provisions herein; or
	 
	 	(d)	 	Other circumstances specified by the laws and administrative regulations
for the employee to rescind the Contract.




Prior to any alteration or rescission of the Contract, Party B shall immediately and
unconditionally complete the formalities of work and property hand-over according to the
regulations and rules of Party A and return to Party A or its authorized agent the following
documents, records, devices and other properties used by and in the custody of Party B:





All the documents or records, including electronic documents and records;




Any properties owned by Party A or its shareholders, inclusive of the documents or
records in connection with the relevant business secrets or information, including but
not limited to:




	 	(a)	 	Business and financial arrangement or position of Party A;
	 
	 	(b)	 	Name list of clients, notices and service suggestion to clients; and
	 
	 	(c)	 	All the business transactions or matters relating to Party A or its
clients.




Party B shall not retain any original or duplicate copy of the above materials. Prior to completion
of the hand-over formalities, without permission of Party A, Party B shall not desert his post;
otherwise, he shall be deemed as violating the confidential obligation.




Certificate of Contract Termination and Rescission



After the Contract is terminated or rescinded, Party A shall issue a certificate of
employment contract termination or rescission as per provisions.




Liabilities for Breach of Contract



In case of rescinding the Contract by breaching the provisions or violating the confidential
obligation specified herein, causing any loss to Party A, Party B shall be liable for
compensation.



Where the Contract becomes unperformable due to the reason of force majeure and any party suffers
any loss, the opposite party shall not undertake any liability for breach of contract.







10









 








Other Matters Agreed Upon by the Parties hereto



The Contract is governed by the laws of the People’s Republic of China. In case of any
change in the laws and regulations as the basis of the Contract, the Contract shall be subject
to such change.



Confidential rules: Party B shall not disclose any confidential materials relating to the relevant
departments of Party A or any company or organization related to Party A, which Party B has
known or acquired during the engagement with Party A, directly or indirectly to any third
party (except for the persons with the right to know about such materials within the terms of
reference or those especially authorized by Party A). In case of violating any obligation
specified herein, Party B shall be deemed as materially violating the labor disciplines. The
confidential obligations specified herein for Party B are open-ended and shall remain valid
upon termination of the Contract. According to the actual conditions, the parties hereto may
execute a separate confidentiality agreement.



Non-competition obligation: Party B shall sign separately with Party A the Non-competition
Agreement prescribed in Appendix I hereto and undertake the non-competition obligations
thereunder; the Non-competition Agreement shall taken as the supplementary terms of the
Contract.



Party B agrees that Party A has the right to amend, at any time, the Employees’ Manual, labor
disciplines and other regulations and rules.



Party B shall consciously abide by the norms formulated by Party A for occupational ethics and
commercial contact and regulate his behaviour accordingly.



Party B is obliged to keep confidential his remuneration and welfare benefits, and in case of any
question about such remuneration and welfare benefits, may consult with the personnel
department of Party A.



As per work and business needs, Party A may carry out necessary business training on Party B. If
necessary, the parties hereto shall separately sign a training contract, which shall be the
supplementary terms of the Contract.




Labor Dispute Settlement



In case of any dispute between the parties hereto resulting from the performance of the
Contract, it shall be settled through negotiation; where such settlement fails, any party may apply
to the labor dispute arbitration committee with the jurisdiction for arbitration; in case of
objecting the award, the objecting party may bring a lawsuit to the people’s court with the
jurisdiction.




Miscellaneous



Where any matter is not specified herein or the terms hereto are in conflict with the laws
and regulations, the relevant national and local stipulations shall prevail.



The parties hereto shall strictly abide by and implement the Contract signed and stamped by them.
The Contract is in duplicate, of which the parties hereto will hold one copy each.









11









 








[Execution Page]




Party A: Shanghai Hongmen Advertising Co., Ltd. (Official Seal)




	 	 	 	 	 	 	 	 	 
	Legal Representative:	 	 	 	(signature)	 	 
	 

	 	 	 	 	 	 	 
	 

	 	 	 	Cuiping Xu	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	September 1, 2007	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Party B: 

	 	 	 	 	 	(signature)	 	 
	 	 	 	 	 	 
	 

	 	 	 	Weidong Zhu	 	 	 	 
	September 1, 2007	 	 	 	 	 	 






Appendix 6






 









 








Appendix 7

Confidentiality Agreement




Appendix 7




 









 








Confidentiality Agreement



The Confidentiality Agreement (“Agreement”) was executed on December 19, 2007 by and between
the following Parties:




	 	 	 
	Party A:

	 	Shanghai Hongmen Advertising Co., Ltd., a limited liability company incorporated
and existing under the laws of China, with its registered address at P-1 Building, No.
7523 Beiqing Highway, Chonggu Town, Qingpu District, Shanghai, China; legal
representative: Cuiping Xu;
	 
	 	 
	And
	 	 
	 
	 	 
	Party B:

	 	Weidong Zhu, with the ID card number of 310110197006105018, domicile: C801-802,
No. 163 Puhuitang Road, Shanghai, China.





(The aforesaid parties are individually referred to as a “Party” and collectively referred to as
the “Parties”.)



Whereas, the Employment Contract (hereinafter referred to as “Employment Contract”) was executed on
September 1, 2007 by and between the Parties;



Whereas, Party B is aware that his post will give him access to Party A’s business materials,
technical data and other information which are confidential and are Party A’s properties;



Whereas, Party B acknowledges that disclosure of any of the aforesaid information to Party A’s
current or potential competitors or any other person or engagement in any business competitive with
Party A will have material advertise impacts upon Party A during competition activities and will
damage Party A’s business,



NOW, THEREFORE, the Agreement is made through equal and amiable negotiation and in accordance with
the Law of the People’s Republic of China against Unfair Competition, the Labor Law of the People’s
Republic of China, the Several Provisions on Prohibiting Infringements upon Trade Secrets and other
pertinent laws and regulations.





	1.	 	Representations and Warranties
	 
	 	 	Either party states and warrants that it is willing to execute and abide by the Agreement.
	 
	2.	 	Confidentiality






	 	2.1	 	Confidentiality Scope






	 	2.1.1	 	For the purpose of the Agreement, “Confidential Information” means
proprietary or confidential information or material, whether tangible or intangible,
of Party A or other parties (“Associated Companies”) which have association or
business relationship with Party A, to which Party B has access by means of or in
connection with the employment relationship with Party A, including, but not limited
to:






	 	(1)	 	information of Party A’s suppliers and clients,
including, but not limited to:






	 	(a)	 	information about the source of Party A’s raw
materials, parts and components, including way of purchase, scope,
quantity, way of outsourcing and purchase price, etc., and
	 
	 	(b)	 	list and contact information of all Party A’s
clients, contracts, 





Appendix 7





 








 






	 	 	 	agreements and orders between Party A and its clients;






	 	(2)	 	information about operation, plans, marketing or
technologies, including Party A’s ad-planning, marketing strategy, channels
and performance;
	 
	 	(3)	 	various technical data in connection with product
development and manufacture, materials and drawings concerning
technologies, techniques and design, and structure chart, circuit diagram,
assembly drawing, operation instruction and supported software concerning
all products;
	 
	 	(4)	 	Party A’s materials and plans for declaring various
fund-supported projects;
	 
	 	(5)	 	all materials, computer software materials, computer
hardware & equipment materials concerning all Party A’s intellectual
property rights;
	 
	 	(6)	 	computer data, internal files, design and function
specifications, development plans, implementation schedule and relevant
results;
	 
	 	(7)	 	Party A’s financial plans and income & expenditures
conditions, including financial budget and final account reports, financial
statements, statistic reports and financial index;
	 
	 	(8)	 	costs and profits of the products;
	 
	 	(9)	 	important decisions made by Party A during operation,
including, but not limited to, business strategies, business focus, items
of business and long-term planning which Party A has not implemented or is
implementing;
	 
	 	(10)	 	various records and documents about the board of
directors and the manager meetings;
	 
	 	(11)	 	Party A’s letters of intent, contracts and other files,
including plans and documents for declaring various fund-supported
projects;
	 
	 	(12)	 	the amount of salaries, compensations or rewards of
Party A’s employees;
	 
	 	(13)	 	proprietary or confidential information of a third
party which Party A obtains from the third party that expresses that such
information may be used for certain restricted purposes only and requires
Party A to keep confidential; and
	 
	 	(14)	 	Other matters as Party A deems confidential.






	 	2.1.2	 	Confidential Information shall not include:






	 	(1)	 	the information which has been available in public
domain prior to execution of the Agreement;
	 
	 	(2)	 	the information which may be available in public domain
other than due to Party B’s faults after execution of the Agreement;
	 
	 	(3)	 	the information which is provided by Party A to Party
B, permitting Party B in writing to use or disclose such information;
	 
	 	(4)	 	the information which Party B obtains from a third
party that has no confidentiality obligation; or
	 
	 	(5)	 	the information which Party B has to disclose in
accordance with laws, regulations, or orders of the competent court,
administrative authorities or other regulatory organs, provided that Party
B shall, before disclosing such information, inform Party A of the order
about disclosure so that Party A may take appropriate protective measures.






	 	2.2	 	Confidentiality Obligation






	 	2.2.1	 	Party B shall protect the confidentiality and exclusiveness of such
Confidential Information. Without Party A’s prior written consent, or unless
otherwise stipulated






Appendix 7




 









 






	 	 	 	herein, Party B may not, during the employment period (including the probation
period) and within three (3) years after his demission for any reason (hereinafter
referred to as “Confidentiality Period”), disclose, copy or distribute directly or
indirectly the Confidential Information to any other individual (including, but not
limited to, Party A’s employees), company or entity in any way, or use the
Confidential Information for its own interests or the interests of any other
individual, company or entity.
	 
	 	2.2.2	 	Where Party B has to provide the Confidential Information to any other
individual (including, but not limited to, Party A’s employees), company or entity
for the need of work, Party B shall first of all apply to Party A’s general manager
and may not provide such information without the approval.
	 
	 	2.2.3	 	For the duration of employment, Party A shall have the right to dispose
all Party A’s materials which are being used by Party B, or require Party B to
deliver such materials to other persons for preservation or use, and Party B must
obey such arrangements.
	 
	 	2.2.4	 	Party B shall notify Party A immediately if, during the confidentiality
period, Party B is aware that any third person uses or discloses the Confidential
Information improperly.
	 
	 	2.2.5	 	After termination or rescission of the employment relationship between
the Parties, or at any time required by Party A prior to termination or rescission
of such relationship, Party B shall, immediately [in no case later than five (5)
days after the day of termination or rescission of the employment relationship or
the day of Party A’s requirements, whichever is earlier], destroy or return Party A
(according to Party A’s requirements) (without any reservation, development
otherwise or delivery to other persons) all materials, documents or articles
concerning the Confidential Information which Party B contacts or masters or which
are under conception; all devices, files, data, records, reports, lists, business
correspondences, instructions, diagrams, design drawings, drafts, raw materials,
equipments, other documents or properties and all articles to be returned to Party
A, or all reproductions thereof made by Party B during his employment, or any other
article owned by Party A or its successors or appointees. Party B may not go through
the procedures for post transfer or demission until Party B has handed over his work
to Party A or its appointed persons or departments.






	 	2.3	 	Non-license or warranty
	 
	 	 	 	Unless otherwise licensed in writing, Party A has not granted Party B any license to use
any trade secret or intellectual property (including patents, trademarks, copyrights and
know-how), or granted impliedly Party B such license by means of transmission of its
Confidential Information or other information. Furthermore, Party A’s disclosure of the
Confidential Information shall not constitute or contain any representation or warranty
concerning the correctness or completeness of such information.
	 
	 	2.4	 	Data about Former Employer






	 	2.4.1	 	Party B undertakes that, during the employment by Party A, it shall not
disclose or use any confidential information which is obtained in connection with
his prior work or prior to employment by Party A and to which Party B assumes
confidentiality obligation, or bring any text or other tangible carriers recording
such confidential information to Party A’s premises. Party B shall be solely
responsible for any dispute arising from Party B’s failure to perform the aforesaid
obligation.




Appendix 7





 









 






	 	2.4.2	 	Party B agrees to execute any appropriate document or to take any
appropriate measures for executing and performing the Agreement. Party B warrants
that the performance of all articles of the Agreement will not violate any agreement
executed by Party B prior to his employment by Party A.






	3.	 	Liability for Breach of Contract






	 	3.1	 	Party B acknowledges and agrees that Party A shall have the right to impose such
punishments as bonus deduction, post transfer, salary reduction or rescission of the
Employment Contract according to the specific circumstances in case Party B breaches the
Agreement in any way.
	 
	 	3.2	 	Party B acknowledges and agrees that, if Party B breaches the Agreement in any
way, Party B shall compensate Party A for all direct or indirect losses resulting from
his breach of contract, including losses of saleroom, profits, commissions, goodwill and
clients, and for the costs incurred by Party A as a result of claim for liabilities for
breach of contract, including, but not limited to, legal cost, reasonable attorney fee
and expenses.
	 
	 	3.3	 	Party B agrees that, if Party B discloses the contents of Article 2.1.1 hereof in
violation of the Agreement, Party A shall have the right to claim for liabilities for
breach of contract according to Article 3.1 hereof and Party B shall also pay to Party A
the penalty equivalent to RMB200,000.
	 
	 	 	 	Party A shall have the right to make further recovery against Party B where the penalty
paid by Party B is insufficient to make up Party A’s losses under Article 3.2 hereof.
	 
	 	3.4	 	Notwithstanding the stipulations in Articles 3.1 to 3.3 hereof, Party B
acknowledges that monetary compensation will not be sufficient relief for his breach of
contract hereunder, and Party A has the right to obtain other remedies such as
injunction and specific performance for such breach of contract. However, the said
remedies shall not be the sole relief for Party B’s breach of contract but one relief in
addition to those granted to Party A by law.






	4.	 	Applicable Law and Dispute Settlement






	 	4.1	 	The Agreement shall be governed by and construed in accordance with Chinese
laws.
	 
	 	4.2	 	Arbitration






	 	4.2.1	 	Any and all disputes arising from or in connection with the Agreement
shall be settled through amiable negotiation between the Parties. Where a certain
dispute cannot be settled through negotiation within sixty (60) days after either
party sends a notice to the other, such dispute (including disputes over the
validity or existence of the Agreement) shall be submitted to China International
Economic and Trade Arbitration Commission Shanghai Sub-commission for arbitration
according to its arbitration rules in force then.
	 
	 	4.2.2	 	Arbitral awards shall be final and binding upon the Parties and shall be
enforced in accordance with pertinent clauses.
	 
	 	4.2.3	 	Arbitration fee shall be for the account of the losing party or the
party designated by the arbitration tribunal. Where either party has to enforce
arbitral awards by virtue of any kind of lawsuit, the breaching party shall be
responsible for all reasonable costs and expenses incurred therefrom, including, but
not limited to, reasonable attorney fee and the costs and expenses of any additional
lawsuit or enforcement incurred by the other party as a result of application for
enforcement of arbitral awards.





Appendix 7




 









 






	 	4.2.4	 	The Parties shall perform the Agreement continually in all aspects
during settlement of disputes, except for those in dispute.






	5.	 	Miscellaneous






	 	5.1	 	Entire Agreement: the Agreement, as well as its schedules and appendices (if
any), shall be the final document which can specify the Parties’ intentions completely
and accurately, and constitute the entire agreement between the Parties in connection
with the subject matter of the Agreement and substitute for all prior written and oral
agreements, contracts, understandings and letters between the Parties in connection with
the subject matter hereof; there are not prior representations warranties or agreements
concerning the Agreement. Without the written consent of the Parties, modifications to,
addition and deletion of the terms and conditions of the Agreement shall not be binding
upon the Parties.
	 
	 	5.2	 	Waiver: Waiver of any default or negligence hereunder shall not be deemed as
its waiver of any other default or negligence, whether the natures are similar. Any
single or partial exercise of any right shall not exclude any future exercise of such
right. Waiver may not be valid until the written document bearing the signature of the
authorized representative of the waiving party has been sent and such written document
shall be confirmed as a waiver according to its literal meaning.
	 
	 	5.3	 	Severability: When any of the terms or provisions of the Agreement is held
invalid for any reason whatsoever, the invalidity shall not affect the remaining terms
and provisions hereof and the invalid term or provision shall be deemed as deleted from
the Agreement unless the invalidity has materially affected continual performance of the
whole Agreement. The Parties may enter into a supplementary agreement through
negotiation to specify relevant issues.
	 
	 	5.4	 	Third Person’s Interest: The Agreement shall be binding upon and inure to the
benefit of each party hereto and its successors and authorized assigns. No provision
hereof may be deemed as granting expressly or impliedly any rights, remedies or
obligations to any person or entity other than the Parties and their respective
successors and authorized assigns.
	 
	 	5.5	 	Notices: all notices, demands, requests, acknowledges or other communications
in connection with the Agreement must made in writing and served on the following
addresses (or other addresses informed by relevant parties hereto in writing) in person,
by carrier or registered letter with a receipt. A notice, demand, request, acknowledge
or other communication in connection with the Agreement shall be deemed as served: 1) at
the time of delivery in case of delivery in person; 2) three (3) days after delivery to
the carrier in case of delivery by carrier; if it is served within three (3) days, the
actual service date shall apply; 3) five (5) days after mailing in case of service by
registered letter (or airmail letter sent abroad); if it is served within five (5) days,
the actual service date shall apply.






	 	To: 	 	Shanghai Hongmen Advertising Co., Ltd.

Add.: 2/F, Tower 1A, No. 345 Lane, Xinhua Road, Shanghai, China

Attn: Yun Yang

Tel: 021-62810161

Fax: 021-52540919




Appendix 7





 









 






	 	To: 	 	 Weidong Zhu

Add.: 2/F, Tower 1A, No. 345 Lane, Xinhua Road, Shanghai, China

Tel: 13901729948

Fax: 021-52540919






	 	5.6	 	Headings: The headings of all the articles in the Agreement are inserted only
for reference and may not deemed as interpretation of the Agreement or affect the
meanings of the Agreement in any form.
	 
	 	5.7	 	Publicity: Unless laws and regulations contain provisions to the contrary,
neither party nor its agent may make any public statement concerning the Agreement, or
any other document or subsequent documents concerning the matters of the Agreement
without the prior written consent of the other party (such content may not be withheld
without any justified reason).
	 
	 	5.8	 	Language: the Agreement shall be written in Chinese.
	 
	 	5.9	 	Counterpart: the Agreement shall be made in two (2) copies, one for each
party.




(Execution Page Attached)




Appendix 7






 









 






(Execution Page)


The Parties have signed the Agreement on the date first mentioned above.





Party A: Shanghai Hongmen Advertising Co., Ltd. (seal)




	 	 	 	 	 	 	 	 	 
	Legal Representative:	 	 	 	(signature)	 	 
	 

	 	 	 	 	 	 	 
	 

	 	 	 	Cuiping Xu	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Party B: 

	 	 	 	 	 	(signature)	 	 
	 	 	 	 	 	 
	 

	 	 	 	Weidong Zhu	 	 	 	 
	
ID card No.: 310110197006105018
	 	 








Appendix 7









 









 





Appendix 8

Intellectual Property Agreement




Appendix 8





 









 








Intellectual Property Agreement



The Intellectual Property Agreement (“Agreement”) was executed on December 19, 2007 by and
between the following parties:




	 	 	 
	Party A:

	 	Shanghai Hongmen Advertising Co., Ltd., a limited liability company duly
incorporated and existing under the laws of China, with its legal address at P-1 Building,
No. 7523 Beiqing Highway, Chonggu Town, Qingpu District, Shanghai, China; legal
representative: Cuiping Xu;
	 
	 	 
	And
	 	 
	 
	 	 
	Party B:

	 	Weidong Zhu, with the ID card number of 310110197006105018, and domicile at
C801-802, No. 163 Puhuitang Road, Shanghai, China.





(The aforesaid parties are hereinafter individually referred to as a “Party” and collectively as
the “Parties”.)



Whereas, the Employment Contract (“Employment Contract”) was executed on September 1, 2007 by and
between the Parties;



Whereas, Party B is aware that he may, according to the Employment Contract, complete certain
service invention-creation as a result of performance of the tasks assigned by Party A or by virtue
of Party A’s material and technical conditions. Such service invention-creation shall be Party A’s
properties, and the titles thereto shall vest in Party A;



Whereas, Party B is willing to transfer all rights and interests in connection with the service
invention-creation to Party A, completely and free of charge, according to the Agreement,



NOW, THEREFORE, the Agreement is made by and between the Parties through equal and amiable
negotiation in accordance with the Law of the People’s Republic of China against Unfair
Competition, the Patent Labor Law of the People’s Republic of China and other pertinent laws and
regulations.





	6.	 	Representations and Warranties
	 
	 	 	Either party represents and warrants that it is willing to execute and abide by the Agreement.
	 
	7.	 	Service Invention






	 	2.1	 	Definition
	 
	 	 	 	For the purpose of the Agreement, “Service Invention” means all results including, but
not limited to, programs, machine, finished products, compounds, improvements, reports,
publications, books, video works, drawings, data, software, inventions & creations
(whether





Appendix 8




 









 






	 	 	 	protected by the Patent Law), works, information in tangible media (whether protected
by the Copyright Law), trademarks, trade names, product appearance, trade secrets,
know-how, concepts (whether protected by pertinent laws and regulations on trade
secrets), and other subject matter of the intellectual property, trademarks, trade
secrets protected by the Patent Law, Copyright Law, Trademark Law, Trade Secret Law or
other laws, new or useful technologies, combinations, discoveries, formulas, production
techniques, technical development, artworks, software and designs, achieved by Party B
(whether independently or jointly with others) from practice, creation, derivation,
development or manufacture or conceived in connection with Party A’s business (whether
related to Party B’s performance of his duties) during employment by Party A on the
basis of primary, partial or slight use of the material and technical conditions of
Party A (including, but not limited to, Party A’s funds, equipments, parts, raw
materials, technical information, technical materials, resource information and trade
secrets).
	 
	 	2.2	 	Service Invention during the Term of Office
	 
	 	 	 	Service inventions as mentioned in Article 2.1 hereof which are achieved by Party B,
whether independently or jointly with others, during his term of office, as well as all
materials and intellectual property rights concerned (whether patents, trademarks or
other rights may be applied for), shall be Party A’s proprietary properties all over the
world. Party B agrees to transfer all rights and interests (including, but not limited
to, rights to apply for patents, rights of authorship, rights of license and rights of
rewards) in connection with the service invention to Party A, completely and free of
charge. Party A may grant certain rewards to Party B in light of specific circumstances.
	 
	 	2.3	 	Invention & Creation after Demission
	 
	 	 	 	Party B agrees that, the inventions and creations achieved by Party B in connection with
Party A’s business (whether related to Party B’s performance of his duties), whether
independently or jointly with others, within twelve (12) months after termination or
rescission of the employment relationship between the Parties shall be deemed as achieved
during the employment with Party A, no matter whether patents, trademarks or other rights
may be applied for. Party B shall transfer all rights and interests (including, but not
limited to, rights to apply for patents, rights of authorship, rights of license and
rights of rewards) in connection with the inventions and creations to Party A, completely
and free of charge. Party B shall assist Party A in applying for patents or other rights
thereto.






	8.	 	License of Service Invention
	 
	 	 	Where Party B is unable to transfer the service inventions as mentioned in Article 2 hereof or
any of the rights and interests thereon to Party A according to the laws, Party B hereby grants
an exclusive, gratuitous transferable, irrevocable and worldwide license (including sublicense
to sub-licensees at multiple levels) to Party A to implement such non-transferable rights,
titles and interests. Where any of the rights and interests to or relating to such inventions
can neither be transferred to Party A from Party B nor be licensed to Party A, Party B shall
irrevocably waive all claims, and agree forever not to claim, for any right, title and interest
in connection with the non-transferable and non-licensable right of Party A or its assigns.





Appendix 8




 









 






	9.	 	Perfection of Relevant Rights






	 	4.1	 	Party B agrees to do its utmost to take all necessary legal actions for Party
A’s acquisition and maintenance of the rights to such service inventions, including
application for registration; Party B agrees to, at Party A’s requirements, issue such
documents and take such measures as necessary to confirm Party A’s right to such service
inventions.
	 
	 	4.2	 	Where Party A fails to obtain any of the necessary documents above for any
reason whatsoever or any of such documents bears no signature of Party B, Party B hereby
confirms to designate and appoint irrevocably Party A and its duly authorized senior
officer(s) and agent(s) as Party B’s actual agent(s) to represent and substitute for
Party B:






	 	(a)	 	to execute, deliver, apply, register and transfer the record of any
such application;
	 
	 	(b)	 	to execute and deliver any document necessary for enforcement of
such documents; and
	 
	 	(c)	 	to conduct all other legal activities, to procure the delivery,
application, registration, record transfer, execution and enforcement of patents,
copyrights, trade secrets and other rights in connection with service inventions,
which shall have the same legal force with those executed by Party B in person.






	 	4.3	 	Without Party A’s written consent, Party B shall have no right to, directly or
indirectly,






	 	(a)	 	copy, adapt, modify, translate, produce, market, publish (issue),
distribute, sell, license or partially license, transfer, lease, transmit, show
or use any of the aforesaid service inventions or any of relevant duplicates in
any part of in any form;
	 
	 	(b)	 	use the aforesaid service inventions or any of relevant duplicates
in any part of in any form to create derivative works, permit electronic access
or read or store any computer memory; or
	 
	 	(c)	 	Procure other persons to conduct any of the aforesaid activities.






	10.	 	Applicable Law and Dispute Settlement






	 	5.1	 	The Agreement shall be governed by and construed in accordance with
Chinese laws.
	 
	 	5.2	 	Arbitration






	 	5.2.1	 	Any and all disputes arising from or relating to the Agreement shall be
settled through amiable negotiation between the Parties. Where a certain dispute
cannot be settled through negotiation within sixty (60) days after either party
sends a notice to the other, such dispute (including disputes about validity or
existence of the Agreement) shall be submitted to China International Economic and
Trade Arbitration Commission Shanghai Sub-commission for arbitration according to
its arbitration rules in force then.
	 
	 	5.2.2	 	Arbitral awards shall be final and binding upon the Parties and shall be
enforced in accordance with pertinent clauses.




Appendix 8




 









 






	 	5.2.3	 	Arbitration fee shall be for the account of the losing party or the
party designated by the arbitration tribunal. Where one party has to enforce
arbitral awards by virtue of any kind of lawsuit, the breaching party shall be
responsible for all reasonable costs and expenses incurred therefrom, including, but
not limited to, reasonable attorney fee and the costs and expenses of any additional
lawsuit or enforcement incurred by the other party as a result of application for
enforcement of arbitral awards.
	 
	 	5.2.4	 	The Parties shall perform the Agreement continually in all aspects
during settlement of disputes, except for those in dispute.






	11.	 	Liability for Breach of Contract
	 
	 	 	In case of breach of the Agreement, the breaching party shall compensate the non-breaching
party for all losses arising therefrom.
	 
	12.	 	Miscellaneous






	 	7.1	 	Entire Agreement: the Agreement, as well as its schedules and appendices (if
any), shall be the final document which specifies the Parties’ intentions completely and
accurately, constitute the entire agreement between the Parties in connection with the
subject matter of the Agreement; there are no prior representations, warranties or
agreements concerning the Agreement. Without the written consent of the Parties,
modifications to, addition and deletion of the terms and conditions of the Agreement
shall not be binding upon the Parties.
	 
	 	7.2	 	Waiver: waiver of any default or negligence hereunder shall not constitute the
waiver of any other default or negligence, no matter whether the natures are similar.
Single or partial exercise of any right hereunder shall not exclude future exercise of
such right. Waiver may be valid only when the written document bearing the signature of
the authorized representative of the waiving party has been sent and such document can be
deemed as a waiver decision in the literal meaning.
	 
	 	7.3	 	Severability: where any of the terms or articles of the Agreement is held
invalid for reasons whatsoever, the invalidity shall not affect the remaining terms and
articles of the Agreement unless it has materially affected the continual performance of
the whole agreement, and such invalid term or clause shall be deed as deleted from the
Agreement. The Parties may negotiate to enter into a supplemental agreement to specify
relevant issues.
	 
	 	7.4	 	Third-Party Interests: the Agreement shall be binding upon and inure to the
benefit of each party hereto and its successors and the assigns permitted by the
Parities. No terms of the Agreement may be deemed as granting expressly or impliedly any
right, remedy or obligation to any individual or entity other than the Parties and their
respective successors and the assigns permitted by the Parties.
	 
	 	7.5	 	Notices: all notices, demands, requests, acknowledges or other communications
in connection with the Agreement must be made in writing and sent to the addressee’s
address as follows (or other address notified in writing) in person, by carrier or
registered letter with receipt. A notice, demand, request, acknowledge or other
communication in





Appendix 8




 









 






	 	 	 	connection with the Agreement shall be deemed as served: 1) upon delivery in case of
delivery in person; 2) three (3) days after delivery to the carrier in case of
delivery by carrier; if it is served within three (3) days, the actual service date
shall apply; 3) five (5) days after mailing in case of service by registered letter
(or airmail letter sent abroad); if it is served within five (5) days, the actual
service date shall apply.





	 	 	 
	To:

	 	Shanghai Hongmen Advertising Co., Ltd.
	 

	 	Add.: 2/F, Tower 1A, No. 345 Lane, Xinhua Road, Shanghai, China
	 

	 	Attn: Yun Yang
	 

	 	Tel: 021-62810161
	 

	 	Fax: 021-52540919
	 
	 	 
	To:

	 	Weidong Zhu
	 

	 	Add.: 2/F, Tower 1A, No. 345 Lane, Xinhua Road, Shanghai, China
	 

	 	Tel: 13901729948
	 

	 	Fax: 021-52540919







	 	7.6	 	Headings: The headings of all articles of the Agreement are inserted only for
reference and may not be deemed as interpretation of the Agreement or affect the meanings
of the Agreement in any way.
	 
	 	7.7	 	Publicity: unless otherwise provisions to the contrary in laws and
regulations, neither party nor its agent may make any public statement concerning the
Agreement, or any other document or subsequent documents concerning the matters of the
Agreement without the prior written consent of the other party (such content may not be
withheld without any justified reason).
	 
	 	7.8	 	Language: the Agreement shall be written in Chinese.
	 
	 	7.9	 	Copies: the Agreement shall be made in two (2) copies, one for each party.




(Execution Page Below)



Appendix 8








 









 







(Execution Page)



The Parties have signed the Agreement on the date first mentioned above.




Party A: Shanghai Hongmen Advertising Co., Ltd. (seal)





	 	 	 	 	 	 	 	 	 
	Legal representative:	 	 	 	(signature)	 	 
	 

	 	 	 	 	 	 	 
	 

	 	 	 	Cuiping Xu	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Party B: 

	 	 	 	 	 	(signature)	 	 
	 	 	 	 	 	 
	 

	 	 	 	Weidong Zhu	 	 	 	 





Appendix 8





 











 





Appendix 9

Non-competition Agreement (to be Executed with Party C) 




Appendix 9



 









 





Execution Version




Non-Competition Agreement




The Non-Competition Agreement (hereinafter referred to as “Agreement”) is made and entered
into on December 19, 2007 in Beijing, China by and among the following parties:




	(1)	 	Shanghai Hongmen Advertising Co., Ltd., a limited liability company incorporated and existing
under the laws of China, with its registered address at P-1 Building, No. 7523 Beiqing
Highway, Chonggu Town, Qingpu District, Shanghai, China (hereinafter referred to as “Party
A”);
	 
	(2)	 	Shanghai Yuqing Advertising Co., Ltd., a limited liability company incorporated and existing
under the laws of China, with its registered address at Room 1533, 15/F, No. 728 Yan’an West
Road, Changning District, Shanghai, China (hereinafter referred to as “Party B”)
	 
	(3)	 	Pacific Asia Mode Cube Limited, a limited liability company incorporated and existing under
the laws of Hong Kong, with its registered address at Room 2703, 27/F, The Centrium, 60
Wyndham Street, Central, Hong Kong, China (hereinafter referred to as “Party C”); and
	 
	(4)	 	Redgate Media AD Co., Ltd., a limited liability company incorporated and existing in
accordance with the laws of China, with its registered address at Room. 1807, 15/F, South
Building, Tower B, Jianwai SOHO, 39 East 3rd Ring Road Central, Chaoyang District, Beijing,
China (“Party D”, hereinafter collectively referred to as “PAMC” jointly with Party C);





(The aforesaid parties are hereinafter collectively referred to as the “Parties”, and individually
referred to as a “Party”.)



Whereas,





	1)	 	Party A is a company engaging in design, production, issue, ad-agency, image production
and planning for enterprise image (those requiring the operating license are subject to
licensing);
	 
	2)	 	Party B is a limited liability company engaging in outdoor advertising operation;
	 
	3)	 	The Parties entered into an Equity Transfer and Capital Increase Agreement on December 19,
2007 (“Equity Transfer and Capital Increase Agreement”). According to that Agreement, one of
the conditions precedent for Party D’s to take over Party A’s equity interest held by Party B
and increase capital in Party A is that Party A shall not encounter any competitive activity
from Party B;
	 
	4)	 	Party B is aware that its violation of the non-competition obligation hereunder will result
in material damage to Party A or PAMC’s interests;
	 
	5)	 	Party B agrees to perform the non-performance obligation according to the Agreement in
order to protect Party A’s and PAMC’s Interests.






	 	 	Now, therefore, the Parties agree as follows through equal and amiable negotiation and in
accordance with existing applicable laws, regulations and rules of the People’s Republic of
China:





I. Definitions




Appendix 9




 









 









	1.1	 	Related Party
	 
	 	 	For the purpose of the Agreement, Related Party of any individual or entity includes (1)any
kind of organization in which such individual or entity acts as management personnel, director
or is a partner or owns 10% or more of the actual interests held independently or jointly with
the Related Party, whether directly or indirectly; (2) 10% or more of the actual interests of
such individual or entity is held directly or indirectly by the Related Party; (3) 10% or more
of the actual interests of such individual or entity and the Related Party is held by the same
person or entity directly or indirectly; (4) any trust or other properties in which the
individual or entity owns material actual interests or acts as a trustee (or other similar
position); and (5) the person who lives with the individual, or acts as the director or
management personnel of such entity or its parent company or subsidiary, or any relative or
spouse of such director or management personnel, or any of the spouse’s relative.






	1.2	 	Competitive Business
	 
	 	 	Competitive Business refers to any business competitive with Party A (including, but not
limited to the project Party A started up in 2004 and will be completed in two stages prior to
June, 2006 to set up 1500 to 2000 mosquito-control light boxes in universities, colleges and
communities of Shanghai, and related business in the following work), including, but not
limited to any activity as follows: 1) development and production of any product which is
competitive or similar to that being developed or produced by Party A; 2) sale, by means of
direct sale or distribution via network, transaction or otherwise sale, of the products
produced by a third person which are competitive or similar to those distributed, transacted or
sold by Party A; 3) provision in any way of the services which are competitive or similar to
those provided by Party A; the aforesaid products or services include any product or service
which is being developed by Party A or which is being planned or developed during the Agreement
period; or 4) other characteristics competitive with Party A.






	II.	 	Non-Competition
	 
	2.1	 	Non-Competition Period
	 
	 	 	The Parties agree that, for the purpose of the Agreement, “Non-Competition Period” means the
period of three (3) years from the execution date hereof.
	 
	2.2	 	Non-Competition Scope
	 
	 	 	The Parties hereby agree that, for the purpose of the Agreement, “Non-Competition Scope” means
all over the world, including but not limited to the People’s Republic of China (including Hong
Kong SAR, Macao SAR and Taiwan Region) and any other country and region where Party A is
developing or will develop businesses.
	 
	2.3	 	Non-Competition Obligation
	 
	 	 	Without Party A’s prior written consent, Party B warrants that, within the non-competition
period and to the extent of non-competition scope and businesses, it will not, nor via its
Related Parties:
	 
	1)	 	conduct any activity damaging Party A’s interests or infringe Party A’s legitimate interests
(for the purpose of this Article, “Party A” in Article 2.3 hereof shall be deemed as including
Party A and its subsidiaries, parent companies or any Related Party); or
	 
	2)	 	incite, entice, instigate or otherwise procure any of Party A’s employees to terminate the
employment relationship with Party A, other than the activities conducted by Party B with
Party A’s written consent during the relevant period for performance of its duties;





Appendix 9




 









 






	3)	 	incite, entice, instigate or otherwise procure any of Party A’s suppliers, contractors or
clients (including, but not limited to, mosquito-control light box and advertising box
production and installation companies, advertising companies as well as advertising operation
releaser) to terminate the cooperation relationship with Party A, or conduct any activity
which may create an adverse effect upon the cooperation relationships between Party A and such
partners, suppliers, contractors or clients; or
	 
	4)	 	provide any consulting service or other assistance to other persons directly or indirectly in
its own name or as the representative or employee of other individuals or organizations, to
assist with other persons in conducting competitive businesses; or
	 
	5)	 	engage in or take part in, directly or indirectly, any business or activity in any way
(including but not limited to investment, emerge, affiliation, joint venture, cooperation,
contracting or leasing management or equity participation), whether independently or jointly
with others.






	III.	 	Governing Law and Dispute Resolution
	 
	3.1	 	Governing Law
	 
	 	 	The Agreement shall be governed by and construed in accordance with the laws of the People’s
Republic of China.






	3.2	 	Dispute Resolution
	 
	1)	 	Any dispute arising from or relating to the Agreement shall be resolved through amiable
negotiation between the Parties. Where a certain dispute cannot be resolved through
negotiation within sixty (60) days after one party sends a notice to the other parties, such
dispute (including disputes about the validity or existence of the Agreement) shall be
submitted to China International Economic and Trade Arbitration Commission Shanghai
Sub-commission for arbitration according to its arbitration rules in force then.
	 
	2)	 	The arbitral award shall be final and binding upon the Parties and may be enforced in
accordance with pertinent clauses.
	 
	3)	 	Unless otherwise ruled, arbitration fee shall be for the account of the losing party. Where
one party has to enforce an arbitral award by virtue of any kind of lawsuit, the breaching
party shall be responsible for all reasonable costs and expenses incurred therefrom,
including, but not limited to, reasonable attorney fee and the costs and expenses of any
additional lawsuit or enforcement incurred by the other as a result of application for
enforcement of such arbitral award.
	 
	4)	 	During the period of dispute resolution, the Parties shall continue to perform the Agreement
in all aspects other than the issues in dispute.






	IV.	 	Remedies for Breach of Contract
	 
	4.1	 	The Parties agree that Party B shall assume the liability for breach of contract if Party B
violates the non-competition obligation as specified in Article 2 hereof, all incomes obtained
from violation of such obligation (such as engagement in the work competitive with Party A)
shall vest in Party A, and Party B shall compensate Party A for all actual losses arising
therefrom. In addition, Party A shall be entitled to require Party B to immediately cease
conducting any activity relating to competitive business.
	 
	4.2	 	Party B acknowledges that liquidated damages as mentioned in Article 4.1 above shall not
constitute sufficient remedy for its breach of contract. Party B agrees that Party B shall
compensate Party A for all expenses, liabilities or losses (including, but not limited to,
interest and attorney fee paid or incurred as a result of breach of contract) to Party A if
any expenses, liabilities or losses (including but not limited to Party A’s loss of profit)
are incurred by Party A due to Party B’s breach of the Agreement.





Appendix 9




 









 









	V.	 	Effectiveness and Term
	 
	 	 	The Agreement shall become effective as of the date of execution by the Parties and remain
perpetually effective. Earlier termination of the Agreement shall not prejudice the right of
the non-breaching party to claim against the breaching party according to the Agreement.
	 
	VI.	 	Miscellaneous
	 
	6.1	 	Entire Agreement: the Agreement, as well as its schedules and appendices (if any), shall be
the sole and final document which specifies the Parties’ intentions completely and accurately,
and constitute the entire agreement between the Parties concerning the subject matter of the
Agreement. There are not prior representations, warranties or agreements concerning the
Agreement. Without the written consent of the Parties, no modification to, addition or
deletion of the terms and conditions of the Agreement shall be binding upon the Parties.
	 
	6.2	 	Waiver: any waiver of any default or negligence hereunder shall not represent the waiver of
any other default or negligence, no matter whether the natures are similar. Any single or
partial exercise of any right hereunder shall not exclude future exercise of such right. Such
waiver may be valid only when the written document bearing the signature of the authorized
representative of the waiving party has been sent and such document shall be deemed as a
waiver decision in the literal meaning.
	 
	6.3	 	Severability: where any of the terms or clauses of the Agreement is held invalid for any
reason whatsoever, the invalidity shall not affect the remaining terms and clauses of the
Agreement unless it has affected materially the continual performance of the whole Agreement,
and such invalid term or clause shall be deemed as deleted from the Agreement. The Parties may
negotiate to enter into a supplementary agreement to specify relevant issues.
	 
	6.4	 	A Third-Party Interests: the Agreement shall be binding upon and inure to the benefit of each
party hereto and its successors and the assigns permitted by the Parities. No content of the
Agreement may be deemed as granting expressly or impliedly any right, remedy or obligation to
any individual or entity other than the Parties and their respective successors and the
assigns permitted by the Parties.
	 
	6.5	 	Notice: all notices, demands, requests, acknowledges or other communications in connection
with the Agreement must be made in writing and delivered to each party’s address as follows
(or any other address notified in writing by such party) in person, by carrier or registered
letter with receipt. A notice, demand, request, acknowledge or any other communication in
connection with the Agreement shall be deemed as served: 1) upon delivery in case of delivery
in person; 2) three (3) days after delivery to the carrier in case of delivery by carrier; if
it is served within three (3) days, the actual service date shall apply; 3) five (5) days
after mailing in case of delivery by registered letter (or airmail letter sent abroad); if it
is served within five (5) days, the actual service date shall apply.






	To: Shanghai Hongmen Advertising Co., Ltd.
	 
	 	 	Add.: 2/F, Tower 1A, No. 345 Lane, Xinhua Road, Shanghai, China
	 
	 	 	Attn.: Yun Yang




Appendix 9



 









 









	 	 	Tel: 021-62810161
	 
	 	 	Fax: 021-52540919






	To:	 	 Shanghai Yuqing Advertising Co., Ltd.
	 
	 	 	Add.: Room 3303, Junling Plaza, No. 500 Chengdu N. Road, Shanghai, China
	 
	 	 	Attn.: Gang Zheng
	 
	 	 	Tel: 021-63618021
	 
	 	 	Fax: 021-63606195






	 To:	 	 Pacific Asia Mode Cube Limited
	 
	 	 	Add.: 8/F, Tower B, International Plaza, No.19 Jianguomenwai Avenue, Beijing, China
	 
	 	 	Attn.: Ying Zhu
	 
	 	 	Tel: 010-58692980
	 
	 	 	Fax: 010-58692960






	To:	 	 Redgate Media AD Co., Ltd.
	 
	 	 	Add.: 8/F, Tower B, International Plaza, No.19 Jianguomenwai Avenue, Chaoyang, Beijing, China
	 
	 	 	Attn.: Ying Zhu
	 
	 	 	Tel: 010-58692980
	 
	 	 	Fax: 010-58692960






	6.6	 	Headings: The headings of all the articles of the Agreement are inserted only for reference
and may not be deemed as interpretation of the Agreement or affect the meanings of the
Agreement in any way.
	 
	6.7	 	Publicity: unless otherwise provided to the contrary in laws and regulations, no party or its
agent may make any public statement concerning the Agreement, or any other document or
subsequent document concerning the matters of the Agreement, without the prior written consent
of the other parties (such content may not be withheld without any justified reason).
	 
	6.8	 	Language: the Agreement shall be written in Chinese.
	 
	6.9	 	Counterparts: the Agreement shall be made in four (4) copies, one for each party.





(Execution Page Attached)




Appendix 9




 









 




(Execution Page)




	 	 	 	 	 
	Party A: Shanghai Hongmen Advertising Co., Ltd.

 	 	 
	Legal Representative or Authorized Representative:	(signature)
 	 	 
	 	Cuiping Xu 	 	 
	 	 	 	 
	 



	 	 	 	 	 
	Party B: Shanghai Yuqing Advertising Co., Ltd.

 	 	 
	Legal Representative or Authorized Representative:	(signature)
 	 	 
	 	Cuiping Xu 	 	 
	 	 	 	 
	 



	 	 	 	 	 
	Party C: Pacific Asia Mode Cube Limited

 	 	 
	Legal Representative or Authorized Representative:	(signature)
 	 	 
	 	BRACK, Peter Bush 	 	 
	 	 	 	 
	 



	 	 	 	 	 
	Party D: Redgate Media AD Co., Ltd.

 	 	 
	Legal Representative or Authorized Representative:	(signature)
 	 	 
	 	Yue Jin 	 	 
	 	 	 	 
	 



Appendix 9




 









 








Appendix 10

Party C’s Capital Increase Termination Agreement



Appendix 10



 









 








Termination Agreement



The Termination Agreement (hereinafter referred to as “Agreement”) was executed on December
19, 2007 in Beijing, China by and among the following parties:





	 	(1)	 	Shanghai Yuqin Advertising Co., Ltd., a limited liability company incorporated and
existing under the laws of China, with its registered office at Room 1533, 15/F, No. 728
Yan’an West Road, Changning District, Shanghai, China (hereinafter referred to as
“Yuqin”);
	 
	 	(2)	 	Fogen Yang, a Chinese citizen, with the ID card No.: 310102490620443;
	 
	 	(3)	 	Cui Yuan, a Chinese citizen, with the ID card No.: 310109461115402;
	 
	 	(4)	 	Weidong Zhu, a Chinese citizen, with the ID card No.: 310110197006105018;
	 
	 	(5)	 	Chengye Guo, a Chinese citizen, with the ID card No.: 110102195603230419;
	 
	 	(6)	 	Shanghai Hongmen Advertising Co., Ltd., a limited liability company incorporated
and existing under the laws of China, with its registered address at P-1 Building, No.
7523 Beiqing Road, Zhonggu Town, Qingpu District, Shanghai, China (hereinafter referred
to as “Hongmen”);
	 
	 	(7)	 	Pacific Asia Mode Cube Limited, a limited liability company incorporated and
existing under the laws of Hong Kong SAR, with its registered address at Room 2703, 27/F,
Central Plaza, No.60 Wyndham Street, Central, Hong Kong, China (hereinafter referred to
as “PAMC”); and
	 
	 	(8)	 	Redgate Media AD Co., Ltd., a limited liability company incorporated and existing
under the laws of China, with its registered address at Room 1807, 15/F, South Tower of
Building B,, Jianwai SOHO, No.39 East 3rd Ring Road Central, Chaoyang
District, Beijing, China (hereinafter referred to as “PAMC Group” jointly with PAMC);




(The aforesaid Parties are hereinafter collectively referred to as the “Parties” and individually
referred to as a “Party”.)





	 	 	Whereas,






	 	(A)	 	The Equity Transfer and Capital Increase Agreement of Shanghai Hongmen Advertising
Co., Ltd. (hereinafter referred to as “No. 1 Capital Increase Agreement”) was executed on
June 4, 2006 by and among Yuqin, Fogen Yang, Cui Yuan, Weidong Zhu, Chengye Guo and
Hongmen;
	 
	 	(B)	 	The Supplementary Agreement for Equity Transfer and Capital Increase Agreement
(hereinafter referred to as “No. 2 Capital Increase Agreement”) was executed on July 3,
2006 by and among the parties to the No. 1 Capital Increase Agreement;
	 
	 	(C)	 	The Supplementary Agreement for Capital Increase of Hongmen (hereinafter referred
to as “No. 3 Capital Increase Agreement”) was executed in 2007 by and among Yuqin,
Weidong Zhu and Hongmen;
	 
	 	(D)	 	Yuqin, Weidong Zhu and Hongmen acknowledge that the No. 1 Capital Increase
Agreement, No. 2 Capital Increase Agreement, No. 3 Capital Increase Agreement, all
appendices thereto and all legal documents (including, but not limited to, amendments to
the articles of association signed by all shareholders of Hongmen, resolutions of
shareholders’ meeting and other application documents submitted for industrial and
commercial registration) constitute all relevant transaction documents (hereinafter
referred to as “Yuqin’s Capital Increase Documents”) executed by Yuqin for investment in
Hongmen;
	 
	 	(E)	 	Yuqin, Weidong Zhu and Hongmen executed the Equity Transfer and Capital Increase
Agreement (hereinafter referred to as “PAMC’s Capital
Increase Agreement”) with PAMC
Group on December 19, 2007. According to PAMC’s Capital Increase Agreement, as one of the
conditions precedent, Yuqin shall enter into an agreement with all parties to Yuqin’s
Capital Increase Documents for terminating Yuqin’s Capital Increase Documents and





Appendix 10




 









 






	 	 	 	confirming the performance of the obligated thereunder at the time of termination.






	 	 	Now, therefore, the Agreement is made by and among the Parties through equal and amiable
negotiation and in accordance with existing applicable laws, regulations and rules of the People’s
Republic of China.






	13.	 	Representations and Warranties
	 
	 	 	Each party hereto represents and warrants that it is willing to execute the Agreement and to
comply with the Agreement.






	14.	 	Termination of Yuqin’s Capital Increase Documents






	 	2.4	 	Yuqin, Fogen Yang, Cui Yuan, Weidong Zhu, Chengye Guo and Hongmen agree to
terminate Yuqin’s Capital Increase Documents. Any obligation under Yuqin’s Capital
Increase Documents which has not been fulfilled up to the date of the Agreement will not
be performed any more.
	 
	 	2.5	 	Yuqin agrees to convert the capital increase amount (“Unregistered Capital
Increase”) which Yuqin shall remit in Hongmen’s capital increase account (A/C.:
216140100100068164) on June 27, 2007 according to the No. 3 Capital Investment Documents
into the loan to Hongmen, and the latter shall make repayment on schedule. Therefore,
Yuqin and Hongmen shall take all legal and feasible measures including, but not limited
to, a) altering Hongmen’s accounting books, balance sheets and other financial data; b)
revoking the Capital Verification Report of Shanghai Hongmen Advertising Co., Ltd. issued
on July 4, 2007 by Shanghai Qinye CPA Firms, amendments to the articles of association,
resolutions of shareholders’ meeting and other relevant documents signed by Yuqin and
Weidong Zhu; c) applying to the industrial and commercial bureau for withdrawing all
relevant materials submitted by Hongmen for handling the Unregistered Capital Increase
and terminating all procedures concerned.






	15.	 	Warranties and Undertakings of All Parties to Yuqin’s Capital Increase Documents






	 	3.1	 	All parties to Yuqin’s Capital Increase Documents hereby warrant to PAMC Group
that the parties have no disputes over the performance of Yuqin’s Capital Increase
Documents up to the date of the Agreement and shall not claim any right relating to
Yuqin’s Capital Increase Documents against PAMC Group due to the latter’s takeover of all
the equity interest of Hongmen held by Yuqin.
	 
	 	3.2	 	Yuqin hereby makes warranties and undertakings to PAMC Group that, after
Hongmen repays the Unregistered Capital Increase Amount according to PAMC’s Capital
Increase Agreement and Yuqin’s loans as mentioned in Article 3.2.1 of the aforesaid
Agreement,






	 	3.2.1	 	Hongmen has not any other debt to Yuqin any more;
	 
	 	3.2.2	 	Yuqin will have no rights under Yuqin’s Capital Investment Documents and
shall not claim against PAMC Group and Hongmen by virtue of any issue concerning
matters with respect to Yuqin’s Capital Investment Documents;
	 
	 	3.2.3	 	PAMC Group shall not assume any of Yuqin’s obligations under Yuqin’s
Capital Investment Documents as a result of takeover of all the equity interest of
Hongmen held by Yuqin; and
	 
	 	3.2.4	 	Yuqin shall be responsible for all losses to PAMC Group in connection
with Yuqin’s Capital Investment Documents as a result of takeover of all the equity
interest of Hongmen held by Yuqin.





Appendix 10




 









 






	16.	 	Applicable Law and Dispute Settlement






	 	4.1	 	The Agreement shall be governed by and interpreted in accordance with the laws
of the People’s Republic of China.
	 
	 	4.2	 	Arbitration






	 	4.2.1	 	Each party shall do its utmost to settle any and all disputes arising
from or relating to the Agreement through amiable negotiation. If a dispute cannot
be settled in a amiable way within sixty (60) days after one party notifies the
other parties, such dispute (including disputes over the effectiveness or existence
of the Agreement) shall be submitted to China International Economic and Trade
Arbitration Commission Shanghai Sub-commission for arbitration according to its
prevailing arbitration rules then.
	 
	 	4.2.2	 	Arbitral awards shall be final and binding upon the Parties and may be
enforced according to relevant rules.
	 
	 	4.2.3	 	Arbitration fee shall be borne by the losing party/parties or the
party/parties designated by the arbitration tribunal. If one party deems it
necessary to enforce arbitral awards by virtue of any kind of lawsuit, the breaching
party/parties shall be responsible for all reasonable expenses and costs, including,
but not limited to, reasonable attorney fee and costs for any additional lawsuit or
arbitration arising from enforcement of arbitral awards by the non-breaching
party/parties.
	 
	 	4.2.4	 	Each and all Parties shall perform the Agreement continually in all
aspects during dispute settlement, except for those in dispute.






	17.	 	Liability for Breach of Contract






	 	 	In case any breach of the Agreement, the breaching party/parties shall compensate the other
parties for all losses arising therefrom.






	18.	 	Miscellaneous






	 	6.1	 	Entire agreement: The Agreement, as well as schedules and appendices (if any),
are the sole conclusive document which describes each party’s intention in a complete and
accurate way and constitutes the entire agreement among the Parties in connection with
the subject matter hereof. There is not any other representation, warranty or agreement
which may prevail over the Agreement. Without written consents of the Parties, amendments
to, supplementations with and deletion of any of the terms and conditions hereof shall
not be binding upon the Parties.
	 
	 	6.2	 	Waiver: Each party’s waiver of default or negligence hereunder shall not be
deemed its waiver of any other default or negligence, whether the natures are similar.
Any single or partial exercise of any right shall not exclude any future exercise of such
right. Waiver may not be valid until the written document bearing the signature of the
authorized representative of the waiving party has been made and such written document
shall be confirmed as a waiver according to literal meaning.
	 
	 	6.3	 	Severability: When any of the terms or provisions of the Agreement is held
invalid for any reason whatsoever, the invalidity shall not affect the remaining terms
and provisions hereof and the invalid term or provision shall be deemed as deleted from
the Agreement unless the invalidity has materially affected further performance of the
whole Agreement. The Parties may enter into a supplementary agreement through negotiation
to specify relevant




Appendix 10



 









 









	 	 	 	affairs.
	 
	 	6.4	 	Third Person’s Interest: The Agreement shall be binding upon and inure to the
benefit of each party hereto and its successors and authorized assigns. No provision
hereof may be deemed, expressly or impliedly, as granting rights, remedies or obligations
to any person other than the Parties and their respective successors and assigns.
	 
	 	6.5	 	Notices: Any and all notices, demands, requests, acknowledges and other
correspondences in connection with the Agreement must be made in writing and served on
the following addresses (or other addresses informed by relevant parties hereto in
writing) in person, by express or registered letter with a receipt. Any and all notices,
demands, requests, acknowledges and other correspondences in connection with the
Agreement may be deemed as served: 1) in case of delivery in person, at the time of
delivery; 2) in case of express, three (3) days after handover; 3) in case of registered
mail (or airmail letter to other countries), five (5) days after mailing; in case of
service within five (5) days, the date of actual service shall apply.






	 	 	To Shanghai Yuqin Advertising Co., Ltd.
	 
	 	 	      Add.: Room 3303, Junling Plaza, No. 500 Chengdu N. Road, Shanghai, China
	 
	 	 	      Attn.: Gang Zheng
	 
	 	 	      Tel: 021-63618021
	 
	 	 	      Fax: 021-63619051






	 	 	To Fogen Yang
	 
	 	 	      Add.: 2/F, Tower 1A, No. 345 Lane, Xinhua Road, Shanghai, China
	 
	 	 	      Tel: 021-62810161
	 
	 	 	      Fax: 021-52540919






	 	 	To Cui Yuan
	 
	 	 	      Add.: 2/F, Tower 1A, No. 345 Lane, Xinhua Road, Shanghai, China
	 
	 	 	      Tel: 021-62810161
	 
	 	 	      Fax: 021-52540919






	 	 	To Weidong Zhu
	 
	 	 	      Add.: 2/F, Tower 1A, No. 345 Lane, Xinhua Road, Shanghai, China
	 
	 	 	      Tel: 13901729948
	 
	 	 	      Fax: 021-52540919






	 	 	To Chengye Guo
	 
	 	 	      Add.: Room 303, Unit 4, Building 7, Block 2, Shuanghuayuan Nanli, Chaoyang
District, Beijing, China
	 
	 	 	     Tel: 13901210748
	 
	 	 	      Fax: 010-87721723





Appendix 10




 









 









	 	 	To Shanghai Hongmen Advertising Co., Ltd.
	 
	 	 	      Add.: 2/F, Tower 1A, No. 345 Lane, Xinhua Road, Shanghai, China


      Attn.: Yun Yang


      Tel: 021-62810161


      Fax: 021-52540919






	 	 	To Pacific Asia Mode Cube Limited
	 
	 	 	      Add.: 8/F, Tower B, International Plaza, No.19, Jianguomenwai Avenue, Beijing,
China
	 
	 	 	      Attn.: Ying Zhu
	 
	 	 	      Tel: 010-58692980
	 
	 	 	      Fax: 010-58692960






	 	 	To Redgate Media AD Co., Ltd.
	 
	 	 	      Add.: 8/F, Tower B, International Plaza, No. 19, Jianguomenwai Avenue,
Beijing, China
	 
	 	 	      Attn.: Ying Zhu
	 
	 	 	      Tel: 010-58692980
	 
	 	 	      Fax: 010-58692960






	6.6	 	Headings: The headings of all the articles in the Agreement are inserted only
for reference and may not affect the interpretation or meaning of the Agreement in any
form.
	 
	6.7	 	Publicity: Unless laws and regulations contain provisions to the contrary,
without the prior written consents of the other parties (such consent may not be withheld
any justified reason), any party or its agent may not make any public statement
concerning the Agreement or any other or subsequent document executed concerning the
issues as mentioned herein.
	 
	6.8	 	Language: The Agreement shall be written in Chinese.
	 
	6.9	 	Counterparts: The Agreement shall be made in eight (8) copies, one for each
party.




(Execution Page Attached)




Appendix 10




 









 








(Execution Page)




	 	 	 	 	 
	Shanghai Yuqin Advertising Co., Ltd. (seal)

 	 	 
	Legal representative or Authorized representative:	
 	 (signature)	 
	 	Cuiping Xu 	 	 



	 	 	 	 	 
	Fogen Yang

 	 	 
	Signature:  	 	 	 
	 	 	 	 



	 	 	 	 	 
	Cui Yuan

 	 	 
	Signature:  	

 	 	 
	 	 	 	 



	 	 	 	 	 
	Weidong Zhu

 	 	 
	Signature:  	 	 	 
	 	 	 	 



	 	 	 	 	 
	Chengye Guo

 	 	 
	Signature:  	 	 	 
	 	 	 	 
	 	 	 	 



	 	 	 	 	 
	Shanghai Hongmen Advertising Co., Ltd. (seal)

 	 	 
	Legal representative or Authorized representative:	
 	 (signature)	 
	 	Cuiping Xu 	 	 
	 	 	 	 
	 



	 	 	 	 	 
	Pacific Asia Mode Cube Limited

 	 	 
	Legal representative or Authorized representative:	
 	 (signature)	 
	 	BRACK, Peter Bush 	 	 
	 	 	 	 
	 



	 	 	 	 	 
	Redgate Media AD Co., Ltd.

 	 	 
	Legal representative or Authorized representative:	
 	 (signature)	 
	 	Yue Jin 	 	 
	 	 	 	 
	 



Appendix 10





 









 





Appendix 11

Fixed-income Right Termination Agreement




Appendix 11




 









 





Execution Version




Fixed-income Right Termination Agreement


The Termination Agreement (hereinafter referred to as “Agreement”) was executed on December
19, 2007 in Shanghai, China by and among the following parties:





	 	(9)	 	Chengye Guo, a Chinese citizen, with the ID card No.: 110102195603230419;
	 
	 	(10)	 	Shanghai Hongmen Advertising Co., Ltd., a limited liability company
incorporated and existing under the laws of China, with its registered address at P-1
Building, No. 7523 Beiqing Road, Zhonggu Town, Qingpu District, Shanghai, China
(hereinafter referred to as “Company”);
	 
	 	(11)	 	Weidong Zhu, a Chinese citizen, with the ID card No.: 310110197006105018;
	 
	 	(12)	 	Shanghai Yuqin Advertising Co., Ltd., a limited liability company
incorporated and existing under the laws of China, with its registered address at Room
1533, 15/F, No. 728 Yan’an West Road, Changning District, Shanghai, China (“Yuqin”);
	 
	 	(13)	 	Pacific Asia Mode Cube Limited, a limited liability company incorporated and
existing under the laws of Hong Kong SAR, with its registered address at Room 2703, 27/F,
Central Plaza, No.60 Wyndham Street, Central, Hong Kong, China (hereinafter referred to
as “PAMC”); and
	 
	 	(14)	 	Redgate Media AD Co., Ltd., a limited liability company incorporated and
existing under the laws of China, with its registered address at Room 1807, 15/F, South
Tower of Building B, Jianwai SOHO, No.39 East 3rd Ring Road Central, Chaoyang
District, Beijing, China (hereinafter referred to as “PAMC Group” jointly with PAMC);





     (The aforesaid Parties hereto are hereinafter collectively referred to as the “Parties” and
individually referred to as a “Party” )




	 	 	Whereas,






	 	(F)	 	The Agreement (hereinafter referred to as “Income
Right Agreement”) was executed on September 27, 2004 by and between Chengye
Guo and the Company;
	 
	 	(G)	 	The Agreement for Conversion of Chengye Guo’s Income Right in Hongmen
Advertising Co., Ltd. (hereinafter referred to as “Income Right
Conversion Agreement”) was executed on April 11, 2006 by and between Chengye
Guo and the Company;
	 
	 	(H)	 	The Parties acknowledge that the Income Right Agreement, the Income Right
Conversion Agreement and all appendices thereto, as well as all pertinent legal documents
(including, but not limited to, resolutions of the Shareholders’ Meeting signed by the
shareholders of the Company) constitute all pertinent legal documents (hereinafter
collectively referred to as “Income Right Documents”) under which Chengye Guo
enjoys the fixed income right of the Company;
	 
	 	(I)	 	The Equity Transfer and Capital Increase Agreement (hereinafter referred to as
“Equity Transfer and Capital Increase Agreement”) was executed on December 19, 2007 by
and among Yuqin, the Company, Weidong Zhu and PAMC. According to the Equity Transfer and
Capital Increase Agreement, as one of the conditions precedent, the Company shall execute
relevant legal documents with Chengye Guo to terminate the Income Right Documents.






	 	 	Now, therefore, the Agreement is made by and among the Parties through equal and amiable
negotiation in accordance with existing applicable laws, regulations and rules of the People’s





Appendix 11




 









 






	 	 	Republic of China.










19. Representations and Warranties





	 	 	Each party hereto represents and warrants that it is willing to execute the Agreement and to
comply with the Agreement.










20. Termination of Income Right Documents





	 	2.6	 	The Parties agree to terminate the Income Right Documents. According to the
Income Right Documents, the Company shall pay the fixed income right amount to Chengye
Guo, namely, RMB eight hundred and twenty-one thousand five hundred
(RMB821,500) (“Income Right Amount”) up to the date of the Agreement. The Parties agree
that any obligation under the Income Right Documents which has not been
fulfilled will not be performed any more, without for the Income Right
Documents.
	 
	 	2.7	 	The Parties agree that the Debts Repayable under Article 3.2 of the Equity
Transfer and Capital Increase Agreement have contained sufficiently the Income-right
Amount as mentioned in Article 2.1 hereof and will be paid by the Company to Chengye Guo
according to the Equity Transfer and Capital Increase Agreement.










21. Warranties and Undertakings





	 	 	Chengye Guo, Weidong Zhu and Yuqin (“Undertaking Parties”) hereby make the following
warranties and undertakings to the Company and PAMC:






	 	3.1.	 	Neither party has objections to the performance of the Income Right
Documents up to the date of the Agreement. The Undertaking Parties shall take all
necessary measures (including, but not limited to, execution of all necessary documents
and procurement of the Company’s shareholders to terminate relevant resolutions of the
shareholders’ meeting) to cooperate with the Company in terminating the Income Right
Documents according to the Agreement.
	 
	 	3.2	 	After the Company pays the Income Right Amount to Chengye Guo according to the
Equity Transfer and Capital Increase Agreement, (i) all rights of the
Undertaking Parties under the Income Right Documents shall be terminated
automatically; (ii) Chengye Guo acknowledges that the Company has
fully performed its obligations under the Income Right Documents; (iii)
Chengye Guo will neither enjoy any right under the Income Right Documents nor
claim any right against the Company by virtue of the Income Right Documents.
	 
	 	3.3	 	PAMC shall not assume any obligation under the Income Right
Documents as a result of subscription for the Company’s equity interest. The
Undertaking Parties shall not claim against the Company or PAMC as a result of any issue
or dispute concerning the matters of the Income Right Documents.





Appendix 11




 









 






	 	3.4	 	Chengye Guo shall be responsible for any and all actual or potential losses to
the Company and PAMC as a result of performance and termination of the Income Right
Documents, for which Weidong Zhu and Yuqin shall assume joint and several
liabilities.






	22.	 	Applicable Law and Dispute Settlement






	 	4.3	 	The Agreement shall be governed by and interpreted in accordance with the laws
of the People’s Republic of China.
	 
	 	4.4	 	Arbitration






	 	4.2.1	 	Each party shall do its utmost to settle any and all disputes
arising from or in connection with the Agreement through amiable negotiation. If a
dispute cannot be settled in a amiable way within sixty (60) days after one party
notifies the other parties, such dispute (including disputes about the effectiveness
or existence of the Agreement) shall be submitted to China International Economic
and Trade Arbitration Commission Shanghai Sub-commission for arbitration according
to its prevailing arbitration rules then.
	 
	 	4.2.2	 	Arbitral awards shall be final and binding upon the Parties and
may be enforced according to relevant rules.
	 
	 	4.2.3	 	Arbitration fee shall be borne by the losing party/parties or the
party/parties designated by the arbitration tribunal. If one party deems it
necessary to enforce arbitral awards by virtue of any kind of lawsuit, the breaching
party/parties shall be responsible for all reasonable expenses and costs, including,
but not limited to, reasonable attorney fee and costs for any additional lawsuit or
arbitration arising from enforcement of arbitral awards by non-breaching
party/parties..
	 
	 	4.2.4	 	All Parties shall perform the Agreement continually in all aspects
during dispute settlement, without for those in dispute.






	23.	 	Liability for Breach of Contract






	 	 	In case of any breach of the Agreement, the breaching party/parties shall compensate the
other parties for all losses arising therefrom.






	24.	 	Miscellaneous






	 	6.10	 	Entire agreement: The Agreement, as well as schedules and appendices (if
any), are the sole conclusive document which describes each party’s intention in a
complete and accurate way and constitutes the entire agreement among the Parties in
connection with the subject matter hereof. There is not any other representation,
warranty or agreement which may prevail over the Agreement. Without written consents of
the Parties, amendments to, supplementations with and deletion of any of the terms and
conditions hereof shall not be binding upon the Parties.
	 
	 	6.11	 	Waiver: Each party’s waiver of default or negligence hereunder shall not be
deemed its waiver of any other default or negligence, whether the natures are similar.
Any single or partial exercise of any right shall not exclude any future exercise of such
right. Waiver may





Appendix 11




 









 






	 	 	 	not be valid until the written document bearing the signature of the authorized
representative of the waiving party has been made and such written document shall be
confirmed as a waiver according to literal meaning.






	 	6.12	 	Severability: When any of the terms or provisions of the Agreement is held
invalid for any reason whatsoever, the invalidity shall not affect the remaining terms
and provisions hereof and the invalid term or provision shall be deemed as deleted from
the Agreement unless the invalidity has materially affected further performance of the
whole Agreement. The Parties may enter into a supplementary agreement through negotiation
to specify relevant affairs.
	 
	 	6.13	 	Third Person’s Interest: The Agreement shall be binding upon and inure to the
benefit of each party hereto and its successors and authorized assigns. No provision
hereof may be deemed, expressly or impliedly, as granting rights, remedies or obligations
to any person other than the Parties and their respective successors and assigns.
	 
	 	6.14	 	Notices: Any and all notices, demands, requests, acknowledges and other
correspondences in connection with the Agreement must be made in writing and served on
the following addresses (or other addresses informed by relevant parties hereto in
writing) in person, by express or registered letter with a receipt. Any and all notices,
demands, requests, acknowledges and other correspondences in connection with the
Agreement may be deemed as served: 1) in case of delivery in person, at the time of
delivery; 2) in case of express, three (3) days after handover; 3) in case of registered
mail (or airmail letter to other countries), five (5) days after mailing; in case of
service within five (5) days, the date of actual service shall apply.






	 	 	To Chengye Guo
	 
	 	 	      Add.: Room 303, Unit 4, Building 7, Block 2, Shuanghuayuan Nanli, Chaoyang
District, Beijing, China
	 
	 	 	      Tel: 13901210748
	 
	 	 	      Fax: 010-87721723






	 	 	To Shanghai Hongmen Advertising Co., Ltd.
	 
	 	 	      Add.: 2/F, Tower 1A, No. 345 Lane, Xinhua Road, Shanghai, China, China
	 
	 	 	      Attn.: Yun Yang
	 
	 	 	      Tel: 021-62810161
	 
	 	 	      Fax: 021-52540919






	 	 	To Shanghai Yuqin Advertising Co., Ltd.
	 
	 	 	      Add.: Room 3303, Junling Plaza, No. 500 Chengdu N. Road, Shanghai, China
	 
	 	 	      Attn.: Gang Zheng
	 
	 	 	      Tel: 021-63618021
	 
	 	 	      Fax: 021-63619051





Appendix 11




 









 









	 	 	To Weidong Zhu
	 
	 	 	      Add.: 2/F, Tower 1A, No. 345 Lane, Xinhua Road, Shanghai, China, China
	 
	 	 	      Tel: 13901729948
	 
	 	 	      Fax: 021-52540919






	 	 	To Pacific Asia Mode Cube Limited
	 
	 	 	      Add.: 8/F, Tower B, International Plaza, No.19, Jianguomenwai Avenue, Beijing,
China
	 
	 	 	      Attn.: Ying Zhu
	 
	 	 	      Tel: 010-58692980
	 
	 	 	      Fax: 010-58692960






	 	 	To Redgate Media AD Co., Ltd.
	 
	 	 	      Add.: 8/F, Tower B, International Plaza, No. 19, Jianguomenwai Avenue,
Beijing, China
	 
	 	 	      Attn.: Ying Zhu
	 
	 	 	      Tel: 010-58692980
	 
	 	 	      Fax: 010-58692960






	6.15	 	Headings: The headings of all the articles in the Agreement are inserted only
for reference and may not affect the interpretation or meaning of the Agreement in any
form.
	 
	6.16	 	Publicity: Unless laws and regulations contain provisions to the contrary,
without the prior written consents of the other parties (such consent may not be withheld
without any justified reason), any party or its agent may not make any public statement
concerning the Agreement or any other or subsequent document executed concerning the
issues as mentioned herein.
	 
	6.17	 	Language: The Agreement shall be written in Chinese.
	 
	6.18	 	Counterparts: The Agreement shall be made in six (6) copies, one for each
party.




(Execution Page Attached)




Appendix 11




 









 







(Execution Page)




	 	 	 	 	 
	Chengye Guo

 	 	 
	Signature:  	
 	 	 
	 	 	 	 
	 	 	 	 
	 



	 	 	 	 	 
	Shanghai Hongmen Advertising Co., Ltd. (seal)

 	 	 
	Legal representative or Authorized representative:	
 	 (signature)	 
	 	Cuiping Xu 	 	 
	 	 	 	 
	 



	 	 	 	 	 
	Weidong Zhu

 	 	 
	Signature:  	
 	 	 
	 	 	 	 
	 	 	 	 
	 



	 	 	 	 	 
	Shanghai Yuqin Advertising Co., Ltd. (seal)

 	 	 
	Legal representative or Authorized representative:	
 	 (signature)	 
	 	Cuiping Xu 	 	 
	 	 	 	 
	 



	 	 	 	 	 
	Pacific Asia Mode Cube Limited

 	 	 
	Legal representative or Authorized representative:	
 	(signature)	 
	 	BRACK, Peter Bush 	 	 
	 	 	 	 
	 



	 	 	 	 	 
	Redgate Media AD Co., Ltd.

 	 	 
	Legal representative or Authorized representative:	
 	 (signature)	 
	 	Cuiping Xu 	 	 
	 	 	 	 
	 



Appendix 11