exv10w4w5






	 	 	 
	

	 	Exhibit 10.4.5
	 
	 
	[Translation of Chinese original]

	 	Execution Version






 






Capital Increase Agreement




Of



Shanghai Hongmen Advertising Co., Ltd.



 





By and among



Pacific Asia Mode Cube Limited



Redgate Media AD Co., Ltd.



Weidong Zhu



Shanghai Aoxue Advertising Broadcasting Co., Ltd.



And



Shanghai Hongmen Advertising Co., Ltd.



Date: December 19, 2007



Shanghai Office



King & Wood PRC Lawyers



Capital Increase B






 









 








Table of Contents




	 	 	 	 	 	 	 	 
	Article         Heading	 	Page	 
	1.	 	 	Definitions
	 	 	1	 
	2.	 	 	Capital Increase
	 	 	3	 
	3.	 	 	Conditions Precedent
	 	 	4	 
	4.	 	 	Undertakings
	 	 	6	 
	5.	 	 	Completion of Capital Increase
	 	 	7	 
	6.	 	 	Equity Transfer and Pledge
	 	 	8	 
	7.	 	 	Representations and Warranties
	 	 	8	 
	8.	 	 	Provision of Information Materials
	 	 	8	 
	9.	 	 	Confidentiality
	 	 	9	 
	10.	 	 	Assignment
	 	 	9	 
	11.	 	 	Liabilities for Breach of Contract
	 	 	10	 
	12.	 	 	Effectiveness, Amendment and Termination
	 	 	10	 
	13.	 	 	Force Majeure
	 	 	10	 
	14.	 	 	Governing Law and Dispute Settlement
	 	 	11	 
	15.	 	 	Notice
	 	 	11	 
	16.	 	 	Expenses
	 	 	13	 
	17.	 	 	Entire Agreement
	 	 	13	 
	18.	 	 	Severability
	 	 	13	 
	19.	 	 	Waiver
	 	 	13	 
	Appendix I	 	Basic Information of the Company
	 	 	1	 






 









 





This Capital Increase Agreement (hereinafter referred to as “the Agreement”) is signed by
the following parties in Beijing, the People’s Republic of China (hereinafter referred to as “China”) on the date of December 19, 2007, in accordance with the Company Law of the
People’s Republic of China, the Regulations on the Merger with or Acquisition of Domestic
Enterprises by Foreign Investors and other applicable laws, regulations and rules of China:





	(1)	 	Pacific Asia Mode Cube Limited, a company duly established 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 SAR, China (hereinafter referred to as “Investor”);
	 
	(2)	 	Shanghai Hongmen Advertising Co., Ltd., a limited liability company duly established 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 “Company”);
	 
	(3)	 	Redgate Media AD Co., Ltd., a limited liability company duly established and existing under
the laws of China, with its registered address at Room 1807, 15/F, Tower B, Jianwai SOHO, No.
39 East 3rd Ring Road Central, Chaoyang District, Beijing, China (hereinafter referred to as “Redgate”);
	 
	(4)	 	Weidong Zhu, a Chinese citizen, with the ID Card number of 310110197006105018; and
	 
	(5)	 	Shanghai Aoxue Advertising Broadcasting Co., Ltd., a limited liability Company duly
established and existing under the laws of China, with its registered address at Building G,
No. 10 Jinwen Road, Zhuqiao Town, Nanhui District, Shanghai, China.
	 
	 	 	Redgate, Weidong Zhu and Shanghai Aoxue Advertising Broadcasting Co., Ltd. are collectively
referred to as “Existing Shareholders”, and Weidong Zhu and Shanghai Aoxue Advertising
Broadcasting Co., Ltd. are collectively referred to as “Original Shareholders”.
	 
	 	 	(The parties hereto are hereinafter collectively referred to as the “Parties”, and
individually referred to as a “Party”.)




WHEREAS:





	(A)	 	The Company is an enterprise duly established and validly existing under the laws and
specialized in the business of design, production, publication and agency of advertisements,
production of images and documents, and planning of corporate images (refer to Appendix I for
the basic information of the Company);
	 
	(B)	 	With the approval of the shareholders’ meeting of the Company, the initial registered capital
of the Company shall be increased from RMB6,410,000 to RMB7,850,964 and the Investor agrees to
subscribe for the increased capital in accordance with the terms and conditions of this
Agreement;
	 
	(C)	 	The Parties agree to transform the Company into a Sino-foreign joint venture (hereinafter
referred to as “Joint Venture”) through the capital increase and jointly manage and operate
the Joint Venture in accordance with the Joint Venture Contract (as defined below) and the
Restated Articles of Association (as defined below) signed by the Parties; and
	 
	(D)	 	The Parties agree to make some commitments in accordance with this Agreement.




NOW, THEREFORE, the Parties hereby enter into the following agreement regarding the capital
increase:





	1.	 	Definitions
	 
	1.1	 	For the purpose of this Agreement, the following terms shall have the meanings defined below:




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	 	 	“Change” shall refer to the transformation of the Company into a Joint Venture in accordance
with the duly approved Joint Venture Contract and the Restated Articles of Association;
	 
	 	 	“Encumbrance” shall refer to the mortgage, pledge, lien, option and preemptive right (except
the statutory preemptive right owned by the Existing Shareholders on the equity interest of
the Company prior to the Change) or any kind of security interest;
	 
	 	 	“Expenses” shall refer to any kind of liabilities, losses, damages, costs (including legal
costs) and expenses (including taxes);
	 
	 	 	“Administration for Industry and Commerce” shall refer to the PRC State Administration for
Industry and Commerce and all the local agencies authorized by it for the company
registration;
	 
	 	 	“Related Party”, with respect to a Party, shall refer to any company, partnership or any
other entity directly or indirectly controlling the Party, directly or indirectly controlled
by the Party or directly or indirectly under common control with the Party; if it is an
individual, it shall refer to his/her spouse or relative. (For the purpose of this
definition, “Control” shall refer to having the control over the Party directly or
indirectly by holding the voting equity of the Party or through agreement or any other
arrangement);
	 
	 	 	“Equity Transfer” shall refer to that Redgate acquires and subscribes for the increased
capital and holds 51.01% equity interest of the Company in accordance with Transfer
Agreement A and Transfer Agreement B, and Shanghai Aoxue Advertising Broadcasting Co., Ltd.
acquires and holds 18.37% equity interest of the Company in accordance with Transfer
Agreement C;
	 
	 	 	“Joint Venture Contract” shall refer to the Joint Venture Contract regarding the Joint
Venture signed by the Investor and the Existing Shareholders on the date of this Agreement;
	 
	 	 	“USD” shall refer to the legal currency of the United States of America;
	 
	 	 	“Mosquito-Control Light Box Project” shall refer to the project of 1,500 ~ 2,000
mosquito-control light boxes to be installed in Shanghai’s colleges, universities and
communities in two phases, one prior to June 2006 and the other as approved by the relevant
government authority, that was launched in 2004;
	 
	 	 	“Renminbi” or “RMB” shall refer to the legal currency of China;
	 
	 	 	“Tax” shall refer to any tax payable (including but not limited to any income tax, business
tax, stamp duty or any other tax, duty, charge, fee, deduction, fine or withholding levied,
charged or imposed). “Taxation” shall be interpreted accordingly;
	 
	 	 	“Lawsuit” shall refer to any claim, legal action, legal proceedings, suit, action,
prosecution, investigation, inquiry or arbitration involved with the Company (other than
those actions arising from the normal business operation of the Company for recovery of
debts, where the Company acts as the plaintiff);
	 
	 	 	“Conditions Precedent” shall refer to the conditions described in Article 3.1 hereof;
	 
	 	 	“Business Day” shall refer to the business day on which the banks in China and Hong Kong are
open to the public (except Saturday, Sunday and public holidays);
	 
	 	 	“Restated Articles of Association” shall refer to the amended articles of association of the
Company signed by the Investor and the Existing Shareholders in accordance with this
Agreement and the Joint Venture Contract on the date of the Agreement;
	 
	 	 	“Government Approvals” shall refer to all approvals, registrations and filing from and with
the relevant departments of the Chinese Government (including the local governments)
required for this Agreement, the Joint Venture Contract, the Restated Articles of
Association and the Change;




2









 






	 	 	“China”, for the purpose of this Agreement, shall refer to mainland China, excluding Hong
Kong SAR, Macau SAR and Taiwan;
	 
	 	 	“Key Management Personnel” shall refer to Weidong Zhu (General Manager) and Yun Yang
(Director of the Business Expansion Department);
	 
	 	 	“Equity Transfer Agreements” shall refer to the Transfer Agreement A, the Transfer Agreement
B and Transfer Agreement C entered into on the date of this Agreement, among which, “Equity
Transfer Agreement A” shall refer to the Transfer Agreement signed by the Investor, Redgate,
Weidong Zhu , the Company and Shanghai Yuqing Advertising Co., Ltd. (“Yuqing”) regarding the
transfer of 39.42% equity interest of the Company from Yuqing to Redgate and subscription
for an increased capital of RMB1,210,000 by Redgate (“Capital Increase A”); “Equity Transfer
Agreement B” shall refer to the Transfer Agreement signed by the Investor, Redgate, the
Company and Weidong Zhu regarding transfer of 0.15% equity interest of the Company (on the
basis of the dilution of Capital Increase A) from Weidong Zhu to Redgate; and “Equity
Transfer Agreement C” shall refer to the Transfer Agreement signed by Shanghai Aoxue
Advertising Broadcasting Co., Ltd., Weidong Zhu and the parties concerned regarding transfer
of 18.37% equity interest of the Company (on the basis of the dilution of Capital Increase
A) from Weidong Zhu to Shanghai Aoxue Advertising Broadcasting Co., Ltd.;
	 
	 	 	“Capital Increase” shall refer to the activities of capital increase where the Investor
makes its contribution to the Company for the capital increase and the Company issues the
relevant documents to the Investor in accordance with the terms and documents of Article 5
hereof;
	 
	 	 	“Capital Increase Amount” shall refer to the total amount of subscribed capital increase
(RMB15,000,000) payable by the Investor to the Company in accordance with Article 2.3
hereof;
	 
	 	 	“Completion of Capital Increase” shall refer to the confirmation by the Parties that the
Conditions Precedent are fulfilled or waived in accordance with Article 5.4 hereof; and
	 
	 	 	“Completion Date of Capital Increase” shall refer to the date on which the Parties
confirm that the Conditions Precedent are fulfilled or waived in accordance with Article 5.4
hereof.
	 
	1.2	 	Headings
	 
	 	 	The headings of all articles are for the reference only and shall not affect the
interpretation of this Agreement.
	 
	1.3	 	Reference
	 
	 	 	Reference to “Laws of China” herein shall include any and all laws, regulations, and
policies with legal effect or any other supplemental legislation within this
jurisdiction. Reference to “Law” herein shall include any and all amendments or
modifications thereto from time to time. Reference to “the Agreement” or any contract
herein shall include any and all amendments or modifications hereto or updates hereof
from time to time.
	 
	1.4	 	Appendices
	 
	 	 	All appendices as listed in the Table of Contents hereof constitute an integral part of this
Agreement.
	 
	2.	 	Capital Increase
	 
	2.1	 	The Investor agrees to complete the Capital Increase of the Company and transform the Company
into a Joint Venture in accordance with the terms and conditions hereof.
	 
	2.2	 	The initial registered capital of the Company is RMB6,410,000 and the shareholding is as
follows:




3









 











	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage in the
	 	 	Amount of Capital	 	Registered Capital
	Name of Shareholders	 	Contributed (RMB)	 	(%)
	Redgate Media AD Co., Ltd.
	 	 	3,269,615	 	 	 	51.01	%
	Weidong Zhu
	 	 	1,962,741	 	 	 	30.62	%
	Shanghai Aoxue
Advertising Broadcasting
Co., Ltd.
	 	 	1,177,644	 	 	 	18.37	%
	 
	 	 	 	 	 	 	 	 
	Total
	 	 	6,410,000	 	 	 	100.000	%
	 
	 	 	 	 	 	 	 	 







	 	 	Upon completion of the Capital Increase, the registered capital of the Company shall
increase to RMB7,850,964, increased by RMB1,440,964.
	 
	2.3	 	The portion of the increased registered capital shall be subscribed for by the Investor with
the premium in an equivalent amount of U.S. dollars. The Capital Increase Amount payable by
the Investor is RMB15,000,000 (for the purpose of this Agreement, in respect of the Capital
Increase Amount to be paid by the Investor in accordance with Article 5 of the Agreement, the
exchange rate of U.S. dollar against RMB shall the middle basic exchange rate announced by the
People’s Bank of China on the date of the Investor’s payment), of which, the portion other
than the subscription for the increased registered capital (RMB13,559,036) shall be accounted
into the capital reserve of the Joint Venture, and after the duly establishment of the Joint
Venture, the capital reserve of the Joint Venture shall be transferred to increase the
registered capital according to the shareholding percentage of each shareholder respectively
if such transfer occurs.
	 
	2.4	 	The Parties hereby agree that the Capital Increase Amount shall only be applied for further
development of the Mosquito-Control Light Box Project, business expansion and any other
purpose approved by the Investor. Without the prior written consent of the Investor, the
Capital Increase Amount shall not be applied for the merger with, acquisition of or investment
in any other enterprise.
	 
	2.5	 	Upon completion of the Capital Increase, the shareholding of the Joint Venture shall be as
follows:





	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage in the
	 	 	Amount of Capital	 	Registered Capital
	Name of Shareholders	 	Contributed (RMB)	 	(%)
	Pacific Asia Mode Cube Limited
	 	 	1,440,964	 	 	 	18.354	%
	Redgate Media AD Co., Ltd.
	 	 	3,269,615	 	 	 	41.646	%
	Weidong Zhu
	 	 	1,962,741	 	 	 	25.000	%
	Shanghai Aoxue Advertising
Broadcasting Co., Ltd.
	 	 	1,177,644	 	 	 	15.000	%
	 
	 	 	 	 	 	 	 	 
	Total
	 	 	7,850,964	 	 	 	100.000	%
	 
	 	 	 	 	 	 	 	 







	3.	 	Conditions Precedent




4









 












	3.1	 	The Capital Increase shall be subject to the fulfillment of the following conditions or a
written waiver of the following conditions by the Investor (hereinafter referred to as
“Conditions Precedent”):






	 	3.1.1	 	The Investor has taken necessary corporate actions, namely:






	 	(i)	 	Approval of the execution and performance of this Agreement,
the Joint Venture Contract and the Restated Articles of Association; and
	 
	 	(ii)	 	Approval of the Capital Increase in accordance with this
Agreement.






	 	3.1.2	 	The shareholders’ meeting of the Company has adopted all necessary
resolutions to:






	 	(i)	 	Approve the execution and performance of this Agreement, the
Joint Venture Contract and the Restated Articles of Association; and
	 
	 	(ii)	 	Approve the Capital Increase in accordance with this
Agreement; and
	 
	 	(iii)	 	All the Existing Shareholders of the Company have waived
their preemptive right in the Capital Increase.






	 	3.1.3	 	All relevant documents have been duly executed and all Government
Approvals have been duly obtained, including:






	 	(i)	 	This Agreement, the Joint Venture Contract and the Restated
Articles of Association have been properly and duly executed and approved by
the relevant government authorities;
	 
	 	(ii)	 	The Company has duly obtained the Approval Certificate for
Foreign-Invested Enterprises and the business license of the Joint Venture,
and such certificate and business license do not require to substantially
amend the Joint Venture Contract or the Restated Articles of Association, or
any such amendments have been approved by the Parties in written form; and
	 
	 	(iii)	 	The Joint Venture has obtained the Certificate of Foreign
Exchange Registration and any other necessary approval from the relevant
government authorities, and such approvals do not require to not substantially
amend the content of relevant applications, or any such amendments have been
approved by the Parties in written form;






	 	3.1.4	 	The Company and the Existing Shareholder have fulfilled their obligations
and duties under this Agreement respectively prior to the Completion Date;
	 
	 	3.1.5	 	All Conditions Precedent for Equity Transfer as prescribed in the Transfer
Agreements have been fully fulfilled and all Equity Transfers have been fully
completed, and there is no violation of the Transfer Agreements by the Existing
Shareholder; and
	 
	 	3.1.6	 	Up to the date of the Completion Date, there is no event which has or by
reasonable prediction will have any material adverse effect on the business operation,
financial condition or assets of the Company.






	3.2	 	The Company and all Existing Shareholders hereby undertake that they shall make all
reasonable efforts to ensure the fulfillment of the Conditions Precedent prescribed in Article
3.1 (other than Article 3.1.1) as soon as possible, provided that in all events such
Conditions Precedent shall be fulfilled within three (3) months upon the execution of this
Agreement. The Investor hereby undertakes that it shall make all reasonable efforts to ensure
the fulfillment of the Conditions Precedent prescribed in Article 3.1.1 as soon as possible,
provided that in all events such Conditions Precedent shall be fulfilled within three (3)
months upon the execution of this Agreement.




5









 












	3.3	 	With a written notice to the Company and the Existing Shareholders, the Investor may, at its
discretion, waive all or part of the Conditions Precedent as prescribed in Article 3.1 above
(other than Article 3.1.1).
	 
	3.4	 	With respect to the Conditions Precedent prescribed in Article 3.1.1 above, unless such
Conditions Precedent are waived by the Investor, if those Conditions Precedent are not fully
fulfilled within three (3) months upon the execution of this Agreement, the Investor may
immediately terminate this Agreement after sending a written notice to the Company and shall
not take any liability for such termination. However, if the non-fulfillment of such
Conditions Precedent is due to the violation of Article 3.2 by the Company or any of the
Existing Shareholders, such termination shall not have any impact on the Party to take
liabilities for breach of contract.
	 
	3.5	 	Notwithstanding the provisions above, if any Government Approval as described in Article
3.1.3 above requires to substantially amend this Agreement, the Joint Venture or the Restated
Articles of Association, the Parties shall make either of the following decisions through
mutual negotiation:






	 	3.5.1	 	To accept any such substantial amendments and waive the corresponding
Conditions Precedent prescribed in Article 3.1.3 above; or
	 
	 	3.5.2	 	To apply to the relevant government authority to procure the relevant
government authority to amend and reissue such Government Approval in the form
acceptable to the Parties.






	 	 	In addition, if any Government Approval (for the purpose of this Article 3.5, it shall not
include the business license, foreign exchange registration certificate and any other
certificate or license issued on the basis of the business license) requires to
substantially amend this Agreement, the Joint Venture Contract or the Restated Articles of
Association, and the Parties do not unanimously accept any such substantial amendments or
waive the corresponding Conditions Precedent, then the Parties shall not file an application
to the Administration for Industry and Commerce for the issuance of the business license
until such substantial amendment and the relevant issues are settled in the form acceptable
to the Parties.
	 
	4.	 	Undertakings
	 
	4.1	 	As of the date of this Agreement and prior to the Completion Date, unless otherwise approved
by the Investor in written form or otherwise stipulated herein, the Company and the Existing
Shareholders shall ensure that:






	 	4.1.1	 	The Company shall take all reasonable actions to maintain and protect all its
assets;
	 
	 	4.1.2	 	The Existing Shareholders shall not transfer or mortgage any of their shares
of the Company to any third party or create whatever form of Encumbrances thereon;
	 
	 	4.1.3	 	They shall promptly disclose to the Investor any fact or event (no matter they
already exist on or prior to the date of this Agreement or occur later on) which is
known by the Company or the Existing Shareholders and may possibly cause the Existing
Shareholders or the Company to violate any representation or warranty made by them
herein according to the facts and circumstances on the Completion Date;
	 
	 	4.1.4	 	The Company shall not declare any dividend or make any dividend payment or any
other distribution;
	 
	 	4.1.5	 	The Company shall not issue or permit to issue any share or bond or take any
action subject to the consent of the shareholders’ meeting or the board of directors as
required by the laws or the Articles of Association;




6









 












	 	4.1.6	 	The Company and the Existing Shareholders shall not take any action to prevent
or unduly delay the completion of the transaction contemplated herein;
	 
	 	4.1.7	 	If the Company pays or decides to pay to any employee any bonus or benefits
beyond the current normal employee remuneration and benefit plan, such action or
decision shall be subject to the prior written consent of the Investor;
	 
	 	4.1.8	 	The Company shall not change or terminate or permit to change or terminate any
existing contract to which it is a party and of which the change or termination will
have material effect on its business scope or business nature, unless such change or
termination is required by any effective court ruling or arbitration award;
	 
	 	4.1.9	 	All investment activities (other than the normal business activities of the
Company) during the period from the date of this Agreement to the Completion Date shall
be subject to the prior written consent of the Investor;
	 
	 	4.1.10	 	The Company shall not enter into any other agreement, contract, arrangement or
transaction, other than those entered into during the course of normal business
operation; and
	 
	 	4.1.11	 	The Company shall go through all necessary formalities of the government examination,
approval and registration according to the applicable requirements (if any) of the
relevant government authority concerning the Mosquito-Control Light Box Project.






	4.2	 	If the Company or any Existing Shareholder substantially or materially violates any
undertakings made by it in Article 4.1 above prior to the Completion Date, the Investor shall
have the right to unconditionally terminate this Agreement without taking any liability. In
addition, the Company or the Existing Shareholders shall indemnify the Investor against all
losses and damages resulting from such violation.
	 
	4.3	 	The Company shall go through all formalities relating to the Government Approval and the
Existing Shareholders and the Investor shall provide necessary assistance.
	 
	5.	 	Completion of Capital Increase
	 
	5.1	 	The Investor hereby agrees that as required for the issuance of the business license,
completion of capital verification and other formalities relating to the Joint Venture, after
the Company obtains the Approval Certificate for Foreign Invested Enterprises, it shall, as
soon as possible, complete the formalities of approval from and registration with the
competent foreign exchange administration authority and open a foreign exchange account for
the Company. Within ten (10) Business Days after all the aforesaid formalities are completed,
the Investor shall pay 20% of the increased portion of the registered capital (i.e. an amount
of U.S. dollars equivalent to RMB288,192.80) to the account to be opened by the Company, and
the Company shall go through all necessary formalities, such as approval from and registration
with the competent foreign exchange administration authority, capital verification and
reissuance of business license of the Company.
	 
	5.2	 	Within three (3) Business Days after all Conditions Precedent as prescribed in Article 3.1
above (other than Article 3.1.1) are fulfilled (or waived), the Company and the Existing
Shareholders shall provide the relevant evidences and documents to the Investor and send a
written notice to the Investor.
	 
	5.3	 	Within three (3) Business Days after the Conditions Precedent as prescribed in Article 3.1.1
above are fulfilled, the Investor shall send a written notice to the Company and the Existing
Shareholders, stating that the Conditions Precedent in Article 3.1.1 have been fulfilled.
	 
	5.4	 	The Parties shall jointly make a written confirmation on whether the Conditions Precedent
have been fulfilled within three (3) Business Days after the date of sending a notice as
mentioned in Article 5.2 or Article 5.3 (whichever is later), or on any other date agreed upon
by the Parties.




7









 












	5.5	 	The Parties hereby agree that within seven (7) Business Days from the date of the Agreement,
the Investor shall remit an amount of U.S. dollars equivalent to RMB4,711,807.20 to the bank
account designated by the Company.
	 
	5.6	 	The Parties hereby agree that the Investor shall pay 1/3 of Capital Increase Amount within
one (1) month from the Completion Date of Capital Increase, i.e. the Investor shall remit an
amount of U.S. dollars equivalent to RMB5,000,000 to the bank account designated by the
Company.
	 
	5.7	 	The Parties hereby agree that the Investor shall pay 1/6 of Capital Increase Amount within
two (2) months from the Completion Date of Capital Increase, i.e. the Investor shall remit an
amount of U.S. dollars equivalent to RMB2,500,000 to the bank account designated by the
Company.
	 
	5.8	 	The Parties hereby agree that the Investor shall pay 1/6 of Capital Increase Amount within
three (3) months from the Completion Date, i.e. the Investor shall remit an amount of U.S.
dollars equivalent to RMB2,500,000 to the bank account designated by the Company.
	 
	5.9	 	Notwithstanding the provisions above, the Parties further agree that if any provision of
Article 5 hereof is inconsistent with any applicable laws or regulations or the requirements
of any government authority (such as the Approval Certificate for Foreign Invested
Enterprises), the Parties shall amend Article 5 through amicable negotiation so that the
Capital Increase hereunder may be completed in accordance with the laws and in conformity to
the commercial intention of the Parties.
	 
	6.	 	Equity Transfer and Pledge
	 
	 	 	Within 36 months upon Completion of the Capital Increase, the Original Shareholders shall
not transfer, distribute, pledge or otherwise dispose of any share owned by them.
	 
	7.	 	Representations and Warranties
	 
	7.1	 	The Company and the Original Shareholders hereby acknowledge that the Investor signs this
Agreement in reliance upon the representations and warranties made by the Original
Shareholders in the Transfer Agreement B and the undertakings made in Article 4 hereof. Each
undertaking, representation and warranty shall be deemed as separate and independent, and
shall not be restricted or bound by reference to or application of any other representation or
warranty made herein or any other provision hereof, unless otherwise expressly stipulated
herein.
	 
	7.2	 	The Company and the Original Shareholders hereby agree that if any of them violates any
undertaking made herein or any representation or warranty referred to herein, it shall
indemnify the Investor against and hold the Investor harmless from any direct or indirect
losses, damages, costs, expenses, liabilities or claims (including any losses, damages,
reasonable costs and expenses, liabilities or claims incurred from defense or settlement of
any claim regarding such liabilities), including (but not limited to) any losses arising from
its ownership of equity interest in the Company. Furthermore, if the Original Shareholders
breach any undertaking made herein or any representation or warranty referred to herein, which
causes depreciation of the Joint Venture or reduction of the assets of the Joint Venture
(including but not limited to suffering any losses, damages, administrative penalty, paying
additional Taxes or undertaking any other legal liability by the Joint Venture), the Original
Shareholders shall take all actions to hold the Joint Venture harmless from such losses and
damages and indemnify the Joint Venture against such depreciation or reduction of assets of
the Joint Venture as required by the Investor.
	 
	8.	 	Provision of Information Materials
	 
	 	 	From the date of this Agreement to the Completion Date of Capital Increase, the Existing
Shareholders shall procure the Company to grant the Investor and its authorized
representatives access to the premises or office of the Company, and examine all books,
title deeds, records, accounts and other documents of the Company reasonably requested by
the Investor, and shall permit the Investor to copy any of such books, title deeds, records,
accounts




8









 






	 	 	and other documents, and shall procure the Company to notify its directors and employees to
provide all information materials and explanations reasonably requested by the aforesaid
representatives.






	9.	 	Confidentiality
	 
	9.1	 	Without the prior written consent of the Parties, no Party shall release to the public the
Agreement, any other document or any subsequent document signed relating to this Agreement or
the investment contemplated herein.
	 
	9.2	 	Unless otherwise stipulated in Article 9.3 hereof, the Parties shall treat the following
information which are received or acquired as a result of execution of this Agreement (or any
other agreement executed under this Agreement) as confidential and shall not disclose or use:






	 	(1)	 	The terms and conditions of this Agreement, and terms and conditions of any
other agreement executed under this Agreement;
	 
	 	(2)	 	The negotiation relating to this Agreement (and such other agreement); or
	 
	 	(3)	 	The business, financial matter and other affair (including future plan and
target) of any other Party.






	9.3	 	Under any of the following circumstances, Article 9.1 and Article 9.2 above shall not be
applied to prevent the disclosure or use of any information:






	 	(1)	 	Disclosure or use of any information as required by the laws, or any regulatory
authority or the rules or regulations of any recognized stock exchange;
	 
	 	(2)	 	Disclosure or use of any information as required when granting all interests of
this Agreement to a Party;
	 
	 	(3)	 	Disclosure or use of any information required for the purpose of any judicial
proceedings arising from this Agreement or any other agreement executed under or
relating to this Agreement, or disclosure of any Tax related information of the
disclosing party to the Taxation authority as reasonably required;
	 
	 	(4)	 	Disclosure of any information to any professional advisor of any Party,
provided that such professional advisor shall comply with the confidentiality
obligation regarding such information under Article 9.2 above, as if such professional
advisor was a Party to this Agreement;
	 
	 	(5)	 	Any information has been or becomes publicly known other than due to violation
of this Agreement;
	 
	 	(6)	 	Any information disclosed or used with the prior written approval of any other
Party; or
	 
	 	(7)	 	Any information independently developed by a Party after Completion of Capital
Increase.






	10.	 	Assignment
	 
	 	 	Without the prior written consent of the other Parties, no Party shall assign any of its
right, interest or obligation hereunder. However, the Investor may assign its rights,
interests and obligations hereunder to its related parties, or in case of Equity Transfer,
assign its rights, interests and obligations hereunder to the equity assignee. The Joint
Venture and the Existing Shareholders shall assist the Investor in assigning its rights,
interests and obligations hereunder, and shall take and execute, and procure their
respectively directors to take and execute all necessary actions and documents as reasonably
requested by the Investor.




9









 












	 	 	From the date of this Agreement to the Completion Date of Capital Increase, the Company
shall not negotiate or sign any binding document with any third party regarding the Joint
Venture, cooperation or similar matter relating to the equity investment of the Company.
	 
	11.	 	Liabilities for Breach of Contract
	 
	 	 	In case of any breach of this Agreement, the breaching party shall indemnify the
non-breaching party against all losses and damages resulting from such breach (if this
Agreement is terminated or rescinded, such losses and damages shall include the costs and
expenses incurred by the non-breaching party as described in Article 16).
	 
	12.	 	Effectiveness, Amendment and Termination
	 
	12.1	 	This Agreement shall become effective as of the date of execution; if it is subject to the
approval of the examining and approving authority, it shall become effective as of the date of
such approval.
	 
	12.2	 	No amendment or supplementation hereto may become effective unless the same is duly signed by
the Parties in written form. If such amendment or supplementation is subject to the approval
of the examining and approving authority, it shall become effective upon receipt of such
approval. The Parties hereby agree that they shall obtain all approvals from and registrations
with the relevant government authorities of China (including but not limited to the examining
and approving authorities and the Administration for Industry and Commerce) to perfect the
transaction contemplated herein, and shall amend the relevant provision of this Agreement as
required by the relevant government authority (and amend the provision of the Joint Venture
Contract and the Restated Articles of Association accordingly), provided that such amendment
shall not change the intent of the Parties in this Agreement.
	 
	12.3	 	Under any of the following circumstances, the Investor may terminate this Agreement:






	 	12.3.1	 	The Investor or any Existing Shareholder breaches this Agreement, which materially
affects the interests of the Investor reasonably anticipated by the Investor when
executing this Agreement; or
	 
	 	12.3.2	 	Any Transfer Agreement is terminated or rescinded.






	13.	 	Force Majeure
	 
	13.1	 	“Force Majeure” shall refer to any event occurring after the execution of this Agreement,
which is unforeseeable when this Agreement is executed and the occurrence and consequence of
which is inevitable or uncontrollable, or which prevents any Party from performing this
Agreement fully or partially, or which obstructs the performance of this Agreement, including
but not limited to fire, flood, earthquake, typhoon, Tsunami, war, terrorist activity or any
other violent act, accident, strike, epidemic and quarantine control.
	 
	13.2	 	If any Party hereto fails to perform all or part of its obligations hereunder due to a Force
Majeure event, such non-performance shall not be deemed as breach of contract until the
elimination of the effect of such event. The Party claiming for release of its liability due
to the Force Majeure event shall immediately (but no later than fifteen (15) days) upon
occurrence of the event send a written notice to the other Parties by means of telegraph or
fax, stating the nature, date of occurrence and predicted period of such event, as well as the
extent to which the Party is prevented from performing its obligations hereunder, and the
claiming Party shall also provide a valid certificate of such event issued by the local
notarization office (or any other appropriate authority) of the place where such event occurs.
	 
	13.3	 	The Party affected by the Force Majeure event shall make its best efforts to mitigate the
losses caused by the event and it shall not be released from its liabilities for any losses
which would be avoided if appropriate actions had been taken.




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	14.	 	Governing Law and Dispute Settlement
	 
	14.1	 	Governing Law
	 
	 	 	The formation, validity, interpretation, performance, amendment, termination and dispute
settlement of or relating to this Agreement shall be governed by and interpreted according
to the laws of China.
	 
	14.2	 	Arbitration






	 	14.2.1	 	Any dispute arising from or relating to this Agreement shall be first settled by the
Parties through amiable negotiation. If such dispute (including any dispute regarding
the validity or existence of this Agreement) can not be settled through negotiation
within sixty (60) days after any Party sends a notice to the other Parties, such
dispute shall be submitted to China International Economic and Trade Arbitration
Commission Shanghai Sub-commission for arbitration in accordance with the effective
arbitration rules of the said Commission.
	 
	 	14.2.2	 	The arbitration award shall be final and binding upon the Parties and can be
enforceable according to the relevant provisions.
	 
	 	14.2.3	 	The arbitration award may be enforced through the filing of the award with the
competent court or through the assistance of such court in enforcement of the award, as
the case may be. The costs of arbitration shall be borne by the losing party or as
decided by the arbitration tribunal. If any Party has to initiate any legal action to
enforce the arbitration award, the breaching party shall bear any and all reasonable
costs, expenses and reasonable attorney’s fees, including but not limited to extra
costs and expenses incurred from the legal action or enforcement of the arbitration
award.
	 
	 	14.2.4	 	During the course of dispute settlement, the Parties shall continue to perform this
Agreement other than those disputed terms and conditions.






	15.	 	Notice
	 
	15.1	 	All notices shall be written in Chinese and sent to the following address or fax number (as
the case may be) by means of hand delivery, registered mail or fax:
	 
	 	 	Pacific Asia Mode Cube Limited
	 
	 	 	Address: 8/F, Tower B, International Plaza, No. 19, Jianguomenwai Avenue, Beijing
	 	 	Attention: Ying Zhu
	 	 	Tel: 010-58692980
	 	 	Fax: 010-58692960
	 
	 	 	Shanghai Hongmen Advertising Co., Ltd.
	 
	 	 	Address: 2/F, 1A Tower, No. 345 Lane, Xinhua Road, Shanghai
	 	 	Attention: Yun Yang
	 	 	Tel: 021-62810161
	 	 	Fax: 021-52540919




11









 












	 	 	Redgate Media AD Co., Ltd.
	 
	 	 	Address: 8/F, Tower B, International Plaza, No. 19, Jianguomenwai Avenue, Beijing
	 	 	Attention: Ying Zhu
	 	 	Tel: 010-58692980
	 	 	Fax: 010-58692960
	 
	 	 	Weidong Zhu
	 
	 	 	Address: 2/F, 1A Tower, No. 345 Lane, Xinhua Road, Shanghai
	 	 	Tel: 13901729948
	 	 	Fax: 021-52540919
	 
	 	 	Shanghai Aoxue Advertising Broadcasting Co., Ltd.
	 
	 	 	Address: Flat 303, Entrance 4, Building 7, Block 2, Shuanghuayuan Nanli, Chaoyang District,
Beijing
	 	 	Attention: Chengye Guo
	 	 	Tel: 13901201748
	 	 	Fax: 010-87721723






	15.2	 	With respect to any notice, letter or communication issued or sent under Article 15:






	 	15.2.1	 	If a notice is delivered by hand and the return receipt is received, and such notice
is delivered no later than 17:00 on a Business Day of the destination, it shall be
deemed as served on the date indicated on the return receipt; or if such notice is
delivered later than 17:00 on a Business Day or on a Non-business Day of the
destination, it shall be deemed as served at 09:00 on the next Business Day of the
destination; or
	 
	 	15.2.2	 	If a notice is sent by prepaid domestic EMS mail in China, it shall be deemed as
served five (5) Business Days from the posting date; or
	 
	 	15.2.3	 	If a notice is sent by prepaid international courier service from or to any place
outside China, it shall be deemed as served ten (10) Business Days from the posting
date; or
	 
	 	15.2.4	 	If a notice is sent by fax, it shall be deemed as served immediately after
transmission with the sufficient evidence of a transmission report confirming the
successful transmission or of an oral confirmation (which shall be recorded and signed
by the sending party in written form); provided that, however, where a notice sent by
fax is sent later than 17:00 on a Business Day or at any time on a Non-business Day of
the destination, it shall be deemed as served at 09:00 on the next Business Day of the
destination.




12









 












	15.3	 	During the term of this Agreement, any Party may change its notice receiving address or fax
number after sending a written notice to the other Parties at any time.
	 
	16.	 	Expenses
	 
	 	 	The expenses incurred from negotiation, preparation and performance of this Agreement shall
be borne by each Party respectively.
	 
	17.	 	Entire Agreement
	 
	17.1	 	This Agreement and all agreements and/or documents referred to or expressly indicated herein
shall constitute an entire agreement among the Parties with respect to the subject matter
hereof, and supersede all previous oral and written agreements, contracts, understandings and
communications among the Parties with respect to the same subject matter.
	 
	17.2	 	If it is necessary to execute any other agreement for obtaining the Government Approval
required by the Capital Increase hereunder or for going through the formalities of the Change,
the content of such agreement shall be consistent with this Agreement and in case of any
inconsistence, the content of this Agreement shall prevail.
	 
	18.	 	Severability
	 
	 	 	If any provision of this Agreement is held invalid or unenforceable, such provision (to the
extent of its invalidity or unenforceability) shall not be enforced and shall be deemed as
severable from this Agreement, but the validity and enforceability of the remaining
provisions of this Agreement shall not be affected. The Parties shall make all reasonable
efforts to replace such invalid or unenforceable provision with a valid and enforceable
provision, and the effect of such replacing provision shall be same as the originally
intended effect of the invalid or unenforceable provision as far as possible.
	 
	19.	 	Waiver
	 
	19.1	 	If any Party fails or delays to exercise any right or remedy hereunder or under any law
arising from this Agreement, such right or remedy shall not be prejudiced, and it shall not
constitute or be deemed as a waiver or change of such right or remedy, and shall not preclude
the exercise of such right or remedy at any time thereafter. Single or partial exercise of any
right or remedy shall not preclude any other or further exercise of such right or remedy, or
exercise of any other right or remedy.
	 
	19.2	 	Each Party may exercise its rights and remedies hereunder or arising from this Agreement at
any time it considers appropriate.




This Agreement is written in Chinese and executed in China by the duly authorized representatives
of the Parties. This Agreement is made and executed in seven (7) counterparts, one (1) for each
Party hereto and the remaining to be used for going through the relevant formalities for Government
Approval.






13









 








Execution Page



IN WITNESS WHEREOF, the Parties duly executed this Agreement on the date first above written.




	 	 	 	 	 
	Pacific Asia Mode Cube Limited [company seal]

 	 
	Signature:  	/s/ Peter Bush Brack
 	 
	 	Name:  	BRACK, Peter Bush 	 
	 	Title:  	CEO 	 
	 



	 	 	 	 	 
	Shanghai Hongmen Advertising Co., Ltd. [company seal]

 	 
	Signature:  	/s/ Yue Jin
 	 
	 	Name:  	Yue Jin 	 
	 	Title:  	Chairman of the Board 	 
	 
	Redgate Media AD Co., Ltd. [company seal]

 	 
	Signature:  	/s/ Yue Jin
 	 
	 	Name:  	Yue Jin 	 
	 	Title:  	Chairman of the Board 	 
	 
	Weidong Zhu [company seal]

 	 
	Signature:  	/s/ Weidong Zhu
 	 
	 	 	 
	 	 	 	 













 






	 	 	 	 	 



	 	 	 	 	 
	Shanghai Aoxue Advertising Broadcasting Co., Ltd. [company seal]

 	 
	Signature:  	/s/ Chengye Cuo
 	 
	 	Name:  	Chengye Guo 	 
	 	Title:  	Chairman of the Board 	 













 






	 	 	 	 	 



Appendix I

Basic Information of the Company




	 	 	 
	Company Name:

	 	Shanghai Hongmen Advertising Co., Ltd.
	 
	 	 
	Business License No.:

	 	3102292067756
	 
	 	 
	Registered Address:

	 	P-1 Building, No. 7523 Beiqing Highway, Chonggu Town, Qingpu District
	 
	 	 
	Legal Representative:

	 	Yue Jin
	 
	 	 
	Company Type:

	 	Limited Liability Company (Domestic Joint Venture)
	 
	 	 
	Business Scope:

	 	Design, production, publication and agency of advertisements; production of images and documents;
planning of corporate images (a license for special business shall be obtained if it is required by law
or regulation).
	 
	 	 
	Registered Capital:

	 	RMB six million four hundred and ten thousand (RMB6,410,000)
	 
	 	 
	Date of Incorporation:

	 	June 9, 2004
	 
	 	 
	Term of Operation:

	 	From June 9, 2004 to June 8, 2014
	 
	 	 
	Shareholders:

	 	Redgate (51.01%); Weidong Zhu (30.62%); Shanghai Aoxue Advertising Co., Ltd. (18.37%)






APPENDIX I