exv4w8






EXHIBIT 4.8




CERTAIN INFORMATION (INDICATED BY ASTERISKS) IN THIS EXHIBIT HAS

BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN

REQUESTED WITH RESPECT TO THE OMITTED PORTION.




SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT



among



DANG HE



MERRY CIRCLE TRADING LIMITED



HONOUR IDEA LIMITED



AEGIS MEDIA PACIFIC LTD.



CHAVIEW INVESTMENTS LIMITED



and



CHARM COMMUNICATIONS INC.



Dated as of 20 January 2010



 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE I DEFINITIONS	 	 	5	 
	 	 	 	 	 
	 	 	 	 
	 	1.1	 	 	Definitions
	 	 	5	 
	 	1.2	 	 	Additional Definitions
	 	 	10	 
	 	1.3	 	 	Construction
	 	 	12	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE II REPRESENTATIONS AND WARRANTIES	 	 	12	 
	 	 	 	 	 
	 	 	 	 
	 	2.1	 	 	Representations and Warranties of the Parties
	 	 	12	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE III CORPORATE GOVERNANCE	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	 	3.1	 	 	General
	 	 	13	 
	 	3.2	 	 	Authority of the Board of Directors
	 	 	13	 
	 	3.3	 	 	Composition of the Board of Directors
	 	 	14	 
	 	3.4	 	 	Committees of the Board
	 	 	15	 
	 	3.5	 	 	Removal and Replacement of Directors and the Chaview Observer
	 	 	15	 
	 	3.6	 	 	Directors’ Access to Information
	 	 	15	 
	 	3.7	 	 	Board Meetings
	 	 	16	 
	 	3.8	 	 	Action by the Board
	 	 	17	 
	 	3.9	 	 	Remuneration of Directors
	 	 	17	 
	 	3.10	 	 	Appointment of External Auditor
	 	 	18	 
	 	3.11	 	 	Subsidiaries
	 	 	18	 
	 	3.12	 	 	Limit on Shareholder Action
	 	 	18	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IV PRE-EMPTIVE RIGHTS OF THE SHAREHOLDERS	 	 	18	 
	 	 	 	 	 
	 	 	 	 
	 	4.1	 	 	Shareholders Pre-emptive Rights
	 	 	18	 
	 	4.2	 	 	Notice of New Issuances
	 	 	18	 
	 	4.3	 	 	Additional Allocation Procedures
	 	 	19	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE V RESTRICTIONS ON THE TRANSFER OF SHARES	 	 	19	 
	 	 	 	 	 
	 	 	 	 
	 	5.1	 	 	General
	 	 	19	 
	 	5.2	 	 	Legend on Share Certificates
	 	 	19	 
	 	5.3	 	 	No Transfer to Competitors
	 	 	20	 
	 	5.4	 	 	Founder’s Lock-up
	 	 	20	 
	 	5.5	 	 	Change in Law Affecting Ownership
	 	 	21	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VI REGISTRATION RIGHTS	 	 	21	 
	 	 	 	 	 
	 	 	 	 
	 	6.1	 	 	Registration Rights
	 	 	21	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VII redemption and put	 	 	22	 
	 	 	 	 	 
	 	 	 	 
	 	7.1	 	 	Redemption and Put
	 	 	22	 






1









 






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VIII CERTAIN COVENANTS OF THE COMPANY	 	 	23	 
	 	 	 	 	 
	 	 	 	 
	 	8.1	 	 	Business Plan
	 	 	23	 
	 	8.2	 	 	Maintenance of Books and Records
	 	 	23	 
	 	8.3	 	 	Access to Books and Records
	 	 	24	 
	 	8.4	 	 	Audit Rights
	 	 	25	 
	 	8.5	 	 	Securities Filings
	 	 	25	 
	 	8.6	 	 	Insurance
	 	 	25	 
	 	8.7	 	 	Intellectual Property Protection
	 	 	25	 
	 	8.8	 	 	Control Documents
	 	 	25	 
	 	8.9	 	 	[RESERVED]
	 	 	25	 
	 	8.10	 	 	Accrued Dividends Distribution
	 	 	25	 
	 	8.11	 	 	United States Information Rights
	 	 	26	 
	 	8.12	 	 	United Kingdom Information Rights
	 	 	27	 
	 	8.13	 	 	Additional Covenants
	 	 	27	 
	 	8.14	 	 	Chaview’ Rights upon an IPO
	 	 	27	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IX PART I	 	 	27	 
	 	 	 	 	 
	 	 	 	 
	COVENANTS RELATED TO CONFIDENTIALITY AND NON-COMPETITION	 	 	27	 
	 	 	 	 	 
	 	 	 	 
	 	9.1	 	 	Confidentiality
	 	 	27	 
	 	9.2	 	 	Restriction on Announcements
	 	 	28	 
	 	9.3	 	 	Non-Competition
	 	 	28	 
	 	 	 	 	 
	 	 	 	 
	PART II OTHER COVENANTS BY THE COMPANY, MERRY CIRCLE, HONOUR IDEA AND THE FOUNDER TO AEGIS AND CHAVIEW 	 	28
	 	 	 	 	 
	 	 	 	 
	 	10.1	 	 	Initial Public Offering
	 	 	28	 
	 	10.2	 	 	Right of First Refusal
	 	 	29	 
	 	10.3	 	 	Right of Co-Sale
	 	 	31	 
	 	10.5	 	 	Restrictive Covenants by Merry Circle, Honour Idea and the Founder
	 	 	32	 
	 	10.6	 	 	Restrictive Covenants by the Company
	 	 	33	 
	 	10.7	 	 	Put Option
	 	 	34	 
	 	10.8	 	 	*****
	 	 	36	 
	 	10.9	 	 	Repurchase
	 	 	36	 
	 	10.10	 	 	Founders’ Loan
	 	 	36	 
	 	 	 	 	 
	 	 	 	 
	PART III OTHER COVENANTS BY AEGIS TO THE COMPANY, MERRY CIRCLE, HONOUR IDEA AND THE FOUNDER	 	 	37	 
	 	 	 	 	 
	 	 	 	 
	 	11.1	 	 	Right of First Refusal of the Company
	 	 	37	 
	 	11.2	 	 	*****
	 	 	38	 
	 	11.3	 	 	Restrictive Covenants by Aegis
	 	 	38	 
	 	11.4	 	 	Call Option
	 	 	39	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE X TERM AND TERMINATION	 	 	40	 
	 	 	 	 	 
	 	 	 	 
	 	12.1	 	 	Term and Termination
	 	 	40	 
	 	12.2	 	 	Effect of Termination; Survival
	 	 	41	 






2









 






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE XI GOVERNING LAW & RESOLUTION OF DISPUTES	 	 	41	 
	 	 	 	 	 
	 	 	 	 
	 	13.1	 	 	Governing Law
	 	 	41	 
	 	13.2	 	 	Dispute Resolution Forum
	 	 	41	 
	 	13.3	 	 	Performance Pending Dispute Resolution
	 	 	41	 
	 	13.4	 	 	Specific Performance
	 	 	42	 
	 	13.5	 	 	Conflict with Charter Documents
	 	 	42	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE XII MISCELLANEOUS	 	 	42	 
	 	 	 	 	 
	 	 	 	 
	 	14.1	 	 	No Partnership; Agency
	 	 	42	 
	 	14.2	 	 	Indemnification
	 	 	42	 
	 	14.3	 	 	Entire Agreement
	 	 	42	 
	 	14.4	 	 	Binding Effect; Benefit
	 	 	43	 
	 	14.5	 	 	Assignment
	 	 	43	 
	 	14.6	 	 	Amendment; Waiver
	 	 	43	 
	 	14.7	 	 	Notices
	 	 	43	 
	 	14.8	 	 	Counterparts
	 	 	45	 
	 	14.9	 	 	Severability
	 	 	45	 
	 	14.10	 	 	Costs and Expenses
	 	 	45	 
	 	14.11	 	 	Further Acts and Assurances
	 	 	45	 
	 	14.12	 	 	Prior Shareholders Agreement
	 	 	45	 
	 	14.13	 	 	Most Favored Nation Treatment
	 	 	45	 
	 	14.14	 	 	Single Cause of Action
	 	 	45	 






LIST OF EXHIBITS




	 	 	 
	EXHIBIT A:

	 	NUMBER AND PERCENTAGE OF SHARES HELD IMMEDIATELY AFTER THE
CLOSING AND REPURCHASE
	EXHIBIT B:

	 	SERIES A PREFERRED SHARES FUNDAMENTAL ACTIONS
	EXHIBIT B-1:

	 	AEGIS FUNDAMENTAL ACTIONS
	EXHIBIT C:

	 	FORM OF SECOND AMENDED AND RESTATED REGISTRATION
RIGHTS AGREEMENT
	EXHIBIT D:

	 	ADDENDUM TO THE SECOND AMENDED AND RESTATED
SHAREHOLDERS AGREEMENT
	EXHIBIT E:

	 	*****
	EXHIBIT F:

	 	*****







3











 





SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT



This SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT (this “Agreement”) dated as of 20 January
2010 is made by and among Dang He, a PRC citizen with PRC passport No. G38016389 (the “Founder”),
Merry Circle Trading Limited, a company incorporated and existing under the laws of the British
Virgin Islands (“Merry Circle”), Honour Idea Limited, a company incorporated and existing under the
laws of the British Virgin Islands (“Honour Idea”), Chaview Investments Limited, a company
incorporated and existing under the laws of the British Virgin Islands (“Chaview”), Aegis Media
Pacific Ltd., a company incorporated and existing under the laws of England and Wales (“Aegis”) and
Charm Communications Inc., a company established and existing under the Laws of the Cayman Islands
(the “Company”).




WHEREAS:





	 	(A)	 	Pursuant to a share subscription agreement dated as of 16 July 2008 (the “First
Subscription Agreement”), Dynasty made an investment of US$29,750,000 in the Company
for 7,437,500 Series A Preferred Shares of the Company and Swift Rise has made an
investment of US$250,000 in the Company for 62,500 Series A Preferred Shares of the
Company. Dynasty Cayman Limited (“Dynasty”), Swift Rise International Limited (“Swift
Rise”), Merry Circle, the Founder and the Company entered into a shareholders agreement
dated as of 22 July 2008 (the “Shareholders Agreement”), pursuant to which Dynasty,
Swift Rise, Merry Circle, the Founder and the Company agreed on their rights and
obligations regarding the management of the Company, the transfer of the shares of the
Company and certain other rights and obligations as set forth therein.
	 
	 	(B)	 	Chaview, the Founder, the Company and other parties thereto have entered into
a second share subscription agreement dated 15 August 2008 (the “Second Subscription
Agreement”) pursuant to which, Chaview made an investment of US$20,000,000 in the
Company for 5,000,000 Series A Preferred Shares of the Company. The Founder, Merry
Circle, Dynasty, Swift Rise, Chaview and the Company entered into an amended and
restated shareholders’ agreement dated 19 August 2008 (the “Amended and Restated
Shareholders’ Agreement”) to replace the Shareholders Agreement.
	 
	 	(C)	 	Merry Circle transferred 1,093,750 Ordinary Shares of the Company to Honour
Idea on 3 December 2008;
	 
	 	(D)	 	Merry Circle and the Company entered into a share repurchase agreement dated 20
January 2010 pursuant to which the Company purchased from Merry Circle 4,890,000
Ordinary Shares in the capital of the Company.
	 
	 	(E)	 	Swift Rise and Dynasty shall tender a redemption notice to the Company dated an
even date as the Closing (as defined below) pursuant to which the Company shall redeem
from Swift Rise and Dynasty 62,500 and 7,437,500 Series A Preferred Shares in the
capital of the Company, respectively.




4









 












	 	(F)	 	Merry Circle, the Founder, Aegis and the Company entered into a share
subscription agreement dated as of 20 January 2010 (the “Share Subscription
Agreement”), pursuant to which Aegis has subscribed for 12,390,000 Ordinary Shares
of the Company from the Company (the “Subscribed Shares”) and, upon the completion
of the transactions contemplated therein (the “Closing”), each of Merry Circle,
Honour Idea and Chaview will hold the number and percentage of Ordinary Shares and
Series A Preferred Shares of the Company set forth next to each such Party’s name in
Exhibit A;
	 
	 	(G)	 	Aegis, Chaview the Founder and the Company have simultaneously entered into an
amended and restated registration rights agreement dated as of the date of this
Agreement (the “Second Amended and Restated Registration Rights Agreement”); and
	 
	 	(H)	 	it is a condition to the Closing under the Share Subscription Agreement that
the Parties shall have executed this Agreement.





          NOW THEREFORE, in consideration of the foregoing and the mutual promises, covenants and
agreements of the Parties contained herein, the Parties agree as follows:




ARTICLE I




DEFINITIONS



               1.1 Definitions. The following terms shall have the following meanings for purposes of this Agreement:



          *****




          “Aegis Group” means Aegis Group plc and any other existing and future Affiliates of Aegis
Group plc from time to time.




          “Aegis Media” means the media division of the Aegis Group operating in the PRC and such other
members of the Aegis Group which provide the same services as the media division of the Aegis Group
in the PRC.




          “Affiliate” means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with such Person (including any Subsidiary).
“Affiliates” and “Affiliated” shall have correlative meanings.




          “Articles of Association” means the memorandum and articles of association of the Company as
amended from time to time.




          “Bankruptcy Event” means with respect to any Person (the “Bankruptcy Party”), (a) the
commencement by it of a Bankruptcy Proceeding with respect to itself or the consent by it to be
subject to a Bankruptcy Proceeding commenced by another Person, (b) the commencement by another
Person of a Bankruptcy Proceeding with respect to the Bankruptcy Party that remains unstayed or
undismissed for a period of thirty consecutive






5









 







days, (c) the appointment of or taking possession by a Receiver over the Bankruptcy Party or
any substantial part of its property, (d) the making by the Bankruptcy Party of a general
assignment for the benefit of its creditors or the admission by the Bankruptcy Party in writing of
its inability to generally pay its debts as they come due, (e) the entry by a court having
jurisdiction over the Bankruptcy Party or a substantial part of its property of an Order for relief
under any Bankruptcy Law which remains unstayed or undismissed for a period of thirty consecutive
days, (i) adjudging the Bankruptcy Party bankrupt or insolvent, (ii) approving as properly filed a
petition seeking the reorganization or other similar relief with respect to the Bankruptcy Party,
(iii) appointing a Receiver over the Bankruptcy Party or any substantial part of its property or
(iv) otherwise ordering the winding up and liquidation of the Bankruptcy Party or (f) the
occurrence of any event similar to (a), (b), (c), (d) or (e) under any applicable Law with respect
to the Bankruptcy Party.




          “Bankruptcy Law” means any bankruptcy, insolvency, reorganization, composition, moratorium or
other similar Law.




          “Bankruptcy Proceeding” means a case or proceeding under any Bankruptcy Law wherein a Person
may be adjudicated bankrupt, insolvent or become subject to an Order of reorganization,
arrangement, adjustment, winding up, dissolution, composition or other similar Order.




          “Board” means the board of directors of the Company.




          “Books and Records” means all files, documents, instruments, papers, books and records
relating to the business or condition of the Company and its subsidiaries, including without
limitation financial statements, tax returns and related work papers and letters from accountants,
budgets, pricing guidelines, ledgers, journals, deeds, title policies, minute books, share
certificates and books, stock transfer ledgers, contracts, licenses, customer lists, computer files
and programs, retrieval programs, operating data and plans and environmental studies and plans.




          “Business Day” means a day other than Saturday, Sunday or any day on which banks located in
the PRC, the U.S., Hong Kong, the British Virgin Islands or the Cayman Island are authorized or
obligated to close.




          “BVI Sub II” means Media Port Holdings Limited, a company incorporated under the Laws of the
British Virgin Islands with its registered office situated at P.O. Box 957, Offshore Incorporations
Centre, Road, Town, Tortola, British Virgin Islands and a wholly-owned Subsidiary of the Company.




          *****




          “Chaview Documents” means (i) the agreement among the Founder, Merry Circle, Chaview and the
Company regarding certain put option given by Merry Circle to Chaview, dated an even date herewith
(ii) the security agreement among the Founder, Merry Circle, Chaview, regarding certain security
arrangement to be made by Merry Circle and Founder in favor of Chaview dated an even date herewith
and (iii) all documents, agreements and instruments contemplated or executed pursuant to the
agreements set out in (i) and (ii) above.







6









 








          “Confidential Information” means (a) any information concerning the organization, business,
technology, trade secrets, know-how, finance, transactions or affairs of any Party or any Party’s
Representatives (whether conveyed in written, oral or in any other form and whether such
information has been furnished before, on or after the date of this Agreement) including
information provided pursuant to Clause 8.3 of this Agreement, (b) any information or materials
prepared by a Party or its Representatives that contains or otherwise reflects, or is generated
from, Confidential Information, (c) the Transaction Documents, the transactions contemplated
thereby, the terms and conditions thereof or any discussions, correspondence or other
communications among the parties to any Transaction Document or their respective Representatives
relating to the Transaction Documents or any of the transactions contemplated thereunder and (d)
any documents or information concerning any Party or any Party’s Representatives furnished to any
other Party in connection with such Party’s due diligence review, if any, conducted in evaluating
the transactions contemplated by the Transaction Documents.




          “control” (including with correlative meanings, the terms “controlling”, “controlled by” and
“under common control with”), as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities or by contract or
otherwise.




          “Director” means a director of the Company (including any duly appointed alternate director or
any director appointed by Chaview and/or Aegis pursuant to Clause 3.3 hereto).




          “Equity Securities” means the share capital, membership interests, partnership interests,
registered capital or other ownership interest in any Person or any options, warrants or other
securities that are directly or indirectly convertible into, or exercisable or exchangeable for,
such share capital, membership interests, partnership interests, registered capital or other
ownership interests (whether or not such derivative securities are issued by such Person) and
includes the Shares.




          “ESOP” means the Company’s 2008 Share Incentive Plan, as adopted by a written shareholders
resolution of the Company on 1 April 2008.




          “Government Authority” means with respect to any Person, any court, tribunal, arbitrator,
authority, agency, commission, official or other instrumentality of any jurisdiction in which such
Person conducts business or operations, or any province, state, country, city or other political
subdivision thereof.




          “Group” means the Company and its Subsidiaries as a group.




          “Initial Public Offering” means the first Public Offering of Equity Securities of the Company
or IPO Vehicle upon the consummation of which such securities are listed on the NASDAQ Global
Market, the New York Stock Exchange or the Hong Kong Stock Exchange, which shall reflect the
valuation of the Company or IPO Vehicle (as determined by reference to the initial public offering
price) immediately prior to the Initial Public Offering of no less than US$280 million.




          “IPO Vehicle” means the Company or a Person organized to effect an Initial Public Offering.







7









 








          “Law” means any constitutions, treaties, statutes, laws (including the common law), codes,
rules, regulations, ordinances, mandatory guidelines, circulars, orders or implemented policies of
any government authority or any Order.




          “Order” means any writ, judgment, decree, injunction, award or similar order of any Government
Authority (in each case whether preliminary or final).




          “Ordinary Shares” means ordinary shares in the Company with voting rights, par value US$0.0001
per share.




          “Ordinary Share Equivalents” means warrants, options and rights exercisable for Ordinary
Shares and instruments convertible into or exchangeable for Ordinary Shares, including, without
limitation, the Series A Preferred Shares.




          “Parties” means collectively the Founder, Merry Circle, Honour Idea, Chaview, Aegis and the
Company and any Person who becomes a party to this Agreement pursuant to Article V hereof. Each of
the Parties shall be referred to as a “Party.”




          “Percentage Ownership” means, with respect to any Shareholder, a percentage represented by the
fraction, the numerator of which is the number of Shares then registered in the name of such
Shareholder and the denominator of which is the total number of Shares then issued and outstanding,
all as calculated on a fully diluted and as converted to Ordinary Shares basis.




          “Person” means an individual, firm, corporation, partnership, association, limited liability
company, trust or estate or any other entity or organization whether or not having separate legal
existence, including any Government Authority.




          “PHK” means Posterscope (Hong Kong) Limited, a company incorporated under the Laws of Hong
Kong with its registered office situated at 16th Floor, 633 King’s Road, North Point, Hong Kong.




          “PHK Group” means PHK and any other existing and future Subsidiary of PHK from time to time
(including  (Beijing Vizeum Advertising Co. Ltd.)).




          “PHK Shareholders’ Agreement” means the Shareholders’ Agreement to be made between BVI Sub II,
Posterscope Advertising Limited, the Company, Aegis and PHK.




          “PRC” means the People’s Republic of China, but solely for the purposes of this Agreement,
excluding Hong Kong, the Macau Special Administrative Region and Taiwan.




          “Public Offering” means, in the case of an offering in the United States, an underwritten
public offering of Equity Securities of a Person pursuant to an effective registration statement
under the U.S. Securities Act of 1933, as amended, and, in the case of an offering in any other
jurisdiction, a widely distributed underwritten offering of Equity Securities of a Person in which
both retail and institutional investors are eligible to buy in accordance with the applicable
securities laws of such jurisdiction.







8









 








          “Representatives” means with respect to any Person, such Person’s directors, officers,
employees, agents, Affiliates, partners, legal and financial advisers, accountants, consultants and
controlling persons.




          “Receiver” means any receiver, liquidator, trustee, administrator, sequestrator or other
similar official.




          “Regulation 10” means the Regulations Regarding the Merger and Acquisition of Chinese Domestic
Enterprises by Foreign Investors jointly promulgated by the Ministry of Commerce, the State-owned
Assets Supervision and Administration Commission of the State Council, the State Administration of
Taxation, the State Administration of Industry and Commerce, the China Securities Regulatory
Commission and the State Administration of Foreign Exchange of the PRC which came into effect on 8
September 2006.




          “RMB” means the legal currency of the People’s Republic of China.




          “Series A Preferred Shares” means the Series A preferred shares, par value US$0.0001 per
share, of the Company, created and issued by the Company to Dynasty and Swift Rise pursuant to the
First Subscription Agreement, and to Chaview pursuant to the Second Subscription Agreement, all
with the rights and privileges as set forth in the Articles of Association.




          “Shareholder” means a registered holder of Shares of the Company, including Merry Circle,
Honour Idea, Chaview and Aegis, but excluding those members holding Shares under the ESOP.




          *****




          “Shares” means, collectively, Ordinary Shares and/or Series A Preferred Shares and any and all
other shares in the capital of the Company or the IPO Vehicle from time to time.




          “Subscription Price” means an aggregate subscription price of Forty Nine Million Five Hundred
Sixty Thousand U.S. Dollars (US$49,560,000) payable by Aegis for the subscription of the Subscribed
Shares under the Share Subscription Agreement.




          “Subsidiary” means, with respect to any Person, any entity which such Person controls,
directly or indirectly. For the avoidance of doubt, the Domestic Companies (as defined in the
Subscription Agreement) shall be deemed as Subsidiaries of the Company.




          “Tax” means any form of taxation (including any value added, excise, use, personal property,
use and occupancy, business and occupation, mercantile, real estate, payroll, franchise or capital
gains tax), estate duty, stamp duty, customs duty, deduction, withholding, duty, impost, levy or
fee or charge levied, collected, withheld or assessed by any Government Authority and any interest,
penalty, surcharge or fine in connection therewith or any other measure of tax.




          “Third Party” means a bona fide prospective purchaser of Shares, in an arm’s-length
transaction, from a Shareholder where such purchaser is not a Party or a Permitted Transferee of
such Shareholder.







9









 








          “Transaction Documents” means this Agreement, the Share Subscription Agreement, the Second
Amended and Restated Registration Rights Agreement and the Articles of Association.




          “Transfer” means to sell, exchange, assign, pledge, charge, grant a security interest,
hypothecate, gift or other encumbrance, or enter into any contract therefor, or into any voting
trust or other agreement or arrangement with respect to the transfer of voting rights or any other
legal or beneficial interest in any of the Shares, create any other claim thereto or make any other
transfer or disposition whatsoever, whether voluntary or involuntary, affecting the right, title,
interest or possession in, to or of such Shares, and “Transfer”, “Transfers” and “Transferred”
shall have correlative meanings.




          “2010 Financial Statements” means the consolidated financial statements of the Company for the
year ended 31 December 2010 prepared in accordance with U.S. GAAP and audited by one of the “big
four” international accounting firms.




          “2010 Net Income” means the after tax net income on the 2010 Financial Statements after the
following adjustments:





	 	(i)	 	excluding any earnings obtained through or as the result of any
merger, amalgamation or other business combination between any other entity and
the Company or its Subsidiaries unless such merger, amalgamation or business
combination has been approved by the Board of the Company in advance;
	 
	 	(ii)	 	excluding any extraordinary item of material earnings obtained
by the Company or its Subsidiaries other than in their ordinary course of
business;
	 
	 	(iii)	 	excluding any extraordinary expenses;
	 
	 	(iv)	 	excluding expenses for share based compensation;
	 
	 	(v)	 	excluding any expenses incurred in connection with the Initial
Public Offering and the Company’s other financing transactions; and
	 
	 	(vi)	 	excluding any income or loss from operation of the PHK Group.





               1.2 Additional Definitions . The following terms shall have the meanings defined in the indicated Clause for purposes of this
Agreement:



	 	 	 
	Defined Term	 	Clause Reference
	“Aegis”

	 	Preamble
	“Aegis — Company Option Event”

	 	 10.7(a)(ii)
	“Aegis — Dang Option Event”

	 	 10.7(a)(i)
	“Aegis Intention Notice”

	 	 11.1(a)
	“Aegis Offered Shares”

	 	 11.1(a)
	“Aegis Offeror”

	 	 11.1(a)
	“Aegis Purchase Option”

	 	 10.2(a)
	“Aegis Put Option”

	 	 10.7(a)(ii)
	“Aegis Put Option Notice”

	 	 10.7(a)(ii)
	“Aegis Put Price”

	 	 10.7(b)
	“Agreement”

	 	Preamble
	“Agreement Provision”

	 	 14.14
	“Amended and Restated Shareholders’ Agreement”

	 	Recital (B)






10









 






	 	 	 
	Defined Term	 	Clause Reference
	“Business Plan”

	 	 8.1
	“Chaview”

	 	Preamble
	“Chaview Observer”

	 	 3.3(a)
	“Closing Recital”

	 	Recital (F)
	“Co-Sale Eligible Holder”

	 	 10.3(a)
	“Co-Sale Eligible Shares”

	 	 10.3(a)
	“Co-Sale Notice”

	 	 10.3(a)
	“Co-Sale Right”

	 	 10.3(a)
	“Co-Sale Shares”

	 	 10.3(c)
	“Company”

	 	Preamble
	“Company Purchase Option”

	 	 11.1(a)
	“Company Purchase Option Exercise Period”

	 	 11.1(a)
	“Company Purchased Shares”

	 	 11.1(a)
	“Cut-Off Date”

	 	 7.1
	“Dang Intention Notice”

	 	 10.2(a)
	“Dang Offered Shares”

	 	 10.2(a)
	“Dang Offeror”

	 	 10.2(a)
	“Declared Dividends”

	 	 8.10
	“Declining Shareholder”

	 	 4.3
	“Disclosing Party”

	 	 9.1
	“Dynasty”

	 	Recital (A)
	“Eligible Holder”

	 	 10.2(a)
	“First Subscription Agreement”

	 	Recital (A)
	“Founder”

	 	Preamble
	“Founder/Charm Call Option”

	 	 11.4(a)
	“Founder/Charm Call Option Notice”

	 	 11.4(a)
	“Founder/Charm Call Price”

	 	 11.4(b)
	“Founder’s Loan Note”

	 	 10.10
	“Honour Idea”

	 	Preamble
	“ICC Rules”

	 	 13.2(a)
	“Indemnified Persons”

	 	 14.2
	“Losses”

	 	 3.12
	“Merry Circle”

	 	Preamble
	“New Issuance”

	 	 4.1
	“Other Transaction Document Provision”

	 	 14.14
	“Permitted Time Period”

	 	 5.5(c)
	“Purchase Option”

	 	 10.2(a)
	“Purchase Option Exercise Period”

	 	 10.2(a)
	“Purchased Shares”

	 	 10.2(a)
	“Redemption/Put Amount”

	 	 7.1
	“Regulation 10 Violation Event”

	 	 7.1
	“Relevant Buyer”

	 	 10.7(a)(ii)
	“Restricted Portion Notice”

	 	 5.5(b)
	“Restricted Portion”

	 	 5.5(a)
	“Restructuring”

	 	 7.1
	“Rights Issuance Portion”

	 	 4.1
	“Rights Offering Notice”

	 	 4.2






11









 






	 	 	 
	Defined Term	 	Clause Reference
	“Rights Offering Period”

	 	 4.2
	“Pro Rata ROFR Share”

	 	 10.2(a)
	“Second Amended and Restated Registration Rights
Agreement”

	 	Recital (G)
	“Second Subscription Agreement”

	 	Recital (B)
	“Share Subscription Agreement”

	 	Recital (F)
	“Shareholders Agreement”

	 	Recital (A)
	“Shareholders Meeting”

	 	 3.1
	“Subscribed Shares”

	 	Recital (F)
	“Swift Rise”

	 	Recital (A)
	“Voting Securities”

	 	 11.5






               1.3 Construction. Whenever used in this Agreement, except as otherwise expressly provided or unless the
context otherwise requires, any noun or pronoun shall be deemed to include the plural as well as
the singular and to cover all genders. Unless otherwise specified, words such as “herein,”
“hereof,” “hereby,” “hereunder” and words of similar import refer to this Agreement as a whole and
not to any particular clause or sub-clause of this Agreement and references herein to “articles” or
“clauses” refer to articles or clauses of this Agreement. Unless otherwise specified, references
herein to the word “including” shall be deemed to be followed by words “without limitation” or “but
not limited to,” as applicable, or words of similar import. The word “or” shall not be interpreted
to be exclusive. The table of contents and headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or interpretation of this
Agreement. Whenever this Agreement refers to a number of days, such number shall refer to calendar
days unless Business Days are specified. Provisions purporting to be an obligation on the part of a
Subsidiary or Affiliate of a Party who is not itself a party to this Agreement shall be construed
as an obligation on the part of the Party to procure the performance of its Subsidiary or
Affiliate.



ARTICLE II




REPRESENTATIONS AND WARRANTIES



               2.1 Representations and Warranties of the Parties. Each Party represents and warrants, severally and not jointly, to each other Party that as
of the date of this Agreement:




          (a) such Party has the full power and authority to enter into, execute and deliver this
Agreement and to perform the transactions contemplated hereby and by other Transaction
Documents to which it is a party and, if such Party is not a natural Person, such Party is
duly incorporated or organized and existing and in good standing under the laws of the
jurisdiction of its incorporation or organization;




          (b) if such Party is not a natural Person, the execution and delivery by such Party of
this Agreement and the performance by such Party of the transactions contemplated hereby and
by other Transaction Documents to which it is a party have been duly authorized by all
necessary corporate or other action of such Party;




12











 






          (c) assuming the due authorization, execution and delivery hereof by each of the
other Parties, this Agreement constitutes a legal, valid and binding obligation of such
Party, enforceable against such Party in accordance with its terms, except as such
enforceability may be limited by applicable Bankruptcy Laws affecting creditors’ rights
generally;




          (d) the execution, delivery and performance of this Agreement by such Party and the
consummation of the transactions contemplated hereby will not (i) violate any provision of
the organizational or governance documents of such Party; (ii) require such Party to obtain
any consent, approval or action of, or make any filing with or give any notice to, any
Government Authority in such Party’s country of organization or any other Person (other than
any notice or filing pursuant to the rules of the applicable stock exchange) pursuant to any
instrument, contract or other agreement to which such Party is a party or by which such
Party is bound, other than any such consent, approval, action or filing that has already
been duly obtained or made; (iii) conflict with or result in any material breach or
violation of any of the terms and conditions of, or constitute (or with notice or lapse of
time or both would constitute) a default under any instrument, contract or other agreement
to which such Party is a party or by which such Party is bound; (iv) violate any Order
against, or binding upon, such Party or upon its respective securities, properties or
businesses; or (v) violate any Law of such Party’s country of organization or any other
country in which it maintains its principal office; and




          (e) such Party and such Party’s assets are not in violation of any Law, the violation
of which would be reasonably expected to have a material adverse effect upon (i) such Party
or (ii) such Party’s ability to perform its obligations hereunder.



ARTICLE III




CORPORATE GOVERNANCE



               3.1 General. From and after the date hereof, each Shareholder shall vote its Shares at any regular or
special meeting of shareholders of the Company (a “Shareholders Meeting”), and shall take, subject
to applicable Law, all other actions necessary or required to give effect to the provisions of this
Agreement (including but not limited to the provisions under Part II and Part III of Article IX)
and each of the other Transaction Documents, including ensuring that the Articles of Association
(and any such organizational documents of any Subsidiary of the Company) do not at any time
conflict with any provision of this Agreement or any other Transaction Document. Without limiting
the previous sentence, each Shareholder shall procure, subject to applicable Law, that each
Director nominated by such Shareholder shall vote and take all other action necessary or required
to give effect to the provisions of this Agreement (including but not limited to the provisions
under Part II and Part III of Article IX) and each of the other Transaction Documents. In all other
respects, each Shareholder shall be entitled to vote in such Shareholder’s own best interests.



               3.2 Authority of the Board of Directors. Subject only to the provisions of this Agreement, the Articles of Association and applicable
Law:



13









 






          (a) the Board shall have ultimate responsibility for management and control of the
Company; and




          (b) subject to compliance with Clause 3.8(c), the Board shall be required to make all
major decisions of the Company.



               3.3 Composition of the Board of Directors. The number of Directors constituting the Board shall be six (6); and:



          (a) Prior to the consummation of an Initial Public Offering, so long as Chaview, together with
its Affiliates, holds no less than Forty Per Cent (40%) of the Series A Preferred Shares purchased
by Chaview pursuant to the Second Subscription Agreement, each Shareholder shall vote its Shares at
any Shareholders Meeting called for the purpose of electing Directors or in any written consent of
Shareholders executed for such purpose to elect, and shall take all other actions necessary or
required to ensure the election to the Board one (1) nominee of Chaview. If Chaview removes its
nominee to the Board, or its nominee on the Board resigns, Chaview shall be entitled to appoint,
and after such appointment remove in each case prior to the consummation of an Initial Public
Offering, an observer to the Board (“Chaview Observer”) and each of the other Shareholders shall
take all actions necessary or required to ensure the appointment of the Chaview Observer. The
Chaview Observer shall have the right to attend all meetings of the Board and/or any committees
thereunder and participate in the discussions in all such meetings but shall have no voting rights.
For the avoidance of doubt, Chaview’s right to appoint one (1) nominee to the Board shall remain
notwithstanding the election and appointment of the additional Chaveiw Observer, and Chaview shall
be entitled to exercise such right of appointment of a director prior to the consummation of the
Initial Public Offering, provided that Chaview removes the Chaview Observer at the time of
re-appointing its nominee to the Board.



          (b) So long as Aegis, together with its Affiliates, holds no less than Ten Per Cent (10%) of
the issued share capital (including all Preferred Shares on an as-if converted and fully diluted
basis) of the Company, each Shareholder shall vote its Shares at any Shareholders Meeting called
for the purpose of electing Directors or in any written consent of Shareholders executed for such
purpose to elect, and shall take all other actions necessary or required to ensure the election to
the Board one (1) nominee of Aegis. Patrick Stahle shall be the initial Director appointed by
Aegis. For the avoidance of doubt, Aegis’ rights to appoint a Director pursuant to this Clause
3.3(b) shall continue after the Company’s Initial Public Offering.



          (c) So long as Founder, together with his Affiliates, holds no less than Fifty Per Cent (50%)
of the issued share capital (including all Preferred Shares on an as-if converted and fully diluted
basis) of the Company, each Shareholder shall vote its Shares at any Shareholders Meeting called
for the purpose of electing Directors or in any written consent of Shareholders executed for such
purpose to elect, and shall take all other actions necessary or required to ensure the election to
the Board three (3) nominees of Founder.



          (d) Holders of more than Fifty Per Cent (50%) of the then issued and outstanding share capital
of the Company shall be entitled to nominate one (1) independent
director to the Board (“Independent Director”) in accordance with applicable exchange rules,
as applicable, and each Shareholder shall vote its Shares at any Shareholders Meeting called for
the purpose of electing Directors or in any written consent of Shareholders



14









 




executed for such
purpose to elect, and shall take all other actions necessary or required to ensure the election to
the Board such nominee of Independent Director.




               3.4 Committees of the Board. The Board may establish such committees or subcommittees with such powers as may be
permitted by applicable Law and the Articles of Association; provided, that any such committees or
subcommittees shall be subject to the direction of and any policies adopted by the Board. The
Director(s) appointed by Chaview and/or Aegis pursuant to Clause 3.3 above shall have the right,
but not the obligation, to be a member of any such committees or subcommittees.




          3.5 Removal and Replacement of Directors and the Chaview Observer.




          (a) Each Shareholder shall have the absolute right to remove any director or observer
nominated by it at any time at its sole discretion, and each of the Shareholders shall vote
its Shares at any Shareholders Meeting or in any written consent of Shareholders so as to
effectuate such right. Except as provided in the previous sentence, no Shareholder shall
vote for the removal of the Director(s) appointed by Chaview or Aegis pursuant to Clause 3.3
above or the Chaview Observer.




          (b) If, as a result of death, resignation, removal or otherwise, there shall exist or
occur any vacancy on the Board, the Shareholder entitled under Clause 3.3 to nominate the
Director whose death, resignation, removal or other departure resulted in such vacancy shall
nominate another individual to serve in place of such Director and the Shareholders shall
elect such individual to the Board as soon as practicable thereafter. If it is the
Director(s) appointed by Chaview or Aegis, whose death, resignation, removal or other
departure has resulted in the vacancy, neither the Shareholders nor the Board shall transact
any business of the Company until the Shareholders have elected the replacement for such
Director without prior consent of Chaview or Aegis, as applicable (which consent shall not
be unreasonably withheld or delayed), unless Chaview or Aegis, as applicable, shall have
failed to nominate a replacement Director within three days after such death, resignation,
removal or other departure.




          (c) At such times that Chaview has the right to appoint the Chaview Observer, Chaview
shall have the absolute right to remove the Chaview Observer. If, as a result of death,
resignation, removal or otherwise of the Chaview Observer other than (i) on or upon the
consummation of the Initial Public Offering or (ii) due to Chaview exercising its right to
nominate a Director, Chaview shall appoint another individual to serve as the Chaview
Observer.



               3.6 Directors’ Access to Information. Each of the Directors and the Chaview Observer shall be entitled to examine the Books and
Records of the Company or any Subsidiary of the Company and shall have free access, at all
reasonable times and upon reasonable prior notice, to any and all properties and facilities of the
Company or any Subsidiary of the Company. The Company shall provide such information relating to
the business affairs and financial position of the Company or any Subsidiary of the Company as any
Director or the Chaview Observer may reasonably request. Any Director or the Chaview



15









 




Observer may
provide such information to his or her nominating Shareholder to the extent permitted by law.




               3.7 Board Meetings.




          (a) Frequency and Location. Meetings of the Board shall take place at least once in
every fiscal quarter of the Company unless otherwise determined by the Board. Board meetings
shall be held in Hong Kong or any other location determined by the Directors; provided that
if the Directors cannot agree on a location for any particular Board meeting, the meeting
shall be held in Hong Kong.




          (b) Notice. A meeting of the Board may be called by the Chairman of the Board or any
one Director giving notice in writing to all other Directors and the Chaview Observer
specifying the date, time and agenda for such meeting. Not less than fourteen days prior
written notice shall be given to each Director and the Chaview Observer; provided, that such
notice period (i) shall not apply in the case of an adjourned meeting pursuant to Clause
3.8(a) and (ii) may be reduced with the unanimous written consent of the Directors and the
Chaview Observer.




          (c) Telephone Participation. Directors and the Chaview Observer shall be entitled to
participate in Board meetings by telephone or video conferencing or any other means of
contemporaneous communication; provided, that each Director and the Chaview Observer taking
part in the meeting is able to hear each other Director and the Chaview Observer taking part
and; provided, further, that each Director and the Chaview Observer must acknowledge his or
her presence for the purpose of the meeting and any Director and the Chaview Observer not
doing so shall not be entitled to speak or, with respect to a Director, vote at the meeting.
Such participation by a Director shall constitute presence for purposes of the quorum
provisions of Clause 3.8(a). A Director or the Chaview Observer may not leave the meeting by
disconnecting his or her telephone or other means of communication unless he or she has
previously obtained the express consent of the Chairman of the Board, and a Director shall
conclusively be presumed to have been present and formed part of the quorum at all times
during the meeting unless he or she has previously obtained the express consent of the
Chairman of the Board to leave the meeting as aforesaid.




          (d) Written Resolutions. Any action that may be taken by the Directors at a Board
meeting may alternatively be taken by a written resolution signed by all of the Directors.
The expressions “written” and “signed” include writings or signatures transmitted by
facsimile. Any solicitation of a written consent shall be sent to the Chaview Observer as
well and the Chaview Observer shall be promptly notified to the extent an action by written
consent is passed.




          (e) Language; Preparation of Minutes. All meetings of the Board shall be conducted in
English or Chinese with simultaneous interpretation of the other language provided, and
written minutes of all meetings of the Board shall be prepared in English (with a Chinese
translation) and provided by the Company to each Director, the Chaview Observer and each
Shareholder within ten days after each meeting of the Board. The English version of the
minutes shall prevail as against any translation thereof.



16









 





               3.8 Action by the Board.




          (a) Quorum. All meetings of the Board shall require a quorum of at least a majority of
the Directors which shall include the Directors appointed by Chaview and Aegis, as
applicable. If such a quorum and if applicable, the Chaview Observeris/are not present,
within sixty minutes after the time appointed for the meeting as included in the notice
delivered pursuant to Clause 3.7(b), the meeting shall be adjourned to the same place and at
the same day and time the following week (or if such day is not a Business Day, at the same
time on the immediately following Business Day), at which meeting the Directors present
shall constitute a valid quorum whether or not the Director(s) appointed by Chaview and
Aegis, as applicable, and the Chaview Observer (if applicable), is /are present; provided,
that written notice of such adjourned meeting shall have been delivered to all Directors and
the Chaview Observer at least three days prior to the date of such adjourned meeting.




          (b) Ordinary Actions. With respect to each resolution to be adopted at any Board
meeting, each Director may exercise one vote. Any Director may, by written notice to the
Chairman of the Board, (i) authorize another Director to attend and vote by proxy for such
Director at any Board meeting or (ii) appoint an alternate Director to attend and vote for
such Director at any Board Meeting. Except as provided in Clause 3.8(c), the adoption of any
resolution of the Board shall require the affirmative vote of a majority of the Directors
present at a duly constituted meeting of the Board. Any Director or Chaview Observer may put
forth a resolution for vote at a Board meeting; provided, that the Board shall not adopt any
resolution concerning any matter that is not specified on the agenda for such meeting unless
(i) a written notice setting forth such matter has been delivered to all Directors and the
Chaview Observer one day prior to the date of the Board meeting or (ii) a majority of
Directors (which shall include the Director(s) appointed by Chaview and Aegis, as
applicable) vote in favor of such resolution and to the extent Chaview has not appointed a
Director and the Chaview Observer is present at such meeting.




          (c) Fundamental Actions. Subject to any additional requirements imposed by applicable
Law and to the obligations of the Shareholders under Clause 3.1, the Shareholders agree that
(i) the Company shall not, without the affirmative consent or approval of shareholders
holding at least a majority of the total Series A Preferred Shares and Ordinary Shares
converted from the Series A Preferred Shares outstanding, take any of the actions with
respect to the matters set forth on Exhibit B; and (ii) the Company shall not, without the
affirmative consent or approval of Aegis (for so long as Aegis, together with its
Affiliates, hold not less than Five Per Cent (5%)
of the issued share capital of the Company) take any of the actions with respect to the
matters set forth on Exhibit B-1.



               3.9
Remuneration of Directors. No Director or observer appointed by Chaview or Aegis shall be entitled to any remuneration
for serving in such capacity except for: (a) reimbursement of reasonable out-of-pocket expenses in
connection with the performance of his or her duties as Director or observer or (b) if such
Director or observer is otherwise an employee of or consultant to the Company, remuneration
received in such capacity.



17









 





               3.10 Appointment of External Auditor. Each Shareholder agrees to vote its Shares, and each Shareholder who has nominated a
Director pursuant to Clause 3.3 agrees to procure that its nominated Directors shall vote to cause
the Board to appoint one of the “Big 4” international accounting firm as the Company’s auditor.
Each Shareholder acknowledges that the Company has appointed Deloitte Touche Tohmatsu as its
current auditor.



               3.11 Subsidiaries. Except as otherwise agreed by the Shareholders, each Subsidiary of the Company shall be
governed and managed in accordance with the same procedures (including board and
committee/subcommittee composition, if a board exists, the procedures related to nominating and
removing directors) applicable to the Company as set forth in this Article III. For the avoidance
of doubt, Nanning Jetlong Technology Co., Ltd. will have a board and
such board shall have the same composition as the Board of Directors.



               3.12 Limit on Shareholder Action. No Shareholder, acting solely in its capacity as a Shareholder, shall act as an agent of the
Company or have any authority to act for or to bind the Company, except as authorized by the Board.
Any Shareholder that takes any action or binds the Company in violation of this Clause shall be
solely responsible for, and shall indemnify the Company and each other Shareholder against, any
losses (including Tax losses), claims, damages, liabilities, judgments, fines, obligations,
expenses and liabilities of any kind or nature whatsoever (including to any investigative, legal
and other expenses and Tax costs incurred in connection with, and any amounts paid in settlement
of, any pending or threatened legal action or proceeding) (collectively, “Losses”) that the Company
or such other Shareholders, as the case may be, are subject to or liable for by reason of such
violation.



ARTICLE IV




PRE-EMPTIVE RIGHTS OF THE SHAREHOLDERS



               4.1 Shareholders Pre-emptive Rights. The Company shall not conduct any new issuance of Equity Securities other than in an Initial
Public Offering of the Company (a “New Issuance”), unless the New Issuance has been approved in
accordance with this Agreement including but not limited to Clause 3.8(c), and the Company has
offered to each of the Shareholders the right to
participate in such New Issuance in proportion to such Shareholder’s Percentage Ownership as
of the date of the Rights Offering Notice (as defined below) (a “Rights Issuance Portion”) on the
same terms and conditions.



               4.2 Notice of New Issuances. Each time that the Company proposes to conduct a New Issuance, it shall give each
Shareholder a written notice (the “Rights Offering Notice”) of its intention, describing the type,
price and terms (including the proposed date upon which such New Issuance is to be completed) of
the New Issuance. Each Shareholder shall have 20 days from the date of the Rights Offering Notice
(the “Rights Offering Period”) to confirm its intention to purchase a portion of the New Issuance
up to its Rights Issuance Portion for the price and upon the terms specified in the Rights Offering
Notice by giving written notice to the Company stating the portion of the New Issuance that it
agrees to purchase. Failure to respond to the Rights Offering Notice by a Shareholder within the
Rights Offering Period shall be deemed to be such Shareholder’s irrevocable waiver of its right to
participate in such New Issuance. The Company shall have 90 days from the date of



18









 




the Rights
Offering Notice to complete the New Issuance, failing which such New Issuance shall again be
subject to this Clause.




               4.3 Additional Allocation Procedures. If a Shareholder (the “Declining Shareholder”) fails to respond to the Rights Offering
Notice within the Rights Offering Period or if a Shareholder responds to the Rights Offering Notice
within the Rights Offering Period but agrees to purchase a portion of the New Issuance less than
its Rights Issuance Portion, each other Shareholder participating in the New Issuance shall have
the right to acquire a portion of the New Issuance declined by the Declining Shareholder in
proportion to such other Shareholder’s Rights Issuance Portion.



ARTICLE V




RESTRICTIONS ON THE TRANSFER OF SHARES



               5.1 General. No Shareholder shall, directly or indirectly, Transfer any Shares or any right, title or
interest therein or thereto unless (a) the transferee (if not already a Party to this Agreement)
has agreed in writing to be bound by the terms and conditions of this Agreement by signing either a
copy of this Agreement or a deed of adherence in the form as agreed by the Parties, in which case
such transferee shall be considered a Shareholder and a Party to this Agreement, (b) the Transfer
complies in all respects with any other applicable provision of this Agreement and (c) the Transfer
complies in all respects with applicable securities laws. Any Transfer of Shares in violation of
the preceding sentence shall be null and void, and the Company shall not register such Transfer in
the Company’s register of members. In connection with any Transfer pursuant to the first sentence
of this Clause 5.1, the transferring Shareholder agrees to give 10 days’ written notice to the
Company prior to the consummation of the Transfer, which notice shall include the number of Shares
to be Transferred and the intended Transferee.



               5.2 Legend on Share Certificates.




          (a) In addition to any other legend that may be required under applicable Law, each
certificate for Shares (other than certificates for Shares to be issued in connection with
an Initial Public Offering of the Company) shall bear the following legend:




“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”). SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE
UNITED STATES OR TO ANY U.S. PERSON IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE SECURITIES ACT AND
ANY APPLICABLE STATE SECURITIES LAWS OF THE UNITED STATES.




THE SHARES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
RESTRICTIONS ON TRANSFER AS SET FORTH IN THE ARTICLES OF ASSOCIATION
OF THE COMPANY AND A SHAREHOLDERS AGREEMENT DATED AS OF 20 JANUARY
2010, A COPY OF EACH OF



19









 






WHICH MAY BE OBTAINED UPON REQUEST FROM THE
HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE. NO
TRANSFER OF SUCH SHARES SHALL BE EFFECTIVE UNLESS AND UNTIL THE
TERMS AND CONDITIONS OF THE AFORESAID ARTICLES OF ASSOCIATION AND
SHAREHOLDERS AGREEMENT HAVE BEEN COMPLIED WITH IN FULL.”




          (b) If any Shares cease to be subject to any restrictions on Transfer set forth in this
Agreement, the Company shall, upon the written request of the holder thereof, issue to such
holder a new certificate evidencing such shares without the legend required by Clause
5.2(a).



               5.3 No Transfer to Competitors.




          (a) Chaview may Transfer any of its Shares to any Person at all times except that prior
to an Initial Public Offering, in the event that the intended transferee is a Person whose
principal business in the PRC is television advertising, Chaview shall not Transfer any of
its Shares to such Person without the prior consent of the Founder and Aegis, and such
Transfer is also subject to compliance with Clause 5.1. It is agreed that (i) the rights
provided in Clauses 8.4 and 8.5 shall not be transferred to any Transferee and (ii) the
rights provided in Clauses 3.3 and 3.5 shall not be transferred to any Transferee without
prior written consents of the Founder and Aegis, which consent shall not be unreasonably
withheld, provided further, that in the
event that the intended transferee is a Person whose principal business is advertising
media (other than television advertising) in the PRC, then the rights provided in Clauses
8.3, 8.4, 8.5, 3.3, 3.5 and 3.8(c) shall not be transferred without the prior written
consent of the Founder and Aegis.




          (b) Subject to Part III of Article IX, Aegis may Transfer any of its Shares to any
Person and such Transfer shall also comply with Clause 5.1.



               5.4 Founder’s Lock-up. Notwithstanding any other provisions herein otherwise, each of the Founder, Merry Circle and
Honour Idea agrees and undertakes that, prior to the completion of an Initial Public Offering, (i)
neither the Founder, Merry Circle nor Honour Idea or any of their Affiliates will Transfer any of
his, its or such Affiliate’s Shares without the prior written consent from both Chaview and Aegis
or contrary to Clause 10.4; (ii) the Founder shall not Transfer his shares in Merry Circle or
Honour Idea; and (iii) the Founder shall procure that any of the shareholders of the Domestic
Companies, will not Transfer any of the equity interests in any of the Domestic Companies (as
defined in the Share Subscription Agreement) to any Person (except a Group company), except in each
case, and upon written notice to Chaview and Aegis, any Transfer to an Affiliate of the Founder.
The Founder, Merry Circle and Honour Idea further agree that they shall not avoid the lock-up
provision in the preceding sentence by holding Shares directly or indirectly through a Person that
can itself be sold free from such lock-up.



20









 





               5.5 Change in Law Affecting Ownership.




          (a) If and only if, due to a change in Law after the date of this Agreement, it becomes
unlawful for any of Chaview or Aegis to continue to hold any portion of its Shares according
to a written opinion of recognized counsel, (such unlawful portion, the “Restricted
Portion”), then, upon the request of Chaview or Aegis, as applicable, the Company shall use
commercially reasonable efforts to assist Chaview or Aegis, as applicable, to restructure
the Restricted Portion so that it is no longer a Restricted Portion. If it is not possible
to restructure the Restricted Portion so that it is no longer a Restricted Portion in a
manner reasonably agreeable to Chaview or Aegis, as applicable, and the Company, Chaview or
Aegis, as applicable, shall have the right to sell the Restricted Portion in accordance with
Clause 5.5(b).




          (b) If Chaview or Aegis elects to sell a Restricted Portion, it shall give a written
notice (the “Restricted Portion Notice”) of such election in writing to the Company, which
notice shall state a minimum price, form of consideration and other terms that any of
Chaview or Aegis, as applicable, is willing to accept for the Restricted Portion. The
Company may at any time during the Permitted Time Period (as defined below) identify one or
more purchasers that are willing and able to acquire the Restricted Portion from Chaview or
Aegis, as applicable, on terms (including as to price) not less favorable than those
indicated by Chaview or Aegis, as applicable. If the Company does not identify such a
purchaser or purchasers, or such purchaser or purchasers fail to complete the purchase on
terms consistent with the terms set forth in the Restricted Portion Notice within the
Permitted Time Period, and if Chaview or
Aegis, as applicable, identifies a purchaser or purchasers approved by the Company
during the Permitted Time Period, Chaview or Aegis, as applicable, shall be permitted, to
Transfer the Restricted Portion to the purchaser or purchasers identified by Chaview or
Aegis, as applicable, on terms no less favorable to Chaview or Aegis, as applicable, than
those set forth in the Restricted Portion Notice; provided that the transferee shall be
bound by Clause 5.1(a) of this Agreement.




          (c) For purposes of Clause 5.5(b), “Permitted Time Period” shall mean the longer of (i)
if applicable, the period of time commencing on the date of the Restricted Portion Notice
and ending on the last day of the time period which equals to half of the time period within
which Chaview or Aegis, as applicable, is required by the Law in question to cease holding
the Restricted Portion, and (ii) sixty (60) days from the date of the Restricted Portion
Notice.




          (d) For purposes of this Clause 5.5, any Taxes arising from the sale of Shares shall be
borne by the Party who sold its Shares.



ARTICLE VI




REGISTRATION RIGHTS



               6.1 Registration Rights. The Company agrees to enter into a second amended and restated registration rights agreement
with Chaview and Aegis in the form attached hereto as Exhibit C on the date hereof to replace and
cancel the current amended and restated registration rights agreement between Chaview, Dynasty,
Swift Rise, the Founder and the Company dated 19 August 2008.



21









 





               6.2 Obligation to Conduct an Initial Public Offering. The Company, Merry Circle and the
Founder agree to use each of their best efforts to complete an Initial Public Offering before 31
December 2010. Each Party agrees to cooperate in good faith and take any and all measures
reasonably required to effect an Initial Public Offering before 31 December 2010 including voting
its Shares and procuring its nominated Directors and officers of the Company to take all other
necessary action at the reasonably appropriate time such as (if necessary or required) causing the
IPO Vehicle to restructure, reclassify its shares, amend its Articles of Association, amend its
financing and/or operating arrangements and/or obtain any necessary or required consents from third
parties.



ARTICLE VII




REDEMPTION AND PUT



               7.1 Redemption and Put. (a) At any time (i) after December 31, 2010 and in the event that an Initial Public Offering
has not occurred on or prior to such date, (ii) upon determination by any PRC Government Authority,
including the Ministry of Commerce and the State Administration of Foreign Exchange in writing that
any transactions (all such transactions, the “Restructuring”) conducted by the Group, the Founder
and other relevant parties involved to form the corporate structure of the Group as of the date
hereof, including the
various transactions contemplated by the Control Documents, violate any provisions of
Regulation 10 or any other applicable PRC Law, or requires the approval from MOFCOM or other
Government Authorities, or (iii) upon any PRC Government Authority taking any enforcement action in
relation to the Restructuring that has the effect of penalizing any Group Company or Chaview or
unwinding the Restructuring or the corporate structure so formed (such event as described in (ii)
or (iii) above, a “Regulation 10 Violation Event”), or (iv) upon the occurrence of any Aegis-Dang
Option Event or any Aegis-Company Option Event, except if the Aegis- Company Option Event is
triggered as a result of the 2010 Net Income being less than US$19,000,000, or (v) upon Aegis
making any claim or claims against the Company under any Transaction Documents that would not
constitute an Aegis-Company Option Event, and final judgment or final arbitration award, as the
case may be, has been issued in respect of the applicable claim(s) in the amount of US$5,000,000 or
greater singly or cumulatively (the “Awarded Amount”), Chaview shall, at its own discretion, have
the right to request the Company to redeem and/or the Founder to purchase, all of the Series A
Preferred Shares or Ordinary Shares converted from Series A Preferred Shares held by it, for an
aggregate consideration (the “Redemption/Put Amount”) equal to the original purchase price paid by
Chaview for the Series A Preferred Shares to be redeemed or purchased pursuant to the foregoing
plus an investment return at a rate of 15% computed on a compound basis annually, calculated from
the Cut-Off Date (as defined below) to the payment date, on such original purchase price, plus any
and all accrued but unpaid dividends on the Shares to be redeemed or purchased pursuant to the
foregoing; provided that if Chaview exercises its redemption/put right under Clause 7.1(a)(v), then
Chaview may only request the Company to redeem and/or the Founder to purchase, such number of the
Series A Preferred Shares or Ordinary Shares converted from Series A Preferred Shares held by it
such that the Redemption/Put Amount calculated based on the foregoing, including the investment
return of 15%, shall equal to the Awarded Amount, with any fractional shares being rounded upwards.
If the Company does not have sufficient cash to pay the aggregate of Chaview’s Redemption/Put
Amount calculated under Clause 7.1(a)(v) and the Awarded Amount, without any prejudice to Chaview’s
rights as a holder of Series A Preferred Shares under this Agreement and the Articles of
Association, including but without limitation its preferred



22









 




rights in the event of the Company’s
liquidation, and without prejudice to Aegis’ rights under this Agreement, the Share Subscription
Agreement and the Articles of Association, Chaview and Aegis agree that the Company shall pay its
available cash to Chaview and Aegis in equal shares, provided that the Company is not in
liquidation. If the Company has additional available cash to satisfy its obligations under Clause
7.1(a)(v) and its obligations to pay the Awarded Amount and provided that the Company is not in
liquidation, it shall pay to Chaview and Aegis such additional cash in equal shares until it has
fully satisfied such obligations. The Company, the Founder and Merry Circle shall be jointly and
severally liable for the payment of the Redemption/Put Amount. Chaview shall exercise the
foregoing right by sending a copy of the written request to the Company and the Founder. The
Company, the Founder and/or Merry Circle shall complete the redemption or purchase within thirty
(30) days after the date of the receipt of such request and in the event that to complete the
redemption or purchase within such thirty (30) day period does not prove feasible, Chaview will
agree to give reasonable extension of time in light of the circumstances provided that Aegis also
has agreed to an identical extension simultaneously. For the purpose of this Clause 7, “Cut-Off
Date” shall mean the date on which the Company pays to and Chaview receives from the Company an
amount equal to an investment return at a rate of 15% computed on a compound basis annually, on the
original purchase price paid by Chaview for the Series A Preferred Shares owned by it, calculated
from the issuance date of the Series A
Preferred Shares to such payment date plus any and all accrued but unpaid dividends on the
Series A Preferred Shares owned by Chaview up to such payment date.




               (b) As security for the payment of the Redemption/Put Amount, the Founder and Merry Circle
shall enter into a separate security agreement with Chaview on the date of this Agreement whereby
Merry Circle shall pledge to Chaview as collateral its interest in a promissory note in an amount
not less than US$19,560,000 issued by the Company to Merry Circle and covenant to enter into
certain escrow arrangement with Chaview in form and substance satisfactory to Chaview. The Founder
and Merry Circle shall have signed the Chaview Documents on the date of this Agreement and shall
agree to fully cooperate and sign all other necessary documents and take all necessary actions to
perfect such security interest upon the request of Chaview.



ARTICLE VIII




CERTAIN COVENANTS OF THE COMPANY



               8.1 Business Plan. The Company, Merry Circle, Honour Idea and the Founder shall cause the Company to submit to
the Board, for their approval of, prior to the start of each fiscal year of the Company, a business
plan (the “Business Plan”) setting forth the annual budget and operating plan of the Company for
such fiscal year. The Company, Merry Circle, Honour Idea and the Founder shall cause the Company to
prepare and deliver to the Board quarterly (no later than forty-five days after the relevant fiscal
quarter ends) and annual (no later than ninety (90) days after the relevant fiscal year ends)
financial statements and other appropriate reports concerning operations of the Company and other
matters submitted to the Board. The Company shall cause the executive officers of any Subsidiary of
the Company to have commensurate obligations, and for the boards of directors of any such
Subsidiaries to receive commensurate reports within the same time frames.



               8.2 Maintenance of Books and Records. The Company and each of its Subsidiaries, if any, shall keep proper, complete and accurate
books of account in each



23









 




case in accordance with U.S. GAAP and such accounts shall be audited
annually in accordance with such standards by the Company’s external auditor. The Company and each
of its Subsidiaries shall also keep such other books of account to the extent required by and in
accordance with applicable Law.




               8.3 Access to Books and Records.



               (a) The Company shall permit each Shareholder and its authorized representatives the right
during normal business hours and upon reasonable advance notice in writing to inspect its Books and
Records and those of each of its Subsidiaries, if any, to make extracts and copies therefrom at its
own expense and to have full access to all of the Company’s and each of any of its Subsidiary’s
property and assets. Notwithstanding the foregoing provisions, neither the Company nor any of the
other Group companies shall be obligated pursuant to this Section 8.3 to provide access to any of
its information which would
be the subject of any confidentiality obligations owed to third parties and any information
which the Company can demonstrate is confidential to its business operations and which would be
detrimental to its competitive position in the marketplace if disclosed including without
limitation media buying rates, rebate structure, media and customer contract details and the CCTV
auction pricing mechanisms. For the avoidance of doubt, the Company shall not be entitled to
withhold information from Chaview.



               (b) Without limiting the generality of the provision in Clause 8.3(a) and to the extent
permitted by law, for as long as any of Chaview or Aegis or their Affiliates holds any Series A
Preferred Share (or if applicable, Ordinary Share converted from Series A Preferred Share) or
Ordinary Share, the Company, Merry Circle, Honour Idea and the Founder shall cause the Company to
provide to each of Chaview and Aegis, to the extent they continue to hold Series A Preferred Shares
(or if applicable, Ordinary Share converted from Series A Preferred Share) or Ordinary Shares: (i)
audited annual consolidated financial statements within ninety (90) days after the end of each
fiscal year, prepared by the Company’s external auditor in accordance with U.S. GAAP; (ii)
unaudited quarterly consolidated financial statements and management report, within sixty (60) days
after the end of each of the Company’s first three fiscal quarter, prepared in accordance with U.S.
GAAP; (iii) monthly financial data; (iv) an annual consolidated budget of the Company for the
following fiscal year as approved by the Board, within 30 days prior to the end of each fiscal
year; (v) audit letters, management letters or other information concerning significant aspects of
the Company’s operations or financial performance; (vi) minutes of the Board and Shareholders’
Meetings within 15 days of the respective meeting; (vii) details of any offer that the Company
receives in respect of the purchase or sale of any material assets, shares of stock or interest in
the Company or its Subsidiaries; and (viii) additional information as reasonably requested.



               (c) Upon reasonable notice and at reasonable times during normal business hours, each of
Chaview and Aegis, at its own cost, shall have reasonable access to the facilities of the Company
and its Subsidiaries to evaluate their assets, operations and governance. Each of Chaview and
Aegis, to the extent reasonable, shall have the right to examine and make copies of any of the
books, accounts, contracts, and financial records of the Company and its Subsidiaries.



               (d) The request of the information by any of Chaview or Aegis in 8.3(b) above shall not affect
and delay the progress of the Initial Public Offering or cause any unreasonable disruptions to the
business of the Company or any Subsidiary.



24









 





               8.4 Audit Rights. Each of Chaview, Aegis and the Founder shall each have the right to cause a financial
audit to be conducted on the Company and each of its Subsidiaries, if any, not more than once per
year by an auditor designated by the Parties requesting the audit. The Parties who have caused such
audit shall pay all of the expenses incurred in connection with the exercise of rights pursuant to
this Clause 8.4. In connection with any such audit, the Company (and its Subsidiaries, if
applicable) shall furnish to the Shareholders and the auditors conducting such audit such financial
and other information relating to the business of the Company and/or any of its Subsidiaries as
they may reasonably request. Notwithstanding the foregoing provisions, neither the Company nor any
of the other Group companies shall be obligated pursuant to this Section 8.4 to provide access to
any of its information which would be the subject of any confidentiality obligations owed to third
parties and any information which the Company can demonstrate is confidential to its business
operations and which would be detrimental to its competitive position in the marketplace if
disclosed including without limitation media buying rates, rebate structure, media and customer
contract details and the CCTV auction pricing mechanisms. For the avoidance of doubt, the Company
shall not be entitled to withhold information from Chaview.



               8.5 Securities Filings. The Company agrees to give Chaview and Aegis a reasonable opportunity to review any
registration statement, preliminary prospectus, final prospectus, application for listing or other
document to be filed with any securities regulatory authority or securities exchange in any
jurisdiction. Promptly after the filing of the foregoing documents, the Company shall provide
copies of such filed documents to each of Chaview and Aegis upon their reasonable request.



               8.6 Insurance. The Company shall use its commercially reasonable efforts to maintain insurance policies on its
behalf and on behalf of each of its directors and officers and shall cause any of its Subsidiaries
to maintain insurance policies, at all times with such coverage as is generally maintained by
responsible companies in the same industry in China.



               8.7 Intellectual Property Protection. The Company and each of its Subsidiaries shall take all necessary reasonable steps to
protect any and all of their respective intellectual property rights, including registering all
their respective trademarks, brand names and copyrights and wherever prudent applying for patents
on their respective technology.



               8.8 Control Documents. The Founder shall and shall cause any of the Domestic Companies, their respective
shareholders and any other parties to the Control Documents to strictly comply with the provisions
of the Control Documents.



               8.9 [RESERVED].



               8.10 Accrued Dividends Distribution. The Parties agree that with respect to the dividends declared by the Domestic Companies on
27 March 2008 but undistributed as of the date of this Agreement to the Founder or his Affiliates
in a total amount of RMB 115,788,000 (the “Declared Dividends”), the Company may distribute to the
Founder or his Affiliates an amount up to RMB 7,040,000 at any time, and the distribution of the
remainder of the Declared Dividends shall only be made subject to the following:



25









 





               (a) If and only if the quick ratio (as defined below) of the Company as of the end of any of
the first three quarters of each year equals or exceeds 60%, the Company may distribute, as part of
the Declared Dividends, dividends up to an amount
by which the amount of cash as shown on the unaudited consolidated quarterly balance sheet of
the Company as of the end of such quarter exceeds the amount of cash that is required to make the
quick ratio as of the end of such quarter equal to 60%; and



               (b) If and only if the quick ratio of the Company as of 31 December in each year equals or
exceeds 100%, the Company may distribute, as part of the Declared Dividends, up to an amount by
which the amount of cash shown on the consolidated balance sheet of the Company as of 31 December
of such year exceeds the amount of cash required to make the quick ratio as of 31 December of such
year equal to 100%.




For purposes of this clause, quick ratio = cash/current liability;




where “cash” and “current liability” shall each refer to the corresponding line
items on the Company’s consolidated balance sheet as of the end of the first three
quarters and as of 31 December, as applicable. If for any quarter with respect to
which the Founder is entitled to request dividend distributions pursuant to the
provisions in (a) or (b) above, such amount of dividends shall be excluded when
determining the quick ratio for the subsequent fiscal quarter, regardless whether
such amount has been actually distributed or not; provided that the Founder shall be
entitled to the dividend distributions determined pursuant to (a) or (b) above if
such distributions have not been made regardless whether the Founder is entitled to
dividend distributions pursuant to (a) or (b) above for any subsequent quarters.



               (c) The aggregate distribution made pursuant to Clauses 8.10(a) and (b) shall not exceed the
amount of Declared Dividends minus RMB 7,040,000.



               (d) Other than the Declared Dividends, the Founder shall procure that no more dividends shall
be declared or paid by the Domestic Companies without the consent of the Parties.



               (e) Notwithstanding anything to the contrary, the Founder or his Affiliates shall be entitled
to receive the Declared Dividends upon the earlier of (i) when Aegis exercises the Aegis Put Option
as payment of the Aegis Put Price to Aegis or such other party as Aegis directs in U.S. Dollars in
immediately available funds to such account as directed by Aegis but without prejudice to any right
of Aegis regarding any remaining balance of the Aegis Put Price after such payment, and (ii) the
expiration of the Aegis Put Option; provided that the Company shall have first repaid amounts owed
to Merry Circle pursuant to that certain promissory note, dated an even date herewith, with the
principal amount of US$19,560,000.



               8.11 United States Information Rights. The Company shall provide to each of Aegis and Chaview all information that it may
reasonably request (a) to allow it or its Affiliates, as applicable, to claim tax credits for the
purpose of the federal income tax of the United States in relation to non-United States taxes
incurred by the Company and (b) to prepare any United States tax returns required to be filed by it
or its



26









 




Affiliates, as applicable, if the Company is treated for the purpose of the federal income
tax of the United States as a controlled foreign corporation.
Upon reasonable request by any of Aegis or Chaview, the Company will take all reasonable steps
necessary to facilitate the election of its status for United States federal income tax purposes by
any of Aegis or Chaview by reason of its interest in the Company and any federal income tax
reporting requirements of the United States.




               8.12 United Kingdom Information Rights. The Company shall also provide to Aegis all information that it may reasonably request to allow
Aegis or its Affiliates, as applicable, to claim tax credits for the purpose of United Kingdom
corporation tax in relation to taxes incurred by the Company.



               8.13 Additional Covenants. The Company and its Subsidiaries hereby covenant with Chaview and Aegis (and the Founder, Merry
Circle and Honour Idea agree to cause the Company and its Subsidiaries), to perform, and will adopt
as the internal policy of the Company and its Subsidiaries, the covenants and obligations set forth
at Exhibit D attached hereto, which is hereby incorporated herein in its entirety. These covenants
shall survive after the Initial Public Offering.



               8.14 Chaview’ Rights upon an IPO. The Company shall also provide Chaview with such right to participate in the underwriter’s
over-allotment option in the Initial Public Offering and priority with regard to registration
rights in secondary sales as specified in Sections 3.5(c), 4.2(c) and 4.2(f) of the Second Amended
and Restated Registration Rights Agreement.



ARTICLE IX

PART I

COVENANTS RELATED TO CONFIDENTIALITY AND NON-COMPETITION




               9.1 Confidentiality. Each Party who has received Confidential Information from another Party (such other Party,
the “Disclosing Party”) undertakes that none of it, any of its Representatives or any
Representative of any of its Affiliates shall reveal to any other Person such Confidential
Information without the prior written consent of the Disclosing Party; provided, that such
undertaking shall not apply to:




          (a) disclosure of Confidential Information that is or has become generally available to
the public other than as a result of disclosure by or at the direction of a Party or a
Party’s Representatives or the Representatives of any Affiliate of any Party in violation of
this Agreement;




          (b) disclosures of Confidential Information by a Party to its Representatives or the
Representatives of any of its Affiliates to whom it is necessary or helpful in connection
with this Agreement or any other Transaction Document for such Confidential Information to
be disclosed;




          (c) disclosures of Confidential Information to the extent necessary or required under
any applicable Law or the rules of any stock exchange or in connection with any judicial
process regarding any legal action, suit or proceeding
arising out of or relating to this Agreement or any other Transaction Document, after
giving prior written notice to the other Parties to the extent practicable under the
circumstances and to the extent legally permissible, and subject to having undertaken



27









 






any
reasonably available arrangements to protect confidentiality (for example, seeking a
protective Order in relation to such Confidential Information); or




          (d) disclosures of Confidential Information by any Shareholder that are reasonably
necessary to permit a Person to evaluate the business of the Company upon such Shareholder
entering into negotiations with any Person with a view to Transferring any Shares to such
Person which Transfer shall be subject to Clause 5.1; provided, that such Person has
executed a confidentiality agreement in such form as may be reasonably required by the
Board.



               9.2 Restriction on Announcements. Each Party shall, and shall cause each of its Representatives and each Representative of
each of its Affiliates, not to make any public announcement about the subject matter of this
Agreement or regarding the Company or any of its business and operating plans from time to time,
whether in the form of a press release or otherwise, without first consulting with the other
Parties and obtaining the other Parties’ prior written consent to make such announcement, except as
required by applicable Law or the rules of any stock exchange on which such Party or any Affiliate
of such Party is listed or registered. If disclosure is so required, the other Parties shall be
given a reasonable opportunity to review and comment on any such required disclosure. For the
avoidance of doubt, any disclosure or announcement relating to any of Chaview or Aegis or any of
its Affiliates by any Party, its Representatives or Affiliates shall require the prior written
consent of Chaview or Aegis, as applicable.



               9.3 Non-Competition. For so long as Chaview own any Series A Preferred Shares or Ordinary Shares converted from
Series A Preferred Shares, the Founder covenants to Chaview that neither he nor his Affiliates
(other than the Group) shall (i) compete with the Company, (ii) directly or indirectly own,
acquire, operate, become an employee of, render services to or participate in the management of or
invest in or loan any funds to any Person that competes or is reasonably expected to compete with
the Company, or (iii) solicit, canvass or entice away any director, officer, employee (including
any part-time, regular, contract or fixed term director, officer or employee) to work for or
otherwise render services to any other Person.



PART II

OTHER COVENANTS BY THE COMPANY, MERRY CIRCLE, HONOUR IDEA

AND THE FOUNDER TO AEGIS AND CHAVIEW



The Company, Merry Circle and the Founder hereby severally but not jointly agree, covenant and
undertake with Aegis and Chaview (as applicable) the following:




          10.1 Initial Public Offering.



          (a) *****




28












 





          (b) The Company and the IPO Vehicle will not issue any Ordinary Shares or other Ordinary
Share Equivalent in the Initial Public Offering at a net price per share (after all discounts,
fees, commission and all other amounts payable by the Company or the IPO Vehicle in relation to the
Initial Public Offering) (i) of less than the price per Subscribed Share payable by Aegis under the
Share Subscription Agreement (subject to any adjustment as a result of any share split or
consolidation which may have happened in the meantime) or (ii) such that the valuation of the
Company or the IPO Vehicle based on such net price per share will be less than US$280,000,000
immediately prior to the Initial Public Offering.




          10.2 Right of First Refusal.




          (a) Prior to the Initial Public Offering and for so long as Aegis and its Affiliate(s) hold in
aggregate not less than 5% of the issued share capital of the Company; or Chaview and its
Affiliate(s) hold in aggregate not less than 5% of the issued share capital of the Company (each,
an “Eligible Holder”), if Merry Circle, Honour Idea, the Founder or any of their respective
Affiliates or any person to whom any Share is transferred pursuant to Clause 10.2(d) (“Dang
Offeror”) wish to transfer all or part of its shares in the Company (“Dang Offered Shares”) and has
received a bona fide offer from the proposed transferee, the Dang Offeror will deliver a written
notice (the “Dang Intention Notice”) to each Eligible Holder and the Company of its intention to
transfer, together with a copy of the offer, and each Eligible Holder shall have an option
(“Purchase Option”) to purchase any or all of its Pro Rata ROFR Share (defined below) of the Dang
Offered Shares at the same price and on the same terms and conditions as the offer. Each Eligible
Holder may exercise the Eligible Holder Purchase Option by giving written notice to the Dang
Offeror of its intention to purchase the Dang Offered Shares and stating the number of the Dang
Offered Shares Eligible Holder would purchase (“Purchased Shares”) within thirty (30) days after
receipt of the Dang Intention Notice (the “Purchase Option Exercise Period”). The failure of an
Eligible Holder to respond within the Eligible Holder’s Purchase Option Exercise Period shall be
deemed to be an irrevocable waiver of such Eligible Holder’s Purchase Option in respect of such
Dang






29









 







Intention Notice (but without prejudice to the rights and obligations of the Dang Offeror and
Eligible Holder under this Clause 10.2 regarding any further Dang Intention Notice and Eligible
Holder Purchase Option). For the purpose hereof, an Eligible Holder’s “Pro Rata ROFR Share” of a
specified quantity of Dang Offered Shares shall mean that number of Dang Offered Shares multiplied
by a fraction equal to (i) the number of Shares then held by such Eligible Holder (on an as
converted basis and including Ordinary Shares issued upon conversion thereof), divided by (ii) the
total number of Shares (on an as converted basis and including Ordinary Shares issued upon
conversion thereof) then held by all Eligible Holders.




          (b) In the event of an Eligible Holder exercising the Purchase Option, the sale and purchase
of such Eligible Holder’s Purchased Shares will be completed at the office of the Company or such
other place as the Dang Offeror and such Eligible Holder may agree within (30) days after such
Eligible Holder has given the notice to the Dang Offeror according to Clause 10.2(a) whereupon,
against the payment by such Eligible Holder of the consideration mentioned in the Dang Intention
Notice:





	 	(i)	 	the Dang Offeror will deliver or cause to be
delivered to the Eligible Holder:






	 	(A)	 	duly executed instruments of
transfer and sold notes (if applicable) in respect of the
Eligible Holder’s Purchased Shares in favour of the Eligible
Holder or its nominee together with definitive share
certificates thereof in the names of the relevant transferor;
and
	 
	 	(B)	 	half (1/2) share of any stamp
duty or transfer duty payable on the sale and purchase of the
Eligible Holder’s Purchased Shares.






	 	(ii)	 	the Board will approve the transfers of the
Eligible Holder’s Purchased Shares for registration, the entry of the
transferee in the register of members of the Company and the issuance
of new share certificate to the Eligible Holder or its nominee.





          (c) If any Dang Offered Shares subject to the Purchase Option is not purchased during the
Eligible Holder’s Purchase Option Exercise Period, the Dang Offeror may sell such Dang Offered
Shares to the proposed transferee at a price not less than, and on terms no more favorable than,
that communicated in the Dang Intention Notice, provided that the transfer must be completed within
thirty (30) days after the expiration of the Eligible Holder’s Option Exercise Period.




          (d) This Clause 10.2(a) shall not apply to the transfer of any Share by Merry Circle, Honour
Idea or the Founder to their respective Affiliates and/or Founder’s spouse, child (natural or
adopted), or any other direct lineal descendant of Founder (or his spouse) or any custodian or
trustee of any trust, partnership or limited liability company for the benefit of, or the ownership
interests of which are owned wholly by, Founder or any such family members of Founder provided that
Merry Circle, Honour Idea, the Founder, or their respective Affiliates (as the case may be) and the
person to whom any Share is transferred shall have notified the Eligible Holders in writing prior
to such transfer and delivered duly executed






30









 







assumption agreement to be bound by the obligations under this Clause 10.2 in form set out in
Exhibit H of the Share Subscription Agreement.




          (e) In the event of an Eligible Holder exercising the Purchase Option, each of the Eligible
Holder and the Dang Offeror shall be liable for its own share of the Tax (other than stamp duty) in
relation to the transfer of such Eligible Holder’s Purchased Shares pursuant to this Clause 10.2.




          10.3 Right of Co-Sale.




          (a) To the extent that any Dang Offered Shares subject to the Purchase Option are not
purchased pursuant to Clause 10.2 and thereafter are to be sold to a prospective transferee (such
Dang Offered Shares, the “Co-Sale Eligible Shares”), each Eligible Holder that has not exercised
its rights under Clause 10.2 (each an “Co-Sale Eligible Holder”) may elect to exercise the right
(“Co-Sale Right”) by notifying the Dang Offeror in writing (“Co-Sale Notice”) within thirty (30)
days after receipt of the Dang Intention Notice to participate in such sale of the Co-Sale Eligible
Shares on a pro-rata basis to the prospective transferee identified, at the same price and on the
same terms and conditions as specified in the Dang Intention Notice. Such Co-Sale Notice to the
Dang Offeror shall indicate the number of shares in the Company that such Co-Sale Eligible Holder
wishes to sell.




          (b) Each Co-Sale Eligible Holder may sell all or any part of that number of shares of the
Company under the Co-Sale Right equal to the product obtained by multiplying (i) the number of the
Co-Sale Eligible Shares by (ii) a fraction, the numerator of which is the number of shares in the
Company held by such Co-Sale Eligible Holder on the date of the Dang Intention Notice and the
denominator of which is the total number of shares in the Company held by the Dang Offeror on the
date of the Dang Intention Notice plus the number of shares in the Company held by all Co-Sale
Eligible Holders on the date of the Dang Intention Notice.




          (c) Each Co-Sale Eligible Holder may effect its participation in the sale by promptly
delivering to the Dang Offeror for transfer to the prospective purchaser one or more share
certificates together with the duly executed instrument of transfer thereof which represent the
number of shares of the Company which such Co-Sale Eligible Holder elects to sell (“Co-Sale
Shares”) and half (1/2) share of any stamp duty or transfer duty payable on the sale and purchase of
the Co-Sale Shares and against such delivery, the Dang Offeror will pay (or cause to be paid) to
such Co-Sale Eligible Holder the consideration for the Co-Sale Shares mentioned in the Dang
Intention Notice.




          (d) To the extent that any prospective purchaser refuses to purchase the Co-Sale Shares from
any Co-Sale Eligible Holder, the Dang Offeror will not sell to such prospective purchaser any Dang
Offered Shares unless and until, immediately prior to such sale, the Dang Offeror purchases from
such Co-Sale Eligible Holder the Co-Sale Shares.




          (e) In the event of a Co-Sale Eligible Holder exercising the Co-Sale Right, each of the
Co-Sale Eligible Holders and the Dang Offeror shall be liable for its own share of the Tax (other
than stamp duty) in relation to the transfer of the Shares pursuant to this Clause 10.3.







31









 








          (f) For avoidance of doubt, the provisions of Clauses 10.2 and 10.3 shall only apply to any
proposed sale by the Dang Offeror of its shares in the Company prior to the Initial Public
Offering.




          10.4 *****




          10.5 Restrictive Covenants by Merry Circle, Honour Idea and the Founder.




          (a) For so long as either (i) the Aegis Group holds not less than Five Per Cent (5%) of the
issued share capital of the Company or (ii) BVI Sub II and/or Affiliate(s) holds any share of PHK,
neither Merry Circle, Honour Idea, the Founder nor their respective Affiliates (excluding the Group
companies and members of the PHK Group for the purpose of this Clause 10.5(a)) will in the PRC:





	 	(i)	 	either on their own account or in conjunction
with or on behalf of any person, firm or company, directly or
indirectly whether as a shareholder, director, partner, agent or
otherwise carry on or be engaged or interested in any business which
competes with the business carried on in the PRC by any member of the
Aegis Group, the PHK Group or any Group company at the date hereof or
in any service of the same type or similar to or performs the same or
similar functions of any service provided by any member of the Aegis
Group, the PHK Group or any Group company in the PRC at the date hereof
save that each of them may hold (A) investment up to Two Per Cent (2%)
of any class of securities of any publicly traded company and (B)
interests in the Company and its Affiliates;
	 
	 	(ii)	 	directly or indirectly solicit, canvass or
approach or endeavor to solicit, canvass or approach any person, firm
or company who was provided with services by any member of the Aegis
Group, the PHK Group or any Group company (as the case may be) at any
time during the previous six (6) months period with a view of offering
to such person, firm or company any service of the same type as or
similar to or perform the same




32









 






	 	 	 	or similar functions of any services provided in the PRC by any
member of the Aegis Group, the PHK Group or any Group company; and
	 
	 	(iii)	 	directly or indirectly solicit or entice away
or endeavor to solicit or entice away from any member of the Aegis
Group, the PHK Group or any Group company any person under their
employment in any capacity with a view to inducing that person to leave
such employment and to act for another person in the same or a similar
capacity in relation to any services of the same type as or similar to
or perform the same or similar functions of any services provided in
the PRC by any member of the Aegis Group, the PHK Group or any Group
company (as the case may be) as of the date hereof whether or not such
person would commit a breach of contract by reason of leaving such
employment.





          (b) Notwithstanding anything herein contained, the restrictions set out in Clause 10.5(a)(iii)
shall not apply to anything done or pursuant to any public advertisement of employment to which an
employee responds.




          10.6 Restrictive Covenants by the Company.




          (a) For so long as either (i) the Aegis Group holds not less than Five Per Cent (5%) of the
issued share capital of the Company directly or indirectly, or (ii) BVI Sub II and/or its
Affiliate(s) holds any share of PHK, the Company and the other Group companies will not in the PRC:





	 	(i)	 	directly or indirectly
solicit, canvass or approach or endeavor to solicit, canvass
or approach any person, firm or company who was provided with
services by any member of the Aegis Group or the PHK Group (as
the case may be) at any time during the previous six (6)
months period with a view of offering to such person, firm or
company any service of the same type as or similar to or
perform the same or similar functions of the services provided
in the PRC by any member of the Aegis Group or the PHK Group
in the PRC to such person, firm or company; and
	 
	 	(ii)	 	directly or indirectly
solicit or entice away or endeavor to solicit or entice away
from any member of the Aegis Group or the PHK Group any person
under their employment in any capacity with a view to inducing
that person to leave such employment and to act for another
person in the same or a similar capacity in relation to any
services of the same type as or similar to or perform the same
or similar functions of any services provided in the PRC by
any member of the Aegis Group or the PHK Group (as the case
may be) at the date hereof whether or not




33









 






	 	 	 	such person would commit a breach of contract by reason
of leaving such employment.





          (b) Notwithstanding anything herein contained, the restrictions set out in Clause 10.6(a)
shall not apply to anything done or pursuant to (i) any open market client pitch process involving
any member of the Group companies, (ii) an approach by the client or prospective client; provided
that the Group company has received consent in writing to perform services for such client from
Aegis, and (iii) any public advertisement of employment to which an employee responds.




          (c) In order to assist the Company to avoid any accidental and involuntary breach of the
provisions of Clause 10.6(a), Aegis Media in the PRC agrees to share any non-confidential
information about its client roster in the PRC with the Company upon the Company’s prior written
request. In the event of any breach by the Company of the provisions of Section 10.6(a) that comes
to Aegis’ attention, Aegis shall provide written notice of such breach. The Company shall be
allowed for a period of thirty (30) days following receipt of written notice of a breach to cure
such breach, to the extent that such breach is curable, in consultation with a senior executive
made reasonably available to the Company. In the event that such breach is adequately cured to
Aegis’s reasonable satisfaction (it being noted that mere cessation of the breaching activity shall
not be deemed to be an adequate cure where Aegis has suffered other Losses as a consequence; in
such event, adequate cure may involve monetary restitution) within such thirty (30) day period, the
Parties agree that Aegis shall not be entitled to any further remedy for such breach.




          10.7 Put Option.




          (a) If either:





	 	(i)	 	the Founder or Merry Circle is in breach of its
obligations under Clauses 10.4 or 10.5 of this Agreement; Sections
12.4 or 12.5 of the Share Subscription Agreement or in breach of the
deed of non-competition executed by the Founder in favor of PHK and
Posterscope Advertising Limited and such breach is not cured by the
Founder or Merry Circle (where applicable) within thirty (30) days
after receipt by the Founder or Merry Circle (where applicable) of
written notice of such breach issued by Aegis; (each an “Aegis-Dang
Option Event”); or
	 
	 	(ii)	 	(y) the Company is in material breach of any
provision under Clause 10.4(b) or Clause 10.6 of this Agreement,
Section 12.4(b)or Section 12.6 of the Share Subscription
Agreement, Clause 6.6.1 of the PHK JV Agreement or Clause 4.2
of the PHK Shareholders’ Agreement or if the Company or Media Port is
in breach of Clause 6.5 or 6.6 of the PHK JV Agreement, and such
material breach is not cured by the Company within thirty (30) days
after the Company’s receipt of written notice of such material breach
issued by Aegis; or (z) the 2010 Net Income shall be less than Nineteen
Million U.S. Dollars (US$19,000,000) (each an “Aegis-Company Option
Event”). Upon the happening of an Aegis-Company Option Event or an
Aegis-Dang Option Event, the Founder and Merry Circle, or the




34









 






	 	 	 	Company, as the case may be, shall immediately notify in writing
Chaview and Aegis of the happening of such event.






	 	 	 	Subject to Clause 10.7(f) below, Aegis shall have the option (the “Aegis
Put Option”), but not the obligation, to require (i) the Founder, in the
case of an Aegis-Dang Option Event or (ii) the Company, in the case of an
Aegis-Company Option Event (the “Relevant Buyer”), to purchase from Aegis
such number of shares in the Company held by Aegis or its Affiliates as
Aegis may determine at the price per share equal to the price per share paid
by Aegis for the Subscribed Shares under this Agreement (subject to (i) any
adjustment as a result of any share split or consolidation which may have
happened in the meantime and (ii) any adjustment pursuant to Section 9.1(d)
of the Share Subscription Agreement) (the “Aegis Put Option Notice”).





          (b) Subject to the terms and conditions of this Clause 10.7, and in the event Aegis exercises
the Aegis Put Option by giving the Relevant Buyer notice in writing, Aegis or its Affiliates shall
transfer to the Relevant Buyer such number of shares in the Company to be purchased by the Relevant
Buyer according to the Aegis Put Option Notice, and the Relevant Buyer shall pay to Aegis the
consideration calculated as mentioned in Clause 10.7(a) (the “Aegis Put Price”) in U.S. Dollars in
immediately available funds to such account as directed by Aegis.




          (c ) In the event of Aegis exercising the Aegis Put Option, the sale and purchase of the
shares in the Company will be completed within (30) days after Aegis has given the Aegis Put Option
Notice to the Relevant Buyer and at the office of K&L Gates in Hong Kong or such other place as the
Relevant Buyer and Aegis may agree whereupon the Relevant Buyer will pay the Aegis Put Price
against the delivery by Aegis of the following:





	 	(i)	 	duly executed instruments of transfer and sold
notes (if applicable) in respect of the shares in the Company to be
sold in favour of the Relevant Buyer or its nominee together with
definitive share certificates thereof in the names of the relevant
transferor; and
	 
	 	(ii)	 	half (1/2)
share of any stamp duty or transfer
duty payable on the sale and purchase of the shares in the Company to
be sold.





          (d) To enable Aegis to exercise any of its rights under this Clause 10.7, the Founder will as
soon as practicable but in any event before 31 March 2011 deliver a copy of the 2010 Financial
Statements to Aegis.




          (e) In the event of Aegis exercising the Aegis Put Option, each of Aegis and the Relevant
Buyer shall be liable for its own share of the Tax (other than stamp duty) in relation to the
transfer of the Shares pursuant to this Clause 10.7.




          (f) The Aegis Put Option, if not exercised prior to the Initial Public Offering, will lapse
upon the Initial Public Offering, save for the Aegis Put Option in respect of a breach of Clause
6.5 or 6.6 of the PHK JV Agreement, in which case such Aegis Put Option shall lapse on 1 July 2010
whether or not the Initial Public Offering has occurred.







35









 








          10.8 *****




          10.9 Repurchase.




          (a) If, at any time prior to the completion of an Initial Public Offering, upon the
occurrence of a Regulation 10 Violation Event, Aegis shall, at its sole discretion, have the right
to demand the Company repurchase all of the Shares held by Aegis for a consideration per share
equal to the original Subscription Price per Subscribed Share payable by Aegis under the Share
Subscription Agreement (subject to any adjustment as a result of any share split or consolidation
which may have happened in the meantime), plus any and all accrued but unpaid dividends on the
Shares to be repurchased pursuant to the foregoing. Aegis may exercise the foregoing right by
sending a written request to the Company and the Founder. The Company shall complete the repurchase
within ninety (90) days after the date of the receipt of such request.




          (b) For the purposes of this Clause 10.9, each Party shall bear its own share of Taxes arising
from the consummation of transactions contemplated in this Clause 10.9.




          (c) Unless previously exercised, the rights of Aegis under Clauses 10.9(a) and 10.9(b) shall
cease upon the Initial Public Offering.




          10.10 Founders’ Loan.




          The Company shall repay the loan made by the Founder to the Company in the principal amount of
Nineteen Million Five Hundred Sixty Thousand US dollars (US$19,560,000) evidenced by the promissory
note issued by the Company to Merry Circle as of the Closing Date (the “Founder Loan Note”) plus
all interest pursuant to the terms of the Founder Loan Note and each of the Shareholders shall
procure the Directors appointed by






36









 







it to vote for the repayment of the loan under the Founder Loan Note in accordance with the
terms thereof.




PART III

OTHER COVENANTS BY AEGIS TO THE COMPANY, MERRY CIRCLE,

HONOUR IDEA AND THE FOUNDER



Aegis hereby covenants and undertakes with the Company, Merry Circle, Honour Idea and the Founder
as follows:




          11.1 Right of First Refusal of the Company




          (a) Prior to the Initial Public Offering, if Aegis or any of its Affiliates (“Aegis Offeror”)
wish to transfer all or part of its shares in the Company (the “Aegis Offered Shares”) and has
received a bona fide offer from the proposed transferee, the Aegis Offeror will deliver a written
notice (the “Aegis Intention Notice”) to the Company of its intention to transfer, together with a
copy of the offer, and the Company shall have an option (the “Company Purchase Option”) to purchase
the Aegis Offered Shares at the same price and on the same terms and conditions as the offer. The
Company may exercise the Company Purchase Option by giving written notice to the Aegis Offeror of
its intention to purchase the Aegis Offered Shares and stating the number of the Aegis Offered
Shares the Company would purchase (the “Company Purchased Shares”) within thirty (30) days after
receipt of the Aegis Intention Notice (the “Company Purchase Option Exercise Period”). The failure
of the Company to respond within the Company Purchase Option Exercise Period shall be deemed to be
an irrevocable waiver of the Company Purchase Option in respect of such Aegis Intention Notice but
without prejudice to the rights and obligations of Aegis and the Company under this Clause 11.1
regarding any future Aegis Intention Notice and Company Purchase Option.




          (b) In the event of the Company exercising the Company Purchase Option, the sale and purchase
of the Company Purchased Shares will be completed at the office of K&L Gates in Hong Kong or such
other place as the Aegis Offeror and the Company may agree within (30) days after the Company has
given the notice to the Aegis Offeror according to Clause 11.1(a) whereupon, against the payment by
the Company of the consideration mentioned in the Aegis Intention Notice, Aegis will deliver or
cause to be delivered to the Company:





	 	(i)	 	duly executed instruments of transfer and sold
notes (if applicable) in respect of the Company Purchased Shares in
favour of the Company or its nominee together with definitive share
certificates thereof in the names of the relevant transferor; and
	 
	 	(ii)	 	half (1/2) share of any stamp duty or transfer
duty payable on the sale and purchase of the Company Purchased Shares.





          (c) If the Company Purchase Option is not exercised during the Company Purchase Option
Exercise Period, the Aegis Offeror may sell the Aegis Offered Shares to the proposed transferee at
a price not less than, and on terms no more favorable than, that






37









 







communicated in the Aegis Intention Notice, provided that the transfer must be completed
within thirty (30) days after the expiration of the Aegis Purchase Option Exercise Period.




          (d) This Clause 11.1 shall not apply to the transfer of any Share by Aegis or their Affiliates
to their respective Affiliates.




          (e) In the event of the Company exercising the Company Purchase Option, where applicable, each
of the Company and Aegis shall be liable for its own share of the Tax (other than stamp duty) in
relation to the transfer of the Aegis Offered Shares pursuant to this Clause 11.1.




          11.2 *****




          11.3 Restrictive Covenants by Aegis.




          For so long as either (i) Aegis Group holds not less than Five Per Cent (5%) of the issued
share capital of the Company or (ii) BVI Sub II and/or its Affiliates holds any share in PHK, Aegis
Media will not in the PRC





	 	(i)	 	directly or indirectly solicit, canvass or
approach or endeavor to solicit, canvass or approach any person, firm
or company who was provided with services by any member of the Group
or the PHK Group at any time during the previous six (6) months period
with a view of offering to such Person any service of the same type as
or similar to or perform the same or similar functions of the services
provided by any member of the Group or the PHK Group in the PRC to
such person, firm or company.
	 
	 	(ii)	 	directly or indirectly solicit or entice away
or endeavor to solicit or entice away from any member of the Group or
any member of the PHK Group any person under their employment in any
capacity with a view to inducing that person to leave




38









 






	 	 	 	such employment and to act for another person in the same or a
similar capacity in relation to any services of the same type as or
similar to or perform the same or similar functions of any services
provided in the PRC by such member of the Group or such member of
the PHK Group as of the date hereof whether or not such person would
commit a breach of contract by reason of leaving such employment.





          (b) Notwithstanding anything herein contained, the restrictions set out in Clause 11.3 shall
not apply to anything done under or pursuant to (i) any open market client pitch process involving
any member of the Aegis Group, (ii) an approach by the client or prospective client; provided that
Aegis has received consent in writing to perform services for such client from the Company, (iii)
the alignment of any global or Asia-Pacific regional client where that alignment is
initiated outside the PRC as between the applicable client and the global or Asia-Pacific regional
Aegis Media team respectively and (iv) any public advertisement of employment to which an employee
responds. In the event that such alignment referred in clause (iii) occurs, (A) Aegis agrees to
give Charm prior notice of the alignment, and (B) Aegis and Charm agree to review the application
of this provision in respect of any relevant Asia-Pacific regional clients after the first
anniversary of this agreement and at each subsequent anniversary.




          11.4 Call Option.




          (a) If, before the Initial Public Offering, Aegis is in breach of its obligations under
Clause 11.2(b) or Clause 11.3, the Founder and/or the Company shall have the option (the
“Founder/Charm Call Option”), but not the obligation, to purchase from Aegis such number of shares
in the Company held by Aegis at the price per share equal to the price per Subscribed Share payable
by Aegis under the Share Subscription Agreement (subject to any adjustment as a result of any split
or consolidation which may have happened in the meantime), by notice in writing to Aegis (the
“Founder/Charm Call Option Notice”).




          (b) Subject to the terms and conditions of this Clause 11.4, and in the event the
Founder and/or the Company exercises the Founder/Charm Call Option by giving Aegis the
Founder/Charm Call Option Notice, Aegis shall transfer to the Founder and/or the Company such
number of shares in the Company to be purchased by the Founder and/or the Company according to the
Founder/Charm Call Option Notice, and the Founder and/or the Company shall pay to Aegis the
Subscription Price per share equal to the price per Subscribed Share payable by Aegis under the
Share Subscription Agreement (subject to any adjustment as a result of any share split or
consolidation which may have happened in the meantime) (the “Founder/Charm Call Price”).




          (c) In the event that the Founder and/or the Company exercises the Founder/Charm Call
Option, the sale and purchase of such number of shares in the Company to be purchased by the
Founder and/or the Company according to the Founder/Charm Call Option Notice will be completed
within (30) days after the Founder and/or the Company has given the Founder/Charm Put Option Notice
to Aegis and at the office of DLA Piper in Beijing or such other place as the Founder and/or the
Company and Aegis may agree whereupon, against payment by the Founder and/or the Company of the
Founder/Charm Call Price, Aegis will deliver the following to the Founder and/or the Company:







39









 









	 	(i)	 	duly executed instruments of transfer and sold
notes (if applicable) in respect of the shares in the Company to be
sold in favour of the Founder and/or the Company or its nominee
together with definitive share certificates thereof in the names of the
relevant transferor; and
	 
	 	(ii)	 	half (1/2) share of any stamp duty or transfer
duty payable on the sale and purchase of the shares in the Company to
be sold.





          (d) In the event that the Founder and/or the Company exercises the Founder/Charm Call Option,
each of the Founder and/or the Company and Aegis shall be liable for its own share of the Tax
(other than stamp duty) in relation to the transfer of the Shares pursuant to this Clause 11.4.




          (e) In the event that both the Founder and the Company wish to exercise the Founder/Charm Call
Option, the Founder shall have priority.




          (f) The Founder/Charm Call Option, if not exercised prior to the Initial Public Offering, will
lapse upon the Initial Public Offering.




          11.5 Standstill.




          Aegis agrees that, on or after the Initial Public Offering, the Aegis Group shall not acquire
securities entitled to vote generally for the election of directors of the Company or any other
securities convertible, exchangeable or exercisable for such securities (“Voting Securities”)
which would exceed, on a fully diluted basis, more than Twenty-five Per Cent (25%) of the Voting
Securities or submit an unsolicited proposal or offer to acquire same without the prior approval of
the board of directors of the Company.




ARTICLE X




TERM AND TERMINATION



     12.1 Term and Termination. This Agreement shall remain in effect until, and shall terminate
upon:




          (a) the Company has been dissolved, liquidated and wound up;




          (b) the Parties have agreed in writing to terminate this Agreement;




          (c) the Company has become subject to a Bankruptcy Event, in which case any of Chaview
and Aegis shall each have the right, but not the obligation, to terminate this Agreement by
sending a written notice to such effect to the other Parties;




          (d) the completion of the Initial Public Offering on or before 31 December 2010.



40









 





     12.2 Effect of Termination; Survival. Following any termination of this Agreement in
accordance with Clause 12.1, this Agreement shall have no further force or effect, provided that:




          (a) any provision, right or obligation that by its nature should survive thereafter
(including Part I of Article IX, Article XI and Clauses 14.2, 14.3, 14.8, 14.11 and 14.14)
shall survive any termination of this Agreement;




          (b) without prejudice to the generality of Clause 12.2(a), the provisions of Part II
(excluding Clause 10.7 “Put Option”) and Part III of Article IX, Clause 3.3(b) shall survive
any termination of this Agreement pursuant to Clause 12.1(d); and




          (c) termination of this Agreement shall not prejudice any accrued rights, claims and
liabilities of any Party prior to such termination.



ARTICLE XI




GOVERNING LAW & RESOLUTION OF DISPUTES



     13.1 Governing Law. This Agreement and any disputes, claims or controversies arising from,
related to or in connection with this Agreement shall be construed in accordance with the Laws of
Hong Kong without regard to its conflict of law principles.



     13.2 Dispute Resolution Forum.





          (a) Any dispute arising out of or in connection with this Agreement shall be solely and
finally settled in accordance with the Rules of Arbitration of the International Chamber of
Commerce (the “ICC Rules”) by a single arbitrator appointed in accordance with the ICC
Rules. The parties agree that the award of the arbitrator shall be the sole and exclusive
remedy between them regarding any claims, counterclaims or issues presented to the
arbitrator, irrespective of the magnitude thereof.




          (b) The arbitration shall take place in Hong Kong or such other place as the Parties
may mutually agree in writing.




          (c) Any decision or award of the arbitral tribunal shall be final and binding upon the
parties to the arbitration proceeding. The Parties hereby waive to the fullest extent
permitted by law any rights to appeal or to review such award by any court or tribunal. The
Parties agree that the arbitral award may be enforced against the Parties to the arbitration
proceeding or their assets wherever they may be found and that a judgment on the arbitration
award may be entered in any court having jurisdiction over the Parties or their assets.




          (d) Notwithstanding anything herein contained, any Party shall be entitled to seek
injunctive relief, if possible, from any court of competent jurisdiction to protect its
rights under this Agreement pending the constitution of the arbitral tribunal pursuant to
this Clause 13.2.



     13.3 Performance Pending Dispute Resolution. Unless otherwise terminated in accordance with
the terms hereof, this Agreement and the rights and obligations of the Parties



41









 




hereunder shall remain in full force and effect during the pendency of the arbitration under
Clause 13.2.




     13.4 Specific Performance. Each Party hereby acknowledges that the remedies at law of the
other Parties for a breach or threatened breach of this Agreement would be inadequate and, in
recognition of this fact, any Party, without posting any bond, and in addition to all other
remedies that may be available, shall be entitled to seek equitable relief in the form of specific
performance, injunctions or any other equitable remedy.



     13.5 Conflict with Charter Documents. In the event of any conflict or inconsistency between
the provisions of this Agreement and the provisions of the Company’s Articles of Association or
other constitutional documents, the Parties shall, notwithstanding the conflict or inconsistency,
act so as to effect the intent of this Agreement to the extent lawful and possible under the
circumstances and shall promptly take all reasonable steps to amend the conflicting constitutional
documents to conform to this Agreement to the extent possible.



ARTICLE XII




MISCELLANEOUS



     14.1 No Partnership; Agency. The Shareholders expressly do not intend hereby to form an agency
relationship or partnership either general or limited, under any jurisdiction’s agency, partnership
or other similar law. The Shareholders do not intend to be agents or partners of each other, or
agents of or partners to any Third Party, or to create any other fiduciary relationship among
themselves, solely by virtue of their status as Shareholders. To the extent that any Shareholder,
by word or action, improperly represents to another Person that any Shareholder is an agent or
partner of another Shareholder or that the Company is a partnership, the Shareholder making such
representation shall be liable to any other Shareholder that incurs any Losses arising out of or
relating to such representation.



     14.2 Indemnification. The Company’s Articles of Association shall include an indemnification
clause to indemnify each Director and officer of the Company (or its Subsidiaries collectively, the
“Indemnified Persons”) against any Losses that any Indemnified Person may at any time become
subject to or liable for in connection with claims brought against any of them on behalf of the
Company or by a Third Party in connection with any of their status as a director or officer of the
Company, any of its Subsidiaries or any of their service to or on behalf of the Company or any of
its Subsidiaries to the maximum extent permitted by applicable law.



     14.3 Entire Agreement. This Agreement (together with the other Transaction Documents)
constitutes the whole agreement among the Parties hereto and thereto relating to the subject matter
hereof and thereof and supersedes all prior agreements or understandings both oral and written
among all of the parties hereto and thereto relating to the subject matter hereof and thereof.
Without limiting the generality of the foregoing, each of the parties to the Amended and Restated
Shareholders’ Agreement hereby confirms and covenants with each of the other parties thereto that,
with effect immediately upon the date hereof: (a) the Amended and Restated Shareholders’ Agreement
shall be absolutely terminated; (b) none of the parties to the Amended and Restated Shareholders’
Agreement has or shall have any rights, claims or interests whatsoever against any of the other
parties to the Amended and



42









 




Restated Shareholders’ Agreement under or in respect of the Amended and Restated Shareholders’
Agreement; and (c) to the extent that any of the parties to the Amended and Restated Shareholders’
Agreement have or may have any rights, claims or interests whatsoever against any of the other
parties thereto under or in respect of the Amended and Restated Shareholders’ Agreement, such
rights, claims or interests are hereby absolutely, irrevocably and unconditionally waived,
discharged and released by the parties concerned.




     14.4 Binding Effect; Benefit. This Agreement shall inure to the benefit of and be binding upon
the Parties and their respective heirs, successors, legal representatives and permitted assigns.
Except for the rights to indemnification set forth in Clause 14.2, nothing in this Agreement,
expressed or implied, is intended to confer on any Person other than the Parties, and their
respective heirs, successors, legal representatives and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.



     14.5 Assignment. Subject to Clauses 5.1 and 5.3, the Parties may assign their rights and
obligations under this Agreement to their permitted transferees other than the rights as provided
in Clauses 8.4 and 8.5. Chaview shall not assign its rights as provided in Clauses 3.3 and 3.5
without the prior written consent of the Founder, which consent shall not be unreasonably withheld.



     14.6 Amendment; Waiver.




          (a) This Agreement may not be amended, modified or supplemented except by a written
instrument executed by each of the Parties.




          (b) No waiver of any provision of this Agreement shall be effective unless set forth in
a written instrument signed by the Party waiving such provision. No failure or delay by a
Party in exercising any right, power or remedy hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of the same preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. Without limiting the foregoing,
no waiver by a Party of any breach by any other Party of any provision hereof shall be
deemed to be a waiver of any subsequent breach of that or any other provision hereof. The
rights and remedies herein provided shall be cumulative and not exclusive of any rights,
powers or remedies provided at law or in equity.



     14.7 Notices. Each notice, demand or other communication given or made under this Agreement
shall be in writing and delivered or sent to the relevant Party with copies to each of the other
Parties at their respective addresses or fax numbers set out below (or such other address or fax
number as the addressee has by five days’ prior written notice specified to the other Parties). Any
notice, demand or other communication so addressed to the relevant Party shall be deemed to have
been delivered (a) if delivered in person or by messenger, when proof of delivery is obtained by
the delivering Party; (b) if sent by post within the same country, on the third day following
posting, and if sent by post to another country, on the ten(10) day following posting, and (c) if
given or made by fax, upon dispatch and the receipt of a transmission report confirming dispatch.
The initial address and facsimile for the Parties for the purposes of this Agreement are:




43












 




(c) if to the Founder, Merry Circle, Honour Idea or the Company,



to:



Charm Communications Inc.

26th Floor, Oriental Media Center

4 Guanghua Road, Chaoyang District

Beijing 100026

People’s Republic of China



Attention: Mr. He Dang

Fax No.: (86) 10 6583 0100



with a courtesy copy to:



DLA Piper UK LLP Beijing Representative Office

20th Floor South Tower

Beijing Kerry Center

1 Guanghua Road, Chaoyang District

Beijing 100020

Attention: Mr. Steven Liu

Fax No.: (86) 10 6561 5158



(d) if to Chaview, to



P.O. Box 309GT

Ugland House

South Church Street

George Town

Grand Cayman, Cayman Islands

Attention: Stephen Lee



with courtesy copies to:

AIF Capital Asia III, L.P.

Suite 3401, Jardine House

1 Connaught Place

Central, Hong Kong

Attention: Stephen Lee/Daniel Hui

Fax number: (852) 2845 0786



and



Winston & Strawn LLP

11th Floor, Cloucester Tower

The Landmark

15 Queen’s Road

Central, Hong Kong



Attention: Simon Luk

Fax number: (852) 2292-2200



(e) if to Aegis, to




44









 





Company Secretary

180 Great Portland Street

London, England, W1W5QZ

Fax number: +44 (0) 20 7070 7800



with a copy to:



General Counsel

Parker Tower,

43-49 Parker Street,

London, England,

WC2B 5P5

Fax number: +44 (0) 20 7550 3322




     14.8 Counterparts. This Agreement may be signed in any number of counterparts including
counterparts transmitted by facsimile, each of which shall be deemed an original with the same
effect as if the signatures thereto and hereto were upon the same instrument.



     14.9 Severability. If any provision contained in this Agreement shall for any reason be
determined to be partially or wholly invalid, illegal or unenforceable by any court of competent
jurisdiction, such provision shall be of no force and effect to the extent so determined, but the
invalidity, illegality or unenforceability of such provision shall have no effect upon and shall
not impair the validity, legality or enforceability of any other provision of this Agreement.



     14.10 Costs and Expenses. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable
attorneys’ fees, costs and disbursements in addition to any other relief to which such party may be
entitled.



     14.11 Further Acts and Assurances. Each Party shall give such further assurance, provide such
further information, take such further actions and execute and deliver such further documents and
instruments as are, in each case, within its power to give, provide and take so as to give full
force and effect to the provisions of this Agreement.



     14.12 Prior Shareholders Agreement. This Agreement shall supersede the Shareholders Agreement
and the Amended and Restated Shareholders Agreement, which shall cease to have any force and effect
as from the date hereof save for any antecedent breach prior to the date hereof.



     14.13 Most Favored Nation Treatment. The Founder and the Company agree to grant Chaview most
favored nation treatment with respect to any terms and conditions (including purchase price)
granted to any other investors that have purchased before the completion of the transactions
contemplated in the Second Subscription Agreement except for terms and conditions granted to
Dynasty and Swift Rise, or may purchase on or after the completion of the transactions contemplated
in the Second Subscription Agreement, Series A Preferred Shares of the Company. Chaview shall
automatically obtain and be entitled to any terms or conditions (including purchase price) that are
not provided for or more favorable than those provided for herein or under the Share Subscription
Agreement upon granting such terms and conditions to such other investors. The Founders and the
Company further agree



45









 




that they will promptly deliver to Chaview a true copy of any transaction documents the Company
and/or the Founder have entered into with any other investors for the purchase or subscription of
Series A Preferred Shares upon the signing of such transaction documents.




     14.14 Single Cause of Action. The Parties acknowledge that to the extent any provision
included in this Agreement (“Agreement Provision”) is repeated in another provision under any other
Transaction Document (“Other Transaction Document Provision”) and a breach of the Agreement
Provision has occurred, a Party who has made a monetary claim (whether for breach of contract,
indemnification or any other legal principle) in respect of the breach of the Agreement Provision
and such claim has been compensated, adjudicated or settled, then that Party shall not be entitled
to make a separate claim on the basis that such breach also amounts to a breach of the relevant
Other Transaction Document Provision separately.



[Signature Page to Follow]




46









 





          IN WITNESS WHEREOF, each of the Parties hereto have caused this Agreement to be duly executed
by its respective authorized officers:




	 	 	 	 	 
	Dang He

 	 	 
	By:  	/s/ Dang He
 	 	 
	 



	 	 	 	 	 
	Merry Circle Trading Limited

 	 	 
	By:  	/s/ Dang He
 	 	 
	 	Name:  	Dang He 	 	 
	 	Title:  	Director 	 	 
	 



	 	 	 	 	 
	Honour Idea Limited

 	 	 
	By:  	/s/ Dang He
 	 	 
	 	Name:  	Dang He 	 	 
	 	Title:  	Director 	 	 
	 



	 	 	 	 	 
	Charm Communications Inc.

 	 	 
	By:  	/s/ Dang He
 	 	 
	 	Name:  	Dang He 	 	 
	 	Title:  	Director 	 	 
	 



	 	 	 	 	 
	Aegis Media Pacific Limited

 	 	 
	By:  	/s/ Patrick Stahle
 	 	 
	 	Name:  	Patrick Stahle 	 	 
	 	Title:  	Chief Executive Officer 	 	 
	 



	 	 	 	 	 
	Chaview Investments Limited

 	 	 
	By:  	/s/ Stephen Lee
 	 	 
	 	Name:  	Stephen Lee 	 	 
	 	Title:  	Director 	 	 
	 



Exhibit A




 









 








EXHIBIT A




NUMBER AND PERCENTAGE OF SHARES HELD IMMEDIATELY AFTER THE

CLOSING AND REPURCHASE



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Number of
Ordinary
	 	 	 	 
	 	 	 	 	 	 	Shares on as	 	 	 	 
	 	 	 	 	 	 	converted
basis (for	 	% (w/o the 	 	% (w/ the
	 	 	Number of	 	Ordinary	 	effect of	 	effect of
	 	 	Shares	 	Shares only)	 	ESOP)	 	ESOP)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Ordinary Shares —
Merry Circle
	 	 	44,016,250	 	 	 	n/a	 	 	 	70.43	%	 	 	62.88	%
	Ordinary Shares —
Honour Idea
	 	 	1,093,750	 	 	 	n/a	 	 	 	1.75	%	 	 	1.56	%
	Ordinary Shares — Aegis
	 	 	12,390,000	 	 	 	n/a	 	 	 	19.82	%	 	 	17.70	%
	Series A Preferred
Shares — Chaview
	 	 	5,000,000	 	 	 	5,000,000	 	 	 	8.0	%	 	 	7.14	%
	Subtotal without ESOP
	 	 	62,500,000	 	 	 	n/a	 	 	 	100.00	%	 	 	89.29	%
	Ordinary Shares — ESOP
	 	 	7,500,000	 	 	 	n/a	 	 	 	n/a	 	 	 	10.71	%
	Total
	 	 	70,000,000	 	 	 	n/a	 	 	 	n/a	 	 	 	100.00	%






Exhibit A





 












 





EXHIBIT B




SERIES A PREFERRED SHARES FUNDAMENTAL ACTIONS



     (a) authorize, issue, purchase, repurchase or redeem shares of stock, convertible securities,
options or other securities (other than pursuant to any exercise of the rights of conversion or
redemption or repurchase of the Ordinary Shares owned by Aegis or attaching to the Series A
Preferred Shares or given to any Shareholder under this Agreement or the Share Subscription
Agreement), vary the rights attached to any Equity Securities, except as necessary to conduct an
Initial Public Offering;



     (b) amend, change or waive the terms of the constitutional documents of any of the Company or
its Subsidiaries; amend, change, waive, terminate or repudiate any of the Control Documents between
the WFOE and the Domestic Companies, other than in each case as necessary to conduct an Initial
Public Offering or effect the Restructuring (as defined in the Subscription Agreement);



     (c) make public offerings of their shares of stock or other securities, other than in an
Initial Public Offering;



     (d) sell or otherwise dispose of any assets or parts of their businesses which are material to
the Company on a consolidated basis, except in the ordinary course of business;



     (e) engage in any material investments or contracts involving an aggregate amount exceeding
US$2,000,000, or terminate or materially amend the terms of such investments or contracts, other
than (i) as necessary to conduct an Initial Public Offering or (ii) the incurrence of accounts
payable and receivable in the ordinary course of business of the Group companies;



     (f) enter into a reorganization, or acquire or merge by any Group company with any company,
business concern, firm or person other than an Affiliate of the Company;



     (g) commence any proceedings for dissolution, winding up liquidation (including any event or
transaction that might result in a deemed liquidation event), bankruptcy, insolvency, change of
control, consolidation, sale, lease or exclusive license of assets in whole or in part, take-over
of major business, or similar transaction of any Group company;



     (h) change outside independent auditor or the accounting year, or any material changes to the
accounting policies, of any Group company, other than as required by applicable Law;



     (i) change the size of the Company’s board of directors other than in compliance with listing
requirements as necessary to conduct an Initial Public Offering;



     (j) make any material changes in the business activities of the Company that are material to
the Group on a consolidated basis;



     (k) engage in any transaction or contractual arrangements outside the ordinary scope of any
Group Company’s business that could have a material effect on any Group Company’s business as a
whole, other than as necessary to conduct an Initial Public Offering;



Exhibit B




 









 








     (l) remove the Director appointed by Chaview or the Chaview Observer, as applicable;



     (m) increase the aggregate amount of debt or, other financial obligation (including
guarantees) of the Group exceeding US$2,000,000, other than the incurrence of accounts payable and
receivable in the ordinary course of business of the Group companies, unless in accordance with an
approved annual Business Plan;



     (n) lend money or grant credits involving an aggregate amount exceed US$2,000,000, to any
Third Party other than the incurrence of accounts payable and receivable in the ordinary course of
business of the Group companies, unless in accordance with an approved annual budget;



     (o) enter into, amend, terminate or waive any transactions, agreement or arrangement with any
Affiliate of any Group company that is not a member of the Group, or with employees, directors or
officers of the Group or any Affiliate of such employees, directors and officers, other than
transactions on an arm’s-length basis;



     (p) approve management stock incentive program other than the ESOP or any amendment thereto
(including the ESOP);



     (q) approve changes of the Chairman, chief executive officer, chief financial officer, chief
media officer or other senior executive officers of the Company; materially increase the
compensation (including cash, stock option and any other forms of benefits) of any Director or any
of the foregoing officers.



     (r) approve the Group’s annual Business Plan and annual budget or any amendment thereto;



     (s) approve any dividend payment or other distribution on Equity Securities by any Group
member;



     (t) permit the creation of any pledge or other security with respect to assets of the Group
that are material to the Group’s business, unless in accordance with an approved annual budget;



     (u) establishment of subsidiaries and/or affiliates or entering into any joint venture or
partnership;



     (v) sale or purchase of any equity interests of the Domestic Companies to and from any person
other than an Affiliate of the Company;



     (w) engage in any transactions where the Group companies receive equity interests in any
Person in exchange of advertising media resources;



     (x) undertake any capital expenditure outside the Business Plan;



     (y) commence or settle any litigation, arbitration or other legal proceeding of any of the
Group Company involving an amount exceeding US$1,000,000; and



     (z) any items requiring approval of or notification to shareholders under the applicable
company laws and regulations.



Exhibit B




 









 








EXHIBIT B-1




AEGIS FUNDAMENTAL ACTIONS



          Prior to the Initial Public Offering and for so long as Aegis holds not less than 5% of the
issued share capital of the Company, the following actions of the Group company shall require prior
written consent from Aegis:




          (a) issue, repurchase or redeem shares or other securities of the Company (other than (i) the
issuance or repurchase of shares reserved under the ESOP to the extent that the total shares issued
or issuable under ESOP shall not exceed 7,500,000 shares at any given time, or (ii) pursuant to any
exercise of the rights of conversion or redemption attaching to the Series A Preferred Shares or
given to any shareholder of the Company under the Second Amended and Restated Shareholders’
Agreement or the exercise of any other rights of repurchase or redemption outstanding as of the
date of this Agreement), except as necessary to conduct an Initial Public Offering;




          (b) amend the terms of the Articles of Association of the Company, amend the articles of
association of the WFOE in breach of any provisions hereof, or amend, waive, terminate or repudiate
any of the Control Documents between the WFOE and the Domestic Companies, other than in each case
as necessary to conduct an Initial Public Offering or effect the Restructuring;




          (c) engage in any transaction or contractual arrangements outside the ordinary scope of any
Group company’s business that could have a material effect on any Group company’s business as a
whole, other than as necessary to conduct an Initial Public Offering;




          (d) commence any proceedings for dissolution, winding up liquidation, bankruptcy, insolvency
of any Group company, except pursuant an internal restructuring of the Group;




          (e) removal of the Director appointed by Aegis to the Board of the Company, unless for cause
or in accordance with the applicable laws;




          (f) make any material changes in the nature of business of any Group company that are material
to the Group on a consolidated basis;




          (g) increase the aggregate amount of debt of the Group exceeding US$20,000,000, other than the
incurrence of accounts payable and receivable in the ordinary course of business of the Group,
unless in accordance with the annual Business Plan;




          (h) undertake any capital expenditure outside the Business Plan;




          (i) (1) settle any litigation, arbitration or other legal proceeding of any Group company
involving an amount exceeding US$1,000,000 or (2) commence or settle any litigation, arbitration or
other legal proceeding of any Group company involving a global or regional client of the Aegis
Group (and in any event Aegis shall also be notified with respect to the commencement or settlement
of any other litigation, arbitration or other legal proceeding of any Group company);




Exhibit B-1




 









 








          (j) increase the annual compensation (including cash, stock option and any other forms of
benefits) of the Chairman and chief executive officer of the Company by more than 20%
year-over-year individually;




          (k) the sale or purchase of any equity interests of the Domestic Companies to and from any
person other than an Affiliate of the Company, except otherwise pursuant to an internal
restructuring of the Group; and




          (l) engage in any transactions where the Group companies receive equity interests in any
person in exchange of advertising media resources with a value of more than US$10,000,000.




Exhibit B-1




 









 








EXHIBIT C




FORM OF SECOND AMENDED AND RESTATED REGISTRATION RIGHTS

AGREEMENT



[See Exhibit 4.9 of this Registration Statement]




Exhibit C





 









 








EXHIBIT D

ADDENDUM TO THE SECOND AMENDED AND RESTATED SHAREHOLDERS

AGREEMENT




Undertakings on Environmental Protection





	1.	 	The Company and its Subsidiaries shall at all times use their reasonable best efforts to
comply with all applicable Environmental Laws. The Company shall notify the Shareholders as
promptly as possible after it becomes aware of any breach or violation of any Environmental
Law by the Company or any of its Subsidiaries, and the Company and Subsidiaries shall use
their reasonable best efforts to take any action reasonably requested by any Shareholder to
correct or remedy any circumstances relating to such breach or violation.






	2.	 	At the reasonable request of any Shareholder, the Company shall, as promptly as possible, but
in any event not more than thirty (30) days after such request by such Shareholder, provide
such Shareholder with such information as may be reasonably requested by such Shareholder to
enable such Shareholder and its Affiliates to prepare an annual environmental performance
report relating to the Company and its Subsidiaries, which report shall include an evaluation
of the environmental, health, safety and social performance of the Company and its
Subsidiaries for the previous fiscal year based on such reasonable requirements as shall be
set forth by such Shareholder from time to time.




For purposes of this Exhibit D, “Environmental Laws” means laws, principles of common laws, civil
laws, regulations, codes of any jurisdiction or political subdivision thereof, as well as orders,
decrees, judgments or injunctions, issued, promulgated, approved or entered thereunder relating to
pollution, protection of the environment or public health or safety.




Undertakings on Business Principles



The Company will, and will cause each subsidiary to use their reasonable best efforts to:-





	(a)	 	provide safe and healthy working conditions for its employees and contractors;






	(b)	 	encourage the efficient use of natural resources and promote environmental protection;






	(c)	 	treat all employees fairly in terms of recruitment, progression, remuneration and conditions
of work, irrespective of gender, race, colour, language, disability, political opinion, age,
religion or national/social origin;






	(d)	 	to the extent permitted under applicable law, allow consultative workplace associations which
provides employees with an opportunity to present their views to the management;






	(e)	 	take account of the impact of its operations on the local community and seek to ensure that
potentially harmful occupational health and safety, environmental and social effects caused by
its operations are properly assessed, addressed and monitored;





Exhibit D




 









 









	(f)	 	uphold high standards of business integrity and honesty, and operate in accordance with local
laws and international good practice (including those intended to fight extortion, bribery and
financial crime);






	(g)	 	design and operate the Company’s business according to local regulations or international
good practices;






	(h)	 	adopt the following minimum employment standards in accordance with internationally accepted
good practice:






	(i)	 	not to employ forced labour of any kind;






	(j)	 	not to employ children under 14;






	(k)	 	provide wages which meet applicable industry or national requirements;






	(l)	 	properly record, report and review financial and tax information relating to the business of
the Company;






	(m)	 	ensure that no payment of value is made or received (in the form of compensation, gift,
contribution or otherwise) in the course of business in order improperly to induce
preferential treatment for any Shareholder, its officers, shareholders or employees or any
member of any Shareholders;






	(n)	 	comply with local regulations on occupational health and safety; and






	(o)	 	review the list of business principles periodically to ensure its ongoing suitability and
effectiveness.





Exhibit D




 









 








EXHIBIT E




*****



Exhibit E




 









 








EXHIBIT F




*****



Exhibit F