Document:

exv4w3w1

Exhibit 4.3.1

Execution Copy

Dated 17th day of September 2004

(1) REDGATE MEDIA INC.

AND

ZHU YING

(2) ROBERT WILLIAM HONG-SAN YUNG

PETER BUSH BRACK

AND

(3) COMMON INVESTORS

AND

(4) SERIES A INVESTORS

AND

(5) SERIES B INVESTOR

AND

(6) SERIES C INVESTORS

*****************************

SHAREHOLDERS AGREEMENT

FOR REDGATE MEDIA INC.

*****************************

ROBERTSONS

Solicitors & Notaries

57th Floor, The Center

99 Queen’s Road Central

Hong Kong

Tel: 2868 2866

Fax: 2868 5820

 

 

SHAREHOLDERS AGREEMENT

DATE:    17th September    2004.

PARTIES:

	(1)	 	Redgate Media Inc., a company incorporated under the laws of the Cayman Islands and having
its registered office at Scotia Centre, 4th Floor, P.O. Box 2804, George Town,
Grand Cayman, Cayman Islands, British West Indies (“Company”)
	 
	(2)	 	Zhu Ying of Flat 8/C., Block 2, 97 Robinson Road, Central, Hong Kong, Robert William Hong-San
Yung of 57 Marina Cove, Sai Kung, Hong Kong and Peter Bush Brack of Flat 2B, Magazine Gap
Road, Hong Kong (together “Original Shareholders”);
	 
	(3)	 	The investors whose names and addresses appear in Part A of Schedule 1 (“Common Investors”)
	 
	(4)	 	The investors whose names and addresses appear in Part B of Schedule 1 (“Series A
Investors”);
	 
	(5)	 	The investor whose name and address appears in Part C of Schedule 1 (“Series B Investor”);
and
	 
	(6)	 	The investors whose names and addresses appear in Part D of Schedule 1 (“Series C
Investors”).

BACKGROUND

	(A)	 	The Company is a company incorporated under the laws of the Cayman Islands and is carrying on
the Business (as defined below).
	 
	(B)	 	The Original Shareholders, the Common Investors, the Series A Investors, Series B Investor
and the Series C Investors hold all of the outstanding shares in the Company in the amounts
set out in Schedule 2 and have agreed to enter into this Agreement to confirm the terms upon
which they will hold such shares.

OPERATIVE PROVISIONS

	1.	 	DEFINITIONS

	 	1.1.	 	In this Agreement, the following words and expressions shall have the
following meanings:-

	 	 	 	 	 
	“Articles”

	 	—
	 	The Memorandum and Articles
of Association of the Company
from time to time.
	 
	 	 	 	 
	“Board”

	 	—
	 	A duly constituted meeting of
the Directors of the Company
at which a quorum shall be
present.

 

 

	 	 	 	 	 
	“Business”

	 	—
	 	The holding company for a
group of companies carrying
on magazine, newspaper,
television, radio and other
advertising and media related
investments and management
businesses in Hong Kong and
the People’s Republic of
China.
	 
	 	 	 	 
	“Director”

	 	—
	 	Any director of the Company
from time to time.
	 
	 	 	 	 
	“ESOP”

	 	—
	 	The Company’s Founders Share
Option Scheme dated
2nd January 2004
and Employee Share Option
Scheme dated 2nd
January 2004.
	 
	 	 	 	 
	“Fair Value”

	 	—
	 	The value per Share as shall
be determined herein at the
relevant time as representing
a fair market value of such
Share for which purpose, the
party making such valuation
shall disregard any discount
attributable to minority
interests and, in which
regard, they shall be acting
as experts and not as
arbitrators.
	 
	 	 	 	 
	“Incapacitating Event”

	 	—
	 	The death, bankruptcy or
mental incapacity of a
Shareholder who is an
individual or the insolvency
of a Shareholder who is a
corporation.
	 
	 	 	 	 
	“Investors”

	 	—
-
	 	All and any of the Series A
Investors and/or the Series B
Investor and/or the Series C
Investors.
	 
	 	 	 	 
	“Nominee”

	 	—
	 	Such nominee or associate to
whom any of the Shareholders
shall transfer all or any of
their Shares in accordance
with Clause 3.11.
	 
	 	 	 	 
	“Party”

	 	—
	 	All or any of the Investors,
the Common Investors, the
Company and/or the Original
Shareholders.
	 
	 	 	 	 
	“Qualified IPO”

	 	—
	 	An underwritten public
offering of the Common Shares
of the Company where the
aggregate net proceeds to the
Company equal or exceed US$30
million with a share price
not less than three times the
then applicable conversion
price for Class C Preference
Shares.
	 
	 	 	 	 
	“Shareholder(s)”

	 	—
	 	All or any of the
shareholders of the Company
from time to time.
	 
	 	 	 	 
	“Shareholding Proportion”

	 	—
	 	In respect of a Shareholder,
the proportion that the
Shareholder’s interest in
Common Shares of the Company
(including Common Shares into
which the Shareholder’s
interest in Preference

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	 	 	 	Shares
could convert) bears to the
outstanding Shares of the
Company.
	 
	 	 	 	 
	“Shares”

	 	—
	 	All or any of the shares in
the issued share capital of
the Company from time to
time.
	 
	 	 	 	 
	“Subsidiary”

	 	—
	 	Any subsidiary of the Company
(within the meaning of the
Companies Ordinance) from
time to time.
	 
	 	 	 	 
	“Supermajority"`

	 	—
	 	Shareholders representing not
less than 75% of the
outstanding Shares from time
to time, or as the case may
be of the outstanding Shares
of a particular class.

	 	1.2	 	For the purposes of interpretation of the provisions herein:-

	 	(a)	 	words importing the singular shall include the plural and
vice versa and any words importing the masculine gender shall include the
feminine and neuter gender;
	 
	 	(b)	 	where any provision contains the expression “and/or” then
this shall mean that the relevant provision may apply to either or both of the
Parties or all or any of the matters that such expression shall connect;
	 
	 	(c)	 	any reference to a clause number shall, unless the context
requires otherwise, mean the relevant clause in this Agreement.
	 
	 	(d)	 	headings are inserted for ease of reference only and, save
where referred to otherwise, shall not form part of the terms of this
Agreement;
	 
	 	(e)	 	any word or term defined at any point in this Agreement shall
bear a like meaning throughout this Agreement;
	 
	 	(f)	 	any reference herein to a named ordinance shall refer to the
relevant ordinance of the laws of Hong Kong; and
	 
	 	(g)	 	references to “outstanding Shares of the Company” shall,
where the context admits, mean the total number of Common Shares issued or
agreed to be issued (on an as converted basis for any issued Preference
Shares), but disregarding options over Common Shares granted under the ESOP
which are not then exercisable [and any Common Shares reserved for grant under
the ESOP which are not then vested.]

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	2.	 	THE BUSINESS

	 	2.1	 	Unless otherwise agreed in accordance with this Agreement, the sole purpose
of the Company shall be to engage in the Business and its Subsidiaries shall be
required to conduct their businesses accordingly.
	 
	 	2.2	 	It is the Shareholders’ intention that the Business be conducted in the best
interests of the Company and its Subsidiaries on sound commercial profit making
principles and so as to generate the maximum achievable profit available for
distribution to its Shareholders and to achieve a Qualified IPO soon as reasonably
practicable.

	3.	 	RIGHTS OF FIRST REFUSAL

	 	3.1	 	Each Shareholder agrees with each other Shareholder that save as provided by
this Agreement or the Articles:-

	 	3.1.1	 	the Shares may not be pledged, mortgaged, encumbered or
otherwise be subjected to any third party charge whatsoever;
	 
	 	3.1.2	 	they shall not create any option over their Shares or any
interest convertible into options in respect of their Shares; and
	 
	 	3.1.3	 	there shall be no transfer of the legal or beneficial
ownership of any of their Shares.

	 	3.2	 	Subject to Clause 3.11, to Clause 5 and to Clause 17, any Shareholder wishing
to transfer the legal or beneficial ownership of all or a portion of its Shares
(such Shareholder being referred to as “Vendor”) shall deliver a written notice to
the Board, which notice shall be referred to herein as “Sale Notification” and
which shall specify:-

	 	3.2.1	 	the number of Shares which the Vendor wishes to transfer (“Sale
Shares”);
	 
	 	3.2.2	 	the price per Share in cash (“Price”) for which the Vendor proposes
to transfer the Sale Shares;
	 
	 	3.2.3	 	the identity and particulars of the proposed transferee
(“Purchaser”), such particulars to include any ultimate beneficial
owner(s) of the Purchaser and the number of Shares the Purchaser is
willing to buy; and
	 
	 	3.2.4	 	the other principal terms of the proposed acquisition by the
Purchaser of the Sale Shares,

	 	 	 	provided that,

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	 	(i)	 	once delivered to the Board, a Sale Notification shall be irrevocable
without the consent of the Board and shall constitute the Company as the
Vendor’s agent for the transfer of the Sale Shares;
	 
	 	(ii)	 	none of the Original Shareholders shall be entitled to issue a Sale
Notification until the earliest of:-

	 	(a)	 	the second anniversary of the date hereof;
	 
	 	(b)	 	a Qualified IPO; or
	 
	 	(c)	 	a sale of all the Shares of the Series C Investors.

	 	(iii)	 	unless otherwise agreed by the Board or in the case of any employee
of the Company, a Shareholder holding a Shareholding Proportion of 2 per
cent or less of the outstanding Shares in the capital of the Company from
time to time, shall only be entitled to issue a Sale Notification in
respect of all but not some only of his interest in Shares of the Company.

	 	3.3	 	Within seven days of receipt of the Sale Notification, the Board shall send
to each Shareholder, other than the Vendor, a written notice (“Offer”) which shall
specify:-

	 	3.3.1	 	the terms of the Sale Notification as set out in Clause 3.2; and
	 
	 	3.3.2	 	the minimum number of Sale Shares to which the Shareholder
receiving such Offer (“Recipient”) shall be entitled (which shall be
determined in accordance with Clause 3.9) and the total number of Sale Shares.

	 	3.4	 	The Recipient shall have the right, within twenty (20) days from receipt of
the Offer, to deliver a written notice to the Board (“Acceptance Notice”) of its
irrevocable commitment to exercise its rights to purchase a maximum number of Sale
Shares (being all or some only of the Sale Shares) as it shall specify in the
Acceptance Notice and any lesser number of Sales Shares as shall be allocated to the
Recipient in accordance with the provisions of Clause 3.5.
	 
	 	3.5	 	In the event that any Recipient shall deliver an Acceptance Notice to the
Board in accordance with Clause 3.4, then the same shall amount to a binding agreement
for the Vendor to sell and for that accepting Recipient to purchase up to such number
of Sale Shares applied for under the
Acceptance Notice. In case of competition to purchase Sale Shares, the Sale Shares
shall be allocated first, to Shareholders giving an Acceptance Notice in accordance
with Clause 3.9 and then, in case any surplus Sale Share, in accordance with the
relevant Shareholders’ Shareholding Proportion provided that no Shareholder shall
be obliged to purchase more Sale Shares than the maximum number specified in its
Acceptance Notice.

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	 	3.6	 	The Board shall as soon as practicable issue notice to each Recipient who has
given an Acceptance Notice of its allocation of Sale Shares pursuant to the
foregoing provision. Completion of the sale and purchase of the Sale Shares shall
take place at such time and place as the Board shall notify to the Vendor and the
relevant Recipient but which shall in any event be no later than fourteen days
after the Latest Date. At completion:-

	 	3.6.1	 	the relevant Recipient shall pay the Price to the Vendor;
	 
	 	3.6.2	 	the Vendor shall execute all documents required to transfer
those Sale Shares to the relevant Recipient (or its Nominee as it may direct)
and shall deliver up to that Recipient the share certificates for the relevant
Sale Shares;
	 
	 	3.6.3	 	the Vendor hereby is deemed warrant to the relevant
Recipient:-

	 	(i)	 	that it is the legal and beneficial owner
of the relevant Sale Shares;
	 
	 	(ii)	 	that the relevant Sale Shares are free and
clear of any liens, claims, options, charges, encumbrances or rights
of third parties; and
	 
	 	(iii)	 	that it has the full legal authority to
sell, assign and transfer the relevant Sale Shares; and

	 	3.6.4	 	each of the Vendor and the relevant Recipient shall be responsible
for one half of the stamp duty payable in connection with the sale and
purchase of such Sale Shares.

	 	3.7	 	For the purpose of this Clause 3, the “Latest Date” shall mean the latest
date by which Recipients could have accepted the Offer for Sale Shares under Clause
3.4.
	 
	 	3.8	 	If any Sale Shares shall not be accepted by Recipients under Clause 3.4 then
the Vendor shall be at liberty to transfer any Sale Shares which shall not have been
accepted to the Purchaser within ninety (90) days of the Latest Date at a price not
less than Price and on the terms specified in the Sale Notification but not otherwise
and provided further that:-

	 	3.8.1	 	the Vendor shall first procure that the Purchaser shall sign
a deed of adherence so as to assume the Vendor’s obligations under this
Agreement; and
	 
	 	3.8.2	 	the Board shall have the discretion to refuse to register a
transfer to the Purchaser if it reasonably determines that the proposed
transferee would be detrimental to the future business of the Company. In this
regard, the Parties confirm that, if the transferee is or is controlled by a
competitor of the Company or is someone of ill repute or poor

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	 	 	 	financial
standing, then the Board shall be entitled to exercise such a discretion.

	 	3.9	 	For the purposes of Clause 3.3.2, the minimum number of the Sale Shares to
which a Recipient shall be entitled shall be calculated as follows:-

	 	 	 	   A    X C

	 	 	 	   B

	 	 	 
	where A =

	 	Common Shares held by the Recipient
(on an as converted basis);
	 
	 	 
	B =

	 	Total number of
outstanding Shares of the Company minus the total number of
Sale Shares (on an as converted basis) to be sold by the
Vendor;
	 
	 	 
	C =

	 	Total Number of Shares
(on an as converted basis) to be sold by Vendor.

	 	3.10	 	If the formula set out in Clause 3.9 shall result in any fractional
entitlements to any Recipient to Shares, then the Board may, as it thinks expedient
and without being held responsible by any Shareholder therefor:-

	 	(i)	 	increase such entitlement to the next whole number of Shares;
or
	 
	 	(ii)	 	decrease such entitlement by disregarding the relevant
fraction.

	 	3.11	 	The above restrictions shall not inhibit any transfer of:-

	 	3.11.1	 	the legal ownership of Shares where the same shall not result in any change
in the beneficial ownership of such Shares;
	 
	 	3.11.2	 	the legal or beneficial ownership to any associate of the Shareholder
(within the meaning of the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong
Limited); or any members of that shareholders’ family or trust for the
benefit of that Shareholder and/or its family,

	 	 	 	provided that, in the case of any such transfer:-

	 	(i)	 	the transferring Shareholder shall procure that the
transferee shall execute a deed of adherence so as to assume the transferring
Shareholder’s obligations herein and the transferring Shareholder shall
indemnify the other Shareholders in respect of any breach of this Agreement by
such transferee; and
	 
	 	(ii)	 	should the transferee at any time thereafter cease to fulfil
the requirements set out either Clause 3.11.1, or 3.11.2 (as the case may be),
then the transferring Shareholder shall forthwith procure that the

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	 	 	 	legal and
beneficial ownership of such Shares are transferred back to it.

	 	3.12	 	All certificates for Shares shall bear the following legend:-
	 
	 	 	 	“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). SUCH SECURITIES MAY NOT BE
TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH
TRANSFER OR, IN THE OPINION OF COUNSEL FOR THE COMPANY, REGISTRATION UNDER THE ACT
IS UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT OR UNLESS SOLD
PURSUANT TO RULE 144 OF THE ACT.”

	4.	 	CO SALE RIGHTS

	 	4.1	 	Right of Co-Sale
	 
	 	 	 	On a proposed sale by an Original Shareholder (being a
“Vendor” pursuant to Clause 3), an Investor who does not
exercise its rights of first refusal pursuant to Clause 3,
may, in lieu of the same (but without prejudice to the rights
of first refusal of other Shareholders in respect of the
Vendor’s Sale Shares under Clause 3), notify the Vendor and
the Board of its wish to sell all or any part of its Shares
on the same terms as those on which the Vendor proposes to
sell its Shares to the Purchaser. The Investor’s right of
co-sale shall be determined as of the date that the Sale
Notification is delivered to the Company and shall be equal
to the number of Sale Shares (or such larger number of Shares
which the Purchaser is willing to purchase) (on an as
converted basis) multiplied by a fraction, the numerator of
which is the number of Shares held by the Investor(on an as
converted basis) and the denominator of which is the sum of
(x) the total number of Shares (on an as converted basis) held by all the Investors plus
(y) the total number of Shares (on an as converted basis) held by the Vendor (the
“Right of Co-Sale Pro Rata Share”). The Investor exercising its co-sale right
shall have the right to sell (and the Vendor shall procure the sale) to the
Purchaser of such Investor’s Right of Co-Sale Pro Rata Share simultaneously with
the closing of such sale to the Purchaser, subject to the terms and conditions set
forth in the Sale Notification.

	 	4.2	 	Mechanics of Sale

	 	4.2.1	 	The Investor shall exercise its sale right by
delivering a notice of exercise to the Vendor
(with a copy to the Board) within 20 Days
after the date that the Sale Notification has
been delivered by such Vendor to the Company.
	 
	 	4.2.2	 	The Vendor shall assign to the Investor who exercises its co-sale
right as much of its interest in any agreement of sale with the Purchaser
that the Investor shall be entitled to and shall accept. To the extent
that any Purchaser prohibits such assignment or otherwise refuses to
purchase

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	 	 	 	Shares from such Investor, the Vendor shall not sell to such
Purchaser any Shares unless and until, simultaneously with such sale, such
Vendor shall purchase such shares from the Investor for the same
consideration and on the same terms and conditions as the proposed
transfer described in the Sale Notification.

	 	4.3	 	Exceptions to Right of Co-Sale
	 
	 	 	 	The Right of Co-Sale shall not apply to (i) sales of Shares by any
Original Shareholders in a Qualified IPO; (ii) sales of Shares by any
Original Shareholders in connection with a merger, consolidation or,
sale of all or substantially all of the assets or reorganisation of
the Company; or (iii) the transfer of any or all of any Original
Shareholder’s Shares to a Nominee.

	5.	 	DRAG ALONG RIGHTS
	 
	 	 	In the event that the Shareholders or the Company receive a written bona fide offer to
purchase all of the outstanding Shares of the Company which holders of more than fifty per
cent of the outstanding Shares of the Company wish to accept and for which purpose they
shall have received a written offer to purchase for cash all the outstanding Shares based
on a valuation of the Company being no less than US$90,000,000 (“Takeover Offer”) then the
remaining provisions of this Clause shall apply instead of Clauses 3 and 4.

	 	5.1	 	at the written request of the Shareholders wishing to accept the Takeover Offer
representing more than fifty per cent of the outstanding Shares of the
Company (the “Selling Members”) and notwithstanding Clauses 3 and 4, each
Shareholder shall be required to participate in such sale by selling to the
prospective Purchaser all of their Shares for the same price and the same terms and
conditions set out in the offer, and to vote all of such Shareholder’s Shares in
favour of such transaction.
	 
	 	5.2	 	The Selling Members shall give to each other Shareholder a notice (an
“Obligation to Sell Notice”) containing a description of the material terms of such
proposed transaction including the name and address of the proposed transferee, the
consideration per share offered by the proposed transferee, the payment terms and
closing date, which shall be a date not less than 60 days after the giving of the
Obligation to Sell Notice, and including a copy of any written offer, letter of
intent, term sheet or contract of sale.
	 
	 	5.3	 	All Shareholders shall be treated equally in a Takeover Offer under this Clause
5 and shall receive the same consideration per Share in connection with the
transaction.
	 
	 	5.4	 	It shall be a condition of the drag-along right under this Clause 5 that the
Selling Member discloses all material facts and circumstances and all material
aspects of any transaction to all Shareholders and that all Shareholders are
provided with definitive agreements for the transaction at least ten (10) days
prior to the anticipated signing date. In the event that the proposed transferee

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	 	 	 	shall be an associate of a Selling Member (“Associate Transaction”), then the terms
of Clause 5.5 shall apply.

	 	5.5	 	In the event of an Associate Transaction, the application of Clauses 5.1 and
5.2 shall be delayed whilst the Company obtains an opinion [from an independent
investment banking or valuation firm of repute (“Valuers”) who shall determine if
the proposed Associate Transaction is at a Fair Value. If the Valuers shall
determine that the Takeover Offer is not at a Fair Value, then the terms of Clauses
5.1 and 5.2 shall apply provided however that the Shareholders other than the
Selling Party shall first be able to exercise their rights pursuant to Clause 3
hereof in respect of such sale.

	6.	 	PRE EMPTION RIGHTS

	 	6.1	 	Restriction: The Parties confirm and undertake to each other that the
Company will not issue any new securities (“New Shares”) without the Company first
offering the New Shares for subscription by the Shareholders in a number as nearly as
practicable equal to the Shareholding Proportion immediately prior to the issue of the
New Shares in accordance with the provisions of this Clause 6.
	 
	 	6.2	 	Issue Notice: In the event that the Company proposes to issue any New Shares,
then the Board shall send a written notice (“Issue Notice”) to each Shareholder which
shall specify:

	 	6.2.1	 	the type of Shares to be issued;
	 
	 	6.2.2	 	the price and the terms upon which the Company proposes to
issue such New Shares;
	 
	 	6.2.3	 	(if known) the proposed subscriber for such New Shares; and
	 
	 	6.2.4	 	the number of New Shares in the proposed issue, equal to the
Shareholder’s Shareholding Proportion over which the Shareholder shall be
entitled to exercise its pre emption rights.

	 	6.3	 	Exercise: Each Shareholder shall have the right, within fourteen 14 days from
receipt of the Issue Notice, to deliver a written notice to the Board stating that
it wishes to exercise its pre emption rights over up to the number of New Shares
and on the terms specified in the Issue Notice (“Issue Acceptance Notice”).
	 
	 	6.4	 	Where all Shareholders do not exercise their pre emption rights in full over
the offer of New Shares, the Board may (but shall not be obliged to) give each
Shareholder exercising in pre emption rights over all of its offer of New Shares,
notice (a “Second Issue Notice”) of any New Shares that remain available for
subscription. A Shareholder entitled to a Second Issue Notice shall be entitled
within fourteen (14) days of such Second Issue Notice to deliver a written notice
(“Second Issue Acceptance Notice”) to the Board of its wish to subscribe for all or
some of the New Shares that remain available

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	 	 	 	for subscription. In case of
competition, the Board shall allocate the New Shares to Shareholders giving a Second
Issue Acceptance Notice in their respective Shareholding Proportions Provided however
that no Shareholder shall be obliged to subscribe for more New Shares than the amount
specified in its Issue Acceptance Notice and Second Issue Acceptance Notice.

	 	6.5	 	Closing: An Issue Acceptance Notice delivered by a Shareholder shall create
a binding agreement for that Shareholder to buy and the Company to sell the number of
New Shares set out in such notice or if applicable allocated in the Shareholding
Proportion in accordance with Clause 6.4 to that Shareholder at the price specified in
the Issue Notice and on the following terms:-

	 	6.5.1	 	all such sales and purchase of New Shares shall be completed
at the same time on such day as the Board shall determine after the offer of
New Shares shall close provided that the Board shall give
the relevant Shareholders purchasing New Shares not less than seven days
advance notice of the date for completion; and
	 
	 	6.5.2	 	the Board shall be required to deliver a notice pursuant to
Clause 6.5.1 within forty five (45) days of the Issue Notice (or such longer
period as is agreed between the Company and all Shareholders delivering an
Issue Acceptance Notice).

	 	6.6	 	Non exercise and Lapse: In the event that:-

	 	6.6.1	 	the Shareholders shall fail to exercise their pre emption
rights over all the New Shares in accordance with the foregoing provision,
then the Company shall have ninety-days after the expiration of the last time
for any Shareholder to accept the offer of New Shares to sell those New Shares
in respect of which such rights were not exercised by Shareholders provided
that such sale shall comply with all of the terms specified in the Issued
Notice; and
	 
	 	6.6.2	 	if the Company has not issued and sold such New Shares in
accordance with such offer pursuant to Clause 6.6.1 within the said period of
ninety days, then the Company shall not thereafter issue any further Shares
without first complying with the provisions of this Clause 6.

	 	6.7	 	Exceptions: The foregoing provisions of this Clause 6 shall not apply to
issue of New Shares in the following circumstances:-

	 	6.7.1	 	the issuance of Shares equal to no more than 15% of the
outstanding Shares pursuant to the ESOP adopted by the Company for the full
time employees of the Group from time to time;
	 
	 	6.7.2	 	a pro-rata distribution to all Shareholders by way of dividend; or
	 
	 	6.7.3	 	a pro-rata distribution to all Shareholders on a
reorganization of the Shares; or

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	 	6.7.4	 	a New Issue approved by a Supermajority of the Common
Shareholders and a Supermajority of the Preference Shareholders; or
	 
	 	6.7.5	 	the issuance of no more than 5,000 Common Shares pursuant to
the Sale and Purchase Agreement dated 15th August 2003 and entered
into between the Company and Lau Yi Fan for the purposes of acquiring the
Media 2U Group of Companies.

	7.	 	BOARD OF DIRECTORS

	 	7.1	 	Until otherwise agreed by the Shareholders in accordance with Clause 11, the
number of Directors shall be limited to five (5). The Directors initially to be
elected by the respective Shareholders are stated in Clause 8.
	 
	 	7.2(a)	 	The Original Shareholders shall by majority vote be entitled to elect three (3)
Directors and to cause the removal of any Director so elected. The Directors elected
by the Original Shareholders are designated “A” Directors.

	 	(b)	 	AsiaStar IT Fund L.P. shall, while its outstanding Series C Preference
Shares represent not less than 10 percent of the outstanding Shares of the Company,
be entitled to elect one (1) Director and to cause the removal of a director so
elected.
	 
	 	(c)	 	The Series A Shareholder, Series B Shareholder and Series C Shareholder
shall by majority vote be entitled to elect one Director while the Series C
Preference Shareholders continue to enjoy the right under Clause 7.2(b) to elect
one Director, and shall be entitled to elect two Directors at such time as the
Series C Preference Shareholders no longer enjoy the rights to elect one Director
under Clause 7.2(b).
	 
	 	(d)	 	The Directors elected by the Preference Shareholders under the
provisions of Clauses 7.2(b) and/or 7.2(c) are designated “B” Directors.
	 
	 	7.3	 	Two (2) seats on the Board shall be reserved for additional Directors as the
Company shall appoint from time to time.
	 
	 	7.4	 	Every request for the election or removal of a Director by a Shareholder
shall be in writing and signed by or on behalf of the relevant Shareholders or by a
majority of the relevant class of Shareholders, as the case may be, and shall be
delivered to the principal office for the time being of the Company.
	 
	 	7.5	 	All decisions of the Board shall be taken by a majority of the Board save for
the matters set out in Clause 11.2 below.
	 
	 	7.6	 	The Board shall meet at places convenient to the Directors but in the absence
of any agreement Board meetings shall be held in Hong Kong, from time to time as the
Board may decide for purposes of discussing reports and other matters (including
reviewing the investments of the Company) but not less than every three (3) months.
Board meetings shall generally be convened on the direction of the Chairman but any
Director may convene a meeting of the

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	 	 	 	Board by giving the other Directors not less
than fifteen (15) days’ notice (including the provision of an agenda of such
meeting).

	 	7.7	 	Each Director shall be entitled by written notice to the Company to appoint
an alternate Director to represent him at any meeting of the Board. Such alternate
Director shall be entitled while holding such office to receive notices of all
meetings of the Board and to attend and vote as a Director at any such meetings at
which the Director appointing him is not present and generally to exercise all the
powers, duties and authorities and to perform all functions of the Director appointing
him. A Director or any person may act as an alternate Director to represent more than
one Director and an alternate Director shall be entitled at meetings of the Board to
count in the quorum and to exercise one vote for every Director whom he represents in
addition to his own vote (if any) as a Director.
	 
	 	7.8	 	At least fifteen (15) days’ notice of meetings of the Board (including
details of the agenda) shall be given to each Director at such address as he or it
shall from time to time notify to the Company for this purpose. In the case of urgent
business the right to receive notice may be waived by any Director by cable, facsimile
or otherwise in writing. Each notice of meeting of the Board shall contain an agenda
of the business to be discussed at such meeting.
	 
	 	7.9	 	Each Director present personally or by his alternate shall have one vote at
all meetings of the Board. The quorum of all meetings of the Board shall be two (2)
Directors, including in each instance at least one “A” Director elected by the
Original Shareholders and one “B” Director elected by the Preference Shareholders in
accordance with Clause 7.2 (or their alternate), provided that where no quorum is
present at any duly convened meeting, the meeting shall be adjourned on notice to all
Directors for seven (7) days thereafter at the same time and place or, if not a
business day, to the next Business Day thereafter. If at such adjourned meeting a
quorum once again is not present there, such Directors as are present at such meeting
shall be the quorum.
	 
	 	7.10	 	Subject always to Clause 11.2 below, a resolution in writing circulated to
all the Board and signed by a majority of the Board including at least one A Director
and one B Director shall be valid and effectual as if it had been a resolution passed
at a meeting of the Board duly convened and held on the day in which the document was
last signed by an affirmative Director. A copy of any resolution in writing shall be
sent to every Director. For the purposes of this sub-clause, “in writing” and
“signed” include approval by facsimile and cable in writing.
	 
	 	7.11	 	Discussion at all meetings of the Board shall be duly recorded by such person
as the Board may direct and minutes of such meetings shall be
drawn up and circulated to all the Directors within ten (10) days after the date of
the meeting of the Board.
	 
	 	7.12	 	A Director shall not be prohibited from voting or being counted in a quorum
at any meeting of the Board in respect of any contract or arrangement in which

- 13 -

 

	 	 	 	he is or may be interested provided he has disclosed the nature of his interest in
accordance with the Articles.
	 
	 	7.13	 	The Shareholders acknowledge that where any Director is appointed by Asia
Star IT Fund or by the Series C Preference Shareholders under a right conferred by
this Agreement, that Director, in performing any of his duties or exercising any
power, right or discretion as a Director, shall be entitled to have regard to and
represent the interests of the Shareholder(s) causing his election, and to act on the
wishes of such Shareholder(s).
	 
	 	7.14	 	The meetings of the Board may be conducted by means of telephone or
audio-visual conferencing or other methods of simultaneous communication by
electronic, telegraphic or other means by which all persons participating in the
meeting are able to hear and be heard at all times by all other participants without
the need for a Director to be in the physical presence of the other Directors and
participation in the meeting in this manner shall be deemed to constitute presence in
person at such meeting. The Directors participating in any such meeting for the
entire duration of the meeting shall be counted in the quorum for such meeting and
subject to there being a requisite quorum at all times during such meeting, all
resolutions agreed by the Directors in such meeting shall be deemed to be as effective
as a resolution passed at a meeting in person of the Directors duly convened and held.
A Director may disconnect or cease to participate in the meeting if he makes known to
all other Directors participating that he is ceasing to participate in the meeting and
such Director shall, notwithstanding such disconnections, be counted in the quorum for
such meeting in respect of any resolutions passed at the meeting before he ceases to
participate. The minutes of such a meeting signed by the Chairman shall be conclusive
evidence of any resolution of any meeting conducted in the manner as aforesaid. A
meeting conducted by the aforesaid means is deemed to be held at the place agreed upon
by the Directors attending the meeting, provided that at least one (1) of the
Directors participating in the meeting was at that place for the duration of the
meeting.
	 
	 	7.15	 	The Company shall procure that each of its Subsidiaries agrees to and adopts
corporate governance arrangements as shall be appropriate to effect as nearly as may
be the arrangements set out in Clauses 7 to 11 hereof. The Parties shall inform one
another promptly upon becoming aware of any action by the board of directors of any
Subsidiary of the Company
inconsistent with the foregoing and use their respective best endeavours to cure
any such inconsistency as promptly as practicable.
	 
	 	7.16	 	The Board shall work towards obtaining the following (subject to available
cash flow from time to time):-

	 	(i)	 	the provision of Keyman Insurance with the proceeds payable to the
Company in the minimum amount of US$1 million (one million United States
dollars) for each of Messrs Peter Brack, Robby Yung and Julia Zhu;

- 14 -

 

	 	(ii)	 	the Directors’ and Officers’ indemnity insurance coverage for all
Directors and Officers of the Company in an amount specified by the Board.

	8.	 	DIRECTORS

	 	8.1	 	The Shareholders shall procure that the following persons (or such other
persons as may be nominated by the Shareholders in accordance with Clause 7.2 above)
are appointed Directors of the Company with effect from the date of this Agreement (to
the extent the same have not already been so appointed):-

	 	 	 	 	 
	“A” Directors appointed by Original Shareholders

	 	:
	 	Peter Bush Brack

Zhu Ying

William Hong-san Yung Yung
	 
	 	 	 	 
	“B” Director appointed by Series C
Preference Shares

	 	:
	 	Jerry Sze
	 
	 	 	 	 
	“B” Director appointed by Series A, B and C
Preference Shares

	 	:
	 	John Zwaanstra

	 	8.2	 	The Chairman of the Board shall be appointed by the A Directors and the first
Chairman shall be Peter Brack. In case of an equality of votes at a meeting of the
Board, the Chairman shall be entitled to exercise a second or casting vote.

	9.	 	SHAREHOLDERS’ MEETINGS

	 	9.1	 	All Shareholders shall receive notice of all meetings of Shareholders and shall
be eligible to attend and participate therein. The number of Shareholders
necessary to form a quorum for the transaction of business at a meeting of the
Shareholders shall be Shareholders holding not less than a majority of the
outstanding Shares in the Company determined on the basis as if all outstanding
securities then convertible into Common Shares
(except options granted under the Employee Share Option Plan) had been so
converted, present personally or by representative, attorney or proxy, provided,
however, that at any meeting of Shareholders at which a matter is considered on
which the Preference Shareholders or any class of Preference Shares is entitled to
a separate class vote, the presence (as aforesaid) of the holder(s) of no less than
fifty per cent (50%) of the relevant Series of Preference Shares outstanding at the
time shall also be required to constitute a quorum. All matters raised at a
meeting of the Shareholders shall, unless otherwise required by The Companies Law
or the Articles or Clause 11.2 of this Agreement, be decided by ordinary resolution
of the Shareholders present at the meeting, provided that all matters submitted to
a vote of Shareholders shall be decided by ballot rather than show of hands.
	 
	 	9.2	 	If within half an hour from the time appointed for holding the meeting a quorum
is not present, the meeting shall stand adjourned to the same time seven (7) days
following at the same time and place upon notice to all

- 15 -

 

	 	 	 	Shareholders. If at such
adjourned meeting a quorum once again is not present, there shall be a further
adjournment for an additional seven (7) days on notice to all Shareholders. If at
such further adjourned meeting a quorum is not present within half an hour from the
time appointed for holding the meeting, then (without prejudice to any requirement
for a separate class vote of the Preference Shareholders or any class of Preference
Shareholders) the Shareholders present at such adjourned meeting shall be the
quorum.

	 	9.3	 	Subject always to Clause 11.2 below, a resolution in writing circulated to all
Shareholders or, as the case may be, all the Shareholders of a particular class of
Shares and signed by holders of a majority of the outstanding Shares of the Company
(or Shares of the relevant class) determined on the basis referred to in Clause 9.1
shall be valid and effectual as it had been a resolution passed at a meeting of the
Shareholders on the date that is seven (7) days after the circulation of the
resolution in writing or, if later the date that it is signed by holders of a
majority of the outstanding Shares of the Company (or Shares of the relevant
class). Any such resolution may consist of several documents in like form, each
signed by one or more Shareholder or their attorneys and signature in the case of a
corporation which is a Shareholder shall be sufficient if made by an officer or
representative of that corporation.

	 	9.4	 	The provisions of Clause 7.14 shall apply mutatis mutandis to meetings of
Shareholders and/or any class meetings of Shareholders with reference to the Board
construed a reference to Shareholders and to a Director, to a Shareholder or his
representative.
	 
	 	9.5	 	In respect of any votes to be made by Series C Investors at meetings of the
Shareholders and/or their Class, the Original Shareholders irrevocably confirm to
the Series C Investors other than themselves (“Remainder”) that they shall exercise
their voting rights in respect of their Class C Preference Shares in accordance
with the written instructions of a majority in value of the Remainder and that they
will sign all documents necessary to convene a meeting of Series C Investors on
short notice if so directed by the Remainder.

	10.	 	ADMINISTRATION

	 	10.1	 	The Board will be responsible for the management and supervision of the
Company’s business.
	 
	 	10.2	 	The Board shall promptly appoint an Audit Committee and a Compensation
Committee, appointments to which shall be made by the Board from time to time. At
least one B Director (initially Mr Jerry Sze) shall be appointed to the Audit
Committee and the Compensation Committee.
	 
	 	10.3	 	In accordance with the Articles, the Board may delegate such functions of the
Board to such committees as it deems appropriate.

	11.	 	SHAREHOLDER AND DIRECTOR VOTING

- 16 -

 

	 	11.1	 	The Board shall be required to consider and determine at least the following
matters.

	 	(a)	 	the declaration or payment of any dividend or distribution or
otherwise the repurchase or redemption of any equity security;
	 
	 	(b)	 	the sale, mortgage, pledge, lease, transfer or other
disposition of the Company’s or any Group Company’s assets which is (i)
outside the ordinary course of business or (ii) in excess of US$500,000 in
aggregate and not approved in the Business Plan;
	 
	 	(c)	 	the adoption and approval and any amendment to the business
plan of the Company and quarterly and annual budget (the “Business Plan”);
	 
	 	(d)	 	incurring any indebtedness or assuming any financial
obligation or issuing, assuming, guaranteeing or creating any liability for
borrowed money in excess of US$500,000 in aggregate at any time outstanding
(unless such liability is incurred pursuant to the then current Business
Plan);
	 
	 	(e)	 	making any capital expenditure or other purchase of tangible
or intangible assets in any year in excess of US$500,000 in aggregate at any
time outstanding (unless such liability is incurred pursuant to then current
Business Plan);
	 
	 	(f)	 	engaging in any transactions under which the Company’s
aggregate obligations to such party or entering into any transaction or
agreement or contract with any party are unlimited or potentially exceed
US$250,000 per year in the aggregate;
	 
	 	(g)	 	the entry into any joint venture arrangement or the
establishment of a material subsidiary;
	 
	 	(h)	 	entering into any transaction or agreement or contract with
any shareholders, directors, officers or employees of the Company or Group
Company; and
	 
	 	(i)	 	subject to Clause 11.2 (h), exercising (including varying,
amending, or waiving) Redgate Media (HK) Limited’s (“RMHK”) rights under the
Profit Target Agreement with Starsome Limited dated 9 March 2001 (“Profit
Target Agreement”) and/or the rights of the Company or any subsidiary under
the Subscription Agreement relating to Winmax Resources Limited;

	 	11.2	 	Neither the Shareholders nor the Board shall pass the shareholder or board
resolutions approving or effecting any of the following transactions involving the
Company or any of its Subsidiaries, and the Company shall not take any actions which
will result in the following transactions taking effect, unless either the written
consents have been obtained from, or at a general meeting of

- 17 -

 

	 	 	 	Shareholders at which
resolutions for the approval of such transactions have been proposed and the
affirmative votes cast by the holders of Supermajority of Preference Shares (or their
representatives or proxies):

	 	(a)	 	the sale or issue of any equity or debt security or warrant,
option or other right to purchase any equity or debt security (with the
exception of Board-approved options to employees not exceeding 15% of the
total number of fully-diluted shares of the Company after the date hereof
pursuant to the ESOP and any shares issued upon conversion of Preference
Shares) otherwise than on a basis that such securities are first offered to
Shareholders on the basis set out in this Agreement Provided further, that no
such sale of securities of the Company being a sale of Common Stock or
securities giving a right to convert into or subscribe for or have issued
Common Stock of the Company at a price less than the
Series C Conversion Price immediately prior to such proposed issue shall
take place without the written consent of the majority by value of the
Series C Preference Shareholders;
	 
	 	(b)	 	making or effecting any merger with another entity or passing
any resolution or taking any steps relating to dissolution, reorganisation,
winding up or liquidation;
	 
	 	(c)	 	engaging in any business materially different from the
Business or ceasing to conduct the Business;
	 
	 	(d)	 	substantive amendment to the Articles and/or changing the
number of Directors of the Company;
	 
	 	(e)	 	undertaking an initial public offering that is not a
Qualified IPO.
	 
	 	(f)	 	selling or otherwise disposing of all or more than fifty per
cent (50 per cent) of the assets of the Company in one or a series of related
transactions, including the Company interest in Group Company and affiliates;
	 
	 	(g)	 	the creation or issue of a new class of Shares having rights
preference or privileges in parity with or in priority to the Series C
Preference Shares; or
	 
	 	(h)	 	exercising RMHK’s rights to make an election pursuant to
Paragraph 5 (iii) of the Profit Target Agreement.

	12.	 	INVESTOR RIGHTS

	 	12.1	 	Demand Registration

	 	(i)	 	In addition to all other rights of the Investors pursuant to
the Articles and/or herein contained with effect from the earlier of (i) the
second anniversary of the date hereof and (ii) 180 days after a Qualified IPO
and subject to the conditions of this Clause 12.1, if the Company shall

- 18 -

 

	 	 	 	receive a written request from the Holders of at least 50% of the Registrable
Securities then outstanding (the “Initiating Holders”) that the Company file a
registration statement under the Securities Act covering the registration of
Registrable Securities then outstanding having an anticipated aggregate
offering price of at least US$25,000,000 (if such request is made before the
Qualified IPO of the Company) or US$5,000,000 (if such request is made after
the Qualified IPO of the Company) (a “Qualified Public Offering”), then the
Company shall, within 30 days of the receipt thereof, give written notice of
such request to all Holders, and subject to the limitations of this Clause
12.1, use its best efforts to file and have declared effective, as soon as
practicable, the registration under the Securities Act of all Registrable
Securities that the Holders request to be registered.

	 	(ii)	 	If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Clause 12.1 or any request pursuant to Clause 12.3 and the Company shall
include such information in the written notice referred to in Clause 12.1(i)
or Clause12.3(i), as applicable. In such event, the right of any Holder to
include its Registrable Securities in such registration shall be conditioned
upon such Holder’s participation in such underwriting and the inclusion of
such Holder’s Registrable Securities in the underwriting to the extent
provided herein. All Holders proposing to distribute their securities through
such underwriting shall enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such underwriting by the
Company with the approval of the Initiating Holders (whose consent shall not
be unreasonably withheld), if the request for registration is made before the
IPO of the Company, or, in the case where the request for registration by the
Initiating Holders is made after the IPO of the Company, the underwriter or
underwriters selected for such underwriting by the Initiating Holders.
Notwithstanding any other provision of this Clause 12.1 or 12.3, if the
underwriter advises the Company that marketing factors require a limitation of
the number of securities to be underwritten (including Registrable Securities)
then the Company shall so advise all Holders of Registrable Securities which
would otherwise be underwritten pursuant hereto, and the number of shares that
may be included in the underwriting shall be allocated among all Holders
thereof, including the Initiating Holders, based on the number of Registrable
Securities held by each Holder; provided however, that the number of shares of
Registrable Securities to be included in such underwriting shall not be
reduced unless all other securities including those of the Company and any
shareholders of the Company (other than the Holders) proposed to be included
in such underwriting are first entirely excluded from the underwriting. Any
Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from the registration.

- 19 -

 

	 	(iii)	 	The Company shall not be required to file a registration
pursuant to this Clause 12.1:

	 	(a)	 	prior to the earlier of (1) the second
anniversary of the First Completion Date or (2) 180 days following the
effective date of the registration statement pertaining to the IPO;
	 
	 	(b)	 	after the Company has effected two
registrations pursuant to this Clause 12.1, and such registrations
have been declared or ordered effective provided however if, in
relation to any registration, less than 75% of the Registrable
Securities which are the subject of such registration are sold, such
registration shall not count as a registration for the purposes of
this Clause 12.1(iii)(b);
	 
	 	(c)	 	if the Initiating Holders propose to dispose
of Registrable Securities that may be immediately registered on Form
S-3 pursuant to a request made pursuant to Section 12.3 below; or
	 
	 	(d)	 	if the Company shall furnish to Holders
requesting a registration statement pursuant to this Clause12.1, a
certificate signed by the Chairman of the Board stating that in the
good faith judgment of the Board of Directors of the Company, it would
be seriously detrimental to the Company and its Shareholders for such
registration statement to be effected at such time, in which event the
Company shall have the right to defer such filing for a period of not
more than 90 days after receipt of the request of the Initiating
Holders; provided that such right to delay a request pursuant to this
Clause or Clause 12.3(i)(b)(4) shall be exercised by the Company not
more than once in any 12 month period.

	 	12.2	 	Piggyback Registrations

	 	(i)	 	The Company shall notify all Holders of Registrable
Securities in writing at least 30 days prior to the filing of any registration
statement under the Securities Act for purposes of a public offering of
securities of the Company (including, but not limited to, registration
statements relating to secondary offerings of securities of the Company, but
excluding registration statements relating to employee benefit plans or with
respect to corporate reorganizations or other transactions under Rule 145 of
the Securities Act) and will afford each such Holder an opportunity to include
in such registration statement all or part of such Registrable Securities held
by such Holder. Each Holder desiring to include in any such registration
statement all or any part of the Registrable Securities held by it shall,
within 30 days after the above-described notice
from the Company, so notify the Company in writing. Such notice shall state
the intended method of disposition of the Registrable Securities by such
Holder. If a Holder decides not to include all of its Registrable
Securities in any registration statement

- 20 -

 

	 	 	 	thereafter filed by the Company,
such Holder shall nevertheless continue to have the right to include any
Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to
offerings of its securities, all upon the terms and conditions set forth
herein.

	 	(ii)	 	If the registration statement under which the Company gives
notice under this Clause 12.2 is for an underwritten offering, the Company
shall so advise the Holders of Registrable Securities. In such event, the
right of any such Holder to be included in a registration pursuant to this
Clause 12.2 shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of such Holder’s Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to
distribute their Registrable Securities through such underwriting shall enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company. Notwithstanding
any other provision of the Agreement, if the underwriter determines in good
faith that marketing factors require a limitation of the number of shares to
be underwritten, the number of shares that may be included in the underwriting
shall be allocated, first, to the Company; second, to the Holders on a pro
rata basis based on the total number of Registrable Securities held by the
Holders; and third, to any shareholder of the Company (other than a Holder) on
a pro rata basis. In no event will shares of any other selling shareholder be
included in such registration which would reduce the number of shares which
may be included by Holders without the written consent of Holders of at least
50% of the Registrable Securities proposed to be sold in the offering. If any
Holder disapproves of the terms of any such underwriting, such Holder may
elect to withdraw therefrom by written notice to the Company and the
underwriter, delivered at least 10 Business Days prior to the effective date
of the registration statement. Any Registrable Securities excluded or
withdrawn from such underwriting shall be excluded and withdrawn from the
registration.

	 	12.3	 	Form S-3 or Form F-3 Registration

	 	(i)	 	Following the IPO, the Company shall use its best efforts to
qualify for registration on Form S-3 or Form F-3, as applicable, for secondary
sales (or any successor form that may be adopted by the
Commission). In case the Company shall receive from any Holder or Holders
of Registrable Securities a written request or requests that the Company
effect a registration on Form S-3 or Form F-3 (or any successor to Form S-3
or Form F-3), as applicable, or any similar short-form registration
statement and any related qualification or compliance with respect to all
or a part of the Registrable Securities owned by such Holder or Holders,
the Company will:

- 21 -

 

	 	(a)	 	promptly give written notice of the proposed
registration, and any related qualification or compliance, to all
other Holders of Registrable Securities; and
	 
	 	(b)	 	as soon as practicable, effect such
registration and all such qualifications and compliances as may be so
requested and as would permit or facilitate the sale and distribution
of all or such portion of such Holder’s or Holders’ Registrable
Securities as are specified in such request, together with all or such
portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given
within 30 days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect
any such registration, qualification or compliance pursuant to this
Clause 12.3:

	 	(1)	 	if Form S-3 or Form F-3 (or
any successor or similar form) is not available for such
offering by the Holders,
	 
	 	(2)	 	if the Holders, together with
the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable
Securities and such other securities (if any) at an aggregate
price to the public of less than US$500,000,
	 
	 	(3)	 	if within 30 days of receipt
of a written request from any Holder or Holders pursuant to
this Clause 12.3, the Company gives notice to such Holder or
Holders of the Company’s intention to make a public offering
within 90 days, provided, that such right to delay a request
shall be exercised by the Company not more than once in any 12
month period;
	 
	 	(4)	 	if the Company shall furnish
to the Holders a certificate signed by the Chairman of the
Board of Directors of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it
would be seriously detrimental to the Company and its
shareholders for such Form S-3 or Form F-3 registration to be
effected at such time, in which event the Company shall have
the right to defer the filing of the Form S-3 or Form F-3
registration statement for a period of not more than 90 days
after receipt of the request of the Holder or Holders under
this Clause 12.3; provided, that such right to delay a request
pursuant to this Clause 12.3 and Clause 12.1(iii)(d) shall be
exercised by the Company not more than once in any 12 month
period,
	 
	 	(5)	 	in any particular jurisdiction in which the Company would be required to qualify to do business
or to execute

- 22 -

 

	 	 	 	a general consent to service of
process in effecting such registration, qualification or
compliance; or
	 
	 	(6)	 	more than once in any six month
period.

	 	(ii)	 	Subject to the foregoing, the Company shall file a Form S-3 or
Form F-3 registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt
of the request or requests of the Holders provided however that the Company
shall not be required to effect more than one registration. Registrations
effected pursuant to this Clause 12.3 shall not be counted registrations
effected pursuant to Clauses 12.1 or 12.2, respectively.

	 	12.4	 	Expenses of Registration
	 
	 	 	 	Subject to compliance with applicable “blue-sky”
laws, all Registration Expenses incurred in connection with
any registration, qualification or compliance pursuant to
Clauses 12.1, 12.2 and 12.3 shall be borne by the Company.
	 
	 	12.5	 	Applicability of Clause 12.1
	 
	 	 	 	Clause 12.1 to Clause 12.4 shall not apply unless and
until (i) the Board has made a decision in favour of a
listing on the New York Stock Exchange or NASDAQ National
Market and (ii) such listing at the values set out in this
Clause 12 are reasonably feasible in light of the then
prevailing market conditions.
	 
	 	12.6	 	Public Offerings
	 
	 	 	 	The Parties’ intention is to achieve as soon as is
reasonably practicable a Qualified IPO for the Company or an
underwritten public offering for shares in its Subsidiaries.
In the case of the Subsidiaries, it is intended for such
offering that the aggregate net proceeds to such Subsidiary
equal or exceed US$15 million) and that the same shall also
apply to the Company’s indirect holding in the One Media
Group. In the event of any such offering, the Company shall
take steps reasonably available to it to cause distributions
to the Shareholders to participate in the same directly
Provided however, this provision shall not require the
Company to take steps which in the opinion of the relevant
sponsor for such initial public offering are likely to
prejudice such offering in a material respect.

	13.	 	INCAPACITATION OF A SHAREHOLDER

	 	13.1	 	In the event of an Incapacitating Event occurring to any of the Shareholders
(“Relevant Party”), then the terms of this Clause 13 shall apply.
	 
	 	13.2	 	At any time after the Incapacitating Event, the Board may determine that an
offer should be made to purchase the Shares of the Relevant Party and shall offer
the same to the remaining Shareholders.

- 23 -

 

	 	13.3	 	For the purpose of a notification pursuant to Clause 13.2, the terms of Clauses
3.2 to 3.7 and Clauses 3.10 and 3.11 hereof shall apply to such offer and for which
purposes:-

	 	13.3.1	 	the legal representatives of the Relevant Party shall be deemed to be the
Vendor; and
	 
	 	13.3.2	 	the Price shall be the Fair Value as determined by the auditors of the
Company.

	14.	 	FINANCES

	 	14.1	 	The Company undertakes and the Shareholders agree that the Company shall
maintain adequate books and records in compliance with General Accepted Accounting
Principles and/or International Accounting Standards and further agree that:-

	 	14.1.1	 	as soon as reasonably practicable after the end of a financial year,
and in any event, within 120 days of the end of such financial year, to
deliver to each Investor holding in excess of 2% of the outstanding Shares
(“Qualifying Investor”) full audited accounts of the Company certified by
the auditors of the Company;
	 
	 	14.1.2	 	within 45 days of the end of each quarter to deliver to each
Qualifying Investor unaudited management accounts for such quarter.
	 
	 	14.1.3	 	as soon as reasonably practicable prior to each financial year, and
in any event, no less than 30 days before the commencement of such financial
year to deliver an operating budget to the Qualifying Investor for the next
succeeding financial year.

	 	14.2	 	The Board shall approve:-

	 	14.2.1	 	an annual capital budget;
	 
	 	14.2.2	 	any assumption of debt by the Company and/or its Subsidiaries and/or
any guarantees of debt or other obligations by them of another entity in
each case in excess of US$5 million outstanding at any time; and
	 
	 	14.2.3	 	any recommendation for the payment of dividends.

	15.	 	STOCK OPTIONS

	 	15.1	 	That at a date to be determined by the Board, 15% of the then outstanding
Shares shall be reserved for issuance to officers and employees pursuant to an employee
stock option plan, the terms whereof shall be approved by the Board.

- 24 -

 

	 	15.2	 	All options to be granted pursuant to the ESOP will vest in equal annual
tranches over a three year period on the full completion of each year service (with
no partial year service counting towards any vesting) provided that all such options
shall fully vest on an earlier Qualified IPO, initial public offering of any
Subsidiary (to include One Media Group) or any sale of all or substantially all of
the Shares or assets of the Company.
	 
	 	15.3	 	The exercise price of options pursuant to the ESOP shall:-

	 	15.3.1	 	at all times be at an agreed discount to the Fair Value of the Shares
to which the options relate at the date of grant of those options; and
	 
	 	15.3.2	 	such exercise price shall be approved by the Board.

	16.	 	DIVIDEND POLICY AND RESERVES
	 
	 	 	Each of the Shareholders shall take such action as may be necessary to procure that, subject
to the making of prudent and proper reserves and the retention out of profits of funds to
meet any requirements as to solvency or otherwise applicable to the Company (whether under
any statute, regulation or ruling, whether or not having the force of law on a pro-rata
basis in Hong Kong, or otherwise), the Company distributes to and among the Shareholders in
such amount as the Board shall agree upon from time to time after provision for tax paid or
accrued due in any financial year, such profits being declared by way of dividend to the
Shareholders within 120 days from the end of that financial year in accordance with the
rights to dividends set out in the Articles and shall be paid to the Shareholders within 30
days from the date of such declaration.

	17.	 	EVENT OF DEFAULT

	 	17.1	 	If any of the events set out in sub-clauses (a) to (d) below shall occur in
relation to any Shareholder (the “Defaulting Party”), it shall constitute a “Default
Event” for the purposes of this Clause 17:

	 	(a)	 	if the Defaulting Party shall commit a material breach of any
of its obligations under this Agreement and shall fail to remedy such breach
(if capable of remedy) within thirty (30) days after being given notice by a
majority in value of the other Shareholders (other than the Company) to do so;
or
	 
	 	(b)	 	if the Defaulting Party shall go into liquidation whether
compulsory or voluntary (except for the purposes of a bona fide reconstruction
or amalgamation with the consent of the other parties (other than the Company),
such consent not to be unreasonably withheld) or if a petition shall be
presented or an order made from the appointment of an administrator in relation
to the Defaulting Party or if a receiver, administrative receiver, judicial
manager or manager shall be appointed over any part of the assets or
undertaking of the Defaulting Party or if any event analogous to any of the
foregoing shall occur in any jurisdiction; or

- 25 -

 

	 	(c)	 	if the Defaulting party shall compound or make any composition
or arrangement with its creditors; or
	 
	 	(d)	 	if the Defaulting Party shall sell, transfer, lease or
otherwise dispose of the whole or substantially the whole of its assets, rights
and undertakings.

	 	17.2	 	Where a Default Event occurs, any Shareholder other than the Defaulting Party
(each a “Non-Defaulting Party”) may give written notice thereof to the Defaulting
Shareholder and the Company specifying in such notice the Default Event (the “Default
Notice”) and thereafter shall, without prejudice to any other rights and remedies which
the Non-Defaulting Parties have pursuant to law or otherwise, be entitled to a call
option (the “Default Call Option”), being the right of each Non-Defaulting Party to
require the Defaulting Party to sell to each Non-Defaulting Party free from all liens,
charges, restrictions, options and other encumbrances and with all rights and benefits
attaching thereto, all (and not some only) of the Shares as the case may be, held by
the Defaulting Party for the time being in the capital of the Company (the “Defaulting
Party’s Shares”) on the terms and subject to the conditions contained herein.
	 
	 	17.3	 	The Default Call Option may be exercised by a Non-Defaulting Party by serving a
notice (the “Default Call Option Notice”) on the Defaulting Party copied to the Company
within a period of sixty (60) days from the date of the Default Notice specifying the
breach or default referred to in Clause 17.2 above, failing which it will lapse.
	 
	 	17.4	 	Upon delivery of the Default Call Option Notice, the Defaulting Party shall be
deemed to have served on each Non-Defaulting Party an Offer under Clause 3.3 in respect
of all of the Shares held by the Defaulting Party as at the date of the service of the
Default Notice on the Company and the provisions of Clause 3 shall apply as if the
Default Notice were the Offer, with the following modifications:-

	 	(a)	 	all references in Clause 3.2 to Vendor shall be to the
“Defaulting Party”;
	 
	 	(b)	 	all references to “Sale Shares” shall be to “Defaulting Party’s
Shares”;
	 
	 	(c)	 	the Price for each of the Defaulting Shareholder’s Shares shall
be as set out in sub-clause 17.6 below; and
	 
	 	(d)	 	the Defaulting Shareholder shall not be entitled to withdraw
the Offer and the Company shall serve on each Non-Defaulting Party a notice
within fourteen (14) days after its receipt of the Default Notice, and such
notice by the Company shall state (i) such Non-Defaulting Party’s entitlement
(calculated pursuant to Clause 3.10), (ii) the Price for each

- 26 -

 

	 	 	 	Default Option Share and (iii) the date by which such Non-Defaulting Party
is required to accept the Offer.

	 	17.5	 	The Defaulting Party’s Shares shall be sold free from all liens, charges,
restrictions, options and other encumbrances and with all rights and benefits attaching
thereto, and the Defaulting Party shall be responsible for obtaining (or paying the
cost of obtaining) all relevant approvals, consents and permits from all applicable
governmental, regulatory, supervisory or administrative bodies or agencies.
	 
	 	17.6	 	The Price of each of the Default Option Shares shall be (i) the price that is
agreed between the Defaulting Party and the majority by value of the Non-Defaulting
Parties within 14 days of Default Call Option Notice or (ii), failing such agreement on
the Price, the sum equal to [75%] of the Fair Market Value of the Default Option
Shares.
	 
	 	17.7	 	[In this Clause the expression “Fair Value” means the price as determined by
Valuers appointed by the Company in accordance with Clause 5.5 at the expense of the
Defaulting Shareholder (and in so determining, the Valuer shall be deemed to be acting
as experts and not as arbitrators) of a Share of the Company.]
	 
	 	17.8	 	In acting under Clause 17.7, the Approved Valuer shall take into consideration
the following assumptions:

	 	(a)	 	valuing the Common Shares of the Defaulting Party on the basis
of an arm’s length sale between a willing vendor and a willing purchaser;
	 
	 	(b)	 	that the Company would continue to carry on its business as a
going concern; and
	 
	 	(c)	 	there shall be no discount or enhancement in the value of the
Default Option Shares by reference to the number of the Default Option Shares
as a rateable proportion of the issued share capital of the Company.

	 	17.9	 	Promptly after the Company’s receipt of notice of the Fair Market Value, the
Company shall send to each Non-Defaulting Party the notice specified in Clause 17.4.
Where the Offer is accepted as to less than all the Defaulting Party’s Shares, the
Company shall send a further notice in accordance with Clause 17.4, and upon expiration
of the period specified in such further notice, the Company shall notify the Defaulting
Party and each Non-Defaulting Party of the date selected by the Company for completion
of the sale and purchase of the Default Option Shares (the “Default Option
Completion”). The Default Option Completion shall take place at the registered office
of the Company on the date specified by the Company not less than seven (7) days after
the date of the notification by the Company or such other date as the Defaulting Party,
the Default Transferee(s) and the Company may agree.
	 
	 	17.10	 	On the Default Option Completion, the Defaulting Party shall deliver to the
Default Transferee(s):

- 27 -

 

	 	(a)	 	a duly executed transfer form in favour of the relevant Default
Transferee(s) or as it/they may direct;
	 
	 	(b)	 	the share certificates in respect of the Default Option Shares;
and
	 
	 	(c)	 	any other document which may be required to enable the Default
Transferee(s) to obtain the effective transfer of the Default Option Shares to
it and to be registered as the holder thereof,

	 	 	 	and the Defaulting Party shall procure the resignations of the Directors which were
appointed pursuant to its nominations, if any, which said resignations shall take
effect on the date of the Default Option Completion.
	 
	 	17.11	 	On the Default Option Completion, the Default Transferees shall pay the
purchase price for the relevant number of Default Option Shares to be purchased by it
in US Dollars by way of a cashier’s order, bank draft or cheque drawn on a licensed
bank in Hong Kong and made out in favour of the Defaulting Party or in such other
manner as agreed to by the Defaulting Party and the Default Transferee in writing.
	 
	 	17.12	 	In the event that the Defaulting Party fails to complete the sale and purchase
of the Default Option Shares on the Default Option Completion, the Company shall be
deemed to have been appointed attorney of the Defaulting Party with full power to
execute, complete and deliver, in the name and on behalf of the Defaulting Party,
transfers of the Default Option Shares to the Default Transferee(s) and/or its nominees
against payment of the purchase price for the Default Option Shares to the Company.
	 
	 	17.13	 	On payment of the purchase price to the Company, each Non-Defaulting Party
shall be deemed to have obtained a good discharge for such payment and the Company
shall cancel the share certificate representing the Default Option Shares issued in
favour of the Defaulting Party and issue and deliver new share certificates for the
Default Option Shares to the Default Transferee(s) or its nominees. On execution and
delivery of the transfer of the Default Option Shares, the Default Transferee(s) shall
be entitled to require that its name and/or its nominees’ names be entered in the
Company’s Register of Members as the holder of the Default Option Shares and the
Company shall so enter the name of the Default Transferee(s) or its nominees as the
holder of the Default Option Shares.
	 
	 	17.14	 	The Default Transferee(s) shall procure that the Company shall forthwith pay
the purchase price into a separate bank account in the Company’s name and shall hold
such price in trust for the Defaulting Party.
	 
	 	17.15	 	Any stamp duty payable on the transfer of the Default Option Shares shall be
borne wholly by the Defaulting Party. The Defaulting Party shall on the Default Option
Completion deliver to each of the Default Transferee(s) the stamp duty payable on the
transfer of the relevant Default Option Shares in

- 28 -

 

	 	 	 	United States Dollars by way of a cashier’s order, bank draft or cheque drawn on a
licensed bank in Hong Kong and made out in favour of the Default Transferee(s) or in
such manner as agreed to by the Defaulting Party and the Default Transferee(s) in
writing.
	 
	 	17.16	 	The restrictions on transfer of shares contained in this Agreement and the
Articles shall not apply to the sale and transfer of the Default Option Shares pursuant
to any exercise of a Default Call Option.
	 
	 	17.17	 	Except to extent specifically incorporated in this Clause 17, the parties
hereto shall exercise all voting and other rights available to them to ensure the
implementation of this Clause 17 and the registration of any transfer of any Shares in
the Company pursuant to Clause 17.

	18.	 	CO-OPERATION

	 	18.1	 	Each of the parties hereby undertakes with each other:-

	 	18.1.1	 	to perform and observe all of the provisions of this Agreement;
	 
	 	18.1.2	 	so far as it is able by the exercise of voting rights or otherwise so to do,
to procure that the Company diligently performs and observes the provisions of
this Agreement which it would be liable to perform and observe if it were
joined in this Agreement; and
	 
	 	18.1.3	 	to take all necessary steps on its part to give effect to the provisions of
this Agreement.

	 	18.2	 	Without prejudice to the generality of Clause 18.1, each of the Shareholders
will procure that every person for the time being representing it will exercise or
(as the case may be) refrain from exercising any rights of voting at any meeting of
the Shareholders or of the Board and any other rights or powers of control so as to
ensure the passing of any and every resolution necessary or desirable to procure
that the affairs of the Company are conducted in accordance with this Agreement and
otherwise to give full effect to the provisions of this Agreement and likewise so as
to ensure that no resolution is passed which does not accord with such provisions.

	19. 	 	CONFIDENTIALITY

	 	19.1	 	Should the Confidential Information (as defined herein) of the Company be
disclosed to any Shareholder in the performance of or in any way in connection with
this Agreement, the Party receiving such Confidential Information (hereinafter
“Recipient”) hereby agrees to receive such Confidential Information in confidence, and
take such precautions as may be necessary to protect the same from disclosure to others
for so long as the Shareholder and/or its Nominee shall hold Shares and for a period of
one (1)

- 29 -

 

	 	 	 	year thereafter. Such precautions to be taken by the Recipient shall be at least
equivalent to Recipient’s precautions with respect to its own confidential and
proprietary information but in no event less than a commercially reasonable standard
of care.
	 
	 	19.2	 	For the purposes of this Clause 19.1 “Confidential Information” shall mean the
proprietary and confidential data or information which is of tangible or intangible
value and is not public information or is not generally known or available to
competitors but is known only to the Company and those of its employees, independent
contractors, consultants, customers or agents to whom it must be confided in order to
apply it to the uses intended, including, without limitation, information regarding the
Company’s customers or prospective customers, marketing methods and business plans but
shall not include information which:-

	 	19.2.1	 	at the time of disclosure to Recipient is in the public domain through no act
or omission of Recipient;
	 
	 	19.2.2	 	as shown by written records, is already known by Recipient;
	 
	 	19.2.3	 	is revealed to Recipient by a third party who does not thereby breach any
obligation of confidentiality and who discloses such information in good faith;
or
	 
	 	14.2.4	 	is disclosed pursuant to a legal order to disclose same to any governmental
entity or pursuant to judicial or quasi judicial action (so long as Recipient
gives the Company prompt written notice sufficient to allow the Company to seek
a protective order or other appropriate remedy).

	20.	 	MISCELLANEOUS

	 	20.1	 	Mutual Warranties
	 
	 	 	 	Each of the parties hereto that is a corporation warrants and
undertakes to the other parties that:-

	 	20.1.1	 	it is duly incorporated and validly existing under the laws of its
country of incorporation, possessing perpetual corporate existence, with the
capacity to sue and be sued in its own name;
	 
	 	20.1.2	 	no steps have been taken or are being taken to appoint liquidators
over or to wind up the party and no steps have been taken or are being taken
to appoint receivers of any of that party’s assets;
	 
	 	20.1.3	 	it has the necessary corporate capacity and power to enter into and
perform its obligations under this Agreement and the transactions
contemplated thereby;

- 30 -

 

	 	20.1.4	 	it has taken all necessary corporate and other actions to authorise
the entry into and performance of this Agreement;
	 
	 	20.1.5	 	the obligations of that party as set out in this Agreement constitute
valid and legally binding obligations of that party in accordance with the
terms of this Agreement.

	 	20.2	 	Whole Agreement
	 
	 	 	 	The parties hereto agree that this Agreement sets out the entire agreement between
them relating to the subject matter hereof and shall apply to the exclusion of all
previous agreements (whether written and/or oral) between all or any of them in
respect of the same (including but not, limited to the previous Shareholders’
Agreement of the Company dated as of 14 October 2003.
	 
	 	20.3	 	Amendment and Conflict

	 	20.3.1	 	This Agreement may not be amended and the rights therein may not be
waived unless such amendment or waiver is in writing executed by the duly
authorised representative of the Company, the Original Shareholders and such
person or persons who shall be authorised in writing by the holders of in
excess of 50% of the Shares held by the Investors;
	 
	 	20.3.2	 	In the event of any conflict between the terms of this Agreement and
the Articles then this Agreement shall take precedence.

	 	20.4	 	Execution

	 	20.4.1	 	This Agreement may be signed in copies or counterparts (and by the parties
hereto on separate copies or counterparts), each of which when so signed and
delivered shall be an original but all the counterparts shall nevertheless
constitute one and the same instrument;
	 
	 	20.4.2	 	This Agreement shall become effective for all purposes as soon as each of the
Parties has signed their respective counterparts and delivered their signed
counterparts to the other Parties and notwithstanding that other potential
members of the Group of Investors shall not have executed an agreement to
subscribe for shares; and
	 
	 	20.4.3	 	The Parties may exchange counterparts by facsimile which exchange shall be
deemed to bind the Parties to this Agreement, provided however that each party
undertakes to the others that, in such circumstances, it shall also forthwith
send an original executed copy of this Agreement by way of registered post to
the other parties.

	 	20.5	 	Term

- 31 -

 

	 	 	 	Subject to the rights of amendment set out in Clause 20.3, this Agreement shall
continue to bind each shareholder until such shareholder shall cease beneficially to
own any Shares in a manner authorised herein.
	 
	 	20.6	 	Invalidity

	 	20.6.1	 	If any one or more of the provisions of this Agreement are found by any
competent authority to be void or unenforceable, such provisions shall be
deemed to be deleted from this Agreement and the remaining provisions of this
Agreement shall continue in full force and effect.
	 
	 	20.6.2	 	Notwithstanding the terms of Clause 20.6.1, in the event that any provision
of this Agreement is found to be void or unenforceable by virtue of its scope
or period of time, but may be made enforceable by a limitation thereof or
amendment thereto, such provision shall be deemed amended to the minimum extent
necessary to render it valid and enforceable, or, if the same shall still be
void or unenforceable, the Parties hereto shall upon the occurrence of the
same, negotiate in good faith in order to agree the terms of a mutually
satisfactory provision to be substituted for the provision found to be void or
unenforceable (as the case may be) that is consistent with the original intent
of the Parties.

	 	20.7	 	Assignment 
	 
	 	 	 	This Agreement shall be binding upon and shall enure for the benefit of the
successors and permitted assigns of the Parties. None of the Parties are permitted
to assign their rights and obligations hereunder save as provided for in this
Agreement.
	 
	 	20.8	 	Execution of Documents
	 
	 	 	 	Each of the Parties shall execute all necessary documents and do all other things as
shall be reasonably necessary in order to give effect to the matters set out in this
Agreement.
	 
	 	20.9	 	Costs
	 
	 	 	 	Each of the Parties shall pay its own legal and other professional costs in respect
of the negotiation, preparation and execution of this Agreement.
	 
	 	20.10	 	Limitation of Relationship and Authority

	 	20.10.1	 	Save as is specifically set out in this Agreement nothing herein shall
constitute any of the Parties as agent or partner of the other Parties for any
purpose whatsoever.
	 
	 	20.10.2	 	None of the Parties has any authority to do any act, entering into any
contract, make any representation, give any warranty, incur any liability or
assume any obligation (whether expressed or implied) of

- 32 -

 

	 	 	 	any kind on behalf of the other Parties save as is specifically set out
herein.

	 	20.11	 	Waiver
	 
	 	 	 	The waiver by any Party of a breach or default of any of the provisions of this
Agreement by any other Party shall not be construed as a waiver of any succeeding
breach of the same or other provisions hereof, nor shall any delay or omission on
the part of any Party to exercise or avail itself of any right power or privilege
that it has, or may have, hereunder operate as a waiver of any breach or default by
any other Party.
	 
	 	20.12	 	Time
	 
	 	 	 	In respect of any obligation that has to be performed within a particular period of
time pursuant to this Agreement, time shall be of the essence in respect of the
same.
	 
	 	20.13	 	Notices

	 	20.13.1	 	Any notice or other communication shall be deemed to have been served or
delivered if sent to the address, or facsimile number (as the case may be) set
out in Clause 20.13.2 such delivery or service being deemed at the following
points in time namely:-

	 	(i)	 	if by facsimile at the time of despatch to
the number relevant; or
	 
	 	(ii)	 	if by hand, when left at the relevant address; or
	 
	 	(iii)	 	if by post, two business days after being
put in the post properly addressed to the relevant address with
pre-paid postage,

	 	 	 	provided that any notice or communication that is not dispatched on a
business day, shall be deemed to have been dispatched on the immediately
subsequent business day.
	 
	 	20.13.2	 	For the purposes of notices under this Agreement the following addresses and
facsimile numbers shall be used for serving notices on named Parties (unless
the Party to be served shall have notified the Party serving the notice in
advance and in writing of any change(s) to the same):-

	 	 	 
	Company:-
	 	 
	 
	 	 
	Address:

	 	Room 2703, 27th Floor, The Centrium, 60 Wyndham
Street, Central, Hong Kong
	Fax Number:

	 	(852) 8106 8655

- 33 -

 

	 	 	 
	Original Shareholders:-

	 
	 	 
	Zhu Ying

	Address:

	 	Flat 8/C., Block 2, 97 Robinson Road, Central, Hong Kong
	Fax Number:

	 	(852) 8106 8655
	 
	 	 
	Robert William Hong-San Yung

	Address:

	 	57 Marina Cove, Sai Kung, Hong Kong
	Fax Number:

	 	(852) 8106 8655
	 
	 	 
	Peter Bush Brack

	Address:

	 	Flat 2B, Magazine Gap Road, Hong Kong
	Fax Number:

	 	(852) 8106 8655
	 
	 	 
	Investors:-

	Address:

	 	As set out in Schedule 1
	Fax Number:

	 	As set out in Schedule 1

	16.	 	GOVERNING LAW AND RESOLUTION OF DISPUTES

	 	16.1	 	This Agreement shall be governed by and construed in accordance with the laws
of Hong Kong.
	 
	 	16.2	 	Each of the parties hereto irrevocably agrees that the courts of the Hong Kong
shall have non-exclusive jurisdiction to hear and determine any suit, action or
proceedings and to settle any claim, dispute or difference, which may arise out of or
in connection with this Agreement and, for such purposes, irrevocably submits to the
jurisdiction of such courts.

- 34 -

 

IN WITNESS whereof the parties have hereunto set their hands the day and year first aforewritten.

	 	 	 
	SIGNED BY Peter Bush Brack
	 	)          /s/ Peter Bush Brack
	FOR AND ON BEHALF OF
	 	)
	REDGATE MEDIA INC.
	 	)
	in the presence of Emily Kwok
	 	)          /s/ Emily Kwok
	 
	 	 
	 
	 	 
	 
	 	 
	SIGNED SEALED AND DELIVERED BY
	 	)
	ZHU YING
	 	)          /s/ Zhu Ying
	in the presence of Emily Kwok
	 	)          /s/ Emily Kwok
	 
	 	 
	 
	 	 
	 
	 	 
	SIGNED SEALED AND DELIVERED BY
	 	)
	ROBERT WILLIAM HONG-SAN YUNG
	 	)          /s/ Robert William Hong-San Yung
	in the presence of Peter Bush Brack
	 	)          /s/ Peter Bush Brack
	 
	 	 
	 
	 	 
	 
	 	 
	SIGNED SEALED AND DELIVERED BY
	 	)
	PETER BUSH BRACK
	 	)          /s/ Peter Bush Brack
	in the presence of Emily Kwok
	 	)          /s/ Emily Kwok
	 
	 	 
	 
	 	 
	 
	 	 
	SIGNED SEALED AND DELIVERED BY
	 	)
	PAUL JOHN PHEBY
	 	)          /s/ Paul John Pheby
	in the presence of Emily Kwok
	 	)          /s/ Emily Kwok

 

 

	 	 	 
	SIGNED SEALED AND DELIVERED BY
	 	)
	JULIE CHRISTINE PETER
	 	)          /s/ Julie Christine Peter
	in the presence of Hung Huk Man
	 	)          /s/ Hung Huk Man
	 
	 	 
	 
	 	 
	 
	 	 
	SIGNED SEALED AND DELIVERED BY
	 	)
	REGINALD KUFELD BRACK JR.
	 	)          /s/ Reginald Kufeld Brack Jr.
	in the presence of Lillian Kelly
	 	)          /s/ Lillian Kelly
	 
	 	 
	 
	 	 
	 
	 	 
	SIGNED SEALED AND DELIVERED BY
	 	)
	AYAZ HATIM EBRAHIM
	 	)          /s/ Ayaz Hatim Ebrahim
	in the presence of Leung Yee Man
	 	)          /s/ Leung Yee Man
	 
	 	 
	 
	 	 
	 
	 	 
	SIGNED SEALED AND DELIVERED BY
	 	)
	PHILIP HENRY GEIER JR.
	 	)          /s/  Philip Henry Geier Jr.
	in the presence of Juliana Mardones
	 	)          /s/  Juliana Mardones
	 
	 	 
	 
	 	 
	 
	 	 
	SIGNED SEALED AND DELIVERED BY
	 	)
	REGINALD KUFELD BRACK III
	 	)          /s/ Reginald Kufeld Brack III
	in the presence of Jill Brack
	 	)          /s/ Jill Brack
	 
	 	 
	 
	 	 
	 
	 	 
	SIGNED BY Rupert James Purser
	 	)          /s/ Rupert James Purser
	FOR AND ON BEHALF OF
	 	)
	BAKER TILLY PURSERBLADE
	 	)
	ASIA LIMITED
	 	)
	in the presence of Ho Ching Yee, Cherry
	 	)          /s/ Ho Ching Yee, Cherry

 

 

	 	 	 
	SIGNED SEALED AND DELIVERED BY
	 	)
	YANG CHA
	 	)          /s/ Yang Cha
	in the presence of Robert Zhang
	 	)          /s/ Robert Zhang
	 
	 	 
	 
	 	 
	 
	 	 
	SIGNED BY John Zwaanstra
	 	)          /s/ John Zwaanstra
	FOR AND ON BEHALF OF
	 	)
	MERCURIUS PARTNERS LP
	 	)
	in the presence of John Pridjian
	 	)          /s/ John Pridjian
	 
	 	 
	 
	 	 
	 
	 	 
	SIGNED BY Jerry Sze
	 	)          /s/ Jerry Sze
	FOR AND ON BEHALF OF
	 	)
	ASIASTAR IT FUND, L.P.
	 	)
	in the presence of Emily Kwok
	 	)          /s/ Emily Kwok
	 
	 	 
	 
	 	 
	 
	 	 
	SIGNED SEALED AND DELIVERED BY
	 	)
	JOHN PRIDJIAN
	 	)          /s/ John Pridjian
	in the presence of Michael Kayman
	 	)          /s/ Michael Kayman
	 
	 	 
	 
	 	 
	 
	 	 
	SIGNED SEALED AND DELIVERED BY
	 	)
	LAU YAT FAN
	 	)          /s/ Lau Yat Fan
	in the presence of Oryanto Rusli
	 	)          /s/ Oryanto Rusli

 

 

SCHEDULE 1

	 	 	 
	PART A
	 	 
	 
	 	 
	Name of Common Investors
	 	Address and Fax No. of Common Investors
	 
	 	 
	Lau Yat Fan
	 	 
	 
	 	 
	Yang Cha
	 	14th Floor, Hui Xin Plaza
	 
	 	Building A
	 
	 	The Asia Game Village
	 
	 	Beijing 100101
	 
	 	China
	 
	 	Fax No. 8610 8499 0025
	 
	 	 
	PART B
	 	 
	 
	 	 
	Name of Series A Investors
	 	Address and Fax No. of Series A Investors
	 
	 	 
	Paul John Pheby
	 	Suite 2703, The Centrium
	 
	 	60 Wyndham Street
	 
	 	Central
	 
	 	Hong Kong
	 
	 	Fax No. 852 2179 5889
	 
	 	 
	Julie Christine Peter
	 	House 7
	 
	 	51 Deep Water Bay Road
	 
	 	Repulse Bay
	 
	 	Hong Kong
	 
	 	Fax No. 852 2812 7414
	 
	 	 
	Reginald Kufeld Brack Jr.
	 	12 Huntzinger Drive
	 
	 	Greenwich
	 
	 	CT 06831
	 
	 	USA
	 
	 	Fax No. 1 203 869 3189
	 
	 	 
	Ayaz Hatim Ebrahim
	 	15/F Citibank Tower
	 
	 	3 Garden Road
	 
	 	Central
	 
	 	Hong Kong
	 
	 	Fax No. 852 2284 1247
	 
	 	 
	Philip Henry Geier Jr.
	 	Heron Tower
	 
	 	70 East 55th Street
	 
	 	15th Floor
	 
	 	New York, NY 10022
	 
	 	USA
	 
	 	Fax No. 1 646 840 6720

 

 

	 	 	 
	Reginald Kufeld Brack III
	 	60 Solon Street
	 
	 	Newton
	 
	 	MA 02461
	 
	 	USA
	 
	 	Fax No. 1 617 663 6005
	 
	 	 
	Baker Tilley Purserblade Asia Limited
	 	10th Floor, Universal Trade Centre
	 
	 	3 Arbuthnot Road
	 
	 	Central
	 
	 	Hong Kong
	 
	 	 
	PART C
	 	 
	 
	 	 
	Name of Series B Investor
	 	Address and Fax No. of Series B Investor
	 
	 	 
	Mercurius Partners LP
	 	1-18-16 Shoto
	 
	 	Shi Buya-Ku
	 
	 	Tokyo 150-0046
	 
	 	Tokyo
	 
	 	Fax No. 813 5790 1860
	 
	 	 
	PART D
	 	 
	 
	 	 
	Name of Series C Investors
	 	Address and Fax No. of Series C Investors

 

 

SCHEDULE 2

SHAREHOLDING

	 	 	 	 	 	 	 
	Name	 	Class	 	Number of Shares
	 
	 	 	 	 	 	 
	Peter Bush Brack
	 	Common	 	 	55,287.003	 
	 
	 	 	 	 	 	 
	Zhu Ying
	 	Common	 	 	35,287.003	 
	 
	 	 	 	 	 	 
	Robert William Hong-San Yung
	 	Common	 	 	35,287.004	 
	 
	 	 	 	 	 	 
	Lau Yat Fan
	 	Common	 	 	15,000	 
	 
	 	 	 	 	 	 
	Yang Cha
	 	Common	 	 	181.33	 
	 
	 	 	 	 	 	 
	Paul John Pheby
	 	Class A	 	 	15,000	 
	 
	 	 	 	 	 	 
	Reginald Kufeld Brack Jr.
	 	Class A	 	 	5,000	 
	 
	 	 	 	 	 	 
	Philip Henry Geier Jr.
	 	Class A	 	 	5,000	 
	 
	 	 	 	 	 	 
	Ayaz Hatim Ebrahim
	 	Class A	 	 	5,000	 
	 
	 	 	 	 	 	 
	Julie Christine Peter
	 	Class A	 	 	5,000	 
	 
	 	 	 	 	 	 
	Reginald Kufeld Brack III
	 	Class A	 	 	1,000	 
	 
	 	 	 	 	 	 
	Baker Tilly
Purserblade Asia Limited
	 	Class A	 	 	626.73	 
	 
	 	 	 	 	 	 
	Mercurius Partners LP
	 	Class B	 	 	50,000	 
	 
	 	 	 	 	 	 
	AsiaStar IT Fund, L.P.
	 	Class C	 	 	64,627.53	 
	 
	 	 	 	 	 	 
	Peter Bush Brack
	 	Class C	 	 	138.49	 
	 
	 	 	 	 	 	 
	Robert William Hong-San Yung
	 	Class C	 	 	92.33	 
	 
	 	 	 	 	 	 
	Zhu Ying
	 	Class C	 	 	92.33	 
	 
	 	 	 	 	 	 
	Mercurius Partners, L.P.
	 	Class C	 	 	15,833.74	 
	 
	 	 	 	 	 	 
	John Pridjian
	 	Class C	 	 	923.25	 
	 
	 	 	 	 	 	 
	Paul John Pheby
	 	Class C	 	 	5,031.71exv4w3w2

Exhibit 4.3.2

Execution Copy

Dated 12th September 2007

This Amendment Agreement is entered into between the parties signing below in relation to a
Shareholders Agreement dated 17th September 2004 and entered into between all of them
(or their predecessors-in-title) except for Uni-Asia Limited (“Shareholders Agreement”).

By an agreement dated 5 Sept 2007, the Company agreed to issue up to 19,020.27 US$0.1 Class D
preference shares (“New Shares”) to Uni-Asia Limited (“Series D Investor”). It was a condition of
the Series D Investor agreeing to subscribe for the New Shares that each of the Shareholders and
the Company (who, together with the Series D Investor, are referred to herein as “Parties” and each
a “Party”) have agreed to enter into this Amendment Agreement so as to govern the terms upon which
shares shall be held in the Company.

Terms and Expressions defined in the Shareholders Agreement shall, save where amended by the terms
of this Amendment Agreement, have the same meaning herein. References to clause numbers shall mean
the clause with such number in the Shareholders Agreement.

In consideration of the foregoing and of the mutual covenants and undertakings of the Parties, the
Parties have agreed that the following amendments shall apply to the Shareholders Agreement with
effect from the date hereof:-

	1.	 	At Clause 1.1, the definition of “Investors” shall be amended so that the words “and/or
Series D Investor” are added at the end thereof.
	 
	2.	 	Clause 7.2 (c) shall be amended to read as follows:-
	 
	 	 	“The Series A Investors, the Series B Investors, the Series C Investors and the Series D
Investor shall by majority vote be entitled to elect one Director while AsiaStar IT Fund L.P.
continues to enjoy the right under Clause 7.2(b) to elect one Director, and shall be entitled
to elect two Directors at such time as AsiaStar IT Fund L.P. no longer enjoy the rights to
elect one Director under Clause 7.2(b).”
	 
	3.	 	At Clause 7.3, the words “[Intentionally omitted"] shall be deleted and substituted by the
following:-
	 
	 	 	“The Series D Investor shall be entitled to appoint a single observer to attend meetings
of the Board. Such observer shall be entitled to receive notices of such meetings pursuant to
Clause 7.8 and the minutes thereof pursuant to Clause 7.11 subject to the observer confirming
that it shall keep such information confidential and shall be subject to the same standard of
duties as required by a Director in respect of its use of the same

 

 

and provided further that
such observer shall not be entitled to vote upon any matter considered at a board meeting and
only contribute to the matters discussed at such meeting when invited to do so by a majority
of the Board.”

	4.	 	At Clause 8.1, the references to the “B” Directors shall be amended by the following
wording:-

	 	 	 	 	 
	 

	 	““B” Director appointed by Series C Investor
	 	: Jerry Sze
	 

	 	“B” Director appointed by Series A, B, C and D Investors
	 	: John Zwaanstra”

	5.	 	Clause 11.1(i) and Clause 11.2(h) shall be deleted, as the references to Redgate Media (HK)
Limited’s rights under the Profit Target Agreement with Starsome Limited have expired.

	6.	 	At Clause 20.13.2, the following be added at the end thereof:-

	 	 	 	 	 
	 

	 	“Series D Investor
	 	 
	 

	 	Address c/o Massaleh Investments	 	 
	 

	 	P.O. Box 719	 	 
	 

	 	Safat, Kuwait 13008	 	 
	 

	 	Chamber of Commerce Building 3rd Floor	 	 
	 

	 	Email Address: Ahmed@Massalehinvest.com	 	 
	 

	 	With a copy to:	 	 
	 

	 	Loeb, Block & Partners LLP	 	 
	 

	 	505 Park Avenue	 	 
	 

	 	9th Floor	 	 
	 

	 	New York	 	 
	 

	 	N.Y. 10022	 	 
	 

	 	Attention: M. Stephen Rasch, Esq.	 	 
	 

	 	Email Address: SRasch@loebblock.com”	 	 

	7.	 	At Schedule 2:-

	 	(i)	 	the reference to “Philip Henry Geier Jr.” shall be replaced by “Geier Holdings
LLC”;
	 
	 	(ii)	 	that the words “Baker Tilly Purserblade Asia Limited Class A 626.73” shall be
deleted and substituted by:-

2

 

	 	 	 	 	 	 	 
	“Paul Justin Hallett
	 	Class A
	 	 	376.04
	 	 	 	 	 	 	 
	Rupert James Purser
	 	Class A
	 	250.69”

	 	(iii)	 	At the end of Schedule 2, the following shall be added:-

	 	 	 	 	 	 	 
	“Uni-Asia Limited
	 	Class D
	 	 	19,020.27

Save as set out herein, the Shareholders Agreement shall remain in full force and effect and
unamended.

In witness whereof the Parties have executed this Amendment Agreement on the date abovementioned.

	 	 	 	 	 	 	 
	SIGNED BY Peter Bush Brack

	 	 	)	 	 	/s/ Peter Bush Brack
	FOR AND ON BEHALF OF

	 	 	)	 	 	 
	REDGATE MEDIA INC.

	 	 	)	 	 	 
	in the presence of Robert Yung

	 	 	)	 	 	/s/ Robert Yung
	 
	 	 	 	 	 	 
	SIGNED SEALED AND DELIVERED BY

	 	 	)	 	 	 
	ZHU YING

	 	 	)	 	 	/s/ Zhu Ying
	in the presence of Robert Yung

	 	 	)	 	 	/s/ Robert Yung
	 
	 	 	 	 	 	 
	SIGNED SEALED AND DELIVERED BY

	 	 	)	 	 	 
	ROBERT WILLIAM HONG-SAN YUNG

	 	 	)	 	 	/s/ Robert William Hong-San Yung
	in the presence of Emily Kwok

	 	 	)	 	 	/s/ Emily Kwok
	 
	 	 	 	 	 	 
	SIGNED SEALED AND DELIVERED BY

	 	 	)	 	 	 
	PETER BUSH BRACK

	 	 	)	 	 	/s/ Peter Bush Brack
	in the presence of Emily Kwok

	 	 	)	 	 	/s/ Emily Kwok

3

 

	 	 	 	 	 	 	 
	SIGNED SEALED AND DELIVERED BY

	 	 	)	 	 	 
	PAUL JOHN PHEBY

	 	 	)	 	 	/s/ Paul John Pheby
	in the presence of Cherie Wan

	 	 	)	 	 	/s/ Cherie Wan
	 
	 	 	 	 	 	 
	SIGNED SEALED AND DELIVERED BY

	 	 	)	 	 	 
	JULIE CHRISTINE PETER

	 	 	)	 	 	/s/ Julie Christine Peter
	in the presence of Belinda Ladio Espiritu

	 	 	)	 	 	/s/ Belinda Ladio Espiritu
	 
	 	 	 	 	 	 
	SIGNED SEALED AND DELIVERED BY

	 	 	)	 	 	 
	REGINALD KUFELD BRACK JR.

	 	 	)	 	 	/s/ Reginald Kufeld Brack Jr.
	in the presence of Barbara Brack

	 	 	)	 	 	/s/ Barbara Brack
	 
	 	 	 	 	 	 
	SIGNED SEALED AND DELIVERED BY

	 	 	)	 	 	 
	AYAZ HATIM EBRAHIM

	 	 	)	 	 	/s/ Ayaz Hatim Ebrahim
	in the presence of Leung Yee Man

	 	 	)	 	 	/s/ Leung Yee Man
	 
	 	 	 	 	 	 
	SIGNED SEALED AND DELIVERED BY

	 	 	)	 	 	 
	Philip Henry Geier Jr.

	 	 	)	 	 	/s/ Philip Henry Geier Jr
	FOR AND ON BEHALF OF

	 	 	)	 	 	 
	GEIER HOLDINGS LLC

	 	 	)	 	 	 
	in the presence of Juliana Mardones

	 	 	)	 	 	/s/ Juliana Mardones

4

 

	 	 	 	 	 	 	 
	SIGNED SEALED AND DELIVERED BY

	 	 	)	 	 	 
	REGINALD KUFELD BRACK III

	 	 	)	 	 	/s/ Reginald Kufeld Brack III
	in the presence of Jill Brack

	 	 	)	 	 	/s/ Jill Brack
	 
	 	 	 	 	 	 
	SIGNED SEALED AND DELIVERED BY

	 	 	)	 	 	 
	RUPERT JAMES PURSER

	 	 	)	 	 	/s/ Rupert James Purser
	in the presence of Chan Chi Kit

	 	 	)	 	 	/s/ Chan Chi Kit
	 
	 	 	 	 	 	 
	SIGNED SEALED AND DELIVERED BY

	 	 	)	 	 	 
	PAUL JUSTIN HALLETT

	 	 	)	 	 	/s/ Paul Justin Hallett
	in the presence of Nick Feletcher

	 	 	)	 	 	/s/ Nick Feletcher
	 
	 	 	 	 	 	 
	SIGNED SEALED AND DELIVERED BY

	 	 	)	 	 	 
	YANG CHA

	 	 	)	 	 	/s/ Yang Cha
	in the presence of Ying Zhu

	 	 	)	 	 	/s/ Ying Zhu
	 
	 	 	 	 	 	 
	SIGNED SEALED AND DELIVERED BY

	 	 	)	 	 	 
	John Pridjian

	 	 	)	 	 	/s/ John Pridjian
	FOR AND ON BEHALF OF

	 	 	)	 	 	 
	MERCURIUS PARTNERS LLP

	 	 	)	 	 	 
	in the presence of Gayane Pridjian

	 	 	)	 	 	/s/ Gayane Pridjian

5

 

	 	 	 	 	 	 	 
	SIGNED SEALED AND DELIVERED

	 	 	)	 	 	 
	Jerry Sze

	 	 	)	 	 	/s/ Jerry Sze
	FOR AND ON BEHALF OF

	 	 	)	 	 	 
	ASIASTAR IT FUND, L.P.

	 	 	)	 	 	 
	in the presence of Carole Ji

	 	 	)	 	 	/s/ Carole Ji
	 
	 	 	 	 	 	 
	SIGNED SEALED AND DELIVERED BY

	 	 	)	 	 	 
	JOHN PRIDJIAN

	 	 	)	 	 	/s/ John Pridjian
	in the presence of Gayane Pridjian

	 	 	)	 	 	/s/ Gayane Pridjian
	 
	 	 	 	 	 	 
	SIGNED SEALED AND DELIVERED BY

	 	 	)	 	 	 
	LAU YAT FAN

	 	 	)	 	 	/s/ Lau Yat Fan
	in the presence of Ying Zhu

	 	 	)	 	 	/s/ Ying Zhu
	 
	SIGNED SEALED AND DELIVERED

	 	 	)	 	 	 
	Ahmed Al-Saleh

	 	 	)	 	 	/s/ Ahmed Al-Saleh
	FOR AND ON BEHALF OF

	 	 	)	 	 	 
	UNI-ASIA LIMITED

	 	 	)	 	 	 
	in the presence of Robert Yung

	 	 	)	 	 	/s/ Robert Yung

6

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