Document:

CMN Disc Sched

 

COMPANY
DISCLOSURE SCHEDULE

 

 

This
Company Disclosure Schedule has been prepared and delivered in accordance with
the Sale and Purchase Agreement, dated as May 12, 2005 (the “Agreement”), among
Metaphor Corp. (the “Acquiror”), Hong
Kong Huicong International Group Limited (the “Shareholder”), each
of Wu Xian, Li Shuanqing, Shen Qizhi and Wang Li Hong (collectively, the
“CMN
Management”), China
Media Network International Inc. (the “Company”) and 8
Holdings LLC. (“8
Holdings”). This
Company Disclosure Schedule is the Company Disclosure Schedule as referred to in
the Agreement

 

 

Capitalised
terms used but not otherwise defined in this Company Disclosure Schedule shall
have the meanings ascribed to such terms in the Agreement. The headings
contained in this Company Disclosure Schedule are for convenience of reference
only and shall not be deemed to modify or influence the interpretation of the
information contained in this Company Disclosure Schedule. In the event that any
inconsistency is revealed between any provisions of the Agreement and any part
of this Company Disclosure Schedule (including the information referred to
herein), this Company Disclosure Schedule shall prevail and shall be deemed to
be the relevant disclosures.

 

 

This
Company Disclosure Schedule makes disclosures for the purpose of limiting the
scope of the representations and warranties and the covenants of the Company and
the Shareholder, as applicable. The representations and warranties and the
covenants of the Company and the Shareholder contained in the Agreement are made
and given subject to the relevant disclosures contained in this Company
Disclosure Schedule and the Company and/or the Shareholder will not be nor will
it or they be deemed to be in breach of any such representations and warranties
and covenants of the Company and/or the Shareholder (as the case may be) in
respect of the matters disclosed or referred to herein.

 

 

For the
sake of convenience, matters disclosed are listed against the section numbers of
the representations and warranties and the covenants of the Company and/or the
Shareholder (as the case may be) to which the disclosure is considered most
likely to relate but any disclosure, whether made generally or specifically,
directly or by reference to any document or other source will apply to all of
the representations and warranties and the covenants of the Company and/or the
Shareholder (as the case may be) to which it is or may be appropriate and any
disclosure will not be limited in any way to the specific representation and
warranty or covenant to which it refers below. 

 

 

References
in this Company Disclosure Schedule to the provision or disclosure of
information to the Acquiror will be deemed to have been satisfied by the
provision of such information to 8 Holdings, the Acquiror's Solicitors or any of
the Acquiror's professional advisers.

 

 

1. GENERAL
DISCLOSURES

 

 

	1.1  	
      Attached
      to this Company Disclosure Schedule is
      an annex of documents of which copies have been delivered or made
      available to 8 Holdings, the Acquiror, the Acquiror’s Solicitors or any of
      its other professional advisers during the course of negotiations for the
      sale and purchase of the Company (the "Disclosed
      Documents").

 

 

	1.2  	
      A
      copy of the schedule referred to above has previously been delivered to 8
      Holdings, the Acquiror or the Acquiror's Solicitors. The Acquiror
      acknowledges that it has received, or had access to, a copy of each of the
      Disclosed Documents and that it has had full notice of the contents of the
      Disclosed Documents.

 

 

	1.3  	
      The
      Company and/or the Shareholder (as the case may be) disclose or will be
      deemed to have disclosed:

 

 

	1.3.1  	
      all
      matters contained or referred to in the Company Audited Financial
      Statements and
      Company Unaudited Financial Statements together with the accounting
      policies adopted by the Acquired Companies and referred to therein and all
      notes thereto;

 

 

	1.3.2  	
      all
      matters which would be disclosed as a result of an inspection of the
      statutory books, memorandum and articles of association or other
      constitutional documents, registers and records of the Company/each of the
      Acquired Companies that have been provided to the
  Acquiror;

 

 

	1.3.3  	
      all
      information contained in, and the full contents of, all correspondence
      (including without limitation all documents enclosed with such
      correspondence, memoranda, notes or schedules) between the Company, the
      Shareholder or any member of the CMN Group or any of their respective
      professional advisers (on the one hand) and the Acquiror, 8 Holdings or
      any of their professional advisers (on the other hand) in connection with
      the sale of the Acquired Companies and matters ancillary thereto;
      and

 

 

	1.3.4  	
      any
      matters contained in any report to the Acquiror made by surveyors,
      investigating accountants, lawyers, investment advisers or any other
      professional advisers retained by the Acquiror for reviewing the Acquired
      Cmpanies.

 

 

	1.4  	
      The
      disclosures contained in this Company Disclosure Schedule are
      not to be taken as any admission that all or any of the matters constitute
      a breach of the representations and warranties and the covenants of the
      Company and/or the Shareholder (as the case may be). The disclosure of any
      matter or document shall not imply any representations and warranties or
      any covenant of the Company and/or the Shareholder (as the case may be)
      not expressly given in the Agreement nor shall such disclosure be taken as
      extending the scope of any of the representations and warranties and the
      covenants of the Company and/or the Shareholder (as the case may be) given
      by the Company and/or the Shareholder (as the case may
  be).

 

 

	2.  	
      SPECIFIC
      DISCLOSURES

 

 

Without
limiting the generality of the disclosures referred to above, the Company and/or
the Shareholder (as the case may be) disclose or the Company and/or the
Shareholder (as the case may be) will be deemed to have disclosed:

 

 

Sections
4.1.5 and 5.12

No
Brokers or Finders

 

 

1. BOC
International Holdings Limited is entitled to receive a fee for acting as the
facilitator of the transactions contemplated in the Sale and Purchase Agreement
upon Closing.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Section
5.1(b)

Organisation
and Qualification

 

 

1. Upon
completion of the Restructuring, Huamei Information will become a
Chinese-foreign equity joint venture company. It will have two shareholders. It
is contemplated that the Company will hold a 98% equity interest in the
registered capital of Huamei Information and a domestic PRC company to be set up
by the management will hold the remaining 2% equity interest in the registered
capital of Huamei Information. Generally, the minimum percentage stake holding
of a shareholder in a limited liability company established in China is 2%.
However, there is a possibility that for policy reason, the relevant PRC
approval and registration authorities of Huamei Information may demand the
minority shareholder of Huamei Information to increase the percentage of its
equity stake in Huamei Information to be more than 2% but equal to or less than
10%. 

 

 

 

 

 

	
       

      Section
      5.7.3

      Subsidiaries

       

	
       

      List
      of Acquired Companies (As of the completion of the
      Restructuring)

       

	
      Item
	
      Chinese
      Name of Company
	
      English
      Name of Company
	
      Registered
      Capital (RMB)
	
      Shareholders
      and Shareholding Structure 

	
      1
	
      北京华媒盛&#-30266;广告有&#-27056;公司
	
      Beijing
      Huamei Shengshi Advertising Co.,Ltd.
	
      5,000,000
	
      Company
      B: 80%; Shareholders who are natural persons (Wu Xian, Li Shuang Qing,
      Shen Qi Zhi): 20%;

	
      2
	
      北京华媒盛&#-30266;信息技术有&#-27056;公司
	
      Beijing
      Huamei Shengshi Information Technology Co.,Ltd.
	
      20,000,000
	
      China
      Media Network International Inc.: 98%; Beijing Hehui Chuangshi Advertising
      Co., Ltd: 20%

	
      3
	
      济南华媒盛&#-30266;传播有&#-27056;公司
	
      Jinan
      Huamei Shengshi Broadcasting Co., Ltd.
	
      500,000
	
      Beijing
      Huamei Advertising: 80%; Company B: 20%

	
      4
	
      兰州华媒盛&#-30266;广告传播有&#-27056;公司
	
      Lanzhou
      Huamei Shengshi Advertising Broadcasting Co., Ltd.
	
      500,000
	
      Beijing
      Huamei Advertising: 76%; Li Guang Yu: 24%

	
      5
	
      兰州华媒广告传播有&#-27056;公司
	
      Lanzhou
      Huamei Advertising Broadcasting Co., Ltd.
	
      1,000,000
	
      Beijing
      Huamei Advertising: 51%; Lanzhou Television Station:
49%

	
      6
	
      乌&#-25471;木&#-24752;华媒盛&#-30266;传播有&#-27056;公司
	
      Urumqi
      Huamei Shengshi Broadcasting Co., Ltd.
	
      1,000,000
	
      Beijing
      Huamei Advertising: 76%; Li Guang Yu: 24%

	
      7
	
      &#-28463;州华媒盛&#-30266;广告传播有&#-27056;公司
	
      Zhengzhou
      Huamei Shengshi Advertising Broadcasting Co., Ltd.
	
      1,000,000
	
      Beijing
      Huamei Advertising: 80%; Company B: 20%

	
      8
	
      B公司&#-248;待&#-28211;组确定&#-247;
	
      Company
      B (pending restructuring)
	
      10,000,000
	
      Beijing
      Huamei Shengshi Information Technology Co.,Ltd.: 90%; Wu Xian: 10%
      (pending restructuring)

 

 

 

Section
5.10

Compliance
with Laws 

 

The
agreements entered into between Beijing Huicong Advertising Co., Ltd
&#-248;北京市慧&#-32662;广告有&#-27056;公司&#-247;, Beijing
Huicong Goldenet Advertising Co., Ltd. &#-248;北京慧&#-32662;&#-28207;网广告有&#-27056;公司&#-247; (both
are the Shareholder’s subsidiaries) and each of Zhengzhou Television Station,
Jinan Television Station, Urumqi Television Station and Lanzhou Television
Station which required the Group to purchase the advertising time-slots and
sub-sell to other parties, may be in breach of (i) the Reply of the State
Administration for Industry and Commerce to the Question of whether the Outright
Purchases of the User Rights to an Advertising Media and Subsequent Assignment
thereof for consideration constitutes Illegal Business (《国家工商&#-30644;政管理局关于买断广告&#-28803;体使用权&#-28709;&#-30644;有偿&#-28820;&#-29783;是否构成&#-26786;法经&#-31707;&#-27154;&#-26472;的答复》) and
(ii) the Reply of the State Administration for Industry and Commerce to
Questions Concerning the Contracting as a Fully Authorised Agent for the
Operation of, or the Outright Purchases of, Advertising Media by Advertising
Companies to Engage in Advertising Business in a Territory other than their own
Territory(国家工商&#-30644;政管理局关于广告公司以全权代理名义承包、买断广告媒介异地经&#-31707;广告业务有关&#-27154;&#-26472;的答复》) (the
"Replies") which provide against the sub-sale of advertising time-slots. The
above arrangements were terminated in March 2003. Company Subsidiaries entered
into the current management agreements with each of the four television stations
under which Company Subsidiaries act as agents for the television stations and
arrange for customers to place advertisements with the television stations. As a
result of the previous breaches, the Company Subsidiaries could be fined up to
RMB5,000 pursuant to Article 21 of the Implementation Rules of the Regulation
Governing Advertising. In addition, the profit derived from such arrangements
may be confiscated and their operating licenses could be revoked pursuant to
Article 71 of the Company Registration Regulations. Since the commencement of
the television advertising business in May 2000 to March 2003, the profit
generated from the above arrangements amounted to approximately RMB2,788,000 in
2001, RMB5,703,000 in 2002 and RMB2,120,000 during the three months ended March
31, 2003. In 2000, the operations of the above arrangements incurred a loss of
approximately RMB96,000.

 

Section
5.13.1

Employees

and

Section
5.26

Employee
Benefits

 

 

The
Company Subsidiaries failed to make timely contributions to the retirement
benefit fund, the medical benefit fund and the housing benefit fund. The main
reason for this failure was that some of Company Subsidiaries' employees were
unwilling to join the funds and therefore have not provided all required
documents for registration with the relevant authorities.

The
Company Subsidiaries' failure to make timely contributions to the retirement
benefit fund or the medical benefit fund contravened the Provisional Regulations
for the Collection and Payment of Social Insurance Premiums &#-248;《社会保&#-27031;&#-29383;征缴暂&#-30644;条例》&#-247; and for
these breaches the relevant PRC authorities may impose a maximum penalty of RMB
10,000 on the person-in-charge of Company Subsidiaries. The Company Subsidiaries
may be held liable to compensate any losses suffered by the employees due to
Company Subsidiaries' failure to make timely contribution to the medical benefit
fund. The Company Subsidiaries' failure to make timely contribution to the
housing benefit fund contravened the Regulations for the Administration of
Housing Funds &#-248;《住房公积&#-28207;管理条例》&#-247; for
which the relevant PRC authorities may impose a maximum penalty of RMB50,000 on
Company Subsidairies. 

 

 

 

 

Section
5.16

Interested
Party Transactions

 

 

Apart
from the service contracts entered into between the Acquired Companies and its
directors and officers, there is no other interested party
transaction.

 

 

 

 

Section
5.20

Changes

 

 

None.

 

 

Section
5.21.1

Material
Company Contracts

 

 

 

	
       

      Item
	
      合同双方
	
      Parties
      to the Contract

	
      1
	
      甲方&#-230;济南电&#-30266;台&#-229;
      

      乙方&#-230;济南华媒盛&#-30266;传播有&#-27056;公司
	
      Party
      A: Jinan Television Station 

      Party
      B: Jinan Huamei Shengshi Broadcasting Co., Ltd

	
      2
	
      甲方&#-230;&#-28463;州电&#-30266;台&#-229;
      

      乙方&#-230;&#-28463;州华媒盛&#-30266;广告传播有&#-27056;公司
	
      Party
      A: Zhengzhou Television Station 

      Party
      B: Zhengzhou Huamei Shengshi Advertising Broadcasting Co.,
      Ltd.

	
      3
	
      甲方&#-230;兰州电&#-30266;台公共&#-26479;&#-28589;&#-229;
      乙方&#-230;兰州华媒盛&#-30266;广告传播有&#-27056;公司
	
      Party
      A: Lanzhou Television Station Public Channel 

      Party
      B: Lanzhou Huamei Shengshi Advertising Broadcasting Co.,
    Ltd

	
      4
	
      甲方&#-230;乌&#-25471;木&#-24752;电&#-30266;台&#-229;

      乙方&#-230;乌&#-25471;木&#-24752;华媒盛&#-30266;传播有&#-27056;公司
	
      Party
      A: Urumqi Television Station Party B: Urumqi Huamei Shengshi Broadcasting
      Co., Ltd

	
      5
	
      甲方&#-230;兰州电&#-30266;台&#-229;
      

      乙方&#-230;兰州华媒广告传播有&#-27056;公司
	
      Party
      A: Lanzhou Television Station Party B: Lanzhou Huamei Advertising
      Broadcasting Co., Ltd

	
      6
	
      甲方&#-230;兰州电&#-30266;台&#-229;
      

      乙方&#-230;北京慧&#-32662;&#-28207;网广告有&#-27056;公司
	
      Party
      A: Lanzhou Television Station Party B: Beijing Hui Chong Jin Wang
      Advertising Co., Ltd

	
      7
	
      甲方&#-230;三亚广播电&#-30266;台

      乙方&#-230;北京华媒盛&#-30266;广告有&#-27056;公司
	
      Party
      A: San Ya Broadcasting Television Station

      Party
      B: Beijing Huamei Shengshi Advertising Co.,
Ltd.

 

 

 

 

 

 

 

 

 

 

 

Section
5.25

Intellectual
Property

 

 

	1.  	
      None
      of the Acquired Companies has made any application to register any
      trademark, trade names, internet domain name or other intellectual
      property rights for its business as currently conducted.
  

 

 

	2.  	
      None
      of the Acquired Companies owns any registered trademark, trade names,
      internet domain name or other intellectual property rights for its
      business as currently conducted. 

 

 

	3.  	
      None
      of the Acquired Companies has entered into any license agreement or
      arrangement with any third party for obtaining any right to use any
      intellectual property for its business as currently
    conducted.

 

 

Section
5.31

Customers

 

 

 

	
      CMN
      Top 10 customers -2002
	 	 
	
       
	
      Chinese
      Name of Customer
	
      English
      Name of Customer
	
      Total
      (RMB)

	
      1
	
      &#-28463;州勤&#-32134;&#-27411;广告公司
	
      Zhengzhou
      Qin Yi Ming Advertising Co., Ltd.
	
      11,971,987
      

	
      2
	
      &#-28463;州&#-31523;&#-32142;&#-28419;市广告有&#-27056;公司
	
      Zhengzhou
      Blue City Advertising Co., Ltd.
	
      9,149,790
      

	
      3
	
      传立媒介
	
      Chuan
      Li Media
	
      7,158,825
      

	
      4
	
      &#-24922;&#-32593;·光明广告有&#-27056;公司
      
	
      McCann
      Erickson Advertising Co., Ltd.
	
      7,122,830
      

	
      5
	
      盛世&#-27265;城(国&#-27067;)广告公司
	
      Shengshi
      Changcheng (International) Advertising Co., Ltd.
	
      5,230,238
      

	
      6
	
      上海李奥&#-29411;纳(宝洁)
	
      Shanghai
      Leo Burnett (P&G)
	
      4,327,300
      

	
      7
	
      济南&#-28791;煌广告公司
	
      Jinan
      Hui Huang Advertising Co., Ltd.
	
      3,907,620
      

	
      8
	
      山东&#-26902;瑞广告有&#-27056;公司
	
      Shandong
      Xuerui Advertising Co., Ltd.
	
      2,861,844
      

	
      9
	
      济南&#-24679;媒广告有&#-27056;公司
	
      Jinan
      Longmei Advertising Co., Ltd.
	
      2,827,100
      

	
      10
	
      济南淳&#-26418;国&#-27067;文化传播公司
	
      Jinan
      Chunfeng International Cultural Media Company
	
      2,437,265
      

 

 

	CMN
      Top 10 customers -2003
	 	 
	 	
      Chinese
      Name of Customer
	
      English
      Name of Customer
	
      Total
      (RMB)

	
      1
	
      李奥&#-29411;纳广告有&#-27056;公司(宝洁)
	
      Leo
      Burnett Advertising Co., Ltd 

      (P
      & G)
	
      9,854,531

	
      2
	
      &#-28463;州&#-31523;&#-32142;&#-28419;市广告有&#-27056;公司

      (&#-26490;先互&#-28646;)
	
      Zhengzhou
      Blue City Advertising Co., Ltd.(Lin Xian Hu Tong)
	
      9,718,008

	
      3
	
      &#-28463;州勤&#-32134;&#-27411;广告有&#-27056;公司
	
      Zhengzhou
      Qin Yi Ming Advertising Co., Ltd.
	
      8,810,057

	
      4
	
      传立媒介(智威汤&#-28662;-中乔广告

      有&#-27056;公司)
	
      Chuan
      Li Media (JWT Employement Communications -Zhong Qiao Advertising Co.,
      Ltd.)
	
      7,999,449

	
      5
	
      &#-24922;&#-32593;光明广告有&#-27056;公司
	
      McCann
      Erickson Advertising Co., Ltd.
	
      7,660,305

	
      6
	
      盛&#-30266;&#-27265;城广告有&#-27056;公司
	
      Shengshi
      Changcheng Advertising Co., Ltd.
	
      6,471,037

	
      7
	
      乌市&#-28207;山峰广告有&#-27056;公司
	
      Urumqi
      Jin Shan Feng Advertising Co., Ltd.
	
      5,413,486

	
      8
	
      济南&#-28791;煌广告有&#-27056;公司
	
      Jinan
      Hui Huang Advertising Co., Ltd.
	
      4,614,260

	
      9
	
      哈&#-31889;&#-26938;团(三精制&#-31889;\三厂\四厂

      \六厂\儿童)
	
      Hayao
      Group (Sanjing Medicine/Hayaosan/Hayaosi/Hayaoliu

      /Haoyao
      Children)
	
      3,738,000

	
      10
	
      广东凯络广告公司
	
      Guangdong
      Kailuo Advertising Co., Ltd.
	
      3,335,038

 

 

	
      CMN
      Top 10 customers -2004
	 	 
	
       
	
      Chinese
      Name of Customer
	
      English
      Name of Customer
	
      Total
      (RMB)

	
      1
	
      传立媒介&#-248;中乔/上海奥美

      /灵智大洋&#-247;
	
      Chuan
      Li Media (Zhong Qiao/Shanghai Ao Mei/
      Euro RSCG Worldwide)
	
      18,873,291
      

	
      2
	
      李奥&#-29411;纳广告有&#-27056;公司(宝洁)
	
      Leo
      Burnett Advertising Co., Ltd (P & G)
	
      10,371,316
      

	
      3
	
      &#-24922;&#-32593;光明广告有&#-27056;公司
	
      McCann
      Erickson Advertising Co., Ltd.
	
      8,956,509
      

	
      4
	
      李奥&#-29411;纳广告有&#-27056;公司
	
      Leo
      Burnett Advertising Co., Ltd
	
      8,613,571
      

	
      5
	
      盛&#-30266;&#-27265;城广告有&#-27056;公司
	
      Shengshi
      Changcheng Advertising Co., Ltd.
	
      6,699,565
      

	
      6
	
      &#-28463;州勤&#-32134;&#-27411;广告有&#-27056;公司
	
      Zhengzhou
      Qin Yi Ming Advertising Co., Ltd.
	
      6,103,123
      

	
      7
	
      济南&#-28791;煌广告有&#-27056;公司
	
      Jinan
      Hui Huang Advertising Co., Ltd
	
      5,444,345
      

	
      8
	
      哈&#-31889;&#-26938;团(三精制&#-31889;\三厂\四厂

      \六厂)
	
      Hayao
      Group (Sanjing Medicine/Hayaosan/Hayaosi/Hayaoliu

      /Haoyao
      Children)
	
      5,068,161
      

	
      9
	
      &#-28463;州&#-31523;&#-32142;&#-28419;市广告有&#-27056;公司

      (&#-26490;先互&#-28646;)
	
      Zhengzhou
      Blue City Advertising Co., Ltd.(Ling Xian Hu Tong)
	
      4,821,006
      

	
      10
	
      新疆春晓广告有&#-27056;公司
	
      Xinjiang
      Chun Xiao Advertising Co., Ltd
	
      3,615,291
      

 

ANNEX

DISCLOSED
DOCUMENTS

[May
require minor amendments]

 

 

	1.  	
      Memorandum
      and Articles of Association of the Company;

	2.  	
      Share
      certificates of the Company;

	3.  	
      Register
      of Members of the Company;

	4.  	
      Business
      Licenses issued at the time of incorporation of the Company
      Subsidiaries;

	5.  	
      Business
      Licenses with 2004 annual certification of the Company
      Subsidiaries;

	6.  	
      Advertising
      Licenses of the Company Subsidiaries;

	7.  	
      Description
      of all changes of the capitalization structure of the Company
      Subsidiaries;

	8.  	
      Registration
      certificates and other related documents in connection with modification
      of Ji’nan Huamei, Zhengzhou Huamei and Urumqi
Huamei;

	9.  	
      Articles
      of associations (and the amendments, if any) of the Company Subsidiaries
      and their shareholders since their inception;

	10.  	
      Capital
      verification reports of the Company Subsidiaries since their
      inception;

	11.  	
      2004
      Balance Sheets and income statements of the Company Subsidiaries and their
      shareholders;

	12.  	
      Consolidated
      Balance Sheet and income statement;

	13.  	
      Management
      account on balance sheets, cash flow statements and income statements for
      the two previous fiscal years;

	14.  	
      All
      resolutions of the shareholder meeting of the Company Subsidiaries since
      their inception;

	15.  	
      Relevant
      resolutions of the shareholder meeting of the Company
      Subsidiaries;

	16.  	
      A
      list of current directors, general managers and supervisors of the Company
      Subsidiaries;

	17.  	
      List
      of prospective shareholders of the Company
Subsidiaries;

	18.  	
      Basic
      information of each officer, director and major shareholder of the Company
      Subsidiaries and professional biographies of key personnel, including Wu
      Xian, Arthur Shen, Li Shuangqin, Chen Bojie, Pu Yue, Pengboand Wang
      Lihong;

	19.  	
      Tax
      registration certificates of the Company Subsidiaries (both national and
      local);

	20.  	
      Organization
      Code Certificates of the Company Subsidiaries;

	21.  	
      Lease
      Agreements and related documents of the Company Subsidiaries,
      including:

 

(1) The
lease agreement entered into by Lanzhou Huamei Shengshi and Lanzhou Broadcasting
and Television Publishing Office dated May 21, 2003;

 

 

(2) The
lease agreement entered into by Lanzhou Huamei and Lanzhou TV dated March 18,
2004;

 

 

(3) The
lease agreement entered into by Beijing Huamei and Property Management Branch of
Beijing Tianhai Jishi Real Estate Development Ltd. dated March 18,
2004;

 

(4)
Certification issued by Beijing Tianhai Jishi Real Estate Development
Ltd.;

(5)
Certification issued by Beijing Beidian Kelin Electronic Ltd.;

(6)
Property lease license of Beijing Beidian Kelin Electronic Ltd.;

(7) The
Agreement entered into by Beijing Huamei Shengshi and Beijing
Huamei;

(8) The
Confirmation issued by Property Management Branch of Beijing Tianhai Jishi Real
Estate Development Ltd.;

(9)
Certifications issued by Urumchi Television and Urumchi Broadcasting and
Television Bureau;

(10)
Certifications issued by Ji’nan Television and Ji’nan Broadcasting and
Television Bureau;

(11)
Property Certificate of Ji’nan Broadcasting and Television Bureau;

(12)
Property Certificate of Zhengzhou Broadcasting and Television Bureau;
and

(13)
Certification issued by Zhengzhou Huamei.

	22.  	
      A
      list of fixed assets, machinery and equipment of the Company Subsidiaries
      as of December 2004;

	23.  	
      Review
      of physical plants and age of broadcasting
facilities;

	24.  	
      Brief
      description of depreciation policy and schedule of depreciation of the
      Company Subsidiaries;

	25.  	
      Brief
      description of other expenses of the Company
  Subsidiaries;

	26.  	
      Brief
      description of Operating lease payments of the Company
      Subsidiaries;

	27.  	
      Brief
      description of all changes in accounting policies or procedures during the
      past three years with respect to the Company
  Subsidiaries;

	28.  	
      Report
      of Accounts receivable and payable of the Company
      Subsidiaries;

	29.  	
      The
      Chart of officer indebtedness to the Company
  Subsidiaries;

	30.  	
      A
      list of applicable tax items and tax rates of the Company
      Subsidiaries;

	31.  	
      Documents
      in connection with applicable tax waivers of the Company
      Subsidiaries;

	32.  	
      Tax
      returns filed by the Company Subsidiaries;

	33.  	
      Material
      Contracts, including 

(1) Two
agreements entered into by Zhengzhou Huamei and Zhengzhou Television dated April
2003 and December 17, 2004;

(2) The
agreement entered into by Ji’nan Huamei and Ji’nan Television dated March 26,
2003;

(3) The
agreement entered into by Beijing Huicong Goldenet Advertising Co., Ltd. and
Lanzhou Television dated December 31, 2003;

(4) Two
agreements entered into by Lanzhou Huamei Shengshi and Public Channel of Lanzhou
Television dated April 1st 2003 and
February 6, 2004

(5) The
Authorization Certificate issued by Lanzhou Broadcasting and Television
Bureau;

(6) The
agreement entered into by Lanzhou Huamei Advertising and Lanzhou Television
dated March 15, 2004;

(7) The
agreement entered into by San Ya TV station and Beijing CMN dated April 22,
2005. 

	34.  	
      The
      TV drama purchase agreement entered into by Shanxi Tai Lun Advertising and
      Lanzhou TV on November 7, 2003. 

	35.  	
      The
      data purchasing contract entered into by Beijing Huamei Shengshi and CSM
      dated March 1, 2005;

	36.  	
      The
      data purchasing contract entered into by Huicong Jin Wang Advertising and
      CTR dated April 9, 2004;

	37.  	
      The
      sales contract signed with Shanghai Leo & Burnett Advertising Company
      Guangzhou Branch;

	38.  	
      The
      advertising agency contract entered into by Zhenzhou CMN and Zhengzhou Red
      Apple Marketing & Advertising company dated December 28,
      2004;

	39.  	
      The
      agency contract entered into by Urumchi CMN and Xinjiang Pu La Na
      Advertising dated Dec. 30, 2004;

	40.  	
      List
      of top 20 key customer in Year 2002, 2003 and 2004 ;

	41.  	
      The
      flow chart to describe the selling process and how the advertisements get
      aired;

	42.  	
      Brief
      description of the size, organization, composition, strategy of
      advertisement sales team and support staff;

	43.  	
      Program
      schedule for 13 existing channels as of December
2004;

	44.  	
      Industry
      overview report (an extract from China TV Report 2003 - 2004 published by
      CSM and China Media University);

	45.  	
      CMN
      brochure issued in 2004;

	46.  	
      The
      standard Sample Employment Agreements of the Company Subsidiaries for
      senior management, staff and temporary staff;

	47.  	
      The
      standard Sample Non-disclosure agreement for senior management and
      employees;

	48.  	
      The
      employee disciplines, company attendance and leave policy and other
      company regulations of the Company Subsidiaries issued in July
      2004;

	49.  	
      The
      wage policy of the Company Subsidiaries issued in July
    2004;

	50.  	
      A
      list of employees of the Company Subsidiaries as of December 2004 (128
      employees in total);

	51.  	
      A
      personnel organization chart of the Company Subsidiaries as of December
      2004; 

	52.  	
      Certifications
      relating to social securities and housing accumulation fund of the Company
      Subsidiaries issued by the competent PRC authority;
and

	53.  	
      Brief
      description of social securities and housing accumulation fund of the PRC
      Acquired Companies issued by each of the Company
    Subsidiaries.MTPH Disc

METAPHOR
CORPORATION 

DISCLOSURE
SCHEDULE

 

The
following disclosure schedules (the “Schedules”) are provided in connection with
the Sale and Purchase Agreement, dated as of May 12, 2005 (the “Agreement”), by
and among Metaphor Corporation, a Nevada corporation (the “Acquiror”), 8
Holdings LLC, a Colorado limited liability company (“8 Holdings”), Hong Kong
Huicong International Group Limited, a British Virgin Islands company (the
“Shareholder”), each of Wu Xian, Li Shuangqing, Shen Qizhi and Wang Li Hong
(collectively, “CMN Management”) and China Media Network International Inc., a
British Virgin Islands company (the “Company”). Capitalized terms used but not
defined herein shall have the respective meaning ascribed to such terms in the
Agreement.

 

The
Schedules are qualified in their entirety by reference to Section 6 of the
Agreement. The Schedules may include items or information which the Acquiror is
not required to disclose under the Agreement and disclosure of such items or
information shall not affect the interpretation of the Agreement or the scope of
the disclosure obligations thereunder. Inclusion of information herein shall not
be construed as an admission that such information is material to the business,
financial position or results of operation of the Acquiror. 

 

Every
matter, document or item referred to or described in any part of the Schedules
shall be deemed to be disclosed for all purposes and under each category or part
of these Schedules to which such matter, document or item is
relevant.

Section
6.2.3

None.

Section
6.2.4

None.

Section
6.3

There are
no outstanding contracts or commitments relating to the issuance, sale or
transfer of Acquiror Common Stock, other than contracts to be entered into for
the sale and purchase of shares of Acquiror Common Stock in connection with the
financing to be consummated by the Acquiror prior to Closing, and the shares to
be issued to the Acquiror Stockholder prior to Closing, pursuant to that certain
Stock Purchase Agreement, dated as of April 7, 2005, by the Acquiror
Stockholder, the Acquiror and Mark L. Baum, an individual (“Mr. Baum”).
Accordingly, as of Closing, the number of shares of Acquiror Common Stock that
will be issued and outstanding will be in excess of 509,705 shares.

 

Section
6.5

None.

Section
6.7

	1.  	
      1998,
      US and California Income and Tax Returns

	2.  	
      1999,US
      and California Income and Tax Returns

 

The
Acquiror believes that it did file California and Federal Income and Tax returns
for calendar years 2000 and 2001; however, it does not possess copies of these
returns.

 

The
Acquiror has not filed Federal or State tax returns for the calendar years 2002,
2003 and 3004. The Acquiror is the process of making such filings with the state
and federal authorities. During the subject periods, there was no operational
activity within the company.

Section
6.10

	1.  	
      2004
      Stock Incentive Plan.

	2.  	
      2003
      Stock Incentive Plan, as amended.

	3.  	
      2002
      Professionals Stock Compensation Plan.

	4.  	
      2001-2002
      Consultants Stock Option Plan.

All of
the 6.10 disclosure documents are on file with the US SEC.

Section
6.11

None.

Section
6.14

Changes
made to the Acquiror’s Common Stock capital subsequent to the end of calendar
year 2004 were disclosed in Form 8-K's filed with the US Securities and Exchange
Commission ("SEC") on January 7, 2005, February 3, 2005 and March 10, 2005.
Additional related disclosures were made with the SEC in a Form 10-KSB on March
11, 2005 and an amended Form 10-KSB filed with the SEC on March 15,
2005.

On April
6, 2005, the Acquiror entered into a mutual release and settlement agreement
with A.P.U. Holdings, Inc., 4117 Investments, Ltd., Grant Thornton Limited,
Fasken Martineau DuMoulin, Davis & Co., Brian Child, Esq. and Mark L. Baum,
Esq. This matter related to a stagnant lawsuit ("Lawsuit") filed by American
Boardsports Corporation, a predecessor entity to the Acquiror, on April 27,
2001. Under British Columbia law, the venue where the Lawsuit was filed,
although the Lawsuit had not been active for many years, the defending party had
the right to file a Notice of Intent to Proceed ("NOIP"), serve the NOIP upon
the other parties to the Lawsuit, and bring resolution to their respective
claim. Upon receipt of service of the NOIP, Mark L. Baum ("Baum") engaged in
settlement discussions with Brian Child, Esq., an attorney with the firm of
Davis & Co. of Vancouver, BC, Canada and counsel for A.P.U. Holdings, Inc.,
the party serving the NOIP. A USD $5,000 settlement was immediately reached.
Baum agreed to gift the Acquiror $5,000.00 which was tendered to the signature
parties to the mutual release and settlement agreement. The matter is now
completely resolved by and among all parties to the Lawsuit.

On April
7, 2005, the Acquiror executed a Specific Power of Attorney with Harlan Kleiman
of Sausalito, California. 

Section
6.15.1(a)

	1.  	
      Mutual
      Release and Settlement Agreement dated April 6, 2005 by and among the
      Acquiror, A.P.U. Holdings, Inc., 4117 Investments, Ltd., Grant Thornton
      Limited, Fasken Martineau DuMoulin, Davis & Co., Brian Child, Esq.,
      and Mark L. Baum, Esq. 

	2.  	
      Release
      and Settlement Agreement dated January 21, 2005 by and between the Company
      and The Baum Law Firm, PC.

	3.  	
      Release
      and Settlement Agreement dated March 2, 2005 by and between the Company
      and The Baum Law Firm PC.

	4.  	
      Specific
      Power of Attorney to Harlan Kleiman dated April 7,
2005.

Section
6.15.1(b)

None.

Section
6.15.1(c)

None.

Section
6.15(d)

Please
see chart below. It is Acquiror’s intent to attempt to negotiate compromises and
settlements with any and all parties the Acquiror has identified as a rightful
claimant or debtholder.

METAPHOR
CORPORATION DEBTS AS OF APRIL 14, 2005: $79,256

Accounts
Payable: $21,759

	
      Debt
      Holder
	
      Amount
      of Debt

	
      Kennan
      Kaeder 
	
      $21,759

Demand
Loans: $32,500

	
      Debt
      Holder
	
      Amount
      of Debt

	
      Branfman
      & Associates 
	
      $2,000

	
      Northern
      Trust Bank
	
      $25,452

	
      Express
      One
	
      $5,048

Convertible
Debentures: $25,000

	
      Debt
      Holder
	
      Amount
      of Debt

	
      Patel
      
	
      $25,000

Section
6.17.

None.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}]]